OP was asking what your limits were. If you read the posts following his you'd see everyone's ideas.
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How much $ to retire and how to fund your lifestyle in retirement
- Thread starter dl003
- Start date
OP was asking what your limits were. If you read the posts following his you'd see everyone's ideas.
KBF
Model X owner (formerly Cdn Signature Model S)
Isn't it 2.5% right now?
My credit union savings account (in Canada) is currently 3.1% (up to 3.3% if your account is $250k+), and GIC's from 4.5% (12 month <$100k) up to 5.2% (60 month >$250k).
At the same time, I fully expect TSLA to at least double in 2 years, hence me still holding onto shares. I will be selling lower potential stocks in 2023, though. I bought in a lot during the 2009 crash and have lots of capital gains to work around.
Edit: my apologies - I didn't realize this was a post from years ago... I hadn't clicked on this thread before and started reading as if it was all recent...
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@Skipdd (and everyone else) , please disregard this part of my previous post:
Apparently that was stale information and no longer an option, at least through 2025. It also appears it was a capped at 2% deduction:
Deducting Losses on Your IRA Investments: No Longer Possible
Apparently that was stale information and no longer an option, at least through 2025. It also appears it was a capped at 2% deduction:
Deducting Losses on Your IRA Investments: No Longer Possible
hi all, outside of general TSLA gains, does anyone here have experience with exiting from a business? I have a tech company that I started 10 years ago, and getting a ton of offers for acquisition.
I'm not familiar with tax strategies on the capital gains (it will be a lot), and don't care to do more real estate buys (bonus depreciation games). Heard about opportunity zones, but also want to see if I could start a solar farm or something. Anyways, any opinions or general advice is appreciated!
I'm not familiar with tax strategies on the capital gains (it will be a lot), and don't care to do more real estate buys (bonus depreciation games). Heard about opportunity zones, but also want to see if I could start a solar farm or something. Anyways, any opinions or general advice is appreciated!
Talk to professionals to structure the sale tax-efficiently, and obviously maximize the valuation.
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If the acquirer is a listed public company, I believe (but am not an expert) you could structure the deal as a stock swap to get shares in the other company without a tax event. Then sell at your leisure as you need the money. But don't trust me on this.
And of course you'd need to believe that the other company had a good future...
Bumping because things haven't gotten so bad we can't still be talking about retirement. This thread dropped to page 4 for crying out loud!
On topic: For those who've retired or gone through the mental exercise, how many years worth of cash do you think is a good amount to set aside going into retirement and, what do you think is a good strategy for replenishing cash reserves during retirement?
I'm asking this question partly because The Tesla Economist recently stated he had 500K in reserve when he panic sold his Tesla position. For me, that would be 4 years worth of cash. My estimation is I will be comfortable with a 2 year buffer. I'm less decided upon how to replenish. I can see monthly, quarterly, yearly, only above 200MA, etc, all being viable options. Right now I lean toward quarterly as long as above 200day. If below the 200day, rely on the buffer until the share price improves.
On topic: For those who've retired or gone through the mental exercise, how many years worth of cash do you think is a good amount to set aside going into retirement and, what do you think is a good strategy for replenishing cash reserves during retirement?
I'm asking this question partly because The Tesla Economist recently stated he had 500K in reserve when he panic sold his Tesla position. For me, that would be 4 years worth of cash. My estimation is I will be comfortable with a 2 year buffer. I'm less decided upon how to replenish. I can see monthly, quarterly, yearly, only above 200MA, etc, all being viable options. Right now I lean toward quarterly as long as above 200day. If below the 200day, rely on the buffer until the share price improves.
Have the same approach, the critical thing is to stay invested past retirement, possibly slightly more conservatively to more steadily and easily fund cash reserve replenishment (you can include social/pension payments as part of the conservative stream, they are essentially like holding a bond ladder). A DCA approach would require less management time, and you could bump it up when SP > 200MA. [I’m retired.]
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I have other retirement income sources which pays for most of my daily expenses. My goal is to have 12-18 months of the amount I need/want on top of that other income.
But last year I bought a new home a bit impulsively and depleted my buffer money. So now I sell whatever I need on a month by month basis.
