47 to early to retire??

L1: 47 to early to retire??Both my wife and I are 47. We have a federal retirement income of $24000 with only $6500 being taxed. Have no debts and own our home valued at $110K. We have $450K in our IRA. We have thought of using the 72t to withdraw $24000 annually. Sell our current home and buy a duplex valued at $250K. We would live in one side and rent the other out at $1000 per month. Take a mortgage for $170K. A conservative estimate we would be paying taxes on about $15000. We would also have liquid assets of about $40000. We are both very conservative financially and live on the current retirement. We believe that we should invest our $400000 of the IRA in CD’s, GNMA etc to ensure that we will not run out of funds. We would want to leave the $50000 in the stocks or mutual funds. Our we to conservative? We think that since we have a cola built into my retirement, and will receive approximately $1000 in social security plus the rise in rent we should be okay. We also plan on paying the duplex off by the age of 62.My calculations show that we would have $275K left at age 60 if we only draw 4% interest. I think we are on solid ground, would like to hear of other views (remembering we are conservative and really want out of the risks) and especially if we have missed some angle that could be devasting. (We have past experience in managing rental property.)2002-05-01 20:16, By: klm, IP: [127.0.0.1]
L2: 47 to early to retire??>>My calculations show that we would have $275K left at age 60 if we only draw 4% interest.Are you assuming that you will also be paying the 10% penalty tax? Where does the 4% figure come from?The other questions should probably be addressed to your financial planner.2002-05-02 19:37, By: Gfw, IP: [127.0.0.1]

L2: 47 to early to retire??From the calculations I have, if we average 4% from the beginning that we start the withdrawals there would be $275K left at age 60. (I would have in place all the investments, and move $424K in place before we would start withdrawals.) You state “10% pentalty”, why would I have a 10% pentalty when using one of the 72T methods? I used the 4% for my investment, using CD’s, GNMA etc. to be conservative. Hopeing that the average would be above the 4% level so we’d have more than the $275K and also having no risk of running out of funds, so that we could stop withdrawal at 59.5. 2002-05-02 21:20, By: klm, IP: [127.0.0.1]

L2: 47 to early to retire??As long as the 4% equals one of the 3 payment methods outlined in 89-25, there isn’t a problem. You mentioned the 4% – which of the 3 methods did you choose and what was the Reasonable Interest Rate used in the payment calculations?Remember, the payments from a SEPP have almost nothing to do with the underlying investment, unless you are too aggressive and run out of money. Current (May 2002) range from 4.99% to 7.04% :~}2002-05-02 21:27, By: Gfw, IP: [127.0.0.1]

L2: 47 to early to retire??gfw:thank you for your responses. I used the amortization method for may 2002 of 5.62%. the 80% rate would be $22656 and the 120% range would be $29842. the 4% interest rate was used as a conservative figure if we only can get a return of that rate. unless i missed something, if we invest in secure fixed income that would be fdic insured and could keep at the 4% range on our return, we would not put our selfs at risk of running out of money before age 59.5 and would end up with $275K. does this sound right. sometimes my writing does not make sense to me. thanks again.2002-05-03 16:11, By: klm, IP: [127.0.0.1]

L2: 47 to early to retire??As long as the payments were calculated properly and with a reasonable interest rate, you shouldn’t have any problem.I didn’t put any numbers in, our calculators can assist in calculating the estimated final balance.Good luck in your retirement – I’ve already come to the conclusion that I’ll never be ready to retire :~}2002-05-04 17:31, By: Gfw, IP: [127.0.0.1]