Author Topic: Critique my FIRE plan please...  (Read 4338 times)

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Critique my FIRE plan please...
« on: July 23, 2017, 01:41:08 PM »
Hi folks,

I've been hanging around here for a few years now, but have never really run my FIRE plan by the forum before.  The plan has me jumping ship around the end of 2017/beginning of 2018, so I figured maybe it's time to get a second opinion, just to make sure.

I hope you don't mind that I'm not doing a full case study.  DW and I have our lifestyle and spending pretty well dialed in, so I'm not really looking for feedback on that aspect of the plan.  Also, I'm a bit paranoid about posting every detail about our investments.  But I'll tell you how I've handled all the major considerations, and hopefully that will be enough for you to see whether I've missed something critical.  On to the givens:

Simulation tool of choice: cFiresim.

Me: Late 40's, employed by Uncle Sam.

DW: Early 60's, retired SAHM.

Debt: About 82k owed on the house, set to be paid off in late 2027.

Current base annual spend: A little over $30k, plus P&I on the mortgage, which brings it to about $40k currently.

Desired FIRE spend: $45k, to allow a little buffer for occasional travel and unexpected large expenses.

Stash: about 57% of it is in taxable accounts plus DW's Roth IRA, all of which can be accessed immediately.  The remainder is divided among my TSP, tIRA and Roth IRA accounts. 75/25 stock/bond breakdown.

Strategy for funding FIRE spend: Pull from taxable accounts and/or DW's Roth while doing a Roth pipeline on my qualified accounts.  In theory, the pipeline conversions should not generate any federal income tax liability due to our MAGI being very low ($45k spend funded by a combination of principal, capital gains, and qualified Roth distributions).

Social Security:  Expected benefits estimated using SS's on line estimator.  DW is planning to start taking benefits as soon as I FIRE (she worked before she was a SAHM), and I'm planning to take them at 62.  cFiresim projects a higher maximum annual spend if we take SS as soon as possible, likely because this strategy reduces the initial withdrawal amount from the stash, thereby mitigating sequence of return risk.

Pension:  I'll have a small FERS pension coming.  I'm planning to take it at 57, for the same reason outlined above for SS.  I used my current high 3 to estimate the amount I would receive at 62, reduced that by 25% to reflect taking it at 57, then further reduced for inflation at 3%/yr for every year between my FIRE date and the date I start receiving benefits.  That amount was put in as a non-inflation adjusted extra income amount for the years from ages 57 through 61.  Then I reduced the amount by 3%/yr for 5 more years to reflect the fact that I lost 5 more years of inflation adjustments between 57 and 62, and plugged the resulting amount in as an inflation-adjusted pension starting at age 62.

Income taxes:  Assuming essentially none, given low annual income and everything being funded by capital gains, qualified withdrawals, and SS (should be non-taxable at our income level).  In reality, the pension income will generate a small tax liability, and we will owe some state income tax.  But the pension will be so small and our state income tax rate will be so low that together those taxes might amount to a thousand dollars or so.  I consider that negligible enough to be covered by the spending buffer.

Strategy for health care: This is still a bit of wild card given the current shit show in DC.  If the ACA survives, our total health care expenditures will go down due to subsidized insurance premiums.  If something like the recently deceased Senate bill passes, our insurance premiums will go down due to the subsidies, but our max out of pocket would be higher, so I'll call that one a wash.  If everything is still up in the air come the end of the year, such that implosion of the individual health care market looks like a real possibility, I will not pull the plug because a $15k/yr increase in premiums would blow the whole plan out of the water.  So, I'm assuming that health care costs are covered under our base annual spend.

Mortgage: I plugged in the P&I part of the mortgage as a non-inflation-adjusted extra expense starting on my FIRE date and ending when the house is paid off.

Extra savings: I plugged in projected savings for the rest of this year, along with my expected payout for unused annual leave.

Length of simulation: I used our life expectancies at age 62 according to the Social Security actuarial table.  This puts us expiring in our early to mid 80's, which generates a run of 30-some years.

