Hello fellow Mustachians!
By way of introduction, I am Dividend Bro. I have recently stumbled upon the FI community within the past 6 months or so, but I've always been a saver and investor. I would say I've saved more than the average person, but less than a hardcore FI person. Figure maybe 20-25%ish of my income in the few working years I've had so far. I value travel and fun trips with friends highly so I have put emphasis on that for sure.
I am in my late twenties, single, completely debt free, have no car payment, blah blah blah. Rent is my biggest expense but I enjoy where I'm living and it's reasonable. I [unfortunately] took control of an Inherited IRA last year, and it has obviously made my financial situation both easier and more complex at the same time. Thus, I am hoping you guys can put your brains together and help me solve this puzzle .
I will try to keep the detail to a digestible minimum, but here goes.
My end goal is to be semi-retired or, if things go well, fully retired with a family by 40 - 45. I don't think I would mind working somewhere or doing something "fun" (read: half my salary) if I had enough passive income to supplement it. If things go well and I can make some smart RE moves or something, great. For now, let's assume my salary will allow me to save at least $12-13k a year to start, with plans on doubling that rate in the next few years hopefully.
Here's my financial situation:
Taxable - $33k in mostly blue chips/dividend growers. Looking to balance this out with Index funds in the future.
Pre-tax 401k - $37k, indexed
Roth 401k - $20k, mostly indexed, some cash
Inheritance - $340k, mostly in blue chips/aristocrats
I will be using the RMD + dividend income to supplement one of my parent's retirement until they are 70, when they can receive maximum survivors benefits. At that point, I will be 40 and able to use the RMD's as I wish, with the exception of having to pay property taxes.
Bottom line is, using a very conservative estimate, when I am 40, I will have about $500k in an inherited IRA spitting out about $12k in an RMD pre-tax, with bigger RMD's each year. Under the same assumptions, I will have a $1 million+ portfolio paying me somewhere around $60k + in RMDs by the time I'm retirement age.
Problem number 1 with this situation is that I have no clue what the market is going to be like when I'm in my 40s and the RMDs can fluctuate a decent amount until then and also the entire time I'm holding it frankly.
My main conundrum, however, is where I should be putting my money. Assuming I am pretty much set for retirement, should I be putting all my money (including withdrawing from the Roth) into a taxable account? Should I be socking away money pre-tax in the 401k to offset my RMDs?
I have done a fair amount of searching on Inherited IRAs and it seems like people either have millions and it doesn't really matter what they do, or they don't have enough to keep stashed away for retirement, using it towards a house or family expenses instead. I seem to be stuck in that "sweet spot" where I don't need to touch the principal, but it's not enough right now to reach FI. It is enough for a "normal retirement" however. Just trying to figure out how to best use this situation to my advantage.
Did I lose you guys?