Most of us on this thread IMHO have been saving some for retirement along the years, just as they have planned for college for their kids. Many have had situations along the way that have impacted the path to retirement.
What are the goals and how do I achieve these goals based on where our family is now? What can we do to improve our retirement financial health? What is important, and what is less important? How can we transition to retirement as stress free as possible?
One may consider how one can manage a healthy lifestyle from now on - it will save on costs and improve quality of life.
If one has LTC insurance, there is some financial protection there. If LTC insurance is not at a good cost/benefit, building up the additional financial reserves for āself insuringā.
Probably similar to Vanguardās retirement planning tool, we did the tool where Hās company 401k is - Prudential. When putting in the numbers we are comfortable with, we have a āsurplusā of monthly money - which is great. That gives peace of mind, especially because we have a lot of financial holdings outside of that account.
I do think a lot of new retirees do want to go on trips and do things while physically active. A good time to downsize (if that is desired) and relocate or have a second vacation place (again if that is desired). One never knows when a major health event will have limitations, so want to be in a good place to maximize quality of life.
A key thing is planning, thinking things out, making ācourse correctionsā along the way.
One thing our FA has told us that he has seen many people that delay downsizing. I think what he was saying is that they are downsizing when forced to - maybe due to health or finances (and the real estate market may not be ideal).
@busdriver ā Iāve got mixed feelings on that. I wouldnāt pay for obvious, generic adviceā¦but a whole lot of folks I see planning how to pay for college would be very well served by obvious, generic advice if they actually listened.
If folks using a financial advisor have full disclosure of ALL the costs ā both direct and indirect (e.g. commissions and higher expense ratios on products), and add value to the clients, they can be a service. Otherwise, I feel FAs are parasites, feeding off the host who earns the money for the accounts and investments.
When an industry claims to provide advice but fights being a fiduciary, I know enough. Who would go to a doctor who refuses to adhere to āfirst, do no harm?ā
I am using an estate attorney because writing wills and setting up trusts is well beyond what I can do. Otoh, investing is not rocket science. Read a book or two (eg, Bogleheads Guide to Investing). You can make some small mistakes (eg, I had TIPS in taxable Treasury Direct for a while, not optimal but not a disaster), but if you stick to the basic simple rules, you will still be ahead of the game. If I can do it, a chimpanzee can do it (no disrespect intended to chimpanzees).
I am 62, wife is 58. We have substantial IRA/401k savings, but not enough to be complacent. I manage these accounts and am shifting toward income orientation - mainly large cap stocks that pay decent dividends. Neither of us have pensions, so we will be dependent on investment income and SS (and side jobs.) House is paid for, but we have a HELOC that we used financed my mothers ALF care. Sheās now 91 and in the SNF wing of her former ALF. She was just approved for Medicaid, so we no longer have to foot the bill. (Woo!) We also have a second property that is probably slightly underwater. Son starts college in the fall, we fully funded the FL prepaid program, but since he got a full ride to FSU he can save it for grad school.
The plan is to pay off the HELOC, sell the house in a few years, become renters and do the travel/hobby/part-time work thing until the wheels come off.
We are not planning to purchase LTC policies. Having spent time in SNFs, itās not a place Iād care to spend my final years (or more likely, months.) Bullets are a lot cheaper.
ā@busdriver ā Iāve got mixed feelings on that. I wouldnāt pay for obvious, generic adviceā¦but a whole lot of folks I see planning how to pay for college would be very well served by obvious, generic advice if they actually listened.ā
Thatās true, @arabrab! I think a problem is, weāre dealing with not just monetary issues with college, but so many other factors. And when it comes to our kids, it can be challenging juggling all the competing issues, as we want the very best for them. But it would be nice to do it without having to declare bankruptcy.
I donāt really trust the entire concept of financial advisors. So many of them are trying to hawk their product, get a commission off of you, and havenāt even taken their own advice. If I was paying for one and he/she gave me a bunch of generic advice that I could get from a Money magazine (save more than you spendāduh), and not giving me specific advice relevant to my situation, they would be quickly fired.
Yes, @IxnayBob, that was a very moving piece. So many these days are living long enough to lose their mental sharpness. It sounds like Rhys woman had the peaceful and dignified death she craved.
My father, his identical twin, and probably others in my family made the conscious decision to end their lives on their own terms. Their theory, similar to the woman in the article, was that if people who loved you thought it was justified, then it was appropriate.
My father did it when he was concerned that to wait longer would make it likely he would not succeed, and his doctor had advised him that dying of colon cancer would be miserable. Itās a shame that the doctor, who liked my father, could not promise to make it successful, because then my father might have waited a few more weeks. I understand the doctorās decision, but not the legal/societal punitive approach that would deprive a terminally ill, 80+ yo person a civilized death.
