50 year old Gramps here is itching to retire.

What's your social life like?

[quote]when you retire you get Medicare

If you're 65.

I retired and never have looked back. It is the only advantage of ageing. The check I get from the government that is.

I don’t think you get Medicare until you’re 67.

You should talk to a financial advisor, or at least get a spreadsheet out and chart it out. I retired at 50. I didn’t anticipate that gentrification of my neighborhood would increase my home value, but also, the cost of all the neighborhood stores. Then I was sued. When that was all over, it was $75,000.

If I move, I imagine my costs will go up, unless I move to less-nice neighborhood. My neighborhood means I should have a net worth of $2 million, probably. I was lucky that the stock market and real estate have boomed for these ten years.

You'll have 15 years to wait to get Medicare if you retire at 50. Unless you have the budget to pay for insurance on your own you'd better keep working.

[Quote] Then I was sued.

What did you do?

R2, under Reagan and Tip O’Neil, they changed the Social Security and Medicare laws for people 59 and younger, today. Normal retirement age for them is 67.

Until then, you used to be able to deduct credit card interest from your taxes, imagine!

R6, it was a property matter. Too long to go into on this site, though I was dying to blab about it when it was happening! As with many cases, we both lost. It was the lawyers who won! Lol.

Wrong, r7. Everyone qualifies for Medicare at 65. You can also retire at 62 and get reduced Social Security benefits.

Medicare is still 65. It's Social Security that you have to wait until 67 to get your full benefit. You can claim as early as 62 or as late as 70 and it's less or more.

[quote] If I move, I imagine my costs will go up, unless I move to less-nice neighborhood.

Since you said your neighborhood got better after gentrification, I assume it was not so "nice" when you moved into it. So if you didn't mind a "less nice" neighborhood then, why are you reluctant now? Because $2M can go a long way outside places like LA and NYC.

R9, Medicare is 67 you filthy whore! Oh, wait, it’s 65. Well, you’re still a filthy whore, just a correct one.

I recommend retirement as early as you can afford it, but make sure you can afford it, if you are going to be worrying about finances your whole retirement then work a couple of more years. Figure out what you will be getting on retirement and see if you can live on that amount for a few months before you take the leap. I love it, best decision I ever made even though it was sort of forced on me.

True, R11. I guess neighborhood niceness is not really the deal breaker. But that’s another matter.

I work with Medicare.. it’s 65 unless you’re qualified as disabled or diagnosed with end stage renal disease.

OP, could you afford a new car?

I bought a used 2005 Honda years ago, and figured it costs me about $4000 a year, including the purchase price amortized over the years owned, but I rarely drive.

Cars are another thing that seem to have gone way up in price. I might try to go without one again, and try Uber and rentals. It’ll certainly be cheaper. Not sure about the inconvenience. I should decide soon.

One thing I regret about retirement, OP, is that I, too, had all my possessions in order, finally, so my after-tax earnings were now going to all go to savings or optional items, finally. All just gravy after 50, for me. Not more necessary items, so it would have been easier to accumulate a bigger buffer for hard times ahead.

Still, my TV and bed are both 10 years old and I imagine will need replacing soon. And then there is my car.

When I retire in 2022 I will have a $55k year fixed pension and $34k year social security. I have assets of approx $200k which is not that much. I will continue to work off the books as best I can.

R18 I'm that is the case, but it seems wrong to pull a pension of $55k a year, plus a generous social security benefit.

Perhaps the US could afford decent healthcare for all if the government wasn't paying out social security to those with good pensions.

One interesting thing is that new technology, I mean my mobile devices, are really expensive. I guess I could do without, but I like them. But I never budgeted for them.

I’m expecting that the next, inevitable recession will be a bad one. Deep and long. As a 50 year old, you might expect a 40 year retirement. In that length of time, there could easily be another financial panic (or two) on the level of the 2008 crash, or even a severe war involving the US mainland. It’s a long time. The last 60 years have been a historical anomaly, I think.

R19, I'm not R18, but, since everyone is having to pay in to Social Security, why should the benefit that a person receives be affected by other retirement money?

R21 Isn't it called 'Social Security' not 'Individual Return on Investment'?

[quote] r19: Perhaps the US could afford decent healthcare for all if the government wasn't paying out social security to those with good pensions.

R19, that’s tricky. Aside from what R18 wrote, I learned that one of the reasons SS survives is that everyone benefits in the manner that they do. If it were means-tested, it would be subject to even more aggressive attacks: Cutting the qualification level, work requirements maybe, drug tests, maybe character tests, in the distant future.

Then people who paid in, but weren’t going to get income from it, would get mad and want to end it entirely.

