Retirement?

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Messages 61 - 80 of total 269 in this topic << First  |  < Previous  |  Show All  |  Next >  |  Last >>
donini

Trad climber
Ouray, Colorado
Mar 20, 2017 - 04:01pm PT
Retiring from work was an easy decision....did it at 62 and never looked back. Climbing is different.....they will have to wipe the chalk from my cold dead fingers.
i-b-goB

Social climber
Wise Acres
Mar 20, 2017 - 09:29pm PT
I've been retired a year at (61 now) the end of this month, and they say that it takes 10.5 years to use up your portion in the system. I was a third level supervisor at the power company, and just last week I took a city test, written and climbing a tree to become a Tree Surgeon to start all over again! I don't need to do it and I like being retired and sleeping in! I won't get the results for a month but I did good and will most likely get an interview down the road! I don't know if I should go back to work and double dip or just stay retired, crazy!
jgill

Boulder climber
The high prairie of southern Colorado
Mar 20, 2017 - 09:36pm PT
^^^^ Fortunate dilemma, i-b.

;>)
Bad Climber

Trad climber
The Lawless Border Regions
Mar 21, 2017 - 06:45am PT
Hey, Lockster. Are you into other fitness stuff, too? I'm always hiking/biking/etc., and having an open schedule is going to make that so much easier. I'm looking forward to reading stuff other than crappy student essays, too. LOL.

Our finances should be okay, but we are taking a pretty big pay-cut to make this happen, so adjustments will be in order, which is fine. I don't need no new BMW every year, not that I could ever afford that anyway.

BAd
donini

Trad climber
Ouray, Colorado
Mar 21, 2017 - 06:51am PT
Bad Climber.....aside from my morbid preoccupation with climbing I enjoy long hikes in the mountains AND I have discovered how much fun a packraft is....check it out!
Gary

Social climber
Desolation Basin, Calif.
Mar 21, 2017 - 07:34am PT
Taking SS before 70 is a no-brainer; if you take it you've no brain.

Hmmm...my brother loves to remind me that all of the males on both sides of the family are dead by 65.
ontheedgeandscaredtodeath

Social climber
SLO, Ca
Mar 21, 2017 - 08:07am PT
Interesting discussion. I never give it much thought to be honest.. I just make the maximum allowable 401k contribution and pay my SS tax. We own a rental property that would already support me if I just want to chillax at a point break in South America until I die. It's 20 more years before retirement is a reality and I like working so hopefully it all works out.

I plugged in my numbers on the SS website and the difference in my monthly payment if I wait until I'm 70 to collect is $1600 per month! (in today's dollars). That's a big difference!

The calculator:

https://www.ssa.gov/cgi-bin/benefit6.cgi

MikeL

Social climber
Southern Arizona
Mar 21, 2017 - 08:17am PT
"The retirement game is over in USA. unless you got min 2 mil in the bank, paid-off property and good SS coming, the medical bills will kill you. "

Splatter: Does not apply if you retire from the state, county, or city in Kaliforny, in which case the government will not only give you a ludicrously generous pension, but will also pay most of your health care bills in retirement.

If you get really ill (like terminally), all bets will be off unless you can simply die without a fight. The grand majority of health care costs of the average person shows up in the last 6-12 months of life. Before that, it seems, everything is manageable financially with whatever health care plan that one has. When you get terminally sick, whatever nest egg that youíve built over the years will melt away very rapidly. It doesnít make much difference how much money you have.

In many places in the U.S., the state will assume your medical expenses (within some limits) once your net worth falls to a very minimal level. In Wisconsin where my mother lives, itís $2000.

Fighting mortality in the last period of oneís life is a very expensive delaying action.
Gunkie

Trad climber
Valles Marineris
Mar 21, 2017 - 08:20am PT
There is another paradigm that says to take SS at 62 and invest it, if you can afford to do so.
moosedrool

climber
Andrzej Citkowicz far away from Poland
Mar 21, 2017 - 09:43am PT
There is another paradigm that says to take SS at 62 and invest it, if you can afford to do so.

Gunkie, that's exactly what you are doing when you postpone the withdrawals. Instead of a risky investment on your own, you get a guaranteed gain of 76% over 8 years.

Theoretically, you should be able to double your investment in 5-7 years, but if the market is not performing, you lose.

I am waiting till 70.

Moose
skitch

Gym climber
Bend Or
Mar 21, 2017 - 10:56am PT
Well the trump bump looks like it's on the decline right now...
ms55401

Trad climber
minneapolis, mn
Mar 21, 2017 - 06:03pm PT
I'm early 40s. Plan to retire in early 60s and forego receiving SS benefits as well as dipping into 401(k)/IRA until I'm 70 1/2.

With that goal I'm setting aside money -- bridge money -- to cover living expenses between 62 (say) and 70 1/2.

