If you invest with Vanguard, here is a tip that I took advantage of a few years ago. ONE TIME ONLY, Vanguard will let you convert from a mutual fund to the comparable ETF with no tax consequences. I have all ETFs now, and I am in control of when I incur capital gains, and I’m not caught by surprise at the end of the year.
As someone else mentioned above, I have all my dividends paid out, not reinvested. I can take the out the cash or use the funds to rebalance if I choose to reinvest.
All three grandchildren have their own stock account (with first funds in by us and DD1 as custodian) which was similar to what their mom and aunt had - mom’s account is a small amount remaining while their aunt has more in her account due to two more years for the money to grow and she had more scholarships at college and not as much funds used for travel - which she will use these remaining funds to help towards a down payment on a house when the time comes. ‘The time value of money’ put to use.
I believe DH and I will be like my parents, have substantial assets left as long as health issues do not have us have them spent down (and only split to 2 kids instead of 5) – my side of the family was good about being able to have home care. And I do believe both DDs would be willing to have us live near them when the time comes and not drain down assets unnecessarily. DD1 is a active RN/BSN, and my RN license will lapse after this year but I know quite a bit having worked in a variety of hospitals and facilities, including rehab and SNF for a sizable company over my last 5 years just before retirement. DH and I are considered ‘in good health’ at this point in time.
2022 is showing itself to be a difficult paradigm to figure out - escalating home prices, higher interest rates for mortgages, inflation, volatile and stock market downturns (January downturn, not recovered from that, and who knows if markets are going to downturn more).
Both DDs had a lot of fine arts, music (DD1 piano guild for 8 years and was All State Orchestra 2 years, 12 years piano; DD2 had 10 years of piano, was All State Band as a 6th grader on clarinet, toured China with a performance jazz band – youngest female and lead alto sax with older HS/College students among many other things). We have a fine arts festival, and DD2 had her art as one of the selected art posters to be made into a promotional billboard. Both DDs had travel (DD1 England/France; later Switzerland/Italy with second trip to Switzerland/Italy on honeymoon; DD2 Australia, China). Both were on family vacation to Alaska with pretty good planned touring (their uncle lives there).
We have a 2nd piano at home which is DD1’s - but she may just want a very good keyboard to start teaching her older two children - only moving the piano when her children are older and when they are settled in a place for a planned longer stay. There is a piano book series similar to what Sazuki is for early violin. Once things settle down a little, she can decide if she wants to get a keyboard and start teaching the first two.
DD1 wants her kids to have similar opportunities with the fine arts. Also with education. If they continue to live not far, and she wants help from me once SIL gets employed. DD1 says she is a planner, so she can direct out her plans.
I can appreciate the comment about sharing an abundant amount of common sense. DD1 just has to have it rub off more on SIL(I know a few on this thread will be critical of this ‘dig’ but someone who leaves a job w/o having the other secured - and now has no job - is operating with a low level of common sense).
Our help in any way is by choice and is not part of their household income or covering household operating expenses. SIL appreciates what we do for the grandkids. I express more here than we do to him. SIL is a work in progress and he also reveals things to us as time goes on which gives us insight in his life.
My key thing with travel is to see people - relatives and friends, not necessarily places. I have purchased some wonderful books where I can pictorially ‘see’ various places. However I have a lot of family in Switzerland – I was there for a month summer 2016 which was grand, saw and did things not done before, some with a cousin and her husband who are retired and took me on a trip with them.
In some ways, as things develop with family will be directing how we spend our time and financial resources the remaining part of this year. I have a lot to do at the house, and schedule every day to get my swimming laps in or work out in the fitness center. DH has fun every day with a hobby, in his workshop, and in his office where he continues to have projects which include electronics/learning new code/building PCBs, etc.
You COULD have written your whole post WITHOUT mentioning your SIL negatively. It really would have been okay. The fact that you focus so much negative energy on him surely isn’t helpful. Maybe try to just let it go?
You say your daughter says she’s a planner,maybe let her do her thing. I’m sure your daughter is a highly capable woman that can handle her own family affairs including her relationship with her husband and their shared responsibilities.
It’s great that you are using your resources to provide nice things for your children and their families. Those are gifts that many aren’t fortunate enough to get. I’m sure they appreciate that. It’s really a blessing for you and them. Hopefully.my wife and I are in a similar situation down the road when we are in your shoes. Congratulations on your successes and kudos for passing them on.
Last fall I gifted my son $ to buy a house. Even though my fidelity persons and I sat over where to take the $, I got hit with $30,000 capital gains.
I told my accountant she must have made a mistake; I hadn’t expected more than $20,000. Nope, the market was good last year. It took me a week to adjust.
Like others on CC, I’d do it again. The kids tiny apartment had gone up in rent to $4500. Now, the dog and baby will have space, plus a home office.
I (we) currently won’t go over the gift exclusion amount ($32k) in a year. I’m not yet ready to mess with filing a 709. However, any real help with a down payment on a house where ds currently lives would definitely require that. Helping purchase a home would depend on circumstances, and it’s not in my current plan to do that. But, I am not one to never say never.
Rents are insane everywhere. Ds currently lives in a rental house with three other guys. Works fine now, but not sure what will happen if and when he wants to settle down and marry.
