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Old 04-12-2016, 06:44 PM
 
Location: RVA
2,172 posts, read 1,270,926 times
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I personally would spend down as much as 1/3 as well, as long as I had at least $600k. A $43k SS / yr to start, plus $16k (4% of the remaining 400k) = $59k/yr is a very healthy fixed income to me! Thats roughly $5k a month right there! In my case, DW gets SS and we both have pensions, so like I said, based on the math it's a done deal. I just have to convince my own human reluctance when the time comes.
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Old 04-12-2016, 06:45 PM
 
6,652 posts, read 3,761,413 times
Reputation: 13748
Quote:
Originally Posted by ReachTheBeach View Post
I have mixed feelings about getting subsidized ACA (Obamacare) insurance but it is an option. Only current income is considered, so some people retiring early use some after tax savings and/or keep spending as low as possible to limit taxable draws and keep income low enough to get insured pretty cheaply. I said "mixed feelings" because that really wasn't the intent of low income subsidies.
I read an article that said it IS part of the intent of the ACA to help older people who don't get employer-sponsored ins., so they don't use all their retirement savings for medical care or premiums.

So whether one is unemployed by choice or not, that's what the ACA is there for. The ACA provisions could easily have prevented that, simply by including an exception, for example, for those who have a certain amount in a retirement account.

You can even sell your house and pocket modest gains, after buying another house (to buy down), and not have it affect your ACA subsidy (because the gains don't go into the Adjusted Taxable Income amount).

This would also be the case for those who are younger and still employed, but make an income low enough to qualify for a partial subsidy. They can have a healthy retirement account saved up and invested, without interfering with getting a subsidy for the ACA.

I imagine the thinking is... what good is the ACA for the country, if it means that people will have to deplete their life savings in order to qualify for a partial subsidy. Then you'll have a large segment of seniors who will have no retirement accounts with which to buy Medigap, pay for things that Medicare doesn't pay for, and try to get by on Social Security alone. And it would discourage saving for one's retirement.
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Old 04-12-2016, 06:54 PM
 
Location: Canada
5,881 posts, read 2,386,567 times
Reputation: 5341
When is the Optimal Age to Start Collecting Social Security?

OP's question has no definitive answer. It all depends on the person who has such an avenue. Majority of those who do have access..may be healthy enough, have physical ability to continue to work in order to pay to live ..However..Majority really do not have any options..Career's took toll on their physical body, rending them unable to gain employment status..OR have health issues ( Mental/ Physical/Life Circumstance) that force them to collecting their SS Retirement , even IF discounted due to prior to '65. No choice for those folks!!

So, I guess, it comes down to the individual, who is able to wait ( wheither thru other investments/Spouses who can contribute to household incomes etc)..however, bottomline ..Optimal Age is when it's a necessity..
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Old 04-12-2016, 08:15 PM
 
Location: OH>IL>CO>CT
5,242 posts, read 8,423,860 times
Reputation: 7191
Quote:
Originally Posted by bpollen View Post
I read an article that said it IS part of the intent of the ACA to help older people who don't get employer-sponsored ins., so they don't use all their retirement savings for medical care or premiums.

So whether one is unemployed by choice or not, that's what the ACA is there for. The ACA provisions could easily have prevented that, simply by including an exception, for example, for those who have a certain amount in a retirement account.

You can even sell your house and pocket modest gains, after buying another house (to buy down), and not have it affect your ACA subsidy (because the gains don't go into the Adjusted Taxable Income amount).

This would also be the case for those who are younger and still employed, but make an income low enough to qualify for a partial subsidy. They can have a healthy retirement account saved up and invested, without interfering with getting a subsidy for the ACA.

I imagine the thinking is... what good is the ACA for the country, if it means that people will have to deplete their life savings in order to qualify for a partial subsidy. Then you'll have a large segment of seniors who will have no retirement accounts with which to buy Medigap, pay for things that Medicare doesn't pay for, and try to get by on Social Security alone. And it would discourage saving for one's retirement.
According to https://www.healthcare.gov/income-an...mation/income/ Capital Gains are to be included in the ACA MAGI calculation. Of course, the $250K/500K exclusion for sale of principal residence could offset or reduce such reportable gains.
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Old 04-12-2016, 08:41 PM
 
17,821 posts, read 19,829,113 times
Reputation: 7489
I will collect it at 62 and put all of it in the stock market... 70 is too long and at least I have eight years of compounded interest if I do hit 70...
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Old 04-13-2016, 02:22 AM
 
71,779 posts, read 71,875,234 times
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and if the market is down ?

how you do market wise is very strongly tied to valuations when you retire . high valuations have always led to below average returns down the road at about the 8 year mark , while lower valuations have always done better then average .

we are high .

make sure you have a plan b if the money grows poorly .
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Old 04-13-2016, 02:53 AM
 