My logic for refilling my buffer is to sell more than I need when TSLA is above MA50 and sell a much larger amount whenever we make new ATHs. This year though I sold some property and filled my buffer half way up. But that was a one off.
By cash, do you mean non-IRA, and non-investment cash? Definitely have more than a few month's worth of cash! I didn't think about this before going into retirement, and last year's TSLA crash taught me a harsh lesson. With my SEPP plan tied to using the RMD calculation, this year's IRA distributions are about 1/3 of last year's - just barely enough to pay the bills. Luckily my wife insisted on still working, so only my pride was hurt.
Still, with the freedom it afforded us, retiring early was still a good decision. Just needed to manage my finances more conservatively.
This brings up a whole other question; how much to draw from IRA vs Brokerage accounts? I haven't dug into the advantages/disadvantages yet but my gut tells me to keep a massive amount in the brokerage fund for potential Home or Cybertruck purchases (we all have multiple Cybertrucks reserved, right?).
I don't have the option of drawing from IRA yet. I've got a year and a half for that but TSLA share price will probably take that long to get me back into retirement range so I might have a convenient convergence there.
I found this super helpful:
earlyretirementnow.com
The Safe Withdrawal Rate Series – A Guide for First-Time Readers
Update 11/15/2021: if you like to navigate across the different parts of the series, there is an easy way: is this landing page will get you part XY or the series, for example, the “swr01R…
earlyretirementnow.com
For those of us using SEPP (Substantially Equal Periodic Payments), the amount is pre-determined by the IRS rules. For yourself, you're free to choose in 2 years (assumes that you meant you'll be 59 1/2 by then?). Just remember that whatever you draw from your IRA will be taxed as regular income, and that RMD (Required Minimum Distribution) starts the year you turn 73. So if your investments do very well over the next 18 years, then you might be taxed more by that point.
I always planned for 5 y of necessity expenses (not wants or actual spending) in 5-y CD Ladder (taxable accounts, not IRAs). Eventually, through no fault or design, I built up to 10 y with I-bonds and CDs. Yes, I know it’s overkill, but I’ve always been very frugal, so my “needs” are significantly lower than others, including people living in my low cost area. Then Covid-19 hit, then market crash, then TSLA crash, now inflation. Suddenly 5 y didn’t seem like enough. Fortunately, spending dropped dramatically without travel or restaurants. Having a large bond buffer has allowed me to ride through TSLA ups and downs without sleepless nights and have essentially 100% TSLA in my IRAs. It certainly isn’t advice or a good method for everyone, but it works for me right now. I’ve been selling TSLA options to earn premiums for the past two years, reinvesting proceeds in stock.
As for a withdrawal/replenishment strategy, I plan to exhaust all the CDs first, as well as convert a minimal amount of IRA to ROTH (just enough each year to get into the 10% tax bracket). Then, I will probably withdraw excess cash options premiums from the IRA until my first I-Bond reaches 30-y (tax deferred, but stops earning interest at 30-y). I will sell stock if/when necessary, but I doubt it will be required because I’m currently able to generate 2x-5x weekly living expenses by selling options. My retirement goal is to ramp up spending enough to actually need to sell some stock.
Instead of retiring I ended up starting working at a medicolegal expertise firm and started doing private surgeries and private consultations to boost my annual income 30-50% to cover for the December margin calls. Now with that extra money I will have a nice cushion or I will be ready for the next downturn
My understanding is that you should exhaust taxable accounts first and then use the traditional IRA/401k accounts through IRA rollovers with the 5 year waiting period to avoid the 10% penalty and finally use your Roth IRA.
As far as how much cash to hold that becomes a personal preference and what you are comfortable with. Replenish cash when it makes sense but again that's impossible to time everytime right.
All, what percentage of your retirement investments will be in Tesla going into retirement? I had way more than what I needed to early retire when Tesla was in the $400's but you guys know how that turned out
. I am trying to plan my exit strategy from Tesla since it accounts for 75% of investments and there is no way I can have a peaceful retirement that way. The goal is to get the investments to sustain a 3.5% withdrawal rate which could happen quickly at the rate Tesla is moving lately.
