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[street]

Welcome!!!
You are in good hands here when it comes to advice and knowledge of your questions. You will learn a ton from the experience of these knowledgeable people.

Good Luck I hope your dream of ER is a successful one.

 

[eyenitnoy]

I'm trying to retire at 57. My wife will retire at the same time and will be 52. She has a 457 that will bridge the gap between my 57 and 59.5. I will have approx 1 million in my 401k and she will have approx 1.3 million when I turn 59.5. we will also have about 800,000 in Roth money. My question may have a very simple answer. When I turn 59.5 and begin to pull money out of my 401k should I use 4 percent of what I have in mine as a withdrawal since she is 5 years younger than me. Are should it still be 4 percent of the entire pot? It's just throwing me off since there is a 5 year gap in age. Seems like I would burn throw my 401k fast if I removed 4 percent of the entire amount from just my account. Maybe a dumb question

Greetings Roger and Welcome!

Honestly, I think you are approaching the question from the wrong direction. The question, in my mind, isn't what percent you should draw. The question is: what are your total annual expenses and, given those expenses, what percentage of your retirement monies will you need to fund these expenses?

Let's say your total annual projected expenses require 2% of your retirement pot. Well, then you should draw 2% and consider rolling over some of the monies from your taxable retirement to your Roth account to take advantage of the lowest tax/tax free brackets. But let's say your projected expenses are 6%. Then you need to take a long, hard look at your expenses to get the expenses down to a more sustainable level.

But I will answer the question you put forth. I am in the 4% camp. Especially in the early, healthy, years of retirement you want to be able to enjoy life while you can. Yes, there is a chance you could run out in your mid 80's, but you will have plenty of years in the future to make additional adjustments in spending. I think the benefit of having a little more to spend and enjoy when young is greater than the risk of being short of money should you live to your mid 80s.

Of course, if you budget allows you to spend and enjoy what you want and still stay under 4%, then you have the best of both worlds. Without knowing in detail your annual expenses, it is hard to say with clarity.

Again, welcome and good luck.

 

[Oakster]

I'm trying to retire at 57. My wife will retire at the same time and will be 52. She has a 457 that will bridge the gap between my 57 and 59.5. I will have approx 1 million in my 401k and she will have approx 1.3 million when I turn 59.5. we will also have about 800,000 in Roth money. My question may have a very simple answer. When I turn 59.5 and begin to pull money out of my 401k should I use 4 percent of what I have in mine as a withdrawal since she is 5 years younger than me. Are should it still be 4 percent of the entire pot? It's just throwing me off since there is a 5 year gap in age. Seems like I would burn throw my 401k fast if I removed 4 percent of the entire amount from just my account. Maybe a dumb question

It seems as your confusion comes from mixing up what is "ours" vs what is "yours" and "hers". If your money is divided, then consider it 4% of yours, and you pay your bills , she pays her bills etc. If you consider it all "ours" than 4% of the entire nest egg basically, and you jointly live off of it.

You are correct in that if you take 4% of the entire nest egg out of just the 401k that is in your name, it will empty that account faster, but its all combined, so which account empties sooner shouldnt matter. Money should be withdrawn to the best tax advantage if possible.

Doesnt you, living off of her 457 to bridge 57 to 59.5 deplete "her" account at a more rapid rate? The same principal applies. Its just one of the several accounts getting hit at that time.

Lastly, dont take more than you need ideally....