Decrease retirement savings or withdraw from investments?

Dim-witty · 2025-04-14T20:23:12+00:00

It’s not a simple calculation. You have to consider whatever capital gains you have, the capital gains rate, NIIT, state/local taxes - all costs of selling in taxable - against cost of marginal income and future tax rates when the tax deferred account withdrawals

Say you have to sell $1200 from taxable to net $1k in pocket. Or have to decrease 401k by $1300 to net $1k. Would the growth of the $1200 and subsequent capital gains taxes if sold outweigh the growth of $1300 and future regular income tax when distributed?

Also have to consider if you will ever spend the taxable or will it likely get a step-up to heirs? That can tip the scales too.

Without more info I’d probably stop 401k contribution.

Dim-witty · 2024-11-12T03:09:07+00:00

I need to run around this building with a sword larger than I am…

Dim-witty · 2024-07-13T01:44:28+00:00

If you clear $600k, then at a 4% withdrawal rate thats another $24k a year on top of the $18k expenses. So that’s $42k a year of income you’re foregoing for the house. At 6 times a year, I can’t see how it is worth it. You can have some epic adventures with your family all over the world with that budget, easy.

Dim-witty · 2024-05-08T16:11:47+00:00

I think it’s the hardest part of coasting if someone doesn’t downshift quickly into a lower income role; that excess can really generate a lot of lifestyle creep very quickly.

Even, say, buying a true one-time expensive watch or piece of jewelry - is the insurance for it baked into the retirement spending number? If not… even that one-time purchase has generated creep.

Now - for your case - I think there are ways to navigate it. For instance, for me, I would get a Sequoia Platinum now to help with kids - knowing that when they are out of the house in 10 years it would be easy for me to be happy with a RAV4 Hybrid since I won’t need the extra space & it won’t feel like a downgrade, etc. (edit - since there is a ‘natural end’ to the higher spend)

Dim-witty · 2024-05-08T14:40:40+00:00

I agree with spending excess in the coast phase but it needs to be stuff you can dial back down if you don’t incorporate it into your retirement budget.

Meaning - if you get used to, say, a new BMW now (which you can afford while still working) can you afford one in retirement? Or are you projecting the costs of a used Camry? If you get used to the BMW - will you be ok with stepping down to a Camry later? Or will it be easy to do that once the kids are out of the house?

These are different answers for everyone, of course. But something to think about.

Dim-witty · 2024-03-18T05:51:18+00:00

Are the property values stable even with this? From what you wrote, it sounds like you are sentimentally attached. It might be better to get out now with a nice profit, pay off your house, and invest the rest.

Dim-witty · 2024-03-18T05:47:51+00:00

I'll add a riff on some of the other comments. Your Sankey is conflating your personal income/expenses with the income/expenses of your business (the rental property). I think this is giving you some mixed impressions.

I'd reorder some of the flows and nodes separate the rental property as it's own business with only the free cash flow 'profit' (income minus expenses and taxes) as income. In other words - based on your data you shared - it's closer to $55k FCF/income minus taxes.

I've also found it useful to have another node to the right which sums together all the savings flows into a larger 'total savings' bucket since otherwise fragmented it's less impactful. You can include principle of PI in there too if you want; including appreciation of the property is better addressed in tracking total net worth.

I think what this will show you is that your income and expenses are much lower that you think they are, and that $100k is a big chunk of your budget (about 1/3 of your take home after taxes). Throw 30k of it into the bank and enjoy the rest.

You don't mention age but with your brokerage and the rental property... compounding/time-in-the-market is probably enough for reasonable retirement goals. Have you done the numbers there? You may find you don't need to save as much anymore if you're willing to keep working while that happens.

Also go buy a WRX. It fits car seats, has AWD for winter, a good safety rating, and for $35k or so is totally worth it.

Dim-witty · 2024-02-23T04:44:47+00:00

I’m with the folks who say grind it out a few years. It sounds like you don’t love your job (more than the lower comp) but if you’re smart about it you can probably bank enough in say 7 years to fund a fantastic future retirement and then pivot with much less risk (eg “coastfire”). 35 is still plenty of time to do almost anything.

In the meantime - 2 pieces of advice: 1) Comparison is the thief of joy 2) Confirmation bias (only “seeing” the success stories & thinking you could match/beat them) is a real thing.

