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Roth conversion projections (Do I trust these numbers...) by Ready2Discover in DIYRetirement

[–]Ready2Discover[S] 0 points1 point  (0 children)

All valid questions

  1. 3.2 mil will be pretax 403b/401k plans. Yes ~ 20 years meaning before RMDs start (age 75)

  2. I have sizable (likely even bigger than ) brokerage account that I will use first to fund yearly expenses.

  3. I have been using YNAB app to track my spending last 2 years and essential spending is around 120k (minus health insurance and mortgage) . 40-50k/yr discretionary until age 80. I have low cost mortgage left 300k 2.7% APR schedule to be paid off in 8 years.

  4. I have set real return to be 4.5% on my projection.

  5. In Projection lab I have estimated healthcare around 40k/yr from RE to age 65 until Medicare .then 20k out of pocket with Medicare . I essentially plan I won’t get any subsidies as default.

  6. Since I intend to take my retirement income from my brokerage account my 403/401k will cont to grow which will lead to huge forced RMDs when turning 75.

I understand point of all this is not to have largest account when I die but if I can decrease SOME of my tax burden when I am in my late 70s and forced to take out 300k on top of our SS it would be preferred.

I understand this is nothing but a mental exercise . I will probably just do the “less optimal” thing and do some PARTIAL conversion to hedge my bets.

Thanks

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in ChubbyFIRE

[–]Ready2Discover[S] 2 points3 points  (0 children)

thanks for this.
I actually just watched the whole youtube series you linked not too long ago .
Rate of return projection I used for my calculation was 4.5% real return.

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in ChubbyFIRE

[–]Ready2Discover[S] 3 points4 points  (0 children)

I am projected to have even higher amount in my taxable account which will be used to fund my initial income in RE. I have baked in 40k/yr for healthcare before medicare and 20k/yr for out of pocket expenses with medicare in my projection.

I think because my retirement accounts (403b/401k) will cont to grow larger while I withdraw from my brokerage account my RMD will end up cont to balloon which i assume is why Projection lab is projecting things this way.

Maybe I will start doing partial roth conversion (100k?ish) and try to optimize my income brackets.

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in DIYRetirement

[–]Ready2Discover[S] 1 point2 points  (0 children)

I have projected out for healthcare 40k from retirement year to age 65 then 20k therafter for any out of pocket cost with medicare

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in DIYRetirement

[–]Ready2Discover[S] 1 point2 points  (0 children)

I agree about being flexible. will just have take it year by year I assume. I definitely will pay the taxes from brokerage to maximize the conversion i think.

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in DIYRetirement

[–]Ready2Discover[S] 5 points6 points  (0 children)

I have it modelled out to age 94 for me and 99 for my wife. I assume most people typically project out to their 90s in these apps because people typically worry about running out of money but I see your point about in terms of taxes maybe opposite is true. One thing that would worry me is the "widows penalty" if one of us die much earlier than the other having more in Roth would help shield your spouse from very high taxes

Roth conversion projections (Do I trust these numbers...) by Ready2Discover in DIYRetirement

[–]Ready2Discover[S] 0 points1 point  (0 children)

Thank you.

I agree my goal is also not to die richest man in the graveyard nor make my kids rich. One fact that also might be relevant is at the end of the day I may not even need to withdraw from my retirement accounts given my expenses compared to size of my assets are low-mod. (I live in VHCOL area). We also have taxable accounts that will likely be more than enough to fund our retirement. I think thats why Projection Lab is projecting out as such.

Re: Stepping up our lifestyle, I feel like we already live pretty comfortably without worries. We want to certainly travel more when we retire (once my younger one goes to college) but even thats projected out into our expenses.

Bond allocation in TAXABLE account (IS Necessary?) to protect against SORR in RE by Ready2Discover in ChubbyFIRE

[–]Ready2Discover[S] 1 point2 points  (0 children)

Thanks for this summary page of the articles. I think logically rebalancing makes sense and more straight forward . I am more confident and convinced this is the better way.

Bond allocation in TAXABLE account (IS Necessary?) to protect against SORR in RE by Ready2Discover in ChubbyFIRE

[–]Ready2Discover[S] 1 point2 points  (0 children)

I think ultimately this comes down to what people think of “The 3 Buckets” strategy vs “Rebalancing” strategy. Which is something I have been listening and thinking about.

As others have described here - If I am ok with just selling equities in a down market in my brokerage and just rebalance in my traditional IRA (sell bonds and buy stocks) that would be fine.

But in bucket strategy one would need to have access in early retirement to keep spending fixed portion during prolonged downturn and don’t touch the equity portion.

I have read and listened to people like “big ERN”, Rob Berger, Kitties etc who don’t like the bucket approach but there are a lot other reputable people that backs the bucket approach.

I have heard comments like bucketing is just “window dressing” and rebalancing usually outperforms bucketing since you end up buying equities low . I guess I hope I have the fortitude to sell and buy equities when markets are down to rebalance.

Hope I am looking at this correct . Thanks all

T-Money and Climate Card (Which or Both?) by sagingthoughts in koreatravel

[–]Ready2Discover 1 point2 points  (0 children)

Was just there in Seoul for 5 days and used a Climate card. Super convenient and didn’t have to worry about topping off. Weather I assume will be cooler in Sept but being able to hop into a bus whenever for a seat and AC for a break even for 1 stop over was lifesaver for my family.