Retirement questions

AKBill said:
I have 4 years active Navy well 3 years 11 months and 29 days and 10 years reserve in USNR. I was hoping to get VA to cover some of the medical.
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Unless you're indigent or have a military disability, its not likely.

Medicare A&B +Medigap, or one of those Medicare Advantage plans will be the way to go.
 
AlleyCat67 said:
Social Security is pay as you go. Even if the trust fund runs dry, about 70% of benefits can be supplied by payroll taxes.
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You are 100% correct in that it's pay as you go. That is why the government had so much trouble getting people to cash SS checks when they first rolled out the program. Few thought they deserved the money. The government renamed the program in an attempt to make the SS more appealing to a society loath of handouts.

You said, 'even if the trust funds dry'. The trust fund is dry. It has been since the 90s. During surplus years, the government spent surplus funds on other programs and then placed an IOU into the trust fund. I'd be willing to bet the majority of the population is oblivious to this fact which is why we continue to hear bogus dates like 2033.

I have no idea if your 70% number is accurate. All I know is that for the last 20+ years, SS revenue is well below SS outlays. The program is insolvent now.
 
For VA benefits you can only earn $2860 a month (34,171). Not many people can live on 34% their pre retirement ($100k) income
 
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Sac Arrow said:
I've always thought that I would need about $5M to retire without impinging on the principal. But, with the runaway inflation we are experiencing, I don't even think that will be enough.
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Sac Arrow said:
Maybe in 'recent years' but in the last couple... ouch.

And I don't go off published indices. I go off of what things actually cost. Gas, food, housing.... seriously through the roof. At least here.
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I believe the inflation is the result of the pandemic, as it seems global in nature. Colleagues 'round the world are telling me about it.

You live in CA...housing and gas has always been through the roof there :). All joking aside, I note the thread where autogas costs the same as Avgas there. It hasn't been so bad in Nebraska.
 
MICHAEL MAHN said:
You are 100% correct in that it's pay as you go. That is why the government had so much trouble getting people to cash SS checks when they first rolled out the program. Few thought they deserved the money. The government renamed the program in an attempt to make the SS more appealing to a society loath of handouts.

You said, 'even if the trust funds dry'. The trust fund is dry. It has been since the 90s. During surplus years, the government spent surplus funds on other programs and then placed an IOU into the trust fund. I'd be willing to bet the majority of the population is oblivious to this fact which is why we continue to hear bogus dates like 2033.

I have no idea if your 70% number is accurate. All I know is that for the last 20+ years, SS revenue is well below SS outlays. The program is insolvent now.
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Here’s a reference:
https://feeds.aarp.org/retirement/s...will-social-security-be-around.html?_amp=true
 
AlleyCat67 said:
Here’s a reference:
https://feeds.aarp.org/retirement/s...will-social-security-be-around.html?_amp=true
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If you look at the total amount of $ SS has taken in, and compare that to the total $ SS has dispensed, it will take until 2023 for the program to turn up side down. That much I agree w/ you. However, that assumes there truly is a "trust fund" where surpluses have been stored. There is no such surplus. Surpluses have been used to offset deficit spending. So when in 2022, when SS doesn't have enough funds to cover outlays, there is no surplus to draw upon. We must borrow the money. I'd be willing to research this point more if you contend my information is incorrect. However, I don't think I am. Politicians do not want to admit they have completely mismanaged tax payer funds.
 
Retirement is a learning curve. It's steep. Hopefully i will learn enough about it to do it successfully, but so far its been brutal. I've only been retired for 3 yrs, and still getting curves thrown at me. Just got another big one from Medicare. Gotta love the gubermint!
 
kayoh190 said:
Aren't you single? WGAS if you impinge on the principal? I can't think of much worse than kicking the bucket with 5M in the bank. :p
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I thought we had conversated on that, but uh, not exactly.
 
Clip4 said:
For VA benefits you can only earn $2860 a month (34,171). Not many people can live on 34% their pre retirement ($100k) income
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Doable if you spend $100k that’s largely taxable assets (e.g. bank CDs, or securities [at a non-retirement brokerage account] that don’t have a lot of capital gains).

Alternatively, if you spend proceeds of borrowing against house or against brokerage account.

Either way, the source of funds is such that the funds are not reported as income for tax or other purposes.

