Congrats on finishing the rookie year successfully. 100% income replacement as a goal might make sense for those who do not track their expenses and need an approximation. To me it does not make sense. I save a good portion of my income and I need not have to regenerate it again to save back. This is tax inefficient. Also, I might have new expenses in retirement like increased spending on travel /vacation/medical insurance and reduced expenses in areas like commuting expenses, formal clothing etc. Ideally, I would like to understand my current expenses and model the expenses in retirement (estimates that need to reviewed and updated every year. Regarding income portion, I am planning on using dividend focused ETFs (SCHD, VIG etc.) to fund majority of the expenses and also use cash and ibonds as a buffer. Using qualified dividends allows you to pay less or even no tax on the income. I know they are not guaranteed but these ETFs have high quality companies and I think it is a manageable risk. I also have cash/ibonds as a buffer .
Very good article. I am about two years away and thinking of the same strategy (Risky % and Non Risky%). I am curious about how you found tutoring opportunities once you retired. Are there websites that list volunteer opportunities in the area? One other thing I am trying to train myself is being comfortable in doing nothing. In other words becoming a "human being" not "human doing" it is awfully hard!
Comments
Congrats on finishing the rookie year successfully. 100% income replacement as a goal might make sense for those who do not track their expenses and need an approximation. To me it does not make sense. I save a good portion of my income and I need not have to regenerate it again to save back. This is tax inefficient. Also, I might have new expenses in retirement like increased spending on travel /vacation/medical insurance and reduced expenses in areas like commuting expenses, formal clothing etc. Ideally, I would like to understand my current expenses and model the expenses in retirement (estimates that need to reviewed and updated every year. Regarding income portion, I am planning on using dividend focused ETFs (SCHD, VIG etc.) to fund majority of the expenses and also use cash and ibonds as a buffer. Using qualified dividends allows you to pay less or even no tax on the income. I know they are not guaranteed but these ETFs have high quality companies and I think it is a manageable risk. I also have cash/ibonds as a buffer .
Post: Rookie Year
Link to comment from February 9, 2024
Very good article. I am about two years away and thinking of the same strategy (Risky % and Non Risky%). I am curious about how you found tutoring opportunities once you retired. Are there websites that list volunteer opportunities in the area? One other thing I am trying to train myself is being comfortable in doing nothing. In other words becoming a "human being" not "human doing" it is awfully hard!
Post: Getting Myself Ready
Link to comment from September 22, 2023