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So, would having a separate IRA really make any sense?
Roth IRA for sure. You will have substantial tax liability in retirement at your income level, especially if you have no debt. Roths, while not providing tax shelter now, do grow tax-sheltered and withdrawals are tax-free. With your combined SS, you'll be taxed on 85% of that, plus any 401k withdrawals, plus pension income.
If you have discretionary money you want to save, Roth IRA is a great place for it. Past age 50, each of you can save $6,000 with the following income parameters:
Quote:
Joint filers with modified adjusted gross income up to $167,000 ($169,000 in 2011) can make a full contribution. Once again, this contribution is phased-out starting at $167,000 ($169,000 in 2011) and you cannot make a contribution if your adjusted gross income is in excess of $177,000 in 2010 or $179,000 in 2011.
Any brokerage or bank can set up a Roth IRA. You'll be working for another 15 years it sounds like. Even a modest 4-5% return will grow to close to $250k in that time. Again, its non-taxable when you withdraw it.
So what you would do at age 70-1/2 is take only your IRS required minimum distributions from your taxable accounts and make up the difference from the nontaxable Roth.
My favorite has been Mayrhofen in the Tyrolean range of Austria [it is a really HUGE resort].
Second was Zermatt / Breul-Cervinia. The Matterhorn straddles the international border, both slopes are competing ski resorts, and they recognize both resorts' lift-tickets.
Skiing is so much better when the slopes go up into higher altitudes.
The one thing about retiring to the North East that I do miss is good skiing. We just don't have the mountains for it.
I am the worst skier in the history of the world. Took my first ski trip out west when I was 35. Had a young cute ski instructor - who didn't understand what it meant to be a 35 year old woman from Florida. One hour into first lesson - had a helicopter fall and tore up a lot of stuff in my knees. Got back to ok in about a year (with rehab) - but was always afraid to ski after that. Especially since I play tennis/golf about 50 weeks a year. Ski trips were maybe 2 weeks a year. Why riisk messing up 50 weeks for the other 2?
That said - my husband kind of enjoyed skiing for a while - so we went to just about everywhere out west over the course of a decade or so (he would ski - I learned to do back county snowmobile stuff).
Perhaps the people in Maine (and other parts of New England) are too proud to admit that their ski areas are kind of mediocre compared to what's out west. But us people in the south would rather have BBQ in Vermont or Maine than go skiing there. There are lots of really big ski clubs down here. They negotiate deals for trips to the areas out west. The one in Miami is big (perhaps the one in Atlanta is huge - don't know). And maybe there are some in the NE too. Google around and see what you come up with. Robyn
Wondering how much $$ anyone thinks is required in savings/investments to retire? Not including value of a home to live in. I guess everyone collects at least $12k per year Social Security, and perhaps another $20k per year pension.
How much savings is needed with just SOS coming in? How much if SOS plus pension coming in?
I think you should include the value of your home in your net worth, because you could sell it if necessary and buy a smaller place or rent. I think home value is normally included in calculating net worth (not absolutely sure though).
Supposedly, a 3% withdrawal rate is considered safe. So if you had $500k, you could withdraw $15k a year, and never run out of money. So that would be almost $50k a year all together, if you had a $20 pension.
You can also buy a pension (immediate annuity) from an insurance company, and the rate would be much higher than 3%, maybe about 6%. So you could get a pension of about $30k a year from $500k savings.
How much retirement savings a person needs depends on how much income they think they need, or want. And of course that varies a lot since it's easy to spend money on luxuries, or not, depending on your lifestyle.
I saw that aspect of your post format and I'm sure it's a great whiz bang way to talley what you did spend last year but I also think it misses the ball more than it hits it -- by the odd combinations of things it puts together.
goodies will vary. little something extra while at the store... a pack of fancy coffee or a good steak or an item of french pastry... like that...
At least at our income level - it is on the one hand non-discretionary medical stuff that runs into thousands of dollars - not our groceries. Dental (not at all covered by Medicare). The second brace my husband needs (not covered by Medicare).
And - on the other hand - it is discretionary spending - mostly for travel - including hotels and restaurants. At our age - we like to spend money on experiences more than "stuff". Robyn
And - on the other hand - it is discretionary spending - mostly for travel - including hotels and restaurants. At our age - we like to spend money on experiences more than "stuff". Robyn
gotcha.