RESULTS

I plugged the particulars into cFiresim and chose the option to explore the maximum initial spend with a 100% success rate.  It spat out $49,500 (mortgage included), which gives us a 24% buffer on the $40k base annual spend (almost twice the buffer I was shooting for).  I've also done runs where both DW and I live to 95; these also produce a 100% success rate, although with a lower spending buffer.  So I should be golden, right?

POTENTIAL RISKS

-- Our SS benefits might get cut by about 25% when the SS trust fund runs out, if Congress doesn't do anything to fix it.  I modeled full benefits, because no previous SS fix has ever made substantial cuts to benefits for people who are as close to claiming them as we are.

-- Congress might reduce my FERS pension, which they are currently threatening to do.  But it's a fairly small part of my overall strategy.

-- We don't have long term care insurance.  Once the house is paid off, I figure we could downsize and extract 60-70k of equity.  Or sell the house outright for $160-$170k if neither of us are in good enough shape to stay in it.  That won't go very far at a nursing home, but Medicaid should serve as a backstop if our assets are exhausted.  Not an ideal outcome, but not the end of the world, either.  Unless the republicans succeed in gutting Medicaid, as they are currently threatening to do.

-- Tax laws could change, potentially screwing up my Roth pipeline and low income/no tax strategy.

SAFETY FACTORS

-- 100% cFiresim success rate would be considered excessively conservative by many folks on this forum.  I chose it because I'm keenly aware of the fact that the current bull market is getting long in the tooth and stock valuations are stretched.  Something worse than the 1970s stagflation era would have to happen to derail my FIRE plan.

-- I likely will receive a modest inheritance at some point.  Currently I have no idea of the timing or amount, so I did not attempt to account for it.

-- I'm considering the potential for side gig, such as part time consulting, monetizing one of my hobbies, or even PT work like substitute teaching.  Not sure if I'll do this or not, and I don't have a good idea of how much money I could make at these activities, so I did not account for the possibility.

-- Our portfolio contains some international equity diversification (about 25-30%), which should, in theory, lead to a smoother sequence of returns than the all-US equity scenario that is modeled by cFiresim.

-- By the time I reach 62, SS plus pension will cover the basic spend (but see potential SS/pension cutting above).  So even if the stash is exhausted less than 15 years into retirement, we should be mostly o.k., except we would no longer have a spending buffer.  But SS and pension are already accounted for in the simulation, so I guess this doesn't really count as a safety factor.

-- Given the age difference between DW and me, I am likely to be spending the last decade or so of retirement alone (morbid thought, but I need to consider these things).  I ended her SS benefit according to life expectancy, but did not factor in any decrease in spending.



O.K., what did I miss?





« Last Edit: July 23, 2017, 02:25:01 PM by Monkey Uncle »

cen murataj

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Critique my FIRE plan please...
« Reply #1 on: July 23, 2017, 03:04:56 PM »
Ok

Sent from my X5 using Tapatalk


Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #2 on: July 25, 2017, 04:27:17 AM »
Ok

Sent from my X5 using Tapatalk

Thanks.

human

  • Pencil Stache
  • ****
  • Posts: 791
Re: Critique my FIRE plan please...
« Reply #3 on: July 25, 2017, 04:45:41 AM »
Do you have about 1.2 million?

clumlee

  • 5 O'Clock Shadow
  • *
  • Posts: 45
Re: Critique my FIRE plan please...
« Reply #4 on: July 25, 2017, 05:17:57 PM »
I think you could be in decent shape. But an even bigger question is how much you have right now saved. For me personally I'm generally an income-oriented investor. So I think if you're looking a brute savings and investments without yield, then I would be cautious about that. If you have a large enough nest egg that you get a decent inflow of cash from dividends and interest, then obviously you're better off.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #5 on: July 25, 2017, 06:47:37 PM »
Do you have about 1.2 million?

No, a little more than half that.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #6 on: July 25, 2017, 06:51:00 PM »
I think you could be in decent shape. But an even bigger question is how much you have right now saved. For me personally I'm generally an income-oriented investor. So I think if you're looking a brute savings and investments without yield, then I would be cautious about that. If you have a large enough nest egg that you get a decent inflow of cash from dividends and interest, then obviously you're better off.

