Can I retire by end of year

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Topic Author
rasagna
Posts: 20
Joined: Fri Aug 09, 2019 3:11 pm

Can I retire by end of year

Post by rasagna »

I am trying to figure out whether I can retire by end of year. Any advice on investments

Current Portfolio:
====================================================================================
Emergency funds: 1.39% of portfolio - $40,000.00

Debt: None. Monthly expenses on Credit Card which we pay in full every month

Tax Filing Status: Married Filing Jointly

Tax Rate: 35% Federal, 9.3% State

State of Residence: California

Age: 50 for myself and 49 for my spouse

Desired Asset allocation: 70% stocks / 30% bonds or 60% stocks / 40% bonds (Not yet completely settled on this and would appreciate some guidance)
Desired International allocation: 10% of stocks or 0% of stocks (Unsure)

Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
My Primary home is paid off and not counted in portfolio. Currently valued at $900K

Expected Expenses: $120,000 (Little bit on higher side to make me comfortable). $80K will come from passive income of DSTs

Current retirement assets

Taxable
18.00% - Cash (for investing - Sold some stocks recently - Holding some for taxes and remaining ready to invest back)
8.77% - Others (private firm investment. Trying to get out of it but there is a lock-in period for now. Will get out as soon as I am out of lock-in period)

xx% fund name (ticker symbol) (expense ratio)
1.41% Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.04%)
1.72% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
1.01% VANGUARD DIVIDEND APPRECIATION ETF (VIG) (0.06%)
1.85% VANGUARD FTSE DEVELOPED MKTS ETF (VEA) (0.05%)
0.89% VANGUARD FTSE EMERGING MARKETS ETF (VWO) (0.10%)
3.77% VANGUARD TOTAL STOCK MARKET ETF (VTI) (0.03%)
0.29% VANGUARD VALUE ETF (VTV) (0.04%)
1.86% ISHARES CORE S&P 500 ETF (IVV) (0.04%)
2.01% ISHARES EDGE MSCI MIN VOLATILITY ETF (USMV) (0.15%)
0.35% ISHARES NORTH AMERICAN MULITMEDIA NETWORKING ETF (IGN) (0.46%)
0.48% ISHARES U S BROKER-DEALERS & SECURITIES EXCHANGES ETF (IAI) (0.42%)
0.41% ISHARES U S HEALTH CARE PROVIDERS ETF (IHF) (0.43%)
0.44% ISHARES U S CONSUMER SERVICES ETF (IYC) (0.42%)
1.32% SCHWAB U S BROAD MARKET ETF (SCHB) (0.03%)
0.12% SCHWAB U S LARGE CAP VALUE ETF (SCHV) (0.04%)


xx% stock company name (ticker symbol)
1.29% FS INVESTMENT CORP III (FSKR)
3.52% VMWARE INC CL A (VMW)
0.99% Frontdoor Inc. (FTDR)

Others (Investments in private companies):
2.09% MHC America Fund
3.60% Virtus RE Capital II, LP
2.64% GPB II
0.44% Armada Waste
NOTE: Trying to get out of it but there is a lock-in period for now. Will get out as soon as I am out of lock-in period

His Roth IRA at Vanguard
xx% fund name (ticker symbol) (expense ratio)
8.02% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)

Her Roth IRA at Vanguard
xx% fund name (ticker symbol) (expense ratio)
0.83% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)

His 401K at Wells Fargo
xx% fund name (ticker symbol) (expense ratio)
26.82% Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.03%)
Company match? 6%

Her 403b at Fidelity
xx% fund name (ticker symbol) (expense ratio)
12.59% FID 500 INDEX (FXAIX) (0.02%)
Company match? No

Her 401a at Fidelity
xx% fund name (ticker symbol) (expense ratio)
1.49% FID 500 INDEX (FXAIX) (0.02%)
Company match? No


New annual Contributions
$26,000 his 401k at Wells Fargo (6% match)
$19,500 her 403b at Fidelity
$15,000 - ESPP (at 15% discount)
jebmke
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Re: Can I retire by end of year

Post by jebmke »

70% stocks / 30% bonds or 60% stocks / 40% bonds (Not yet completely settled on this and would appreciate some guidance)
the difference between these is negligible.
10% of stocks or 0% of stocks (Unsure)
again, probably not material difference. IMO less than 20-25% weighting on a "factor" is a waste of time.