This tactic is common for qualifying for ACA subsidies in early retirement.
 
I'm retiring next year at 58 and it's been a long planning, saving and investing period for me. Going to be seriously ****ed off if I die next year.:D

That being said, I have a long list of things I'm looking forward to doing instead of working and having those things to get up and do are really important to a happy retirement.

I've found this gents blog interesting. https://www.theretirementmanifesto.com/blog/
 
NoHeat said:
Doable if you spend $100k that’s largely taxable assets (e.g. bank CDs, or securities [at a non-retirement brokerage account] that don’t have a lot of capital gains).

Alternatively, if you spend proceeds of borrowing against house or against brokerage account.

Either way, the source of funds is such that the funds are not reported as income for tax or other purposes.

This tactic is common for qualifying for ACA subsidies in early retirement.
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How do one do this if their retirement assets are in IRA and 401k accounts?
 
Oldmanb777 said:
Retirement is a learning curve. It's steep. Hopefully i will learn enough about it to do it successfully, but so far its been brutal. I've only been retired for 3 yrs, and still getting curves thrown at me. Just got another big one from Medicare. Gotta love the gubermint!
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You could check prices on the exchange for people age 64, that might change your perspective.
 
MICHAEL MAHN said:
If you look at the total amount of $ SS has taken in, and compare that to the total $ SS has dispensed, it will take until 2023 for the program to turn up side down. That much I agree w/ you. However, that assumes there truly is a "trust fund" where surpluses have been stored. There is no such surplus. Surpluses have been used to offset deficit spending. So when in 2022, when SS doesn't have enough funds to cover outlays, there is no surplus to draw upon. We must borrow the money. I'd be willing to research this point more if you contend my information is incorrect. However, I don't think I am. Politicians do not want to admit they have completely mismanaged tax payer funds.
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https://www.americanactionforum.org...icare-and-social-security-trustees-reports-4/
 
My financial guy is disappointed I'm not carrying a mortgage. But it's comforting not having a mortgage and I couldn't see taking out a mortgage just to invest the money.
 
As for taking SS, that's easy. All you have to do is tell us how long you plan to live.

But I suggest you continue working until your home mortgage is paid off, without touching your savings or IRA.
 
NoHeat said:
Doable if you spend $100k that’s largely taxable assets (e.g. bank CDs, or securities [at a non-retirement brokerage account] that don’t have a lot of capital gains).
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I believe he mentioned that his income is in the 100k range. That includes taxes and retirement contributions and some money he spends because he works. He needs to sit down with his bank and cc statements and look at what exactly he spends money on to gauge his ongoing cash-flow needs in retirement. It'll be a fraction of the 100k.
 
weilke said:
I believe he mentioned that his income is in the 100k range. That includes taxes and retirement contributions and some money he spends because he works. He needs to sit down with his bank and cc statements and look at what exactly he spends money on to gauge his ongoing cash-flow needs in retirement. It'll be a fraction of the 100k.
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True, but remember, withdrawals from IRAs are taxable at regular income rates. If things keep going the way they are, regular income tax rates may increase substantially (regardless of what a politician may tell you).
 
Seriously get out of the US when you retire. I plan to live in a very low COL country where $500/mo make you the 1%. Cheap good food, health care is sanely priced and you no longer have to put up with the rat race. Philippines is popular. Many Asian countries have large ex-pat retirement communities
 
Oldmanb777 said:
I've only been retired for 3 yrs, and still getting curves thrown at me. Just got another big one from Medicare.
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Curious. What curves? I've been retired for over 7 years with no curves and still years short of medicare. Am I missing something?
NoHeat said:
This tactic is common for qualifying for ACA subsidies in early retirement.
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FYI: you still need income to qualify for ACA otherwise you fall under medicaid or too much and you lose both subsidies. The latest is around $13K to $51K to qualify for a single person which if your state allows medicaid extension changes the lower end up to the $17K range or so. Two people is $21K to $69K.
Pugs said:
I've found this gents blog interesting. https://www.theretirementmanifesto.com/blog/
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Here's another site. It taught me the basics on "financially independent retired early" (FIRE): https://www.early-retirement.org/forums/
Clip4 said:
How do one do this if their retirement assets are in IRA and 401k accounts?
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If talking about ACA you need to stay within the above limits which you should figure out beforehand. I retired the same year ACA went live and because no one knew what it would cause I got caught in that BS. After 3 years I intermixed my cash and investments and found a workable medium to have affordable premiums and keep my investments on target. If planning retirement today its pretty much defined what you need to do.
 
