Well... Tomorrow's the big day.. "R" Day!

[dodge man]

I’ll throw out another idea. Do you like to travel. We’ve been all over the US and Europe twice.

 

[ultrarunner]

When I was working the employee bus (remote minesite, no personal vehicles allowed) left the parking lot at 0430 hours. I was usually logged in on the computer in my office and working by 0545. Depending on what was happening that day the bus might have me back in town by 1800 hours - or 1930 hours. So yes, a long day. But usually had to work only 4 days a week.

But after having to get up at 0330 every morning for so many years it got to be such a habit that even now, 9 years into retirement, I still wake up around 0330 and start my day. No alarm clock needed!

I wake at 3 with the alarm off on my day off… if I’m off 2 or more days the first alarm clock 3 am is the hardest…

 

[WM75Guy]

Congrats on retirement. It is an adjustment. Understand change to a retirement lifestyle takes some time. After 2 years I still wake up at 0600. Sleeping late doesn't occur very often, it would be nice if that changed. Plenty of projects to keep me busy, I wonder how I ever did them when I was working full-time.

 

[ericm979]

My good friend and colleague of 30 years worked his last day today. I think he will struggle more as he remained almost strictly technical and had little mangerial duties.

I was mostly technical. I rarely had direct reports, though I was on the management team for most of my career. I'm not missing work AT ALL. I have not written a line of code since I retired last year. Your friend may be different of course.

There's plenty of other problem solving type things on my plate, all of them in the physical world.

 

[Bocephous]

Less than three months to go for me til that 'R" day. 10.5 years in Florida state corrections and 20 years in the Feds at penitentiarys and I would not recommend that line of employment for anyone. Waiting for and reacting to violence is what that job is/was for me. The last two years I've bid on a post that doesn't have me around the vermin inside anymore which was a wise decision on my part.

I have a lot of hobbies and the tools/toys to keep my entertained and busy. I'm burning my sick leave off now, only working three days a week. Going to church and restocking on supplies I can't buy online and have shipped will be my only outings for a while until I esteem my mind defragged enough to deal with people I don't know.

 

[ponytug]

Less than three months to go for me til that 'R" day. 10.5 years in Florida state corrections and 20 years in the Feds at penitentiarys and I would not recommend that line of employment for anyone. Waiting for and reacting to violence is what that job is/was for me. The last two years I've bid on a post that doesn't have me around the vermin inside anymore which was a wise decision on my part.

I have a lot of hobbies and the tools/toys to keep my entertained and busy. I'm burning my sick leave off now, only working three days a week. Going to church and restocking on supplies I can't buy online and have shipped will be my only outings for a while until I esteem my mind defragged enough to deal with people I don't know.

Good luck on your transition to retirement. You sound as if you have a good handle on yourself, which is, I think, a great start for life going forward.

All the best,

Peter

 

[part-time-Farmer-NC]

Are you going to change your name to Full-Time-Farmer-NC?

Hmmm. Good Idea. Except the full time part, I'm hoping I can do more just not equivalent to full time. That farming can be hard work. Wifey continues to "think to much" about projects for me. I watched her this morning as she looked at a book shelf behind my recliner... I could almost see the wheels turning as she scanned it up and down then staring at some part or another. I stopped her with No need to find me more work to do, I can fill my own schedule. She's been out of work about 11 yrs now and spends way too much time "helping" me with stuff to do.

 

[part-time-Farmer-NC]

I’ll throw out another idea. Do you like to travel. We’ve been all over the US and Europe twice.

Well... Since you mention it, yes I do have a desire to do more traveling. I hope this doesn't sound or come off as braggadocios.

When I was in my mid 30's I was traveling quite a bit for work so I made it bucket list item to see all the 50 states, check. Then all the continents, check. Seen all but two Canadian provinces.
Been to several countries along the way, mostly before I turned 55.

Been to Alaska a few times both hunting and fishing. Took the wife fishing with me and yes she caught the biggest fish. Took her on a fishing trip in Wa state for lake trout and yes again she caught the biggest fish there too.

Rode my goldwing to California, Alaska, Yellowstone/Idaho, Niagara Falls, across NZ (upper south island) well "hired" a bike there.

Been fortunate to go on some mission trips to Panama, Mexico, Montana, NC. I'm interested in doing more mission trips.

I wanted to go see where my dad was stationed in Vietnam. I went to where he was stationed in Europe and met my mom. Also forgot I want to go to the place my grandfather was from what used to be Smyrna Greece. In the Ottoman uprising it became Istanbul. I'm planning to make it out there one day.

Planning a turkey hunt in SD this spring with my grandson. May plan a deer hunting trip next year in a Illinois, Indiana, Ohio or similar.

 

[dodge man]

There are lots of big deer in Western Illinois.

 

[part-time-Farmer-NC]

Lots of good advice here. #1 - keep moving, #2 - don't go crazy with spending. I know retirees that had to go back to work after a couple of years, they'd spent down their retirement.

My wife and I were fortunate to retire at 55, (9 years ago). We'd been debt free for 5+ years, that allowed us to retire early. We've done a little travelling, worked on a bunch of projects around the house and do a fair amount of volunteer work. My blood pressure dropped significantly in retirement. We both have decent pensions, investments and healthy 401k's that have not been touched. We consider the 401k's our pre-funded long term care, chances are at least one of us will need LTC.

We don't know how we got everything done when we had to work full time. We have absolutely no regrets in retiring early. Every day is Saturday.....

Wifey and I are not crazy spendthrifts. Prior to deciding I kept/keep asking myself how much is enough. I really mulled that over for some years. We are debt free minus the gas/electric/taxes/food and medical expenses. She being about 17 months younger than I and in better health. She has issues with long walks so doesn't want to travel to places I am planning to go to.

