Retirement income continued
General Topic
Contributors to this thread:
sasquatch 18-May-19
Genesis 18-May-19
AZ8 18-May-19
jstephens61 18-May-19
Genesis 18-May-19
timex 18-May-19
Z Barebow 18-May-19
Trial153 18-May-19
Quinn @work 18-May-19
JSW 18-May-19
sasquatch 18-May-19
Genesis 18-May-19
sasquatch 18-May-19
weekender21 18-May-19
JSW 19-May-19
JL 19-May-19
IdyllwildArcher 19-May-19
Jaquomo 19-May-19
IdyllwildArcher 19-May-19
pav 19-May-19
elkmo 19-May-19
HDE 19-May-19
map1 19-May-19
BOHUNTER09 19-May-19
HDE 19-May-19
cnelk 19-May-19
HDE 19-May-19
Whip 19-May-19
TXCO 19-May-19
sasquatch 19-May-19
jstephens61 19-May-19
SDHNTR(home) 19-May-19
Jaquomo 20-May-19
peterk1234 20-May-19
Whip 20-May-19
Stix 20-May-19
SDHNTR(home) 20-May-19
SDHNTR(home) 20-May-19
map1 20-May-19
Jaquomo 20-May-19
SDHNTR(home) 20-May-19
JohnMC 20-May-19
JohnMC 20-May-19
Shiras42 20-May-19
Stix 20-May-19
Bob H in NH 20-May-19
JohnMC 20-May-19
cnelk 20-May-19
Stix 20-May-19
Stix 20-May-19
Jaquomo 20-May-19
Stix 20-May-19
JohnMC 20-May-19
cnelk 20-May-19
Stix 20-May-19
Shiras42 20-May-19
JohnMC 20-May-19
Stix 20-May-19
JohnMC 20-May-19
midwest 20-May-19
Z Barebow 20-May-19
sasquatch 20-May-19
Stix 20-May-19
Jaquomo 20-May-19
sasquatch 20-May-19
Stix 21-May-19
Jaquomo 21-May-19
Jaquomo 21-May-19
South Farm 21-May-19
SDHNTR(home) 21-May-19
South Farm 21-May-19
cnelk 21-May-19
Bake 21-May-19
Whip 21-May-19
iceman 21-May-19
Whip 21-May-19
Bake 21-May-19
Whip 21-May-19
SDHNTR(home) 21-May-19
Whip 21-May-19
jstephens61 21-May-19
grossklw 21-May-19
Jaquomo 21-May-19
Stix 21-May-19
SDHNTR(home) 21-May-19
Bowfreak 21-May-19
deerhunter72 22-May-19
Jaquomo 22-May-19
deerhunter72 22-May-19
LungBuster 22-May-19
oilcan 22-May-19
Genesis 23-May-19
deerhunter72 23-May-19
1boonr 23-May-19
SDHNTR(home) 23-May-19
JohnMC 23-May-19
deerhunter72 23-May-19
cnelk 23-May-19
SDHNTR(home) 23-May-19
Silverback 23-May-19
JohnMC 23-May-19
pav 23-May-19
SDHNTR(home) 23-May-19
Genesis 23-May-19
Iowabowhunter 25-May-19
oilcan 12-Jun-19
Junior 12-Jun-19
CPAhunter 12-Jun-19
KY EyeBow 12-Jun-19
Dale06 12-Jun-19
JL 12-Jun-19
Irishman 13-Jun-19
peterk1234 13-Jun-19
From: sasquatch
18-May-19
The other retirement threads got me to thinking about my constant dilemma of which 401k plan would be better for me.

I have the option to use a traditional 401k or Roth 401k. Since the trump tax cuts I switch to Roth as I feel taxes are probably the lowest they may ever be for me.

Outside of that, on average which would be best to do in some of you older wiser people’s opinions? Invest tax deferred or pay the taxes now for tax free withdraws and growth? 401k vs Roth 401k

From: Genesis
18-May-19
Roth’s offer a lot more advantages than just tax planning

From: AZ8
18-May-19
You have no idea what tax bracket you’ll be in years down the road. If you have the option, the Roth 401K is a no brainer. Pay the small taxes now, and enjoy full cash later. Your money will last longer! :)

From: jstephens61
18-May-19
You can not withdraw from a Roth until 59 1/2. If you retire from the company that a 401k is with, you can do it and withdraw the year you turn 55. Law past last year a few people know about it.

From: Genesis
18-May-19
Regarding Roth,you actually can take 72(t) withdrawals (equal periodic) before 59 1/2 without penalty along with other qualifying distributions like college,first home.

From: timex
18-May-19
I'm currently putting 17% of my gross plus the company 3% contribution for 20% total & it's adding up I'm 57 & have no plans on retiring any time soon. however the $$$$$$ some are saying is needed to retire is mindboggeling. 175.000-200.000 a year. my basic household & personal expenses are easily below 1.200 per month. the most expensive hobby I have is offshore fishing in my paid for boat & even that is $200-400 a trip split between 3-5 head. some of these guys are saying they need 12 to15k a month WOW

From: Z Barebow
18-May-19
I have a mix of both. I started with traditional. My current IRA contributions are Roth. Roth has benefits over traditional. (Mentioned above.) Skipping feature differences, do you think the tax rate will be higher when you withdraw your IRA or when you contribute to your IRA? If you think your taxes less now vs future, Roth. If you think you are paying higher tax rates currently, go traditional.

From: Trial153
18-May-19
Hedge your bets. Go 50/50.

