Retirement questions

Bell206 said:
And so do I. But I think what's more important is when you ask that question: before or after retirement. While I believe that answer is very subjective to the person, just like what is airworthy, I've found where a person is in their journey affects that answer. However, I think the core question when it comes to retirement is which risk do you prioritize first: having enough money or having enough health. For me, I accepted a lot more risk that my money would be there, than if my health would be for the simple reason I could manage the money risk. To me it is/was all about managing the risk vs managing toward a target wealth number. As they say money can't buy you an extra day of life.
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Exactly!!
 
With all this discussion, just maybe I’ll go buy that Bonanza I have wanted, but my practical side always says no to. LOL
 
judypilot said:
So one question here is, is $1M enough? I think it can be. Coupled with Social Security, reasonable investments, and a conservative withdrawal rate, it could be. I guess it depends on whether you want to leave money to your heirs and how expensive you want to (or have to, depending on where you live) live.
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Assuming he’s going to remain active in aviation, I’d say $2M is minimum.
 
Rcmutz said:
With all this discussion, just maybe I’ll go buy that Bonanza I have wanted, but my practical side always says no to. LOL
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Buy it ! It's a good investment. Just like waterfront property, 'they are not making any more', so the value must go up. Right ?
 
weilke said:
Buy it ! It's a good investment. Just like waterfront property, 'they are not making any more', so the value must go up. Right ?
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Maybe you identified what is keeping me from finding a financial planner. One of my criteria is someone that will tell my better half that a plane is good investment.
 
NoBShere said:
Maybe you identified what is keeping me from finding a financial planner. One of my criteria is someone that will tell my better half that a plane is good investment.
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The positives of a plane (motorcycle, boat, RV, etc.) won't be found on a balance sheet...
 
My financial adviser has a few type ratings. A Baron and a really nice boat. Only one divorce.............. Come to think of it, maybe i'm paying him too much ;-)
NoBShere said:
Maybe you identified what is keeping me from finding a financial planner. One of my criteria is someone that will tell my better half that a plane is good investment.
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weilke said:
Coming here for financial advice is as reasonable as going for substance abuse counseling in a Bar.
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Maybe, maybe not. My most astute financial advisor was my mom. I attribute much of my success at building wealth to her. Even "amateurs" can be pretty astute sometimes. The problem is figuring out which ones are!!
 
judypilot said:
Maybe, maybe not. My most astute financial advisor was my mom. I attribute much of my success at building wealth to her. Even "amateurs" can be pretty astute sometimes. The problem is figuring out which ones are!!
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Interesting. It was my mom who encouraged me to learn about investing and managing my own money. And they say that women of that generation rarely handled the money. I'm guessing from what you have posted that you and I are of similar ages.
 
Everskyward said:
Interesting. It was my mom who encouraged me to learn about investing and managing my own money. And they say that women of that generation rarely handled the money. I'm guessing from what you have posted that you and I are of similar ages.
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I'm 71, so you can do the math. My parents used to get cold calls from brokers. Inevitably, my mom would answer the phone and they'd ask for my dad. My dad would say, "You'll have to talk to my wife. I don't even know how much money we have."
 
judypilot said:
I'm 71, so you can do the math. My parents used to get cold calls from brokers. Inevitably, my mom would answer the phone and they'd ask for my dad. My dad would say, "You'll have to talk to my wife. I don't even know how much money we have."
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I remember my mom doing the accounts and putting out cash for my father weekly. It's not as if he was uneducated; he was an engineer. But he had no interest in managing the household finances. I'm 64 but I was a late baby, so my mom would have been 104 if she was alive.
 
A network can be amazingly valuable. Hard to do. Jealousy can easily obscure the value. I was lucky in that regard. I have friends that I worked with for many years that are willing to talk finances openly. And no one got really jealous. We all knoew what each other made, and what our wives did, or didn;t do. And how many divorces each had or didn;t. Things that worked or didn't work for them. In my crash pad, there were several people really good at finances. Several were really good at cooking, but that's another story. We had some great discussions about what works and what doesn't. Everyone is different, but the ideas and discussions were great learning experiences. Having that network is really valuable.
 
Everskyward said:
I remember my mom doing the accounts and putting out cash for my father weekly. It's not as if he was uneducated; he was an engineer. But he had no interest in managing the household finances. I'm 64 but I was a late baby, so my mom would have been 104 if she was alive.
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LOL! My dad was an engineer, too! I don't know if mom gave him an allowance--I don't think so. But then again, they made all significant purchases together. Except the Chevy Malibu my dad became enamored with. She was dead set against it, as I recall. I guess that was his mid-life crisis. The Malibu didn't last long because it's not very practical, and my dad, above all, was practical.
 
