MedSaver's Journal

Where are you and where are you going?
MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

MBBboy wrote:
Thu Feb 03, 2022 10:18 am
Getting close to the original goal of $3-4M - have y'all thought at all about what reducing work would look like now that you're getting closer? Has it changed over time?

Also, see that groceries went up quite a bit. Was curious if you ever sussed out the drivers behind that; we are looking to get our grocery spend down and also have high incomes, so want to know what to watch out for!
We have both started plans to reduce work (slightly) with a glidepath for further significant reductions in about 5 years.

Regarding food spending, I think a large part is we are eating out and traveling more since Covid peak. We have noticed price increases for most groceries as well.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

March 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,349,965
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $695,610 @ 2.75% fixed

Net:$2,804,355

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

Getting soooo close. If the markets would just recover a bit from the recent dip, you'd be well past your minimum required amount of $3 million.

I assume you won't drop everything at work and walk away once your net worth reaches $3 million (although definitely a good life can be had on that amount, maybe not in a HCOL, but you don't have to live in a HCOL - so know that it is an option if a workplace turns sour).

But even though you'll probably keep working for a bit longer, I hope it feels nice for you guys that you've reached this stage of financial security.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

April 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,188,697
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $694,293 @ 2.75% fixed

Net:$2,644,403

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Thu Mar 31, 2022 4:36 am
Getting soooo close. If the markets would just recover a bit from the recent dip, you'd be well past your minimum required amount of $3 million.

I assume you won't drop everything at work and walk away once your net worth reaches $3 million (although definitely a good life can be had on that amount, maybe not in a HCOL, but you don't have to live in a HCOL - so know that it is an option if a workplace turns sour).

But even though you'll probably keep working for a bit longer, I hope it feels nice for you guys that you've reached this stage of financial security.
Because of some vesting requirements for work, I cannot leave for at least another 3 years. I guess we didn't expect to get to $3 million as fast as this. The problem with retiring now is that a lot of our worth is tied up in retirement funds and home equity. Even if we moved to a LCOL area and cashed out our home equity, it would be difficult to live for 20-30 years on our taxable funds alone. We could start 72t distributions, but doing the calculations for that can get dicey and the penalties for doing it wrong could put us in the poor house at just the wrong time.

MBBboy
Posts: 212
Joined: Sat Jan 01, 2022 12:11 pm

Re: MedSaver's Journal

Post by MBBboy »

The bridge is tricky. Not sure if you saw this, but IRS changed the 72t rules pretty significantly early this year - it's a much more attractive option now.

https://www.cnbc.com/2022/03/03/new-irs ... irees.html

Scott 2
Posts: 2824
Joined: Sun Feb 12, 2012 10:34 pm

Re: MedSaver's Journal

Post by Scott 2 »

Have you planned what your retirement portfolio and distribution strategy look like? Not in theory, but nuts and bolts? Cash flow per year, what accounts it comes from, what you want to hold, how you harvest income, tax strategies, long term care plan, estate plan, etc.

That's something I wish I'd done a few years before pulling the trigger.

With the possible run-away wealth you are building, looking ahead to tax optimization may be especially important. Maybe you want to setup something like a Donor Advised Fund during your highest earning years, for instance. Minimizing the tax penalty from retirement account RMD's is another consideration. Medicare IRMAA as well.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

May 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,212,800
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $692,978 @ 2.75% fixed

Net:$2,669,822

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

MBBboy wrote:
Tue May 03, 2022 9:38 am
The bridge is tricky. Not sure if you saw this, but IRS changed the 72t rules pretty significantly early this year - it's a much more attractive option now.

https://www.cnbc.com/2022/03/03/new-irs ... irees.html
I hadn't seen that, thanks. But I still think we are not quite old enough to predict a 72t withdrawal accurately. Within 5-10 years it would make sense for us to start seeking out a savvy accountant to crunch the numbers. Also, by that time, who knows what IRS changes would have occurred.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

Scott 2 wrote:
Tue May 03, 2022 9:59 am
Have you planned what your retirement portfolio and distribution strategy look like? Not in theory, but nuts and bolts? Cash flow per year, what accounts it comes from, what you want to hold, how you harvest income, tax strategies, long term care plan, estate plan, etc.

That's something I wish I'd done a few years before pulling the trigger.