From: Quinn @work
18-May-19
^^^^ Put money in both

From: JSW
18-May-19
I started out with a Simple IRA because I needed the tax deduction. Later on I realized that a Roth was probably a better option but by then I was in a position to not really care about my IRA. I made personal investments that allowed me to retire early and the IRA is not a factor. In fact, I've dedicate my entire IRA to charity since it is taxable and if given to charity, I'll have no tax burden. It's my opinion that if you can retire with about $100,000 a year in income from whatever source, be it dividends, interest or rental property, you can get by just fine. What's it take to get there? At least $2,000,000 in assets that create about 5% per year in revenue. That's fairly conservative and very realistic. If you have no debt, you really only need about $30,000 a year to get by. The rest can be reinvested or used to support your addictions. Ideally, you spend about half on your addictions and reinvest the other half for a while until you realize that you no longer need to increase your retirement and can start using the principle. Once you reach about 65, you need to realize that you may not have many decades left to save for. Start spending it and enjoy life. That $2,00,000 mark is not attainable for everyone but it really is enough to retire on. Can you retire on $50,000 a year? Certainly, but with that you can survive but not pay for a half dozen hunts per year. You can live comfortably, if you have little or no debt and still do several DIY hunts per year.

From: sasquatch
18-May-19
this is my thoughts and plans ^^^^

im debt free now and slowly trying to work on a second rental house. I put avg of around 20% in 401k. (change it up at times). This is the first year I switched to putting it in Roth thinking its better and wont affect social security and things.

Just trying to get others prospective on which is better to do

From: Genesis
18-May-19

From: sasquatch
18-May-19
and also the principle you actually contributed to right genesis? which over many years can be a lot thatll get you from say the age 55 to 60 when there wouldn't be penalties?

From: weekender21
18-May-19
I contribute to a traditional TSP (similar to 401k). But....have the option to make that a Roth. We also max out two (wife and mine) Roth IRA's. We've been on the splitting the difference plan but I have been considering moving everything to Roth recently. Who knows what taxes will be like in the future...unlikely lower.

From: JSW
19-May-19
I encourage everyone to max out any match that your employer offers. That is financial planning 101. It's free money. Not only that, invest every penny you can. If it's gone, you can't spend it. Put 10% into savings every single paycheck. If you get a raise, increase your savings by that amount. You will be surprised how easy it is to get by without it if you never get used to spending it. At one point I had 100 employees and only 14 took advantage of the matching IRA option. It made me sick. Worse than that, once their IRA got to over $10,000, several guys took the money out, paid the penalty and just blew it. If you ever consider taking money out of your IRA or 401K early, you are an idiot. I know that's harsh, but don't do it. Ever!

From: JL
19-May-19
The smartest thing the wife and I ever did was start saving and investing when we got married at a young age (21). That was in 1982. It paid off as we do ok these days with a pretty good variety of investments that will keep us comfortable. I think there were 2 parts to the goal of being financially stable in your later years. The first part is of course save and invest your money smartly early on in life. The second and just as important part is don't live extravagant and beyond your means in those working years. Running up alot of bad debt and living paycheck to paycheck will eventually bite you.

19-May-19
"I know that's harsh, but don't do it. Ever!"

It is harsh, but it's true. And matching whatever your employer will is more good advice.

From: Jaquomo
19-May-19
Back when Obama was elected I was worried about the market (didn't know then that the Fed would start printing money). I rolled two IRAs into a solid lifetime benefit annuity that I'll start taking in two years.

Yes, I'll have to pay ordinary income on it, as with an IRA. But I'll never need to worry about market fluctuations, and everything else across my investments and dividends will be play money, or a health care cushion, for the rest of my life.

Annuities aren't for everyone, but for me with no pension it made sense to slide those IRAs into one. Not sorry.

19-May-19
I hear you Lou. My parents haven't been good with money although they've made plenty over their lifespans. My grandpa is 97 and has money and I've talked them into putting the inheritance into an annuity once the time comes. It guarantees that I won't see any of it, but I'm ok with that since I make my own money. What it does guarantee is that my parents will be taken care of for the rest of their lives.

My siblings (1/2 of them) are going to be pissed once I finally break the news about that. (My parents will be dead or demented at that point; probably dead). Oh well, they should have been the responsible one.

From: pav
19-May-19
My company has never offered the Roth IRA option...just the traditional 401 with company match. Most of my retirement savings is in that account. I did open Roth accounts for both the wife and myself and max those out annually. Sure wish the Roth IRA option would have been available earlier in life. At only $7k/year max (over age 50), it sure isn't growing as fast as I would prefer!

From: elkmo
19-May-19
Correct me if I am wrong, doesn't a Roth have to be open for 5 years minimum to take penalty free distributions at 55?

From: HDE
19-May-19
It really all depends on what you want out of retirement. Retirement is a state of mind and most people retire from the corporate way of life and not from work in general. In retirement, are you wanting to maintain a lifestyle or just enjoy a hassle free life from policies and procedures? Once you figure out what you need and don't need and identify some realistic wants, it is easier to figure on what you can live on in retirement.

Many say that at my age I have a lot of time to keep putting away for retirement. That may be true if I go status quo, but at my age it is almost unheard of to have what I have put away into qualified accounts and be debt free at the same time. I did take a small distribution to pay my house off - the last obstacle to be being debt free. But it was at a time that I could pay myself back because it was a 401K loan. Then the bottom fell out of my career industry. I could have given all the money back to the account because the loan was distributed only a couple weeks prior to the big upset in employment.

After securing my "McDonald's job", I went ahead and paid the house off. Best thing I could have done, because when you are debt free, no single one employer can use your debt against you. A little financial freedom goes a long way and is in itself a lot like retirement at a young[er] age. The real thing is, everyone's situation is different and all anyone can do is throw their two cents out of what worked for them. Although taxes are lower now and none of us know what the tax structure will look like in the future, I still take advantage of the tax free investment because $1.50 regularly invested over time will earn more than $0.95 will. In the future, a post-tax investment my fall short on your obligation with whatever future tax laws are in place and you will pay on some of it anyway. Who knows, it's all a gamble in the end...