I'm definitely looking at a draw-down scenario, at least early on until the pension and both SS benefits have kicked in.  At that point what's left of the stash is just padding.  I'm of the view that if you've saved enough to live solely off the income produced by your investments, you've worked longer than you really needed to.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #7 on: July 28, 2017, 04:39:50 AM »
Bumping to see if anyone else wants to chime in.

MDM

  • Walrus Stache
  • *******
  • Posts: 9598
Re: Critique my FIRE plan please...
« Reply #8 on: July 28, 2017, 05:32:43 AM »
Income taxes:  Assuming essentially none....
Given that, are the two of you contributing the maximum allowed to traditional (tIRA, 401k/403b/457) and HSA accounts?

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #9 on: July 29, 2017, 05:14:15 AM »
Income taxes:  Assuming essentially none....
Given that, are the two of you contributing the maximum allowed to traditional (tIRA, 401k/403b/457) and HSA accounts?

We're maxing both of our Roth IRAs.  I have a tIRA that I haven't been contributing to, as I've favored Roth contributions for easier future access to the funds.  I should have been maxing the TSP (=401k) years ago, but didn't.  Water under the bridge now.  I've always contributed enough to get the full match.

In the last couple of years when I really got serious about the FIRE thing, I elected to focus on putting $ in the taxable account instead of the TSP to make sure we have enough to live on until the converted Roth assets build up.  Not wanting to pay taxes on the Roth conversions puts a pretty low limit on how much I can convert each year, plus there's always a little bit of the nagging fear that the tax laws will change in a way that eliminates the Roth ladder.  So I didn't want to be too dependent on that strategy.  Plus our income historically has been low enough that we're paying 0% on the capital gains and dividends generated by the taxable account.  This year our income is up enough that we may owe a bit, but not much.

We don't have a HSA available to us on our current insurance plan.  I tried convincing DW that we should switch to a high deductible plan with a HSA, but she wouldn't go for it.  The high OOP expenses freaked her out, especially after she and DS (who is still on our insurance, despite being launched) had to have a couple of emergency surgeries.

[edited to clarify Roth instead of tIRA contributions]
« Last Edit: July 29, 2017, 07:36:16 AM by Monkey Uncle »

human

  • Pencil Stache
  • ****
  • Posts: 791
Re: Critique my FIRE plan please...
« Reply #10 on: July 29, 2017, 09:29:28 AM »
It's a bit long winded and difficult to follow. When do you want to quit working (how many years from now) and when does pension and ss kick in?

600k now, ss and pension later.

For what it's worth I'm thinking of quitting in 5 years at 45 with 500k in the bank and a 40k cola'd pension at 60. I spend close to 30k a year, could cut back but would mean leaving my gf so not worth it for me.

Taxes, health care, etc. no one can predict what the gov will do. You have to decide how much of a cushion you need for this stuff, you already have about 5k a year built in.

So to recap how many years from now are you quitting and in how many years is the other income starting?


Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #11 on: July 29, 2017, 10:29:24 AM »
It's a bit long winded and difficult to follow. When do you want to quit working (how many years from now) and when does pension and ss kick in?

600k now, ss and pension later.

For what it's worth I'm thinking of quitting in 5 years at 45 with 500k in the bank and a 40k cola'd pension at 60. I spend close to 30k a year, could cut back but would mean leaving my gf so not worth it for me.

Taxes, health care, etc. no one can predict what the gov will do. You have to decide how much of a cushion you need for this stuff, you already have about 5k a year built in.

So to recap how many years from now are you quitting and in how many years is the other income starting?

My plan is to quit the end of this year, if the state of the health care mess at that time doesn't scare me too badly.  Current stash is about 650k; planning to add about 30k more by the end of the year.

Wife's SS would kick in immediately, but that's only a little over $8,800/yr (she hasn't worked for pay since 1993).

My pension would kick in 2026.  Adjusting for erosion due to inflation between now and then, it would be worth about $7,900/yr.  It would be fixed for a few years and would then start COLAs in 2031.  Value in today's dollars when the COLAs start in 2031 would be about $6,800/yr

My SS would start in 2031; that's another $15,700/yr. 

At that point total annuitized income would be $31,300.  The mortgage will be paid off in 2027, so by the time all of the annuitized income is rolling in, base spending is estimated at $30,654.  Buffered spending would be $35,654.  So if the stash were totally depleted by then, we'd just have to cut back on the buffer spending.