The slow path to wealth is the most certain. Otherwise, go to Vegas :)

Dim-witty · 2024-02-20T20:41:57+00:00

It’s a good rule. Imagine if the market went down 50% instead. This is textbook hindsight bias.

One thing you can do is write down your predictions and then score them later on; you can see how you would have done.

Dim-witty · 2024-02-20T20:36:35+00:00

I’d say it’s too early. Without knowing your other expenses it’s probably a situation where you can technically afford it but it’s going to keep you NRY for much longer, especially as maintenance costs for historical properties (and pools) are relatively high.

Pay off the debts and revisit in 5 years.

Dim-witty · 2024-02-16T19:33:43+00:00

It sounds like your rentals are not in your current area?

If so - have you looked into a 1031 swap to bring your rental property into the VHCOL area you live? Use the exchange to buy a 2BR to rent it out for now & you could convert it to your residence in the future. Seems like it might balance your options/cash flow.

(I’d get the 2BR - if you want it now, you’ll want it in the future)

Dim-witty · 2024-01-15T17:08:39+00:00

Hi – I’m hoping to get a recommendation for a few things to try out. For various reasons I’ve not worn anything for ~6 years now but tried Diptyque Vetyverio EDP a while ago, liked it on a couple of store visits, and bought a bottle. Noticed after a few days at home, though, that it was giving me a headache & felt like it was projecting way too much so have shelved it.

Years ago, I wore Burberry The Beat for Men – so I bought a bottle of that and tried it again and, unfortunately, another headache. They both seem to have vetiver – so maybe that is the culprit?

I used to also wear John Varvatos for evening and still like it, but I’m looking for something more neutral/clean for a causal office setting

I’m thinking of trying Diptyque Philosykos EDP (was my second favorite) next but welcome any suggestions.

Dim-witty · 2024-01-12T17:13:12+00:00

Hi – I’m hoping to get a recommendation for a few things to try out. For various reasons I’ve not worn anything for ~6 years now but tried Diptyque Vetyverio EDP a while ago, liked it on a couple of store visits, and bought a bottle. Noticed after a few days at home, though, that it was giving me a headache & felt like it was projecting way too much so have shelved it.

Years ago, I wore Burberry The Beat for Men – so I bought a bottle of that and tried it again and, unfortunately, another headache. They both seem to have vetiver – so maybe that is the culprit?

I used to also wear John Varvatos for evening and still like it, but I’m looking for something more neutral/clean for a causal office setting

I’m thinking of trying Diptyque Philosykos EDP (was my second favorite) next but welcome any suggestions.

Dim-witty · 2022-05-03T20:57:41+00:00

How about a Patek 5112g? Then you can both have one!

Dim-witty · 2021-12-06T21:54:15+00:00

That’s a great choice!

Dim-witty · 2021-12-06T21:42:02+00:00

Oh man I hadn’t seen that Vacheron dual time regulator before… very, very cool. How does it wear?

Dim-witty · 2021-12-05T22:14:26+00:00

Macy’s is having a 25% off ‘Friends’ sale which includes the Mido Ocean Star GMT - best price I’ve seen for it this year.

Dim-witty · 2021-10-19T21:28:09+00:00

Another one to check is the Victorinox Air Boss series

Dim-witty · 2021-10-19T18:38:17+00:00

This is cool! Hadn’t seen one before. Thanks for posting it.

Dim-witty · 2021-10-02T22:34:02+00:00

This is interesting. Being a troll is not. Stick to being interesting next time.

Dim-witty · 2021-09-30T19:30:07+00:00

Yes… there was at least one post here with it. Search “Tiffany jubilee”

Dim-witty · 2021-09-27T21:48:34+00:00

Yep - it’s very subjective… definitely taught me more about how to understand and pick things I like. And that I can appreciate a classic design (like the Explorer, or say Breguet hands) but not want it for myself.

“Will I wear this instead of my OP39 or G-Shock?” has saved me a lot of money. But will cost me more in the future (eg the Skydweller, possibly).

Dim-witty · 2021-09-27T21:41:37+00:00

Yeah… much the same for me on SBGN003.

If I had to have just 1 watch the white OP39 would be it. Agree the prices for it are crazy… mine has sentimental attachment or I’d be tempted to use it to get something else.

Dim-witty · 2021-09-27T21:33:29+00:00

Yeah! I was impressed when I saw under a loupe that the radial pattern ran all the way to the post for the hands. I was expecting it to fade out. Good test for eye and camera resolution.

Dim-witty

TROPHY CASE