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2021 Taxes Done - Turned out well

March 28th, 2022 at 12:14 am

We got our taxes back from our accountant last night. 2021 was complicated because we had to file our normal personal return, a final return for my late cousin, and an estate return. I had no idea what to expect. Our accountant didn't either, so he was extra conservative with our tax planning this past year. Back in December after we got some large investment distributions in taxable accounts, he had me pay a total of $9,400 in estimated taxes and he thought we'd likely owe another $1,500 or so before we were done.

Thankfully he greatly overestimated. Overall, we're getting refunds totalling $7,623. I was very pleasantly surprised by that. I've been sitting on extra cash in our checking account expecting to have to write a couple of large checks. Now that money, and the refunds when they come, can get put somewhere better.

February updates

February 20th, 2022 at 12:42 am

Things are cruising along reasonably well. I've adjusted well to working part time. At first it didn't seem much different. It took me a few weeks to adjust my schedule and stop feeling like I had to cram things into the 3 days I was off since I now have a whole 4th day free. Plus 2 days a week I don't go in until 1pm so I've got those mornings free now too.

Still, I'm constantly running the numbers to see when it is reasonable for me to drop to per diem and just work when I want to. I'm thinking that if I can pick up at least enough shifts to earn what we will be spending on health insurance, that would be perfect.

I'm not sure if I mentioned this in my blog (I know I've talked about it on the forums) but my wife developed back trouble at the end of October so we've been dealing with that. She's had 3 epidural injections and is having facet joint injections on Friday. She's better than she was but still nowhere near normal. Because of that, I don't really want to switch insurance plans now, which we'd need to do if I stopped working part time. We could do COBRA but that's super expensive so not really a good option. Hopefully, things will turn around over the next few months and she'll be better so switching coverage won't be a big concern anymore.

I've been much more active on ebay, which was my intent when I started working less. I currently have 72 items listed (plus 10-20 on Marketplace). Just this morning, for the first time in a long time, I bought some stuff to resell from an estate sale. While we still have plenty of stuff in the house for me to sell, I also know that if I want ebay to become a meaningful source of retirement income, I'm going to need to buy stock. I spent $14 today on 6 items that should bring in $100 or more. We shall see.

We have a cruise booked for August so we're hoping both that COVID is under control and that DW is physically able to do it.

I'm taking our tax stuff to the CPA on Tuesday. This year is complicated as it's our normal personal return, a final return for my cousin, and an estate return. I have no idea what that will all look like, if we'll owe, if we'll get money back, or what. So I kind of feel like I'm in limbo at the moment as far as making any big financial decisions until that's all done and I know where we stand.

Plenty of other things happening, but that's enough for now.

Extra tax bill - ouch

January 6th, 2022 at 01:18 am

Two of our taxable mutual funds paid out particularly large year-end distributions. Along with other taxable investment income, it came to about 46K, as I said in my last post.

I sent that info to our CPA and he ran our numbers and we need to pay over 10K in taxes. We need to pay at least $9,400 by 1/18 to avoid an underpayment penalty.

We have the funds, so that's not an issue. I just wasn't anticipating a 10K bill.

I did log in tonight and turn off reinvestment of dividends and capital gains for the one fund. The other fund already paid out rather than reinvesting. So at least when this happens again 12/22, we'll have those funds to draw from to pay the taxes.

Oh well. My father the accountant always said it's better to make the money and pay the taxes than to not make the money at all.

Investment income

January 3rd, 2022 at 01:59 am

I just had to add up our taxable investment income - interest, dividends, capital gains - for our accountant to see if we need to make an estimated tax payment.

It came to $46,000.

There was also about another $6,000 in dividends from two inherited stocks that are still in my late cousin's name and were paid to the estate, not to me directly.

In 2022, I have to start taking RMDs from the inherited IRA. That will be about $20,000 this year.

Finally, there's just over $550,000 still sitting in the estate bank account currently earning nothing. I will gain control of those funds soon and be able to invest them. Even at a modest 3% return, that would be another $16,000/yr. Obviously more if I can do better than 3%, which I think I can.

All together, that comes to $80,000 or so in income that we can reasonably expect this year. That's before touching a penny of our retirement accounts (except that inherited IRA) and in addition to my income from work.

If it truly plays out that way, I think I'd be well-positioned to retire by the end of the year, which has been my plan. It's just nice to have some actual numbers to back it up.

2021 year-end portfolio numbers

January 1st, 2022 at 12:58 am

Happy New Year to all!

I'm spending some of my New Year's Eve downloading year-end numbers for our portfolio. My goal was to end the year with $3.3 million and we just made it with a final total of $3,302,333.14.

That represents an increase of $1,677,361.02 for the year. Of course, the bulk of that came from the inheritance I received when my cousin died, but he "only" left me about $1.2 M. The rest is from growth of our existing holdings and the growth on that money once it became mine.

