Personal Investments • Pre-retirement planning

Hi there,

I’m 52/M, married with 2 grown children. I’ve confused myself by reading too much about taxes and planning and so, I’m hoping someone can guide me here.

Portfolio

• 1.8M in 401k, I contribute 30.5k every year split 50/50 in traditional and Roth. 7% company match. Currently invested in Vanguard TDRF 2040

• 1.2M in pretax supplemental savings, I contribute 100k every year. 6% company match. Currently in Vanguard TDRF 2035. When I leave the company, whatever is in this account will be paid out over the next 5 years equally - I have no discretion or control over this. This is a big deal because I fully expect it to be at ~$2M by the time I leave in 5 years if I continue to invest at this rate.

• 1.5M in taxable brokerage, mixture of individual stocks and funds held more than 1 year but with significant LT capital gains.

• 200k in Roth, similar to taxable brokerage

• 70k in HSA

• No debt

• 1.2M Owned real estate

• 500k annual w2 income

• There are likely a few hundred thousand dollars of inheritances coming my way but I’d rather not count those in my calculations

I know I’m fortunate to be where I am. I’d like to set myself up for a cash cushion of 3-5 years and a 70-30ish stock/bond split portfolio to ride out market gyrations. Plan on expenses being $150k a year. Planned retirement is at age 57.

But I’m confused about timing. I cannot change the 5 year payout of supplemental savings. So, the first 5 years of retirement, I’ll likely make 300-400k annually, which seems tax inefficient.

Questions

• ?? Should I stop (or reduce) contributing to the supplemental savings plan even though it’s pretax and matched, because I’ll be in close to the top tax bracket for 5 years after retiring? If so, what might I do with that 100k (minus ~40% taxes) each year?

• ?? Should I build/maintain a separate cash cushion (5 years of expenses minus dividends from investments) or take the excess from supplemental savings in years 1-5 of retirement to build up a cushion?

• ?? Teach a man to fish - can I model my options somehow?

If I didn’t have the supplemental savings plan, all would be straightforward. Now, I’m confused.

Thanks so much

Auro

Statistics: Posted by Auro — Sat Nov 23, 2024 5:38 am — Replies 0 — Views 93

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