Topic Title: Reader Case Study Pre-Retirement investing strategies (Thoughts?)
Life Situation: IRS filing status single. Unfortunately still paying VA taxes while serving overseas (this will be nixed ASAP.) Living overseas in USG provided housing with no liabilities. Will retire in 7 years with a pension of approx. $2800.00 per month.
AGI Gross Salary/Wages: ~$101,000.00
Pre-tax deductions: TSP $18,000.00, Health, dental and vision $2357.16
Other Ordinary Income: None
Qualified Dividends & Long Term Capital Gains: Ordinary Div $595 Qualified Div $476
Rental Income, Actual Expenses, and Depreciation: None
Adjusted Gross Income: $86,319.00 ($76019 taxable)
Taxes: NA
Current expenses: Amazon Prime $99 per year, Netflix $7.99 a month. I spend less than $600 per month currently. No other bills
Expected ER expenses: Health Ins $1781.00 year
Assets: TSP $300,000.00 (still has 16 years to grow up), Taxable money market account $65,000.00
Liabilities: None!
Specific Question(s)[/b]: [/b]I am curious on hearing all of your thoughts on strategies on building/protecting wealth, pre 15% bracket time, while being locked in the 25%ers.
I will retire at 50 with the above mentioned pension and am currently investing to bridge that 50-59 ½ gap. I will have no need to touch my TSP until 59. I am trying to think of the most advantageous way to invest and avoid taxes eating into earnings.
Such is life
is an acceptable answer.
If I build up a dividend portfolio now, it will be taxed. Still a gain but it feels like a loss.
Additional background:
I am currently firmly planted in the 25% bracket until I retire. Once there I will be in 15% paradise.
I have my taxable account currently at $65,000.00 and will be adding at a minimum $26,000.00 additional per year (pre-tax)(likely closer to $45k). These monies and pension will be more than enough to get me around in retirement until 59 ½.