Just FYI, I pay a larger Medicare premium because my retirement income is above a certain level. I also pay taxes on 85%of my Social Security income, instead of on 50%, so there is some accounting for higher or lower income people.

I originally planned to retire at 50 but decided to see how much longer I can hang in there to build up my savings. It’s been four years and I’m glad I did. Would rather work a few extra years and not drink cheap booze and clip coupons.

R24, how much are you holding out for? I’m always curious on the line between affording only cheap booze and living comfortably.

Not R24, waiting to hear from him...

But it depends a lot on where you live. I was an engineer at a financial company, so rather natural for me to track my income and savings, on a macro level. My income had few sources, and my savings was easy to track, so one minus the other produced spending, roughly. I tracked it over a decade to give me an idea of how I spent.

There are weird differences once you retire, for example, my employer used to get a group rate on insurance. Other things like that.

OP, here’s a big deal, if you might refinance, do it while working! Your income after retiring won’t be enough to get the best rate on a large sum, or whatever. Same goes for buying new, mortgaged property. Retiring will limit your flexibility, so do it before.

I retired a couple of years ago at 57 and I'm sooooo glad I did. I saved like crazy, sold a business and had a paid off house. Part of my company sale was having my health insurance paid for five years which is a huge help. Every day is my own now and it's great.

It’s easier now, with Obamacare. Before, it was possible to not be able to find insurance at any price, or at a truly ridiculous price.

R21 and R22 I have a very generous pension, and am constantly grateful for it. My pension's rules don't allow me to take Social Security. That seems more than fair to me.

[quote] My income had few sources, and my savings was easy to track, so one minus the other produced spending, roughly. I tracked it over a decade to give me an idea of how I spent.

Lol. Talk about a Rube Goldberg approach! Why not just track your actual spending? That would be a lot easier.

R24 here. At least another year. I’ve been able to squirrel away a lot more money but if I go beyond another year I’ll have even more wiggle room and the ability to be more philanthropic.

I know lots of retired people who tell me they’re pretty bored — I do enjoy being challenged at work — and that I have tons of time to retire. Lots of people in my family live long and I’m in great health so it’s possible I could live another forty years, in which case I should keep working...and I should worry about running out of cash.

It is better to take Social Security at 62 than wait for the larger payout at 70 - if you live to 100 you are getting eight more years of checks from the government.

R22, lifelong Democrat here, but it is indeed Social Security, not Socialist Security.

No, R31. Spending has a thousand events to track. For income, I only had one job. I just had to subtract taxes. But I think I just got that info from my tax returns. For savings, I just had to look up my year-end statement at my bank. Plus, there were a few things to jigger, such as large, one time events, maybe. Such as an inheritance, or an insurance loss. But it really was that simple. The trick was writing it down in a spreadsheet at the end of each year, so that it required no research. I did it in the 1990s, before it became so easy to do online. These days, all your year-end savings balances should all be available online. Your income should be on your tax forms.

R33, everything I’ve heard says that you should wait until 67 to collect Social Security. 70, even, as your yearly benefits are larger if you do so. Then, they are fixed. This is especially true if you expect to be longed lived. I can expect to live to be 90. I’m planning financially on 100, just so I make sure not to run out of money when it’s impossible to earn more.

R36 Oh god, you sound just like my mother

R36, don't believe the hype. Social Security does indeed increase if you put it off, but it is all geared towards working out the same actuarially regardless of when you start it. All you have to do is figure it out for yourself on a spreadsheet to see when the break-even ages are. I definitely plan on taking it at 62 since I won't be dependent on it either way and neither parent lived to the break even point.

All dependent on how long you live. My family has generally not lived past 70. And just had a genetic test that shows a specific mutation. So at 50, I’m checking out of the miserable existence of work and ensuring I enjoy 10+ years of life before I die. The retirement racket spawned by privatization - 401k, IRA, “you are on your own, good luck with that” - ensures perpetual insecurity about outliving your money. At some point, you have to risk it.

I took Social Security at 62 when I was still employed (part-time) with a law firm. Before SS kicked in, I got laid off. However, house is paid for. Bills are OK. Car payment still going for 8 months.

If you want to retire early, go for it. But realize that your lifestyle is likely to change. Budgeting becomes a continuing task. And, of course, the lovely "unexpected" things happen - car accident, major illness, etc.)

I'm now on Medicare (advantage plan) which is less expensive than my previous Obamacare plan. Considering all of the various expenses (health care being #1) I can't imagine retiring at 50 without a huge chunk of $$

OP, if you have a 401k, your withdrawals from it are taxed at regular rates.

