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I calculate that my after tax take home income will be about the same.
A big reason is that while working, I contribute the IRS maximum to the TSP (401k type) and that includes the "catch up contributions" ($18,000 + $6,000). Also I am putting the max ($5,500+$1,000) every year into a Roth IRA.
Also in retirment I don't have payroll taxes (7% pension contribution, 1.45% medicare).
All those contributions stop in retirement.
I am not taking any TSP or IRA withdrawls (health willing) unitl age 70.5 (RMD). My estimated income from regular investments may vary but it is only a small fraction of my pension income. And being CSRS, I don't get Social Security.
Now my gross income in retirment will be much lower than while working, but not the after tax take home amount.
Gross income will be way, way less. But, since I won't have a mortgage or have to pay rent, my net income, (discounting my current mortgage), will be pretty close to the same.
My income in retirement will be roughly half of what it is now---a very scary scenario for me. Illness has curtailed my ability to work for last 15 years and will be unable to do so after I retire. I have some savings, but I honestly don't know how I will manage---am considering a reverse mortgage at some point, as I do own my home free and clear. I will have $936 a mo social security and that is before medicare cost is subtracted. Due to illness and late in life divorce, I have done the best I can over the last 12 years to save even the amount I have. It looks bleak.
hopefully the reverse mortgage will help but most folks are taken back when they find out they will only loan you money based on 1/2 the houses value because reverse compounding of interest and fees and expenses eat up equity like crazy .. it isn't as much as they thought in most cases ..
My income in retirement will be roughly half of what it is now---a very scary scenario for me. Illness has curtailed my ability to work for last 15 years and will be unable to do so after I retire. I have some savings, but I honestly don't know how I will manage---am considering a reverse mortgage at some point, as I do own my home free and clear. I will have $936 a mo social security and that is before medicare cost is subtracted. Due to illness and late in life divorce, I have done the best I can over the last 12 years to save even the amount I have. It looks bleak.
How soon, and at what age, do you plan to retire? If you can delay retirement for even one year beyond the point at which you will have the $936 a month Social Security, that will increase the Social Security amount and allow you to put a few more bucks into savings. Best of luck to you.
Edited to add: I see from your response in another thread that you already started your Social Security about six months ago at age 64. Are you still working?
Last edited by Escort Rider; 10-11-2015 at 04:46 AM..
Thanks to Mathjak and Escort Rider for your responses to my posts. I am aware that a reverse mortgage is based on roughly half of a home's value. I need to do more checking, as I think there are changes coming to make it more difficult to qualify for one.
I have fibromyalgia and chronic fatigue syndrome, so haven't worked in quite a while. The fatigue is the worse, as pain is better since I moved to a warmer climate. Also have damaged discs in spine that surgery helped but still have problems. Currently having vision problems after 8 surgeries over the last 15 years. Because SSDI based on tax returns and my ex wrote off everything he could on my earnings, I show no earnings in necessary quarters to have qualified for disability income. Talked to attorney at the time I could have filed. (at least that's the way I understood it)
the amt I quoted is based on my ex's income, as mine would be much lower. thanks again for responses.
hopefully the reverse mortgage will help but most folks are taken back when they find out they will only loan you money based on 1/2 the houses value because reverse compounding of interest and fees and expenses eat up equity like crazy .. it isn't as much as they thought in most cases ..
My sister did a reverse mortgage years ago which I along with others urged her not to. It is now turning out to be a good decision if not a very good decision due to failing health sooner than expected.
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