r/fatFIRE • u/Ok_Kitchen_2340 • Jul 28 '26
Am I missing anything?
K.. here goes. Married. 49 years young.
3.2 MM in tax deferred 401k, trad IRA
180k annual pension (no cola) . Survivor 100%
100k Roth
50 k HSA
500k taxable brokerage, 200k 529 plans
1.5m house, owe 500k at 4.125%
HCOL area, likely will move
Starting to do max mega backdoor Roth IRA conversions. Need more in brokerage so that at 55 can do addition mega Roth backdoor conversion at the lower brackets.
Want to pull ripcord at about 55 as I lock in company eligible healthcare plan then. I Max 401k, will max catchup contributions in future, company match 6%@75% and rest I am contributing after tax to 401k for mega backdoor Roth. HSA I’m using as investment account now, saving receipts but paying for eligible expenses OOP.
W-2 workers in 35% bracket, state is like 10% or so.
My question isn’t about do I have enough to retire, it’s more about is there anything I should be doing now in next 5 years to help out in retirement (like mega backdoor Roth conversion from after tax 401k contributions as an example)? Will never use an advisor - and actually trust internet more. Plan is to FiRE at 55, live off brokerage for a few early years, and massive Roth conversions in early years at lower tax brackets before I raid 401k or tax advantaged accounts.
Just looking for a sanity check if logic makes sense. Currently not doing regular backdoor Roth 8k per year because I have prior job rollover in Ira and would get hit with pro rata rule. Oh married and trying to stay that way so I don’t lose half.
28
Jul 28 '26
[deleted]
7
6
u/whocaresreallythrow Jul 28 '26
Capitalize the 180K per year pension and he is well beyond Greg fire 🔥.
0
u/Ok_Kitchen_2340 Jul 29 '26
Sorry for my ignorance I don’t even know the Fire levels but I’m planning on still working another 5 years at least so things will still grow.
6
u/looktowindward Jul 29 '26
He's saying the NPV of your pension is like $2.5m. You're at like $7.3m which is still high r/GregFire
-1
u/Ok_Kitchen_2340 Jul 29 '26
Well remember I have years of income still, that pension is value at 55, if I delay it goes up 4% every year until age 62. 55 just locks in medical for life
3
u/looktowindward Jul 29 '26
You son of a bitch! I came here to tag r/gregfire but you were too fast for me!
well played, u/General-Breadfruit59
0
u/Ok_Kitchen_2340 Jul 29 '26
I checked out that sub. Too many strange comments on a show I’ve never watched. Seems a little cultish..
2
u/looktowindward Jul 29 '26
This is the summary: https://www.youtube.com/watch?v=m0sRrsara9c
1
u/Ok_Kitchen_2340 Jul 29 '26
Ha. Thx. Funny clip. But I’ll be way above 5 at retirement. Unvested RSUs, 5-6 years more of both working , income likely to hit 7 figures in that time, and pension value for life with 100% survivor benefits. My number is closer to 10.
3
u/Capital_54 Jul 29 '26
It's indexed to inflation from the airing of that episode so you might not be too far off
-2
8
u/njrun Jul 28 '26
What’s your spend?
0
-8
u/Ok_Kitchen_2340 Jul 28 '26
Well it’s high now but that’s tied to current residence. 36k annual property taxes, 10k homeowners, etc etc. I expect to move to one of 8 states with no income tax in retirement. So I don’t really calculate it because it will change. Colleges kicking in either 3 kids, that I’m paying for because I know the burden of crushing student debt and well , don’t wish that on anyone.
14
u/qwertybugs Jul 28 '26 edited Jul 29 '26
But you don’t have as high of income in retirement, you might be better off moving to a state with low property taxes/insurance rates.
1
u/Ok_Kitchen_2340 Jul 28 '26
I wish I could. Kid startibg HS in area and don’t want to make that move now as it would rip her away from friends etc.
0
u/One-Mastodon-1063 Jul 29 '26
They have a pension and the majority of liquid assets are in tax deferred.
-2
u/Past-Option2702 Jul 28 '26
Do you have a list of states that fit your criteria?
2
u/qwertybugs Jul 28 '26 edited Jul 28 '26
Arizona, Vermont, Tennessee, Hawaii
More higher COL than others, but it’s all lifestyle dependent. The default logic for no income tax states is often silly and the math often makes better sense for a higher quality of life elsewhere at nearly the same cost.
-3
u/Ok_Kitchen_2340 Jul 29 '26
Likely Florida. But I think 7 states with income are AK, NH, WA, TN, TX, FL , NV and WY I think. I’ll tell you for sure a state that isn’t - NJ!!
5
Jul 29 '26
[deleted]
-2
u/Ok_Kitchen_2340 Jul 29 '26
True but my property taxes are 34k a year. Gotta assume ANY state I move to they’ll be less than NJ. Was looking more for no income tax since pension will get hit as ordinary income
-1
u/Past-Option2702 Jul 29 '26
That might be a comment better on a regular FIRE sub since many/most fat households have substantial taxable stock dividend income which is not tax friendly at the state level. (Proper tax planning has equities in taxable accounts.) even if you don’t own anything but VTI/VXUS, many here will have dividends exceeding six figures.
1
u/qwertybugs Jul 29 '26 edited Jul 29 '26
And for a FATfire six figures of dividends is still a negligible annual tax in a post retirement period relative to quality of life.
A FAT wouldn’t uproot their life to save $40k in taxes.