Should that pan out, I have to believe I will have no income tax liability, as I'm literally not taking in money but rather living on savings. Anyone do this? Curious if my understanding of taxes is incorrect.
moosedrool

climber
Andrzej Citkowicz far away from Poland
Mar 21, 2017 - 07:50pm PT
ms55401, sure, you won't pay taxes when leaving off your savings. But eventually you will have to start withdrawing money from your SS and 401k. If your taxable income is high at that point, part of your income might be subjected to higher taxes.

It seems to make more sense to use both, nontaxable and taxable accounts and avoid higher taxes. That way, you also take advantage of various tax deductions.

But, maybe you can get food stamps and Medicaid if you have no taxable income. Doesn't make sense if you have a lot money saved, but who knows? Hmm, I need to investigate.

Moose

Moof

Big Wall climber
Orygun
Mar 21, 2017 - 07:56pm PT
Married filing jointly with standard deductions lets you take about 35-40k out before taxes rise above $0. You can also have another 70k of long term capital gains and qualified dividends tax free as well. Taxes with modest retirement income will be very low for most.

http://www.gocurrycracker.com/never-pay-taxes-again/

Tryit at a site like this one:
https://www.dinkytown.net/java/Tax1040.html

I can live off my age 70 SSA, so I am trying to fill the planned 22 year gap with comfy margin. With IRA/401k savings and brokerage account savings. Target is to take out 4.5% adjusted for inflation, and I should be fine even if SSA stays underfunded by 25%.
moosedrool

climber
Andrzej Citkowicz far away from Poland
Mar 21, 2017 - 08:03pm PT
Absolutely, Moof. But look what I found about the ACA:

the ACA ď[r]equires states to use a net income standard (no asset or resource test, no income disregards) to determine [Medicaid] eligibility.

So, under the current law, I can qualify for Medicaid even if I saved millions!

Isn't it fuked up, though?

Moose
Moof

Big Wall climber
Orygun
Mar 21, 2017 - 08:17pm PT
You paid in for your whole working life, so not eff'ed up at all. Same with SSA, you get what you deserve even if you also saved millions along the way. High earners get less back than they put in, but I find progressive benefits and taxes to be a gud thing!
mudrock

climber
Eastside
Mar 21, 2017 - 08:41pm PT
Lotsa talk these days about "guaranteed minimum income" as the bots take over from people.

Rest assured the gerries will be first in line.

Plenty of gerries want to screw their kids who don't give a f* about skin color or bedroom prefs. The kids will have the last laugh.

SS isn't worth worrying about. But anyone with a pension should do what they can to investigate the actual assumptions and practices that support the scheme. Check nakedcapitalism dot com on CALPERS for an example.
ShawnInPaso

climber
Paso Robles, CA
Mar 22, 2017 - 01:18am PT
If you have a 401k and haven't retired yet.....be sure to read and understand "the rule of 55". Most financial advisors will never tell you about the rule of 55 because they want to profit from your 401k being rolled over into an IRA that they manage.

Moof

Big Wall climber
Orygun
Mar 22, 2017 - 11:15am PT
Beyond your work 401k you can also squirrel away 5.5k in a traditional IRA if you make less than about 100k (if married filing jointly), or 5.5k into a Roth if you make less than about 160k. You can squirrel away another 5.5k in your spouses name (look up spousal IRA) even if you make too much to qualify for a traditional or Roth IRA. It requires they are not working or don't have access to a 401k plan at their work however.

Under 50 that lets you squirrel away 18k+5.5k+5.5k=29k per year in tax deferred/advantaged accounts. Over 50 (the tax year in which you turn 50 to be precise) lets you put away another 6k into your 401k.

Rule of 55 lets you withdraw your 401k balance you built up at your present employer if you quit/retire/leave in the year you turn 55 or later without the usual 10% penalty.

Rule 72(t), aka substantially equal periodic payments (SEPP) lets you trigger penalty free IRA withdrawals for 5 years or age 59.5 (whichever is LONGER). to help bridge the gap if retiring early enough without the 10% early withdrawal penalty. If going this route pay an accountant to set it up, it must be done carefully to not run afoul of the IRS.

If you have enough Roth principle (post tax money), and brokerage balance you can also do a Roth ladder where you live off of the brokerage and Roth principle while slowly doing an IRS to Roth rollover conversion while staying in the lowest tax brackets where most will be converted tax free. rolled over principles can't be withdrawn without penalties for 5 years, so you have to plan pretty far out to take advantage of this one.

You can also just take the 10% penalty, and use up Roth balances and any brokerage balances to minimize how much is withdrawn under penalty. It can result in only a minor overall hit if you are getting close to 59.5 with you quit working.

The rich have setup so many loop holes that can be taken advantage of if you are a good saver and plan on retiring early on a modest retirement income.
Moof

Big Wall climber
Orygun
Mar 22, 2017 - 11:18am PT
What are you waiting for Locker?
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