I'm certainly happy with that, but it could have been more except that $551,000 is still tied up in the estate account earning nothing. All of the paperwork has been filed to release it - over two months ago actually - but the court hasn't gotten around to it yet. Hopefully sometime early in 2022 that money will come into my control and I can start putting it to work for us.

Our year-end asset allocation is still overly conservative, thrown off by that 551K sitting in cash. We are now at:

Stock 58.12%

Bond 18.79%

Cash 23.09%

I haven't started to analyze performance yet. I just know that 7 of our holdings ended the year at or near their 52-week high and 4 ended at or near their 52-week low. The rest fell somewhere in between. Not too bad overall.

I hope everyone had a successful 2021 and I wish you all a happy, healthy, and prosperous 2022.

2021 spending

December 27th, 2021 at 01:45 am

I haven't crunched the numbers in detail but big picture, here's how our spending stacked up for the past 3 years.

2019: $81,200

2020: $70,600

2021: $88,400

There was also a large one-time expense in 2021 not included there. We paid the lawyer handling my late cousin's estate $14,500. Technically that was paid from the estate (even though I was the sole beneficiary of the estate so ultimately it was my money either way) but I certainly don't need to count that when doing future spending projections.

We had one other large expense this year spending $10,200 for a home repair. If not for that, our 2021 spending would have come in a few thousand under 2019. We're not quite back to pre-pandemic spending yet.

We have trimmed a couple of costs over the past year or so. We cut cable in November 2020. Just this past month, I dropped DW's life insurance and one of my disability insurance policies. Our daughter aged off our health insurance in October but we're now paying out of pocket for her therapy as her new plan doesn't cover it.

Overall, I'm pretty satisfied with where our numbers are at this point. I dropped to part time at the end of November so my income dropped by 1/3. That should still have me earning more than we're spending with a little to spare. That was pretty much my goal - earn enough to pay the bills and still save a bit and not have to touch the nest egg yet.

Had CFP follow up meeting today

November 19th, 2021 at 09:32 pm

Today was our follow up visit with our CFP. We saw him initially on 10/29 at which time we presented all of our information and discussed our plans and goals.

Today he reviewed the results of his analyses. He modeled several scenarios ranging from me retiring at 60 to retiring January 1, 2022. In all but one scenario, our projected success rate was 100%. In the one outlier, our success rate was "only" 99% so I think we could squeak by.

All of his projections assumed that I would have zero income after retirement, which isn't my plan. I anticipate dropping to per diem status and still working a few days per month for at least a few more years. At worst, if I work one weekend a month and nothing more, I'd earn at least $30,000/year. I also plan to do more online sales on ebay and Marketplace and have some money coming in that way, too. So his projections would look even better if you plug in that "post-retirement" income.

His projections also use a 4% rate of return from our portfolio. I certainly hope the long term return will be better than that. Even if it is 5%, that tips the scales even more in our favor.

Bottom line is that he thinks we're well positioned to succeed regardless of what I end up doing or when I end up retiring. I was pretty confident that that would be his conclusion, but it was nice to actually hear it stated.

I will be part time as of next Sunday, 11/28. I'm looking forward to seeing how that goes. I expect I'll find the work-life balance more to my liking and can stick with that for a while. Otherwise, we're set for me to cut back more if and when I decide it's time.

 

401k maxed for the year

November 17th, 2021 at 02:18 am

I just downloaded this week's paycheck. I contributed the final $740.78 needed to max my 401k at 26K for 2021. This is the third year I've done so. It's also possibly the last since as of 11/28 I will drop to part time. I don't think I'll be able to contribute that much going forward for however much longer I work (and the max rises for 2022).

Still, I'm happy to have been able to put in what I did. That account now stands at about $215,000 and I won't be touching it for at least a few more years so it can continue to grow. And even if I can't put in the max, I do want to keep contributing as much as I can for as long as I can.

This working thing is really getting old

November 9th, 2021 at 12:51 am

I'm tired of working. I suppose more accurately I'm tired of never having enough time to do everything else I want and need to get done because I spend so much time working. House stuff, financial stuff, family stuff, medical stuff, car stuff, exercise, the list goes on and on. Even fluff like staying current on a Netflix show I'm watching or being able to take advantage of a special offer at a favorite restaurant. There just aren't enough hours in the day. So many people say they'd be bored if they retired. I say bring it on. I'm ready. My to-do list is a mile long.

Three weeks from yesterday I'll officially be part time at work, dropping from 36 hrs/wk to 24, from 4 days to 3 days. I'm hoping that having that extra day, those extra 12 hours each week will provide better balance and give me more time to do all the stuff that gets ignored or delayed now. If not, it will be time to very seriously plan cutting back to just per diem work and getting our finances in order to make sure that will work.

