Thanks for the comments everyone. Please keep them coming.
To respond the first few comments:
I’ve built a full calculator for projected taxes under different scenarios, my projections under the 12% conversion + cap gains scenario are about $4,300 taxes due, which is already accounted for in the ~$82k realized income. I’ve already accounted for NY’s exclusion of $20k in retirement income, as it comes up every year with the RMDs from the inherited account. With another $10k in healthcare expenses, I don’t think it will result in a 20% tax rate, but I’ll start playing around with it to see what comes out.
I think taking off some time and moving to a competitor is probably what I will wind up doing, but it’s important to me to have that “security blanket” of knowing I can pull the plug if I need to. I agree with several of the comments that boredom is likely to be my biggest problem if I retire now. Some college friends and I have discussed starting our own small scale real estate development and design practice, but we were never able to make the numbers work in NYC - I think something like that could be interesting, and very satisfying.
The headhunter who approached me is someone I’ve spoken to several times through the years, and specializes in our field. The position that fell through would have been perfect I think, but (according to the headhunter) as much as they liked me the other firm wanted someone who was a clone of the person who previously filled the role and that person doesn’t exist. They did say the other firm was looking into creating a position for me, but I’m not holding my breath. There are probably fewer than a dozen people in the NYC area doing what I’m doing, and maybe as many firms working on the same scale work as we do, so finding the right place to jump to is tricky and will take time. I am always open to the idea of “temporary” relocations, but maintaining a base in NYC is important to me since my entire family is here.
Message received about moving the cash into a better account. I’ll get started on that tomorrow - thank you to muffins14 for pointing out the opportunity cost there.
Budget breakdown:
I found a few items where I missed updating my spreadsheet to current values (e.g., homeowner’s insurance and co-op maintenance fees) so this won’t agree with the numbers in my first post, I will update when I get the chance.
In retirement I assume health insurance costs jump to $1,200/mo, and professional fees jump to $1,200/year although if retired I’m not sure why I would need to maintain my professional registrations.
All of my work travel expenses (flights, hotels, meals, travel to/from airports, conferences) are fully reimbursable by my employer. I haven’t gone through my expense reports for the year to check, but I would be surprised if the total in 2023 wasn’t in the neighborhood of $100k.
I have idly considered a second home (most likely upstate NY), or perhaps a Golden Visa/retirement visa situation in Portugal or Italy. In my ideal world, the upstate second home would be one that I design and build myself - as mentioned, I have professional experience in this area. More likely would be buying a fixer-upper. It could be a great project to keep me busy for a while. I’m currently of the opinion that neither would be financially viable without working at least another 4-5 years.
To respond the first few comments:
I’ve built a full calculator for projected taxes under different scenarios, my projections under the 12% conversion + cap gains scenario are about $4,300 taxes due, which is already accounted for in the ~$82k realized income. I’ve already accounted for NY’s exclusion of $20k in retirement income, as it comes up every year with the RMDs from the inherited account. With another $10k in healthcare expenses, I don’t think it will result in a 20% tax rate, but I’ll start playing around with it to see what comes out.
I think taking off some time and moving to a competitor is probably what I will wind up doing, but it’s important to me to have that “security blanket” of knowing I can pull the plug if I need to. I agree with several of the comments that boredom is likely to be my biggest problem if I retire now. Some college friends and I have discussed starting our own small scale real estate development and design practice, but we were never able to make the numbers work in NYC - I think something like that could be interesting, and very satisfying.
The headhunter who approached me is someone I’ve spoken to several times through the years, and specializes in our field. The position that fell through would have been perfect I think, but (according to the headhunter) as much as they liked me the other firm wanted someone who was a clone of the person who previously filled the role and that person doesn’t exist. They did say the other firm was looking into creating a position for me, but I’m not holding my breath. There are probably fewer than a dozen people in the NYC area doing what I’m doing, and maybe as many firms working on the same scale work as we do, so finding the right place to jump to is tricky and will take time. I am always open to the idea of “temporary” relocations, but maintaining a base in NYC is important to me since my entire family is here.
Message received about moving the cash into a better account. I’ll get started on that tomorrow - thank you to muffins14 for pointing out the opportunity cost there.
Budget breakdown:
I found a few items where I missed updating my spreadsheet to current values (e.g., homeowner’s insurance and co-op maintenance fees) so this won’t agree with the numbers in my first post, I will update when I get the chance.
- Mandatory spending ($59,600/year):
- Housing: $41,600/year ($2,200 mortgage/mo + $1260/mo co-op maintenance; property taxes are included in my maintenance bill)
- Utilities: $3,700/year ($100/mo 1gb fiber internet + $82/mo cell phone + $125/mo electric)
- Groceries: $4,700/year ($390/mo)
- Insurance: $8,500/year ($1000/year homeowner’s + $600/year umbrella + $500/mo employer health insurance + $90/mo LTC policy through employer)
- Clothing: $1000/year
- Discretionary spending ($15,230/year):
- Dining: $2,600/year ($220/mo - includes eating out lunch 3x/week at work, plus getting takeout 2x/mo)
- Media consumption: $300/year ($25/mo Netflix + AppleTV+)
- Transportation: $1500/year ($120/mo bus + subway)
- Holidays/birthdays: $1000/year
- “Amortized capital expenses”: $3,250/year ($1,000/year for replacing computer every 3 years + $250/year to replace cell phone every 4 years, $2,000/year for home repairs/appliance replacements every 5 years)
- Professional fees: $80/year licensure ($250 every three years); other professional registrations and associations are reimbursed by my employer
- “Other”: $4,000/year domestic travel (primarily airfare - I stay with friends), $1,000/year hobbies, $1,500/year storage unit
In retirement I assume health insurance costs jump to $1,200/mo, and professional fees jump to $1,200/year although if retired I’m not sure why I would need to maintain my professional registrations.
All of my work travel expenses (flights, hotels, meals, travel to/from airports, conferences) are fully reimbursable by my employer. I haven’t gone through my expense reports for the year to check, but I would be surprised if the total in 2023 wasn’t in the neighborhood of $100k.
I have idly considered a second home (most likely upstate NY), or perhaps a Golden Visa/retirement visa situation in Portugal or Italy. In my ideal world, the upstate second home would be one that I design and build myself - as mentioned, I have professional experience in this area. More likely would be buying a fixer-upper. It could be a great project to keep me busy for a while. I’m currently of the opinion that neither would be financially viable without working at least another 4-5 years.
Statistics: Posted by nuyawkr — Tue Jan 02, 2024 3:15 am — Replies 11 — Views 2008