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I’m not sure whether it’s even a good idea for a person to retire that early. What exactly will he do for the rest of his life?
I’ve heard of people’s brains becoming numb if they are not intellectually challenged in some way.
Yeah, I agree. It certainly is possible to keep yourself intellectually challenged, but not everyone is cut out to do that. (I've been reading up on neuroplasticity as we age - a subject where I'm a complete novice. It turns out there are mental exercises that can help.)
But beyond that, in the pure financial planning space, I personally have difficulty wrapping my head around the OP's objective of living on relatively modest annual sums for such a long time. Most of us on this board have incurred large & significant unexpected and unplanned financial expenses at one time or another in our lifetimes, and the impact of a large unexpected/unplanned expense on the OP's finances could be catastrophic.
Yeah, I agree. It certainly is possible to keep yourself intellectually challenged, but not everyone is cut out to do that. (I've been reading up on neuroplasticity as we age - a subject where I'm a complete novice. It turns out there are mental exercises that can help.)
But beyond that, in the pure financial planning space, I personally have difficulty wrapping my head around the OP's objective of living on relatively modest annual sums for such a long time. Most of us on this board have incurred large & significant unexpected and unplanned financial expenses at one time or another in our lifetimes, and the impact of a large unexpected/unplanned expense on the OP's finances could be catastrophic.
absolutely agree but i would never offer advice either way
Last edited by mathjak107; 02-04-2024 at 10:23 AM..
If you've been investing 1k for 44 months and only made 1k in growth, then you need to figure out your allocation as it's not very good. I've been investing in FZROX since 2019, not too long after it came out and have made more than 20k. That's just by doing automatic monthly contributions.
You really need to find someone who will work in your best interest and you absolutely need to become educated on how finances work. No one's going to care about your money more than you. You can offload the work to someone, but ultimately the decisions have to be yours
I often think hiring a financial advisor is just a way to take the responsibility off oneself. Depending one what we are talking about, it often makes no sense. For example, if you have a simple tax return, it makes no sense to hire a CPA.
That totally sums up all of my fears! I have tried dabbling in the stock market about half a dozen times throughout my life and I have lost all of my money every single time! I honestly think that I might have some sort of curse when it comes to the stock market. Every stock that I have ever bought has dropped like a stone as soon as I buy it. Then it skyrockets the moment I sell it. Not just once, but every single time for the past 25 years!
So a few years ago I hired the best possible financial planner that I could possibly find, but that hasn't gone very well either. I'm struggling to keep my head above water since I've started investing with him.
So based on my track record, I'm not sure if it's safe for a guy like me to be handing over my entire inheritance to another financial advisor and hoping that it goes well for once. I can't afford to keep having history repeat itself. The investment is way too big this time.
Maybe my best bet is to just put my money in the safest place possible. It looks like Capitol One Bank has a savings account with 4.35% APY. I could always invest in a small percentage of mutual funds on the side. I don't know. I'm just brainstorming the safest options possible. I can't afford to mess this up.
You can get 5.08% on a Fidelity government money market. I would stick with that for now. Stay away from banks. They want to sell you on their lousy investments. NO ONE with $$ uses a bank for investing. I can get you the ticker symbol if you want. I still haven't see an answer to your health insurance costs. You could blow that money in a couple of weeks if you have an accident or illness with no coverage.
That totally sums up all of my fears! I have tried dabbling in the stock market about half a dozen times throughout my life and I have lost all of my money every single time! I honestly think that I might have some sort of curse when it comes to the stock market. Every stock that I have ever bought has dropped like a stone as soon as I buy it. Then it skyrockets the moment I sell it. Not just once, but every single time for the past 25 years!
So a few years ago I hired the best possible financial planner that I could possibly find, but that hasn't gone very well either. I'm struggling to keep my head above water since I've started investing with him.
So based on my track record, I'm not sure if it's safe for a guy like me to be handing over my entire inheritance to another financial advisor and hoping that it goes well for once. I can't afford to keep having history repeat itself. The investment is way too big this time.
Maybe my best bet is to just put my money in the safest place possible. It looks like Capitol One Bank has a savings account with 4.35% APY. I could always invest in a small percentage of mutual funds on the side. I don't know. I'm just brainstorming the safest options possible. I can't afford to mess this up.
You can get 5.08% on a Fidelity government money market. I would stick with that for now. Stay away from banks. They want to sell you on their lousy investments. NO ONE with $$ uses a bank for investing. I can get you the ticker symbol if you want. I still haven't seen an answer to your health insurance costs. You could blow that money in a couple of weeks if you have an accident or illness with no coverage.
AND NEVER, EVER, EVER put your money into one stock..or even a few. Too much risk.
You can get 5.08% on a Fidelity government money market. I would stick with that for now. Stay away from banks. They want to sell you on their lousy investments. NO ONE with $$ uses a bank for investing. I can get you the ticker symbol if you want. I still haven't see an answer to your health insurance costs. You could blow that money in a couple of weeks if you have an accident or illness with no coverage.
but that doesn’t mean he can draw out 5.08% .
much of that has to stay with his money to keep generating inflation adjusted income for as much as 48 years.
with just fixed income his allowable safe withdrawal rate would be very low, at least to start
16,000 is about max on 850k with zero equities planning to 95 .. anything else would not be considered a safe withdrawal rate , just a withdrawal rate that may or may not work out depending how much he takes and how long he needs to support
Well that's the problem. I don't know the answers to most of your questions, so I'm basically just flying blind and trusting that the CPA knows what he's doing.
So based on my circumstances and my past history, would I be better off just putting all of my money into one of the 5% high yield savings accounts that several of the banks in my area offer?
5% of $850,000 is $42,500 per year in interest, which is almost double the $20-$25k that I currently live on. So would it be safer and easier to just go with a 5% bank rate, rather than stressing out about losing all of my money in a stock market that I don't understand?
I don't think any of them are still paying 5%. Go with my earlier recommendation of the government bond fund.
850k would be way over the FDIC limits so you put your money at risk. Also the current 5% rates will likely slide down as the Fed cuts rates.
Personally I would try to keep things simple. Split it between VTI and BND to whatever mix if stuck and bits your comfortable with.
You really need to get educated otherwise even having a CFP in your corner can be disastrous if you don't realize they don't have your best interests in mind.
If you put your money in Fidelity and you buy their CDs, you can put the money in 3-4 different banks but manage it from one place. The problem is, CD rates are dropping like a rock. But no need to go to actual different banks. Some one of s&ls payer higher rates on CDs. You can get a 5.3% APY on a BMO CD right now.
And don't buy individual stocks, don't speculate on risky investments like gold or cybercurrency or real estate, I can name a few others...I can imagine some scammer sending the OP a PM and saying "hey I will help you with your investments, let me handle it...". I hope that's not happening.
I am not going to tell him absolutely do not buy an annuity. I certainly wouldn't. But they do have there place in some circumstances.
They are great for the guy selling them. Other than that, not really.
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