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pfarber said:
Seriously get out of the US when you retire.
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You ever actually lived in a foreign country for an extended period? And where are you going to keep your money?
 
MICHAEL MAHN said:
... The trust fund is dry. It has been since the 90s. During surplus years, the government spent surplus funds on other programs and then placed an IOU into the trust fund. I'd be willing to bet the majority of the population is oblivious to this fact which is why we continue to hear bogus dates like 2033....
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Might want to take a look for yourself. The last I looked, the combined OASI/DI trust funds held over $14.9 Trillion in investments.

https://www.ssa.gov/cgi-bin/investheld.cgi

The problem is, as we begin sometime in the next few years to pay out more than we take in, those trust funds will get spent down. Last I heard the OASI trust was projected to be gone by 2033. When that happens, Social Security payments to retirees will will come from current payroll taxes and will have to be supplemented by congressional appropriations. That's what the whole argument is really about, fixing social security so that doesn't happen. But, its so unpopular to "touch" social security in any way, the politicians have just stood in the middle of the road like deer in the headlights.
 
JOhnH said:
True, but remember, withdrawals from IRAs are taxable at regular income rates. If things keep going the way they are, regular income tax rates may increase substantially (regardless of what a politician may tell you).
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How does that have a bearing on the question at hand: How to bridge the two years until he is medicare eligible and able to start SSI without taking a beating.

RMDs dont kick in until he is 72, so he doesn't have to draw from his deferred accounts right now. He has about 200k equity in his home, if he was to get a heloc while he still works and draws on that to cover his 50k living expenses, he will qualify as 'poor' from an income perspective and be eligible for a subsidized ACA plan once his cobra ends. Once he has Medicare A/B and starts getting SSI for beer money, he can start drawing from the deferred accounts at a rate that keeps him in a good tax bracket. He can also refi the house and roll the HELOC into the main mortgage. As he hits 72, his RMD on 1.2M is $46,875. Between that, a small company pension, a few $$ from the Navy and his SSI, he'll be in good shape.
 
Pugs said:
I'm retiring next year at 58 and it's been a long planning, saving and investing period for me. Going to be seriously ****ed off if I die next year.:D

That being said, I have a long list of things I'm looking forward to doing instead of working and having those things to get up and do are really important to a happy retirement.

I've found this gents blog interesting. https://www.theretirementmanifesto.com/blog/
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Congratulations! 57ish is my target full retirement goal as well.
 
If I were you I would definitely wait the year for medicare. Sounds like you could have the house paid of in a year too...
 
weilke said:
How does that have a bearing on the question at hand: How to bridge the two years until he is medicare eligible and able to start SSI without taking a beating.
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It doesn't. It was merely a comment on your post.
weilke said:
That includes taxes and retirement contributions and some money he spends because he works. He needs to sit down with his bank and cc statements and look at what exactly he spends money on to gauge his ongoing cash-flow needs in retirement. It'll be a fraction of the 100k.
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JOhnH said:
True, but remember, withdrawals from IRAs are taxable at regular income rates.
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wilkersk said:
Might want to take a look for yourself. The last I looked, the combined OASI/DI trust funds held over $14.9 Trillion in investments.

https://www.ssa.gov/cgi-bin/investheld.cgi
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Lol.

It says that they are empty right at the link you posted:


The table below shows the investments held by the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. Today, the trust funds hold only special issues. At times in the past, the funds also held publicly traded securities backed by the Federal government.

Calpers or any other retirement fund contains things that can be sold by the fund. The government can't sell the 'special issues' that they put into the 'fund'. They are strictly a tool to move money from the left pocket to the right pocket, they are not anything of value.
 
MAGI and IRMAA, the twin ******* can really hammer you. Punishment for have a little bit of financial success in your life. Success that you worked very hard for and managed well enough to try and have a stable decent retirement. Trying to get out of the assets of the second job I worked for years, has us paying, BIG $$$$$
 
TCABM said:
Yup. One reason we are intending to hang it all up professionally at 63. Our plan to set aside a year’s worth of income as additional savings to help us get to there from here.
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What am I missing here. If you are still making a full income in the IRMAA range, the 200 or 300 /month going to the .gov rather than your employer plan would not seem to be a major factor in the decision how long to work.
 
weilke said:
Lol.

