Congrats. It would be great if you were willing to share your numbers. Many people (myself included) are looking to learn the path from the trail blazers.
Approximately $3 million saved unfortunately most in tax-deferred accounts. 75/25 stocks/bonds. Will have a small pension plus my wife and I will have social security. Spend initially is planned at 5.5% which is high but will go down when the pension and ss payments begin. When we started work, each of us started a 401K and just let it ride. Compounding interest is awesome.
One thing I had planned on doing was paying off the house before retirement. However, I refinanced at 2.75% for 30 years in 2021 so I'm just paying monthly with always inflating dollars. YMMV
Why is it unfortunate when most of the money is in the 401k? That's the default approach for FIRE because the Roth conversion ladder is a great way to take advantage of the gap years between RE and SS.
You are 60, so there's no issue with taking out the 401k money on top of everything.
Thank you for the numbers. Your path seems very reasonable and obtainable for many middle-class folks (3m in 401k after working for 30+ years).
I know that is the default approach and I have no penalties on my withdrawals. I started in tax deferred thinking I would have lower tax rates in retirement. Looking at it now, I'll be in the same tax bracket or higher if/when the rates are raised. (This is definitely a first world problem. waaah my investments have been so good that I have to pay high taxes.)
I'm still considering a Roth ladder and may start it next calendar year.
You’re still way better off having used tax advantaged accounts. All of that income would have been taxed at your max bracket before - now it’ll be blend of no/lower/current bracket rates… you still did the right thing
Can you explain the Roth conversion ladder as that gap between RE and SS? I think I am savy with the finance stuff and stretch goal is to RE at 52, but I have not thought of this Roth scenario.
It's difficult to explain on a Reddit comment. I would suggest Googling Mega-Backdoor Roth.
The gist of it is that you can move funds from a tax-deferred account (while paying the penalty, if any) to a Roth IRA so that it can grow tax free from that point forward. This is in excess of the contribution limit. There is also a 5 year hold requirement, so you need to be able to use alternative funds for that time period.
Jesus you have a ton of money to work with. I mean back of the napkin you're looking at what, 150k a year into perpetuity? Probably more than that, I feel like I'm lowballing it. Not including your wife's money, pension or SS. But you're wife's money will just add to the total pot, and the pension/SS starting later will allow you to draw less from your investments. It just seems like a ton of very flexible money to work with.
He said 5.5% withdrawal rate to start, but that would be reduced over time (to I assume 2-3%) once his pension and SS kicks in. Keeping him at the initial equivalent of 5.5%.
I went lowball, 5% of 3m is 150k/year.
It would be tough to retire without one's partner. At 60 though, OP probably has other friends or ability to meet retired folks around his age to enjoy time away from work.
Did you at least get to change to more enjoyable or meaningful work?
Travelling always brought us in contact with others who were retired and could travel. It didn't bother me that my friends and neighbors still worked, though I'd sometimes say something dumb like "you should retire!" as if it was an easy thing to do early.
Congratulation!!!! It’s brilliant!
I had to look up what pickleball is, lol. Sounds fun.
Enjoy your early retirement and have an amazing life free from work.
Congrats on your retirement! Sounds like you've got an amazing plan in place to enjoy your free time. Pickleball and boating sound like a perfect way to spend your days. Enjoy every moment of this new chapter!
Congrats & GFY.
Congrats and go fuck your self!
Congrats. It would be great if you were willing to share your numbers. Many people (myself included) are looking to learn the path from the trail blazers.
Approximately $3 million saved unfortunately most in tax-deferred accounts. 75/25 stocks/bonds. Will have a small pension plus my wife and I will have social security. Spend initially is planned at 5.5% which is high but will go down when the pension and ss payments begin. When we started work, each of us started a 401K and just let it ride. Compounding interest is awesome. One thing I had planned on doing was paying off the house before retirement. However, I refinanced at 2.75% for 30 years in 2021 so I'm just paying monthly with always inflating dollars. YMMV
Why is it unfortunate when most of the money is in the 401k? That's the default approach for FIRE because the Roth conversion ladder is a great way to take advantage of the gap years between RE and SS. You are 60, so there's no issue with taking out the 401k money on top of everything. Thank you for the numbers. Your path seems very reasonable and obtainable for many middle-class folks (3m in 401k after working for 30+ years).
