Published on October 24, 2016
1. Streamline, Simplify, Document • Laura Ricci • Milwaukee Bogleheads • November 1, 2016 Student Level Expertise Ages: 40’s to retirement My steps to get ready for retirement:
2. Stages of Retirement 1. Early, Pre-retirement, ages 50 – 65 1. Figuring out when you can retire 2. Organizing the portfolio to begin draw downs 2. Starting retirement, ages 60 – 70 1. Social Security strategy 2. Are ROTH conversions needed? 3. Begin estate planning 3. Mid term retirement, ages 65 – 85+ 1. How will you annuitize your portfolio? 2. Simplify financial management in all aspects 4. Late retirement, ages 75 – 100+ 1. Just spending, not managing money
3. What I can offer • I’m closing our first stage of Retirement, and in the midst of the second stage, but being an over-achiever, I’m starting to think about the third stage. • Our actions fit somewhat with the stages, but the order we tackle tasks vary. • Take what you can use, and don’t assume any of this is the absolute best way to do anything. “We don’t know nuthin” as John Bogle would say.
4. Financial • Convert to Boglehead Portfolio o almost finished after 5 years of liquidating and consolidating • Simplify to 2 investment firms o 10% invested with another firm in case cyber attack makes one account unavailable while an intrusion is repaired. • Consolidate to one bank o I had three banks when we started (two businesses and personal) • Consolidate Credit Cards o We had 6, so I picked the two best and put the others away. (Travel Hacking ruined this though, so now I have 20 credit cards) • Write Down and update my Investment Policy Statement o Leaving bread crumbs so others know why I’ve done what I’ve done
5. Financial Cont. • Finish ROTH conversions o We will maximize tax planning per I-ORP and Fidelity RIP. This began almost 5 years ago and I plan to finish within 3 years from now. • Social Security Strategy is set. o One person takes at age 62, the other takes at 70 • Estate Planning is pretty well set. o No trust needed. We’ll use the beneficiaries for each account to direct funds. Charitable Fund has been opened to receive some estate upon death. • Streamlining bills o Hoping to travel enough that we manage all accounts online. Fewer accounts is the goal. • Starting to think about streamlining after age 70 o I like Bob’s idea of all-in-one accounts. I don’t plan on annuities for us because they are too expensive.
6. Legal • Update wills • We aren’t using Trusts, so not much else to do here. • Scan legal documents and put in the cloud o Wills and letter of instructions o Passports ✔ o Driver’s Licenses ✔ o Birth Certificates ✔ o Marriage License
7. Housing • We downsized our home o 3400 Sq.Ft. to 2100 sq. ft. o and then 2100 to 1560 sq. ft. • Jettison flotsam and jetsam every step along the way: o Clean out duplicates by using up, donating or discarding – I found 5 bottles of aspirin in various spots. We’d never use these up, so I gave most of it away and am down to 1 bottle of aspirin. o Quit buying massive quantities – Took awhile for us to admit we aren’t going to be feeding a houseful of teenagers again! o Use it or lose it: • Clothing – not used w/in a year, donate to charity before the moths or styles make it worthless. • Kitchen – slowly moving out items I don’t use so someone else can use them. o Simplify: Sold my worm farm this week, gave away my pressure cooker.
8. Transportation • Downsized from two+ to one car. o I garaged my car over the winter and tried out other transportation: • Zip Car – hourly rental cars • Uber and Lyft – P2P taxi service • Bus – some places the bus is the fastest and easiest way to get there. o In Spring, I sold my car. o Cost of owning a second car was $6500/year. Cost of using alternatives is $3500/year. Nice!
9. Books • We had 3 floor to ceiling bookcases. o If the book is available as an ebook, and I still want it, I sell the book and buy the ebook version. o I keep out of print and books with inscriptions from author friends. o Sell the rest on Amazon • We are down to 2 bookcases • The Goal is to get down to 1 bookcase, reduce clutter, save money.
10. Newspapers and Subscriptions • Two years ago: 6+ magazines and 3 newspapers • Now: 1 magazine, 2 newspapers, and 7 electronic subscriptions. • Next year: 1 newspaper, and all magazines and other newspapers on electronic subscriptions. • Goal is to reduce paper waste and clutter, save money. As the resolution on computer screens improves, no need for paper subscriptions.
11. What are you doing? • What are you doing that I haven’t thought of yet?
12. Resources • Bogleheads forum: Lots of discussion and instruction for financial streamlining and retirement planning. o http://www.bogleheads.org • Can I Retire Yet? o http://www.CanIRetireYet.com
13. Milwaukee Bogleheads® • A DIY investment group, followers of John Bogle's Index investing strategies, the Milwaukee local chapter of Bogleheads. • This presentation was made November 1, 2016 by Laura Ricci of our chapter. 13
14. Disclaimer • All examples are for illustration purposes only and are not investment recommendations. • The views expressed in the presentation, are those of the presenter, commenters, guests and participants and may not reflect the views of the Bogleheads organization. • Use your discretion in using examples presented here for your own investment purposes. 14