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Mapping Retirement Income and Spending

beebee
in Off-Topic
I found this linked article a good read as I transition from early retirement (I stopped working full time at age 51.5) to where I am now 8 years later knocking on the "withdrawal eligible" retirement age of 59.5.

During the past 8 years I have worked part time. Much of that income has been adding to my Self Directed IRA. In addition to saving my part time earned income, I have been able to fully fund my HSA (Health Saving Account) with unearned income (a portion of my early retirement pension). More importantly, these last 8 years have taught me to live within my means, but live... "by all means".

I have traveled, cared for an elderly parent and dedicated some of my early time to "finding things on sale", such as a condo in a sunny warm tropical climate. I have spent more than half of my time in early retirement fixing things that I normally would have hire a professional to have done, such as renovating the condo or maintaining my fleet of aging cars. I have an appreciation for knowing where my skill set ends and where a professional skill set is needed. Early retirement has afforded me the time to hone and deploy my personal skill that has both saved me money, but also enriched my life. The concept of "time" has taken on a different dynamic in early retirement.

In any event, I hope you find this linked blog post interesting and helpful.

easy-early-retirement-portfolio-withdrawals

Comments

  • MikeMMikeM
    Great article @bee, and you are one savey early-retiree. Great job making it work.

    May I ask, what is your self-directed IRA directed in, real estate, a business?
  • oletimer63
    Gee, I hope I am successful as Bee is when it comes to pre/post retirement. I plan on tipping my toes into the ocean every day.
  • beebee
    edited October 2018
    @MikeM, If you like the financial buff blog you can sign up for periodic emails...always good stuff.

    My SDIRA will hopefully continue to be funded by self employment income until I am 65...maybe beyond (70.5). I decided to keep this investment simple and to attempt to treat it as a buy and hold investment until RMDs kick in. My fund choices include PARWX (85% Large Cap Value Equities & 15 % Cash) and IOFIX (Multisector Bond). I attempt to keep a 70% (equities) and 30% (cash/bond) Allocation which works out to be 85% PARWX and15% IOFIX with the two funds.
  • MikeMMikeM
    Thanks @bee. I signed up for the news letter.

    We have a different definition of self directed IRA. I think of them as investing in things other than mutual funds or stocks or bonds. I see it as investing, for example, in buying and selling real estate, owning rental properties or owning a business. But, Googling the definition says it can be all the above. Thanks for the feedback.
  • beebee
    @MikeM...Maybe a better way for me to describe this account is a "self directed Traditional IRA".

    Investopedia does a good job of describing what I believe you point out is more commonly referred to as a Self Directed IRA.

    what-are-differences-between-selfdirected-ira-and-traditional-ira
  • beebee
    edited October 2018
    This article touches on the concept of Withdrawal Rates (from a retirement portfolio) starting in a low interest environment:

    does-the-4-rule-work-in-todays-markets

    Thanks @Ted (corrected)
  • TedTed
    @bee & MFO Members: Here is the article, "Does The 4% Rule Work In Today's Market ?" I'm also including a recent MarketWatch article on the same subject.
    Regards,
    Ted:)
    https://www.forbes.com/sites/wadepfau/2016/07/07/does-the-4-rule-work-in-todays-markets/#65b36892b336

    MarketWatch article:
    https://www.marketwatch.com/story/the-4-rule-desperately-needs-to-be-modernized-2018-07-20/print
  • davfordavfor
    edited October 2018
    The simple minded rule I follow is to withdraw 3.5% of the year-end balances from my investment accounts -- in quarterly increments -- during the following year. Fourteen years into retirement that procedure is working just fine. This procedure allows me to "celebrate" a little bit following the good years. It also requires me to tighten my belt a little bit following the lean years. But that's the point. If the inflation adjusted running account balances drop for a few consecutive years, I have the flexibility to reduce that 3.5% percentage amount as I also receive SS and a modest inflation adjusted retirement annuity. But, so far all is well....Today, I might start at 3% rather than 3.5%. But, maintaining some flexibility is the most important thing with my situation....
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