L1: Retirement-how soonNot of my doing, but I left at 54 from a large global oil company with “good” benefits and decided to just retire. I lived on a nice severrance for the 1st two years then started a SEPP because I rolled the 401K and lump sum monies into IRAs. All is going well in that respect and this site has been extremely helpful.Here”s my two cents worth. Of course there are lots of factors at play here and everyone”s situation is different, especially lifestyle. First, as said, don”t put you money in an IRA if your 401K will allow you to transfer the IRA in and draw funds out routinely until your over 59-1/2. Second, many money folks now say that you should draw only 4% of your portfollio to help insure longevity, 5% at most. At 6%, many say you may likely go broke before you die. Given these rates and inflation, you”ll need to average 10-12% return over time, and this can prove to be difficult for the average guy. At 52, that”s a long time until you MAY recieve any SS. And remember, you could easily live in retirement longer than you worked. Consider this too. I too left with with what I thought to be “plenty of money”, especially with no mortgages or payments of any type. Only 4 years ago I was paying $280 a month for healthcare. Currently I pay near $400 a month for healthcare and the share ratio has decreased. I fully expect to pay it all within 10 years or less. In the last year alone, your direct fuel cost has doubled, and this is also driving up the cost of all goods and services rapidly. Sure it may go down some, but not to $2 a gallon. Those day are gone.The bottom line is for you to educate yourself and be very sure of your decision. The longer you work, the more likley that you will meet your goals of having a good standard of living in retirement and then leaving a legacy. Along the way you”ll have to be smart in your spending and to have some luck in your investments, and your health.2008-05-20 14:57, By: Larry, IP: [22.214.171.124]
L2: Retirement-how soonVery good points.In your case you were fortunate enough to only need a 5 year SEPP plan, and even then you have illustrated what unexpected expenses can do to a SEPP plan. This is why SEPP plans much longer than 5 years can be very problematic. The longer the plan the longer unanticipated trends can multiply and the longer the SEPP the greater the cost to bust the plan toward the end due to these trends. That”s why having an emergency or additional IRA account to use as a safety valve or second SEPP plan is vital to those longer term plans.
In your case, albeit with 20-20 hindsight, you probably have wondered what NUA benefits there would have been with oil company appreciated stock. Perhaps not to compelling then, as that”s when I bought my current gas hogging SUV………………..not expecting to be paying 3.70 per gallon.2008-05-20 16:25, By: Alan S., IP: [126.96.36.199]