I’m hoping to RE by 2017 at age 44 and I’m starting to think about what to do about my existing accounts. I think I want to consolidate accounts to a minimum as I will be nomadic for awhile so I want to keep mail to a minimum (might get a mailbox in my current state which has no income tax). I also want to simplify from a tax standpoint. There is a small chance I’ll retire this year after bonus is paid in late March.
Here are the current accounts I have. How would you make over these accounts? What time frame would you do each (now, before retirement, vs. immediately after, etc).
Invested in mostly stock funds:
• 401k from former company. It’s been sitting there for over 10 years and currently is managed by Fidelity
• 401k from current company. Vangaurd.
• Deferred Compensation account. Vanguard. Can’t ever touch this except allocations. Once I retire, this starts 15 year payout that is taxable income.
• 6 different Roth IRA accounts managed by 6 different fund companies – ranging from $1200 to $15K. Stupidly in my 20’s someone convinced me I needed to diversify my accounts so I ended up with all of these dinky accounts. I feel like I should consolidate these by rolling into a single Roth, as the fees are eroding these and it’s been difficult to keep addresses up to date with various moves. I’m ineligible to put any new money in due to income.
Other:
• Two savings accounts – I have too much money in these as I have been scared to dump money into the market. Getting 0.5% - 1% interest on these. I’m a bit embarrassed to say I have over 10 years of expenses in these accounts. There really wasn’t a lot in here until 2011 when the condo was paid off. Everything that doesn’t go in the deferred accounts above goes here.
• HSA – to get matching by my company, I have to put this in the preferred HSA provider. This has been sitting in a fixed account and will be around $28K by retirement.
• Own condo without any debt. Can sell for about $480K or rent for $2100 per month. I know this income is bad and after vacancies, management, repairs, property tax and dues this will only net about $1K a month. Kind of want to hold onto this to live in it later after traveling for awhile as it’s in a great location and is a good bachelorette pad.
• Have frozen pension and Cash Balance plan in fixed, can’t cash these out or change allocations.
• Small amount of life insurance which is basically paid up.
Heres’ the tentative plan – please comment if any of these are bad ideas or if there are alternatives:
• Now: consolidate the Roth IRAs into a single account at Vangaurd.
• Retirement: roll 401Ks into IRA
• Live off of savings, rental income, and Deferred Comp to age 59
• At 60, draw some out of 401Ks to minimize tax rate.
• At 65, start payouts of pensions
• At 67+, start payout of social security
• Leave HSA & Roth until needed
• Hold onto condo until I’m tired of living there and/or renting it.
• Possible to move additional money into Roth IRAs if I don’t have earned income in the future? Ideally out of savings account.