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I was always told to use the available funds whenever you can. Anything you leave goes to your wife and her "young buck" boyfriend to spend.
 
Something to think about if you plan to work while taking SS. SS is double taxed, and possibly triple taxed or more. So you paid into SS with "after" tax dollars, then it may be taxed again when you receive it. if you do some work after retirement your SS benefit may be taxed. If you make too much then it could totally wipe out your SS benefit. I think (but not sure) that goes away after you are 70 yrs old. And some states (like mine) tax your SS.
 
AKBill said:
Net worth is IRA's and 401K plus house. House is valued at about $250K.

Compelling reason to stay is saving for retirement and medical insurance.
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Bill, I can't tell you what to do, I can only tell you how I would approach it myself.

You need to figure income and expenses, and eliminate as much unknown as you can within both.

Income:
Pension: : unknow, but I think they are legally required to tell you what it would be.
Investment income: Take the amount that you have in savings/IRAs/etc and figure you can use about 4% of that every year. so i fyou have 1.2M (not counting house) then that would be 48K/year
SS: You know what this would look like now s 2 years. It probably doesn't change the "should I retire now or in 2 years?" but is worth figuring if you should take SS now, at 65 or at 66. Once you figure out if you're retiring, you can play the strategies out to see which strategy is best on that.
AK Permanent fund payments: call it $1,000/year
Spousal SS: $$
Spousal permanent fund: 1,000

conservatively, you're probably looking at
Your SS: 2,500/mo
Permanent fund $100
Pension: $500??
Spousal SS: 1,000
Spousal permanent fund: $100
Investment takeout $4,000

so SWAG would be $8,200/month income, but I'm totally taking a wild swing at a bunch of your numbers. My guess would be you're living on a lot less than that now.



Expenses:
Can you figure out what you guys actually spend in a year now
Then add some extra for medical between now and 65
then add a little extra for any medical costs from 65 onward where medicare and medicare supplemental insurance might not be quite as good as your current company medical
 
Oldmanb777 said:
if you do some work after retirement your SS benefit may be taxed. If you make too much then it could totally wipe out your SS benefit. I think (but not sure) that goes away after you are 70 yrs old. And some states (like mine) tax your SS.
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The penalty for working while collecting SS is $1 of SS for every $2 you make over a certain amount (in 2021 that is $18,950), and it ends at your full retirement age (FRA). After that there is no penalty. There's a different limit for the year you hit FRA, and then some way that they supposedly prorate your SS after FRA to pay you back what was withheld.
 
The $1 of every $2 is the penalty.

You still pay Fed, State and SS!

What’s left?
 
Magman said:
The $1 of every $2 is the penalty.

You still pay Fed, State and SS!

What’s left?
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The "penalty" which is withheld is out of the Social Security that you're collecting, so you don't also pay Social Security or Medicare on that $$. You would pay Federal income tax on up to 85% of what you receive, depending on your "combined income" (AGI + tax-exempt interest + 1/2 of your Social Security income). It's way too complicated to try to explain here.
 
judypilot said:
You said exactly what I was thinking as I read this thread. I am a geologist. I retired 10 years ago, but I'm still a geologist and I'm still doing geology. I'm just doing it on my own terms. I love it because I love being outdoors and doing geology gives me all the motivation I need to keep moving and stay in shape, which is more important the older you get. I also do a lot of what we loosely call service; currently I'm president of the foundation associated with one of my professional societies. It's nice to continue to use all the skills I built over my long career.

On another topic, I think sometimes people make the mistake of thinking the money they retire with is all they'll ever have. Invested properly and spent wisely, it's not, it will keep growing, even despite the occasional setback in the economy. So one question here is, is $1M enough? I think it can be. Coupled with Social Security, reasonable investments, and a conservative withdrawal rate, it could be. I guess it depends on whether you want to leave money to your heirs and how expensive you want to (or have to, depending on where you live) live.
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If you are happy on Medicaid living in what ever end of life care facility that will pay for, yes.
 
Half Fast said:
Then I realized that it's okay for who you are to be tied to your profession without being tied to the particular job you hold. I am an engineer. I am still an engineer even though I no longer practice at Lockheed. "Engineer" is a big part of who I am; I dedicated a sizeable chunk of my life to learning my profession and it influences how I think, how I act, etc. That's not a switch I can turn off, and I don't even want to turn it off. I'm quite proud of being an engineer and I think that's healthy.
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:yeahthat: Engineering how I earn my living, but also who I am... most of my hobbies are engineering related, too.

