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Posted
Back of the napkin math says 8 mil gets you 26,000 a month at a 4% draw rate. Thats also assuming no other income. Obviously have to factor in taxes, but what am I missing? You would probably die with 15+ million.

This is closer to reality. Just had a meeting with our financial guy and this is more inline for $8M. We won’t get close to $26k a month and can still get matching sports cars.
Posted
1 hour ago, Superhero said:

 

Pulling the pin at 59 when my son finishes HS might work. By then we'll be sitting on ~$8M. It should be enough to last us for 20-30 years assuming we we keep our monthly expenses below $10K.

But I also want to drink 18 YO whisky instead of 4 Roses, so working 'til I'm in my early 60s doesn't seem terrible.

Didn't you have a huge health scare fairly recently? (maybe that was someone else) My dude. Take it easy.

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Posted
3 hours ago, CleverNickname said:

Having managed my mom's finances (mostly all taxable inheritance), I kinda wonder how obnoxious managing RMDs and filing Schedule Ds will be when I am old and crabby. In theory a pre-tax saving is likely superior, but the simplicity of WYSIWYG Roths (plus simplicity of its inherited) is appealing.

RMDs are easy.  You will figure out how to do it the first year and then just repeat every year.

Each year, you will determine your IRA value at the end of the year.  Based on a table from the IRS, you will calculate how much your RMD is for the next year.  Most mutual fund companies calculate this for you and tell you "you must take $X in RMD this year and you have taken out $Y to date" if you don't want to do the math.

At the end of the year, they send you a 1099-R with the amount you took out and you report that on your taxes.  Then you repeat that every year.

Once you turn 70 1/2, you can make donations to charities straight from your IRA and they count as part of your RMD.  You don't have to itemize to take these deductions -- they come right out of the IRA.  These are called Qualified Charitable Deductions or QCDs.

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If you want to get fancy, you can do your taxes in December once you know any dividends or cap gains and then do a partial Roth conversion, if you are OK with the tax rate you would pay on the conversion.  But that's a bit more math, but it's not hard.  You can enter your stuff into TurboTax and figure out what your tax is without the Roth conversion, then figure it out with the conversion, and if you are happy paying tax at that rate, do a partial conversion.

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Pre-tax 401(k)'s are great for deferring income when you are in a high bracket to a later time when you are in a low bracket ... but I tell young adults to do the max Roth 401(k) that they can early in their career while their income is lower.  The limits for the pre-tax 401(k) and post-tax Roth 401(k) are the same, so you can really sock away a ton early in your career if you have a low tax rate and choose the Roth 401(k).

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Posted
5 hours ago, CleverNickname said:

Didn't you have a huge health scare fairly recently? (maybe that was someone else) My dude. Take it easy.

Must’ve someone else. I could stand to lose about 5-10 lbs, but health wise I’m doing okay.

The calculations you guys came up with are pre-tax. Like I said earlier, my target is $10-12k/month after taxes. Sounds like a lot; but $1k for tithe, $2k for health insurance, $2k for property tax and home owner’s insurance, $1k for utilities and groceries, $1k for auto. That leaves $3K for eating out, entertainment and vacations.

There are probably things we can do without. Right now we’re doing fairly well, but between everything I mentioned above, add in kids’ stuff, we’re still watching our cash flow at the end of each month.

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Posted
16 hours ago, Superhero said:

 

Pulling the pin at 59 when my son finishes HS might work. By then we'll be sitting on ~$8M. It should be enough to last us for 20-30 years assuming we we keep our monthly expenses below $10K.

But I also want to drink 18 YO whisky instead of 4 Roses, so working 'til I'm in my early 60s doesn't seem terrible.

 

16 hours ago, Larry T. Spider said:

Back of the napkin math says 8 mil gets you 26,000 a month at a 4% draw rate. Thats also assuming no other income. Obviously have to factor in taxes, but what am I missing? You would probably die with 15+ million.

 

8 hours ago, Superhero said:

Must’ve someone else. I could stand to lose about 5-10 lbs, but health wise I’m doing okay.

The calculations you guys came up with are pre-tax. Like I said earlier, my target is $10-12k/month after taxes. Sounds like a lot; but $1k for tithe, $2k for health insurance, $2k for property tax and home owner’s insurance, $1k for utilities and groceries, $1k for auto. That leaves $3K for eating out, entertainment and vacations.

There are probably things we can do without. Right now we’re doing fairly well, but between everything I mentioned above, add in kids’ stuff, we’re still watching our cash flow at the end of each month.

I know it might not exist, but I have to think you’re going to have 5-10k a month in social security payments if that’s still around once you hit 65 or whatever age. 
 

there’s a free Monte Carlo site I use that I can dig up, and I estimate 80% or my retirement income  being taxable, and I budget 15k a month, and it estimates In still most likely to grow our egg even retiring at 55 with 5 million. 

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