I figured with SS from now both of us it was not too far off from what I brought home after excluding all the money I was putting in for retirement. She hadn't gotten a paycheck in 11 yrs.

We seem to mange fine with that. If we go over my estimated amount we've been able to take it out of savings but even then it was fairly rare. We also have our farm as some income but mainly to help paying the taxes and buying new plants/trees etc for the farm. Unfortunately we both like growing new varieties of fruits. We are now at a point where it may not make sense to buy more but we still do.

Now I'm thinking it may be a challenge to not have high RMD's when the time comes.

 

[part-time-Farmer-NC]

There are lots of big deer in Western Illinois.

I had planned to check out the public hunting areas and make a trip out there during the rut or post rut. Wasn't sure which side of the state has accessible public lands etc. I have done numerous DIY hunts of the years and prefer that to guided hunts.

 

[dodge man]

Our finical adviser is worried about the tax implications of our RMD’s. He had us buy some Roths but then we are paying the taxes on 401k withdrawals now. They have you coming and going on the taxes.

 

[dodge man]

I had planned to check out the public hunting areas and make a trip out there during the rut or post rut. Wasn't sure which side of the state has accessible public lands etc. I have done numerous DIY hunts of the years and prefer that to guided hunts.

I’m not sure how much public lands there are that allow deer hunting in Illinois. My impression is not a lot but I don’t know for sure.

 

[Snobdds]

I could retire now at 44, but there is no need to. A person needs to work for both mind and body. I am planning to never retire. I will always have rental houses to tinker on.

My dad still does a few consulting contractor jobs a month, just to keep him busy. He is 74. He has 12 rental houses that keep him busy also.

It's true, the only thing that will kill you dead is if you retire to the couch.

Retirement finances are simple...you need to have free cash flows. There should really be no debt and all things should be paid for without a loan. Use dividend producing stocks to replace the loan feature from a bank. Dividends and savings should be able to fund anything.

 

[drssg]

Our finical adviser is worried about the tax implications of our RMD’s. He had us buy some Roths but then we are paying the taxes on 401k withdrawals now. They have you coming and going on the taxes.

If you run a projection that assumes a constant tax rate, there is no difference between paying now (with a ROTH) vs. paying later (with a regular IRA).

If the concern is that the future RMD will be so high that it throws me into a higher tax bracket, I would consider that to be a high-class problem. I wouldn't sweat it.

 

[WinterDeere]

If you run a projection that assumes a constant tax rate, there is no difference between paying now (with a ROTH) vs. paying later (with a regular IRA).

I'm not following you. The proposed benefit of the Roth is that the taxable amount is much smaller at time of deposit, than with a standard IRA at time of withdrawal. Yes, your tax bracket may be higher at time of desposit, but for most this difference is many times smaller than the change in taxable amount after many years of growth.

 

[drssg]

I'm not following you. The proposed benefit of the Roth is that the taxable amount is much smaller at time of deposit, than with a standard IRA at time of withdrawal. Yes, your tax bracket may be higher at time of desposit, but for most this difference is many times smaller than the change in taxable amount after many years of growth.

Yes, you pay less taxes with a Roth, but the end result of your after-tax nest egg works out the same. By delaying the tax payment, you invest the tax money and receive gains on it for decades, before eventually paying taxes.

Do the math. Your wallet will tell you that the two options are equal. The deciding factor is the tax rate at the time that you pay the taxes.

 

[EscapedSuburbia]

I'm not following you. The proposed benefit of the Roth is that the taxable amount is much smaller at time of deposit, than with a standard IRA at time of withdrawal. Yes, your tax bracket may be higher at time of desposit, but for most this difference is many times smaller than the change in taxable amount after many years of growth.

Do the math both ways and you'll see that if you assume the same tax and growth rates it doesn't matter whether you pay the tax now (via Roth) or later (via Traditional). When you put money in Roth you're investing less money because the government takes its cut up front. The only way you end up with a different after tax amount when you withdraw from a Roth vs Traditional is if the tax rate changes between the time you invest and the time you withdraw. Many (most?) people make less money in retirement so are in a lower tax bracket when they retire. For them a Traditional makes sense. People who saved and invested religiously can end up having a similar income in retirement in which case it doesn't make any difference whether they did Roth or Traditional. Roth makes sense for people who will have a higher income in retirement than when working.

EDITED TO ADD AN EXAMPLE:

Let's say you have $20,000 and put it in the Traditional IRA so you invest the entire $20,000 for 10 years at 8% return. At the end of 10 years the investment has grown to $43,178. If you withdraw it and pay 12% in taxes ($5,181) you've got $37,997 left to spend.

Now instead let's say you decide to put your $20,000 in a Roth. You pay 12% tax ($2,400) so you've got $17,600 to invest. If it grows the same 8% a year and the end of 10 years it will grow to $37,997. So you'll have the same amount to spend as if you'd put it in Traditional.

 

[paulsharvey]

In theory, you would assume your taxable income is Lower once you retire, though. Typically, for the average person, your highest years will be 45-55, dipping some 55-65, and dipping significantly in the 65-75 age.

With gov pensions, there is often a misunderstanding, average of last 5 years, vs best 5 years, and for Many, the best 5 years are Not the last 5 years.

 

[WinterDeere]

By delaying the tax payment, you invest the tax money and receive gains on it for decades, before eventually paying taxes.

Okay... I see what you're doing there, now. Makes me feel a little bit better for giving up on Roth conversions.

Because of the income eligibility limits applied to Roth IRA contributions, I used to have to play the whole game of starting new conventional IRA's each year to convert to Roth, as there was no income limit on conversions. But it was such a hassle that I didn't keep up with it, after the first few years.