C (4:19)

Well, I mean, from the standpoint of where I live, I don't see any oil drills or anything.

A (4:27)

Anthony, what brings you to the show today?

C (4:30)

I am getting closer to where I would love to leave my job. And so I need some guidance on. First of all, am I in a position financially where I can do this? And then second of all, I am so not clear on exactly how to do the proper withdrawals once I go into that mode.

A (4:52)

Okay. Anthony, how old are you?

C (4:55)

I am 57.

A (4:57)

And are you married, Single? Partnered?

C (5:00)

I'm single.

A (5:01)

Do you hate your job?

C (5:04)

No, I don't hate it. I mean, there may be some days when I do, and then there's. Okay. But on the most part, no, I. I mean, I, I'M tolerating it, but it. I don't.

A (5:14)

But if you could, it would be nice. And when you talk about can I leave my job? You mean can I choose never to work again or would it be can I leave my job and do something else?

C (5:26)

It's more that it. It's more of what I'm visualizing is let's get out of corporate and let's start pursuing maybe other interest or possible other passions that I need to rediscover. I guess what I would visualize here is take a year sabbatical, so, so to speak. Now I would like to go into some classes, learn some new stuff.

A (5:47)

Yeah, I'm with you.

C (5:49)

And then maybe then come into doing some part time work after that year.

A (5:54)

Okay. Like financial independence, new or next endeavor. I love a sabbatical. I'm going to just call it your gap year. You forgot to take it when you were 20. Now you're going to take it in your 57. Anthony, do you have any children?

C (6:07)

No children.

A (6:08)

Okay, so it's just you that we need to worry about. And that in a lot of ways makes it easier. Tell us, how much are you earning right now?

C (6:17)

My base salary is around 150. And then we usually get bonuses, which can put me around 180, 190.

A (6:27)

Okay. 30 to 40 grand a year. Okay. And are you using a retirement plan through work?

C (6:33)

Yes, I am.

A (6:34)

Okay. Are you maxing it at this point?

C (6:37)

I am not. I was up until a couple years ago because that 401k is getting to a point of RMD issues. And so I have been only getting that. I've been only doing the company match. Then I have been directing all those funds over to Roth and to my brokerage.

A (6:59)

Okay, great. So let's go through, what is the value of that traditional 401k.

C (7:06)

There's an equities position and a bonds position. Is that all right?

A (7:09)

Yeah, you do whatever you do.

C (7:10)

Okay. Okay. Okay. So on the equities, as I just looked Yesterday, I'm at 1,851,460.

A (7:20)

Calm down. Just give me. Let's round 1,000,850. You're a rock star. That's just in stocks. Equities, right?

C (7:28)

That's correct.

A (7:28)

What's in bonds?

C (7:30)

And then I have 503,000 in there.

A (7:33)

Good lord, you are a rock star. Okay, you got a Roth as well. What do you got?

C (7:38)

Yes. So in equities position that when I had met, 303,000. And then I have 3,121 in bonds

A (7:46)

and that 3,000 fixed. What about the brokerage?

C (7:49)

And in the brokerage, I have a 591,000 in equities.

A (7:55)

Yeah.

C (7:56)

And then 70,000 in bonds. I do have an HSA.

A (8:01)

How much in there?

C (8:02)

I have 56,000 in the HSA.

A (8:04)

Great.

C (8:05)

And then I have a high Yield savings account, and I have 162,000 in that account.

A (8:13)

Okay, so that's it for your assets, right?

C (8:16)

That's correct.

A (8:17)

Which is amazing, by the way. It's totally Mark. I can't believe I haven't heard you snicker yet. We're about to get hate mail. But, guys, the bases. Oh, my God. He's got $3 million.

D (8:26)

He can do whatever he wants. Just because $3 million would allow you to do whatever you want doesn't mean he can do whatever he wants.

A (8:32)

I have a feeling he could do whatever he want also, because the way you save all that money is you don't spend a lot. Anthony, do you own your own home?

C (8:39)

This. No, I. I am renting and.

A (8:42)

Okay.