From: map1
19-May-19
Never take a loan on your 401k. It's repaid in after tax dollars, then when you retire you pay taxes on that money again, hence double taxation.

From: BOHUNTER09
19-May-19
I agree with map 1. Loans and early withdrawals from a 401k are rarely a wise move.

From: HDE
19-May-19
^^^ Depends. How much more are you paying interest on a regular loan? Those are paid back with after tax dollars as well and the extra income from a cheaper 401K loan can be reinvested back into the account from a higher contribution during the life of the loan. Depends on what the interest rates are. In my case, it's nice to be able to "cop an attitude" at work if I want without the fear of losing my house over it...

From: cnelk
19-May-19
Over the years Ive contributed to 401k's, 403b's and 457's.

Since my employer doesnt pay into Social Security, I did a roll over of those investments to purchase almost 5 'years of service' into my state pension. [Basically converted SS years into pension years since I did have enough SS credits]

With 25 years worked, ~5 years purchased, I can retire at 56 with almost 30yrs of pension service credit for the rest of my life

From: HDE
19-May-19
Also depends on what your tax structure is in your income earning years vs. retirement years. Chances are, retirement years are a lower tax bracket because if you're smart, your necessary cost of living is less.

Once again, everyone's situation is different. Some will say to never go into business for yourself because the risk is too great and it is safer to just be a timeclock puncher instead. I know people who took that risk and the paid out dividends were much better...

From: Whip
19-May-19
Everybodys situation is different. What is best for one is a poor choice for others. But I'll share one thing that really worked well for us.

The majority of our IRA funds were in traditional accounts and rollovers from a 401k. Plus we had a significant chunk in regular investment accounts. The money in those accounts was already taxed so only the income & capital gains were taxable.

We retired right before the bubble burst in 2008. Scary times for sure! But we were able to get by with cutting back spending, working part time for myself at home, and having a couple of years worth of expenses set aside in a safe account.

When the markets dropped so did the value of our IRAs. For the next 4 years or so we did rollover convertions of as much of those traditional IRAs as we could and still stay in a reasonable tax bracket. Ultimately as the markets recovered the money that was now in Roth accounts recovered nicely and we will never have to pay taxes on the gains.

For example a $1,000 dropped to $500, we rolled it into Roth at that amount, paid taxes on the $500 income, and it now has grown to more than the original $1,000 which has already been taxed. 10 years later we still haven't dipped into the IRAs, the majority of our IRA money is now in Roths, and we'll never pay any more taxes on it. It was the saving grace of the market crash of 2008 for us.

Obviously a matter of timing, luck and good financial advice. And hopefully you don't need to go through something like that. But it does demonstrate the value of good advice and not bring afraid to take advantage of opportunities that present themselves.

When it comes to choosing a financial planner I can't suggest strongly enough to find one that works on a percentage of your investments - usually 1% per year. They don't earn commissions from the products they use and will pick investments with the lowest fees. They are only working to help grow your portfolio as much as possible, not on what is going to earn another commission check. Fees and commissions can really eat up an otherwise good investment.

From: TXCO
19-May-19
Most company matches go to a traditional sub plan and not the roth portion. So if you invest in the roth the company provides a natural hedge by going the traditional route. Then in retirement you can choose which to withdraw from ie let the roth continue growing tax free.

From: sasquatch
19-May-19
txco is correct, my company match goes to traditional.

From: jstephens61
19-May-19
With 25 years worked, ~5 years purchased, I can retire at 56 with almost 30yrs of pension service credit for the rest of my life. Brad this is pretty much what I did in April. With 30 years, 7 months true service and several months accrued sick and vacation, it was just time. My insurance is paid for life and the wife’s costs me basically nothing. That’s the biggest bonus. Decided that I can always make more money, but can’t make more time. Planning as soon as possible is the key.

From: SDHNTR(home)
19-May-19
If you have to ask this question, you could probably use advice from a professional financial planner. One worth his or her salt can run a projection each way (Roth vs Trad) and tell you exactly which is the best option, for you and you alone.

You can also withdraw your contributions from a Roth anytime, without penalty.

From: Jaquomo
20-May-19
i want to thank SDHUNTR for the great advice he offered when I was looking for a new fee-only financial planner in my area. He provided some specific questions to ask I'd never have thought of, which led to choosing one I'm pretty happy with. Thanks, Nate!

From: peterk1234
20-May-19
Here is a question for you guys. What multiple of your anticipated need to live should you strive for at retirement? Given there is volatility in almost all investment products, you need to provide for fluctuations. I am shooting for two times my living expenses, but that is probably way too high. Pete

From: Whip
20-May-19
Pete, again, that is a question that will really vary for each person based on what their goals and desires are for retirement. Some people dream of working in the garden or workshop and hunt out the back door. Others want to travel constantly, hunt multiple states every year, and have a pile of toys to play with. The only way to know what you need is to develop a realistic budget based on your goals and then have a financial planner figure how much savings it will take to support it. If push came to shove and we depleted our investments we could survive strictly off of our social security incomes. But that's not how I dreamed of spending my retirement.

From: Stix
20-May-19
You guys are over thinking it. I retired at 55. Get equal monthly disbursements from 401K til age 65, draw down to zero , + pension. Bank extra every month. I could live on that amount, and drop a good sum into savings.

Once 401K to 0, then draw SS to give level income thereafter.

Most so-called "investment professional" want you to leave money in 401K or their investments so they can get their commission. That is a bogus action. Why should YOUR money pay someone else's commission. Just put extra into savings acct and it's tax-free thereafter. Why leave a "legacy" of blood money for family to fight over?

If I plan it right, the last check I write will be to the undertaker which will bounce for insufficient funds.

It's YOUR retirement, not theirs.