Spend as much or more time understanding expenses and levers on them than investments. You may have much more control on expenses than investment outcomes. Many people wet-finger their expenses and agonize over decimal points on investment returns - working the wrong problem, IMO.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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retired@50
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Re: Can I retire by end of year

Post by retired@50 »

I'd say the answer about retirement is yes.

If my math is reasonably close, you've got around $750k in the taxable account space, and you'll need to take $40k per year from it until you reach 59.5 years old. At that point you'll have penalty free access to the retirement accounts. This presumes the rentals keep up their end of the bargain by providing the $80k per year mentioned in your post.

I'd urge you to simplify the taxable account holdings over the decade, selling off small positions in various holdings that aren't adding anything meaningful to your results.

Regards,
This is one person's opinion. Nothing more.
Topic Author
rasagna
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Joined: Fri Aug 09, 2019 3:11 pm

Re: Can I retire by end of year

Post by rasagna »

Thanks
BernardShakey
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Location: CA

Re: Can I retire by end of year

Post by BernardShakey »

I think you could retire before the end of the year.
An important key to investing is having a well-calibrated sense of your future regret.
congruentsea
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Re: Can I retire by end of year

Post by congruentsea »

2.8MM
40k/year net spend
= 70x
Can I retire? really?
Wannaretireearly
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Re: Can I retire by end of year

Post by Wannaretireearly »

congruentsea wrote: Mon May 03, 2021 11:06 pm 2.8MM
40k/year net spend
= 70x
Can I retire? really?
I truly believe a ton of 50 to 60 year olds will retire next 5 years. Fire fomo's @2.5% withdrawal rate 😉
This time next year, we'll be millionaires!
LeftCoastIV
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Re: Can I retire by end of year

Post by LeftCoastIV »

To test for sequence of returns risk, I would reduce your $2.8M by 20%, to $2.24M and see how you feel about the plan.

If my math is right, you have $40K cash + $50K cash in taxable ($2.8M * 18%), or $90K cash. I don't see any other fixed income or bonds in your taxable.

How will you handle a sequence of returns issue if you retire into a 3-year bear market? Your $90K cash would support you for a little over 2 years (assuming $120K spend/yr and $80K of real estate income, ignoring taxes), and then you would need to decide on what assets to sell to generate cash to avoid selling equities in a down market.

This also assumes that you don't put that $50K in taxable back into equities. If you do that, then it looks like your cash is actually $40K, so one year of spending needs (again, taking into account the real estate income).
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Wiggums
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Re: Can I retire by end of year

Post by Wiggums »

Yes, you can retire. I like your asset allocation. You just need to cover the 40k between now and 59.5 where you have more options.

I retired at 56 with more (?) fixed income for Roth conversions and in case the market tanked.
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StevieG72
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Re: Can I retire by end of year

Post by StevieG72 »

Looks like your finances are ok, maybe simplify?

Lots of funds! Less is more. Income generated from DST’s seems low for amount invested, I understand you may like the tilt towards real estate and relative security of the passive income, but is the juice worth the squeeze?
Last edited by StevieG72 on Tue May 04, 2021 10:36 pm, edited 1 time in total.
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WyomingFIRE
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Re: Can I retire by end of year

Post by WyomingFIRE »

rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Dave55
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Re: Can I retire by end of year

Post by Dave55 »

WyomingFIRE wrote: Tue May 04, 2021 7:17 am
rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Not in DST's so much, but in the underlying apartment complex. During the downturn in 08-09, I was an TIC (Tenant In Common) investor in numerous apartment complexes in various locations around the country. Distributions pre meltdown were 7%-9%. In 08 the distributions went down to 0% to 2%. The income fell off a cliff. The risk of losing the distribution/income exists, even though it is low.

