AUTHOR: Cheryl Low on 11/13/2024 FIRST: luvtoride44afe9eb1e on 11/13/2024 | RECENT: Jonathan Clements on 11/25/2024
Comments:
We wrapped toys for our 10 grandkids until they were in high school, then we gifted cash for Christmas and birthdays. I love the idea of a book! When I graduated and started my first real job, I was burnt out and wouldn't open a book. My best friend gave me a James Herriot book "All Creatures Great and Small" - loved it.
We did the same, Mike.
We are overdue for having a conversation with the lawyer (that did our original trust) on how to title some of our accounts to take into consideration the stepped up basis.
I've read a few articles that support not having a dedicated emergency fund especially if withdrawals are tax efficient like you said and not selling an investment in a down market.
I invested my 'fun money' in dividend stocks (stocks with history of 25-50 years of paying dividends). When I retired, I decided to use this portfolio as our emergency or contingency fund. I keep a set amount in cash (now only earning 4.3%) and reinvest the dividends. If I withdraw cash, then the dividends eventually replenish the cash back to the set amount. Note: I probably would withdraw from my HSA if I had out-of-pocket medical expense.
The cost of health insurance was the main reason I didn't consider retiring before 65. I give credit to those who made it work.
I'm glad you brought up having some of your investments in a taxable brokerage account. I like having a Roth account and HSA account, as well, to draw from in certain situations.
Coming up with an efficient withdrawal strategy to pay routine expenses is key. This can be even more challenging if you have a gap between when you retire and when you collect social security. Fortunately, there are a handful of different withdrawal strategies to research and select the one best for your situation. In our case, we chose to cover our expenses with social security, small pension, and an annuity (net of tax withholding and Medicare part B premium). I liked the simplicity and it helps mitigate sequence of returns risk and market risk.
yes, and also consider some withholding on a pension, RMDs, social security (but not overpaying taxes).
I agree, but I found it difficult to find a good fee only financial advisor. Some only have one tool in their toolbox.
Ha! not during Thanksgiving dinner, but in a private conversation. I could see it was weighing on him, probably more out of frustration with his job. I hope to give him some clarity without overwhelming him. Our second daughter and her husband asked if I could help them set up her 401K at her new job. Our kids are in their 50s, so retirement is on their mind. Thanks for discussing your strategy. You noted that you set up investment buckets 3 years before you retired. I think this is a good timeframe, because a lot can change between 10 years before retirement and 2-3 years before retirement. Sounds like there will be additional tax law changes in 2025.
Good point, Jonathan, that should definitely be on the list. My challenge when planning for retirement was figuring out exactly what I should/could be doing now to prepare. While I found individual articles on the topics above, I couldn't find a comprehensive checklist that guided me through all the key decisions and considerations. I believe this uncertainty is one of the main reasons people question whether they are ready to retire—they don't know what they don't know.
Numbers 1 and 2 hit home for me as we want quality of life if we are fortunate to live into our 90s. When we downsized our home, we included 'aging in place' features (one level, no steps from garage, walk-in shower, bars, higher vanity, and wider hallways). Waited until 70 to take social security and opted for monthly payments on a small pension. We added a deferred annuity to cover home services as we age (lawn care, house cleaning, windows/gutters, HVAC maintenance, etc). We do have kids/grandkids close by who help us whenever we need them, but we want to be as self-sufficient as possible. We enjoy hiking and biking and live 1/2 mile from trails, so we stay active. Side note: My dentist told me, "Take care of your teeth and your feet!"
I check my net worth weekly when I update my checking account, probably out of habit. I use Quicken, so it's easy to update my investments/net worth with the latest quotes. As a side note, I include a list of income (social security, annuity, and pension).
Comments:
We wrapped toys for our 10 grandkids until they were in high school, then we gifted cash for Christmas and birthdays. I love the idea of a book! When I graduated and started my first real job, I was burnt out and wouldn't open a book. My best friend gave me a James Herriot book "All Creatures Great and Small" - loved it.
Post: Am I the boring aunt?
Link to comment from December 21, 2024
Thanks for the kind words, Winston!
Post: Pre-Retirement List
Link to comment from December 15, 2024
We did the same, Mike. We are overdue for having a conversation with the lawyer (that did our original trust) on how to title some of our accounts to take into consideration the stepped up basis.
Post: Pre-Retirement List
Link to comment from December 15, 2024
Thanks Harold, I'll add those to my list!
Post: Pre-Retirement List
Link to comment from December 15, 2024
I've read a few articles that support not having a dedicated emergency fund especially if withdrawals are tax efficient like you said and not selling an investment in a down market. I invested my 'fun money' in dividend stocks (stocks with history of 25-50 years of paying dividends). When I retired, I decided to use this portfolio as our emergency or contingency fund. I keep a set amount in cash (now only earning 4.3%) and reinvest the dividends. If I withdraw cash, then the dividends eventually replenish the cash back to the set amount. Note: I probably would withdraw from my HSA if I had out-of-pocket medical expense.
Post: Pre-Retirement List
Link to comment from December 15, 2024
These are all good points, David.
Post: Pre-Retirement List
Link to comment from December 15, 2024
Ha! not during Thanksgiving dinner, but in a private conversation. I could see it was weighing on him, probably more out of frustration with his job. I hope to give him some clarity without overwhelming him. Our second daughter and her husband asked if I could help them set up her 401K at her new job. Our kids are in their 50s, so retirement is on their mind. Thanks for discussing your strategy. You noted that you set up investment buckets 3 years before you retired. I think this is a good timeframe, because a lot can change between 10 years before retirement and 2-3 years before retirement. Sounds like there will be additional tax law changes in 2025.
Post: Pre-Retirement List
Link to comment from December 15, 2024
Good point, Jonathan, that should definitely be on the list. My challenge when planning for retirement was figuring out exactly what I should/could be doing now to prepare. While I found individual articles on the topics above, I couldn't find a comprehensive checklist that guided me through all the key decisions and considerations. I believe this uncertainty is one of the main reasons people question whether they are ready to retire—they don't know what they don't know.
Post: Pre-Retirement List
Link to comment from December 14, 2024
Numbers 1 and 2 hit home for me as we want quality of life if we are fortunate to live into our 90s. When we downsized our home, we included 'aging in place' features (one level, no steps from garage, walk-in shower, bars, higher vanity, and wider hallways). Waited until 70 to take social security and opted for monthly payments on a small pension. We added a deferred annuity to cover home services as we age (lawn care, house cleaning, windows/gutters, HVAC maintenance, etc). We do have kids/grandkids close by who help us whenever we need them, but we want to be as self-sufficient as possible. We enjoy hiking and biking and live 1/2 mile from trails, so we stay active. Side note: My dentist told me, "Take care of your teeth and your feet!"
Post: Pick Your Peril
Link to comment from December 7, 2024
I check my net worth weekly when I update my checking account, probably out of habit. I use Quicken, so it's easy to update my investments/net worth with the latest quotes. As a side note, I include a list of income (social security, annuity, and pension).
Post: How Often Do You Calculate Your Net Worth And Why
Link to comment from November 30, 2024