Already retired and consider TSLA:non-TSLA allocation pretty irrelevant until TSLA recovers towards ATH. What looks likely at present is to place a $ rather than % cap on TSLA core shares once ~$300, then rebalance quarterly to that max (either buying or selling shares), perhaps putting quarterly overages into a bond ladder for steady income, and selling buy-write and 20%OTM CC’s for continued income/growth/shares replenishment, and gardening current LEAPs beyond the cap. All of above is in Roth, having converted all Traditional and Rollover IRAs since early retirement. Have enough in taxable investments and pension/future Social Security for a number of years’ expenses, so eventual goal is to pare down to Roth and less real estate to simplify taxation and estate planning.My understanding is that you should exhaust taxable accounts first and then use the traditional IRA/401k accounts through IRA rollovers with the 5 year waiting period to avoid the 10% penalty and finally use your Roth IRA.
As far as how much cash to hold that becomes a personal preference and what you are comfortable with. Replenish cash when it makes sense but again that's impossible to time everytime right.
All, what percentage of your retirement investments will be in Tesla going into retirement? I had way more than what I needed to early retire when Tesla was in the $400's but you guys know how that turned out
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Some perspective for a Monday:
"
Asked to describe their financial situation, only 4% of respondents already in retirement said they were “living the dream,” and 42% said they were comfortable. However, the majority (54%) of retirees were not as fortunate, as 36% said they were “not great but not bad,” and 18% said they were struggling.
Notably, one-third (33%) of respondents already in retirement said their expenses were higher than expected, including 10% who said, “a lot higher.”
"
"
Asked to describe their financial situation, only 4% of respondents already in retirement said they were “living the dream,” and 42% said they were comfortable. However, the majority (54%) of retirees were not as fortunate, as 36% said they were “not great but not bad,” and 18% said they were struggling.
Notably, one-third (33%) of respondents already in retirement said their expenses were higher than expected, including 10% who said, “a lot higher.”
"
Just 26% of Americans Near or at Retirement Age Have Enough Saved for Retirement
DC survey
www.schroders.com
bballshinobi
Member
This is not necessary a way to set up your retirement withdraw, but this is what I did to minimize taxes right now while selling options and also later on when I want to just exit my TSLA position (if ever! ha!):
- set up C Corp
- transfer shares to the C Corp in the form of a "loan"
- C Corp pays me an ammortized monthly payment (like a mortgage)
- set up an ICHRA
The reasons/benefits:
- lower tax rate when I trade (21% copr rate)
- the ICHRA allows me to deduct all health expenses (insurance premium, deductible, etc.)
- business setup allows me to deduct all dining-out expenses
- business setup allows me to deduct everyday exepnses that can be relevant to the business
- flexiblity of withdraw as the repayment from Corp to you can be in the form of cash or TSLA, and it can also be strucutred as additional principle payment (like what you would do on a mortgage) so you don't get taxed
It's not an ideal setup if you plan to withdraw a huge amount or exit all at once, as you will be hit with double taxation on the corp + personal taxes. However, if you plan to live off your investment and withdraw slowly, this might be beneficial to you as it allows you to deduct a lot of life expenses and lower your taxable amount.
- set up C Corp
- transfer shares to the C Corp in the form of a "loan"
- C Corp pays me an ammortized monthly payment (like a mortgage)
- set up an ICHRA
The reasons/benefits:
- lower tax rate when I trade (21% copr rate)
- the ICHRA allows me to deduct all health expenses (insurance premium, deductible, etc.)
- business setup allows me to deduct all dining-out expenses
- business setup allows me to deduct everyday exepnses that can be relevant to the business
- flexiblity of withdraw as the repayment from Corp to you can be in the form of cash or TSLA, and it can also be strucutred as additional principle payment (like what you would do on a mortgage) so you don't get taxed
It's not an ideal setup if you plan to withdraw a huge amount or exit all at once, as you will be hit with double taxation on the corp + personal taxes. However, if you plan to live off your investment and withdraw slowly, this might be beneficial to you as it allows you to deduct a lot of life expenses and lower your taxable amount.
Great interview with Bill Bengen even though its dated to almost a year ago:
www.thinkadvisor.com
Father of 4% Rule Urges Caution, Cash as Market Risk Rises | ThinkAdvisor
But recent calls to cut withdrawals to around 3% or less are too conservative, Bill Bengen tells ThinkAdvisor.
www.thinkadvisor.com
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