- Joined
- Jan 4, 2021
- Messages
- 1,893
I'd rather they use it and give me my bonus if other income allows than have to come up wit it before April. It's not like the bank is going to pay me much interest on it.
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I file tomorrow .
- Thread starter mmcmdl
- Start date
Things have changed recently.
1.) Interest on CD's has recently jumped. It's not so dumb to park some money in a three-year CD that pays over 4%, just to put it out of temptation range. CD's are now out-performing what I've invested in bond index funds as a hedge against the vicissitudes of the stock market.
2.) The age at which we must take minimum required distributions on 401K's has increased as of this year. For those young enough to not already be taking RMDs and old enough to start taking them before 2033, the new age is, I recall, 73. For those not required to take them until 2033, the age will be 75. Something like that.
In my view, and thinking of investment behavior long-term, if one takes out 4% of the total in an investment every year to spend, any reasonable investment portfolio should never run out of money. Some years that will bite the principle and other years it won't use up the gain. That means a million in a 401K should pay an income (before taxes) of $40K basically forever. If MRD's exceed that, reinvest in a post-tax investment portfolio.
For us, retirement is going to be the assembly of a lot of things: SS, small pensions from various employers, those 4% withdrawals from IRA/401Ks, and the big increase in disposable income that will come when we have paid off the mortgage. As of right now, all that would add up to about what I make now or a bit less. Paying off the house will be the retirement trigger for me.
Rick "paid cash for the shop but still owes on the house and land" Denney
1.) Interest on CD's has recently jumped. It's not so dumb to park some money in a three-year CD that pays over 4%, just to put it out of temptation range. CD's are now out-performing what I've invested in bond index funds as a hedge against the vicissitudes of the stock market.
2.) The age at which we must take minimum required distributions on 401K's has increased as of this year. For those young enough to not already be taking RMDs and old enough to start taking them before 2033, the new age is, I recall, 73. For those not required to take them until 2033, the age will be 75. Something like that.
In my view, and thinking of investment behavior long-term, if one takes out 4% of the total in an investment every year to spend, any reasonable investment portfolio should never run out of money. Some years that will bite the principle and other years it won't use up the gain. That means a million in a 401K should pay an income (before taxes) of $40K basically forever. If MRD's exceed that, reinvest in a post-tax investment portfolio.
For us, retirement is going to be the assembly of a lot of things: SS, small pensions from various employers, those 4% withdrawals from IRA/401Ks, and the big increase in disposable income that will come when we have paid off the mortgage. As of right now, all that would add up to about what I make now or a bit less. Paying off the house will be the retirement trigger for me.
Rick "paid cash for the shop but still owes on the house and land" Denney
- Joined
- Nov 22, 2022
- Messages
- 411
The "Shop" is all that matters!
