I am a 43 -year -old divorced father. I have $ 315,000 in a traditional individual retirement account (IRA), $ 90,000 in Roth IRA, $ 22,000 in health-saving accounts (HSA), $ 8,000 in 529 college savings account, $ 30,000 in traditional 401,000, $ 25,000 in US I-Bonds, $ 40,000 in Funds (ETF) and $ 20,000. Each year, their employer 401 (K) and family HSA. At the age of 57, I would like to stop most of my work day and start paying money from my traditional IRA to your Roth Ira, before the standard deduction every year. At that time, I would try to live on tax -free income for up to at least 62 years. Then I would like to keep this in my Roth accounts up to 67, then I would take social security that would be around $ 3,500 a month and is quite close to my actual monthly expenditure. Am I too much?
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First of all, I would like to praise you for both the savings you have already accumulated and for what thought you put into this plan. All that work has helped you in a fantastic situation so you can withdraw from your conditions.
So do you retire at the age of 57? And are you too much? Let’s look. (And if you are looking for help for your financial question, this tool can help coincide with potential advisers.)
A spokesman for Mathematics
Ask the adviser: I’m a 43 -year -old dad with $ 315,000 IRA, $ 90,000 in Roth and other accounts. Every year I make the most of my 401 (k). Can I retire at the age of 57?
To take a quick look at your investment and saving situation, you can use a 4% rule and make some assumptions about your return on your investment to see if you are on the right path.
The 4% rule says that when you retire, you can withdraw 4% of your pension savings each year, applying inflation, with minimal risk to run out of money. You may not want to bet on all your financial plan for this rule, but there is a lot of research on it. Using a 4% rule is a good way to find out if you are on the right path.
If you start at the age of 43 with $ 522,000 pension savings (I do not include your cash and 529 savings accounts because they are for other purposes) and assume that 4% annual inflation is adjusted with a return rate with $ 29,700, you reach 57 centuries.
Applying the 4% rule on that $ 1,468,936 balance, you could withdraw $ 58,757 a year, which sounds like it should be sufficient to cover your expenses.
Of course, this is a simplified calculation that does not take into account social security or taxes, so let’s get a little deeper. (Looking for help for a financial question? This tool can help coincide with potential advisers.)
Using SmartSet Output Calculator
For a more reliable appearance, I use Smartset retirement calculator and entered all the information you provided in your question. I estimated your annual cost of $ 60,000.
Based on that calculator, you will need $ 1 342 034 to retire at 57 years and you go to the road to have $ 1,516,049. So again, you seem to be on the right path to achieve your goals. (Looking for help for a financial question? This tool can help coincide with potential advisers.)
Additional considerations
Ask the adviser: I’m a 43 -year -old dad with $ 315,000 IRA, $ 90,000 in Roth and other accounts. Every year I make the most of my 401 (k). Can I retire at the age of 57?
Although all of the above shows that you are in very good shape, there are certain variables that we have not taken into account above.
One large variable is the price of college. There are many options, starting from pay to $ 70,000 or more a year to a private university. And while you have some savings in college, high college costs can force you to immerse yourself in pension savings that may require longer work or reduce your retirement costs.
There are also many things about your situation that can change over the years, starting from your work to your health to your return on your personal goals. No financial plan, no matter how good, is never a finished product, so it is important to reassess regularly to make sure you are still going.
When it comes to your withdrawal plan, especially in the first year of retirement, I would also be careful to reduce taxes too priority. (Looking for help for a financial question? This tool can help coincide with potential advisers.)
You really don’t want to pay more than you have, and the right idea is a conscious tax conscious attitude. However, it may be smart if you need to fill those smaller tax groups in those previous years, which may allow you to avoid higher tax groups and actually pay less taxes over a long period of time.
I would also consider the possibility that your first year of retirement in the first few years of retirement, the distribution of your total asset may be more conservative than you should be for your goals and risk tolerance. It can definitely make sense to maintain large cash supplies that you are not as sensitive to short -term market changes. However, being too conservative can donate long -term growth and security. And remember that paying tax means that your money has grown, which is a good thing.
Of course, it is also important to admit that there is a lot of information about your situation I don’t know, so I really have no opportunity to give you specific withdrawal and tax strategies. These are just things to consider when you continue to combine your plan.
Other actions
Looks like you are going right in order to achieve your main goals with some WigGle space to withstand the unexpected one where you want to be. Until you look at your goals, save and make changes, you should be in good shape.
Tips for investing and pension planning
If you have any questions typical of your investment and retirement situation, a financial advisor can help. Finding a financial advisor should not be difficult. The Smartset free tool matches you up to three proven financial advisers who serve your area and you can interview your advisers for free to decide which one is right for you. If you are ready to find an advisor who can help you achieve your financial goals, start now.
Observe social security when you are planning to retire. Use the SmartSet Social Security Calculator to understand how your advantages might look like when you retire.
Follow the emergency fund if you encountered unexpected costs. The emergency fund should be liquid – in an account that does not have significant fluctuations such as the stock market. The compromise is that the value of liquid cash can be deleted due to inflation. However, at the expense of high interest rates allows you to earn compound interest. Compare the savings accounts of these banks.
Matt Becker, CFP®, is a SmartSet financial planning journalist and answers the reader’s personal finances and tax topics. You have a question you would like to answer? E -mail By email askanadvisor@smartaset.com and your question can be answered in the future column.
Remember that Matt is not a participant of the Smartset AMP platform, nor is he an employee of Smartset and has been compensated for this article.
The post asks the adviser: I’m a 43 -year -old dad with $ 315,000 IRA, $ 90,000 in Roth and other accounts. Can I retire at the age of 57? First appeared on Smartset blog.
