retiring

[KennyG]

The 25x guideline will never dip into the principal if you can maintain a 4% return AND (and this is the rub) your expenses don't increase with inflation. However, today it's pretty hard to find 4% without some risk to the capital (even bonds have some risk of capital loss). Assuming you have a mix of investments, it will probably exceed 4% over time but you need some margin and some of that gain is just keeping up with inflation.

 

[kenmac]

when finished buying things bought for this farm. And I began to take SS. I'm going to cut back on taking out of my IRA.
I think I can live pretty good off $3500.00 per mo. If I can't ,I can always tell my money manager to send me a few $$ more

 

[Travelover]

The 25x guideline will never dip into the principal if you can maintain a 4% return AND (and this is the rub) your expenses don't increase with inflation. However, today it's pretty hard to find 4% without some risk to the capital (even bonds have some risk of capital loss). Assuming you have a mix of investments, it will probably exceed 4% over time but you need some margin and some of that gain is just keeping up with inflation.

Correct in general. Inflation is a major risk that is easy to overlook. Since I retired 12 years ago, what cost a dollar then costs $1.24 now. Over a 30+ year retirement that erosion is significant. The second big risk is sequence of events. If there is a major crash early in your retirement, like 2009, you have to sell more shares of stock to meet your needs. The effect of that loss negatively compounds over the rest of your retirement. If there is the same level of crash late in your retirement, it doesn't affect you nearly as much.

Holding enough cash and bonds to allow not selling stocks helps mitigate a bad sequence of events, but holding too much cash and bonds won't allow you to keep up with inflation.

 

[Travelover]

when finished buying things bought for this farm. And I began to take SS. I'm going to cut back on taking out of my IRA.
I think I can live pretty good off $3500.00 per mo. If I can't ,I can always tell my money manager to send me a few $$ more

One thing to plan for is RMDs (required minimum distributions) when you are age 70 1/2 and older. It might make sense to take from the IRAs now so the additional tax hit is smaller once you have to start the RMDs. You can also do Roth conversions to get that money out of the IRAs, if you are in a lower bracket right now. Hopefully your money manager has discussed this with you.

 

[kenmac]

One thing to plan for is RMDs (required minimum distributions) when you are age 70 1/2 and older. It might make sense to take from the IRAs now so the additional tax hit is smaller once you have to start the RMDs. You can also do Roth conversions to get that money out of the IRAs, if you are in a lower bracket right now. Hopefully your money manager has discussed this with you.

we have discussed this. I have a little more than 10 more years to go.
My hope is they will raise the age, or perhaps do away with RDM's all together, which I doubt they will. At some point, my government wants their fair share of my money.

 

[Jstpssng]

we have discussed this. I have a little more than 10 more years to go.
My hope is they will raise the age, or perhaps do away with RDM's all together, which I doubt they will. At some point, my government wants their fair share of my money.

Unfortunately as we get deeper and deeper in debt, I fear that their "fair share" is going to get bigger and bigger, as they eye the assets of those who worked hard and saved wisely.

 

[RickB]

My short term plan is to maximize the tax bracket we are in by converting traditional IRA funds to Roth up to the threshold of the next bracket. Federal income tax rates for most of us are low historically speaking and I will gamble that they will rise sooner than later. The 0% rate on capital gain is another current advantage that might not last forever.

 

[zzvyb6]

Count on and plan for this: Socialism is coming. The IRS will confiscate ALL your IRA's, bonds, SPIAs and pensions. Then hand all of us our 'fair share' per month. Open your eyes to the campaign slogans.

You're gonna need a BIGGER mattress...

 

[buckeyefarmer]

Americans think $1M is enough for retirement, here are top 1 cities where it'''ll go furthest | Fox Business

 

[kenmac]

Count on and plan for this: Socialism is coming. The IRS will confiscate ALL your IRA's, bonds, SPIAs and pensions. Then hand all of us our 'fair share' per month. Open your eyes to the campaign slogans.

You're gonna need a BIGGER mattress...

I think if that happens, you can forget about a mattress. They will need to ramp up the number of body bags, because this would cause a war from within.
There is no doubt the your elected officials would love to get their hands on more of your money though