Got an S.S. question, please?

gwstang · May 15, 2018

"Old school men looked out for their spouses"

Amen to this! I told my wife of 41 years that it is my honor and a pleasure to serve her all the days of my life or hers. Now, if she won't drive me crazy....I have one more week to work and I will be free at last from that! Don't know how she is going to like me being around allllll the time,though...lol

Jstpssng · May 16, 2018

gwstang said:
"Old school men looked out for their spouses"

Amen to this! I told my wife of 41 years that it is my honor and a pleasure to serve her all the days of my life or hers. Now, if she won't drive me crazy....I have one more week to work and I will be free at last from that! Don't know how she is going to like me being around allllll the time,though...lol

Good for you! I hope that you remain healthy enough to enjoy your retirement. :thumbsup:

dmccarty · May 16, 2018

Travelover said:
If you retire before Medicare age, one reason not to take SS right away is to keep your taxable income below the ACA (Obamacare) thresholds. Depending on your other income, living off after-tax money can qualify you for big health care subsidies.

A second consideration is if you have a lot in IRAs or 401(k)s, you start required minimum distributions (RMDs) at age 70 1/2. This can throw you into a higher tax bracket, so it can be advantageous to spend down pre-tax money in IRAs to minimize the tax torpedo from RMDs. That torpedo is even worse for a widow, as they get bumped into a higher tax bracket.

In our case, I don't think Obamacare will be in its present form when we retire, so it is all but impossible to plan around. Flip side, IN OUR CASE, we do have some money that should allow us to pay for health care irregardless of the state of Obamacare, and if our plans go right, it won't matter any way since we won't be living in the US. One should consider Obamacare if they are close to retirement.

We also won't have much after tax income to live on but we hope to be living well below the income levels for Obamacare which should places us in a no tax/low tax position. Money in most of our retirement funds will be taxable so getting SS early does not make a difference tax wise and gives us some time to deal with future RMDs.

Later,
Dan

Travelover · May 16, 2018

dmccarty said:
........... Money in most of our retirement funds will be taxable so getting SS early does not make a difference tax wise and gives us some time to deal with future RMDs.

Later,
Dan

Another option for dealing with future RMDs is to make Roth conversions from your regular IRAs prior to age 70 1/2, especially if you are in a low tax bracket. One needs to play with different scenarios to see how much you can convert yearly without kicking in higher taxes or messing with other income based benefits like Medicare B premiums.

dmccarty · May 16, 2018

Travelover said:
Another option for dealing with future RMDs is to make Roth conversions from your regular IRAs prior to age 70 1/2, especially if you are in a low tax bracket. One needs to play with different scenarios to see how much you can convert yearly without kicking in higher taxes or messing with other income based benefits like Medicare B premiums.

Exactly.

Just hope our plans go as planned.

As they say, The Best Laid Plans of Mice and Men....

:shocked::laughing::laughing::laughing:

Later,
Dan

California · May 16, 2018

dmccarty said:
Just hope our plans go as planned.

As they say, The Best Laid Plans of Mice and Men....

Nobody knows the future but the only constant in investing is the 'time value of money' principle. ie any reasonable and well-thought-out investment will grow to a surprising sum, over a long time. People don't conceptualize long periods of time as a 'lever' that multiplies an initial investment.

My own choice was to put most savings years ago into S&P 500 mutual funds, while my wife has chased every favorite of the day. Her analysis was good but it didn't exceed my no-brain, steady-as-you-go preference.

Analysts say my choice will exceed 85% of other individual investors. I've read that Trump would be wealthier today if he had done this with his inheritance instead of his strategy of promoting his Trump brand. That's not a political statement, just a comparison of development strategies.

Basic investment strategy is that it is more risky to be out of the market than in, over a long time, because when out you miss the rare periods of unexpected increase. My S&P jumped up surprisingly over several years, 25% one year and more the following year (early 90's) and I realized this had met my retirement goals years early. Retired at 54. 20 years later we're still comfortable.

My point is: understand the Time Value of Money principle. Especially if you're young and have many years ahead for a small investment to grow.

And back on-topic: my Roth / conventional IRA proportions aren't optimum for where we are today but I think this reflects how difficult it is to forecast the future 20 years out.

Ford850 · May 16, 2018

This is at least the third time I've opened this thread expecting to see a discussion about SSQA. You'd think I would remember this was a SS discussion after the first time. Apparently I'm approaching SS age quicker than I realized.

dmccarty · May 16, 2018

California said:
Nobody knows the future but the only constant in investing is the 'time value of money' principle. ie any reasonable and well-thought-out investment will grow to a surprising sum, over a long time. People don't conceptualize long periods of time as a 'lever' that multiplies an initial investment.
...

Absolutely. I started retirement saving as early as I could, not as much as I wanted, but I started. There was not much money in the retirement accounts for many years, then it suddenly seemed like there was a bit of money. A little while later, that money started to get serious. :laughing::laughing::laughing: All it took was TIME.

We have drilled this into our kids and hopefully it sticks.

Later,
Dan