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I was going to type it out, but Schwab does a hell of a job... https://www.schwab.com/ira/roth-ira/withdrawal-rules
Regarding re-contributions: If you withdraw $6,000 worth of contributions from this year, you have until April 2021 to re-contribute those funds back into the Roth IRA. Essentially, by withdrawing your contributions from this year, it is like your contribution never happened. Your Roth IRA contributions toward the limit are reset back to $0.
Just a nit, RMDs now are age 72 unless you turned 70 1/2 in 2020. Also RMDs are waived for this year due to Covid19.
https://www.schwab.com/ira/understand-iras/withdrawals/required-minimum-distributions
retirement - when every day is Saturday and every night is Friday night ;)
We avoid weekend activities away from the house in general. Too many people on the trails, too long a wait at a restaurant, too long lines at checkout in a store.
We got this dayclock just to see what day it was :)
I have a friend who retired early at 57 and had the same struggles. He was an accountant and a damn good one at that. He spent his first 4 months of retirement doing taxes for people and making a boatload of money doing it. Then, for the next 6 months he tried to find his way in retirement and struggled. He then spent the next 2 months looking forward to doing taxes again.
We met regularly and talked about what goals does he have outside of doing taxes for people. He doesn't need the money from it, and he could be focusing on other things that piqued his interest. He had to try a lot of different activities before he fell into painting and swimming for exercise. Now he swims 4-5 times a week for 1-2 hours a day and paints like crazy. I like his work.
He did read a book that helped him.
https://www.amazon.com/How-Retire-Happy-Wild-Free/dp/096941949X/ref=sr_1_10
I hope this helps you out, but the book only accomplished so much. It was me sitting and talking with him about his interests to get him to finally start trying new things that helped the most. This is why I am starting to think of what I am going to do in retirement today rather than waiting until retirement to start thinking about it.
Assuming you really are serious, then one might be able to say that you have done an excellent job of preparing for your retirement financially, but perhaps have been inattentive to preparing emotionally. Though you are no longer young, you likely do have many years ahead of you, and it seems that you might need to spend some of them in learning what gives you enjoyment. You might read about how others have dealt with this, perhaps even starting with something wild like Aristotle's Nicomachean Ethics. Only you can determine how to bring purpose (or whatever ) to your life now.
We built our portfolio around low cost index funds and invested heavily for 20 plus years. Market returns are not good right now but that just means you can buy things on sale at the moment. The best advice I could give you would be to get this book and follow his advice.
For those of you willing to look past the fear mongering, this book is an excellent primer for CEFs, how they work, and how to choose them.
Sounds like you have a very financially illiterate family. For under $20 buck and some time reading you will save yourself a lifetime of bad financial decisions. https://www.amazon.com/Morningstars-30-Minute-Money-Solutions-Step/dp/0470918136
Book - get whats yours - by the folks at that maximize calculator listed above is something I have read and recommend… https://www.amazon.com/Get-Whats-Yours-Revised-Security/dp/1501144766/ref=mp_s_a_1_1?adgrpid=59706783327&gclid=EAIaIQobChMI9dqjgqCn-gIVxsiUCR2JZQRmEAAYAiAAEgJ_KfD_BwE&hvadid=274697774361&hvdev=m&hvlocphy=9021516&hvnetw=g&hv...
The 5 Years Before You Retire by Emily Berlin: https://www.amazon.com/Years-Before-You-Retire-Updated/dp/1507213603/ref=sr_1_1?crid=SE61U0WW5IM1&keywords=5+years+before+you+retire&qid=1657075159&s=books&sprefix=5+years+%2Cstripbooks%2C108&sr=1-1 AND Retirement Planning Guidebook by Wade Pfau: https://www.amazon.com/Retirement-Planning-Guidebook-Navigating-Important/dp/194564009X/ref=nodl_?dplnkId=448401c1-2408-4559-801c-577bc69ed4cc
If you and your siblings allow it then the problem is not her, it’s y’all. This is a situation that sounds like you and your siblings need to address with her in a straight forward manner, now. This book should interest you and your siblings.