I’ve been taking small withdrawals from mine, essentially, for the last decade, and converting them into a Roth. Because they are small withdrawals, I usually pay only 10% federal income tax on the conversion. Sometimes 0%, if my deductions that year are really high.

Once you get to age 70, the government forces you to withdraw from your 401k and that can throw you into a higher tax bracket. I’m trying to avoid that by moving as much of it as I can in these little, low-taxed tranches now.

Applies to a 403b and 501c account, too.

R38 is correct. The break-even age is 77. So unless you think you're going to live a lot past that age, you're better off taking SS at age 62.

And the break-even point is even further out, R42, if you figure in being able to take it at 62 and invest it. Well, what you're really doing is using your SS and not removing other investments that you'd have to otherwise. Either way, that amount of money is earning you money which pushes the break-even age in to the 80s. It's 82 and a few months based on my hoped for return.

I was surprised ot learn that even at age 65 when you get medicare ,YOU HAVE TO PAY for part B! It's like $260 a month or something, more if you make a lot more money.

Warren and Sanders never talk about that!

WTF?

Compared to the $1,100/ month I pay now at 50 years old, I’ll take $260 in 15 years.

Yes, only Part A (hospital) is free; Part B (professional) costs a premium. You can find $0 premium Medicare Advantage (private Medicare) plans, but they have larger cost-sharing rules, of course.

2020 Medicare part B premiums are $144.60 monthly; or $202.40 if your modified gross income is more than $87,000. It goes up in you MGI is over $109,000.

R42/R43, does your math apply specifically for your situation only, or does it apply for all situations?

I assume you are basing it on a single person, right? I know it’s more complicated for married couples. SS was designed in an era when women were more dependent on their husbands, so there is some provision where one party can take their partner’s SS income, IIRC. I haven’t researched this as it doesn’t apply to me, so I can’t be certain how this works.

I think they really ought to update this for today’s society. It’s more common to have two income couples, today. I can see averaging the two benefits, but not giving a low earner the SS benefits from the high earner.

It’s easy to think of social security as a back account into which you deposit savings, and later draw it down. But it’s not, at all. It’s an insurance plan. Your SS income is actually coming from people who pay premiums at that time. Likewise, if you are disabled, it pays you income. If you die with dependents, it sends them a check to age 18, later if in college.

The math applies for everyone, but you can do it for yourself. Also, if you are figuring your break-even point based on investing it, that also depends on what average return you want to use which will make it earlier or later depending on what you think you can get. And there is also the potential that they will change the rules in subsequent years and lower the payments based on your assets or other income, etc. If it is all the same actuarially, I'll take it early, thank you very much. It does make a difference if you are the higher earner and think your spouse will outlive you, etc., where they can potentially benefit after you die. Of course, why give them another reason to wish you dead.

R49, it probably doesn't apply to many here, but if you die with dependents, survivors' benefits only go to 18 (or 19 if still in high school). College benefits stopped in 1981, with Reagan.

r19 will have to pay taxes on 85% of his Social Security because a combined retirement income of 89k will put him well over the no Soc. Sec. tax earning limit.

And even if you were eligible for Medicare (you aren't and won't be for almost 2 decades), you still have to pay medical bills. Medicare doesn't cover everything.

If you don't know these basic facts, you are too dumb to ever retire

OP, as per R53, I buy “Gap” insurance, for $129 a month, and it seems to cover everything, except the deductible. I don’t ever see the bill which bugs me, but just a little. In 2020, the deductible is $198. For Rxs, not covered by this insurance,, it’s $435. Rx’s insurance is $42.50 A month or other, as you select.

All these expenses are tax deductible if you itemize.

Do it OP, you could always free lance or work in a part-time capacity if things do not go as planned. I would definitely ditch the car eventually too, if you can get by without.

Catastrophes and worst-case scenarios can always strike and render you unable to work at any time. Fears like these shouldn't prevent us from our dreams.

As a few upthread made reference, there's no telling how short our lives may actually be too.

I'm taking SS at 70 as I come from a large family that has longevity. My analyst recommended this as it's a guaranteed 8 percent per year.

I'll consequently pay down my 401K so 70.5 won't be a hit. Also, if the Secure Act passes, an inherited 401K has to be paid down in 10 years.

I start Medicare in January. I chose a traditional supplement and the cheapest Pat D for prescriptions. All in it's $340/month, a savings of $390/month.

Retired at 59, sold my co-op, and love every minute of it.

If you live in one of the Medicaid expansion states, you can qualify for free Medicaid if you are under 65 and make less than $1385 per month (from earned income, as well as from interest and investments). Surprisingly, they don't do an asset test for income-based qualifications, so you can own a mansion and have millions in the bank and still qualify (though generally, if you have millions in the bank, you'll be earning too much from interest).