Dave
"Reality always wins, your only job is to get in touch with it." Wilford Bion
WyomingFIRE
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Re: Can I retire by end of year

Post by WyomingFIRE »

Dave55 wrote: Tue May 04, 2021 7:26 am
WyomingFIRE wrote: Tue May 04, 2021 7:17 am
rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Not in DST's so much, but in the underlying apartment complex. During the downturn in 08-09, I was an TIC (Tenant In Common) investor in numerous apartment complexes in various locations around the country. Distributions pre meltdown were 7%-9%. In 08 the distributions went down to 0% to 2%. The income fell off a cliff. The risk of losing the distribution/income exists, even though it is low.

Dave
Thank you very much, Dave. I very much appreciate it.

How are distributions from such vehicles taxed? Assuming OP's $80K from DSTs represents a share of rental income, I'm assuming that it is taxed as income in the hands of the DST investors.
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birdog
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Re: Can I retire by end of year

Post by birdog »

Congratulations on your upcoming retirement! My only recommendation would be to simplify (especially the taxable account) a bit.
Dave55
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Re: Can I retire by end of year

Post by Dave55 »

WyomingFIRE wrote: Tue May 04, 2021 7:30 am
Dave55 wrote: Tue May 04, 2021 7:26 am
WyomingFIRE wrote: Tue May 04, 2021 7:17 am
rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Not in DST's so much, but in the underlying apartment complex. During the downturn in 08-09, I was an TIC (Tenant In Common) investor in numerous apartment complexes in various locations around the country. Distributions pre meltdown were 7%-9%. In 08 the distributions went down to 0% to 2%. The income fell off a cliff. The risk of losing the distribution/income exists, even though it is low.

Dave
Thank you very much, Dave. I very much appreciate it.

How are distributions from such vehicles taxed? Assuming OP's $80K from DSTs represents a share of rental income, I'm assuming that it is taxed as income in the hands of the DST investors.
It's been a while since I was in a DST and I always hand off tax documents to my CPA so I do not recall.

Dave
"Reality always wins, your only job is to get in touch with it." Wilford Bion
Topic Author
rasagna
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Joined: Fri Aug 09, 2019 3:11 pm

Re: Can I retire by end of year

Post by rasagna »

LeftCoastIV wrote: Tue May 04, 2021 2:42 am To test for sequence of returns risk, I would reduce your $2.8M by 20%, to $2.24M and see how you feel about the plan.

If my math is right, you have $40K cash + $50K cash in taxable ($2.8M * 18%), or $90K cash. I don't see any other fixed income or bonds in your taxable.

How will you handle a sequence of returns issue if you retire into a 3-year bear market? Your $90K cash would support you for a little over 2 years (assuming $120K spend/yr and $80K of real estate income, ignoring taxes), and then you would need to decide on what assets to sell to generate cash to avoid selling equities in a down market.

This also assumes that you don't put that $50K in taxable back into equities. If you do that, then it looks like your cash is actually $40K, so one year of spending needs (again, taking into account the real estate income).
Currently I am holding almost $500K in cash as I just sold some shares. I am planning to keep 2 years worth of cash $80K cash, keep money to pay my taxes and rest I am planning to reinvest back in stocks. I will use that to buy bonds to get closer to my desired allocation. If I come against a bear market which lasts > 2 years I can tighten up my expenses and if I do that I can survive with the passive income being generated by my DSTs. Hope that helps
Topic Author
rasagna
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Re: Can I retire by end of year

Post by rasagna »

StevieG72 wrote: Tue May 04, 2021 7:02 am Looks like your finances are ok, maybe simplify?

Lots of funds! Less is more. Income generated from DST’s seems low for amount invested, I understand you may like the tilt towards real estate and realities security of the passive income, but is the juice worth the squeeze?
Yes I have been simplifying over period of time such that I don't get hit with lot of taxes in doing so. I will continue doing so with taxable investments over next few years.

