Also consider if you plan for the inheritance to remain invested after the tax-free 10 year growth period. At 10 years, you could do a full or partial in-kind (non-cash) distribution, allowing you to transfer assets into a taxable account. I too would keep the Roth for the 10 years, but I would begin thinking how to structure the investments for longer term if I didn't need to sell.
I'm fortunate to be in this situation, too. Like you, I've emptied the small accounts and am trying to reduce future RMDs. For me, thinking about the proportions of my spending, and hence, withdrawals, is more useful. Roughly a third goes to taxes, another third to charity, and one third is for expenses. I feel I am living my best -- if not simple life -- and whatever is left at the end will go to charity.
Congrats, Dana, on the upcoming retirement. Assuming the courses you taught were as thoughtfully planned as your retirement, your students are really going to miss you! I joined Medicare two years ago and found the local SHIP program to be helpful. The program provided a mandatory "Medicare 101" session followed by a much more useful private consultation. Since you have already decided on traditional Medicare, the guidebook, Choosing a Medigap Policy 2024 is a great starting point. Medicare sends the print version upon enrollment in Medicare; if you are like me, by then you'll already have a plan. Looking back, the guidebook and the list of Medigap policies and rates compiled by my state's bureau of insurance were all the info I ever needed. California appears to have a comparison tool, too.
Thank you, Marjorie, for your cautionary advice. I LOVE retirement (3 years in; age 66), feel incredibly blessed to afford it, and am never bored. The important pieces for me have been channeling my work ethic into volunteer activities, creating a central place for exercise and nature, and continuing on a path of lifelong learning. I also feel fortunate to work in a college lab several (largely unscheduled) hours a week -- great for socialization, being among the young, and using the mind.
Such a useful article, David. Thank you. A non-profit I volunteer for hired an independent insurance advisor this year to review its policies. The review process was quite thorough and uncovered many gaps in coverage and troubling risk exposures. The advisor worked with the non-profit's insurance agent and would sometimes need to (gently) educate the agent. Every cent of the advisor's fee seemed to be money well spent. This particular advisor only takes non-profit and corporate clients, and independent advisors in general seem few and far between. Do you know of any who advise individuals?
Like you, Mike, the failed Rhode Island savings and loan system froze my nascent nest egg, too. At the time (late 1980s), I couldn't resist the lure of supposedly insured savings and all-too-high interest rates. I was eventually grateful to have been made whole by the state and to have learned lessons of diversification and due diligence. The experience also resulted in my excessive caution with respect to safety. To this day, the proportion of fixed income in my portfolio (50%) may be too high for most but it helps me sleep at night.
The concept of 401k's certainly isn't a scam. The plans have worked extremely well for me. I do, however, believe that 401k's are overly subject to the individual proclivity to save (or not) and to the consequences of life events, including loans, job changes etc. For 30 years, I contributed with a full employer match of 6.5% to a 403b, and, to nearly the allowed limits, to a 401a. The funds were conservatively invested (50% fixed), but nonetheless grew such that upon retirement they could replace my working income, through annuities. My ability to contribute undoubtedly owed much to having modest living expenses and no children. That said, had I only contributed enough for the full employer match, I could have still replaced about half my working income and relied on SS for the remainder.
Comments:
Just less time and mental energy.
Post: An Inherited Roth IRA… Now What?
Link to comment from January 14, 2025
Also consider if you plan for the inheritance to remain invested after the tax-free 10 year growth period. At 10 years, you could do a full or partial in-kind (non-cash) distribution, allowing you to transfer assets into a taxable account. I too would keep the Roth for the 10 years, but I would begin thinking how to structure the investments for longer term if I didn't need to sell.
Post: An Inherited Roth IRA… Now What?
Link to comment from January 13, 2025
I'm fortunate to be in this situation, too. Like you, I've emptied the small accounts and am trying to reduce future RMDs. For me, thinking about the proportions of my spending, and hence, withdrawals, is more useful. Roughly a third goes to taxes, another third to charity, and one third is for expenses. I feel I am living my best -- if not simple life -- and whatever is left at the end will go to charity.
Post: Spending It
Link to comment from January 12, 2025
Congrats, Dana, on the upcoming retirement. Assuming the courses you taught were as thoughtfully planned as your retirement, your students are really going to miss you! I joined Medicare two years ago and found the local SHIP program to be helpful. The program provided a mandatory "Medicare 101" session followed by a much more useful private consultation. Since you have already decided on traditional Medicare, the guidebook, Choosing a Medigap Policy 2024 is a great starting point. Medicare sends the print version upon enrollment in Medicare; if you are like me, by then you'll already have a plan. Looking back, the guidebook and the list of Medigap policies and rates compiled by my state's bureau of insurance were all the info I ever needed. California appears to have a comparison tool, too.
Post: 2025 Retirement Countdown by Dana/DrLefty!
Link to comment from January 1, 2025
Thank you, Marjorie, for your cautionary advice. I LOVE retirement (3 years in; age 66), feel incredibly blessed to afford it, and am never bored. The important pieces for me have been channeling my work ethic into volunteer activities, creating a central place for exercise and nature, and continuing on a path of lifelong learning. I also feel fortunate to work in a college lab several (largely unscheduled) hours a week -- great for socialization, being among the young, and using the mind.
Post: Revising Retirement by Marjorie Kondrack
Link to comment from December 29, 2024
Your spirit and courage humble me. To time, health, and healing, Jonathan.
Post: Staying Alive by Jonathan Clements
Link to comment from December 21, 2024
Such a useful article, David. Thank you. A non-profit I volunteer for hired an independent insurance advisor this year to review its policies. The review process was quite thorough and uncovered many gaps in coverage and troubling risk exposures. The advisor worked with the non-profit's insurance agent and would sometimes need to (gently) educate the agent. Every cent of the advisor's fee seemed to be money well spent. This particular advisor only takes non-profit and corporate clients, and independent advisors in general seem few and far between. Do you know of any who advise individuals?
Post: Pricing Catastrophe
Link to comment from December 10, 2024
Like you, Mike, the failed Rhode Island savings and loan system froze my nascent nest egg, too. At the time (late 1980s), I couldn't resist the lure of supposedly insured savings and all-too-high interest rates. I was eventually grateful to have been made whole by the state and to have learned lessons of diversification and due diligence. The experience also resulted in my excessive caution with respect to safety. To this day, the proportion of fixed income in my portfolio (50%) may be too high for most but it helps me sleep at night.
Post: Pick Your Peril
Link to comment from December 8, 2024
:)
Post: Getting Roasted
Link to comment from November 27, 2024
The concept of 401k's certainly isn't a scam. The plans have worked extremely well for me. I do, however, believe that 401k's are overly subject to the individual proclivity to save (or not) and to the consequences of life events, including loans, job changes etc. For 30 years, I contributed with a full employer match of 6.5% to a 403b, and, to nearly the allowed limits, to a 401a. The funds were conservatively invested (50% fixed), but nonetheless grew such that upon retirement they could replace my working income, through annuities. My ability to contribute undoubtedly owed much to having modest living expenses and no children. That said, had I only contributed enough for the full employer match, I could have still replaced about half my working income and relied on SS for the remainder.
Post: Bashing the 401k scam – looking for a better idea. RDQ says it’s misunderstood
Link to comment from November 27, 2024