What I produced is titled something like modest cheap etc
that is meant as a "how low can you go" approach to it especilly in light of the numbers you high-flyers are posting.
I mostly do live that close to the bone most of the time as that parsimonious-ness is a large part of why I'm able to be (sorta) retired at my age, but, er, uh... I have a whole other set of books for the summer trip to Italy money.
markg91359 - you hit the nail on the head....living the life that we are accustomed to living.... That's why i can't figure things out.....because I want my cake and I want to eat it too! Since my husband is older than I by 20 years - he deserves to retire (just had quadruple bypass as well) and I want him to be happy. It may be that I have more time left than him (or not - despite everything his family lives to be old....mine - not so much) so I want him to be able to relax. He was never a saver and never a financially saavy person....but he deserves to have what he wants.
He was never a saver and never a financially saavy person....but he deserves to have what he wants.
He deserves to have what he wants? Sorry, but not necessarily. It depends on what he wants and what he as done to "deserve" it. Sounds like an expression of an entitlement mentality as articulated by someone who is spoiled by always having had his or her way.
51 going on 52. Wife is almost 51. We keep increasing the withholding for our 401K account. Our contributions are about $8,000 a year. The employer contributes about $4,000. So, would having a separate IRA really make any sense? We own and maintain a home where we live and one in southern Utah which our intention is to eventually make our retirement home. If economic circumstances compel it, when we retire, we might sell or rent the home we are currently in.
Sending both our kids to college is also a priority to us and we pay about $3300 a semester currently for my son. Our daughter's turn comes in six years.
Our lifestyle involves a fair amount of domestic and international travel (NYC in July and Yosemite National Park in August). We could give up that I suppose and save for retirement. What if one of us doesn't make it that far in life though? I think of the lost opportunities to enjoy life while we are healthy and can do so.
I'm spoiled, but I don't want to give any of it up. IRA, 401K, or whatever I can't see any likely retirement currently that will allow us to live the life we are accustomed too. Sitting in front of a tv or being a door greeter at Walmart holds little appeal for me either.
As Robyn pointed out you are at a tweener age. Somewhere between probably not impacted by changes in SS and Medicare and probably impacted. Look at Robins budget and you will see that she is living a good life on a 100K budget. There are things you will find cheaper like travel. Now your vacation schedule is dictated by work and when you can get free and booking around those dates. In retirement you can schedule when you can get the best discounts and plan further in advance etc. The key thing is to get your primary home mortgage free. If you have a mortgage let it be a vacation home and part of your retirement lifestyle.
I think you should include the value of your home in your net worth, because you could sell it if necessary and buy a smaller place or rent. I think home value is normally included in calculating net worth (not absolutely sure though).
Supposedly, a 3% withdrawal rate is considered safe. So if you had $500k, you could withdraw $15k a year, and never run out of money. So that would be almost $50k a year all together, if you had a $20 pension.
You can also buy a pension (immediate annuity) from an insurance company, and the rate would be much higher than 3%, maybe about 6%. So you could get a pension of about $30k a year from $500k savings.
How much retirement savings a person needs depends on how much income they think they need, or want. And of course that varies a lot since it's easy to spend money on luxuries, or not, depending on your lifestyle.
i believe never include a house until you sell it and know whats left over if anything. until that time its an expense and represents your cost cost of housing. a 3% withdrawl rate inflation adjusted lasting forever is dependant on 2 things. the return your getting on that money and the order of those gains or losses. assuming zero gains you will be broke in 23.5 years . . if you have losses early on and try to maintain the initial 15k a year you will run out of money even sooner even if markets recover.. there really is no rule of thumb anymore because returns in cash and fixed income are in un-charted low territory and that represents more than 1/2 a retirement portfilio in most cases..
all the reirement income calculators were based on a certain level of cash and bond income that historically was many times higher than now. a 15% drop on the equities side historically was whole again in 2 years . but those days are gone and outcomes can be far different than back testing indicates. like i always point out , if there was a 90% chance a 4% withdrawl rate would last 30 years we have been living that 10% failure rate
Last edited by mathjak107; 05-13-2011 at 03:09 AM..
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What do we all "deserve"?