From: SDHNTR(home)
20-May-19
Peter, I don’t “do” rules of thumb like universally applied multiples that are supposedly sufficient. That’s just a short cut are rarely accurate. I want to be more precise. I want to be able to tell my clients confidently, you need to save “X” amount to retire the way you want. And then once in retirement, you need to keep your spending within “Y” annually. I don’t wing it. I provide concrete numbers with a very high level of certainty. Any good financial advisor should be able to do the same. And knowing these numbers is key to a sound financial plan.

Most people don’t have pensions anymore. That presents a far greater challenge to most workers today. Pensions used to define your retirement numbers for you. Now, you need a sound financial plan to do the same and some serious discipline of your own to follow through. Regardless, you should know exactly what you need to do and how much you need to save to reach your retirement goals, and it’s far too important to rely on loose “rules of thumb”.

From: SDHNTR(home)
20-May-19
Jaquomo, thanks for the kind words! You are doing it right!

From: map1
20-May-19
Stix you hit the nail on the head. Financial plannings not that difficult to learn. DIY and save $$$. If your more comfortable paying someone to do it more power to you. I hit my tax guy up every year with a few financial questions at no charge. I've heard a few horror stories about financial planners....

From: Jaquomo
20-May-19
Stix, its like anything else in life. If you have the acumen to do your own invesring and are totally confident that you have everything nailed-down for a solid retirement for 40+ years, thats great. But 90% of people do not. Thats why we pay doctors, lawyers, other professionals.

Most people (without pensions) rely on "hope" as a strategy, and assume "something" will happen to ensure a comfortable retirement. Then they get there and they're looking forward to a life of gardening because thats all they can afford. If they're lucky.

My mother's pension and Social Security amount to 1300 a month now. That seemed ok back when they were planning in the '70s and saving a percentage of their income in a company matching plan every month. Together they probably made maybe $25K a year. Enough for modest comfort then, not extravagance. They didn't know that in today's dollars, $25K would be poverty level, even with a paid-off house. Before my mom went into a nursing home (over $9K a month) she couldn't do much of anything besides "live". A whole bunch of boomers nearing retirement will find themselves right there with her.

Fast forward. Tell someone who makes $70K today that they can retire on $70K a year for the next 40 years and that sounds pretty good. In 30 years, $70K won't be squat.

From: SDHNTR(home)
20-May-19
Jaquomo, thanks for the kind words! You are doing it right!

From: JohnMC
20-May-19
Stix is a perfect example of why doing it yourself with no guidance is a bad idea for many. Most so-called "investment professional" succeed if you are successful. If they do right by you they will be reward. Not only by your continued business but also by happy customers referring friends and family. If you are working with someone that is worried about more than helping you meet your goals find someone else. Unless you really want to just get by on very meager SS check every month. SS will not be enough for most to live the retirement they truly want to live. Also if you are living SS check to SS check then a emergency pops up - then what?

Stix -Why leave a "legacy" of blood money for family to fight over. Two points on that. If you have a proper will/trust there will be no fighting. Second I am not the most religious guy on here but fairly sure the bible encourages leaving an inheritance to your children. End of day that a personal choice everyone gets to make. I hope to leave a nice nest egg.

From: JohnMC
20-May-19
Another food for thought for you younger guys saving. No doubt IRA's be it traditional or Roths are great tools for saving for retirement and should be fund to max of your ability. However if you have an entrepreneurial spirit and have aspirations to start or buy your own business at some point down the road or make a larger purchase (such as purchasing land). Make sure you are investing out side of IRAs. It is important to have money available that is accessible. This money should be goaled separate from money saved to reach retirement.

From: Shiras42
20-May-19
I have not seen anyone on here mention an HSA account. To me this is the most important account I contribute to. Pre-tax going in and tax free coming out. I get a bit of a company match on it. Any amount of principle above my current health insurance deductible I can invest in the market. I plan to retire in 9 years at age 56 and will use this money to pay the premiums on my retirees health insurance plan the company offers to those 55 and over with 20+ years. I am maxed out on my 401k & HSA contributions and hope to have many years to enjoy them.

From: Stix
20-May-19
Just saying in my case, 78k retirement is gonna be fine for the next 30 years. Past age 85, you're normally sitting in a corner blowing bubbles, and wouldn't care one bit if they took your house to pay for nursing home. There's a good chance you wouldn't even know what's going on, even if your diaper needs changing.

Nothing in the bible that directs leaving an inheritance.

Shiras, you cant use HSA to pay for health insurance premiums.....

Lou, also dont forget that in Colorado, if you've been in your home for 10 years and you turn 65, your property taxes drop 50%. I'm sure glad the dems passed that in the 90's!!!

From: Bob H in NH
20-May-19
Shiras, the HSA idea is worth exploring. I have 3 years until at 58 my company will pay 50% of my insurance premiums until on medicare. Hadn't thought of investing in the HSA now to fund my 50% later. Interesting.....

From: JohnMC
20-May-19
Proverbs 13:22 A good man leaves an inheritance to his children’s children,

From: cnelk
20-May-19
I will also get 50% stipend for health insurance until medicare and then Ill get another stipend for Part B medicare.

Colorado will offset the first $20k of my pension income for state taxes too [age 55]

From: Stix
20-May-19
HSA's can't be used for health insurance premiums

From: Stix
20-May-19
The full bible verse: A good man leaves an inheritance to his children's children, But the wealth of the sinner is stored up for the righteous.

Solomon was not referring to $$$, but the Godly works as witnessed by his offspring and carried forward through them. In other words: monkey see, monkey do. That's the "inheritance" you leave to your children and childrens, children.

We need to leave our children an inheritance of godliness and wisdom.

Do you want them to live Godly lives as they witnessed from you, or evil, judgemental, wicked as witnessed from you.

