Retirement Question
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MoPops
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Edit.. If I sound jealous, it's because I am. Ha!
I can sure tell you are in California. 15K ea month at 52 is amazing. To try and do that with a 401K with investments in the market is extremely difficult for anyone else. Then get free HC for life.
I have to admit, I'm almost shocked to see this. There's no way the pension fund and healthcare funds for the municipality can cover that. I would be very surprised to see how this program will be sustainable in another 30 or 40 years. Don't get me wrong, it is a fantastic, amazing program, if you are in it. It just seems a bit out of balance compared to real world. I also appreciate the life threatening jobs you guys perform. Even factoring that into consideration, it still seems amazing.
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MoPops
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FYI,
I'm 61, 13 months away from having everything paid off. Have IRA, 401K, even dumped some $$ into an annuity to treat like a pension. My advisor tells me I'll have enough to retire, with a bit to spare. (Factoring in inflation and taxes.)
However, I haven't done the spreadsheets you guys talk about in regards to current spending. I really need to do that. I've just been ball parking it, rounding everything up. I will have to take more than a 50% cut in total pay though. That's what's holding me back. We save a lot now, and have been for a while. We also get hammered in taxes, and have for a while. Ha!
So the 50% cut won't be a real 50% cut. Hopefully less taxes and savings.
But we still like to spend $$ for fun. That will have to change. I'm on my 7th and 8th motorcycles over the last 12 years. (Not big Harley's, I ride dual sport bikes. My last upgrade was from a 07 to a 09 for $2K)
I'm just not ready to give up that freedom yet.
That and the cost of healthcare. I've got to wait until 65 to call it quits. Buying my own is too expensive.
Some good advice here. Thanks to the OP that started the thread. I've managed to read through it all this morning.
I'm 61, 13 months away from having everything paid off. Have IRA, 401K, even dumped some $$ into an annuity to treat like a pension. My advisor tells me I'll have enough to retire, with a bit to spare. (Factoring in inflation and taxes.)
However, I haven't done the spreadsheets you guys talk about in regards to current spending. I really need to do that. I've just been ball parking it, rounding everything up. I will have to take more than a 50% cut in total pay though. That's what's holding me back. We save a lot now, and have been for a while. We also get hammered in taxes, and have for a while. Ha!
So the 50% cut won't be a real 50% cut. Hopefully less taxes and savings.
But we still like to spend $$ for fun. That will have to change. I'm on my 7th and 8th motorcycles over the last 12 years. (Not big Harley's, I ride dual sport bikes. My last upgrade was from a 07 to a 09 for $2K)
I'm just not ready to give up that freedom yet.
That and the cost of healthcare. I've got to wait until 65 to call it quits. Buying my own is too expensive.
Some good advice here. Thanks to the OP that started the thread. I've managed to read through it all this morning.
buckeyefarmer
Epic Contributor
I was up late last night running some numbers. I have 20 yrs of records in quicken, so the yrly spending numbers is pretty easy to get. I use master and sub categories, like utilities, then sub cats under it for elect, phone, cell, internet, trash, etc..
Anything i buy at grocery store is all grocery, things at walmart,costco are all household, except some big ticket items like a new appliance i enter under personnal property. Dining out is sub under grocery. It got too time consuming to break out groceries from walmart and costco, so i think my way averages out. Gas is a top category. Insurance is top, then type is a sub.
I break out my pay, so i have exact numbers for everything that comes out.
Paid off my 1st mortgage last yr, still have some heloc debt. Tractor paid off, 2 vehicles paid off, but need a new one.
Will be paying college costs 5 more yrs, which now takes all my mortgage money.
I want to retire now, but will have to go at least 5 more yrs if i cover kids college.
max out my 401k, so college is not touching that.
Cost of health ins before 65 is my concern if i retire before than.
I have a deferred retirement waiting for me at 60, from my first career....
Can't wait to lower those taxes.
Anything i buy at grocery store is all grocery, things at walmart,costco are all household, except some big ticket items like a new appliance i enter under personnal property. Dining out is sub under grocery. It got too time consuming to break out groceries from walmart and costco, so i think my way averages out. Gas is a top category. Insurance is top, then type is a sub.
