U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 04-20-2016, 09:38 AM
 
Location: NC Piedmont
3,911 posts, read 2,885,095 times
Reputation: 6291

Advertisements

Quote:
Originally Posted by Perryinva View Post
A $5k/mo Bridge is pretty steep. Is that the amount that covers both yourself and your spouse with both near max SS at age 65 when delaying. Is that why you went that high? My bridge would be just for myself at 63 or 64, so only maybe $2500/mo, but for 6 or 7 years max.
Mine will be near max, hers middle of the road. I ran those numbers at the high end so I would get info in the form of "each % less in returns could cost me as much as X" and also just used some nice round numbers.
Reply With Quote Quick reply to this message

 
Old 04-20-2016, 04:46 PM
 
Location: Gilbert, AZ
3,195 posts, read 1,969,245 times
Reputation: 3333
Quote:
Originally Posted by ReachTheBeach View Post
An annuity for the bridge might be worth it to me
It just occurred to me that a different sort of annuity could be useful here. I've never seen something like this offered, however.

What could be useful is a period certain annuity, with the provision that benefits terminate upon death. This sort of contract would benefit a bit from mortality credit, although probably a minor amount for someone who's in their early 60s.
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 04:50 PM
 
71,841 posts, read 71,919,037 times
Reputation: 49410
i am not sure i saw them like that , mostly because odds are slim enough would die to fund it well in only a bet on a few short years .
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 04:57 PM
 
Location: Gilbert, AZ
3,195 posts, read 1,969,245 times
Reputation: 3333
I just looked up the mortality tables. At age 62 the death probability (over one year) is roughly 1.25% for a man, and 0.75% for a woman. So not really worth the bother.
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 07:06 PM
 
2,881 posts, read 1,017,276 times
Reputation: 3292
Quote:
Originally Posted by ReachTheBeach View Post
I like the bridge account idea a lot. Depending on how long I am bridging, it could change my perspective on risk tolerance with the rest. I don't mean taking crazy risks to chase big gains; I just mean not being ultra conservative.
I'm planning something similar. I have a 403b that gives 4% a year. I plan on using that as bridge with my pension to get me to FRA 66.8 when I retire at 62 and then collect pension and SS. This would meet my needs without having to touch my 401k money.
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 07:22 PM
 
Location: Central Massachusetts
4,800 posts, read 4,857,647 times
Reputation: 6379
Quote:
Originally Posted by Beach Sportsfan View Post
I'm planning something similar. I have a 403b that gives 4% a year. I plan on using that as bridge with my pension to get me to FRA 66.8 when I retire at 62 and then collect pension and SS. This would meet my needs without having to touch my 401k money.
If I read this right. You retire at 62 with Pension and 403b and that will bridge you until 66.8 when you will take SS and begin 401k withdrawals. If that is right you have a good plan in my book.
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 07:36 PM
 
2,881 posts, read 1,017,276 times
Reputation: 3292
Quote:
Originally Posted by golfingduo View Post
If I read this right. You retire at 62 with Pension and 403b and that will bridge you until 66.8 when you will take SS and begin 401k withdrawals. If that is right you have a good plan in my book.
Thanks. Yes at 66.8 I will use pension and SS, the 401k money is extra I realize it wasn't clear in my post
Reply With Quote Quick reply to this message
 
Old 04-20-2016, 07:52 PM
 
Location: NC Piedmont
3,911 posts, read 2,885,095 times
Reputation: 6291
Quote:
Originally Posted by Beach Sportsfan View Post
Thanks. Yes at 66.8 I will use pension and SS, the 401k money is extra I realize it wasn't clear in my post
But it begs the question - why not spend some of the 401K money and bridge to 70? I would at least run some numbers to see when you would break even using simple math.
Reply With Quote Quick reply to this message
 
Old 04-21-2016, 12:42 AM
 
Location: RVA
2,172 posts, read 1,272,094 times
Reputation: 4492
Yes, that was my thought too, since I also have similar type numbers. If it's worth bridging to FRA for 6% per year increase in SS, then planning to do it for 8% per year for 3 more years would be a no brainer, depending on the size of the 401k at the time.

If I can count on a steady pension plus SS income stream (both of us) of $110k at 70 (with an equivalent total tax of 12%) by delaying, with expenses in the $70k range, (which would be very generous for us), it's well worth spending down even an $800k 401k or IRA to $500k to get there, especially if say half or more is a Roth. I would actually have significantly more after tax savings at that point from income and RMDs per year than I do now, rebuilding savings for very old age quite fast.

The key for us is the pension size (diminishing in spending power since neither of ours are COLA ones) from retirement age through 70, when the larger lower taxed SS kicks in. That requires me working until 62 or 63 to get there. The differential in income vs expenses that will allow no voluntary tax deferred saving withdrawals for 10 or more years, makes recovery of the savings easy, so when inflation and health care costs finally eat away at the value of the pension, requiring savings withdrawals to maintain income levels, it should be more than adequate until the end.

Last edited by Perryinva; 04-21-2016 at 01:04 AM..
Reply With Quote Quick reply to this message
 
Old 04-21-2016, 01:47 AM
 
71,841 posts, read 71,919,037 times
Reputation: 49410
if you have no other income while bridging an ira can have up to 42k or so pulled out at less then 5% tax . if you have the resources , what could be better than drawing 336k over 8 years at almost no tax and reducing rmd's . that is a gift from the tax gods . in fact if you can stay under 22k you can have it tax free .

that is 176k in tax free money over 8 years that you wrote off at higher brackets while growing ss and reducing rmd's as well as likely going to get a nice aca subsidy too on health insurance from 62- 65 .. what a nice comprehensive valuable package that strategy can make .

had i known i could have over funded my permanent life insurance policy every year , got 4% tax free since that is my floor and paid no fees and commissions on any over funding since that is the rules i would have done that instead of getting 1% on my cash . i would have borrowed it out tax free now in retirement without ever having to pay it back .

oh well live and learn , that is the price we pay by thinking we know all we need to know and we don't need no stinkin adviser .

Last edited by mathjak107; 04-21-2016 at 03:15 AM..
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top