I think everyone on bowsite has witnessed the inheritance JohnMc is leaving, one of a very bitter person.

From: Jaquomo
20-May-19
Stix, the Dems didn't pass the senior property tax exemption. It was passed by voters as Referendum A in 2000. Colorado was still "blue" then, voted overwhelmingly for GWB.

However, Dems DID try to undo it in the legislature this year with HB19-1317 which would, according to the bill itself, "Section 3 of the bill lowers the maximum amount to $0 for all property tax years beginning on and after January 1, 2020, which has the effect of eliminating the exemption." Instead it would have created a tax credit for 10 years only for low-income seniors. Thank goodness it didn't pass!

Nice try, though!

From: Stix
20-May-19
Thanks for the correction, Lou, I guess we shouldn't speak too loud, since D's control all 3 branches. It may jeopardize it.

My original intent was to show that as you get older, there are programs available to lower your expenses, ie: the senior tax rebate, medicare instead of healt insurance, ss kicking in. Even though I will have a stable income through my passing, some major expenses will be going down

From: JohnMC
20-May-19
It is not that am a bitter person it is just that you are low IQ

From: cnelk
20-May-19

cnelk's embedded Photo
cnelk's embedded Photo

From: Stix
20-May-19
Who brought it up first on this post? Not me..... Besides, Christianity is not a religion, it's a relationship... Religion is man-made.

From: Shiras42
20-May-19
I can use it for COBRA which is the cheaper of the two options currently and then use it until I meet my deductible. Can also be used for medicare when over age 65.

From: JohnMC
20-May-19
It is a religion. I have a relationship with my wife. Does not mean she not my wife. You are cuckoo for Cocoa Puffs.

From: Stix
20-May-19
I wasnt aware you can use it for COBRa, never checked. Is COBRA only good for 24 months? I knew you can use it to reimburse yourself for medicare premiums. I know I checked for my retiree health insurance and it cant be used. My former employer pays for 60% of my retiree medical, I still pay ~700/mo. for me and family. It sure would be nice to use tax free moneys.

John Mc, Christianity is a relationship with Christ. All others are religion because they are man-made, not biblically inspired. The more you post, the more you are showing ignorance. Your post are hate filled , all one has to do is search history. You regularly demean folks, resort to derogatory comments. It would be better for you to stop. I'll pray for your salvation.

Eternity is a very long time.

From: JohnMC
20-May-19
Please don't. Most are not demeaning just when you post your ignorant crap. If you do a search of your past post you find one when you promised not to post any more on bowsite because every one was coming down on you for ridiculous arguments defending BCHA. Was not very christian of you to lie.

From: midwest
20-May-19

midwest's embedded Photo
midwest's embedded Photo

From: Z Barebow
20-May-19
I will try and get this thread back on track.

Talk me out of an HSA. My employer began one this year. Currently I have an FSA. But I couldn’t talk my wife into it. In 2020, I would like to take my current FSA contribution and add my premium savings into HSA.

From: sasquatch
20-May-19
I can try that. FSA is to me a waste, cant invest it, or roll it over. You basically use it or lose it.

HSA can be invested and stays with you forever. almost like an extra 401k for medical expenses and I believe after a certain age can also be used other than for medical.

usually comes with a higher deductible plan but those plans premiums usually cancel each other out, better to pay what you can for your own medical now while working to save for later on.

From: Stix
20-May-19
i max out my family HSA contribution. It has good tax advantages. plus at age 65 you can use it without penalty for non-medical expenses or withdrawal without penalty. Still have to pay tax for that use, but no penalty. Plus it can be invested with no tax on the gains. You're right that it is much like a 401k in that respect.

But only if we can get universal health care, that will remedy the whole early retirement healthcare conundrum. Let's see what angry debate this starts. LOL

From: Jaquomo
20-May-19
"Universal health care" won't do much good if there arent any doctors. They're dropping out and retiring now due to payment cuts from O'care and Medicare. Projected to be a shortage of 133,000 doctors in this country in 10 years.

I just got on Medicare, and as posted earlier I am having a heck of a time finding a doc who will take new Medicare patients. Finally found one, after calling two dozen, who will give me an appointment for a physical......in November.

Out medical system is in trouble. I predict in 10 years there will be two tiers: free or cheap single payer that will be like going to the DMV to see a disinterested government doctor, or expensive private-pay that only the wealthy can afford.

From: sasquatch
20-May-19
I agree jaquomo. One of our big cost issues I believe though is the lack of care we take of ourselves and you cant bill people different because of that to help cause people to just be a little bit healthier

From: Stix
21-May-19
If it's good for the seniors, then it's good for everyone. How about social security expanded to everyone? Everyone has a job and works for the state. Everyone gets a house, car, and cell phone....LOL

From: Jaquomo
21-May-19
Yep, Stix, thats the UBI, "Universal Basic Income" our Democratic Socialist friends are pushing. Figures that I worked and saved for 50 straight years to retire, and now they'll be able to retire at 21 if this ever happens..

From: Jaquomo
21-May-19
Yep, Stix, thats the UBI, "Universal Basic Income" our Democratic Socialist friends are pushing. Figures that I worked and saved for 50 straight years to retire, and now they'll be able to retire at 21 if this ever happens..

From: South Farm
21-May-19
My retirement plan = Quit my job the two seconds after I turn 59-1/2, live on 401k until two seconds after I turn 62, file for Social Security and sell my house for twice what I paid for it, move into a house half that, quit buying steak and live off squirrels I kill at the bird feeder, and wrap it all up by getting shot in the back by a jealous husband...and hopefully he's a good shot and doesn't just "wing" me!

From: SDHNTR(home)
21-May-19
1. Rarely does it make sense to take Social Security at age 62. Virtually no one should. You get dramatically reduced payments. This is why you need Roth and/or non qualified savings to live off while you wait for at least FRA, or better yet, age 70.