Anyway, it is only peripherally connected to retirement, but it is something everyone should think about and discuss with their loved ones (and attorney).
This is such a complex issue and so many emotions are involved. Iām glad that people are able to find ways to die with dignity and at the time and circumstances of their choosing when they have terminal conditions or are losing their mental faculties and no longer want to continue on. It is indeed an issue that will come up more and more, as people seem to be outliving their brains and having chronic conditions that make living miserable and sometimes painful as well.
Where you retire - something that could affect you specifically within medical is how much is pain medicated.
It helps to know communities well to see how particulars in your specific circumstances can and will be handled.
I know there is a lot of abuse in the top 5 states for painkiller prescriptions (DEA āoperation pillutedā targeted prescription pill abuse in the south) - front page of our AL newspaper today. Painkiller prescription top 5 states: AL, TN, WVA, OK, and KY. A Bāham doctor was arrested and did a plea deal, where he admitted he wrote painkiller prescriptions for his housekeeper, her son, her granddaughter, sonās GF and four other people. He had a much bigger group - he wrote 390 prescriptions for about 22,796 pills over a two year period (for opiates oxycodone, morphine sulfate, norco, and narcotic stimulant Adderall).
The bottom 5 states for painkiller prescriptions (are legitimate pain needs being fully medicated?) are HI, CA, NY, MN, and NJ.
When my WI dad was dying of cancer, he wanted to stay clear-headed, so he often took less pain medication in order to be more alert. That was his quality of life choice. On the other end of the spectrum, my mother liked taking pills to solve her problems (she could have benefited from psychotherapy).
We have a medically appropriate pain management center that medicare almost shut down due to poor reimbursement - but somehow they managed to get a reversal and enough federal money and correct reimbursement for services that were legitimate (and keeping people at home and out of more costly care alternatives).
I glanced through July Kiplingerās Personal Finance which I received this week. Two great articles that are pertinent to this thread āWhere to put your money nowā and ā9 Funds for a rainy dayā. Specific Vanguard and Fidelity funds mentioned among the listings in the rainy day article.
I also recommend Money and Smart Money. It keeps one thinking on people in our circumstances. I find all three of these magazines give me enough information and keep me thinking about how to stay on course.
The one article talks about the bull market heading into its 7th year (feat only accomplished 3 other times in the past 85 years). I gain some comfort in feeling informed and thinking about my options once the bull market does shift.
Also in this issue, a couple of snapshots interesting for CC āLow Rates on Private Loansā and āTop Schools under $20,000ā - a short list! The private loan article may help someone in finding lenders with low-cost alternatives to federal PLUS loans, quoting variable and fixed rates from various financial sources.
In considering where to retire, thinking about water and water shortages, and having the budget cushion for that factor.
In some areas, maybe purchasing flood insurance, while in others earthquake insurance, or others sink hole insurance. Can often avoid that extra insurance if your property is carefully selected.
Since this article was done in April (before the recent flooding in TX)ā¦
Weāve been affected by low snowpack, last winter when ski resorts and those who depend on snow & skiers were forced to close early. Very early.
My daughter was planning to participate in a cross country ski race last weekend, but the mt hadnāt had any snow for months!
Snowpack for the watersheds that provide water to Seattle are at 8% to zero % of normal.
In Eastern Wa, it is even more dire. Combine the drought, with last summers record setting fires, and anticipate another memorable season.
Iāve been reading about taxes in retirement, and RMDs from IRAs, etc. and it occurs to me that the money in our tax-exempt account is ā in a way ā less valuable than the money in our after-tax account, because a significant portion will be ear-marked for Uncle Sam. Which leads me to musing about whether I should discount the value of our tax-exempt account in some way, when thinking about safe withdrawal rates and our total portfolioā¦ Thoughts?
Post #6457, there are many ways to withdraw money to avoid paying tax. I plan to stay within the 15% bracket if I can help it.
Btw, does anybody here know how long it takes to you receive your SS, when to file. My husband is taking his SS beginning next year, so I just want to know when to initiate the application.
I trust you meant tax-deferred (401k, 403b, IRAs), from which withdrawals will be considered Ordinary Income. You are correct. For each $1 taken from those accounts, you will owe tax, so you should plan accordingly. Recall that these dollars went in pre-tax to begin with, so you have received returns from the taxes deferred which is a good thing.
However, there has also been much discussion (scattered among this thread), how to minimize RMDs by converting portions of your tax-deferred balances into a Roth IRA once one stops working by managing the amount needed to fill lower tax brackets/buckets. Lowering the balance of your 401k/403b/IRA before age 70.5 will reduce the yearly RMD.