Submitted by Cautious_Second7321 t3_zz2uko in personalfinance
ScoDucks89 t1_j29hwm5 wrote
I dont understand why anyone would pay someone else to invest their money when you could literally just buy VTI and fall asleep at the wheel and come out of your dream a millionaire.
Cautious_Second7321 OP t1_j29kso9 wrote
You’re not wrong. It’s not all about investing. I get great returns i’m happy with and agree with you 100%.
It’s the plan, course of action and knowing when you can retire. How much and from which accounts can I withdraw money from each year during retirement in a strategic way. What are the tax implications. Am I investing enough do I need to do more, etc.
I’m basically just maxing out a 401K and IRA each year not knowing where that will get me.
UMfan11244 t1_j2ac6z2 wrote
Listen, if you can withdraw 2.5-3.5% per year and cover your expenses, you can likely retire. Remember to plan for things like Social Security, and pensions, and healthcare, and you’ll be just fine. Don’t overcomplicate this. EJ advisors are just salesmen.
Cautious_Second7321 OP t1_j2b9ihv wrote
Dumb question, but when you say remember to plan for things like SS, pensions and healthcare, i’m assuming SS/pensions as income and healthcare as an expense?
UMfan11244 t1_j2bm9c9 wrote
Yup, usually. Although, pension plans have healthcare that is greatly reduced in cost. So you just need to know what you are eligible for specifically.
Cautious_Second7321 OP t1_j2bv00y wrote
When you withdraw that 2.5-3.5% doesn’t it complicated depending on if you withdraw from pretax or after tax accounts?
So, let’s say year 1 of retirement I withdraw 3.5% of $1,000,000 ($35,000) wouldn’t I be hit with taxes at the 22% rate on the 35K?
I know everyone says it’s easy, but am I thinking about this the right way?
UMfan11244 t1_j2bw0fw wrote
Yes, you are. Taxes would have to be included in your annual expense estimate. Keep in mind, if your income is low Social Security will not be taxed.
Rxpert83 t1_j2c34a9 wrote
Remember taxes are progressive. You aren't changed 22% on the entire amount. Only on the amount above the previous tax bracket.
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