How Much Do You think You Need to Retire/What Age Will You/Spouse Retire: General Retirement Issues (Part 2)

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4388

Person who had a pretty much total loss house fire here :wave:. Granted, it was 20 years ago and renter’s insurance, but I doubt the process has changed much.

If you have something unusually valuable, have it appraised, and get a special rider.

You want a replacement value policy for sure.

You have to itemize everything you claim to have lost (Quick: how many pairs of underwear do you have? What are all of the things in your garage cabinets? Books on your book shelf?), and submit receipts. For electronics, iirc we had to provide serial numbers if we were claiming something of a higher than typical value. It was easy to max out our policy, though, with the total value of all of the possessions we had. At some point there is diminishing returns to itemizing piddly things.

Friend of mine recently had a neighbor’s tree fall on their garage. She had to prove there was a pricey light fixture in order to get the replacement paid for. By the time they were told that, the debris was long gone. Who takes a picture of a light fixture? They only got the replacement paid for once they miraculously found an old photo with the original fixture in the background.

Sure, you can hire professionals to help, but the insurance companies will get you on the little stuff - in the range of not worth enough to hire someone to fight over it, but worth enough to mind not being reimbursed.

That said, I have twice made homeowners claims with my current homeowners insurance (Nationwide) - one for a leaky pipe thing and one for a leaky roof thing. The adjusters were good and fair. Cut a check no fuss. One for more than the fix actually cost.

Overall, I have had good experiences with my insurance claims. We have had to file claims for disability, long term care, fire, uninsured motorist, so many things. All experiences were far less painful than I thought they would be. The long term care adjuster even found additional money for us. We have been paid out far more than we have paid in, and would be financially ruined without it. As a result I am a bit of an insurance junkie - earthquake insurance? Check. Pet health insurance? You bet. Umbrella policy? Heck yeah.

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4389

Our homeowners insurance, Chubb has very specific rebuilding codes in addition to meeting local codes. There was definitely more added than we would have ever thought of. Had we used a normal contractor we would have gone with price. The adjuster knew Chubb, had a list of contractors ( higher end) who knew they could not cut corners and acted as GC. Worked for us. Our house gained in value as cracked ceiling and walls needed full repair due to water damage.
I would keep Chubb as long as we have a home. If I had a condo I might go for lower cost insurance.

4390

Our neighbor was concerned with the undamaged parts of the home with what was ‘behind the walls’ - any other area where something was done wrong. He wasn’t concerned about the rework - he could check as that was going on.

We have had more ‘cosmetic’ damage home claims, and have had good work done by contractors/subs/people off insurance list – and have hired some directly for other work.

New construction sometimes has subs hired that they have to complete the job with the agreed price - and the contractor may not have screened/overlooked some of these subs and the people they actually have do the work.

One of the contractors off insurance list has built in profit right up front with their quote - and that has worked for us. They seem to keep their employees too.

4391

We are pondering making the first withdrawal from our 401K or Roth. Retired last September, but we still have a pension and income from a DST. Seems early to do it (59 1/2), but I think insurance is going to total our boat, and we would like another one, but don’t want to borrow for it.

If we did this, I know the typical wisdom is to withdraw from your 401K first as opposed to accessing your Roth, but we sold a rental this year and will be in a high tax bracket. Plus, our fantastic investment advisor for our Roth is retiring, has us in a relatively high cash position right now, and I don’t want to make new investment decisions!

Feels weird to do this, but maybe we want to spend some now instead of saving it for the memory care facility. Any thoughts?

4392

^^Oh nooo! :frowning:

I would definitely consider using some of the money now. :slight_smile: Hard to give advice not knowing the entire picture. Can your financial guy run some “what if” scenarios for you?

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4393

10%? Well
woohoo. That means I’ll get $25 more per month. My benefit (due to the offset and windfall provisions) is less than $250 a month. I’m hoping the increase will pay my IRRMA.

