Welcome to the forum.
Thanks! I have already gotten so much helpful information.
Unks wrote: Tue Sep 30, 2025 9:55 am
… Emergency Funds: Yes, a mix of VMFXX and VMRXX money markets for about 6 months total.…
VUSXX has a slightly higher 7-day SEC yield of 4.1% than 4.08% for VMFXX and VMRXX.
Okay, I will look at that one instead. The VMFXX is what Vanguard uses for the settlement fund, which is why I have that.
… Debt:Car (5.39%): $23,801.80 …
Consider paying off your 5.39% car loan with your emergency fund (EF). Then redirect the car payment amount (and perhaps Taxable dividends) into replenishing your EF. Pay cash for future cars.
Yes, you are the third person who has suggested this and it does make sense.
When is your $340k mortgage paid off?
Unfortunately, not until age 79, but hoping to potentially start putting more towards it.
… Taxable: $192,406.38 (10.68%)VANGUARD TOTAL WORLD STOCK ETF (VT): $42,014.13 (2.33%)
CVS HEALTH CORP (CVS): $305.63 (0.02%)
MICROSOFT CORP (MSFT): $66,460.71 (3.69%)
NVIDIA CORP (NVDA): $16,502.12 (0.92%)
RTX CORP (RTX): $20,285.18 (1.13%)
STARBUCKS CORP (SBUX): $9,897.17 (0.55%)
SHOPIFY INC (SHOP): $30,141.44 (1.67%)
SNDL INC (SNDL): $6,800.00 (0.38%) …
Single stocks have more risk. Turn off single-stock dividend reinvestment and use dividends to buy more VT.
Good idea. I mentioned in another reply that unfortunately, all of these were purchased when we were working with Edward Jones, which we stopped about 5 months ago. Now am buying VT each month instead.
… His HSA: $27,006.67 (1.50%)Deposit Account: $1,000.00 (0.06%)
Vanguard LifeStrategy Moderate Growth Fund Investor Shares (VSMGX): $26,006.67 (1.44%) …
Consider using VTSAX for highest expected tax-free growth in your HSA.
I will check if my HSA offers this. As you probably know, sometimes the fund choices are limited.
…Her Traditional IRA at Vanguard (roll over from previous 403b): $189,784.62 (10.54%)
VANGUARD TOTAL WORLD STOCK ETF (VT) $189,784.62 (10.54%) …
To help avoid inadvertent wash sales, don’t use substantially identical holdings (VT) in both Taxable and tax-advantaged accounts. Use VTSAX and/or VTIAX instead.
Thanks! Someone else mentioned that.
… New Annual Contributions: $59,300.00His 401k (Employer match ~$8k): $31,000.00
His HSA (+Employer contrib $500): $4,300.00
Her 457 (VTSAX): $12,000.00
Taxable (VT) – DCA first of each month: $12,000.00 …
If his 401k offers a mega-backdoor Roth (MBR), prioritize contributing to the MBR over Taxable. Roth accounts grow tax free.
Unfortunately, my 401k does not allow this. I looked into it.
Does she have unused 457 contribution space? Is Roth 457 available?
Yes, in that we are only doing $12k per year and I think she can contribute up to $31k. I am just not sure how much more we can contribute realistically.
… 1. My wife and I are both 53 and planning to retire at 56. She will have two pensions and I will have one small one. Combined these will total ~$43k per year. …
Do the pensions have annual COLA?
The largest of the pensions does have a COLA.
At what age(s) can you start claiming the pensions?
Mine I can start claiming at retirement. Her larger one, she can start claiming at 55, the other at retirement.
Do the pension benefit amounts grow if you delay claiming?
Yes, hers do. My thought is that if we start taking them sooner, we draw less from our other investments.
… We both intend to take SS at 62 (an additional ~$45k annually). …
Use opensocialsecurity,com for a recommendation regarding the best ages to claim SS to maximize your lifetime benefit. Both claiming at age 62 may not maximize the benefit.
I did check that out and as I responded to another helpful person on here, it only yielded an additional $30k over the lifetime for me to delay and her to start taking at 62. That didn’t seem to make sense in terms of not having that money come in each month.
… 2. In hindsight, I wish we had more non-qualified money to bridge the gap from 56 to 59.5. …
The Taxable and Roth contributions are accessible from ages 56-59.5. You can use a SEPP/72t plan and ‘rule of 55’ to access tax deferred $ prior to age 59-1/2 penalty-free.
Yes, I had thought about the rule of 55. I think I like that better than 72t for the flexibility, but I also know that means I have to keep my 401k at my employer. The good thing is that Vanguard is the admin and the fees are low.
The single stock represent ~8% of your portfolio which isn’t overly large or overly risky. You will likely be selling them in early retirement (maybe at 0% capital gains rate) for cash to fund spending. In the meantime, turn off dividend reinvestment as suggested, above.
Yes, good suggestion and I agree that it makes sense to sell them then instead of now when our income is much higher and the gains will be taxed at 15%.
Do open and fund even small Roth IRAs in 2025 to start the 5-tax-year clock on initial Roth IRAs for flexibility. If necessary, he can do a backdoor Roth and she can do a small IRA conversion.
Thanks. I was thinking about that. Do you think it makes sense to do a backdoor Roth for me even though that money will then not be accessible for 5 years.
Does your projected annual gross retirement spend of $160k include everything – income taxes, post-retirement healthcare premiums & OOP, periodic large expenses such as a new car or new roof?
Yes, this is all in. I have $28.8k in the plan for pre-Medicare health insurance and buckets for all of the things you mentioned.
Do you have long-term care insurance?
We do not. We have debated getting it, but my wife has a condition that makes it virtually impossible to get underwritten.
Overall:
Today’s portfolio balance of $1,801k + 3 years of contributions @$59k/yr is a portfolio of $1,980k at retirement age 56 before market returns.– You will need to withdraw 8% from your portfolio to fund expenses of $160k before your retirement income from pensions/SS start.
– At age 62, your remaining portfolio before market returns is $1,020k (= $1,980k – ($160k x 6 years)). Your annual withdrawal drops to $72k (= 160k – $88k pension/SS) which is a withdrawal rate of 7% (= $72k / $1,020k).
Thanks for the numbers. The 8% is probably a little high because the pensions can start at 56.
Your withdrawal rates (before accounting for future market returns) of 8% from age 56-62 and 7% from age 62+ are high. It’s hard to say whether your portfolio will last for your probably 30+ year retirement without answers to the questions above and running projections. Have you used any retirement calculators such as FireCalc to see the success rate for your portfolio?
Yes, I actually use Projection Lab and it shows that we won’t run out of money going to age 100 with a 5% assumed return and a 3% inflation rate. For the ‘Chance of Success’, which runs the Monte Carlos, it shows a ~92% chance of success.
Are you open to working longer to reduce the pre-62 portfolio withdrawals?
Maybe a year, but not much more. My dad passed away a couple years ago and it made me really see just how fleeting things can be and that I want to be doing something else. I have been working in some capacity since I was 14. Thanks so much for all of your thoughtful input. This is really helpful.