First meeting with CFP done

October 30th, 2021 at 05:15 pm

We had a meeting yesterday with a CFP. He happens to be my wife's cousin and is someone we know and trust. He's the farthest thing from a sleazy salesperson type as you can get. Very upfront and honest about everything. We told him before we scheduled the meeting that we were not interested in money management services and did not want to be sold anything. We were strictly looking for planning services.

Prior to the meeting, he sent a list of information he wanted us to bring: income statement, SS statements, tax returns, spending log, and portfolio review. All easy enough for me to put together.

We started by talking about our situation and goals and what we'd like retirement to look like. He asked if we had any specific questions or concerns we wanted him to address. I then walked him through our portfolio spreadsheet because it's not really designed for a stranger to necessarily read and clearly understand so I wanted to make sure he knew what everything was and how to follow it. We talked a fair amount about our spending and how we envision that changing (or not) in retirement.

He explained the review he will do and what the results will look like, what sorts of things he models in, etc. We scheduled a follow up visit for 11/19 to go over what he comes up with.

Without giving us any specific answers, which he can't do just off the top of his head understandably, he was impressed with our situation, portfolio, knowledge, and mindset. Just based on the initial review, he thought we were in good shape overall to retire in the near future but will go into far more detail once he runs all the numbers, analyzes our portfolio, etc.

One thing he particularly liked was how we have good diversity of account types. Traditional IRA, Roth IRA, 401k, taxable accounts, etc. He said it's always challenging when someone comes to him who has a lot of money but it's all in one place, like their 401k. The diversity creates much more flexibility when it comes to withdrawal planning and managing tax efficiency.

So overall he thinks we're on the right track and have managed things well. I'll post again after we have the follow up in a few weeks.

Part time starts 11/28

October 28th, 2021 at 08:20 pm

I gave notice on 8/3 to end my current full time contract and switch to part time. My contract requires 120 days notice which took me to 12/1. The pay period starts 11/28 so the change will be effective then.

I'll be dropping from 36 hours/week to 24. I currently work two 12-hr days, one 8-hr, and one 4-hr. The new schedule will either be three 8-hr days or one 12, one 8, and one 4. We got our new schedule yesterday that runs through 12/25. It was nice to see my newly reduced hours in black and white.

Due to over-extending my PTO this year when my cousin died, I still owe them about 45 hours that I need to make up. I've been picking up 4 hours here and there and have already worked off 35 hours (I owed 80 originally). Even after I switch to PT, I'll still need to pick up some extra shifts until I make up that deficit, but it will be a lot easier at that point since I'll have more time free.

Once I've taken care of the PTO deficit, I'll probably still pick up extra shifts fairly regularly. Working a 4-hour shift is pretty easy and pays nicely. So maybe I'll aim to actually work 28 hours most weeks, still better than 36.

We're meeting with a CFP tomorrow for some hard core retirement planning. I think I have a good grasp on where things stand but I wanted to get a pro's input, particularly on a withdrawal plan once I do retire fully. We have so many accounts and I don't want to do anything that screws us up at tax time when doing something a little different could have saved us thousands of dollars. I'm really looking forward to seeing what he has to say. More to come on that once we've reviewed everything with him.

Estate probate period has ended

October 14th, 2021 at 12:28 am

The probate period for my cousin's estate ended yesterday. The lawyer emailed me all of the forms needed to officially petition the court to close the estate and release the funds to me. There was one form I had to get notarized which I did earlier today. I just scanned and emailed everything back to him and will put the originals in the mail tomorrow. I'm not sure how long it takes for everything to process but that should be the last step.

Sometime soon the estate account should be paid out to me. It currently holds just over 547K. Then the task will be to invest that money. I'm not planning to do anything crazy with it. It will pretty much be added to our existing investments. Even at a modest return, though, that money will generate a nice chunk of our retirement income in the near future.

Portfolio milestone - $3.2 million

September 4th, 2021 at 02:07 pm

As of close of business yesterday, our portfolio now stands at just over $3,200,000.

I thought we might hit that by the end of the year and here we are at that mark almost 4 months before that. The market performance has been wild. I know it can't continue but it's sure a great ride while it lasts.

I've gotten our AA up to 56% stock as it had gotten really low due to the inheritance. My target is 60-65% stock so we're close. I may just leave things be for now as in another month or so, I'll be getting the money currently locked up in the estate account and will need to deploy that.

401k milestone

August 29th, 2021 at 12:35 am

As of this week, my 401k balance topped the $200,000 mark for the first time.

I started this account when I started working here per diem in April 2016. I went part time in February 2017 and full time in November 2017. I contributed the maximum allowed in 2018, 2019, and 2020.

So 200K accumulated in under 5-1/2 years. Not bad at all.

Florida house sold, portfolio update, odds and ends

August 19th, 2021 at 01:13 am

The Florida house did close on 8/10 as scheduled. All went pretty smoothly. I had to run around a bit to get the paperwork notarized and sent back but that was minor.

Final result was me walking away with $477,203.26. It went into the estate account for now. I'll get it once the probate period ends in early October. There's now over $547,000 in that account.