C (8:43)

Yeah. And I'm kind of caught in that dilemma of should I secure a mortgage before I pull the plug or.

A (8:51)

Wait a minute. How much is your rent?

C (8:54)

Right now? I'm paying only 16, 13. Home month.

A (8:58)

1600 bucks a month? That's it?

C (9:00)

Yes.

A (9:01)

Do you like where you live?

C (9:03)

Actually, what my thoughts were to do is to upgrade and to maybe increase that a bit, you know, and rent a bit higher. So I was thinking Mary, on about maybe 2,500.

A (9:14)

Okay. If you did that, if you had 25, if you got a rental for 2,500, you'd be happy in that. And we didn't have to, like, invade any of your money, and you could just keep renting and that would be fine, especially if you're taking a year off. I think that's a good game plan. Anyway, what do you spend right now? And then we'll just bump it up by a thousand bucks for the upgrade. But what do you spend? What are your expenses?

C (9:36)

Yeah, so I did a whole breakdown of that. Right.

A (9:39)

I don't know why this doesn't surprise me. This guy sounds way on the ball. Totally. So what do we got on expenses?

C (9:48)

I've got right now for my current budget, it's around $59,000.

A (9:52)

So if we bumped that to 70,000 just so that we, you know, could. Then you'll be able to have your. Or even, I'm going to say 72,000, because it's a nice round number on a monthly basis. So 72 grand would be kind of like what we're looking at. So quick question for you, Anthony, in your organization, like, what would you have to give notice wise, like, how much? If you said, I quit, how much longer would you be working?

C (10:20)

Well, because I really, you know, I've been with the company for so long, you know, I've got some really good relationships there and respect for a lot of the managers. And so I would definitely not do, like, I'm out of here, you know, I wouldn't.

D (10:33)

Sure.

C (10:34)

I would definitely be like a person who would give at least if they need a month or two months, whatever it is, to find the right candidate and then do knowledge transfer and then get them onboarded and do all that

A (10:45)

stuff, you know, you'd hang around for that. You don't, you know, you, you. And if they said to you, anthony, we need you to stay through the end of the year, you'd be willing to do that?

C (10:53)

Oh, yeah, yeah, yeah, yeah.

A (10:55)

Okay. Okay.

C (10:56)

Yeah. Because in the. Because we also get bonuses that would go into. It's the first quarter of the next year is when you get it. But you have to be there to get that. So if I had to do that, I might as well just stay until I can get that bonus.

A (11:09)

Ideally, though, what would you want to happen? Give your notice right now and be like, I'm done before the summer, because who needs to be working in Texas in the summer? Right.

C (11:18)

No, what I'd probably do is I'm kind of visualizing this end of this year, sometime later this year. Really?

A (11:26)

Okay. And will you turn 58 this year or next year?

C (11:29)

Next year.

A (11:30)

Next year. Okay, so we're not 59 and a half yet. I just want to make sure I got that. Okay. So you give your notice at the end of this year. You have all this money that you have accumulated. It does not go without saying that you've done an incredible, incredible job. You really have. I mean, you have so much money. What was your game plan going to be for Social Security claim at 67 or 70? What? Is your health good? What does that look like for you?

C (11:58)

Yes. So for me, health is good. I'm a major advocate for keeping healthy because as we age, you know, you just. That's just one of the things. Right. So when I turn, I really want to take Social Security at 70.

A (12:11)

Okay. What would that be?

C (12:13)

And that amount is $5,222 is what it said on the site.

A (12:17)

5,200. Okay. And do you have family that needs your help? I know you said you didn't have kids, you have parents, siblings? Tell me.

C (12:27)

Yeah, my parents. So right now my brother and I are both assisting. We're supplementing the portion that they need to, you know, pay rent. And they live in an independent living community. So right now we help them out. And so my portion of that, you know, right now it's 600 bucks a month that I, I give towards their budget. And so I'm including that by the way, in my.

A (12:51)

In your, in your. Okay. And are your parents in good health? Not so good health. Like where are they in the timeline here?

