I really appreciate this article, William. You have clearly given this a lot of thought. The approach you describe is similar to what is referred to as Coast FIRE; Once your future "number" has been achieved, you stop or significantly reduce contributions. Personally, I was never that confident that I knew what the balance would be at retirement, so I kept making significant contributions right up to the end of my employment. I may have oversaved, but that was a risk I was willing to take. ;)
Our preliminary estimate for 2025 is 13.5% Fed and 4.4% State effective/average rate. Looking back at our earnings history, most of the funds we are living on today were deferred into our pre-tax 401(k) accounts at marginal 28% or 25% rates before 2018 and 22% after. It seems our tax rate in retirement IS lower than while working if you compare on that basis.
I may be missing your point here, but I believe the "4% Rule" indicates that you should be able to withdraw 4% ($4K in this case) in the first year and INCREASE withdrawals for inflation so as not to lose purchasing power. Based on historical periods, including the periods beginning in the late 60s, and a reasonable stock allocation (50% to 75%), the original study showed that that all portfolios survived 30 years. Of course, the future may be different ...
We have 39% of our stock portfolio in international/emerging markets. Stocks make up 56% of the total so international is about 22% of our total portfolio. This allocation has underperformed in recent years until 2025. The expectation is that the international exposure will smooth out the ride rather than increase overall returns.
With the exception of our checking account and remaining 529 account funds (a topic for another thread), we consolidated our brokerage, 401(k), Roth, IRA and HSA accounts at Fidelity. I like having everything in one place and at one website and we are paying about 9 bps in expenses.
I retired at 61 one year ago after accepting a generous voluntary severance package from the large public utility where I worked for 35 years. Fortunately, our savings were in order when the opportunity presented itself, so I jumped at the chance to leave a couple of years early. Another deciding factor was the availability of retiree benefits; Premiums are greater than the employee rates but significantly less than public markets. With finances in good shape, we have been able to spend our days travelling, drinking coffee and chatting, hitting the gym or taking a walk, visiting the local pub and doing a bit of volunteer work, not necessarily in that order. No complaints so far.
Comments
I really appreciate this article, William. You have clearly given this a lot of thought. The approach you describe is similar to what is referred to as Coast FIRE; Once your future "number" has been achieved, you stop or significantly reduce contributions. Personally, I was never that confident that I knew what the balance would be at retirement, so I kept making significant contributions right up to the end of my employment. I may have oversaved, but that was a risk I was willing to take. ;)
Post: Should You Stop Contributing To Your IRA?
Link to comment from February 10, 2026
Our preliminary estimate for 2025 is 13.5% Fed and 4.4% State effective/average rate. Looking back at our earnings history, most of the funds we are living on today were deferred into our pre-tax 401(k) accounts at marginal 28% or 25% rates before 2018 and 22% after. It seems our tax rate in retirement IS lower than while working if you compare on that basis.
Post: Your effective tax rate
Link to comment from February 1, 2026
Home equity line of credit.
Post: Advice I give to anyone who’ll listen!
Link to comment from January 31, 2026
Right on cue, the spot price of gold dropped 8% today! :)
Post: The Playground Indicator
Link to comment from January 30, 2026
I may be missing your point here, but I believe the "4% Rule" indicates that you should be able to withdraw 4% ($4K in this case) in the first year and INCREASE withdrawals for inflation so as not to lose purchasing power. Based on historical periods, including the periods beginning in the late 60s, and a reasonable stock allocation (50% to 75%), the original study showed that that all portfolios survived 30 years. Of course, the future may be different ...
Post: Considering a Lost Decade When Retirement Planning
Link to comment from January 15, 2026
We have 39% of our stock portfolio in international/emerging markets. Stocks make up 56% of the total so international is about 22% of our total portfolio. This allocation has underperformed in recent years until 2025. The expectation is that the international exposure will smooth out the ride rather than increase overall returns.
Post: International allocation
Link to comment from January 14, 2026
I second that sentiment Jan! Thanks Darlene!
Post: The impossibility of defining needs.
Link to comment from January 6, 2026
With the exception of our checking account and remaining 529 account funds (a topic for another thread), we consolidated our brokerage, 401(k), Roth, IRA and HSA accounts at Fidelity. I like having everything in one place and at one website and we are paying about 9 bps in expenses.
Post: Consolidating 401(k)s in retirement
Link to comment from January 5, 2026
I retired at 61 one year ago after accepting a generous voluntary severance package from the large public utility where I worked for 35 years. Fortunately, our savings were in order when the opportunity presented itself, so I jumped at the chance to leave a couple of years early. Another deciding factor was the availability of retiree benefits; Premiums are greater than the employee rates but significantly less than public markets. With finances in good shape, we have been able to spend our days travelling, drinking coffee and chatting, hitting the gym or taking a walk, visiting the local pub and doing a bit of volunteer work, not necessarily in that order. No complaints so far.
Post: What Age Did You Retire—and What Made You Decide It Was Time?
Link to comment from December 31, 2025
So, assuming I take 4% per year, ten years would be 40% in cash and fixed income resulting in a 60/40 portfolio. Hmm... ;)
Post: Would You Raid the Piggy Bank or Mortgage the House?
Link to comment from December 19, 2025