“We would be in a position where a 4% withdrawal rate plus her income alone would be enough for us to maintain our current lifestyle. So it doesn’t seem scary high risk but I’m still struggling with the decision.”
What happens if she can’t work for some reason or gets burned out?
@Barbalot - “After having had retirement contributions go to Vanguard with the job I’ve had for nearly 20 years, my new employer gives a choice between TIAA CREF and Voya. I’ve heard more about TIAA CREF over the years. If anyone has any guidance on how to decide, please let me know.”
I don’t know anything about Voya, but I’ve been very satisfied with TIAA-CREF for the past 2 decades I’ve had them. Getting a hold of an advisor over the phone is really quick with never a long wait and they’re very knowledgeable and extremely patient. Their online is quite good, too, so you can do most of your transactions easily without having to talk to anyone over the phone or via online chat. I just exchanged all of my equity plans over to the Traditional via online.
My H recently retired from his university job and is actually planning to move all of our retirement funds OUT of TIAA-CREF and into either Vanguard or Fidelity. He feels that the investment options are very limited and they are not very transparent re:info about their brokerage account (seems that you can’t easily get info without first opening an account). Perhaps different universities have different investment options; ours are limited and fees are higher than Vanguard and Fidelity.
Fidelity has been great for us, too. All of my wife’s retirement and investment accounts are with Fidelity, while I have Roth IRA and my boys’s 529’s with Fidelity. A nice thing about Fidelity is that there’s a local office where we can visit anytime to talk in person with an advisor. There’s no consultation fee if there’s a certain threshold amount (I think $500K?) with them.
So far, I’ve liked Fidelity as well. I’d be happier if there was still a brick & mortar Fidelity branch in our state. Sadly, it has closed and moved.
DH thought he wouldn’t have a hard time pulling the plug, but his boss convinced him to take a six month leave of absence as a trial. He thoroughly enjoyed the six months but, at the end when his boss asked him if he was going to cut the cord or come back, he went back for “one last engagement” (2 months). When the engagement concluded, he officially retired, but several months later that last client wanted a “phase 2.” So, DH created an LLC and consults the equivalent of two days a week for that client. This way, he keeps his hand in but with content and at a pace he enjoys. For him, this is the best of all worlds. Eventually, he’ll ease out entirely, but he says as long as there are gigs that offer work he likes and time he can control, he doesn’t see any reason to stop. Also, for the first time in our married life, he has a separate bank account that is all his. The money he earns is his play money to do with however he pleases with no need to consult me. I told him that as long as I don’t see any toys or hookers hitting our house account, he can go wild. So far, so good.
“What happens if she can’t work for some reason or gets burned out?/”
One of a few things would happen I presume, depending on where I end up as far as a new gig.
Either the new gig supports us allowing her to step back, or it doesn’t. If it doesn’t I would have to go back to public accounting. Note to self that I need to keep up with CPE and other requirements so that I hold onto my CPA license. If I do that, with 20+ years of public accounting experience, I don’t worry about finding employment. With no clients and rusty skills, I would make a lot less I suppose. No question, there is something to lose, something at risk there.
Apparently she would have to put in fifteen years (55 years of age for her) to have the option of remaining in health plan. We would have a long gap period between now and Medicare so I know the health insurance component is a big piece of the puzzle. One of our kids has epilepsy (under control with meds) and she also has a blood clotting disorder. I’d be concerned about switching to some type of individual plan. I need to become smarter in this area.
Bogleheads has a long thread about Larry Swedroe and his view that “3% is the new 4%”. Just because past history has had a 4% withdrawal rate succeed for 30 years, does not mean that it will in the future (with higher valuations, lower interest rates, and higher life expectancy.
If nothing else, you could do people’s taxes for 3-4 months a year.