2. Remember that whatever you have in a 401(k) is really 30 to 40% less in real money terms.

3. Squirrels are high in cholesterol. You may not need that jealous husband’s bullet.

From: South Farm
21-May-19
Appreciate the advice, but quality of life is better at 62. I'm going fishing..

From: cnelk
21-May-19
Im taking my SS at 62. You only have a set amount in SS based on work history/life expectancy. The only reason you get more by delaying is because you are deferring it out.

Plus, there's a good chance I wont get any SS anyway based on the GPO [Government Pension Offset]

Tomorrow is no guarantee. Im taking what ever I can get

From: Bake
21-May-19
I've never given too much thought to retirement (although I do have retirement accounts), as I work for myself, at a job that doesn't require any physical ability other than speech, and I can pick and choose what I do, and my hours, pretty easily.

However, recently, I've given serious thought about it, and given some serious thought to running for judge someday. There's a chance a judge spot will open up in 2026 in my home county. I'll be 45 years old at that time. Judges retirement vests on the first day of the job. But if you can be elected to and do 3 terms (12 years), you are eligible for full retirement benefits, which is 50% of the pay you were receiving when you retire. Which in 2038 would probably equal about $75-80k a year in retirement benefits, maybe more, depending on what they do with the judges' salary (It's $138k a year currently).

The problem is you can't draw that until you turn 67, unless you have 20 years of service, then you can start drawing at 62. So if I could be elected to and do 5 terms (20 years), I'd be 65 at retirement. Could maybe have some state service that transfers, as I worked for the state for about 2 years straight out of school. After retirement I could always work more. Do mediations or something

The other factor to consider with that is that I'd get state healthcare, which might be better than the healthcare through my wife's employment, which means she could double or triple her 403(b) contributions with what we would save off of her health insurance costs.

It's awfully tempting. Of course, it wouldn't be a given. I would have competition for the seat, and there's no guarantee I could win an election.

It would be a great job though.

It's a long ways out though. 7 years is almost forever :)

From: Whip
21-May-19
I also took SS @ 62. We looked at it very hard with our financial planner and it was a tough choice. If I remember correctly the break even age was something like 78. After that I'd have been better waiting. What made sense for us is that we only have our own savings and investments to draw from and live off of. No pension of any kind. So taking SS early meant we could reduce our monthly draws significantly, and that in turn reduces the risk of big market downturns.

The worst thing that can happen to an investment portfolio is to be pulling money out during the middle of a big drop. We still draw monthly from our investments, but not nearly as much. And if the sh*! hits the fan again we can easily throttle back the withdrawls to a minimum.

Having retired exactly two months before the start big plunge of 2008 I know all to well what a 40% loss of a portfolio feels like. Having to pull money out while we rode through that hurt. So we chose the safe route in an effort to minimize the risk of another big downturn, even though the chances of something similar may be relatively small.

My situation is not yours. Everyone needs to make their own plan and not just do what worked for someone else. Sure, there's a good chance I would have been better off in the long run delaying SS. But reducing risk is as much of a factor as accumulating a bigger pile. I left a little bit in the Social Security pot for the rest of you.

From: iceman
21-May-19
Bake for Judge! I'll be sure to make Jim be your campaign manager.

From: Whip
21-May-19
I'll also add that I spent a career in banking and have a pretty good grasp of investing, risk management, diversification etc. Yet I still choose to have a fee only financial planner handle our investments.

They have access to institutional funds that save a little bit to offset some of the fee I pay. And they have full time extremely bright people that work with this stuff every day.

I could probably do it myself but it would take a significant amount of time to do it right. Having someone I trust handle it all takes away the worry and the impulses that might lead to bad decisions.

If you think you'll just save that 1% per year in fees and do your own investing you are probably going to give up far more than that in lost income, poor investment choices and hidden fees from commission based brokers. Managing a decent retirement portfolio is not a DIY project for the vast majority of people.

From: Bake
21-May-19
I'm keeping Jim away from that campaign! :) :)

From: Whip
21-May-19
Get elected, put in your 20 years, and then start a Judge Jim reality TV show!

From: SDHNTR(home)
21-May-19
Whip, I see your point, and you are not wrong, but if given the means, another strategy is often having enough cash savings and conservative, income producing, investments (exposed to little market risk) set aside in non retirement accounts to “buy” you the extra years after 62 to gain the higher SS payments. Not easy, I realize, but doable with sound planning done well in advance.

From: Whip
21-May-19
Exactly Nate, that was the big discussion at the time. And we could have gone that way but ultimately decided to keep those funds fully invested and hopefully earning decent returns in the meantime. So far we're doing OK. It's all about balancing risk and reward, and each individual needs to make their own decision.

From: jstephens61
21-May-19
I guess the wife and I are lucky. I worship her, so she’s my religion. Just kidding. She has a large 401k and retired in March at 54. I have a state pension and deferred comp and retired in April at 57. My insurance is paid until MC kicks in and wife’s cost less than $125 a month. We both have a Roth IRA and have decided that I’ll claim SS at 62 and the wife at 67. We started planning this out back in 1996 when we got married. My ex wife is the polar opposite. She spends every penny and trades cars every 18 months. My son made the comment that she’s never paid one off. He’s following after me thankfully. You have to sacrifice a little today to enjoy tomorrow.

From: grossklw
21-May-19
Agree and disagree, I absolutely agree that commission based financial planners are a scam. I don't currently have a fee-based financial planner, as I'm young and have no reason to yet, but I will likely have one some day for a consult when I need to start making decisions on drawing. When I'm at the stage of life you're at Joe, I'll likely be doing the same.

