How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire? (Part 1)

Parents Forum Parent Cafe
1781

<p>Going off topic a bit here, but has anyone set up or considered a donor-advised fund?</p>

<p>Basically, it’s a poor man’s foundation. You donate funds, Vanguard, Fidelity, etc. administers it, and you invest in their funds. You can leave the funds there for years and just make charitable donations when you wish.</p>

<p>You can donate highly appreciated equities to start the account, get a tax deduction for the current market value, and not pay any tax on your gain.</p>

<p>I believe the minimum to open an account is $5,000 at Fidelity and $25,000 at Vanguard. I think Schwab offers this, too.</p>

<p>I know a lot of people who have done this recently.</p>

<p><a href=“https://www.vanguardcharitable.org/”>https://www.vanguardcharitable.org/&lt;/a&gt;&lt;/p&gt;

<p><a href=“What is a Donor-Advised Fund? | Fidelity Charitable”>What is a Donor-Advised Fund? | Fidelity Charitable;

<p>(Please don’t tell me that I mentioned this previously, as I will then be convinced that I am losing it.)</p>

1782

<p>I’m on the boards of several organizations that receive gifts from donor advised funds. It is a little bit more of a hassle for us (we’re often required to provide various documents to show our good standing,…) they do offer a couple of nice features:

  • Donors can, if they choose, give anonymously. We got one reasonably large and a number of small donations through donor advised funds where we don’t know who the donor is. Fidelity (or Schwab, or Vanguard, or …) knows, and takes care of the paperwork, but we don’t. On our federal 990 income tax form (which like all 990s is on-line and available for public viewing) shows Fidelity as the donor, not the name of our actual donor. (We’re required to list particularly large donations.) Also, we can’t go back and ask for another gift – because we do not know the donor! (Donors do not have to be anonymous.)
  • Fidelity (Vanguard,…) vets the charity and confirms eligibility for making a tax deductible contribution before the contribution is made. Many charities are out-of-compliance, and many have actually lost their tax exempt status. Others are political organizations ineligible to receive deductible charitable donations.</p>
1783

<p>I used to think 80 was ancient and if I could live to that, it would be great. It crept up to 85 for a while and now it’s definitely 90. LOL.</p>

1784

<p>How many of you (who do not plan on receiving a pension) have a financial advisor? How are they paid? Do you monitor your financial picture totally yourself? If you do it yourself, how much time do you spend?</p>

<p>We HAD a financial advisor, but they quit advising (at least us). They were fine for investing, but we wanted advising, not investing advice. I’m comfortable dividing our retirement savings into multiple index funds, but would like periodic review, tax planning, Social Security advice, etc. Neither of us really want to spend our retirement tracking investments either. </p>

<p>Around here, the going rate for advisors is 1% of the account. That can add up quickly, and we’re trying to decide if worth it.</p>

1785

<p>I avoid advisor because some guy at work told me he gave $700K+ to an advisor and told the advisor to put only in safe investment. I think the advisor was managed to half it during the 2009-2010 time with Euro banks. He finally took it back but it was too late. I said thanks but no thanks to that kind of advisor, I can do that cheaply without the 1% fee.</p>

1786

<p>I do not have an advisor. I know a lot of professionals who can give me tax advice,etc.</p>

1787

<p>How does a donor advised fund work? You open an account and transfer an appreciated asset worth $100,000 . You make donations from the account and you get to deduct $100,000 in the year you open the account? Can you limit the lifetime of the fund?</p>

1788

<p>Yes, you transfer in funds and get a tax deduction in the year you open the account. Then you decide when and to what charity you want to give to.</p>

<p>In a particular year, you can give away nothing or the entire balance in the fund.</p>

<p>You decide when the fund ends by giving away the balance.</p>

<p>You can name successors to the account, so that when you and your spouse decease your children can decide when to make donations to what charities.</p>