That means that our overall portfolio now stands at over $3.1 million. That's well above where I thought we'd be with the inheritance. I had estimated we'd be around $2.7 or 2.8 million but the inheritance ended up being more than I thought plus the ongoing stock market returns have pushed up the value of what we already had as well as the value of the money I inherited that was invested in equities.

That estate account, however, has pushed our cash allocation to about 23% right now and our stocks down to 51% with the remaining 27% in bonds.

I'm working on fixing that. I can't do anything about the 540K in the estate account yet but I'm reallocating the money that is in our control, namely the inherited traditional IRA. I started moving 10K/week from bonds to stocks but realized that would take forever, so today I moved 50K and will do that every week for the next couple of months. That will get us to about 57% stock. Then the estate account will get distributed to me and I'll be able to invest that to get the asset allocation where I ultimately want it.

No word yet on when my part time status will begin. We're actually short staffed at work right now so it's very possible they will hold me to my contract, meaning I'll remain full time until December 1. I'm hoping they can find a way to get me part time before that but I'm not complaining as I completely understand I'm bound by the contract.

We go to Florida 3 weeks from today for a big fundraising event and convention. We're not thrilled about traveling in the midst of the COVID surge but we've decided we're just going to do it and take precautions as much as possible.

Updates: estate, job, etc.

August 7th, 2021 at 11:34 pm

It's been over a month since my last entry. Time for an update.

I did return to Florida where I spent about 2 more weeks finishing up. Donated a bunch more stuff. Got the house ready to sell. Met with the realtor. A guy who lives in the neighborhood and knew my cousin had a sister in NY interested in the house. I had her and a couple of others excluded from the realtor contract. She flew down to see the house while we were there (my wife joined me partway through) and made a cash offer for just over our asking price. We're on track to close on Tuesday as far as I know.

We rented a truck and packed up a bunch of stuff that we wanted to bring home and drove back 7/14-7/15. I returned to work on 7/17.

Work has been nuts thanks to COVID and the fact that they closed one of our 8 sites at the end of May. At my primary site, we've had several days where we've seen over 70 patients which is a lot. 50s to 60ish had been the norm. We all can't wait for COVID to settle down but this particular location is also in an area with high anti-vax sentiment and "free-dumb" folks. Even a number of the staff members are anti-vax which just drives me nuts. How can you be on the front line of the pandemic seeing COVID patients every single day and still not see the value in the vaccine? Thankfully, our job has made the vaccine mandatory. We must be fully vaccinated by September 15. A bunch of people have quit as a result, though I'm not sure where they're planning to go since most other health systems are doing the same thing, but at least I won't be stuck with them anymore.

Big news on the job front is that I officially gave notice to drop to part time. I don't have an effective date yet. My contract requires 120 days notice so it could be as late as December 1. They handle that on a case by case basis so it could be before that. I know they have per diem providers waiting for hours to open up so if they can fill my spot easily, they might let me out of the contract early.

I'll go from 36 hours to 24. I'll still have medical benefits but at a slightly higher rate (about $70/month). And I'll still have the option of picking up extra hours whenever I'd like based on availability. I'll definitely do that for a while because I owe them about 80 hours. My leave of absence used up all of my PTO but we have a couple of trips planned in the fall that I'm still taking so I have to make up that time. Also, if I pick up 4 hours a week, I'd make some extra money and still be doing 8 hours less than I had been. One nice thing, hopefully, is that I won't be working 12-hour days anymore. I requested three 8-hour shifts for my 24 hour week.

Hopefully, the house closes as scheduled on Tuesday. That will be the last big piece of the estate. Then I just have to wait for the probate process to end in early October before the funds can be distributed to me.

I've been staying active listing stuff on ebay since a lot of what came home from Florida is items I wanted to sell. I've got about a dozen listings going and have already sold several. Little by little, I'll work through it all. Once I go part time, I plan to devote more time to the sales.

I think that's about it for now.

Heading back to Florida

July 4th, 2021 at 12:10 am

I'm flying back down to Florida on Monday. The plan is to finish cleaning out the house, get rid of most of the furniture, and pack up everything that needs to come home with us. I was thinking about replacing some carpet but might not be able to accomplish that on short notice. At the very least, I'd like to have the carpet cleaned if possible.

I also want to meet with the realtor to go over the process moving forward, sign with him officially, and see if he has any other advice to get the house ready to put on the market.

My wife is then going to fly down on Saturday to help me finish up. The following Tuesday we're renting a truck (already reserved). We'll pack it up and hit the road for home Wednesday morning and should get home Thursday evening.

The one possible complication is Tropical Storm/Hurricane Elsa. I'm hoping it doesn't interfere with my flight on Monday. Time will tell.

I go back to work on 7/17 so if any further stuff requires me being down, I'll have to fly down on one of my weekends off since I'm out of PTO at this point. Hopefully between some friends in the development and the realtor, that won't be necessary.

