Absolutely, estates (and probate adn trusts adn wills) are state-specific.
1 Like
Before moving an asset into you and your siblingās names, be sure that is smart financially. You should get a stepped up basis at the ownerās death, so if Mom bought the house for $25k in 1964 and now itās worth $2MM, your basis would be $2MM, but if you transfer it now, you get Momās basis.
8 Likes
Not necessarily. Most estates are not large enough to trigger estate taxes (even back in 2001 when the estate tax exemption was only $675,000), but dealing with probate can be an additional complication or expense in settling the estate.
2 Likes
If you wanted to retire at 50 with zero sacrifices or adjustments (no need to downsize, move to a cheaper market, etc.) and a comfort level to travel and do whatever you want (within reason) ā and you expect yourself and your spouse to live another 40 years, how much is enough?
Straight number. Not how to calculate it or a formula relatively to lifestyle, etc. ā what number is sufficient high you donāt need to even think about it.
This is my plan but no spouse. My number is $5M.
1 Like
Sorry - canāt answer because Idk how you are currently living. Maintaining your current lifestyle without adjustments or sacrifices depends on what that your life looks like now.
Not trying to be snarky. But if you are trying to maintain a current lifestyle, I think we have to know what that lifestyle is.
4 Likes
Thatās why I wrote it to be regardless of lifestyle (āwithin reasonā ā as in anyone who doesnāt own a private jets and staying on private islands and traveling with entourages). I wasnāt asking for personal advice based on my particular circumstances ā I was asking what people considered a safe for āalmostā everyone number. āNot how to calculate it or a formula relatively to lifestyle, etc. ā what number is sufficient high you donāt need to even think about it.ā
I agree about estate taxes but in PA for example we have an inheritance tax and anything owned by the decedent is subject to the tax. And as far as avoiding probate, generally that requires no assets in your name and many people arenāt comfortable divesting themselves of their assets such as their home, their bank accounts, investment accounts and so forth. Pensions, retirement accounts, life insurance policies are more straightforward because of the beneficiary designations. Trusts are also useful. Careful planning can definitely reduce the amount of assets subject to probate and possibly avoid it all together.
$10 million
My dh says more
3 Likes
Note that bank and brokerage accounts can be put in pay-on-death ownership as well.
2 Likes
I thought if everything in a Trust, then no need for a probate. That would include home, bank account, etc.
2 Likes
Probate is basically a process of figuring out the deceasedās assets that donāt have a designated beneficiary and assigning new ownership to those assets. POD, TOD deeds, trusts, JTWROS deeds, etc. all are mechanisms to assign a beneficiary (and avoid probate process) without having to give up the ownership while one is still alive.
2 Likes
Iād go with more than $10 MM.
I suspect that almost all Americans retire on less than $10mā¦. usually LOTS less. Some have pensions, an awesome thingā¦. but many just have SS (not our plan, but other couples make it work).
@Youdon_tsay - I hope you figure out the probate question. Yes, this kind of stuff can be soooo stressful. Kudos to you for trying to sort through it.
3 Likes
How much more?
Definitely. But my question wasāt what people have to settle for or is typical, itās what # is big enough that you donāt worry about anything. In the workplace they call it your āF-U #ā (i.e. the amount you would need to be able to tell a bad boss off and quit on a whim because you never have to work again. We could all say a billion, but the question was more how much is enough for the person who wants to live as comfortably as they want but not like a billionaire.
1 Like
Our retirement # goal is $7 million with no debts.
2 Likes
We could probably do it with a little less, but Iād say $10 million would probably be the āset it and forget itā number for us.
Back here in the real world, weāre going to be 52 and 50 this year, and we have somewhere around $3 million socked away. One kid finishing college in December and the other starting in August. Sold our house when we were expats a few years ago and have remained renters since. Our financial adviser told us a couple of years ago that we have an annual savings deficit of $80,000 if we want to hit our targets for retirement. Not too worried as DW has pinged back and forth between the corporate and nonprofit worlds; currently nonprofit, but weāre confident she can get a much more lucrative job when she decides to look in a year or two. I do my part but make about half what she does now, and a smaller percentage when sheās really bringing it in.
I think many find that when they can qualify for Medicare, or are getting close, and they see they have enough - confirmed by the way life is lived and confirmation by oneās financial advisor. Some have health insurance options before Medicare that can be put into place.
Many do not have options to bump up their income once their career is āsetā. Achievable goals can potentially be thought of early in career selection and how productive one is after putting in career efforts. One can have more control on spending and saving. How investments do, that is also another story.
One also sometimes has no control over medical issues, or things like a new boss that is contrary to one continuing good emotional health. Then one has to decide when it is best to finish work.
Once retired, if it feels right and is going well, great. One can always make new plans. One can delay filing for social security if one decides to go back to paid employment. I donāt see too many rushing back to another job. It seems many decided to end work during Covid - hard to tell how Covid affected their work/life balance and retirement decision.
3 Likes
Seems you have years to consider wiggle room in careers to ālastā through. How much extra money would be needed for health care coverage before age 65 if choosing to retire before age 65.
There were only months between our ages; having the younger person with insurance - it depends on that person having the COBRA coverage for 18 months (as a single, not that bad of a rate). To cover DH, I would have needed to take family COBRA to cover him on my company insurance plan. For us, I could āhang inā working until I qualified for Medicare as well, and DH quit working 11 months before that time. My sister, 16 years younger than her DH, worked long enough at school system and was able to have the single coverage with her school system to retire at age 63.
Staying healthy is something that does affect spending and quality of life in retirement.
Hopefully younger people on this thread find the life balance to have good plans moving forward. It seems life paradigm changes outside of oneās control can throw a wrench in having things go smoothly.
1 Like