It says that they are empty right at the link you posted:


The table below shows the investments held by the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. Today, the trust funds hold only special issues. At times in the past, the funds also held publicly traded securities backed by the Federal government.

Calpers or any other retirement fund contains things that can be sold by the fund. The government can't sell the 'special issues' that they put into the 'fund'. They are strictly a tool to move money from the left pocket to the right pocket, they are not anything of value.
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MICHAEL MAHN said:
@wilkersk @Clip4
https://www.fedsmith.com/2014/04/21/trust-fund-money-already-spent/
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weilke said:
Lol.

It says that they are empty right at the link you posted:


The table below shows the investments held by the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. Today, the trust funds hold only special issues. At times in the past, the funds also held publicly traded securities backed by the Federal government.

Calpers or any other retirement fund contains things that can be sold by the fund. The government can't sell the 'special issues' that they put into the 'fund'. They are strictly a tool to move money from the left pocket to the right pocket, they are not anything of value.
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If you guys really believe this is how money works, I hope you have your bomb shelter's built and well stocked. Because, the more people that become convinced of this, the sooner we'll all be playing "The Walking Dead" for realz.
 
weilke said:
What am I missing here. If you are still making a full income in the IRMAA range, the 200 or 300 /month going to the .gov rather than your employer plan would not seem to be a major factor in the decision how long to work.
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I’m retired .mil, no employer health plan. Wife will retire a fed employee.
 
wilkersk said:
If you guys really believe this is how money works, I hope you have your bomb shelter's built and well stocked. Because, the more people that become convinced of this, the sooner we'll all be playing "The Walking Dead" for realz.
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If the .gov held an auction tomorrow to sell off items held in the trust fund (similar to how they would sell treasury securities), what items from the trust fund would the government be able to sell ?


That IS how money works. It is a tool to trade things of value, something that can't be sold has no value.
 
I just love this topic. Why is there so much of “go hire a financial planner” advice and we seem hesitant to openly talk about details. There are so many variables blah, blah, blah.

Go research it. Average life expectancy in the US is 78.8 years. Life expectancy has not moved much in the past 30 years but pushing out max retirement benefit has. How long has your family tree lived? Are you healthy and take good care of yourself? We are a product of genes from prior generations so be honest here.

Most, not all, planners want to sell you something, either investments or their services. Wall St wants to keep you investing. All these investment houses (TD, Fidelity, Schwab, etc) want to keep you investing. They all went zero commissions to make it easy to stay in the game. It’s business, and their business.

The govt wants you to wait as long as possible for one reason - delay payouts. The govt loves “kick the can down the road”. There are plenty of calculators and graphs that show what collecting at various years will pay and when do the lines intersect. And guess what - they are intersect around the age of 78. Imagine that. Get your SSI statement and graph your specific numbers. It’s not hard.

When to collect - do you think you will be as active at 75 as you will be when you are 65? Don’t think so. In your early retirement years you will want to be more active and that likely means you will want more resources. By taking earlier can I invest and make interest off that? I’m still investing my money by using SSI resources. This also influences when to take. Health care is a crap shoot as who knows what 5 years out will look like.

Many, not all, are simply not educated enough to make this decision and my advice is do research on your own first. And validate what you read. Then decide if you need professional advice. You may. But you may also be able to navigate. Don’t just run and hire a planner without getting yourself educated first.

Your retirement goals (be realistic what do you want to do and what that will cost), your assets, your savings and investments, other income (part time work for ex) your health, your debt, and your ability to stick to a budget are what you need to think through. Answer these and it will provide a lot of clarity on what is best for you. It’s not an absolute number but rather a strategy.

I have thick skin so let the feedback begin.
 
TCABM said:
I’m retired .mil, no employer health plan. Wife will retire a fed employee.
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While I agree that it is not fair having to pay extra for something that you already paid for during your working life, if you are pulling 250 or 400k a year in retirement, the $300 extra a month for IRMAA seems hardly a number to fret about.
 
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