R56b can you expand on your post ? I'm confused on the 'pay down" of 401k and also the 8 percent return on SS?

Some insurance experts are now advising that medigap policies are a waste of money if you're relatively healthy. You have to weigh the costs. If, like R54 you're paying $1500+ a year for a medigap policy but on average are going to the doctor infrequently and have no serious health issues, it's obvious that it's much cheaper to just pay the 20% Medicare doesn't cover out of your own pocket than shell out $1500 (or more likely much more for most medigap policies) you're not even getting any benefit from.

It’s all numbers and assumptions. I hate that you just can never know. Spent a lot of time in therapy on this - and ultimately have to accept that you can’t control and have to live with the uncertainty until the day you are diagnosed with that terminal illness. But I do have a responsibility to live now - so I’ve decided I’ll take risk that I’ll be broke at 75 rather than be miserable from 52-65.

The SS at 62 is important. I’ve read that opinion in a few places recently. After years of being told to delay it as long as possible. Given my genetic mutations and family history, 62 makes sense.

My father died at 62. My mother - who never worked (due to the era) - receives like 1/2 of his reduced SS benefit which he had to take early as he had terminal cancer and no income/ job. Mother now lives on $1,100/month - for 20+ years. So whenever I hear the neurotic paranoia of fellow middle aged relatively wealthy gay men, I’ve learned to see it as a luxury problem.

[quote] R59; If, like [R54] you're paying $1500+ a year for a medigap policy (drop it).

You misread. It’s $129, and I deduct it on my taxes, saving 20% of it. So it costs me more like $103 a month, not $1500+.

The $1500+ is YEARLY. So, you're actually paying $1200+ a YEAR. Still a waste of money if you're reasonably healthy and don't have to go to the doctor frequently.

Ok. Thank you.

IMO, I would not try to cut corners on health insurance.

[quote] My analyst recommended this as it's a guaranteed 8 percent per year.

What is guaranteed 8% per year?

R69, For every year you don’t take the social security benefit, your monthly payment after that increases by 8% for the rest of your life.

OP, just move to Palm Springs and find a sugar daddy. 50 is considered "chicken" there.

They say the biggest thread to funding retirement is a recession in the early years, which can force people to deplete principal. It appears we are heading for a recession. Bear that in mind.

[quote] For every year you don’t take the social security benefit, your monthly payment after that increases by 8% for the rest of your life.

No, the 8% annual increases you realize if you don't take SS at full retirement age stop at age 70. So, the most your SS can increase by delaying benefits is 32%.

Unless I just misread what you wrote and you meant that you'll collect whatever the increase is for the rest of your life.

Do what makes you happy. I would love to retire young, as long as I had enough money to maintain what I consider to be a decent standard of living for myself. I am not overly ambitious or career-oriented, and I don't identify at all with people who say you need to work to provide a purpose to your life. There are many ways to find a purpose and if you need work to provide that and give your life meaning and structure, you've probably not got a very happy life IMO.

R58, R66 answered your first question. If I live until 90, I'll get $699K from SS. Had I taken it at 62 and lived until 90, it would have been$499K. Big difference, and I break even for waiting pretty quickly.

I'm living off my 401K, so it's being depleted. That means at 70.5 (soon to be 72 under the Secure Act). I'll have less I have to take out that might increase my income, and therefore taxes and Medicare costs.

Of course, best laid plans of mice and men...

R72, who does that age increase apply to? That’s bad, right?

R69/70, I meant the latter. Sorry if i wasn't clear.

You just want to J/O TO PORNHUB ALL DAY .

R71 - I have never heard someone explicate my belief system so clearly. Thank you. Work brings fulfillment Always reminds me of “Arbeit mach frei” - a fraud perpetrated by capitalism to ensure the greed of overlords and the perpetual enslavement of the working class.

R71, might you just be ignorant about it?

It is actually fun to be responsible for a submarine being launched on time. Or a fortune 50 company’s web site up and running when it’s crapped out. Or saving the day when your boss makes a bad technical decision. Or getting a President’s award for any of the previous.

So, it’s not for you, fine, but don’t denigrate it if you don’t know about it.

[quote] Big difference, and I break even for waiting pretty quickly.

R72, I guess "quickly" is relative. You'll break even around age 80, as noted in posts above. So you're giving up income in your 60's so you'll have more in your 80's. If you figure you're living to 90, maybe that is a good choice for you.

Statistically people die soon after retirement no matter at what age they retire

Some posters are operating under the assumption they know how long they have to live. Major fail. There is something coming for all of us and it is usually the last thing we would suspect at the last moment we expected it. Live in the now. It's all ya got.