I've done a cFiresim run that only goes through 2030, just to see what the likelihood is of making it the SS/pension promised land.  It returned 100% success.  I guess that's to be expected if the full run is showing 100%, but the shorter run is valuable information because it includes more recent start years than the long run.

Sorry for the long OP.  All of that info seems pertinent to the outcome, so I figured I'd better put it out there.

human

  • Pencil Stache
  • ****
  • Posts: 791
Re: Critique my FIRE plan please...
« Reply #12 on: July 29, 2017, 10:45:41 AM »
By the time you call it quits what you consider to be base spending will almost be completely covered by the investments. I would say you are good. My plan is to start of retirement with lower spending for a year or two and gradually increase if things look good. So in your case you could always start off your retirement with spending only bas spending to let the investments accrue or if the market is in the toilet you won't hurt so much.

However, my advice is kinda worthless, I'm no where near FIRE yet.

MDM

  • Walrus Stache
  • *******
  • Posts: 9598
Re: Critique my FIRE plan please...
« Reply #13 on: July 29, 2017, 12:18:00 PM »
Income taxes:  Assuming essentially none....
Given that, are the two of you contributing the maximum allowed to traditional (tIRA, 401k/403b/457) and HSA accounts?
We're maxing both of our Roth IRAs.  I have a tIRA that I haven't been contributing to, as I've favored Roth contributions for easier future access to the funds.  I should have been maxing the TSP (=401k) years ago, but didn't.  Water under the bridge now.  I've always contributed enough to get the full match.

In the last couple of years when I really got serious about the FIRE thing, I elected to focus on putting $ in the taxable account instead of the TSP to make sure we have enough to live on until the converted Roth assets build up.  Not wanting to pay taxes on the Roth conversions puts a pretty low limit on how much I can convert each year, plus there's always a little bit of the nagging fear that the tax laws will change in a way that eliminates the Roth ladder.  So I didn't want to be too dependent on that strategy.  Plus our income historically has been low enough that we're paying 0% on the capital gains and dividends generated by the taxable account.  This year our income is up enough that we may owe a bit, but not much.
In the situation described (some capital gains taxed at 15%, some at 0%), using traditional accounts instead of Roth will save you 30% until you have contributed enough that the capital gains are not taxed.  See the case study spreadsheet if you would like to use your specific numbers.

Even if you had to pay the 10% charge to withdraw early from a tIRA, saving 30% now and paying 10% later would be a good deal for you.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #14 on: July 29, 2017, 12:27:11 PM »
By the time you call it quits what you consider to be base spending will almost be completely covered by the investments. I would say you are good. My plan is to start of retirement with lower spending for a year or two and gradually increase if things look good. So in your case you could always start off your retirement with spending only bas spending to let the investments accrue or if the market is in the toilet you won't hurt so much.

However, my advice is kinda worthless, I'm no where near FIRE yet.

Thanks, that's kinda what I was thinking, but it's nice to hear it from someone else.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #15 on: July 29, 2017, 12:49:52 PM »
Income taxes:  Assuming essentially none....
Given that, are the two of you contributing the maximum allowed to traditional (tIRA, 401k/403b/457) and HSA accounts?
We're maxing both of our Roth IRAs.  I have a tIRA that I haven't been contributing to, as I've favored Roth contributions for easier future access to the funds.  I should have been maxing the TSP (=401k) years ago, but didn't.  Water under the bridge now.  I've always contributed enough to get the full match.

In the last couple of years when I really got serious about the FIRE thing, I elected to focus on putting $ in the taxable account instead of the TSP to make sure we have enough to live on until the converted Roth assets build up.  Not wanting to pay taxes on the Roth conversions puts a pretty low limit on how much I can convert each year, plus there's always a little bit of the nagging fear that the tax laws will change in a way that eliminates the Roth ladder.  So I didn't want to be too dependent on that strategy.  Plus our income historically has been low enough that we're paying 0% on the capital gains and dividends generated by the taxable account.  This year our income is up enough that we may owe a bit, but not much.
In the situation described (some capital gains taxed at 15%, some at 0%), using traditional accounts instead of Roth will save you 30% until you have contributed enough that the capital gains are not taxed.  See the case study spreadsheet if you would like to use your specific numbers.

