I'm hoping I didn't quit too soon

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Timaaaaay53
Posts: 8
Joined: Fri May 12, 2017 10:19 pm

I'm hoping I didn't quit too soon

Post by Timaaaaay53 »

Called it a day on 5May2017. More for mental health as I just couldn't manage people making six figures, sense of entitlement, etc. Anyway...Not anticipating working again at least in my former industry.
Currently have Four 401K's from previous employers with Fidelity. One with Wells Fargo from my most recent.
Almost all assets in them are pre-tax at 900K.
Looking to consolidate to Vanguard, reduce the ER and pull 40k/year from them. Did all the math with SS/pension (currently 63.5 Y/O and will start at 64) and that is what I should need. Other variable such as wife's investments not included for simplicity-she's still working.
Question after 100+ hours of looking at Bogleheads, MMM and the noise from various "media" investment advisers (yes I have a severe headache and need some peace of mind really soon to enjoy my non-working years!):
3 bucket system?
3 Fund approach?
Drop into a retirement distribution fund like VTINX?
Help!
mac808
Posts: 522
Joined: Mon Sep 19, 2011 8:45 pm

Re: I'm hoping I didn't quit too soon

Post by mac808 »

Is that 40k pulled from IRAs pre-tax or after-tax? Have you given thought to what your marginal tax rate will be in retirement?
heyyou
Posts: 3873
Joined: Tue Feb 20, 2007 4:58 pm

Re: I'm hoping I didn't quit too soon

Post by heyyou »

Currently have Four 401K's from previous employers with Fidelity
If you haven't already, roll them into one traditional IRA (tIRA) at Fidelity or Vanguard for cost savings and for the simplicity of managing what is within them.

While DW is still working, max out her and his annual Roth IRAs (RIRA), buying them with money from your taxable savings if necessary. You do have Roth IRAs from the past, don't you, so the 5 year minimum holding period is not a problem? You can withdraw your initial contributions from the Roth IRAs, but not any the earnings, without penalty, within that 5 year minimum waiting period. There is no income tax on the future earnings of the Roth IRAs or on the RIRA contribution withdrawals since you initially paid that tax. Also study about converting a little of your tIRA into the RIRA accounts each year now, depending on your future taxes on the mandatory tIRA withdrawals that start at age 70.5.

Delaying Social Security(SS) grows your SS payment by 8% a year which is more sure and permanent growth than any of your other investments. Also, think of it as life insurance for your spouse if she had lower lifetime earnings than you did. When you have passed, she gets the larger of your SS or her SS. There is always risk in every investment, obvious or not. The risk in SS is lower payments later when SS has exhausted its assets. Voters will have influence on that.

In retirement, DW and I have found that patience helps us to reduce our spending. We try to only buy what is on sale at the grocery stores, knowing that whatever we want will be on sale on a periodic rotation of 3-4 weeks, often on different weeks at different stores. We buy on the first day of the weekly sales, then again on the last day. One store has 10% off every item, for seniors on the first Wednesday of each month.

Our cars last longer without the daily commute, and I don't care what others think about the age of my vehicle. It is only 22 years old with 213K miles on it. She drives the better car.

I think that you will do fine in retirement. The first years can be euphoric. For us, we seem to have all that we need, a few times, even all that we want, so we are living with a sense of gratitude. Our older friends have poorer health but our health problems are not limiting us yet. We are healthier than when we were working, due to less stress and more time to exercise.

Standard jokes for new retiree posters here:
Retiree's wife (RW): What are you going to do today?
Retiree (R): Nothing.
RW: But that is what you did yesterday!
R: Yes, but I didn't finish.

No one talks loud enough to be heard, everyone but me, drives too fast, and stay off of my lawn.
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ruralavalon
Posts: 20573
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: I'm hoping I didn't quit too soon

Post by ruralavalon »

Welcome to the forum :) .
Timaaaaay53 wrote:Called it a day on 5May2017. More for mental health as I just couldn't manage people making six figures, sense of entitlement, etc. Anyway...Not anticipating working again at least in my former industry.
Currently have Four 401K's from previous employers with Fidelity. One with Wells Fargo from my most recent.
Almost all assets in them are pre-tax at 900K.
Looking to consolidate to Vanguard, reduce the ER and pull 40k/year from them. Did all the math with SS/pension (currently 63.5 Y/O and will start at 64) and that is what I should need. Other variable such as wife's investments not included for simplicity-she's still working.
Question after 100+ hours of looking at Bogleheads, MMM and the noise from various "media" investment advisers (yes I have a severe headache and need some peace of mind really soon to enjoy my non-working years!):
It doesn't seem to me that you "quit too soon".