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4394

I’m assuming you maybe have another pension? For my Dad the extra 10% will help a lot. Last year’s SS went up a lot too ( can’t remember what %). For Seniors with oil heat could be the difference between them being cold or ok. I’m just thinking about those on fixed incomes with limited assets. Inflation hits them hard.

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4395

In our previous home, the GC’s electrical sub for a remodel was one of his relatives. You couldn’t tell him anything, much less count on him to read instructions. He installed a switch that was rated much lower than the requirement for a light/vent fan/heater and we nearly had a fire. The Panasonic CSR I talked to after I had trouble with their fan (and felt the switch get hot) couldn’t emphasize enough that we needed to replace that switch immediately. When H opened it up it was scorched.

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4396

No building inspector checking this work?

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4397

You might be surprised by how lax some building inspectors can be, particularly during construction boom times. I called the inspector who signed off on the final (didn’t get to see the earlier inspection reports) and he agreed there were problems but he was overruled by his boss who said the builder claimed everything was corrected. I guess we’ll find out over time.

At our previous home, I called the building dept. after discovering some major problems and two county inspectors came out. Their excuse was that it was a big house and it wasn’t unusual to miss a few things. We also had hired our own inspector and he screwed up as well. Their liability is limited to the cost of the inspection, which he refunded. We spent thousands correcting wiring, ducting and more.

4398

Bummer about the boat!
As long as you can access the ROTH without any penalties (you’ve had account 5 years, not sure what else) then I think it makes sense to take from the ROTH this year, and then you can probably do a ROTH conversion in a year when you’re not in a high bracket, if you choose to. BUT, another option is to take out a small loan and if you have money “laying around not earning much” use it, realizing you can take the ROTH money later. Reason I suggest taking a small loan Is I have heard it can actually be harder to get credit once you’re retired, so having a recent loan may help if you need credit (or a high credit score, like to get a new credit card) later.

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4399

Yeah, it’s likely to be totaled. But it’s a small, old boat anyways. Don’t really want to ask the financial guy, he’s not actually our advisor, but invests our Roth. He’ll likely lecture us for pulling money out.:grimacing:

4400

I definitely would get someone to guide you with your investment picture and how to handle moving forward on the boat purchase. IMHO you can always borrow what you need to if you found the ‘boat of your dreams’ and want to purchase it now. If between now and the end of the year you have good advice from someone looking over your situation and guiding you on the financial and tax implications. You can always pay off the boat loan early, or spread it out as needed with your tax situation.

Did you want to buy the boat with what you received from the rental, or is that money already spoken for?

Correct in spending off 401k on low tax years, and you have time between now and 72 to shift from 401k to Roth IRA as appropriate so that when RMDs take place, you are at a good point with that.

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4401

We do have a decently sized HELOC, so we could use that. But rates are going up quickly, so we really don’t want to access it. That is a good thought, we could scrounge up what we have on hand, and only access the Roths if needed. There’s a comfort factor in having cash available, but the Roth should be pretty accessible, so maybe we should think of that more as cash in hand.

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4402

Well, in the spirit of original question of this thread - however much we need to retire, I sure hope we have it, because I retired at 59, and husband will be officially retired in the next couple of days, at 62.

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4403

For me this stuff is part psychological. We have a “lot” of cash, but we kind of forget about it, and we don’t want to spend it all

My husband even wanted to budget for savings in retirement. Um
 it’s draw-down time buddy!

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4404

We already paid off much of our mortgage with the sale of the rental, and paid for a kitchen remodel. Hadn’t planned on our boat being totaled, though, otherwise we wouldn’t have paid off so much of the mortgage. I’m sure any advisor would say to do it, because we can live off our pension if needed. It just feels uncomfortable to access it so soon.

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4405

Congrats to you and your husband for taking the step!

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4406

Sounds like a discussion I had with my husband before he retired. Thank goodness he’s far more relaxed about our spending now and not stressing out any longer.

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4407

It can be extremely difficult emotionally to go from am accumulator for 5/6 decades to being a spender. And that emotion can have a big impact when deciding whether to to wait to 70 to claim SS, when the best NPV of the future SS cash flows – + survivor benefit – is clear.

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