Back at home - for now

June 24th, 2021 at 11:22 pm

I left Florida on Monday and got home Tuesday evening, 4 weeks to the day that I left. I definitely feel like I accomplished a lot while I was there, but the job isn't 100% done. The plan now is for my wife and I to fly down probably right after July 4th, pack up what remains, and rent a truck to drive home with everything that we're keeping (much of which will ultimately get sold on ebay).

I need to speak with the realtor and get his opinion on what furniture can remain. He did say that he likes there to be some furniture rather than the house being totally empty as it shows better that way. I also want to ask him if he thinks we need to replace any carpet or do any other touch up stuff to the house. I'm not going to do any major work. The last step will be to hire a cleaning service to come in and thoroughly clean top to bottom, floor to ceiling.

I'm estimating we'll need 3 days to get everything packed and cleared out. A bunch more stuff will need to go to the thrift shop. I just couldn't donate it while I was there because I was still using it (dishes, toaster oven, cookware, etc.).

I'm still waiting on the probate stuff from the court. My lawyer warned me that all 3 judges in the county are new and don't know what they're doing so the process will take longer than normal. They already denied a request and said they had to get a copy of my license to prove I'm over 25. The lawyer said that was the most bizarre denial he's ever seen. Hopefully they won't come up with some other outlandish requests to further dealy the process.

The Wells Fargo accounts did transfer to Vanguard so that's done. Once I have the court stuff, I can work on transferring non-retirement accounts (checking, savings, stocks). I can also actually take over insurance policies, the car loan, the homeowner's association, etc. Right now I'm kind of in limbo with all of the legal stuff.

First big installment of inheritance

June 14th, 2021 at 11:50 pm

Not that this was unexpected but as of close of business today, my late cousin's main IRA has been transferred into my account: $433,656.00. The money was already effectively mine but actually having it in my name is one more step in the process.

His Roth hasn't transferred yet. I'm guessing that will happen tomorrow as it's with the same firm (Wells Fargo). He also had much smaller traditional and Roth IRAs with Vanguard which should be in the process of transferring as I spoke to them a couple of days ago.

The final step will be moving the Wells Fargo money over to Vanguard. I already have the new accounts set up so once everything is in my name, I can have Vanguard start that process.

In the meantime, I asked the account manager to liquidate the money within the IRA to go to all cash. It's currently in a ridiculous portfolio of 22 mutual funds which is what you get when you pay a "professional" to handle your affairs - high complexity and high expenses. I will be greatly simplifying that and almost certainly outperforming it as well.

Next chapter of the estate saga

June 13th, 2021 at 12:30 am

I just reread my post from last week saying I was pretty much done with the "debulking" of stuff. Boy was I wrong. A week later and I've put out 3 more bins of paper for recyling and taken 2 carloads of stuff to the thrift shop. I've sold multiple items on Marketplace and have a couple listed on ebay. I have several more that I'll probably list tomorrow. I keep unearthing more stuff. It seems to go in layers - get one layer cleared and discover there's another layer behind it. Just tonight I found that a large box that I thought only held packing material and bubble wrap also contained a nice barstool which will go on Marketplace tomorrow.

The really big news is that I sold the Corvette! My lawyer put me in touch with somebody he has worked with before and not only did they end up buying it but they paid me my full asking price of 45K! Note that that occurred less than 8 hours after some bozo offered me 20K for the car (which I flat out turned down). Selling the Vette was the thing I was most stressed about with the entire estate.

All of the court papers have been filed so I should have the official order naming me executor soon. I need that to take care of the financial stuff and start closing accounts and transferring funds into my own name.

I have started putting myself in as the contact person for the utility bills so that nothing gets missed and everything gets paid on time. There was a minor issue with the most recent electric bill because it was on autopay but the account had gotten frozen before the bill got paid so the payment got rejected. They charged a $30 fee but I called today and got them to waive it and switched the account to our bank so there won't be any more issues.

I need to call a realtor to get an opinion of value on the house to establish my cost basis. The lawyer recommended someone so I'll call him on Monday or Tuesday.

More to come.

Update on settling my cousin's affairs

June 6th, 2021 at 02:05 am

I realized I haven't made a post since I arrived in Florida. I did leave a week ago Tuesday and arrived Wednesday evening. I had a nice drive down and even got to detour in North Carolina to visit my cousins who just moved there a couple weeks earlier from Connecticut. I got to see their new house and have dinner with them.

Since arriving, I've been working every day to clean out the house. I've taken out 7 or 8 bags of trash, about 6 bins of paper for recycling, and packed 10 cartons of documents to be shredded. I've also sold his tool chest, tool boxes, and most of the tools, a mini bike, and just tonight sold his floor jack on Marketplace. Oh and I've taken half a dozen boxes of stuff to the thrift shop along with 6 garbage bags of clothing plus several suits and some assorted loose items.

