Transistioning from accumulated to spending - so, Dividends
My wife and I are 56 and retirement is upcoming. The plan was always to retire at 62, but my wife's job is incredibly stressful and she doesn't think she can hold on to 62. We do have twins who are slightly on the spectrum - not 100% sure they will ever fully be able to support themselves - so I want to ensure I leave them a decent amount.
So, we are thinking of retiring by 12/31/29 - we will both be 59. We are currently in the accumulation stages for retirement. Our 401Ks currently total around $2.6 million - it is about an 85/15 split between Traditional/Roth. We both contribute the max each year to ROTH. It is all invested in S&P 500 ETFs.
We also own a home and have savings outside of our 401Ks. When we sell the home based upon today's prices after expenses and mortgage payoff - we should net around $1.2 million plus we expect to have another $500K in cash savings.
We will use our cash to buy a retirement home - not sure what it will cost - anywhere from $600K to $1million, which will leave me with $700K to $1.1M in cash.
It is our hope to have around $200K a year to spend in retirement. We currently spend around $180K a year, but I won't have a mortgage or my ridiclous NJ RE Tax to pay - which is around $50K together. Plus I will live in a lower cost state (almost any state is lower cost than NJ).
My friends who just retired say we have plenty of money and that we should retire now. I was thinking about a 4% withdrawal rate and he was mentioning QQQI and SYPY that pay over 10% and my withdrawal rate is very low.
How would you deploy my 401K funds and my cash so that I could have $200K annually for spending and continue to grow my portfolio. Obviously there is risk in QQQi and SYPY or everyone would just investment all their money there. Any help or guidance would be appreciated.
EDIT: I want to add that I am not planning on touching my 401Ks until 65. I hope to live on the proceeds from house sale and cash saved until then. My 401Ks should grow significantly in those 9 years. Also my wife and I will both get max or close to max SS, so at 65, together we should get over $100K/yr. So, I will need to draw less than $200K/yr from my 401Ks. However, if we find ourselves short of cash before 65 - we might draw something the last year or 2 to cover the difference.
This not a set in stone and all the numbers run plan - this is just what I have been thinking that will work..