Buckly
5 year old buck +
I retired at 56 so that’s how I became familiar with it all. You’re 1099R has a code for qualified disbursement , no penalty
Stock Market is the bottom in?
- Thread starter Peplin Creek
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yoderjac
5 year old buck +
When I was younger, I had visions of retiring in my 50s. I used a dual track. I had been funding 401K for years and looked at all the options for retiring early. I could not find any way to reasonably use tax deferred funds for early retirement. I ended up saving outside the IRA/401K containers through austerity. Because I'm older than my wife, we eventually decided to retire together when she became eligible at age 56. I ended up using those additional savings to fund a slow transition to a retirement home. By buying a few acres of retirement land and building a barn with a tiny living space out of that savings, we now have a get-away place. We will be able to sell our suburb home and move into that tiny living space while we build our retirement home next to the barn. This avoids the high cost of a bridge loan (construction loan) which is especially helpful these days with supply chain delays. For me, things changed significantly at work since my 50s. I'm now outside the critical path and am functioning more as a grey beard. With COVID considerably easing the commuting pain, and increased flexibility with my work hours, I'm now enjoying work more than ever, so I'm in no rush.
Keep in mind there are both advantages and disadvantages to early retirement. On the plus side, it give you a lot of time to do the things you enjoy while you are in the best physical condition. On the other hand, unless you are quite fortunate, you probably have less discretionary funds to do the things you enjoy. Also, for every year you retire early, it is one more year you are eating out of your nest egg and one less year you are building it. It is hard to find the right balance.
Best of luck,
Jack
b116757
5 year old buck +
I’ll have my 30 years with railway at age 54 and be fully vested we technically aren’t supposed to retire until age 60 for our pension disbursements. We have some industry specific retirement rules not applicable to any other profession that I’ll have to navigate but there are ways around the age 60 requirement. Knowing that I could slide out the door early and live off my 401k at age 55 is comforting. I’ve been thinking a great deal about this lately I figure this is a oneway plane ticket no do overs, no get out of jail free cards. The earlier I can retire and enjoy life without job stress the better and hopefully still have good enough health to actually do a few things before the dirt nap takes me.
Buckly
5 year old buck +
I’m telling you Jack, retirement you can’t beat it.
As far as eating into my nest egg. I’ve been retired 4 years now and the nest egg is much bigger than when I started. Guys that I worked with that retired 10-12 years ago have doubled their nest egg. Hopefully you can be as fortunate.
S.T.Fanatic
5 year old buck +
My uncle is 79, he has been taking a mandated disbursement out of his retirement fund to the amount of about $220K. It isn't even putting a dent in his total and the total keeps growing. Unless you spend like a drunken sailor 1 mil should get you about 100K a year to spend and not touch the rest. It just goes to show that you can't quit working until your money starts working for you.I’m telling you Jack, retirement you can’t beat it.
Sure, when the market returns 20%+ in a year. What about when you get a 40% correction and the resulting recession/bear market lingers for 3-7 years?
jsasker007
5 year old buck +
100k would be 10% of a milly.
And in 5-7 years with negative market returns you would be broke if you took out that much. When I look at projections, 4% is the max for withdrawals. That's if you retire at 65. Retire at 55 and you better be closer to 2.5 or 3%.
Bszweda
5 year old buck +
My retirement strategy is to take my 401k or half of it and buy some large duplexes in a non socialist state. Then figure out a RMD strategy when that time comes. It has a pretty dependable yearly return, and should appreciate.
b116757
5 year old buck +
Have you owned and managed duplexes or any rental property in the past?
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I was a landlord at one point. Never again. A guy can make some money, but it isn't a get rich quick deal most of the time.
jsasker007
5 year old buck +
Would have lost your ass during the "pandemic".
yoderjac
5 year old buck +
I’m telling you Jack, retirement you can’t beat it.
That's some good financial planning! My problem is that I'm having a hard time estimating the cost of boredom. Right now, our spending is constrained by our time availability due to work. My hobbies aren't inexpensive, but they are predictable. My wife on the other hand is an athlete. Most of her spare time was spent participating in athletics. That is beginning to change for her in the last few years. We both went into the orthopedist. She ended up getting scoped so she could participate in the senior olympics. The doc looked at my knees and said it would be malpractice to scope me, but I was a candidate for a partial knee replacement. I had hunting and fishing to backfill my decline in athletics. My wife is not so lucky. I have a feeling she will want to do a lot of travel after retirement, but who knows.
With more time on our hands, will we need more money to keep from becoming couch potatoes? My hope is similar to what you have realized. After pensions, social security, and similar income streams, I'm hoping to be able to earn more on the nest egg that we take out each year. I my go early which may help, but my wife's genetics suggest she'll live to be over 100. Lots can happen between now and then.
Thanks,
Jack
Bszweda
5 year old buck +
I was a land lord by accident for one property it was a high end condo, and my renter paid my mortgage for three years. It worked out well. Id probably do a test run on a 5 unit building and see how It goes and what the real returns would be. I’d end up using a property manager to deal with everything or try to be as handoff as possible. I think the pandemic would’ve hurt, but probably not as bad as you’d think depending on the state. Government had programs to pay peoples rent.
b116757
5 year old buck +
I much prefer single family homes over duplex or larger multiple family units generally those tenants are shorter term and the class of tenant isn’t as good as single family homes. Higher end stuff will certainly be better tenants but your vacancy rate will most likely run higher there simply aren’t as many high end tenants in any given market. If I where to undertake your desired objective I’d probably focus in on very hot housing market area’s so your gaining as much in equity as you do in rent.
Jerry-B-WI
5 year old buck +
That's why you don't leave all of your money in stocks. Put about 4 years worth in bonds, money market or similar safer places to ride out the market down turn.
You're going to have $400K in bonds/money market/similar out of $1 million and still maintain a $100K annual draw?
b116757
5 year old buck +
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I believe one rule of thumb on investment withdrawals is 4% so as not to eat up your principal. So $40,000 a year x 4 years $160,000 in bonds or maybe a straight Marcus by Goldman Sachs savings account. The rest in stocks. I think this is more along his thinking I could be wrong. There are so many variables involved with each person’s other retirement income it’s hardly a one size fits all equation.
Jerry-B-WI
5 year old buck +
Not me, I don't live so high on the hog that I need 100k a year