What are your expected total (for both of you) annual expenses after your retirement? What is your wife's annual net income? What is your expected Social Security benefit at present age? At full retirement age? At age 70? What is your pension benefit? Is the pension indexed for inflation?

You can simply add this to your original post using the edit button, so that all of your information is in one place.

Here is a calculator you can use to analyze the retirement income issue. http://www.firecalc.com .

Timaaaaay53 wrote: 3 bucket system?
3 Fund approach?
Drop into a retirement distribution fund like VTINX?
Help!
To give ideas on what to do next we will need more information like this: "Asking Portfolio Questions". You can simply add this to your original post using the edit button, so that all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Dottie57
Posts: 9742
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: I'm hoping I didn't quit too soon

Post by Dottie57 »

Timaaaaay53 wrote:Called it a day on 5May2017. More for mental health as I just couldn't manage people making six figures, sense of entitlement, etc. Anyway...Not anticipating working again at least in my former industry.
Currently have Four 401K's from previous employers with Fidelity. One with Wells Fargo from my most recent.
Almost all assets in them are pre-tax at 900K.
Looking to consolidate to Vanguard, reduce the ER and pull 40k/year from them. Did all the math with SS/pension (currently 63.5 Y/O and will start at 64) and that is what I should need. Other variable such as wife's investments not included for simplicity-she's still working.
Question after 100+ hours of looking at Bogleheads, MMM and the noise from various "media" investment advisers (yes I have a severe headache and need some peace of mind really soon to enjoy my non-working years!):
3 bucket system?
3 Fund approach?
Drop into a retirement distribution fund like VTINX?
Help!

Congratulations. I wish I felt I could retire now. It really all depends on your expenses. Look at the three fund portfolios.
I am 60 and am at 50% stocks and 50% fixed income.

https://www.bogleheads.org/wiki/Three-fund_portfolio
chinto
Posts: 296
Joined: Wed Jan 04, 2017 7:39 pm

Re: I'm hoping I didn't quit too soon

Post by chinto »

heyyou wrote: If you haven't already, roll them into one traditional IRA (tIRA) at Fidelity or Vanguard for cost savings and for the simplicity of managing what is within them.
The comments I'll add is you may wish to carefully weight out the difference in various forms of creditor protection. There is a substantive difference between a 401K plan and and a traditional IRA in terms of bankruptcy and creditor protection.

Another point to consider is if one or more of he 401K plan has a Stable Value fund. You cannot obtain those outside of 401k plans.

You may be able to consolidate your 401K plans by rolling the into one of the plans.


Related to the above if 401K you may want to consolidate 401K plans and failing that considered dividing up your assets betwen a roll over IRA and one of the 401K plans to keep access to a Stable Value fund.


That being said these are just things to consider before deciding to roll your 401K plans into a traditional IRA.

Normally I would lsay look at the ERs, but both Fidelity and Vanguard are stellar in terms of low cost index fund options.
heyyou wrote:While DW is still working
I keep wanting to ask, what is a DW?
chw
Posts: 974
Joined: Thu May 24, 2012 4:22 pm

Re: I'm hoping I didn't quit too soon

Post by chw »

DW= Dear Wifee...

Congrats on your retirement(I'm right behind you in July)! I would suggest reading a few books (now that you have more time). The best I found for a pre-retiree/retiree IMO is Making Your Money Last, by Jane Bryant Quinn(it's a very easy read). She advocates a bucket type system for withdrawals to answer one of your questions. The book is very comprehensive in all aspects of a retirees financial life. The Bogleheads Guide to Retirement is also very good, and written by mang regular contributors on the forum.

If you haven't done so, you need to plot your annual expense spending to fully understand what you will need for cash flow in retirement. Make sure to categorize work related expenses that you no longer have, as well new expenses related to your retired life (hobbies, travel, etc).

Hard to know if you quit too soon unless you know exactly what you are spending now, and your baseline and disecretionary expenses in the future. It sounds like at a minimum you needed to make a change for your mental/physical health, which is the right move as an older employee(stress does kill). Whether you need to continue to work in the future in some form of less stressful work, will depend on your assessment of your expenses, and cash flows in the future. The books mentioned should give you a very good sense of where you stand financially.
TheJoker
Posts: 58
Joined: Mon Apr 17, 2017 12:21 pm
Location: Bellingham, Wa

Re: I'm hoping I didn't quit too soon

Post by TheJoker »

Being with Vanguard will help with the cost of investing. Read books by Bogle and letters to Berkshire stockholder by Buffett. They have been investing for 70 years each.
TheJoker
PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: I'm hoping I didn't quit too soon

Post by PFInterest »

SS at 64 seems like a bad move.
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