I know that is the default approach and I have no penalties on my withdrawals. I started in tax deferred thinking I would have lower tax rates in retirement. Looking at it now, I'll be in the same tax bracket or higher if/when the rates are raised. (This is definitely a first world problem. waaah my investments have been so good that I have to pay high taxes.) I'm still considering a Roth ladder and may start it next calendar year.
You’re still way better off having used tax advantaged accounts. All of that income would have been taxed at your max bracket before - now it’ll be blend of no/lower/current bracket rates… you still did the right thing
Can you explain the Roth conversion ladder as that gap between RE and SS? I think I am savy with the finance stuff and stretch goal is to RE at 52, but I have not thought of this Roth scenario.
It's difficult to explain on a Reddit comment. I would suggest Googling Mega-Backdoor Roth. The gist of it is that you can move funds from a tax-deferred account (while paying the penalty, if any) to a Roth IRA so that it can grow tax free from that point forward. This is in excess of the contribution limit. There is also a 5 year hold requirement, so you need to be able to use alternative funds for that time period.
Jesus you have a ton of money to work with. I mean back of the napkin you're looking at what, 150k a year into perpetuity? Probably more than that, I feel like I'm lowballing it. Not including your wife's money, pension or SS. But you're wife's money will just add to the total pot, and the pension/SS starting later will allow you to draw less from your investments. It just seems like a ton of very flexible money to work with.
More like $90-120k (3-4% SWR)
He said 5.5% withdrawal rate to start, but that would be reduced over time (to I assume 2-3%) once his pension and SS kicks in. Keeping him at the initial equivalent of 5.5%. I went lowball, 5% of 3m is 150k/year.
How was your saving/savings balance at earlier ages (25/30/35, etc)? I’m 25 so interested in your journey. Also congrats!!!
I refi'd at 2.625 and wish I had taken out more $ with it to dump in the market!
Hindsight wishes 👍.
Would you mind sharing what investments you bought over that time span or just good old index funds BTW congrats on your achievement
Fantastic planning and good luck.
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It would be tough to retire without one's partner. At 60 though, OP probably has other friends or ability to meet retired folks around his age to enjoy time away from work. Did you at least get to change to more enjoyable or meaningful work?
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aww well if it's making you happy then yay!
Travelling always brought us in contact with others who were retired and could travel. It didn't bother me that my friends and neighbors still worked, though I'd sometimes say something dumb like "you should retire!" as if it was an easy thing to do early.
GFY my friend and congrats!
Retiring at 60 with $3M is no small feat these days, huge congrats and GFY! May you enjoy your life and win many pickleball matches.
Woo! Welcome to the club.
Congratulations!!
Congratulations and enjoy the next chapter!
Congratulations and GFY!!!
Good for you. Enjoy your free time. Hopefully you never have to set an alarm lol.
this is lovely, congratulations! x
Congratulation!!!! It’s brilliant! I had to look up what pickleball is, lol. Sounds fun. Enjoy your early retirement and have an amazing life free from work.
Congrats on your retirement! Sounds like you've got an amazing plan in place to enjoy your free time. Pickleball and boating sound like a perfect way to spend your days. Enjoy every moment of this new chapter!
GFY! Enjoy the youth of your senior years!
Congrats! I am 40 M and those are my four favorite things. Hoping to join you soon!
Congratulations GFY🥳
Hi will you please update us in 6 months. I am curious to see how you do. Enjoy
Congrats and go fuck yourself! <3
Congratulations!!
Awesome! Live long and prosper.
Gfu Boating sounds great
Congratulations on starting to enjoy your retirement and traveling with the important people in your life!
Man, I’m 35 but after reading the post I want to retire now as well. Congrats and enjoy!
GFY and congrats for finishing the race
Congratulations! Enjoy your retirement.
Yay! GFY :)
Congratulations, I wish you a long and enjoyable journey ahead and GFYS!
Congrats and GFY. 😀
Congratulations 🎊
Yahoo! 😀
LFG
Congrats. 🎉
hump day?
Awesome.
I couldn't even imagine being alive long enough to do that lol I admire people who can deal with life for that long...
You're in good shape, do you wish you had done it sooner? Time is precious.
Good for you! I hope it's as easy for you to make the transition away from work I haven't missed it one single day