Retirement Question

[California]

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.

Re IRA withdrawals affect SS: I think when you are drawing SS, then taxable withdrawals from an IRA can increase your base taxable income to a level where part of your SS becomes taxable. In that article I referenced in post #70, scroll down to about the twelfth comment below the article. 'Joe Taxpayer', another financial author, discusses this and references an article he wrote.

As for MRD's from your various tax-deferred retirement accounts: The MRD applies to each account. In some cases you can pool accounts and figure MRD on the total, in other cases each account needs its own MRD annually. I recommend what I did: as I approached MRD age I had Fidelity pull in the funds from my other IRA's. (They will do this for you upon your written instruction). With everything at Fidelity they send you an annual advice letter stating this year's MRD, you don't need to figure anything.

However ... I screwed up the first year. Before kids we had been putting the maximum annually into 457's. (The same as IRA's except they were established for nonprofits and local/state government employees). I requested a MRD from my Fidelity account that was large enough to also cover my MRD obligation on the 457. Then later that year I requested the 457 trustee to close my 457 and send the funds to Fidelity to add into my Fidelity IRA. To my surprise Fidelity credited part of the funds to the IRA and part to 'converted to taxable'. They said I hadn't taken a MRD from the 457 before closing it so they were obligated to account for the funds that way upon receiving the transfer. Then later the 457 trustee sent me a 'revised 1099' declaring part of the funds they had sent over would be considered the annual MRD for the closed 457, a taxable withdrawal. So now I had two 1099's declaring the same $10,000 as taxable withdrawal, a boost in reported taxable income for the year that is double what it should be. I wrote an explanation and filed it with my 1040 this year. We shall see how this turns out ...

What I learned: The different types of IRA's and similar plans were established with slightly different rules and not all have been conformed to any common standard. So pooling your tax-deferred funds into a single master IRA account before MRD age will save you headaches.

 

[randy41]

https://www.irs.gov/Retirement-Plans/RMD-Comparison-Chart-(IRAs-vs.-Defined-Contribution-Plans)

this compares rmd rules

 

[QRTRHRS]

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?

Those up front medical insurance costs are deductable as opposed to the co-pays and incidentals which are if you are extremely low income and pretty sickly to reach the percent of income.

 

[MoPops]

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.

If things get so frustrating at work, I'll hang it up. I had heard about Christian Healthcare. I had thought it would be a good choice. I had not thought about it being a significantly more economical choice. You can expect to be hearing from me, if I don't stick it out to 65..

 

[txdon]

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.

Is it true it only covers pre-existing with a ridiculously high deductible.

I think they are mostly looking for healthy Christians.

 

[k0ua]

Is it true it only covers pre-existing with a ridiculously high deductible.

I think they are mostly looking for healthy Christians.

No, not true, there is a pre existing waiting period. If your pre existing is a maintenance condition, like high blood pressure, non insulin diabetes, and something happens to you like a blood pressure breakthrough for instance , and you have to go to the hospital it will cover it as if it was a new condition. This forum is not the best place to go thru all the ramifications of the coverage.

 

[txdon]

This forum is not the best place to go thru all the ramifications of the coverage.

Yep you are probably right, each insurance will have different deductibles and different ways they handle pre-existing. However, I thought that the stipulations of pre-existing were eliminated with Obama-care, but I see they are still used.

 

[ch1ch2]

I got a pay raise when I retired. Kind-of.
As i worked and got raises, I tried to put the extra money into savings/investments. As I reached retirement age I was putting over 35% of my pay into savings/investments. I was living on less than 65% of what I made due to all the deductions.
My pension paid 68% with less deductions. Now my retired bring home pay is greater than my working bring home pay.
To top that off is the return on my saving/investments. If I took the principle out over 30 years, it would equal close to the 35% I was putting in or the 32% cut in my pay. (that make sense?)

So not I am retired with 50 hours a week more time and so much to do I need 100 more hours a week.

 

[buckeyefarmer]

My outlook for retirement is not that good, but I also tried to put pay increases towards retirement, and live on my past pay level. Snowing today, so I stayed home to practice retirement. Unfortunately with college costs, I will be working a few more years.

 

[drajj5]

$$$- not a problem if everything paid off...but health insurance / dental/ prescriptions/ vision coverage until 65 is a BIG problem !!

Read through several pages and found this.......

I plan on keeping everything paid off, I did acquire debt with a purchase of a, "Investment home". This should be owned free and clear in 5 years. I understand that there could be unforeseen health issues. I am hoping someone could expound on the (BIG problem) that is mentioned above. I am healthy and never frequent a Dr's office, is the cost that high? Should I set aside money for insurance cost?

Reason for this specific question; 'I plan on retiring at 57'. Certainly I could make it without significant health issue until the age of 65 - Fingers crossed! Maybe I am under thinking it.