I think I'm pretty much done with the debulking. I've been through every drawer, cabinet, closet, and file. Although it's been time consuming, that was the relatively easy part as it didn't involve too much in the way of personal or sentimental stuff.

Now I'm getting to the harder part with the more personal items. A lot of that will end up being transported home with me. There are a bunch of things that need to either be sold or donated. I'm sure I'll do a mix of both. I'll need to decide what to do with furniture - sell or donate. I'll probably at least try to sell some of it and if I don't get any bites fairly quickly, I'll give it away. There is a large local thrift shop that will pick it up.

I'm not sure how long I'm staying. I finally got the death certificate on Friday and have an appointment with the lawyer on Monday to start the probate process. I'm not sure all that's involved with that or whether or not I need to physically be here to do anything.

There are 2 cars, one antique and one regular, that need to be sold. I've been doing some word of mouth advertising for the antique but if nothing comes of it in the next couple of days, I need to actually start listing that at a few sites. The regular car will be no problem as I'll probably go to Carmax, Carvana, and the dealership and take the highest offer. I don't want to get rid of the car until we're pretty much done as we may need it to get around if I drive home and fly back.

I guess that pretty much sums it up for now.

Beginning to deal with cousin's estate

May 23rd, 2021 at 07:03 pm

Now that the funeral is behind us, it's time to start dealing with everything needed to settle his estate. I'm expecting to leave for Florida Tuesday morning and get there Wednesday night (I'm driving).

Until I have death certificates, I can't address any of the financial stuff, so I'll start cleaning out the house, getting rid of trash, shredding unneeded papers, donating clothing and other items, etc. Once I have the certificates, I can start closing credit cards and bank accounts and getting assets transferred into my name. I will schedule a meeting with his attorney and give his financial advisor a call. I've already spoken to both of them. The advisor manages his retirement accounts and I'm the beneficiary so that stuff should be simple. No probate needed. Other stuff has to go through probate.

I got the first tiny piece of the inheritance - he had $85 cash in his wallet. Woo hoo.

Also in his wallet are two gift cards that they get as part of their HOA dues in his community. They are good at the clubhouse cafe (which has been closed for COVID) and at one local restaurant. I checked the balances and between the two of them, there's over $190 credit. I guess I know where I'll be eating regularly when I get down there.

I have a lot of work ahead of me and I'm sure some of it will be emotionally difficult, especially dealing with some of the more personal items, but I'll work my way through day by day. I'll be there by myself so I won't really have any distractions. I figure in the mornings, I'll start in the garage and crawlspace before the temperature heats up for the day. Once it's too warm, I'll focus on the inside stuff - clothing, kitchen, home office files, etc. The thrift shop where everything will be donated is just a few minutes away so I'm sure I'll be making multiple trips there. They will pick up but I'll save that for big items like furniture. I'm certainly capable of hauling bags of clothing and small household items over there myself, plus it will give me a reason to get out.

I suspect I'll be blogging more going forward so I'll update as I have new info.

My cousin died today

May 18th, 2021 at 02:10 am

My cousin in Florida who has been dealing with cancer passed away today. My wife and I had gone down to see him about 3 weeks ago. A few days after we got home, she went back and has been there since helping to take care of him. The past 2-3 days he had 24 hr care from hospice along with the home care aide we had hired. I'm sure it was still exhausting for my wife. She'll be flying home tomorrow evening so that will be good.

His funeral will be here in NJ so probably Wednesday morning we'll go over to the funeral home to make all of the arrangements. My mom will probably want to come along for that too.

Obviously I'm deeply saddened by his death as he has always been like a brother to me. That said, I'm also typically the practical one so I'm already working on taking care of business. I called and spoke to his lawyer today to find out what I need to do as I start dealing with the estate. I also chatted with our CPA who will handle that end of things.

The difficult but ultimately silver lining here is that I'll be inheriting somewhere in the neighborhood of $1.2 million when everything is settled. That will eventually lead to my retirement in the not too distant future. My cousin was a huge proponent of early retirement having retired at 55 himself. I can't think of anything that would please him more than knowing that the money he left me will allow me to do the same, though I'll likely be 58 by the time I get out. I really can't even fully process that end of things quite yet even though I've been running the numbers for months. Much more to come on that but first comes the mourning process and what I'm sure will be several months of working to settle everything, clean out the house, sell the cars, sell the house, transfer all of the accounts, etc. Maybe by the end of 2021 I'll have a pretty good idea of where things stand.

I'm not a market timer, but ....

May 11th, 2021 at 09:23 pm

I am by no means a market timer. I believe in investing regularly over time and, for the most part, holding things long term.

That said, over the past 3-ish years, I have gradually reduced the equity allocation of our portfolio and it now stands at about 66% (it was 80% 3 years ago). It's part of the adjustments I've been making as we prep for retirement. My plan had been to wait for the impending inheritance I'll be getting and use that money to adjust it down further to 60%. However, I don't know when that money will come and I've gotten increasingly nervous about the state of the market, so I've decided to start tweaking things a bit now.