Totally agree R80. Though the American system has now been set up to ensure that 98% of us worry about running out of money until the day we die, the challenge is not letting that fear ruin our lives. I have known way too many people who worked until they died - or died shortly after retirement - without ever getting to enjoy life without a miserable job they hated. Quit early.

R73, it's not bad. Under the Secure Act he government will require that withdrawals are made from a 401K at 72 instead of 70.5, giving an additional 18 months to redirect (or spend) that money so one doesn't find themselves in a higher tax bracket when the money must be pulled.

I’ve been working for 8 years to move money out of my 401k now, at lower fed tax rates, rather than be forced to, later, at much higher fed tax rates. I know, a first world problem, but still a problem, and one I want to address, some how. It gives me some pleasure to have figured it out on my own, and done something productive about it.

R81 on the other extreme , people are worried about their RMD equations. " Oh dear, you mean I have to take all this money out of here? , but I really don't need any of it""

[quote] Live in the now. It's all ya got.

How's that working out for you, Chris Watts?

R81, you are assuming that these people hate work. That’s true for many people, but a lot of people like the challenges. I loved my jobs, except for being on-call. But even then, there was some fun in saving the day when things went pear-shaped.

[quote] I’ve been working for 8 years to move money out of my 401k now, at lower fed tax rates, rather than be forced to, later, at much higher fed tax rates.

How can you predict "much higher fed tax rates" later?

You people are tiresome. You're all going to die . Your loot will go to the lawyers and your parasitical relatives. Never seen one of these.

[quote] R87: How can you predict "much higher fed tax rates" later?

tl; dr: my Federal Required Minimum Distribution (RMD) of 401k funds at age 73 will be federal income taxed at as high as 31%, but I can convert small sums every year now, costing me 10% instead.

This is simplified a little. I start with some assumptions. The law today says you must make a RMD yearly, starting at age 73. The amount of your 401k balance at the start of the year, divided by your IRS-determined remaining life expectancy, is the amount required. I assume that this law remains unchanged.

I assume federal income tax rates are the same as today or higher

I assume my 401k saving will grow on average at some particular rate yearly.

Now imagine an exaggerated example with reference to Fed income tax rates: suppose I have $500,000 in my 401k at age 50. At 7% return, it should double in 10 years by age 60, then double again by age 70. That’s $2,250,000 at age 73, and my remaining life expectancy will be about 22.5 years. So, my yearly required withdrawal will be $100,000. Add social security, and my income will be at least $125,000 per year on average. That would be taxed at an effective rate of about 31%.

At a very low 401k balance, say $1000, this RMD won’t change my income much. So, there is a point somewhere between a 401k balance of $1000 and $500,000, (at age 50), that produces this situation where the RMD pushes me into a higher tax bracket. It’s a little different for everyone. (You might run into this if your 401k balance at 50 is, maybe, $200,000 or more).

When I convert 401k funds in small increments today, my tax rate is 10%, instead some higher rate.

50??’ Get back to work you lazy fuck!

R89 good explanation but my takes is thus. At 73 I do not want to be bothered with taxation worries. I have no legacy(kids or estate) I probably won't live past 85. If the rate is 31 per cent , so be it. The rate is there for a reason. The pervasive tax evasion concerns that permeate wealth management is almost criminal. Just enjoy yourself and know your conscience is clear for the pitchforks that constantly attack the wealthy.

That’s certainly your right, R91. I’m an engineer and this is a kind of puzzle that I get some satisfaction out of figuring.

Early in my working career I put 10% into my 401k, but when I discovered this RMD business in my late 40s, I reduced my contribution to only enough to get the explorer match, because my balance was already high enough for a young man.

I remember Suzie Orman constantly pushing ROTH IRA's and I was not very astute at the time. Now its too late for me anyway to be able to convert, so whatever RMD is dished up ,I'll live with it. So many people are worried about not having anything for retirement, its odd for them to enter into this debate.

I'm 42. I can't imagine working about 25 years. I'm so over it.

A lot of my friends had a time in their early 40s when they were exhausted. Then they got a second wind after a few years, so stick with it.

R93, it's Suze (not Suzie) Orman and Roth IRA (not ROTH).

I retired from my career job and so did many of my friends ages between 52 and 62. All of us have worked since in some capacity either in full or part time jobs, or in my case, a small business. Some do unpaid volunteer work.

For many people ordinary retirement without meaningful work is boring. The challenge is that you have to figure a way to structure your life and connect with others. Plus, working keeps your brain sharp. The great thing is you can create your own life without much of the stress and pressure of your younger days. I have a house, a decent car, some investment income, and live in an area of lots of diverse opportunities for social interaction, volunteering, and paid work. Challenges include unexpected expenses like vet bills for pets, car repairs, etc.