Even if you had to pay the 10% charge to withdraw early from a tIRA, saving 30% now and paying 10% later would be a good deal for you.

Thanks for the tip.  I'll have to take a closer look at expected income for the year to see if we really will have any gains taxed at 15% this year (right now I'm just speculating that we might).

Would you mind walking me through how you arrived at the 30% savings?  I do appreciate the link to the spreadsheet, but at first glance I'm finding the inputs a bit overwhelming.

MDM

  • Walrus Stache
  • *******
  • Posts: 9598
Re: Critique my FIRE plan please...
« Reply #16 on: July 29, 2017, 01:27:51 PM »
Would you mind walking me through how you arrived at the 30% savings?
Not at all.  For purpose of example, let's add some specific assumptions to what is in the OP (use these for now, then change to your actual numbers after the concept is clear):
* W-2 earnings of $90000
* LTCG+QD of $10000

Enter into these spreadsheet cells (let me know if it isn't clear why):
G2:     2
G3:     2
G8:   49
H8:   61
B2:   =90000/12
B26: =10000/12

That should be enough to generate a chart (see ~cells F63:M86) similar to


That shows a 30% savings zone (it's negative because you are saving, not paying, taxes).  Doesn't yet explain why - but do things make sense so far?

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #17 on: July 30, 2017, 05:04:02 AM »
Yes, the inputs make sense.  I adjusted to fit my real numbers.  The graph pattern looks much the same as your example, except the cumulative line ends up slightly higher.

So let me make sure I have this straight - the graph is showing the change in marginal and cumulative tax rate (or total taxes paid?) at various 401k contribution amounts, correct?  But change relative to what?

MDM

  • Walrus Stache
  • *******
  • Posts: 9598
Re: Critique my FIRE plan please...
« Reply #18 on: July 30, 2017, 01:16:26 PM »
Yes, the inputs make sense.  I adjusted to fit my real numbers.  The graph pattern looks much the same as your example, except the cumulative line ends up slightly higher.

So let me make sure I have this straight - the graph is showing the change in marginal and cumulative tax rate (or total taxes paid?) at various 401k contribution amounts, correct?  But change relative to what?
First, apologies for a typo: should have said "B2:   =100000/12" instead of "B2:   =90000/12" to get the chart shown, but it appears you figured out how it works in any case.

The chart shows the marginal tax saving rate (gray line) for 401k contributions.  In other words, for each additional $100 contributed, you would save $25, $30, or $15, depending on how much you had already contributed.

The blue line shows the cumulative (aka average) tax saving rate for all 401k contributions up to that point.  E.g., the first $3300 all save 25% so the marginal and cumulative numbers are equal.  The next $10K saves 30% on every dollar so that's the marginal rate.  The cumulative rate is the average of the 25% and 30% contributions.  So far so good, or more questions?

As to why there is a 30% saving rate, one has to understand how the Qualified Dividends and Capital Gain Tax Worksheet (see page 44) works.  We'll use $100K of ordinary income, $10K of LTCG, the MFJ standard deduction of $12,700 and the personal exemptions of 2 * $4,050 = $8,100.  Referring to that worksheet (see the linked pdf and cells K3:M33 in the spreadsheet Calculations tab:
Line 1 = taxable income = $100K + $10K - $12.7K - $8.1K = $89,200
Line 4 = LTCG + QD = $10,000
Line 7 = taxable ordinary income = $79,200
Line 8 = top of the 15% bracket for ordinary income, and top of the 0% bracket for LTCG = $75,900 for MFJ

It may help to imagine the LTCG income "sitting on top of" the ordinary income.  See Mechanics Of The 0% Long-Term Capital Gains Rate for some pictures.

At this point, there is $79,200 - $75,900 = $3,300 ordinary income taxed in the 25% bracket, and all $10K of the LTCG is taxed at 15%.  That's why the first $3,300 of 401k contributions saves 25%.  With that $3,300 401k, taxable ordinary income is $75,900.  Tax on that (line 24 of the worksheet) is $10,453.  Add $1500 for the LTCG tax for a total of $11,953.

