mxracer317
Well-known member
- Joined
- Nov 20, 2020
- Messages
- 1,382
Check out “sequence of return risk”
Withdrawal calculator
- Thread starter sigpros
- Start date
antelopedundee
Well-known member
If you need more than the $30K what to do? Wiithdraw from the principal? Also can we assume the OP is getting something from Social Security? Adding $25K from SS gets you $55K. Not a great amount if you have medical issues. So far my copays have not been THAT hard o my bank account.
antelopedundee
Well-known member
Yikes. And that's likely for a policy with maybe $5K OOP along with the high premiums.
I will have retiree health care through my retirement, so that will help.
I am just trying to be proactive I want to be comfortable but I also wouldn't mind living and doing some thing while hopefully I can. I would like to do a lot of fishing with my wife and still do a couple hunting trips and hopefully spoil some grandkids one day.
The SS thing is a whole other can of worms. I don't have to start drawing at 62 but my pension changes if I do or not. And my wife is also 2 years older than me so I need to figure out how we should do all that. Her delay? She draw at 62 and I wait? lots to figure out for sure still.
I am just trying to be proactive I want to be comfortable but I also wouldn't mind living and doing some thing while hopefully I can. I would like to do a lot of fishing with my wife and still do a couple hunting trips and hopefully spoil some grandkids one day.
The SS thing is a whole other can of worms. I don't have to start drawing at 62 but my pension changes if I do or not. And my wife is also 2 years older than me so I need to figure out how we should do all that. Her delay? She draw at 62 and I wait? lots to figure out for sure still.
A great tool for determining the optimal withdrawal strategy.
Open Social Security: Free, Open-Source Social Security Calculator
SAJ-99
Well-known member
Yes and No. You can sell principal but that will decrease the next interest payment. The 30yr treasury example was just a baseline, and part of my "never invest in a fixed annuity" sales pitch. It is pretty easy to see the problems inflation and time create. This is why I suggest people build the quick and simple model and play with the numbers. It helps them create a budget for 5yr, 10yr, 15yr, etc and think about the future. One thing is for sure, the future will be different than today. Retirement advice has changed greatly over the last 40yrs.
There is a site called Maxi Fi that I have used that is pretty cheap. I thought it was decent but I will want to do it when I am closer to the decision date. You only have to do it once but it does take some time to load in the files from SS and such. If you use a FA, just make sure you use one with a fixed fee.
What about TIPS?
SAJ-99
Well-known member
There are not a lot of TIPS in general and certainly not 30yr TIPS. The problem the OP would have is the coupon is around 2.5% so the income received would be less. The Inflation adjustment is made to the amount of principal received at maturity. That isn't as useful to someone in retirement that needs income. The real solution is to ladder a bond portfolio with various maturities, but that introduces some risk in what interest rates are 1, 5, 10, 20 yrs from now.
Pucky Freak
Well-known member
Sounds like a solid financial advisor might be best. Of course you can do all this yourself, and basic chatbot mastery makes it easier than ever. The problem is if you really mess up the consequences can be catastrophic. We went through this with my wife’s aunt - being broke and old is a nightmare. Aunt cashed out her pension and blew it in <10 years, but then lived another 19 years and still going. Financial burden falls on family, which we don’t hesitate a second and are happy to do. It doesn’t bother us, but if you’re the one getting the handout b/c of your own financial mismanagement it can be embarrassing.
Hats off on an age 55 work exit. I plan on doing the same. Recent pension reform in July makes retiring right at 55 highly optimal for finances. That’s 12 years away for me, and I’m planning carefully with plenty of tax advantaged supplemental savings accessible at 55 (Roth isn’t until 59 1/2, etc.)
I'd agree if you said not many with high coupons compared with standard bonds, but there are TIPS out to 30 years except for years 2037-2039, which will be filled in with 10 yr TIPS over the next three years. Real yield is close to 3% for 20yrs and higher, but much of that is from buying at a discount.
I use a ladder and count on the maturing ones to give me part of my income for the years up until social security. Then the coupon and interest rate risk doesn't matter much. There is, however, "monkeying around with the CPI" risk so mixing in regular tsy bonds is a good idea.
There's a tool to build a TIPS ladder at https://www.tipsladder.com/
SAJ-99
Well-known member
That approach is certainly possible, but it gets harder with TIPs because the coupons can vary so much. The 2050 bond has a coupon of 0.25% while the 2055 has a coupon 2.375%. I like that the website takes that into account. The OP seemed not confident to build a basic spreadsheet so the website is good. One slight flaw is that the income is listed as real while expenses can be expected to be nominal. Still might cause cashflow problem.
Similar threads