OP, maybe change jobs if you can rather than retiring. It's never too late to try something new. I know a farmer who became a renowned local artist in his 70s. Didn't make much money at his art but was in shows and exhibits and his charm and character made him many friends until the end of his life at 103.

I’m 51 and looking to do something low stress. But then when I did the math, the idea of working for less than $100/day made it seem like a lot of hassle for nothing after taxes.

I hear you, R98. I'm 55 and may be in a position to retire in four years or so, and I'd like to do something low stress to stay busy and bring in a little bit of money for extras. But below some dollar figure like you mention, it just seems like the restrictions of the hassles of a job (can't go on vacation, can't just take the dog to the vet) are more than the value of the little money if it isn't absolutely necessary.

You bitches are all so smart, I’ll never understand finances.

Yes, I know this means I’m too stupid to ever retire, before the next poster says it.

R100, you made me laugh. I like your sense of humor.

I figured out a draft of my taxes, and it seems I can transfer $8377 from my 401k to a Roth this year, and it’ll be at the 10% tax rate. Assuming I live to age 73, i expect this saves me ~21% on my Federal taxes, or $1760. It’s difficult to calculate the cost/savings because there are so many factors.

But aside from the money, it’s a good idea to diversify the kind of account with their varied tax treatment, in case taxes go way up, for example. I keep thinking that they can only go up as we are at rock bottom, but then the Republicans go ahead and cut them further.

I would not retire at 50, or any age, if I thought I had just enough to skirt by year after year in the same house, with the same car, scrimping and cutting corners comstantly, with absolutely no consideration for unforeseen costs, or even inevitable changes like inflation or gentrification. That’s foolish and goes against all advice and basic common sense.

Work as much as you can and earn as much money as you can, WHILE YOU CAN. When you are 80 and getting foreclosed because you didn’t plan for house repairs and property tax increases, you can’t ask for your old job back. Plan for the future and plan for unforeseen costs, and the costs of living that will increase as you and your home age and both require more care and upkeep.

OP sounds like an idiot, thinking the rest of his life will be stress-free days of leisure. He wants to retire tomorrow and hasn’t done enough basic research to understand Medicare. It is not given away for free to anyone who decides they’re retired.

[quote] R88: You people are tiresome. You're all going to die. Your loot will go to the [bold] lawyers [/bold] and your parasitical relatives...

Relatives, maybe; but you can avoid having your loot got to lawyers by specifying beneficiaries on your accounts. Their ownership will get transferred upon your death, this potentially will leave your estate simple enough that your heirs will be able to settle the estate without a lawyer. My experience is that you really only need a lawyer if your estate is complicated, or if your wishes might be contested.

[quote] R103: He wants to retire tomorrow and hasn’t done enough basic research to understand Medicare

That’s what a financial advisor can help you with. Failing that, you can talk it up among friends and DataLounge. You can learn a lot this way.

I informally contested the executors’ actions in my Mother’s estate. We all had given my brother $7000 each, to help him stabilize my late Dad’s business. Then we found that they had “mistakenly” misappropriated $2500 more each, to fund the business. I had already felt that I had been mislead and pressured to give away the$7000, so I drew a line here. We had a meeting with the judge, and just came to an agreement there, that my brother would refund me the money. A lawyer wasn’t necessary.

A couple of my siblings were of the same opinion and encouraged me to pursue the refund, but then they backed-out in the judges chamber, and didn’t request the $2500 backM which was a minor annoyance. Inheritances are complicated and unexpected things can happen.

I wish my husband and I were like OP. I'm 64, my husband turns 70 next year. And we both are afraid of the financial downside of retirement. He will get the maximum Social Security possible beginning in April 2020, and in 2020 he will have to take him RMDs out of his 401k and IRAs. And we will both keep working. I need to work one more year to get Medicare. After that I probably will work until 66, 4 months (my Full Retirement Age). We both come from families with histories of extreme longevity (a lot of family members live past 100 without any health problems). We have a lot of money saved, no mortgage, one car that is paid for and zero debt. We have nieces and nephews who don't even speak to us, so we're not leaving them the money. We just can't make the shift from working and saving all our lives to no longer saving, but also pulling down some of our savings. There's something wrong with us that we can't stop working and enjoy other things in life. HELP!

Don't worry, R107, your nieces and nephews will suddenly "reconcile" with you when you get older and frailer and they see $$$$.

I don't want to retire fully just yet. I'd like to be able work at a temp or as a consultant before sliding into full retirement. Something to keep my mind busy a few days a week/weeks a month. I'm 57 right now so I've got some time. I'm thinking of retiring from full-time work at 62 so that I qualify for Medicare. My company's Med/Den/Vis plans cost$85 per month, pre-tax.