It certainly can be extremely easy and non-time consuming once you have a handle on understanding index funds. I can't fathom paying a commission based financial planner. It takes me all of 30 seconds every year to re-balance all of mine and my wife's investments. I follow a boglehead style investment strategy, 3 fund index portfolio, re-balance once/year with my stock/bond preference and don't even look at it the rest of the year. A majority of commission based FP's will have a very hard time beating my performance by 1-1.5% every year.

My wife and I are on-track to "retire" by 40 (I'm 29 with one kid, will have 1-2 more), should reach financial independence within the next 5 years, but I'm in the group where I want to hunt all over the west every year and take my family to Europe, so I need F U money, not just plant a garden and be happy haha. We max roth's, take the company match on our 401k's, and every other cent goes into real estate. I'm not planning on drawing from roths/SS/401k's in my long-term plan, my tenants should be paying my retirement.

This is a great thread for younger guys to be reading, you can't get back time with compound interest.

From: Jaquomo
21-May-19
My wife did a great job managing our investments, consistently beat the market, until they got big and we neared retirement age. Then she started to get nervous about making a big mistake, so we moved to a fee-only planner.

Our first one was too conservative and didn't take full advantage of the run-up while the Fed was printing money. So Ioved to a different one and am happy. He is also a bowhunter, not that that really matters.

From: Stix
21-May-19
I reached my goal of having accrued enough to not worry about trying to have investments perform to a certain growth. Once I reached that goal I put everything in conservative securities @ 2+% growth, and don't watch or care about the market. It could tank and it wouldn't affect me. Retirement is not about keeping an eye on your investments or posting on bowsite.

I'm outta here,.. Heading to Kelowna BC for a few weeks,.... good luck folks

From: SDHNTR(home)
21-May-19
Stix, you bring up a good point. Investments should never “have” to perform to any sort of arbitrary growth figure, index or benchmark based, or otherwise. All that does is encourage investor behavior that chases past performance. Furthermore, if you’re going to buy index funds (And I’m not saying they are bad. I use them, strategically.) you better have a really good understanding of what a Cap Weighted index means, and how it can dramatically increased risk and concentrate holdings. Otherwise, expect a severe butt kicking during the next downturn. An S & P 500 Fund isn’t what most people think — the majority of your money is in a handful of mostly tech stocks, not nicely spread between 500 safe blue chips.

Instead, investment performance should be benchmarked and measured against the minimum growth required for one to accomplish their retirement and lifestyle goals. That way you don’t take unnecessary risk. Doing this right requires a plan! Funny how that element keeps popping back up, isn’t it?

This also reinforces the benefit of starting early. You can take more risk in your early years, which will likely accumulate more wealth as you age and near retirement. At which time you can then reduce risk so that market volatility is a non-issue.

From: Bowfreak
21-May-19
I have a 401 and a 457 where I invest a small amount. It is not a significant amount but it effectively will be play money to go along with my pension. I just recently received a promotion and by accepting this role I can make a huge difference in my pension. Working 5 years in my new position, which will be extremely hectic, is equivalent to working 16 more years at my previous position.

From: deerhunter72
22-May-19
During our recent planning session I was really disappointed to learn that because my wife will have a good pension my SS is really compromised. Basically, I can draw it, and he recommended I start at 65, but when I'm gone it's over. I knew there was a pension off set, but I kind feel like she gets penalized just because she worked for the state.

From: Jaquomo
22-May-19
Lol, deerhunter, I feel like I got penalized because I didn't keep working for the state, and never had a pension of any kind. Back in my late 20s I never thought about pensions, retirement, etc.. Just figured "something" would happen so I could retire someday.

From: deerhunter72
22-May-19
Jaquomo, I know what you mean. If had I been smart I would have considered those kinds of things back then, never even entered my mind.

From: LungBuster
22-May-19
You can withdraw any of your Roth contributions anytime without penalty.

From: oilcan
22-May-19
Deerhunter with that being the case why wouldn’t you start drawing at 62 ? God forbid you pass away at 64 1/2 you would receive nothing.

From: Genesis
23-May-19
“You can withdraw any of your Roth contributions anytime without penalty”

Not accurate

From: deerhunter72
23-May-19
oilcan, I probably will do that. Just depends on how our money is holding out and how healthy I am at the time. I had an uncle that waited until 67 to draw his SS and he fell over dead 2 months after getting his first check. That's a rarity I'm sure, but it does happen.

From: 1boonr
23-May-19
If taking social security at 62 can get you retired you need to do it. You never know how much time you got and what shape you will be in. Maximum social security at 70 sounds good but if you can find a way to make it on less, do it

From: SDHNTR(home)
23-May-19
“You can withdraw any of your Roth contributions anytime without penalty” Not accurate

Actually, that is accurate. Contributions being the operative word. Your contributions went in after tax, so you can always withdraw them. Earnings are the sticking point.

From: JohnMC
23-May-19
“You can withdraw any of your Roth contributions anytime without penalty” Not accurate

What is not accurate about that statement? I’d say it is accurate. Probably not advisable, but accurate.

From: deerhunter72
23-May-19
1boonr, there are a lot of variables but I don't plan on working a day longer than I have to.

From: cnelk
23-May-19
Roth qualifications = must be 59 1/2 and the account must be in place for a minimum of 5 years - or penalties could apply.

From: SDHNTR(home)
23-May-19
Roth qualifications = must be 59 1/2 and the account must be in place for a minimum of 5 years - or penalties could apply.

That only pertains to earnings. What I think you guys are missing is the specific terminology. CONTRIBUTIONS can always be withdrawn at any time penalty and tax-free. Just think of the logic behind it… Roth contributions are made with after-tax money. That money has already been taxed, so no additional taxes upon withdrawal. The earnings, however, have not been taxed. Therefore, if you remove any amount of money which constitutes a portion of earnings, that portion will be taxed, unless you are 59 1/2 and have had the acct for 5+ years.

