Hi,
It seems like I might just could be FIRE. I will soon pay off my house, and I will have $625,000 in assets, not including home equity, after that. I think I need about $23,000 to live on each year. Bad news? I have no idea how to draw down my assets correctly to maximize their long-term value. And, I think I either quit in the next few weeks or I will be let go. Not that it would be a bad thing because this job has just been soul-crushing, but it makes the decision more pressing.
Can anyone help me understand how to withdraw while making the money last and grow best? I don’t see that MMM has dealt with drawdown strategies, even hypothetically. His own first system of redundancy when he first retired – a paid-off rental throwing off enough money to cover all their expenses – is less a system of redundancy and more of an alternative to living off of the saving of 25 times the amount you need to live on. So.
I have about:
$46,000 I want to keep in cash to use in down years so I don’t have to sell stocks at losses in those years
$100,000 in taxable accounts
$400,000 in 401k accounts
$90,000 in Roth IRAs
Other info:
Worried about: Insurance costs, health care emergency, big expense like needing a new roof or car, down years in the market toward the start of retirement
FIRECalc says 95% chance of success over 40 years.
I’m 51, so technically I can’t touch the retirement money for another 8-ish years without conversion ladders or something.
Do I take distributions from taxable? Capital gains from taxable (if so, which kind)? I don’t think distributions and capital gains will be enough each year, so I would have to sell something in addition. What?
I figure in a few months I will start looking at other things to do with my time that might earn money, but right now, I feel completely incompetent because of my current job and don’t have a side gig.
Thanks for your help!