C (12:59)

Yeah, I would say they're, they're decent health, let's just say decent, not great. But yeah, there have been some issues that have been coming up recently. So yeah, it's, it's. Yeah.

A (13:13)

Okay. And do you live near them?

C (13:18)

I don't live too far. You know, I'm about, maybe less than an hour.

D (13:22)

Okay.

C (13:22)

Depending on traffic. But yeah.

A (13:24)

Okay, so let's say that you give your notice, you finish out this year and we need to float your cash flow for two years. And also you'll have to be purchasing health insurance for a while, Right. There's no pension, right?

C (13:41)

No pension.

A (13:42)

Okay. So you have to buy health insurance. So instead of, I mean 72 grand a year or 6,000amonth, we'd have to kick that up a little bit just because you'll have to buy your own insurance, right?

C (13:53)

That's correct.

A (13:54)

So now I've increased your monthly because of, we're going to get you a nicer place to rent and we'll make it in. I mean it's not going to be $1,000 a month, but I like round numbers. So I'm going to say seven grand a month is what we need. Between your health insurance and maybe your parents ongoing needs, you'll need a little extra money. So we'll say seven grand a month or 84 grand a year. Okay. So year 2027, you know what you're going to do? You got money in your brokerage account in 2027 and 2028. You can use money for those two years to get money out of the account, use it to live on and the money that's all in equities, you're going to have to make sure that, you know, between the high yield savings account and whatever you free up in your brokerage account, you will have to make sure that that money is in cash for the next couple of years. Cause you know you're gonna need it. So it can't be at risk. Like, so this year, maybe as you get into the end, you're gonna have to start freeing up some of that money and make sure that it's not at risk. Because next year, you know, you're. That's what you're living on. Then after those two years, it is time to start attacking that 401k and getting that money out. And at that point, what you're really gonna try to do is pull money out of that traditional environment in order to pay the tax that is due. And I'm presuming that whatever you do next, to be honest with you, Anthony, is going to be a much lower paying. Maybe it's going to be very satisfying, but, you know, it's not going to be. Not going to be something where you're like, oh, I'm making so much money that my tax bracket's blowing up. So you've been paying the 24% bracket. I think you should continue to do so. And you would start pulling out a couple hundred thousand dollars a year again up to whatever that 24% bracket is out of your traditional assets. And you're going to live on that from, you know, age 59 and a half to 70. And you're going to pull as much money as you can out of that traditional account. You're not going to worry about it. You're going to pay yourself. That's the money you saved. You're going to work that. And you will still have. I presume you're still gonna have a problem because it's gonna be hard for you to get rid of every single bit of traditional money. It's possible, but it's unlikely. I mean, you're just not gonna. You had 1.8 in equities and another half a million in bonds. So that's just like a lot of money to get out. I think you can get a bunch out. But remember, you've got until you're 75 before you have to take it out. So the goal would be to just live on that traditional money during the period of time between now or let's say 59 and a half and age 70. Right. At age 70, you'll have that money of Social Security, but then you'll just take whatever you need in excess of Social Security from the traditional account. And your goal is that by 75, you basically emptied that account. It'll be fabulous because then, I mean, maybe you won't empty it because you'll make too much money. Maybe you won't spend as much, but then you're left with your Roth, your brokerage, your bonds, your savings. And it works pretty beautifully. I mean, I think you can. If your question is, can I quit? Yeah. Mark, do you agree with that?

D (17:20)

100%. I mean, I know he's going to do something, he wants to do something else. But, you know, worst case scenario, you can go, you can go a long time without having to work.

A (17:28)

Yeah, a long time. You know what's kind of cool is I hear that also in your voice. Like you just want to take a break from what you're doing now. You know, if you make extra money from doing anything, even if you said, I'm never going to make 150 or 180, I'm never going to have a corporate job, but let's say even you made 50, or let's say you just got something where you're making a little bit of money, you know, 40 grand, and you get health insurance. Like, wow, that will save you some. You know what I mean? So there are little things here. It doesn't have to be a lot of pressure. You've got plenty of time to find your way. You know, you might fall in love with not working at all, perhaps. Or maybe your parents are going to need you to be more hands on. So that's one of the big reasons I don't think buying a home right now makes a ton of sense that I think that you would want flexibility. I mean, what if you found out that, like, gosh, I really want to be not an hour from my parents, I need to be 15 minutes from my parents. That's important. Important to me. You know, I think that it's better to preserve that as an option just given where you are in your life.