<p>If you start the account with $100,000, as long as the fund was to earn at least 5% a year, you could give away $5,000 a year and the fund’s balance would just keep growing.</p>

<p>Alternatively, in some future year you could decide to end the fund and just give the balance to a charity or charities.</p>

1789

<p>No financial advisor here, but H is very in to this and has done well. About one to two hours a day devoted to it- reading about investments, reading books stock market etc., He considers it a second job. Has been doing it for at least 35 years. It is fun for him.</p>

1790

<p>Interesting discussions.</p>

<p>Someone mentioned about D/S starting 401(k) and Roth IRA. DD Air Force ROTC has one of their sessions talking about these topics - military wants financial savvy officers. Since I have frequently mentioned these topics at home, DD was ‘on board’. Last year DD made $700 on small part time job, and this spring we put $700 into a Roth IRA through TD Ameritrade. Plan to do the same at the beginning of 2015 with both DDs. Good way to shift some assets into something that grows for them and uses the time value of money and current tax laws to their advantage. Both have enough funds to finish college, and so shifting this money as we can.</p>

<p>Had a job interview on Friday, and hope to get hired for this FT job. Second income will be a big help to make home improvements needed, rebuild emergency fund, and make our future more secure. Had a lot of medical expenses (stage III cancer) with 4 years of max medical copays and deductibles. Thanks for prayers!</p>

1791

<p>^^Wow, stage III cancer, that is a big scare. I hope you’ve seen the last of it, and are in complete recovery now.</p>

<p>As far as funding your kid’s Roth as a way to shift assets, I’m all for that. It’s probably the smartest thing you can do for them, especially if it’s invested in something with a good return. However, I don’t know that it makes sense to be funding their Roths, while you’re trying to take care of basics such as making needed home improvements and rebuilding your emergency fund. I think Dave would read you the riot act on that one. Do you think you and your husband will have well over 10 million dollars in assets? As right now, you could leave 10.68 million to your kids, tax free (in most states), and that amount adjusts up every year.</p>

<p>I am completely onboard with allowing them to have their money grow as long as possible, tax free, but it seems that if you need the money, then perhaps that should wait. As long as your assets aren’t massive right now, chances are, it won’t be taxed when you die, and you’d be better off funding your own Roths (that you can pass down to them) first.</p>

<p>My disclaimer is that I’d fully fund my kids Roths right now (though my older one does it easily for himself) as a way of passing on our estate tax free, except for my husband thinks that would be crazy until we have much of our debt paid down. It’s a desire to do something financially smart for them, though logically it might not be the right thing for us.</p>

1792

<p>"…as a way of passing on our estate tax free…"</p>

<p>So you have more than $10.68 million to pass down? </p>

1793

<p>I hope I’ll have more than that at some point. I’d like to live awhile longer, before passing on my estate. But in our case, our estate gets hammered at a far lower level by our state.</p>

1794

<p>busdriver, I think it depends on what your investment returns and how many years. It’s not impossible.</p>

1795

<p>DrGoogle, let’s hope for high returns and many years for us all! And that we don’t need to go to nursing homes and can save it.</p>

1796

<p>No nursing home here, I’ll be too rambunctious and they have to kick me out. :D</p>

1797

<p>Y’know Dr. Google, I get your joke (assuming it is a joke), but that a topic we haven’t talked about too much (wait – 1,700+ posts, and something we haven’t hit on yet?!?). My parents belonged to a very active social set, probably about 30 couples who did an endless round of parties, weekends together, etc. for about 60 years. I always somehow thought they would all go off into the same nursing home and party their final years away together. It has not gone that way at all as they have gotten into their late 80s… Sadly, as I think they might have enjoyed their final years more if they had made a “group plan” and gone to some kind of stepped living situation with some of their life-long friends. They are now getting more and more isolated, struggling to keep connections with those who are still alive, and none of them wanting to give up their single family homes that none of them can really maintain. I chat with their kids, and we are all struggling watching the same thing. Your post reminded me of this because they MIGHT have been too rambunctious for some senior communities with stepped care as their health declined, but I honestly think they really would have livened such a place up and continued with the blast they have had for so long at a slower pace but with better access to each other. Sigh… I sure won’t hold onto a hard to maintain house in my old age, that I know.</p>

