don't wanna 7500 the thread but then again the thread is "retirement questions" so here's a question.......
how many of you who are retired have ever claimed a higher income when retired than when you were working?
I'm not sure yet, but I'm going to be close.
When I turned 60 my wife threw a party. Several friends flew into town to help with the feast. The first words I was asked then was "Why are you still working?" I didn't have a good answer then and I'm not sure I have one now, except, "I never thought about not working." Followed closely by, "Can I afford it?" My friend, a Piper driver scoffed, "You can."
I built a spreadsheet. It was simple at first, and now manages my retirement income planning and spans 26 sheets, keeping everything tidy. I built a budget predictor taking into account a modest university annuity plan, social security at various ages, various other income streams and came up with a number. I then had it calculate 401k RMDs at various predictive return models and came up with a number. If I didn't do anything about it, I was going to get hammered at about age 77 and be right back where I was. It was time to retire, but I still took two years to decide and another year to execute. We had no debt, we had the assets, and we had the available income streams to turn on.
At 63, I pulled the plug and lasted about 6 months on the street, then took a 3 week temporary job in my primary field then was asked if I wanted to fly EMB175s up and down the east Coast. I thought it was a joke, but no joke, even though I'd turn into a pumpkin in 30 months.
Instead I was asked to help a group in another state re-develop a failing center, which was supposed to be a 3 week gig and turned into a 5 year major project. I retired again, in 2022, and now I'm so busy with projects I think I should go back to work full time so I'll have more free time. It did allow me to put the Dynon Skyview HDX in the C182, and Flint Tip Tanks so I could make the bi-weekly 700 nm flight non-stop faster than the commercial services could get me there, and at 25 hours a month flying that was cool and a good replacement for an office in the EMB175 at FL360.
How did this mess up my financial plans:
63: quit my day job, paid obscene COBRA premiums for health care which were lower than O-Care, and for far better coverages, and I could keep my doctor. Converted to Self Employed which has its own tax benefits.
63.5: Took the temporary 3 week gig which turned into nearly 6 years. Plan was to do max 22-24% tax bracket, below IRMA cliffs 401(k) internal roth rollovers which my plan permits each year to minimize the downroad RMD hit. Since I was now earning an income approaching my day job, the excess funds all went into the pretax, and the max went into back door roth iras, the pretax problem got worse.
Health Insurance in a new state was suddenly affordable since I could get it through the professional society and avoid Ocare all together and was comparable to my previous plan and get spouse covered which will continue as I aged into medicare at 1/4 the cost of OCare, and I could not only keep my doctor but go to any doctor anywhere. The new state bonus: very low income taxes, very generous charitable and 529 tax benefits, compared to the old state which is starting to make California look cheap.
64: Borrowed max from 401(k) Roth sub allowed to finish off the mortgage; Paid by moving tax inefficient securities from taxable accounts in kind to pay the 401(k) loan payments, allowing me to grow the roth at the cost of cap gains from moving the securities.
65: Medicare age; spouse now on society plan BCBS
67: Retired again; living off taxable accounts while making max 401(k) to 401(k) Roth IRR conversions at the top of the 24% bracket. This will reduce my RMD by well over $35,000/year. Will continue this until 73 instead of 70 because they raised the RMD age. Tax savings will be around $10k/year. (lower bracket, less RMD basis)
68: BCBS discontinued spousal coverage policy; spouse too young for medicare: O-care atrocious. Went with a "medishare " program; we're healthy at 1/8th the cost.
70: SS arrives: continuing 401k roth IRR and max below IRMA levels.
71: Borrowing on margin from taxable accounts to avoid cap gains at the moment for home improvement; net cost after brokerage returns about 4% in annual interest.
73: RMDs start. Spouse eligible for early SS (calcs show age 62&1month is ideal for our combined); and we will be significantly below our working income, but I had to pay a lot of income tax in the non-working years to get there due to the conversions which are taxable as ordinary income.
I have postponed the inevitable tax issues until we are well in to our late 80s, but by then I'll have a couple of less loose screws because they are missing and may need some long term care stuff. But we're skiing for a month this winter, just completed a 46 day trip to the Arctic Ocean at the end of the Dempster Highway in the NWT, about 9000 miles 2000 on dirt roads at 40km/h (30mph) ate musk ox burgers and watched the sun circle us on the solstice. Went to Starbase TX to see the Elon Musk Show and camped on the beach with our little teardrop for 3 weeks, plan to hike the Collegiate Peaks and the Needletons in Colorado this coming summer, and spend some money fixing up the house and barn. I'm healthy so waiting for 70 to get SS was a good thing, both of my parents lived into the mid 90s, and my spouse's parents are in their mid-late 80s. And we'll keep going from there. Maybe a 3000 mile bicycle ride, or a sailing cruise along the NE seaboard, or the great circle tour in the 182.
