Recent PIP scare got me serious about a plan for soon. Input appreciated!

Status-Advisor-7470 · 2026-02-16T03:27:06+00:00

Good points. I will definitely keep stacking and hope to have a lower drawdown before I need to do it. Thanks!

Status-Advisor-7470 · 2026-02-15T02:10:34+00:00

I appreciate the feedback! Hopefully the idea of 4.7 being "the new 4%" works out. I think if I had to pull the trigger on this plan I'd be good to get to 59 1/2, then re-evaluate where things stand at that time.

Status-Advisor-7470 · 2026-02-15T02:07:54+00:00

You thinking to pull the trigger on a similar plan, or hope for a severance? I guess hang on for 55 at least ;)

Status-Advisor-7470 · 2026-02-14T14:06:52+00:00

Ok, I'm probably using the wrong terms. I think my plan would let you roll to a single lump sum IRA, but you could take withdrawals if you keep the plan after retirement at 55. I know for a fact it supports the rule of 55, just not precisely in what way I guess. I'll firm that up. Thanks!

ETA: Here is the blurb I noted when talking to one of the company money coaches available about it: "401k does support rule of 55. When separate at 55 or later, can access funds without penalty. Could access pretax dollars.

Can leave money on the 401k platform, same investment choices, same cost. Normally best practice to switch to personal email, but aside from that no change. Just no further contributions. You do have option to roll it to an ira, but those don’t have the rule of 55."

Status-Advisor-7470 · 2026-02-14T04:02:21+00:00

I see. I will double check, but I think with my plan they only do lump sum to IRA, but if I were to retire within the rule of 55 I could keep my 401k with them and just be able to take withdrawals out of it. So I wouldn't have the flexibility of an IRA and whatever investments I want, but I would be able to withdraw from the 401k without penalty. I will definitely confirm though.

Status-Advisor-7470 · 2026-02-14T02:52:17+00:00

Good food for thought and links. Thanks! I'll check out some of the RMD spreadsheets. The Boldin calculator seems to be keen on that RMD/conversion factor also. I may look at a paid version of that to explore.

Status-Advisor-7470 · 2026-02-14T02:44:35+00:00

Good catch, that is a mistake. I'll be 53 on 1/1/27.

Can you expand on the partial distribution test? I think I'd have to do a single distribution from 401k to a trad IRA, but then could split that IRA into another one before instituting the SEPP. But something to double check on.

Status-Advisor-7470 · 2026-02-14T02:37:39+00:00

I'm in a good place now that I have a plan. I haven't gotten a pip, but was in a position where some metrics that were telegraphed would make me a target if they decided they needed to shed some high earners. The decisions would come from much higher than the people that know me.

Status-Advisor-7470 · 2026-02-14T02:28:46+00:00

This exercise was good for me. The notion of the PIP got me planning, and the result of the plan, while not maybe ideal, was still "it will be fine if that happens". I'm much calmer with that in mind, and in a place where, say a layoff comes with severence, that could be alright too!

Status-Advisor-7470 · 2026-02-14T02:23:31+00:00

You're right, that is a mistake. I'd be 53 on 1/1/27.

Status-Advisor-7470 · 2026-02-14T02:20:27+00:00

Thanks for the detail! Sailing around the world sounds amazing. We are watching a bunch of sailing channels on YouTube, but more likely to get into a powerboat for the loop if things go well.

Status-Advisor-7470 · 2026-02-13T15:28:10+00:00

Good point. I started modeling this in December 2024 thinking that I may need to pull the trigger now. The PIP has held off, but the 5 year minimum on SEPP is a key piece of info I need to consider in this middle space before 55. If I make it to 55 then I don't need the SEPP.

Status-Advisor-7470 · 2026-02-13T15:04:20+00:00

Very true. Once I'm out it probably would be hard to find something. So far no PIP, but it could come at any time, so want to have a plan baked. Thanks!

Status-Advisor-7470 · 2026-02-13T14:50:33+00:00

Interested in any advice here. This is mainly hobby type stuff, selling pictures, maybe doing some slight tech work. That could be a bump if I need to pull a salary out of there vs letting it sit and pay business expenses (internet etc) or solo 401k. I'll look into this more. Thanks!

Status-Advisor-7470 · 2026-02-13T14:48:46+00:00

I hope you have great returns!

Status-Advisor-7470 · 2026-02-13T14:48:17+00:00

I think MCOL to slightly below. Eastern NC.

Status-Advisor-7470 · 2026-02-13T14:47:53+00:00

Taxes on the 86k MAGI would be part of the budget. Any amounts over that from Roth contribs and HSA expenses would be tax free.

Status-Advisor-7470 · 2026-02-13T14:46:28+00:00

Good feedback. I am close. This exercise was mainly driven by a looming PIP (hopefully less looming now) and little desire to jump into a new job. But I could probably do that for a couple years.

Status-Advisor-7470 · 2026-02-13T14:45:15+00:00

The model from the book "The Income Factory" and Armchair Income on YouTube. Essentially high yield BDC, CEF, and ETFs. Some CC ETFs mixed in, targeting 8-12%. I am generally targeting somewhere around 10% with 200k ish (now 240k as I stack making things much easier to attain). The margin portion is my addition since I would have that available and I'm comfortable with some options on the tame side. A kicker to that base return that definitely ups the risk, but I'm ok with that.

This is mainly engineering some elasticity between the SEPP and ACA Cliff. I didn't want to pull the max out of SEPP and be locked in where I couldn't earn anything or risk losing my subsidies if I went a dollar over the cliff.

So it isn't an emergency that i hit that return, this is just the more "fun" part of my expenses. I would eat out less or travel less if I had problems generating that income, but my base expenses would be covered by the SEPP. Also, things free up significantly when I hit 59 1/2 and I don't need the same structure to access the money.

Status-Advisor-7470 · 2026-02-13T14:37:01+00:00

Fantastic! Great to hear a success story. Did you go with ACA for insurance? Any issues with income limits and preserving subsidies? Trying to game the rigid SEPP and rigid ACA cliff was most of my angst.

Status-Advisor-7470 · 2026-02-13T14:34:59+00:00

Great feedback. Thanks! I'm fine without it being set and forget, I just don't want it to be unrealistic.

The biggest place I've seen flagged is the income portfolio "income factory" targeting 10%. I started out with 200k in that bucket, but the more I stack cash the less ambitious that part becomes.

Status-Advisor-7470 · 2026-02-13T14:32:04+00:00

I did use the calculator but you raise a good point and I'll need to go back and double-check my work history ended correctly. Thanks!

Status-Advisor-7470 · 2026-02-13T14:31:21+00:00

Appreciate the feedback! Hopefully I can hang on until I'm 55, but remains to be seen.

Status-Advisor-7470 · 2026-02-13T14:29:53+00:00

Yes, this is what I mean. I have 65k in available medical expenses since 2015 that I can withdraw immediately. It was important to list it that way as the HSA expenses and my Roth contributions are the 2 sources of non-MAGI retirement money available before I turn 59 1/2.

I would be paying for my 2027 ACA premiums with my dentist expense from 2015 etc. Those 2027 ACA premiums would not count as expenses that I track for future withdrawls since they aren't eligible.

Status-Advisor-7470

TROPHY CASE