With DSTs you get passive income and also there is potential appreciation also expected when DSTs are sold (generally in 7 to 10 years time).
Last edited by rasagna on Tue May 04, 2021 10:08 am, edited 1 time in total.
Topic Author
rasagna
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Re: Can I retire by end of year

Post by rasagna »

Dave55 wrote: Tue May 04, 2021 7:26 am
WyomingFIRE wrote: Tue May 04, 2021 7:17 am
rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Not in DST's so much, but in the underlying apartment complex. During the downturn in 08-09, I was an TIC (Tenant In Common) investor in numerous apartment complexes in various locations around the country. Distributions pre meltdown were 7%-9%. In 08 the distributions went down to 0% to 2%. The income fell off a cliff. The risk of losing the distribution/income exists, even though it is low.

Dave
With apartment complexes (and that's why I invest only in apartment complexes in DSTs) is they go down last during downturn and recover first as things recover. People need place to stay. I had invested prior to pandemic and I was really worried about DSTs but it has survived well so far. I have received monthly returns as promised even though there were some renters who were not able to pay rent and there was moratorium with eviction.
Topic Author
rasagna
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Re: Can I retire by end of year

Post by rasagna »

WyomingFIRE wrote: Tue May 04, 2021 7:30 am
Dave55 wrote: Tue May 04, 2021 7:26 am
WyomingFIRE wrote: Tue May 04, 2021 7:17 am
rasagna wrote: Mon May 03, 2021 4:59 pm
Current total portfolio:: $4.3M ($2.8M - Investments, $1.5M - DSTs - Apartment complexes investment in 5 different properties in 5 different states for diversification)

Note: My DSTs are generating $80K/year of passive income
I am embarrassed to admit that I had to Google what "DST" meant.

Now that I understand $1.5M in DSTs can throw off $80K, it makes me want to shift a chunk of my investments into those vehicles as $80K is in the ballpark of our estimated annual spend in retirement, yet I'm struggling to reach the same amount of passive income (in the form of dividends, interest, etc.) from a substantially larger amount invested via an AA of circa 65/30/5.

Are there unique risks presented by DSTs?
Not in DST's so much, but in the underlying apartment complex. During the downturn in 08-09, I was an TIC (Tenant In Common) investor in numerous apartment complexes in various locations around the country. Distributions pre meltdown were 7%-9%. In 08 the distributions went down to 0% to 2%. The income fell off a cliff. The risk of losing the distribution/income exists, even though it is low.

Dave
Thank you very much, Dave. I very much appreciate it.

How are distributions from such vehicles taxed? Assuming OP's $80K from DSTs represents a share of rental income, I'm assuming that it is taxed as income in the hands of the DST investors.
You can claim depreciation against your investment so that helps with taxes
Chris K Jones
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Re: Can I retire by end of year

Post by Chris K Jones »

jebmke wrote: Mon May 03, 2021 5:02 pm
70% stocks / 30% bonds or 60% stocks / 40% bonds (Not yet completely settled on this and would appreciate some guidance)
the difference between these is negligible.
10% of stocks or 0% of stocks (Unsure)
again, probably not material difference. IMO less than 20-25% weighting on a "factor" is a waste of time.

Spend as much or more time understanding expenses and levers on them than investments. You may have much more control on expenses than investment outcomes. Many people wet-finger their expenses and agonize over decimal points on investment returns - working the wrong problem, IMO.
I agree with above points. One other point though: If you set your allocation at 60/40 and have 5% rebalancing bands, your portfolio will spend most of its time between 60 and 65% because stocks tend to go up more than bonds over time.

Congratulations, if your 80 k passive income seems pretty reliable, I think you can retire too. But be careful with healthcare expenses.
Slacker
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Re: Can I retire by end of year

Post by Slacker »

TIL about DST investments. I may have to investigate doing a 1031 from some of our SFH properties into DST.
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JonL
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Re: Can I retire by end of year

Post by JonL »

rasagna wrote: Mon May 03, 2021 4:59 pm
Desired International allocation: 10% of stocks or 0% of stocks (Unsure)
I'm a fan of diversification. So, I always advise my clients to include an international allocation in their portfolios.