Okay, everyone has good inputs concerning this. I've found that the more you educate yourself, the better you will make decisions based upon your situation. Don't hesitate to read a book or two that may guide you or at the least, give you ideas.
You may want to try some of the following as it's a big big financial world out there. Just a couiple of suggestions.
or
Agree with everything u/stevedidit said. Highly recommend A Simple Path To Wealth. Also very useful is I Will Teach You To Be Rich, and a free PDF by William Bernstein called If You Can.
Live below your means. Build up an emergency fund of 6-12 months of expenses. Max out all tax-advantaged retirement accounts that you have available to you. Put any leftover money you have into a taxable account with an online discount broker--don't try and pick stocks, just dump into VTSAX. Save for a down payment on a house if you want, otherwise, save up for when you eventually want to move out.
Don't forget to live your life and have fun.
Read this book:
Good luck.
You wrote two great books on this topic that everyone young and old should read.
US Total Market index will give you diversification and adding Total International will add even more. S&P500 Index will provide you with a narrower of the US Total Market Index. At 23, you have a very long runway for compound interest to work. S&P500 averaged about a little over 10% through its life. So for 42 years (assuming 65 is your magic number) at 10% a year is more than fantastic! You simply need to continue to feed the beast!
If you want more diversification to your portfolio, look into Bogleheads three-fund portfolio. Sub to r/Bogleheads and read The Bogleheads' Guide to Investing. Continue to feed and forget it. Also, don't forget to start to learn about personal finance! Don't just take others' opinions, especially from Reddit! Good luck my young friend!
I will add one more area of consideration that I hesitated to include before since it involves personal philosophy/spiritualism. In retirement, the ego needs to be set aside. While occasionally useful in the professional stage of life, it is a hindrance in retirement. The ego wants to be stroked, recognized, given achievements, and is very judgmental to others. It is the ego that wants to be back in the workplace so that it will continue to receive the awards and pats on the back. If you are interested, I found Ryan Holiday's book "Ego is the Enemy" to be well written from this perspective.
Best wishes to all!
>Another consideration is that I’m a little uncomfortable with all eggs in one basket and the feeling that I’m not in control (even though I am not financially savvy and don’t really know what I’m doing).
You are always in control because you are paying them. They can only manage your accounts within the parameters that you allow them to. They should give you their opinion as to why it will be to your benefit to do this or that but the final decision will always be yours. Since you say you don't know what you're doing you need to ask as many questions as possible, like a 5-year old who's always asking why.
I don't know that your situation is a big as a dilemma as your making as long as you go with one of the big financial companies. Before making a decision ask each one why they would be a good fit for you. Ask all of the others why can Vanguard (or whichever company has the lowest cost) can provide what seems like the same service for less.
Before signing with any of the companies I would recommend reading a book like this or this. Not to turn you into a professional DIY money manager but to at least give you some basics on investing and hiring someone else to manage your money.
Good luck.
There are books written on this subject. William Sharpe called living off of a portfolio “the nastiest, hardest problem in finance", and won the Nobel Prize in Economics.
My favorite YMMV
Congrats aon the book -- that's huge! (Here's mine.)
I really hear you about taking a little time off before launching into the next project too -- very wise of you.
I'm in Bloomington Indiana (Indiana University). I'm sort of looking for a group, ideally f2f, but you know, maybe online too...
Thanks for your thoughts, and I think you're totally correct. I just finished the textbook I wanted to write, too! It might be a springboard to some part-time stuff in the future, but every day I'm more and more convinced to take some serious time off.
Out of curiosity, since you're looking for a gamer group, where are you located? I'm currently in Charleston, SC.
I know what you mean -- I truly love teaching, working with the students, and being creative in my field (game design). But from all that I've been told and now have experienced, definitely take the time off!
I'm not sure for how long, but I'm thinking weeks or months, not days or a few weeks -- "decompress and reflect" as you say. I've already written the textbook I wanted to write, so I'm not sure what else might come up in that direction for me. It may be that I'm just ... done.
I don't feel quite ready to just fully retire, but maybe that's something I need to reconsider.
I suggest McClung's Living Off Your Money. He explores this issue, and others, in depth. Lots of back testing of different withdraw methodologies.
