Here we are ... DH wants to leave his job next month. He's been thinking about it for a while now; the past year he's been weighing whether to do it this fall or wait till next year, so it's not unexpected. I believe we are ready for this financially, but I would love some thoughts on our numbers and what to do from here on out WRT investments and withdrawals and so on.
DH is 59; I will be 61 next month. He'll be 59-1/2 in January.
DH's salary this year would have been about $150,000 (for the full year), and he has been putting the max into his 401k and Roth IRA. His take-home pay this year if he does leave next month will be about $70k.
I'm basically retired (left my last full-time job 5 years ago), though I usually earn a little bit with some part-time SE work - somewhere around $10k per year or less.
We will be eligible to buy subsidized health insurance through DH's employer when he retires. This year the premium would have been $1400 per month for both of us (this is pretty much gold-plated coverage), but they don't know what it will be next year. It is almost certainly going to be more.
This is what we have; overall AA in retirement accounts is 60 stocks/40 bonds. Everything except for the “other IRAs” and the savings account are at Vanguard.
401k 1,045,000
tIRAs 821,000
Roth IRAs 257,000
Other IRAs 10,000
VMMXX 3,600
VBIAX 123,000
VTSMX 4,200
Savings account 15,000
TOTAL: 2,278,800
Other assets: house worth between $450k and $500k. No mortgage.
Two Honda Fits.
Some stuff (only things of any value are probably my musical instruments)
Estimate of basic expenses (not including income tax or health care or any extra stuff): $60,000 (this number is shifty because for the past couple of years we have spent quite a bit over that doing way overdue upkeep on our house, including a new roof, replacing old light fixtures and flooring, painting, a little redecorating; also had two older cats that got sick and we spent a good sum on their care and ultimate demises). Total taxes last year (on AGI of $140k) were about $26k (fed + state).
My questions:
We are thinking that this month we'll move the VBIAX and VTSMX money into the Vanguard money market account so we have cash available. We were putting $1,000/month into the VBIAX account but stopped when DH started getting serious about leaving his job in the near future. It doesn't make sense to me to continue to invest in those two accounts when we're going to be spending this money fairly soon. Does this seem right? This would give us almost two years' living expenses easily available.
We were then thinking we'll start withdrawing from the retirement accounts next year. My understanding is that we should draw out of the 401k/tIRAs both for expenses and to move some into our Roths.
How much we will have to withdraw depends on a couple of things. DH MAY continue working part time at his current place, in which case they will continue to pay for our health insurance. He also may get another job. Or he may do volunteer work.
I will most likely continue with my part-time, self-employed jobs.
But assuming the above is what we will have and no more (other than SS at some point), any thoughts on what to do from here?
TIA