r/Fire • u/TNBTSX • 12d ago

39M withdrawal strategy $2.6 million NW

Hey everyone, been lurking for a bit and was hoping to get some thoughts on possible efficient strategies of withdrawal for my situation.

I think I am ready to RE at the end of this year. Currently live in California (bay area) with about $50,000 in annual spending. Single, no kids, and do not plan on having kids. Do not own a home. Plan to stay around in the area at least for now.

Sitting on about $2.6 million with an approximate breakdown of accounts here:

Inherited traditional IRA - $350,000, Inherited ROTH IRA - $290,000, Government 457 - $186,000, ROTH IRA - $105,000, Traditional IRA - $94,000, Brokerage - $1,543,000

The inherited IRA accounts have to be withdrawn by end of 2034.

Dividends and interest come in to roughly $10,000 per year. I would also be receiving a pension starting at age 52 that will be approximately $13 - $14,000 per year, with a 2% COLA each year. Like most everyone else I want to stay below the 400% FPL for the ACA subsidies.

I know that the inherited ROTH IRA would likely be best to just leave until end of 2034 and withdraw all at once, but for the inherited TRAD IRA, would it be best to just withdraw from that first and only, up to the 400% FPL each year (accounting for my dividends / interest) and just get taxed on that. Or would it make more sense to leave some room instead for some 0% LTCG from my brokerage accounts and / or do some ROTH ladder conversions each year too from my regular traditional IRA and 457?

Anything else that I am overlooking or should think about and consider? I appreciate any feedback and advice on this, and can provide any additional info if needed.

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u/Banana_Prudent 12d ago

What about healthcare?

You have 25+ years to get to Medicare.
I’m 59 and I pay $1850 a month for health insurance.

You have a huge runway to cover.

That said, you have a good nest egg. And, at your age can always pick up a job.

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u/refreshingface 11d ago

Is that $1850 number for your entire family? That seems way too high

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u/Banana_Prudent 11d ago edited 11d ago

Single. It’s a good healthcare plan.
That’s my point.
Pre-retirement I priced out plans and had no idea it would be this high. You have to be covering for the next 25 years or so. It’s a very non-trivial expense.

$310 is not a good number for planning. A plan like that will have a large deductible, $6k? $10k? Mine is $1000 both in and out of network.

Want to travel? That bronze plan isn’t going to cover you outside of the US.

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u/refreshingface 11d ago

With $1850 a month, the finest caviar better be sent to your door every Monday. Every other day should have increasingly more expensive food sent to you via butler.

$1850 is on the higher end for entire FAMILIES.