I got the paperback and had Staples drill it so that I could put it in a notebook.
Wade Pfau has also done a lot of work on this subject.
I assume you know that you need to do a 72-T plan IRS from your Trad IRA accounts. No requirement to have equal withdrawals see Schwab from Roth IRA, but it has to have been open 4 years. You are of course free to take any amount from your CD/Bank/Brokerage accounts.
Not sure what you meant by 125% of social security, as you get a fixed amount and can't change it up or down.
You can't assume medicare will be available before age 65, as that would require enacting Medicare for all which is problematic in the current political environment. I was offered an early out at my work and received 50% subsidized health insurance to age 65.
Yes, the contribution is tax-free, but the earning portion is taxable.
You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free.
There have been books written about this.
Fair points, but the 4% drawdown rule assumes you’re 65, not 55. You might want to use one of the many free retirement calculators just to test your assumptions. I’ve tried most of them and liked Schwab’s best: https://www.schwab.com/public/schwab/investing/retirement_and_planning/saving_for_retirement/retirement_calculator
I used to have the same reflexive negative feeling towards annuities but I recently read some information that changed my mind. Not to be completely in favor of them but to consider them as an option.
Jane Bryant Quinn's How to Make Your Money Last - Completely Updated for Planning Today: The Indispensable Retirement Guide
I took it out of the library and I have since returned it so I will probably not do her reasoning justice.
There are a few things to consider about "annuities"
- Annuities have been bastardized over the years ("It's a pension! It's a life insurance policy! It's a tax-free investment!") and we have all been warned to not invest in things we don't understand so that's where the reflexive "no" comes from.
- We bemoan the loss of pensions but buying a simple annuity can be considered as buying yourself an annuity. Giving yourself a guaranteed income stream can provide you with a sense of security.
- One of the emotional responses to annuities is the feeling that you're a sucker because when you (and your spouse if you buy a joint annuity) die the income stops and the principle goes to the insurance company. But who cares? You're dead.
Ms. Quinn recommended investigating your annuity options at https://www.immediateannuities.com/
The investing advice is not great but if you can internalize the mindset and live your life accordingly you'll probably achieve your goals.
Big take-away from the book: know how much you actually make per hour of work. Not your net hourly on your paystub but what you really get to keep after paying for all the costs of working and including the time you spend getting ready for work and travelling to/from work; it's less than you think! Once you know this number you can start to look at expenditures as "hours of work" rather than dollars. When you are considering a purchase think of it as how many hours you have to work to acquire that good or service.
One of the best books ever on the subject.
https://www.amazon.com/Facilitating-Financial-Health-Therapists-Books24x7/dp/0872189627
Did you see this resource that someone shared in the comments? book
> when I totally forgot what day it was.
My wife and I got ourselves this clock for just that problem :)
> Doesn't help that garbage day is now Friday morning rather than Monday and recycling is every other week.
yup, virtually everything I do has to go on the calendar nowadays - else I'll most likely forget about it. They moved my trash day around and I kept missing it.
Here is a book about planning retirement and travel in European Union, free on Amazon Prime: https://www.amazon.com/dp/B07XFRNRMD And another one like that, a bit more specific to Czech Republic, also free on Amazon Prime: https://www.amazon.com/dp/B07XYDN1B3
What if I want to share a link to a Kindle book I have written which is within the chat topic? I retired in 2012, then started the quest for the thing to do in retirement, and now am writing books that address questions relevant to retirement, not finance. Can I share a link like this?: https://www.amazon.com/dp/B07WVFFX6X — I would appreciate a response from the Mod.
Please dont listen to Dave, his advice is terrible unless you are a financial mess.
Check out Christine Benz and read her book. https://www.amazon.com/Morningstars-30-Minute-Money-Solutions-Step/dp/0470918136
Take a look at this book - very simple explanations at beginning but you can cut to the chase if you want on a recommended structure https://www.amazon.com/All-Weather-Retirement-Portfolio-post-retirement-investment-ebook/dp/B00WF8XW78/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1526149043&sr=1-1&keywords=randy+thurman+all+weather+portfolio&dpID=41nywAtuDbL&preST=_SY445_QL70_&dpSrc=srch