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Originally Posted by bigdog
Thanks to everyone for all the great dialogue here !
Investment thoughts....
I'm thinking pork-bellies and frozen concentrated orange juice:
Call me 'Louis Winthorpe III'- from the movie 'Trading places', they made a killing $$$ !
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Sell Mortimer, sell!!!
I'm 48 and planning on pulling the pin on full time work in about 10 years. Through my current employer's 401k and rollovers from previous companies I'm invested almost exclusively in growth funds - international, small/mid cap, S&P500 index and a target fund. Even though I will leave the full time workforce in 10 years, I'm not planning on touching those tax deferred accounts until I have to.
To help delay that process I'm investing my taxable savings in a couple different ways including a basket of dividend growth stocks.
This site has done a ton of the work that helps me filter out companies that have a history of increasing dividends, shows payout ratios, dividend growth rates, etc. Buying these stocks and reinvesting the dividends leads to a nice compounding effect and while the stocks will get hit during a market downturn they tend to hold up better than others.
I've got a goal number for both the tax deferred and taxable accounts. When they are both at that number I will feel comfortable deciding to walk away. To figure out what those numbers were the first thing I had to do was come up with a budget. For me this was the toughest thing. X factors like health insurance, will you travel more, not having a mortgage, eliminating the hidden costs of working like commuting were difficult for me since my wife and I don't have a true budget that we put on paper now.
Once you're comfortable with your budgeted spending you have to figure out if your income streams will cover it. One of the often touted (and sometimes argued about) numbers is that you can withdraw 4% of your retirement nest egg and you will not deplete it for at least 30 years. Obviously there are many factors that impact that calculation - market returns, timing of taking the money out, how the money is invested, etc. If that 3 or 4% withdrawal coupled with other income (SS, pension, etc.) meets your budget needs you're probably further ahead than the majority of Americans so raise a glass and have a toast to yourself!