We plan to pay our weekly contributions to our church directly from our IRA. Our older friends suggested doing this … it’s a win-win, IMO. We’ll probably pay either once or twice during the year, to keep it simple.
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We also like organizing our trips ourselves as it gives us more control and allows going off the beaten track. Going to Patagonia a few years ago was a blast. In this internet era, you can research anything
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I’m going to look into the RMD charitable donation thing. Thanks for the tip!
Thanks for the link. Looks like I won’t get a tote bag after all. 
Smart churches know to inform their older congregants of this option
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This is interesting. I knew that this was possible a few years ago but did not know that it had become a permanent part of the tax code. I would have to transfer money from a 401k to an IRA. Then make my donations. We have been accumulating money in a Fidelity Donor Advised Fund (DAF) but Qualified Charitable Distributions (QCD) may be better as I will have some large RMDs in the first few years. I guess the revised RMDs are significantly lower than they were under the previous regime, though if I’m still working as I hope/expect to be, the RMDs will be pretty heavily taxed. So, QCDs seem like a really good idea.
I was wondering if one could make a QCD to a DAF. Alas, apparently not.
I concur that @ucbalumnus’s categorization of retirees is helpful. I think I’ll be in group 3 unless something bad happens (which of course I worry about)-- at least that is what Monte Carlo analysis seems to suggest.
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Agreed. Also they could advise to ensure the asset has assigned beneficiary, possibly with a small portion to the church. (I’m actually on my church trust fund board, trying to think of ways to share that kind of estate planning tip.)
Coincidentally an older church friend was explaining QCD concept to me yesterday, but he didn’t use the term. Glad to see that link above.
I think when you reach 70 1/2 you can make charitable donations directly from your IRA ie pre-tax before you have to start taking required minimum distributions at 72.
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mumfromca - thanks for the reminder about the cheaper traveling in retirement. I keep being focused on the larger, looming expenses (long term care, kid’s possible grad school, unexpected health care bills) - it’s nice to think of something on the positive financial side!
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This is a super helpful post (for me), as it is helping me wrap my head around where I am on track to be v. where I want to be. I am 13-17 years out from retirement and my H is 8-10. I would say we are firmly a 2 right now. I’d really like to be a 3, as passing on some money to my children is a high priority.
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I think we are also a 2.5. The things that worry me are cost of nursing/memory care if needed. So many friends have parents in retirement homes where each parent now needs separate levels of care, so double the cost. My parents were in independent living cottage, dad has second stroke and died, but if he had returned it would have been to skilled nursing which is costly if that’s where you are long term. I’ve also been discouraged to hear of friends whose parents are in nice, most well thought of facility in our city and still feel like they have to pay for extra sitters for loved ones. So to me that’s a great unknown. I’m pulling for dying at home in my sleep but what if it’s me or spouse and dementia for many years.
If I knew those costs are not an issue then I think we could be a 3.
My mom is still in independent. At some point parents got into really good fund in their IRA. Every year they have taken the RMD that they did not need and fund has made more than that back. They have been using the strategy of send charitable directly out of the IRA to keep it from being income.
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Yes, if it weren’t for unknown health care costs I would put us at a 3.
As I said before, my parents lived/are living long healthy lives with no major health problems, and thanks to TriCare they have had almost no health care expenses, even into their 90s. We don’t have TriCare, and I take a specialty injection quarterly. It’s the unknown medical expenses that keep me in the 2 range, emotionally.
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We have several things that have had us in a good financial place with both of us 65 and retired. Still setting up some of the estate stuff - baby steps and decisions.
DH wants to stay in our home, and we have really no need to move. I have small and larger projects - with a few projects to do just prior to when we want to sell.
Contributing to various organizations as life goes along. Plan to leave some kind of estate to DDs, just as I received from my parents. Since DH’s mom had such a short time at skilled care, some assets got passed to her four sons. Each DD has a few things from their grandmothers and they both got to know their grandmothers pretty well (one died when DDs were in early teen years) and one grandfather. My dad died in 1995 when DD1 was 1 year old. DDs were both adults with lots of experiences with DH’s parents.
We have a good medical network, MDs I know and trust. DH is going through cardiac testing and new meds now (may have been triggered by Covid and Covid vaccinations, or also hereditary/combination, but he never felt good after Covid Dec 2020 and clearly identified palpitations within days of 2nd Covid shot) - I know he is scared and a bit depressed about it. Paradoxical A-Fib which may be taken care of with ablation - getting set up with specialist appointment; has another 2 weeks of Holter monitor. Everything has gotten better - the Holter monitors use to be a big bulky thing – now it is a little device with skin adhesive and a cell phone to send the signals (one very significant A-Fib event already showed up in first week with very rapid heart rate, and so saw the Cardiologist on Tuesday, had EKG, and set up for ablation specialist for evaluation). We have a personal connection with the Cardiologist (his daughters are same age as ours, the children were in Montessori together, and I got to know his wife at our DDs’ joint Chuck E Cheese birthday party) - his wife still remembers me (I was also evaluated twice with this Cardiologist, with last time 9 years ago). Cardiologist did a great job explaining to DH and me with wall chart and a plastic pull apart heart model exactly where the sources of the A Fib are from the nodes. I know someone can be very ‘numb’ with receiving information and would have some stuff go over their heads w/o experience with cardiology from other family members or nursing/medical background – his NP talks fast. I picked up immediately when ablation was mentioned by NP. Cardiologist also told us about the advances made with technology and technique with ablation surgery, and for the right candidates about 95% success rate and shorter procedure time (use to be 6 hours and now 2 hours or less). Getting our regular screening stuff done. All these medical appointments take time. Key is getting on right meds and treatments, prioritizing what needs to be addressed now and what body system addressed later.