I need the next few years to figure out my expenses (mortgage, condo HOA, gas, electric, cable, water, taxes). That's a huge portion of my outgoing expenses. I'm planning to pay off my car by October 2020 if not sooner. I also have a sizable debt for remodeling my kitchen last 2 years ago. My current income is $80k with over $100k in equity in my condo and $225k+ in retirement. My Mom passed from Dementia at 83; my Dad id 85, not on any medications and fully in control of faculties.

R109 -- You cannot go on Medicare until age 65. And what you pay as an employee for your benefits probably isn't relevant to what you pay for insurance when you're no longer an employee. You need to check with HR before you make any decision.

Your genetic and family history is important. I was like R107 but realized the fear was making me miss my life. If you don’t hate work, that’s fine. And if you have family history of long life, it is probably smart to keep working. But if work is misery and your family history and genetics indicate death before 80, I suggest giving up fear and jumping into the unknown.

Retired early and I’ve never been happier. Even though I worry about running out of money if I live too long, I try to be an optimist - because we never really know if we have “enough”. And since I’ve stopped working, I’ve lost 3 close relatives before 62 - which has confirmed my choice. If we wait until we feel “safe”, we will die working - which is my worst nightmare rather than running out of money.

OP -- I think the life you're describing would get awfully boring fairly quickly. It sounds like my idea of a 2 week vacation, just not how I want to spend my retirement.

I was only able to retire at 59 1/2 because I could maintain my employers insurance until 65, but its close to $900/month, but max out of pocket $1250/yr. They had a formula whereby your age plus years of service were the qualifier for retiree health benefits and I made it just barely.

[quote]Add social security, and my income will be at least $125,000 per year on average. That would be taxed at an effective rate of about 31%.

That's not correct, if all you're talking is federal income tax. The money is taxed in brackets, not as a single unit, so your $125k would be taxed as follows:

$9700 at 10%

$29,775 at 12%

$44,725 at 22%

$40,800 at 24%

for a net federal tax of $24,175.50 or an effective rate of 19.34% if my calculations are correct.

My partner and I have been planning for retirement for quite some time - but we both expect to be working for roughly the next 20 years.

Thankfully, he is in one of the last solid unions this country has - the UFT. He's a clinical social worker in the city school system. When he retires in about 17 years, he will have a 60k a year pension, over 800k in a 7% guaranteed investment account and we both will have full medical and dental benefits until we die. I should have about a million overall saved in various investments. Plus I will always find some kind of work. I'm a copywriter now - but will gladly work in our local food co-op or some other menial job down the road.

Despite all of that, I still get nervous. Who knows where our country will be in a decade or two. Full-blown fascism? In some sort of permanent recession?

One thing that will benefit us immensely - our apartment is rent stabilized.

R115 - you are set. Teachers pensions are the Golden ticket. Don’t worry - you are in better shape than 95% of Americans. Consider yourself wealthy. Because a pension makes you more secure than the majority of us with hundreds of thousands in our 401k. Congrats.

I ran the numbers on what I could expect from Social Security if I retired at age 62, 66, and 70. If I die at age 78 or younger, I get the maximum total payout if I retire at age 62. If I die between 78 and 80, retiring at age 66 gives me the maximum payout. If I live past 80, retiring at age 70 gives me the maximum payout.

One other thing to consider, though, is that my Social Security payout age doesn't need to match my retirement age. I could retire at age 62 but not start pulling Social Security money until age 70. However, that would give me 8 years of living off of my investments, potentially pulling money out of my principal, which could then make things tougher for me later. Decisions, decisions....

R117 I went against my financial advisor's advice and started pulling at 62 vs Full retirement age for the exact reason you mention.

r115, please tell us more about the 7% guaranteed investment account. What is it?

"[R115], please tell us more about the 7% guaranteed investment account. What is it? "

It's a fixed rate of return fund negotiated with the state legislature. Only available to UFT members. I know it sounds like a giveaway, but my partner's job is brutal and he doesnt make that much money given that he has 2 masters degrees. Sometimes he is literally breaking up fights between unhinged inner-city adolescents.

Just kill yourself gramps you're sucking down all our air.

Thanks @116! I appreciate the well-wishes. Aside from the occasional dinner out or a vacation, we certainly don't live lavishly. But we definitely benefit from being quintessential DINKs (double income, no kids).

[quote] R114: That's not correct, if all you're talking is federal income tax. The money is taxed in brackets, not as a single unit, so your $125k would be taxed as follows:

I don’t recall how I got the 31% number; but your numbers look good; however, using your numbers, if some money was converted to a Roth it would be the funds in the highest bracket, taxed at 24%. So that would be the cost, wouldn’t it?