MooneyDriver78 said:
Assuming he’s going to remain active in aviation, I’d say $2M is minimum.
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I guess it depends on what level of aviation, there's a big difference between a $30K experimental or classic and a $500K Cirrus.

Everskyward said:
I remember my mom doing the accounts and putting out cash for my father weekly. It's not as if he was uneducated; he was an engineer. But he had no interest in managing the household finances.
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That's me, I make the money and my wife manages and spends it. :blowingkisses:
 
Oldmanb777 said:
If i had known how much work retirement was, i would have kept working.........:)
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One of several items I was told to expect after retiring was one day you'll wonder how you ever had time for your job given how busy you are during retirement. So true.
 
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Greg Bockelman said:
what I wonder is what are they doing that makes them so busy?
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The only way I can explain it is that when I was working I had X number of free time so I only did what I HAD to do within that time frame. After retirement, I had 24/7 free time so I do all the things I never had the time to do plus 100 other items I never even thought about doing. Its the gift that keeps on giving. For example, I never had time to attend the local college baseball games. Last year I attended all 55(?) games in a 4 state area. Etc. Etc. Etc.
 
Greg Bockelman said:
what I wonder is what are they doing that makes them so busy?
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Having a blast!

My wife just retired at the end of August. She's already in that mode. Plays tennis at least twice a week; practice and matches. Works out with me in the morning, and then does a boot camp workout some days. Occasionally she works out with me, then boot camp and tennis in one day.

I know others than do lots of volunteering. Or visiting their kids and grandkids.

Basically they are doing the things they enjoy, but didn't have time for while fully employed.
 
Bell206 said:
For example, I never had time to attend the local college baseball games. Last year I attended all 55(?) games in a 4 state area. Etc. Etc. Etc.
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That sounds fantastic, but it also makes me worry that unlike the conventional wisdom, I'll end up spending *more* money in retirement than I do right now. Thus my complete inability to even hazard a guess how much money I'll need (much to my financial guy's chagrin).
 
kayoh190 said:
I'll end up spending *more* money in retirement than I do right now.
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FWIW: I've not found that to be true in my case. For example, the total cost of my baseball extravaganza was less than a 1/3rd of my yearly fuel costs when I was working. The key is to be brutally honest with yourself on what exact amount you are living off now. You might be surprised. Without that figure you can't plan sheet.
 
kayoh190 said:
That sounds fantastic, but it also makes me worry that unlike the conventional wisdom, I'll end up spending *more* money in retirement than I do right now. Thus my complete inability to even hazard a guess how much money I'll need (much to my financial guy's chagrin).
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You may spend more initially in retirement. But covid totally changed that, because you can't do what you wanted to do. So after the "honeymoon" of retirement is over you will spend much less. It's something like this. You no longer drive as many miles, you no longer have kids destroying things like the couch and the car etc. You won't spend the money working that you once did. Even lunch and the coffee fund adds up when you are working. My per diem never covered all my work expenses. Meals at home seem to be less exciting, so you do less interesting meals. You don't need new clothes. Since you are always home, doing "Date night" becomes sitting in front of the tv, instead of Ruth Chris. The new drill press, or chop saw, is no longer important. after all, you have already bought most anything anyone could want. Well except that Staggerwing that is on my bucket list. Many other things I can't recall at the moment. But I'm a senior and maybe having a senior moment.
 
I think I spend more in retirement... on health insurance and travel (before COVID). But I took a number of expensive international vacations that I didn't take when I was working. I knew I was going to do this, though.

On the other hand, I'm 100% glad I retired when I did.
 
Yes the first few years are usually spent doing more and that is expensive. Then it tapers off. Our health care insurance premuims sky rocketed.
 
Bell206 said:
FWIW: I've not found that to be true in my case. For example, the total cost of my baseball extravaganza was less than a 1/3rd of my yearly fuel costs when I was working. The key is to be brutally honest with yourself on what exact amount you are living off now. You might be surprised. Without that figure you can't plan sheet.
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I think I'm living on about the same amount I did before I retired with one exception: I'm not contributing to my retirement fund. I maxxed out my contributions and then some while I was working; every time I got a promotion or a pay raise, I just contributed the extra to retirement. So that is many AUs that I was "spending" (actually saving, of course) before retirement. And with Medicare and Medicare supplemental, I'm paying quite a lot less for health care, so I may in fact be spending less than I did when I was working. (For the record, I think Medicare and Social Security should be means tested, which means I'd get a lot less, but for the time being, they are not, so I'm doing well on that front.)
 
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