It is so helpful to have a medically knowledgeable close relative or family member. Besides DH having me, we have capable/competent DD/BSN who has been working in hospital setting since graduating college in 2016 and intricately knows a lot of things at the large medical center 100 miles away from us. A close friend’s son is finishing his fellowship years in Radiology at Harvard/Boston (we are going to his wedding in May; also know his fiancé who is a PA who has completed fellowship and also very experienced). We are at getting the heart situation resolved/stabilized med situation, getting the rest evaluated and then moving forward.
I turned down another chance to travel with a group to Italy and side trip to visit my relatives/friends in Switzerland. Looking for DH’s medical situation stabilized; also if DD/SIL/kids with a possible move out of state – helping with the kids and their transition. Also keeping in touch with DD in Orlando area - saw her in Nov and will see her at one of the May weddings. 3 weddings/travel in May. Plan to travel for a family event out of state in June. Have to keep priorities in order.
Having the retirement time/loose schedule is grand. So reduces stress. No racing around.
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My financial planner told us we were THREEs. We believe him.
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We are as well. Many on this thread are there. I know there are a fair number on this thread who are younger, and anticipating retirement with planning for their finances to be there as well.
However how one chooses to use resources or unexpected medical situations that may drain resources. Good to have the resources to draw off of. Having the growing funds helps pay for these expenses so there is enough of a comfortable base. People that have built their personal estate probably tend to be conservative with spending but also prioritize and can reward themselves with what ‘floats one’s boat’. DH traveled too much with work to enjoy anything other than family events. My life has to settle down more before I gain any desire beyond family events at this point in time.
Our non-retirement growth account got eliminated years ago with having children and then going to single income. Now we are funding again with a lowish 10 year home mortgage (monthly payments about $1400) so we have a place to draw money out as alternative to 401k - keeping an eye on tax situation for that particular year. Will still draw most from 401k, but also have a place for things like life insurance pay outs, parking money from home sale, etc.
To those of you worried about end-of-life healthcare costs, that is just part of good financial planning. If you believe healthcare costs are unknown, you need to pick an extreme. For example, if you think you could need a million for healthcare out-of-pocket beyond Medicare and LTCs if you have them, well then that’s what you have to save. But you have to identify that number, whatever it is that enables you to sleep at night. Once identified and amassed, you can let it go. If you think you can never amass the number that will ease your mind, then either you keep working/saving/investing and never retire (a reasonable option) and/or you come to terms with what an underfunded end-of-life might look like and let it go.
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Yes, in the scenarios listed in post #2933, big unknowns like health care costs or what actual investment returns end up being may make it more difficult to know which side of the boundary one is on (between scenarios 2 and 3, or scenarios 1 and 2 for that matter).
Perhaps another way to think about it is to consider both typical assumptions (of health care costs, investment returns, etc.) and conservative assumptions (e.g. higher than expected health care costs, relatively poor investment returns, solid-looking pension fails). For example, someone may be in scenario 3 with typical assumptions, but in scenario 2 if conservative assumptions end up being true.
There are also worst-case assumptions, but the actual worst case scenarios are bad enough (e.g. civil war, societal breakdown, deep economic depression) that anyone in scenario 1-3 with conservative assumptions cannot make any reasonable prediction for a worst-case outcome.
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My worst-case scenarios put me at a 3, based on Monte Carlo simulations and financial advisor. I “feel” closer to 2.5 at times, even though it’s not rational. I choose to relax into the 3, though, because to do otherwise would be a huge waste of happiness.
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If you are not sure you have enough funds to cover the very worst case of high nursing home costs a long time for both spouses, remember that if funds run dry there will likely be government assistance. After the years of grandmother in nursing home and later grandfather, he ran out of funds. He lived another year, staying in same place but with medicaid(?) covering the bill. This was decades ago, so somebody should probably post confirmation with newer example.
Note: This scenario would mean no inheiritance for family. Some couples opt to gift money to children before too old, since there is some kind of.5 year look-back rule.
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Absolutely correct - it is Medicare/Medicaid. Key is being in the facility of choice and when one transitions to the government paying the costs one is where they have been already a resident.
When one person of a married couple goes into skilled care (nursing home) the remaining person is able to keep the home and certain assets – so one does need very good financial and legal advice well before something like this happens so the remaining spouse can continue to have the assets and home to live out their fuller life. For DH’s parents, his mom had a pension and SS, and they had to have her funds separated from the dad - and the dad’s SS went to his skilled care facility. She was able to keep the home - but they had put their home’s deed into their son’s name in earlier years. IDK if it would have become an issue if she needed skilled care for a long time beyond what her funding stream was. She was in skilled care less than 2 weeks.
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