What's the right amount of international? It depends on who you ask.

Rick Ferri suggests roughly 2:1 - one part international for every two parts domestic.

Image

Rick argues that international stocks weigh exposures to industries distinct from U.S. stocks, giving investors greater diversification.
He also points to valuations; international stocks are cheaper than U.S. stocks (for the moment).

Image

Jack Bogle says 0: https://www.nasdaq.com/articles/diversi ... 2018-01-12 I see Jack's point. Yet, consider the “naughties,” or the 10-year period between 2000 and 2009. During this time, the S&P 500 (as a measure of U.S. stocks) produced quite meager returns. The total return over the 10-year period was -3.25%, or an annual loss of 0.33% per year. Said another way, holding U.S. stocks exclusively may be great for generating wealth, but preserving it is another issue - once (retirement) distributions come into play. In that case, diversifying into international may be valuable.

Swensen says 6:5, which includes a hefty slice to Emerging Markets: https://www.amazon.com/Unconventional-S ... 0743228383
Jon Luskin, MBA, CFP® | Advice-Only is the New Fee-Only
LeftCoastIV
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Re: Can I retire by end of year

Post by LeftCoastIV »

rasagna wrote: Tue May 04, 2021 9:56 am
LeftCoastIV wrote: Tue May 04, 2021 2:42 am To test for sequence of returns risk, I would reduce your $2.8M by 20%, to $2.24M and see how you feel about the plan.

If my math is right, you have $40K cash + $50K cash in taxable ($2.8M * 18%), or $90K cash. I don't see any other fixed income or bonds in your taxable.

How will you handle a sequence of returns issue if you retire into a 3-year bear market? Your $90K cash would support you for a little over 2 years (assuming $120K spend/yr and $80K of real estate income, ignoring taxes), and then you would need to decide on what assets to sell to generate cash to avoid selling equities in a down market.

This also assumes that you don't put that $50K in taxable back into equities. If you do that, then it looks like your cash is actually $40K, so one year of spending needs (again, taking into account the real estate income).
Currently I am holding almost $500K in cash as I just sold some shares. I am planning to keep 2 years worth of cash $80K cash, keep money to pay my taxes and rest I am planning to reinvest back in stocks. I will use that to buy bonds to get closer to my desired allocation. If I come against a bear market which lasts > 2 years I can tighten up my expenses and if I do that I can survive with the passive income being generated by my DSTs. Hope that helps
Thanks. Simple (but material) math error on my part. Your logic on two years expenses seems reasonable. I would personally hold more in liquid non-equity assets but we are conservative on these types of things.
WyomingFIRE
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Re: Can I retire by end of year

Post by WyomingFIRE »

Slacker wrote: Tue May 04, 2021 10:25 am TIL about DST investments. I may have to investigate doing a 1031 from some of our SFH properties into DST.
I apologize for high-jacking this thread to focus on DSTs. I, like you, was also curious about them based on the returns discussed in the OP.

Like everything else, I suppose, it looks like DST's are somewhat complicated (at least for the uninitiated, such as myself) and have pros and cons: https://seracapital.com/1031-exchanges/ ... es-of-dst/. It also looks like they may be for experienced real estate investors who may have an appreciated property or two and thus desire to do a 1030 exchange into a DST (vice buying a replacement like-kind property).

For an ordinary, boring ETF investor like me, however, putting a chunk into a DST may be a little too risky.

Aside from DSTs seeming to be illiquid, for example, I'm worried about them perhaps leaving investors subject to cash calls for major maintenance issues. It looks like DSTs cannot raise more capital once closed, and to me that sounds like the investors might be on the hook for needed property maintenance. It also looks like investors in DSTs are not limited partners, which might create legal liability risks. And as noted elsewhere, the returns seem to fluctuate (which also makes me wonder about OP's financial plan).