A bit of tangent on withdrawal rates. I enjoy thinking about this stuff when I’m driving around. I was thinking about a simple portfolio anchored around two core ETF investments. VYM (yield 3.39%) for the equity portion and VCSH (yield 3.46%) for the bond portion. Allocation to be determined, but perhaps 50/50 with regular rebalancing. The income distributions alone should cover most of what you need annually. In market corrections perhaps you don’t need to take any more than just the income distributions. Over the long term you would expect to get capital appreciation and income growth out of the VYM equity component that should allow you to have an income stream that grows annually to offset inflation. From a risk perspective, you would have a diversified portfolio split evenly between large cap US stocks with above average dividend yields and short term corporate investment grade bonds. You could add some accent pieces if you like but these two funds would be the core.
This isn’t my portfolio right now by the way. Just in my imagination about what a retirement portfolio designed to get you a decent withdrawal right in the current environment might look like. I think even a slow thinker like me could run such a portfolio without a lot of help or helpers (or fees).
@TiggerDad - I think I could live on $30,000 per year once I have Medicare. I’d probably rather live off more. Nevertheless, Medicare is ten years away for me (and I’m assuming they will have increased the age by the time I get there, so it will be even longer). We are still on dh’s COBRA for eight more months - which is high enough. However, we will likely pay more on the open market and have not nearly as good of coverage. I’m anticipating that we will have to spend $15,000 per year on health insurance. So, $30,000 per year wouldn’t cut it for us now.
@LOUKYDAD I’m a CPA and I’ve been surprised at the number of former partners I’ve met working as auditors for our state Dept of Revenue, and similar agencies. They were really open in discussing how they were tired of high stress and workload compression in public accounting, their kids were older/our of the house, debt was paid off, etc. They wanted to maintain skills and work in the profession, but in a different capacity.
They were traveling to taxpayer’s offices and liked the independence of not being chained to a cubicle, in an office, etc. 40 hours max/wk. They seemed pretty happy with their transitions.
Every year I think I can’t finish another tax season. Here I am 
Love my clients, but the workload compression is more difficult every year. Good luck!
I love this quote. I’m borrowing it. :))
Medicare isn’t cheap, either. We are paying $12,000/yr for medicare although we have retirees health coverage for supplemental and Rx.
@Iglooo: We’re in the process of evaluating Medicare options now, so especially interested in what to expect. Some numbers we’re finding: A=free. B=$135.50/mo (or $1626/yr). Supplement G = approx. $150/mo ($2000/yr. incl. deductible), and D=$25/mo (300/yr) plus $400 deductible + drug costs (we’re guessing about $1200/yr). All that equals about $4826/yr x 2 = $9650/yr. Just wondering what we’re missing? Not cheap, but not (yet) $12,000/yr. Do the supplements increase significantly as age increases? Are there huge differences in locations? We could get the price down even further, but then copays and co-insurance goes up if the health condition requires.
How much you pay depend on your income. It goes up fast. The number you listed are likely to be the minimum amount. I doubt many on this board will pay the minimum. In 2017, we converted tIRA to Roth and had an artificially high income. It will come down next year but not to the minimum. Far from it. You should consult the table to determine the rate for your income. My $12,000 is only for B. For the rest, we are covered by retirees’ insurance by former employees. You can imagine my shock since I thought medicare will be practically free.
For reference, government spending on the socialized universal medical insurance part of Medicare is about $11k per person. So if a Medicare recipient spends $10-12k per year in addition, that is $20k total spending per year on his/her medical care.
Getting old can be expensive in the US.
@IxnayBob Thanks for the heads up. It doesn’t take much to be in tier 4 in the new revision.
@NJres thank you, I enjoyed reading about Mr Money Mustache and his story. I think I have seen him quoted a few times but didn’t really know who he was. Agree with others he is a bit extreme, but so was a lot of the frugality and financial “preaching” I received from my grandfather (born 1930) when I was growing up. I’m grateful for some of the principles he passed along to me and anyone else in our family who was listening.