Now it gets interesting.  Assume an additional $300 (total of $3,600) 401k contribution.  This reduces the ordinary income tax by $45, from $10,453 to $10,408.  That is a 45/300 = 15% savings, as one would expect in the 15% bracket.  What also happens is $300 of the LTCG drops into the 0% LTCG bracket, saving an additional 15%, for a total savings of 30%.

Any clearer, or still muddy?


Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #19 on: July 30, 2017, 03:01:22 PM »
Thanks very much for taking the time to give that detailed explanation.  I think I'm following everything now.  I had done enough previous studying of tax brackets to understand the stacking concept, but hadn't really worked through it with actual numbers.

Minor quibble: earlier you noted that the 30% savings compared favorably to the 10% penalty in a scenario where a non-qualified withdrawal is made.  Wouldn't you actually be paying 25% on the withdrawal (10% penalty plus 15% ordinary income tax)?  You still come out 5% ahead on the original money, but then there is the issue of the penalty + ordinary tax that you pay on any gains that may have accrued, which doesn't compare favorably to the taxes on any gains that would have accrued had the money been in a taxable account.  But as I said, it's a minor quibble, because unless the tax laws change in a way that eliminates both the Roth ladder and the SEPP option, it's very unlikely that I would find myself in this scenario.

MDM

  • Walrus Stache
  • *******
  • Posts: 9598
Re: Critique my FIRE plan please...
« Reply #20 on: July 30, 2017, 03:46:22 PM »
Thanks very much for taking the time to give that detailed explanation.  I think I'm following everything now.  I had done enough previous studying of tax brackets to understand the stacking concept, but hadn't really worked through it with actual numbers.

Minor quibble: earlier you noted that the 30% savings compared favorably to the 10% penalty in a scenario where a non-qualified withdrawal is made.  Wouldn't you actually be paying 25% on the withdrawal (10% penalty plus 15% ordinary income tax)?  You still come out 5% ahead on the original money, but then there is the issue of the penalty + ordinary tax that you pay on any gains that may have accrued, which doesn't compare favorably to the taxes on any gains that would have accrued had the money been in a taxable account.  But as I said, it's a minor quibble, because unless the tax laws change in a way that eliminates both the Roth ladder and the SEPP option, it's very unlikely that I would find myself in this scenario.
You're welcome - glad to see that it makes sense.

The 10% withdrawal rate was based on "Income taxes:  Assuming essentially none..." from the OP.  Yes, the total rate would be 10% plus whatever actual rate.

Monkey Uncle

  • Handlebar Stache
  • *****
  • Posts: 1487
  • Location: West-by-god-Virginia
Re: Critique my FIRE plan please...
« Reply #21 on: July 30, 2017, 06:33:13 PM »
Thanks very much for taking the time to give that detailed explanation.  I think I'm following everything now.  I had done enough previous studying of tax brackets to understand the stacking concept, but hadn't really worked through it with actual numbers.

Minor quibble: earlier you noted that the 30% savings compared favorably to the 10% penalty in a scenario where a non-qualified withdrawal is made.  Wouldn't you actually be paying 25% on the withdrawal (10% penalty plus 15% ordinary income tax)?  You still come out 5% ahead on the original money, but then there is the issue of the penalty + ordinary tax that you pay on any gains that may have accrued, which doesn't compare favorably to the taxes on any gains that would have accrued had the money been in a taxable account.  But as I said, it's a minor quibble, because unless the tax laws change in a way that eliminates both the Roth ladder and the SEPP option, it's very unlikely that I would find myself in this scenario.
You're welcome - glad to see that it makes sense.

The 10% withdrawal rate was based on "Income taxes:  Assuming essentially none..." from the OP.  Yes, the total rate would be 10% plus whatever actual rate.

If I somehow got into a situation where I had to live off of non-qualified withdrawals, the portion that exceeds standard deduction + exemptions would be taxed as ordinary income.  The "none" assumption is based on living off of capital gains/dividends that fall within the 0% bracket for LTCG/qualified dividends.  But I'm getting way into the hypothetical realm, here; probably not worth worrying about.

Thanks again for your help.