Anyway, I think I'll stick with my boring ETFs.
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rasagna
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Re: Can I retire by end of year

Post by rasagna »

Chris K Jones wrote: Tue May 04, 2021 10:17 am
jebmke wrote: Mon May 03, 2021 5:02 pm
70% stocks / 30% bonds or 60% stocks / 40% bonds (Not yet completely settled on this and would appreciate some guidance)
the difference between these is negligible.
10% of stocks or 0% of stocks (Unsure)
again, probably not material difference. IMO less than 20-25% weighting on a "factor" is a waste of time.

Spend as much or more time understanding expenses and levers on them than investments. You may have much more control on expenses than investment outcomes. Many people wet-finger their expenses and agonize over decimal points on investment returns - working the wrong problem, IMO.
I agree with above points. One other point though: If you set your allocation at 60/40 and have 5% rebalancing bands, your portfolio will spend most of its time between 60 and 65% because stocks tend to go up more than bonds over time.

Congratulations, if your 80 k passive income seems pretty reliable, I think you can retire too. But be careful with healthcare expenses.
I am still trying to figure out healthcare expenses. I have taken some quotes using ACA website to get some understanding. We also have an option of my wife working part time with medical benefits (she has that option at her workplace and I don't). We are discussing that and still unsure which way we will go.
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rasagna
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Re: Can I retire by end of year

Post by rasagna »

WyomingFIRE wrote: Tue May 04, 2021 11:14 am
Slacker wrote: Tue May 04, 2021 10:25 am TIL about DST investments. I may have to investigate doing a 1031 from some of our SFH properties into DST.
I apologize for high-jacking this thread to focus on DSTs. I, like you, was also curious about them based on the returns discussed in the OP.

Like everything else, I suppose, it looks like DST's are somewhat complicated (at least for the uninitiated, such as myself) and have pros and cons: https://seracapital.com/1031-exchanges/ ... es-of-dst/. It also looks like they may be for experienced real estate investors who may have an appreciated property or two and thus desire to do a 1030 exchange into a DST (vice buying a replacement like-kind property).
Agreed. I have been investing in real estate for a while.
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Watty
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Re: Can I retire by end of year

Post by Watty »

One thing you should do is make sure that the mutual funds in the taxable account do not automatically reinvest any dividends or capital gains distributions. This helps make sure that when you sell them any gains will be long term.

With as many funds as you have in the taxable account you could have a few with capital losses that you might want take too.
rasagna wrote: Mon May 03, 2021 4:59 pm Expected Expenses: $120,000 (Little bit on higher side to make me comfortable). $80K will come from passive income of DSTs
One thing that may not have been mentioned is that your expenses need to include your income taxes and it was not clear if that $120K included that or not.

Your post also did not mention Social Security.

I don't really understand the DST but be sure to also consider if it is likely to keep up with inflation, or even decline as the real estate investments in it get older.
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rasagna
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Re: Can I retire by end of year

Post by rasagna »

Watty wrote: Tue May 04, 2021 11:46 am One thing you should do is make sure that the mutual funds in the taxable account do not automatically reinvest any dividends or capital gains distributions. This helps make sure that when you sell them any gains will be long term.

With as many funds as you have in the taxable account you could have a few with capital losses that you might want take too.
rasagna wrote: Mon May 03, 2021 4:59 pm Expected Expenses: $120,000 (Little bit on higher side to make me comfortable). $80K will come from passive income of DSTs
One thing that may not have been mentioned is that your expenses need to include your income taxes and it was not clear if that $120K included that or not.

Your post also did not mention Social Security.

I don't really understand the DST but be sure to also consider if it is likely to keep up with inflation, or even decline as the real estate investments in it get older.
Thanks for the suggestions.
Yes I am not automatically reinvesting dividends. Currently all my investments are long term gains.
I have expenses on higher side to keep buffer for taxes. I have not done detailed analysis on what the taxes will look like post retirement though I have kept buffer which will help with that. I would do more analysis on taxes. Thanks.
DSTs income will increase over the years with the assumption that rent charged will increase to keep up with the inflation.
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