I can’t wait to get to Tampa Bay, my wife will be 57, I’ll be 62.
Same deal here, 4% drawdown. I phase in and out of equities,after a 2-3 year bull run, usually. Right now, it’s about when to get back in. Strategists and money management types, are between 4 and 11 % gains in 2022 in the S&P.
Although, I’ve been pretty much 100 stocks my whole life, I did get lucky and time the Mortgage crisis perfectly, and then got back in within 500 points of the Dow low.
Depending on what the market does between now and retirement, I’ll make my portfolio decisions. There is a lot of risk downside with very little return expected. So, this will be a challenge to stick with my conservative retirement portfolio. But, the upside and downside range just doesn’t look great. So, I’m likely to just be like 20% equities until I’m certain we are in for another long bull haul.
I’ve been reading alot of Modern Portfolio Theory and really focusing in on Retirement Portfolio risk, especially Sequence risk, where taking losses early in retirement is a big killer. Good reason to be overly conservative early, unless the market shows the all clear signs.
My biggest mistake was the 2000 bubble, lol, kept doubling down with my discretionary account. My second biggest mistake was not moving from Maryland, so my first distribution from my 401k, will be taxed by feds and also Maryland. I freaking hate Maryland and will get a last F U from them prior to getting to Florida.
Another thing is if you're within the income limits to start a Roth IRA (if you haven't already done so). Basically, you can put money into your Roth 401K at work, then when you leave work transfer your Roth 401K money to your Roth IRA and have no tax hit for the transfer (unlike a conversion from traditional/tax deferred retirement money to Roth post-tax money). That money can be withdrawn penalty free only if your Roth IRA is at least 5 years old (really 5 January 1st's years old since the 5th year is satisfied on January 1st of that year).
Keep in mind that each conversion has its own 5 year rule. For example, when my wife retired a couple of years ago and I converted part of her 401K into her Roth IRA, that amount of money is counted as conversions in year 2020, thus can't be withdrawn penalty free until year 2025. Between now and then we can withdraw the contributions portion of her Roth IRA because her Roth IRA is over 5 years old. But we can't withdraw the conversion portion until year 2025. If we do another conversion between now and then we can't withdraw that amount until 5 years after whenever we did that conversion. Only after all of the conversion money is done doesn't it count as withdrawing earnings, which has the 59.5 years old rule (which you already satisfy).
I'm basically spelling out what in IRS jargon is referred to as the Order of Distibution Rules for Roth IRA's.
The last time I was near Tampa I visited the vacation homes of Henry Ford and Thomas Edison, including the lab Edison discovered that rubber can be extracted from goldenrod plants (so we wouldn't have to import as much rubber from Cuba in case we wound up in another world war, which we did).