71,779 posts, read 71,875,234 times
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Quote:
Originally Posted by Perryinva View Post
I personally would spend down as much as 1/3 as well, as long as I had at least $600k. A $43k SS / yr to start, plus $16k (4% of the remaining 400k) = $59k/yr is a very healthy fixed income to me! Thats roughly $5k a month right there! In my case, DW gets SS and we both have pensions, so like I said, based on the math it's a done deal. I just have to convince my own human reluctance when the time comes.
it seems easier to delay for me mentally when markets suck like they have last year and this year so far .

i appreciate the growing ss check making me less dependent on this stuff so i don't give spending down assets to delay a 2nd thought .

don't forget too that typically a standard retiree mix which ranges from 40 to 60% equity's usually starts out with at least 1 year in cash ready to spend and most folks i have seen on a popular early retirement forum have 2 years set a side , that is what we did .

so with 40-60% bonds in the mix odds are very little invested money in equity's will have to be touched if you kind of structure in a bucket system .

we can deplete cash first and then have years of bonds to hit before equity's get sold .

a bucket set up has nothing to do with the amount of money you have , it works the same no matter what the balance .

by the way there is no advantage to using a bucket system vs just systematically selling equally from the pie maintaining your origonal allocation through out .

a bucket system has a rising glide path for equity's until you refill cash and bonds and reset allocations back , you rebalance by years of money left not performance

a conventional systematic withdrawal maintains your allocation at all times and sells assets in good or bad times .

the bucket system is just easier to deal with mentally .

Last edited by mathjak107; 04-13-2016 at 03:12 AM..
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Old 04-13-2016, 04:24 AM
 
Location: Central Massachusetts
4,800 posts, read 4,855,118 times
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Quote:
Originally Posted by mathjak107 View Post
it seems easier to delay for me mentally when markets suck like they have last year and this year so far .

i appreciate the growing ss check making me less dependent on this stuff so i don't give spending down assets to delay a 2nd thought .

don't forget too that typically a standard retiree mix which ranges from 40 to 60% equity's usually starts out with at least 1 year in cash ready to spend and most folks i have seen on a popular early retirement forum have 2 years set a side , that is what we did .

so with 40-60% bonds in the mix odds are very little invested money in equity's will have to be touched if you kind of structure in a bucket system .

we can deplete cash first and then have years of bonds to hit before equity's get sold .

a bucket set up has nothing to do with the amount of money you have , it works the same no matter what the balance .

by the way there is no advantage to using a bucket system vs just systematically selling equally from the pie maintaining your origonal allocation through out .

a bucket system has a rising glide path for equity's until you refill cash and bonds and reset allocations back , you rebalance by years of money left not performance

a conventional systematic withdrawal maintains your allocation at all times and sells assets in good or bad times .

the bucket system is just easier to deal with mentally .
This could be a separate thread and maybe one of us will start it but I am not sure how the bucket system works and why it would be better. In my instance I do not think it is quite as important to have that bucket system. I am different than many here with no income issues so the need to have a large cash bucket to protect the ups and downs from the market conditions. I think because I have a conventional retirement (pensions) my systematic withdrawal plan should work best for us.

I know that the FA put the bucket question in his draft plan to me. I will be seeing him in a few weeks.
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Old 04-13-2016, 04:27 AM
 
71,779 posts, read 71,875,234 times
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buckets are only mentally better . you don't actually see stocks being sold until well down the road .

math wise it is no different then a simple draw from all parts but some folks have an easier time in down markets with buckets .
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Old 04-13-2016, 04:32 AM
 
71,779 posts, read 71,875,234 times
Reputation: 49345
Quote:
Originally Posted by golfingduo View Post
This could be a separate thread and maybe one of us will start it but I am not sure how the bucket system works and why it would be better. In my instance I do not think it is quite as important to have that bucket system. I am different than many here with no income issues so the need to have a large cash bucket to protect the ups and downs from the market conditions. I think because I have a conventional retirement (pensions) my systematic withdrawal plan should work best for us.

I know that the FA put the bucket question in his draft plan to me. I will be seeing him in a few weeks.
if you take an extreme example of a bucket system with extended refill times :

bucket one would hold up to 7 years withdrawals in cash instruments less any interest as well as can hold annuity's , gic contracts, etc , another 7 in bonds and income funds , less any incoming interest or dividends and bucket 3 all equity's . you can even have a bucket 3a with growth and income funds and a bucket 3b with growth funds , commodity's , reits , etc

you can delay selling equity's at a loss for up to 15 years . that can be a mind easier in a down turn .

but the weight of the cash and bonds hurts you in up markets so the cushion you would grow in a more conventional manner is less .

but many folks do like using buckets .

we use 2 years draw and an emergency fund in bucket 1 , assorted bond funds in bucket 2 and bucket 3 all our stock funds .

we start at 40/60 but as cash and bonds get spent equity's allocation rise until you refill . depending how aggressive you want to let the portfolio grow before refilling you can refill earlier when markets are up or wait until you draw them down years later .

remember spending down cash and bonds before selling off some equity's has you on a rising glide path equity wise

Last edited by mathjak107; 04-13-2016 at 04:53 AM..
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