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If you could go back to 5 years before you retired, what’s the one decision you’d change that would have made the biggest difference in your first 1–3 years of retirement and what do you wish you’d done sooner? Examples:
When to claim Social Security?
How you structured withdrawals/taxes
Whether you carried a mortgage?
Where you lived?
How you planned for healthcare/long-term care?
thanks,
Jeff
I would have started reading HumbleDollar sooner.
Sorry about my mistake about the post above. My laptop was dying and doing some crazy things.
If we have understood what was coming for us after we turned 65 with IRMAA & 2 years look back, we would not have done 3 mega Roth conversions, and were hit with 3 highest tier IRMAA years. We would had done much smaller Roth conversion ladder instead. That 3 years hit were almost as bad as the sequence risk for our early unplanned retirement years.
I would have hired our financial advisor at that time-5 years out-rather than 1 year before retirement.
I agree with Dan. I have been very happy with my retirement. I also hear Richard on Roth conversions, but Roth IRAs, never mind 401ks, didn’t exist until two years before I retired. Also, I’m not sure my income once I retired was often low enough for conversions to make sense.
I would not change a thing. I am right where I need to be.
As I look back on pre-retirement planning, the one thing that I wish I had done differently is plan more Roth conversions. As I look out 5+ years (we’ve been retired 7 years) I think the combination of RMD’s, SS and income from after-tax investments will push us into higher tax brackets than I anticipated. I realize these are “1st world problems” but I hate giving the Federal Government any more than I have to, I’d rather donate it to worthy causes.
Sounds like QCDs (Qualified Charitable Distributions) are a perfect match for you, Richard!
I always planned to start Social Security at FRA
Withdrawals were not an issue as I have a pension. But RMDs of course, are required. Didn’t think about taxes as I knew it was taxable income as
Mortgages were paid off several years before.
Never planned to relocate, but did move to a condo 7/10 of a mile from where we lived 45 years. Moved 8 years after retiring, but should have done it sooner. Children and grandchildren dictated where we live.
Since I was over 65 at retirement, Medicare and supplemental coverage took care of that. Purchased LTC for both of us when I was 45.
For anyone retiring before 65 health insurance is a serious consideration unless they are fortunate to have employer coverage.
“Moved 8 years after retiring, but should have
done it sooner.”
I agree.
If you plan on moving do it as soon as possible. It probably won’t get easier the longer you wait.
More time to give away unnecessary items (for us) or unwanted items (for our children) would have been a HUGE benefit.
The thing is we didn’t plan on moving and I didn’t want to move, but the three story house with laundry in the basement just made it impossible to stay. The good news is we moved only 7/10 of a mile away, so nothing changed except the walls surrounding us.
I wish we could have saved more cash. We had a couple of curve balls in 2022 and 2023 when our daughter was seriously injured twice in two car accidents 14 months apart. The second one in particular was financially devastating—she was unable to work at all for months due to her injury, and the driver responsible had minimal insurance and no assets worth suing him for (plus he was going to jail for a year).
Both times we jumped in and helped her out a lot because we didn’t really see how we couldn’t. We’d have a lot more savings if that hadn’t all happened just a few years before retirement when we had a lot of disposable income. That said, we’re blessed that we had the means to help her when she needed us to, and I can’t think of anything more important we could have done with that money.
Dana, that was a blessing you had the savings to help your daughter I saved a lot of cash the last few years also. Chris
5 yrs BEFORE RETIREMENT know what SORR means!!!
Good question, Jeff. We are in the time frame you are talking about, since we are just at 2 years into retirement. Covid was part of this time for us, and was unexpected, as it was for everyone. We had thought about doing some remodeling of our house, but weren’t far enough along to get estimates before things shut down. And, as you know, prices have gone up a lot so we are having to save more money for what we would like to do. Chris
Given more thought to what I would do in retirement
Interesting. Do you find that to be an issue in retirement?
It turned out not to be an issue, but there was no planning on my part that made it successfully work out. Over time, a balanced structure or routine of exercise, volunteering, grandchildren, socializing, & enjoying not having anything special to do has worked out.
Thanks for asking, Jeff.
The one decision I would change was signing a phased, three-year retirement contract. Half time work in phased retirement was essentially full time work at half salary, amplified in part due to the pandemic and having to find new ways to do existing tasks. Had I been at full salary, I could also have delayed withdrawing from savings for at least one year longer.
I really think the only thing I would have done differently is…retired five years earlier.
Right?! It’s pretty awesome!
While I had a pretty good budget and awareness of how much income we needed to live, I hadn’t yet developed a long term financial/tax plan. I wish I had developed my long term financial/tax plans 5 years before retirement. If I had, I possibly would have realized the impact of RMD’s later in life and made a few adjustments (such as switching to Roth 401K contributions those last 5 years) to have a more efficient tax/IRMAA plan in my later years. Gene
Totally agree. I focus our IRA withdrawal on staying just below the point where IRMMA kicks in.