I break out my pay, so i have exact numbers for everything that comes out.
Paid off my 1st mortgage last yr, still have some heloc debt. Tractor paid off, 2 vehicles paid off, but need a new one.
Will be paying college costs 5 more yrs, which now takes all my mortgage money.
I want to retire now, but will have to go at least 5 more yrs if i cover kids college.
max out my 401k, so college is not touching that.
Cost of health ins before 65 is my concern if i retire before than.
I have a deferred retirement waiting for me at 60, from my first career....
Can't wait to lower those taxes.
ultrarunner
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It really does boggle the mind... and yes, new hires no longer have the same deal... although my friend with the 180k didn't get the same deal as those before him... they had an even better deal in that their pensions were tied to what their rank currently gets paid and yes there are still a lot of them out there.
The study said there are retired law enforcement getting nearly 3 times more that they did working...
Sergeant retires at 50 25 years ago and retirement is 90% of what a sergeant earns in 2015
Several I know took early retirement from municipal jobs... there were big changes coming so they retired to preserve what they had... one lady in park and rec gets $800 more by leaving under the old system and for others it was just having a full medical or not.
RSKY
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I signed up for Social Security last week. Will draw my first check in May. I listened to the advice of somebody that knew what she was talking about and took money out of my IRA for some things. Gave the daughters some. Built an awning in the back yard, Bought a new truck (my old one was bought new in 93, got $800 for it after 22 years of use). Now the stock market has crashed and shares are worth much less.
As to my earlier post about using spread sheets to figure your retirement. At the time I had two 401Ks and my wife had one. I took the one from my last job and figured out how much I needed to make it from 57 to 59.5 years of age. I drew that one out completely. My last check from them was about $50. Then I rolled my second, much larger, 401K over into an IRA. I did not go thru some local yokel but kept it with Fidelity. Didn't see any need to give a local part of my earnings. I draw a monthly check from this IRA and can draw out lump sums anytime I want to. I did all this planning using spreadsheets. So far, so good.
Planning, planning, PLANNING!!!
What you gotta do.
As to my earlier post about using spread sheets to figure your retirement. At the time I had two 401Ks and my wife had one. I took the one from my last job and figured out how much I needed to make it from 57 to 59.5 years of age. I drew that one out completely. My last check from them was about $50. Then I rolled my second, much larger, 401K over into an IRA. I did not go thru some local yokel but kept it with Fidelity. Didn't see any need to give a local part of my earnings. I draw a monthly check from this IRA and can draw out lump sums anytime I want to. I did all this planning using spreadsheets. So far, so good.
Planning, planning, PLANNING!!!
What you gotta do.
ultrarunner
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This thread and preparing for taxes has got me thinking about my overall plan... Social Security and Rent House Income.
HUD just published the new Fair Market Rent for my county and I am woefully under market... the new rent standard released yesterday is up 33%
https://oaklandnorth.net/2016/02/12...n-8-vouchers-an-assist-to-low-income-renters/
Section 8 Fair Market Rent for a 4 bedroom house now tops out at $3,268 per month... I charge $1600
Section 8 Fair Market Rent for a 3 bedroom house now tops out at $2,932 per month... I charge $1500
Section 8 Fair Market Rent for a 2 bedroom house now tops out at $2,103 per month... I charge $1375
I know many want no part of being a Landlord because it is a job... on the other hand it does seem to provide some protection against inflation.
In 1985 my 3 bedroom home was rented to Section 8 for $450 and 30 years later it tops out around $3,000 of course I'm getting half that now.
Seems if I had not got sidetracked 25 years ago to become an employee... simply keeping to my schedule of buying 1 home every 18 to 24 months would far exceed any compensation achieved from all those years working 7 days a week on salary.
Worth mentioning... Section 8 rent is generally considered the bottom of the market... premium homes regularly exceed Section 8 standard...
HUD just published the new Fair Market Rent for my county and I am woefully under market... the new rent standard released yesterday is up 33%
https://oaklandnorth.net/2016/02/12...n-8-vouchers-an-assist-to-low-income-renters/
Section 8 Fair Market Rent for a 4 bedroom house now tops out at $3,268 per month... I charge $1600
Section 8 Fair Market Rent for a 3 bedroom house now tops out at $2,932 per month... I charge $1500
Section 8 Fair Market Rent for a 2 bedroom house now tops out at $2,103 per month... I charge $1375
I know many want no part of being a Landlord because it is a job... on the other hand it does seem to provide some protection against inflation.