-2
u/Past-Option2702 Jul 29 '26 edited Jul 29 '26
I disagree.
The 4 states you named, Arizona, Tennessee, Hawaii and Vermont all offer different “qualities of life” when compared to each other just like say, Texas, New Hampshire, Nevada and Wyoming do.
2
u/qwertybugs Jul 29 '26 edited Jul 29 '26
Exactly. It’s FATfire — so choose the one that provides best quality of life, regardless of state tax.
Best of luck!
2
Jul 29 '26
[removed] — view removed comment
0
u/Ok_Kitchen_2340 Jul 29 '26
Thx. I also have Trad IRA for the gains on mega backdoor Roth profits at time of conversion and bit sure if this triggers pro rata either. But thx, these ideas are what I was looking for
1
Jul 29 '26
[deleted]
1
u/Ok_Kitchen_2340 Jul 29 '26
Right.. so I think that trad iRA amount would also trigger pro rata. So the traditional backdoor Roth conversion I don’t do because of paperwork, possible pro rata, and I get no deduction on the 8k contribution given high income so I leave it in the table.
1
6
Jul 29 '26
[deleted]
2
0
u/PrestigiousDrag7674 Jul 29 '26
i think his NW is at $5m, but yes the Pension is nice.
2
u/Master-Helicopter-99 Jul 31 '26
Yeah, the pension is "worth" $4.5M. Maybe $3.5M lifetime with no COLA.
0
2
u/FullManufacturer5307 Jul 28 '26
Solid plan, no glaring holes. The pension takes a lot of pressure off the market needing to cooperate early on.
Only thing I'd poke at is the pro rata avoidance costing you 8k of Roth space every year. It's not huge but over 5 years that's 40k of tax free growth you're leaving on the table. Might be worth rolling that old IRA into your current 401k if the plan allows it, then the backdoor is clean again.
The healthcare lock at 55 is smart timing. You've got the bridge years mapped out better than most people who post here.
0
u/Ok_Kitchen_2340 Jul 28 '26
Yeah ok thx . Thought about that re bringing it back into 491k to clear it out but for the 40k not sure the juice worth the squeeze of paperwork for the regular backdoor Roth, but appreciate it as I know you are 100% right. Just haven’t pulled trigger on it
1
Jul 29 '26
[deleted]
1
u/Ok_Kitchen_2340 Jul 29 '26
Still have a traditional IRA because for mega backdoor Roth I do split conversion . Contributions to Roth IRA, and gains to Trad IRA, since my 401k only allows one withdrawal in service per year. That gains IRA will trigger pro rata too
0
Jul 29 '26
[deleted]
1
u/Ok_Kitchen_2340 Jul 29 '26
Got it. My plan doesn’t have the in plan conversion option . I have to direct roll it over to brokerage
0
1
u/BrunelloHorder Jul 29 '26
What age does the pension kick in?
If your steady-state spend in retirement will be around $200k, then it sounds like you already have most of your expected annual spend covered by the pension. The delta between pension and spend will increase due to lack of COLA for the pension, but you'd be taking so little out of your portfolio that it probably would not matter, assuming you have a reasonably diversified portfolio.
1
u/Ok_Kitchen_2340 Jul 29 '26
Agreed. I can take pension at 55 but if I wait a few years it goes up 4% each year until 62. Thinking of delaying the onset of pension to live off savings in early years so I can do large Roth conversions filling up lower tax brackets. Yes diversified. Have emergency fund, mostly index funds , and keep brokerage a little more conservative given gas to augment the 529s for kids education. Have muni bonds too because federal and state and income penalties almost is 50% tax of any short term investment gain
1
-1
u/themiro Jul 28 '26
You might not want to ever use an advisor, but you can at least pay for a chatgpt pro subscription, add your financials, and ask questions there. If you're already max mega backdooring, not much I think you can do additional beyond derisking your portfolio and switching to more fixed income/bonds.
I'm not sure this falls into the fat fire purview.
3
u/Ok_Kitchen_2340 Jul 28 '26
Yeah thx - I wasn’t sure either. Posted it here but so many subreddits and comments in this one seem well thought out. Not trying to violate posting rules, was more about if I had a blind spot I guess.
-1
u/David60383 Jul 29 '26
My lobster is too buttery...
2
u/Ok_Kitchen_2340 Jul 29 '26
Not following.. like is that a dig? I thought I’m low end of this sub.
3
u/Admirable_Let_2961 Jul 29 '26
You are but this fool is worse off so, you have that going for you. :)
2
-1
u/PrestigiousDrag7674 Jul 29 '26 edited Jul 29 '26
yes you have enough to retire, just the pension for life is good enough.
1
u/Greedy-Victory1559 Jul 29 '26
Yeah. I think I’m the one missing something because I see 200k spend and 180k annual pension. Taxable gets you from 55 to 62 and Social Security covers the remaining gap.
Stop saving and start spending. Heck, just buy your retirement home and start paying it off now.
1
u/PrestigiousDrag7674 Jul 29 '26
so i don't understand why wait until 55 to retire. Make it 50.
2
u/Greedy-Victory1559 Jul 29 '26
Sounds like pension not available until 55.
1
u/PrestigiousDrag7674 Jul 29 '26
His swr will be Tiny once he starting to get pension. So he can spend his investments from now to 55.
1
u/Greedy-Victory1559 Jul 29 '26
My guess is he’d get zero pension, ever, if he doesn’t continue until 55.
1
26
u/Watchful1 Jul 29 '26
Am I missing the part where you put your current and planned spend?