The first thing I did was to turn off reinvestment of dividends and capital gains for a few of our stock mutual funds. That won't make a huge change and it won't move the needle quickly, but it will gradually lessen the stock exposure.

The other more immediate thing I did was to put in a sell order last night for one growth fund in my Roth. The aggressive growth stuff has shot up the most and will likely drop the most when things go sour. I'd much rather sell high and buy low than the other way around.  That fund held about 2.5% of our total so it takes us to about  63.5% equities.

I don't want to make any drastic moves so I may stop there until I get the inheritance, and then tweak it the rest of the way to the 60% mark. Of course, if today's market performance continues, the market itself might get us down the rest of the way.

I think I have "the number"

April 17th, 2021 at 12:57 am

In recent months, I've been doing a lot, and I do mean A LOT, of retirement planning. I've been reading and studying and educating myself on every aspect of retirement I can think of including withdrawal rates, taxes, Social Security, ACA coverage, Medicare (well not so much on that yet actually), and more. I've asked a bunch of questions on the SA forums. I joined and became quite active at Early-Retirement.org and have learned a ton of useful information there. I highly recommend the site if you are in the same boat as me.

I've made all kinds of charts and run through countless calculations and projections, played with FireCalc a bunch, and posted a "Can I Retire?" thread at ER with all of our details and I got a bunch of helpful responses.

Based on a number of things I've learned, I've made numerous changes to our portfolio to better position our holdings (more stocks in Roths, more bonds in taxable accounts, for example). I've done a number of things to consolidate our holdings and try to simplify some stuff (rolled over DW's old 401k and 403b, moved an outside MF into our Vanguard account, donated some appreciated stock to our synagogue, eliminated some duplication in our portfolio and got the total number of funds we own down from 16 or more to 11, which is still a lot but it's much better.

Anyway, the bottom line and the point of the title of this post is that no matter how I work the numbers and do the projections, I keep arriving at the same result: the amount we need to have saved for me to retire keeps coming out to be right around $2,500,000. I've become more and more confident in that number.

So what does that mean? Right now, today, we are a bit over $1,700,000. However, I will unfortunately be receiving an inheritance most likely within a year. The estate is currently valued right around $1,200,000 with minimal debt (less than 50K). There will be some expenses involved in settling everything, funeral costs, selling the house, travel, taking a leave from work, etc. I'm guessing that 200K should cover all of that which should leave me with roughly $900,000 as my inheritance. That would put us at $2,600,000 based on our current portfolio. If the market remains at least reasonably stable, even if it doesn't keep climbing like it's been doing, we'd likely have another 100-200K over the next year anyway and be at $1.9 million before the inheritance meaning we could potentially be at $2.8 million or even more when everything is done.

Assuming nothing crops up to make me question the $2.5 million figure, I should be at the point where retirement will work, even if the inheritance turns out to be 100K or so less than estimated.

That's both exciting and scary to be honest.

My plan right now is to beef up our cash holdings to create a nice big cushion to have in place when I do retire. My expense projection has us paying full price for ACA coverage but there's a reasonably good chance we can manage our taxable income to qualify for the subsidy which would make our numbers even better. I'm planning to meet with our CPA after tax season to really drill into a bunch of retirement tax issues including that one.

So yeah, that's how I've been spending way too much of my free time.

Mid-March check in

March 13th, 2021 at 03:53 pm

We're almost halfway through the month so I thought I'd post a quick update.

Our federal tax refund arrived on Wednesday. $518, so not a huge amount but I'll take it. Our state refund is bigger - $3,000 - but that always takes longer.

We aren't eligible for stimulus money but our daughter is, so that's nice for her. She is also due federal and state refunds. She filed last week so should have that money soon.

I sold the JETS shares I bought after last March's crash. I made an 81% profit which was nice. I'm still holding the AAL I bought but will probably sell it this week. It's at its 52-week high and I want to trim our stock allocation anyway.

DW gets her 2nd vaccine on Tuesday. Once we're both fully vaccinated, we may consider returning to indoor dining. One nice thing is that we will no longer need to wear masks to visit my mom since she had both of her shots already.

My cousin with cancer is doing okay. Things seem stable at the moment. He is on hospice service now which is good since he lives alone and we're 1,200 miles away. We're glad to know someone is checking in on him regularly. He also just started getting Meals on Wheels. He's had a couple of them so far and says they're very good. He really isn't a cook so having those on hand for an easy, balanced, nutritious dinner is great.

I've got PTO coming up starting 3/20. We were supposed to be in Florida that week but the event got cancelled due to COVID. No big plans, though DW and I were talking about tearing up the carpet in our bedroom so we'll probably do that. I'm hoping the floor isn't in too bad of a shape when we do.