If you live in NYC - 31% may even be low when you add in state and local.

r120, that is a good deal. I'm sure your partner deserves it for the work he does.

[quote] The combination of the three tax statuses can give investors great flexibility in managing the tax impact of their retirement income.

Here’s an article that describes how diversification in a Roth, 401k, and brokerage account can help you stretch your retirement money, as I wrote in R102.

Have any of you changed your retirement plans due to COVID and the market troubles? My planned retirement isn't for at least 3.5 more years, but the stress of the crisis has convinced me to retire them minute I can do so with reasonable comfort.

R127 - I would think we should be back to normal in 3.5 years. I can't process this disaster lasting for over 4 years - it's too much to think about.

Nobody knows anything right now, but staying at home the past 6 weeks have been eye-opening in terms of retirement and the boredom that can result.

R128, I've actually found i have less boredom than expected. I cook every afternoon, read books at night (and drink a little too much...), walk the dog, etc. But it's the work stress that drives me crazy, particularly all the Zoom calls and no real personal interaction with co-workers. That's the part that is pushing me to retire as soon as I can.

I kind of retired at 50. Biggest expense is healthcare. Almost $1,000/month. It’s the one thing that’s pushing me to consider going back to work. I’m hoping Biden pushes Medicare age down to 60.

The big wild card is longevity. Because 80% of my parents family died of cancer before 70 and siblings have had cancer before 50, I am not worried about living to 90. I’m more concerned about working until cancer diagnosis and never enjoying life. So financially I’ve planned for 75. Glad I did - just confirmed I have the cancer gene that predicts a very high likelihood of early and aggressive cancer.

Everyone’s physical and financial situation is different. There is no “right” answer - it’s a balance of risk and reward. If you hate your job or have physical risks, plan to retire early. But if your parents lived to 90+, keep working.

Universal healthcare but while that’s being hashed out Medicare age should definitely be decreased to 60. I have many patients in their early 60s who have to work just for insurance. Many of them would do better if they could just concentrate on managing their chronic health conditions instead of working full-time jobs just to afford healthcare.

The best retirements are also early ones. I used to have a colleague who retired as a firefighter at age 41 with full benefits and pensions. He then took prerequisite science courses to apply to nursing programs. Got his second bachelor’s in nursing within 4 years then went straight to grad school afterwards. Took him a total of 9 years from retirement to graduating with a DNP degree. Now he works a cushy and well-paying part time position doing telemedicine while collecting a fat pension every month. He’s 53 now and recently bought a Lake Tahoe vacation home. I’m so jealous, he’s a hot daddy with a physique honed from firefighter days and now he has a Tahoe vacation home plus 2 incomes.

I don’t know how the country will be able to increase entitlements after all we are spending to bail out people and businesses. I’m hoping for a lower Medicare age, too, but am skeptical.

What’s crazy is that we are suddenly able to take on $3 trillion of debt - after years of comparing that we “can’t afford” universal healthcare or an expanded safety net. One way to pay for it is reversing the 40% tax cut Trump have corporations in 2017. We gave $1 trillion to corporations - but we “can’t afford” support for people in poverty.

[quote]R13 I recommend retirement as early as you can afford it, but make sure you can afford it

One can always “keep one’s hand in” with a little whoring on the side. And barter skills like gardening or tatting doilies in exchange for eggs, etc.

Get creative.

My 60ish co-worker died working for healthcare coverage. He had severe health problems and would invariably be hospitalized 1-2 times annually. The last time he took time off, he was in the hospital, then quickly to hospice care and within days he was dead. He told me he couldn't retire because of his medical bills. Did what he was told because he couldn't lose the job.

He worked from home and was on oxygen. Every morning I would see the little green dot next to his name in the company messaging app and would know he was online for the day. And on days he weren't and it wasn't a planned day off, then there was the dread he was too ill to work. He worked as a contractor for the same company that had laid him off many years earlier. Lost all his benefits with the layoff and he returned to work as a contractor where he had to pay much more for health care. America!

As far as Covid, I haven't even looked at my retirement accounts. There was probably a big dip in March but I hear the markets have bounced back. I assume so has my accounts. I was looking at every which way to retire as soon as financially feasible. But with the way the market can drop and how we are one black swan event away from the streets, I've vowed to grind out a very comfortable nest egg so if things go sideways during my retirement, I have enough to sit still and not go back to work or to the bread lines. So unless I can increase my pay check significantly, that means working at least until the early 60's. I was hoping to retire in my mid-late 50's.