In 1985 my 3 bedroom home was rented to Section 8 for $450 and 30 years later it tops out around $3,000 of course I'm getting half that now.
Seems if I had not got sidetracked 25 years ago to become an employee... simply keeping to my schedule of buying 1 home every 18 to 24 months would far exceed any compensation achieved from all those years working 7 days a week on salary.
Worth mentioning... Section 8 rent is generally considered the bottom of the market... premium homes regularly exceed Section 8 standard...
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k0ua
Epic Contributor
What is a huge amount Dan?. the Part B medicare premium is $121.80 per month. or $104 for those that are already on medicare and "grandfathered".. The government gets this. The Medicare deductible is $166 annually. Pay once per year. A typical G supplement for a person turning 65 in their open enrollment ranges from $135 to $180 or so monthly. So you have 121.80 plus lets say 150=$271.80 as a monthly expense that pays for everything related to healthcare except your part B premium of 166 annually. so about another $14 per month
Now we need to talk about your part D drug plan, They run from about $18 to $35 per month for most people. Of course this could be much more if you are very ill and on a lot of expensive drugs. Where are your folks spending so much on?
MoPops
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What would healthcare cost for a couple of 62 yr olds in very good health? I'm just curious. I've never priced it, thinking it would be over $3,500/mo..
ultrarunner
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My understanding is it depends on Income, Geographic Region and Level of Coverage
k0ua
Epic Contributor
Too many variable to help you over an internet forum.. Also don't forget
Christian healthcare.. If you are a Christian. Very affordable, not exactly insurance, it is Christians helping other christians with their healthcare bills. It is nationwide, and growing. I am on it. We are paying about $300 per month for both of us. This is what we will stay with until Medicare age. It has paid for thousands of dollars worth of my wife's medical expenses in the last few years. Contact me if you want more info about it. Oh by the way it does qualify under the ACA as credible coverage, so it takes care of that responsibility.
ultrarunner
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I've thought of looking into the Christian Coverage should I retire early...
I've been lucky... probably spent less than a couple of hours in the Doctor's Office in the last 20 years...
Although cancer does run in both sides of the family and men always go in their 70's...
I've been lucky... probably spent less than a couple of hours in the Doctor's Office in the last 20 years...
Although cancer does run in both sides of the family and men always go in their 70's...
buckeyefarmer
Epic Contributor
Does money in IRA's or 401K's effect your SS payments in the future?
Are minimum required distribution from 401K the same rate as with IRA? I found IRS table for IRA, but it did not specifically say it also applied to 401K.
I've spent the whole day just looking at sources of income, and all the variables. I've squirreled away stuff here and there, and there are so many variables when to take, survivor benefits, etc...., and I haven't even rolled the wife's numbers into the totals yet.
If I want to retire before 62, looks like I will have to take some IRA or 401K money before 70.5, to fill the gap from retirement to 62.
Are minimum required distribution from 401K the same rate as with IRA? I found IRS table for IRA, but it did not specifically say it also applied to 401K.
I've spent the whole day just looking at sources of income, and all the variables. I've squirreled away stuff here and there, and there are so many variables when to take, survivor benefits, etc...., and I haven't even rolled the wife's numbers into the totals yet.
If I want to retire before 62, looks like I will have to take some IRA or 401K money before 70.5, to fill the gap from retirement to 62.
ultrarunner
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I think you have discretion with most expenses... the big wile card is medical and good coverage is expensive and then there is the long term coverage that doesn't get talked about much.
k0ua
Epic Contributor
Always consult a professional. BUT no, the IRA or 401K will not affect your SS in any way. Disclaimer: I am NOT a Social security professional.
TomSeller
Super Member
interesting.
k0ua
Epic Contributor
We don't "sell" it, but If you use my name and number I will get a free month of coverage. You will too if you recommend someone and they take the coverage and keep it for 3 months. You do not have to be an agent to do this.