I just want to say though this thread goes back and forth, is pleasant and sometimes unpleasant ( 
) , has people from varied incomes and situations and smart money people and not so smart (me)…… whatever your abilities or decisions in helping your kids it is wonderful to see so many “being there” if not financially, emotionally for our grown children - there are many ways to lend a helping hand - and writing a check is not the only one!
It is what it is.
Yes and no. This has a good discussion about the tax efficiency differences.
We are wrestling with the thoughts on the gifting an amount to help with down payment on a home, and maybe it will be over a 2 year period - the first as set aside gift to offspring for that purpose and the second (or more years). But DD2 definitely needs to be a lot closer to having her own savings in place first. Who knows when DD1/family are going to be set in more permanent geographic location - if it will be different from where they are now.
It is always helpful with having room-mates especially in higher cost areas. DD1 as a recent college grad shared a 2 BR with her also recent college grad friend that she was friends with since HS, and they got a nicer place for less money than the one bedrooms in their same complex.
Happiness in retirement is something I discussed with my neighbor yesterday who recently retired from government employment (his whole career). He has health issues with immune system that affects him with pain in his whole body if he does physical things like lawn care - the only effective TX is steroids and he has been weened down on dosage. He has a healthy attitude about hiring help, and has the funds to do so. He has been feeling so much better once he has adjusted to his diagnosis and adapted on his activities. They had some issues with launching their offspring (son who was capable in college didn’t apply himself as he should and took much longer to graduate; their daughter just aged out of being on their health care plan although she is a college graduate and employed - she just had to buckle down to have the employment with those benefits). It is an imperfect world and offspring make decisions as adults or as YAs. It does affect parents to some extend.
DH and I are happy people and our children and grandchildren are happy people. Life has some unpleasant things where people do make choices.
Agree with @abasket and we can all perhaps take away little tidbits on the thread that may directly or indirectly have input on ‘how much one thinks they need for retirement, and at what age’. We are still happy with our retirement at age 64 (DH) and me at age 65; still sorting out the ‘financial picture’ of 2022 but thankfully have the resources to ride the year out and then see what 2023 brings.
I know your son/family are appreciative of the financial gift and sacrifice you made financially. Glad you continue to be happy that you made the right decision. I would have a few pictures as a reminder of their new happy home to brighten up a day to look at!
Helping with a down payment on a home is not something I ever thought I would consider. It will depend on what happens in the real estate market and if/when/where he settles.
For those thinking of sprucing up before selling a home, interesting article:
if selling is in the near future, the thing that the article did not discuss was going with neutral colors to appeal for a broader market.
If selling in the very near term, the right answer might be to do zero upgrades. (Though decluttering etc is always helpful). Consult with real estate agents in your area. Often the advice around here, especially for starter home candidates in hot market periods, is to sell as-is.
I think hitting the hottest part of the market timing can be helpful with multiple/competing offers - so if there is a little time before time to sell – I also agree about neutral colors unless the current color scheme looks great and no reason to change. Most of us on this thread are not in a starter home, but may want to consider buying down in some other geographic area. I like the idea of getting top price for your current property and then time out the purchase of the new place. A bit of a hassle to move stuff into storage with a short term rental in between, but the payoff can be huge. And retirees usually have time and other resources at hand to be smart about how they handle things in a cost effective way.
What is really a “head of household” anyway? Isn’t it really an IRS term?
I’d definitely suggest you understand why you got taxed just so it doesn’t happen again. We once owned a strange financial product. Before it was purchased we talked about how taxes would be done. Often with financial products there is a way to avoid/optimize your taxes if you have it in a retirement account. Sometimes you have to switch things around or sell something doing poorly to offset the gain etc. But there are lots of tax hits that can be really painful. We tend not to own any/many mutual funds preferring owning the stocks outright. It works for us but doesn’t work for about 90% of friends I’ve spoken with. Most like ETF’s, mutual funds and even gold/silver.
We’ve never paid tax on a mutual fund as we have the financial planner talk to the tax guys and vice versa. Anyway, we plan taxes like we financial plan. Sometimes laws change. Obamacare hit us hard one year. But that’s unavoidable. I just detest paying more taxes then needed esp if they are out of the blue.
[quote]We’ve never paid tax on a mutual fund as we have the financial planner talk to the tax guys and vice versa.
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Don’t let the tax tail wag the dog. Your financial guys are probably offsetting gains with losses to minimize tax due. I’d much rather have all gains, and owe tax, than a bunch of losers to minimize taxes due.
Lol:
https://www.seattletimes.com/opinion/from-the-former-editor-of-mad-magazine-retire-already/
Especially this:
“ One big benefit of early retirement? It gives me the perfect excuse when my brother-in-law comes around looking to borrow money: “Gee, I’d love to help you out, but I’m on a fixed income now.” I always emphasize the word “love” so I sound sincere.”
After my mother’s death last year we owed long-term capital gains tax on about half of her estate. The issue? My dad hated the thought of paying taxes, so 30 years ago, before his death, he had everything structured with a bypass trust to avoid estate taxes. But, unknown to him, the about excluded from estate taxes went up by millions and we all would have been better off if the house and surrounding property had just been in my mom’s name directly. The moral of the story – review these things more than once every 25 years and you can’t predict what Congress will do!