1798

<p>I think the wild retirement facility with your friends sounds like the best possible option. Hopefully our generation will work that one out.</p>

1799

<p>Intpatent, I understand what you are saying.</p>

<p>I pulled my parents out of an assisted facility. The socialization was a big plus. The nickel and diming of increasing costs was just too much.</p>

<p>There were also these ridiculous rules. The facility said my dad was not capable of giving himself his own drugs so they had to do it. The cost was an additional $900 a month. The doctor said my dad could take care of his own drugs. </p>

<p>I guess what I am saying is you lose some independence and these places are expensive. The costs were $90,000 a year for my parents and as their health failed the costs would rise. Plus…monthly costs rose more than inflation.</p>

<p>Now they are back home. They spend much less. My mom does miss the socialization. But they were gong to go through all their money at this facility.</p>

<p>A friend has his 90 year old in a similar facility. Costs about $80,000 a year.</p>

1800

<p>I am shifting the kids’ own money. That way they can see how it grows over time. They already had some experience with that as we had started a college fund with both buying stock in MGE through their direct purchase program, when my brother bought a share for each DD (I know it is normally not wise to buy single stock, but we didn’t start with a lot in there, and as an energy company - Madison WI and area, it has done well). Mother’s two small life ins policies got split at her death to the grandchildren, so that was a good cash boost. Stock has climbed and recently had a 3 for 2 split, and also recent dividends. The kids know that whatever money is left after college is their money.</p>

<p>Hopefully I can get the job and we can boost our emergency fund. The work on the house is cosmetic that can be done with cash flow. Since we no longer pay HS tuition, that has decreased cash outflow.</p>

<p>Got a great positive sign tonight when DH and I went to client appreciation dinner with our financial advisor (room of 300; two years ago he had 100 clients - added more staff to assist with clients) - the had 3 I Pads as door prizes. DD needs an Apple device with at least 8 GB for required nursing software. Never underestimate the power of prayer and positive thinking - we won the 3rd one! DD will be so excited that she doesn’t have to buy!</p>

<p>1 1/2 years ago at a CME (Continuing Medical Education) course - needed for nursing CEUs, there was one 6 month fitness center pass (with almost 200 in the room) - I said a quick prayer - if I am meant to get my health back on track, please let me win it God, and I won it! I continue to use the center mainly for swimming, but I also won a health assessment, so I could build up from that point! Swimming has been great for me to restore my range of motion with my arm/shoulder after the effects of radiation. Buying ahead 3 year membership, I have only had to pay what amounts to $9/month to continue (I am an optimist!) Well kept and convenient, good number of hours open. They provide towels, shampoo, conditioner, body wash.</p>

<p>So I am hoping to win the job - as one of three great happenings within a week!</p>

<p>Had on my mom’s earrings and one of her necklaces (mom, DD2 and I are kinda lucky). DD2’s birthday is one day off of mom’s.</p>

<p>Being employed (and of course H’s continued employment) will be the biggest thing to help secure our financial future until retirement, and assist with retirement. That and of course continued good health. I was fortunate that I responded well to chemo and the biologic drug combination, and second line chemo drugs could finish off what was left (along with radiation) and continued one year biologic drug protocol. My dad’s cancer was aggressive too, and chemo wouldn’t stop it, so all he had was radiation to try to slow it.</p>

<p>H’s employer does not foster strong company spirit. There still is a sense of family there though - employees organized their own picnic - open to the entire group, because company has cut a lot of that out. One guy commented to H “the company beats us until the morale improves” - rings true. Through all the RIFs, H has stayed employed.</p>

<p>Just turning on the news (esp recent violence in the world) has me especially grateful for our blessings.</p>