C (18:31)

Well, I totally agree. That is exactly why I was like, I really don't want to assume a mortgage because I really like the flexibility aspect.

A (18:39)

Yes, right.

C (18:40)

But let me tap your brain on something because I didn't mention this, and that is I do have. The company does allow us to utilize the rule of 55.

A (18:51)

Oh, yeah, you can do it right. Tap it right out of.

C (18:54)

I can tap into now. Hey. And so my plan was, and I need your expertise on this. What I was planning to do is, you know, I was going to do a certain percentage withdrawal of the portfolio. And out of that percentage, let's just say, like, you know, let's say that if my portfolio gets to that 3.6. Okay, let's just say it gets at 3.6. And I take, I want to take like a I'm going to take maybe a 2.8% withdrawal. You know, that right there is going to give me $98,000.

A (19:28)

Done. Done. I would even do. I would take out whatever I could to keep me in the 24, maybe the 32% bracket.

C (19:36)

Well, actually, what I was thinking of is still stay in the 12% tax bracket.

A (19:42)

No, no. Take out more. You're not. You're going to have a problem if you stay in 12. The problem is you're going to accumulate money faster than you can get it out, and then you're going to be forced to take that money out later when we have no idea what the tax brackets are going to be.

C (19:59)

Okay.

A (20:00)

I mean, at the very least, I would say 22. Mark, do you agree with that?

D (20:04)

Yeah. Otherwise it's just like, you know, it's like a snowball going downhill, you know?

A (20:08)

Do you see why? Because, like, if you don't take enough money out, it just keeps growing. And then we do have. That's the tax time bomb that Ed Slott always likes to talk about. Because if the money stays in there, it's going to continue to grow. Then when you're, you know, then all of a sudden you're going to get to the point where you're like, oh, darn it. Now I'm forced to pull money out. Oh, darn it. Now I have to pay for Irmaa. Oh, darn it. Now I'm in. The tax law has changed. Tax rates are up. Oh, darn it. I should have taken more out sooner. So at the very least, I mean, right now the 22% bracket is 105. Right. You're going to work this year. Right. And you're already up in the 24% bracket. So as far as I'm concerned, 24 or lower is great. I would not worry about, you know, when you're making no money, I would at least take out at the 22. That's 105. The top of the 22 is $105,700. So you got to get the money out, man. It's going to grow. Rule of 55 is like, great, you're 57. That leaves 18 years of growth in there. Your money is going to keep doubling every seven years. So you're going to get screwed.

C (21:21)

Well, part of the withdrawals that were included in that 98,000 that I was planning to do is max out the contribution to the HSA and to also the Roth.

A (21:33)

I mean, that's fine. Yeah. But I'm not worried about paying taxes at 22 or 24, that's where you are right now. That's where most of your money is taxed. Don't hyperfocus on that. Truly it's not worth it because right now, right, you're in the 24 bracket. Right. You make 150. That's your top bracket. Your bonuses, let's say your bonus is 30 this year, that puts you at 180. And the 24% bracket single goes up to 200. So you're paying from 105 to 200 ish. You're paying at the 24% bracket. Okay? So I don't know. I am not hyper focused on 12. You're not going to get because it doesn't matter. Let's say you pull it out at 12 now, then what you are risking is that in 18 years you're in 22, 24, 32. You don't know. You don't know where you're going to be. And I'd rather have that money out either.

D (22:28)

Pull it out.

A (22:29)

Convert.

D (22:29)

But I don't think I want to

A (22:30)

convert because I don't want to convert. I want to hold until we figure out what you're doing. I mean, I will happily have you convert eventually, but not now.

D (22:40)

You've got a nice chunk of yours.

