Hi! I've read about Roth laddering, a safe withdrawal rate of 4% of assets, etc.
In doing some calculations and really thinking through our annual expenses (mainly based on the case study MMM posted last night), I realized that end of the year we have more than enough assets to cover our ~$20K annual expenses. We've done a ton of cost cutting in the last few months to make this possible (move to Ting, cut home security monitoring, cut unnecessary life insurance, raised deductibles, cut vacations, cut food, started shopping at Costco). We could even cut some expenses further and would probably want to leave our current house and move to a more desirable to us area (we live in this town for DH's work right now). However, I feel nowhere near ready financially of HOW we would pay our bills and need to convince DH a bit more.
While it may sound like a stupid question, exactly HOW would we fund our expenses? We or he will likely work a bit longer to continue to fund luxuries in our life since we are so young (he is 33, me 34) and still have college on the horizon (currently pregnant with #2 and have a 18 month old).
For those that have retired, how did you do it? Did you have a year or two of cash (in a savings account or money market) saved before making the plunge? Did you just liquidate some of your taxable account investments to pay for living expenses? Did you prepay some expenses while working? If you liquidate your taxable accounts while waiting for the Roth laddering, do you sell mutual funds monthly? Annually? Just live off dividends? What are the mechanics of what to do? I just feel like we need to get our financial house in order to move from wealth building to transitioning to actually USING the funds. It seems confusing to me.
Thanks in advance.