gpburdell

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A lot of people on here will argue that you should never have a house payment when you retire. I disagree because not everyone is living in the location or size of the house they want to retire in.

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I've got 25 years left @ 2.25% and I'm planning to retire in a few years. No way I'm paying that off early. I just account for the mortgage payment as part of my basic expenses in early retirement.

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When this was initially announced, I immediately did research into how to pivot to a more useful debit card. The overwhelming answer was to open a checking account with Schwab and use their platinum visa debit card: LINK

No foreign transaction fees
Full reimbursement on ATM fees
On the Visa network

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Fidelity does the same with their atm/debit card for their Cash Management Account. I was in Puerto Vallarta last year and had to use the ATM at the resort once. I got charged $20+ in fees and Fidelity re-imbursed automatically.

Over on Bogleheads they generally don't recommend annuities. Though I've seen them also say the only type of annuity to ever consider is a Single Premium Immediate Annuity (SPIA).

I'm 50 and planning to retire in a few years myself. Instead of annuity, I will be using a TIPS ladder to cover my basic expenses until SS. Though TIPS rates are so good right now, that I've added rungs to my ladder past SS and added to existing rungs.

My withdrawal plan is to use a combination 401k rule of 55 and taxable assets.

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If they are mostly the same, why pay a 0.03% VOO fee versus one with a 0.01% fee. I know it seems small but the difference between $100 and $300 per million can add up. If I see two identical items in the store and one is $100 and the other $300, I’m buying the $100 one. What am I missing?

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In the example of VOO vs FXAIX, you're right FXAIX should give you the higher overall return with its lower expense ratio. This assumes that they both have nearly identical performance which they should.

Though according to this VOO still comes out slightly ahead:
https://testfol.io/?s=ldlXuUs6UQ8

So for a long time, pretty much only Vanguard offered mutual funds or ETFs with very low expense ratios. Over time more and more companies started offering low expense ETFs and eventually even mutual funds.

Fidelity even offers 0% expense mutual funds but those definitely cannot be moved to another brokerage.

Going back to VOO vs FXAIX, even if FXAIX came out a little ahead I would still buy VOO. I prefer Vanguard investment products as all Vanguard funds/ETFs are owned by the underlying mutual funds themselves which are owned by the shareholders. They are like the Greenbay Packers of the investment world.

When I first started investing, I used to have most of investments at Vanguard. When Vanguard started offering ETFs, I moved everything to Fidelity. At the time, Fidelity was a far superior brokerage/cash management platform which I still believe it is.

I have all of my investment accounts at Fidelity now but 80% of investments are Vanguard ETFs.

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I see that the expense ratio for FXAIX is 0.015% while VOO is .03%. Does that mean I am charged those fees for owning those funds or does that amount get deducted from the value of the fund? Some are listed as mutual funds and others ETF’s. What is the advantage / disadvantage?

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https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds

I generally prefer ETFs over mutual funds especially in a taxable account as they can be more tax efficient. The one big advantage for ETFs is they can be transferred in kind to another brokerage. I don't think that's available for most mutual funds.

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Man I fired up Witcher 3 remastered on the PC and have been playing it before bed.

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Yeah after I finish Expedition 33 & Baldur's Gate 3, I want to play that next. That or Cyberpunk, I bought it when it first came out but didn't play much of it with all the issues it had. After all the updates it's supposed to be a pretty good game now.

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I think most in this thread have missed the question. It’s not whether one should retire with 800k at 40, it’s whether one should dial back saving for retirement at that time. With 20 plus years for the portfolio to grow, that could be a possibility.

Whether or not it is a good idea depends on an individuals financial situation and goals. But there is a point where you run into the “problem” of having more money than you can spend in retirement, and you may be better served to spend more now, trade that money for time, etc.

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From reading the coast FIRE subreddit, it seems alot of people who reach coast fire early (before age 40) will drastically reduce if not stop contributions all together. Imo that is a mistake as there are too many unknowns that could derail the plan. Now if the expected spend is very low (2-3%) of portfolio, then yeah go ahead and stop contributions.

I know alot of places cite this Fidelity chart. At age 40 Fidelity says you should have at least 3x your salary. When I was 40, I was at almost 5x my income. At age 50 now, I'm at over 15x.

In hindsight, could I have stopped saving at 40? Probably but I wouldn't have been very confident at the time. At age 50, I'm highly confident I'll be able to retire early and that's why I have significantly reduced my contributions. The saver in me won't let me completely stop.

Now more than likely, I have over saved. Which I'm fine with, better than have under saved. I'll just be spending more than planned which I've already started doing as I coast these final few years of working.

Turned 50 this year. I've been coast fire for several years now but kept maxing 401k, maxing roth, maxing hsa, taxable account.

Contributions aren't that significant anymore. But I won't stop saving for retirement until I retire; however I am taking my foot off the gas.

This will be the first year since my early 30s that I'm not maxing my 401k. I will do just enough to get the full match. I'll keep maxing hsa & roth; they provide alot of flexibility for controlling taxable income. Though, I will stop contributions to my taxable account.

I believe I could retire now (Firecalc says 100%) but I'm very leery of inflation & healthcare costs. Also it would be much easier to retire using rule of 55. 72t is an option but rather not use it.

My job pays well and it isn't that stressful. So I'll keep working for a few more years and let my nest egg keep growing.

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Rates are higher meaning prices are lower for bonds now. I’d argue it’s a much better time for bonds now than in the past few years. You can get close to 6% yields for investment grade (Baa3/BBB- to Aaa/AAA) bonds right now with about a 6yr duration.

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The problem is many people don't understand the difference between bond funds and individual bonds. If you buy individual bonds AND hold to maturity, the changes in interest rates mean nothing. You will get the agreed interest and par value of what you bought. Only a default would cause you to lose money.

You are correct. If you are a bond fund holder for the long term then you want higher rates. Yes the bond fund value dropped now due to higher interest rates. However you will eventually come out ahead and have higher overall return than if rates had stayed flat or fell. The catch is you have to hold the bond fund for long enough for the higher interest payments to make up the difference.

This is directly related to a bond fund's duration which many people don't understand either. If you need the money in a year; you shouldn't be buying a bond fund that has a duration of 5+ years.

That is why many people who held a general bond fund like BND were crying when interest rates went up. BND has a duration of 6 years but if you were looking to retire in a couple years then you are SOL. You would need to hold the fund for ~11 years (2xduration-1) to come out ahead. That assumes the interest rate stayed flat which it wouldn't.

Obviously if you could market time when to buy and sell based on rate changes that would be great but almost impossible without luck.

As someone who owns mid 6 figures in a ladder of individual bonds, I made sure I understood what I was getting myself into. Those individual bonds will guarantee my basic yearly income when I retire in a few years.

So I will never have to sell stocks in a down year to fund my basic expenses. This is my solution to SORR and to help ensure that I can retire early and not have to work again.

I still remember the crash of 2008 that derailed the plans (for years) of so many who were close to retirement or just started retirement and then fell victim to SORR.

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Motor City Supreme is very legit. Half now save half for later. Red Baron Supreme also.

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Big fan of Motor City frozen pizza. They taste good and cook very consistent for a thicker pizza unlike Digiorno.

I wished my Costco carried the supreme version; they just have the double peperroni.