A (22:41)

Yeah. This is so good.

D (22:42)

Use this bomb, right?

A (22:43)

Yes. Oh, Mark, you are well.

C (22:48)

And then when you pull this money out, the other question is, should taxes be included in that amount?

A (22:54)

What do you mean? Like, should you, let's say out of

C (22:56)

that 98,000 that I was giving that number, right?

A (22:59)

Yes.

C (23:00)

Should that also include the taxes?

D (23:02)

Yeah, yeah.

A (23:03)

I mean, whatever. You have to pay taxes on it. Whatever you pull out, you have to pay tax on.

C (23:07)

Well, I was thinking because that savings account and I'm also getting this interest income that I had to also declare that is also part of income that's going to show up on taxes. So I was thinking with that interest that could build up my tax amount. So I don't necessarily need to withdraw those taxes.

A (23:24)

Dude, pay the taxes now or pay it later. You decide.

C (23:28)

Okay.

A (23:28)

We cannot avoid paying the tax. That's the problem.

C (23:32)

Yeah, I'm just, I'm just in the mindset of God, minimize your taxes. Try to keep it as low as possible.

A (23:37)

Dude, get over it. You have $3 million. You're going to pay taxes. Calm down. I mean really like you have great opportunity here. People who are 57 years old with aging parents who they have to help are in the position be like oh, you know what? I can do whatever I want. That's where you are. And you know what the. The price of that is? You have to pay taxes. Big deal. Yeah, get over that. You're in great shape. Answer to the question, can I quit? Answer. Yes.

D (24:05)

Yes.

C (24:05)

Okay.

A (24:06)

Go find something else to do. Anthony, do you have all of your beneficiaries and estate stuff all set up? Because you do have a lot of money.

C (24:17)

Yes, so I do have all the beneficiaries set up. I have it in the paperwork, also written out. I need to get it notarized. Thank you. Yes. Notarized.

A (24:27)

Let's get that done. Get that done. Do your parents have all their. Do they have estate documents? Do they have, like, their wishes known to you guys?

C (24:34)

My parents are not in a financial position where they have any assets.

A (24:39)

No, me, I mean more of the other stuff, like the healthcare proxy.

C (24:44)

Oh, yes, yes, yes. Okay.

A (24:46)

All right, Anthony from Texas, go forth and quit. Mark, another Texan who's in just fine shape. We must be very popular in Texas. I'm excited about that. Hey, are you like, Anthony? Are you kind of done? Do you feel like you need a sabbatical? A gap year? Is that something we can help you with? Get in touch with us. Go to jillonmoney.com, click the contact us button, write us a note, and if you'd like to join us on the air live, check the box. Mark will do everything else. Hey, you know what? While you're there on the website, sign up for the free weekly newsletter comes out Fridays today. How great for you. And you can subscribe to us on the Odyssey app or wherever you find your favorite podcasts on Fridays. We thank the folks who make this show possible. Our music is composed by Joel Goodman. Mark Telercio is the executive producer, king of all things web, and a fine individual. We are just distributed by the lovely people at Odyssey. We ask that you please do something nice for someone else today. Change your work, change your wealth, change your life. Thank you so much for listening and we'll talk to you on Monday. Hey, gang. I just made a first time ever purchase on behalf of the pod. I was so psyched because Mark and I don't do a lot of promotional materials, but. But I was able to create a branded sweatshirt. Yep, a Jill on Money branded sweatshirt with Vistaprint. Now, I'm not usually good at these things, but Vistaprint made it simple to bring this idea, like, oh, wouldn't it be cool if Mark and I could create some sweatshirts that we'll try out and maybe the listeners would want to get them as well. They've got these great design tools. They have fast shipping human support if you need a little guidance along the way. Because the sweatshirts were so easy to execute. Now I'm thinking about doing some other stuff. Maybe there's some baseball caps or, I don't know, other fun stuff that you guys would want. You'll let us know. There's a reason that over a million people trust Vistaprint for their small business print needs. Vistaprint print your possible right now, new customers get 20% off with code new20@vistaprint.com.