With the possible run-away wealth you are building, looking ahead to tax optimization may be especially important. Maybe you want to setup something like a Donor Advised Fund during your highest earning years, for instance. Minimizing the tax penalty from retirement account RMD's is another consideration. Medicare IRMAA as well.
We have started mulling over the nuts and bolts of actually pulling the trigger. We aren't close enough to get really in the weeds, but are learning more about ways to eventually shift 401/403/457 funds into Roth IRA while being mindful of tax brackets. We have started liquidating some of our individual stocks and purchasing index funds/ETFs to reduce volatility. Hopefully, at the end of the day we will have only a few funds to keep an eye on (maybe a Bogleheads' 3 fund approach). If we go half/part time, then cash flow is easy; we just save less for retirement and spend W2 income. I expect that could happen in around 5 years, stock market willing. Regarding LTC, we are planning to just self-insure. Estate planning has been discussed with a lawyer, but nothing signed yet. One other issue is my wife has a pension and we will need to decide if we take a lump sum payout or annuity with discounted healthcare.

I'm not sure I would characterize our situation as "runaway wealth", but it sounds fun! I will look into the donor advised fund.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

June 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,086,203
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $691,658 @ 2.75% fixed

Net:$2,544,545

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

I see you're also able to buy stocks at a discount these days. Oh well...

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

July 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,229,723
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $690,335 @ 2.75% fixed

Net:$2,689,388

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Sat Jul 02, 2022 4:42 am
I see you're also able to buy stocks at a discount these days. Oh well...
Yup. Just pluggin' along.

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

So as I understand, you still "have to" work 3 more years. It does sound like that should also give you time to for example start putting more money into "normal" (non-retirement) investment accounts to navigate the first years of retirement - if that is the best option for you guys. Sounds like it already is a good time now to start making plans. And yes, also hope that some changes in politics, or your personal circumstances, or just in the economy in general don't mess toooo much with those plans.

In recent weeks I've been listening a lot to "Doc G" from the Earn & Invest podcast. He recently has a book out and has been interviewed by many other podcasts I listen to while walking. I'm not sure whether you've heard of him yet, but for me his story makes me think about other ways to work in medicine (parttime, specific areas, etc). Maybe you two are also discussing what types of work you like and what parts are most annoying and will be removed from your day to day work ASAP? I'm curious as to your thoughts.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

DutchGirl wrote:
Sat Aug 27, 2022 6:58 am
So as I understand, you still "have to" work 3 more years. It does sound like that should also give you time to for example start putting more money into "normal" (non-retirement) investment accounts to navigate the first years of retirement - if that is the best option for you guys. Sounds like it already is a good time now to start making plans. And yes, also hope that some changes in politics, or your personal circumstances, or just in the economy in general don't mess toooo much with those plans.

In recent weeks I've been listening a lot to "Doc G" from the Earn & Invest podcast. He recently has a book out and has been interviewed by many other podcasts I listen to while walking. I'm not sure whether you've heard of him yet, but for me his story makes me think about other ways to work in medicine (parttime, specific areas, etc). Maybe you two are also discussing what types of work you like and what parts are most annoying and will be removed from your day to day work ASAP? I'm curious as to your thoughts.
Hi. We have been maxing out our tax advantaged retirement accounts and then putting the rest into our "regular" taxable brokerage accounts. I think to start, we will both try to go part time for a few reasons - fully retiring would be an abrupt transition for both of us, we have not yet explored our health insurance options outside of work plans, we don't hate our jobs. Part time work will continue to cover our living expenses, we just won't be putting as much into savings so specific details regarding full retirement isn't a very pressing issue at this point.

I am not familiar with Doc G, but I will look into it, thanks. Two of the doctors that have a lot of clout in FIRE circles are White Coat Investor and Physician on Fire. They are in different specialties than I am, but their advice is pretty good for all health professionals. I expect when we go half time those major annoyances will get better, but not completely go away.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

August 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,174,790
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $689,011 @ 2.75% fixed

Net:$2,635,779

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

Sept 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,180,443
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $687,711 @ 2.75% fixed

Net:$2,642,732

DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: MedSaver's Journal

Post by DutchGirl »

Progress once again! Albeit slow.

MedSaver
Posts: 153
Joined: Tue Nov 24, 2015 1:04 am

Re: MedSaver's Journal

Post by MedSaver »

Oct 2022 Update

Assets:

IRA/Brokerage/403b/457/cash: $2,279,710
Estimated Home Worth: $1,150,000

Liabilities:
Mortgage: $686,441@ 2.75% fixed

Net:$2,743,299

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