The siding on the wall of our garage is coming loose. I contacted a couple of contracters to come out and take a look. Both are backed up for weeks so hopefully it doesn't get worse before one of them is able to get to us.

Otherwise, we're plugging along. I was spending a lot of time playing with retirement calculators and figuring out where we stand. I've pretty much determined that once my cousin is gone and his estate is settled, I should be good to drop down to part time. Right now, I'm figuring on remaining full time through the end of 2022 and maybe transitioning at that point. We shall see how it all plays out. How the market performs is a factor, too.

I hope everyone has a great weekend.

Taxes done - big refund

March 1st, 2021 at 09:59 pm

We got our taxes back. As expected, a few changes resulted in a substantially lower tax bill for us. Instead of owing nearly $1,000 like last year we're getting back over $500 on our Federal return. We're also getting back over $3,000 on our state return.

I generally try to get closer to even than that but the investment stuff always throws things off since I can't really control that. Our investment income was down about $12,000 last year so less tax to pay. Also, I sold a losing stock in December so we had a loss to take against what was already reduced investment income. Then they added the new $300 charitable donation deduction that you can take even if  you don't itemize, so that helped us too.

I'm certainly not complaining. We'll pay the accountant and the rest goes into savings.

 

Dealing with the impending death of a loved one

February 4th, 2021 at 01:59 am

My cousin, who has been like a brother to me, was diagnosed with cancer about 3 years ago. From the start, we knew it was inoperable/incurable. He has done a few rounds of chemo and a course of radiation and he has actually done extremely well... until just recently. His last scan showed that the last chemo just didn't work and the cancer progressed. He still felt fine, though, which was great. However, over the past few weeks, he has started to decline and have obvious symptoms to indicate that the cancer is taking over.

We don't know how much longer he has but I suspect it won't be terribly long. One tough thing is that we're in NJ and he's in FL. That would be hard enough anyway and it's just worsened by the pandemic. It's not so easy to just fly down there to see him for a few days because we really should quarantine for 2 weeks after we get there. I'm already fully vaccinated but that still doesn't mean I couldn't transmit COVID to him. We're still deciding what to do and when. If his condition declines and he needs help, we'll just do what we need to because COVID really won't matter at that point. He's dying anyway.

There is a big financial piece to this story, too. I am the executor and sole beneficiary of his estate. Whenever he does die, I'm going to have to go down there for a while to settle his affairs, sell his cars, clean out and sell his house, etc.

I already notified my lead physician about this and she was super understanding and said not to worry at all about my shifts or coverage issues. She would handle all of that, even if I need to leave with no notice. Today she sent me the link to the leave of absence info for when I need to do that. I have no idea how long it will take to settle everything but I would think at least a month if everything moves quickly.

I reached out to our CPA as well just to give him a heads up that I'd be needing him to handle the estate tax filings. I'm trying to get as many ducks in a row as I can before I actually need them.

The emotional part sucks. The fact that he's going to die before my 90-year-old mother, who considers him like a son to her, really sucks. And she really wishes she could go down there but by her own admission she's really not up to it. We'll probably have to take her down for a few days at least just so she can see him one more time, which is going to be incredibly difficult for everyone. The whole thing just sucks.

Hug your loved ones. But also have a plan. Make sure your family/executor/heirs know what you have and where it is and how to access it. Make sure they know your wishes. My cousin and I sat down about 2 years ago and reviewed his entire situation, every account, the house, his cars, valuables, etc. so at least after he's gone, I won't be trying to piece it all together. I've even already been in touch with his financial adviser just so we could introduce ourselves and share contact info for when I need it.

Not really much else to say at this point.

Working on our taxes

January 24th, 2021 at 06:12 pm

I spent some time this weekend starting to organize everything for our taxes. I made an appointment to drop things off to our CPA on February 24, so I've got time, but I don't want to wait until the last minute.

We haven't gotten all of the paperwork yet but there was enough I could do with what we already have.

The good news so far is that our taxable capital gains were lower in 2020 by about $3,400 so that will lower our tax bill. Also they are allowing $300 of charitable donations to be deducted for 2020 even if you don't itemize, so we'll get to take advantage of that. And that doubles to $600 for 2021 for those filing a joint return.

Otherwise, things should be pretty much the same as last year. With the lower CG and the charity deduction, we'll hopefully owe less and/or even get a small refund. We owed a little over $900 last year.

Vanguard account milestone

January 2nd, 2021 at 01:35 am

I forgot one thing in my previous post.

As of market close on 12/31/20, our Vanguard account topped $700,000 for the first time.

We actually have more than that there as that only includes my rollover IRA, my Roth IRA, and our joint brokerage account. My wife also has a rollover IRA and a Roth IRA which hold another $123,000. But the figure that I see when I log into my account doesn't include those.

As always, it's really just another number and doesn't particularly mean anything, but we all like to see those milestone numbers.


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