From: Silverback
23-May-19
I retired at 61 and took my social security at 62. At 71 I have no regrets. Yes I could have got more ss money if I waited but I wouldn't trade these last 10years for anything. To Me time is worth more than money.

From: JohnMC
23-May-19
You guys knowing when to take SS is very simple. You only need one date. That would be the date you will die. If you have that it is a simple math problem.

From: pav
23-May-19
Anyone aware of an online calculator which provides a social security estimates for those who retire young, but defer social security benefits? When I log in to SSA.gov, I can see the estimates listed at ages 62, 67 (FRA) and 70....but each of those numbers assume a certain level of taxable earnings every year up to the age specified.

So, in other words, if you retire at age 59-1/2 on 401k/IRA account savings....and basically wind up with zeros on your earnings record for a decade, what is your social security benefit at age 70? Your lifetime annual earnings record is available on SSA.gov....but I'm not seeing a formula?

From: SDHNTR(home)
23-May-19
Pav, online no, I’m not aware of one, although there may very well be something out there. But any good professional advisor can run an analysis on exactly what you describe.

From: Genesis
23-May-19
Yeah got me!Ha

25-May-19
IUL + Index annuity with an income feature.

From: oilcan
12-Jun-19
I had been following this and the other thread on retirement income. I had been in real good shape to retire at 55 or 57 at the latest I am currently 52 but just got thrown a real curveball. I just returned from vacation to find out the company I have worked for the last 19 years has been sold. It’s early and I don’t have all the details but it looks like retirement age is 65 for new company with 62 being the early retirement for them. But the real kicker is I don’t think I will get any medical from them in retirement. I still will be able to leave early but this throws a wrench in the plans. I thank god I'm debt free and have been maxing out my 401k but my take home will take a hit for sure.

From: Junior
12-Jun-19
That sucks....FWIW A couple of guys I know are about in the same boat as you. There solution was to semi retire. These guys are at 55 to 58....one cuts grass in the summer and hunts all winter...he loves it....the other changes brakes on the side and other easy auto mechanic jobs.....These guys are living pretty darn good! "The couch has killed more people than cancer" is there motto...The right attitude goes along way.

From: CPAhunter
12-Jun-19
There's lots of good advice here and some absolutely horrible advice. The best advice is talk to a professional and not Joe's cousin's buddy from the shop that read it on a hunting forum. No two snowflakes look alike and your situation may be unique for one reason or another. Any of my bowsiter friends that would like 15 mins of my time in a phone call free of charge send me a PM. I've been a CPA (primarily a tax guy) in public practice for 34 years working solely with business owners and individuals that want to make money. All I ask is that you return the favor to other bowsiters using your vocation or knowledge of the topic at hand.

From: KY EyeBow
12-Jun-19
Awesome offer from CPAhunter!!! Y'all would be crazy not to take him up on his offer

From: Dale06
12-Jun-19
Retired three days before I turned 61, after 39 years of corporate life. We are financially in great shape, six figure pension, plus SS, and eight figures in savings/investments. Keys for us have been- Live under your means, our case, well under. Keep debt to a minimum or zero, except mortgage. And pay off mortgage early. Save! And invest in a balanced portfolio. Max out your 401k or Roth or both, if they are available. Unless you are an investment expert and will take the time to manage ( without emotion) your money, hire someone to do it. How they are compensated is less important that the “net” in your account growth.

From: JL
12-Jun-19
^X2 That's part of what I was saying back on 5/19/19. Live cheap, eat cheap, save/invest alot in your working years and you will find out those early thrifty years were well worth it. Kinda like the saying,..."the juice was worth the squeeze". (The Girl Next Door movie)

From: Irishman
13-Jun-19
I always have a laugh when I see people telling you how much money you will need for retirement. The truth is, they have no idea how much money you will need. It depends on how long you will live, what your spending habits are, what your lifestyle is, and what fate will bring your direction. Why would anyone worry about leaving money to their kids? By the time you die your kids should be around 60 years old and around retirement age. And if you die younger, you probably will leave them money, ha! I read on a retirement forum one time about a woman who was thinking of retiring young and looking for advice on how much money she needed. She got all the usual responses, from well meaning people telling her how many millions she needed. Then one old guy told her to retire as soon as she thinks she can. He said that he made the stupid mistake of waiting until he had lots of money, and that now he was old with lots of money, but lacking the physical ability to enjoy it.

From: peterk1234
13-Jun-19
Irishman brings up a couple interesting points. The leaving money for the kids is an interesting discussion. My wife feels the same way as you. And you guys are right. But I just can't help but worry about it. I am first generation American. My parents escaped Hungary to come here (legally). They worked their asses off, making peanuts. But they created a nice life for them and me. We lived simple, but they directed me where I needed to get to so I could then make an even better life for me, and then my family. I am self employed. I took a pretty big risk with the support of my wife. It is working. Our life, and our children's lives are pretty darn good. I want to do the same as my parents, but kick it up a notch and be able to leave some wealth to the two delinquents. I am 52 years old right now and basically all savings are going towards building assets large enough where I do not have to erode principal during retirement. I also started funding a Roth IRA for both kids when they turned 18. I hope to do that until I croak. If I can do all of this, I will consider my life a total success and all the shit my wife and I put up with will have been worth it.

The old guy story has a very important moral. I have seen this so often because my business deals with many other business owners, often wealthy ones. They are beat up, overweight, sick and look like they are 90, not 60. I think it is a common issue. It is hard not to let Old Man Greed get the best of you once you realize how quickly you can build wealth once you get to a certain level. I am at that point where if I wanted to really step on the gas, wealth could accelerate, but I recently looked at life and said to myself, "do the opposite". Wind it down a bit, grow it enough so we will be comfortable but start to enjoy some more free time now while we can still move without pain. Pete

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