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Anyway you can save a lot of money on taxes if you retire a few months earlier.
jrkliny, explain?? I'm just lost as to which exact factor you're referring to.
I really WOULD prefer to retire at the end of the year (actually let vacation take me to the first week in Jan. and earn an extra five weeks payout.
BUT I also really wanted to hit the PREVIOUS spring's housing market. (That's why I wondered about people's thought's on selling in the spring versus in November. Hardly anyone is house buying between Thanksgiving and Christmas. They just aren't.)
Which means:
-- sell the previous spring and rent for six months
-- or sell in November/December (ugh) when there are few buyers to get interested
One key will be if the job lets me retire from vacation/CTO and how MUCH time they'll let me burn like that.
One person was able to retire from vacation -- uh -- TWO WEEKS.
Another guy had 16 weeks and they made him burn some one or two weeks at a time the last 6 months he worked.
That's unfair treatment, BUT he didn't fight them on it, so he'd go away for two weeks. Come back, then work a week. And be gone another two weeks. etc. It was stupid. But he also was still living locally.
I can't imagine the company letting me burn SIX MONTHS of time, and retiring from that without coming back. But I can hope, right??
I also don't want to retire THEN sell because I can't afford the mortgage off of just my pension. And the main goal is selling retiring and getting to my already paid off hour ASAP.
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MIRoger, Oh my knowing what Medicare bases your premium on is good to know.
So one can work hard and boost one's last two years of salary to boost Soc Sec. (if it IS only a bit)….only to have that "cost you" in the form of a higher Medicare payment. Geez.
Anyone done the math on THAT to see which pays of better in the long run. IF the higher income means 50.00 more a month in Soc Sec, BUT only raises the Medicare premium by $10.00 more. That's at least still $40 to the good.
selhers, it sounds like you are ready to go. Why wait? I was in a similar situation with a June birthday. I found that in my area real estate moved best in the dead of winter. That sounded strange to me, but my agent explained that a great many people want to be settled by the end of the school year and they needed to start in the winter to hit that time frame.
Since I stopped working at the end of February, my first year taxes were low even with some payouts for accrued vacation time. My only financial issue was healthcare. Now there is Obamacare but when I retired my only reasonable option was Cobra at over $600/month. I found that I could pay for Cobra at anytime in the first 6 months and it would be retroactive to the date I retired. I got by without needing to pay for Cobra before I was on Medicare.
Anyway you can save a lot of money on taxes if you retire a few months earlier.
Not saying you are wrong, but on LI it almost always takes 3 months to close on a house once a contract is signed. So, perhaps, it could be different for people in other parts of the country where that long a time to close is unusual.
Exactly it takes 3 months or more. This is one reason winter is a big real estate time. Anyone who waits until summer to buy can be pretty sure that they will not close and move in before the start of school in the Fall.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I like your plan (ning)
I would plan to be sold, packed, and closed by 15 of May, use Vacation to get you through to R-day. but leave work on 15 May (if possible).
It is still springtime and you can get busy at enjoying your new freedom.
If you get a 'taxable' lumpsum distribution, you can mitigate with excess Retirement contributions, or a few other ways. I used a section 179 accelerated Business depreciation on some capital equipment I felt I needed / could justify and could resale later for same price. (deferring taxes). I had 17 weeks accrued vacation, so my 'spring' exit (aged 49) carried me till Fall. (when I stated grad school and got a stipend). No healthcare and still several yrs from 65, but lucky so far.
I headed out the 'work' parking lot and arrived at Utah National Parks by morning. Been like a 'vacation' ever since. never gave it a second thought. (work, that is...) It was a great job with great people, glad I was able to participate for 32 yrs and in over 6 unique careers and 4 international assignments within same company. Was great while it lasted... on to next chapter. Only my boss knew I was leaving.... poof GONE!
Exactly it takes 3 months or more. This is one reason winter is a big real estate time. Anyone who waits until summer to buy can be pretty sure that they will not close and move in before the start of school in the Fall.
Yeah, but that wasn't my point. The point was it doesn't usually take 3 months to close in the rest of the country. Most other places I've closed it takes 5 or 6 weeks.
I assume its the mandatory lawyer thing in NY, but I don't really know. Just know it never took me 3 months to close anywhere other than Long Island, and possibly all of NY.
Not saying you are wrong, but on LI it almost always takes 3 months to close on a house once a contract is signed.
Quote:
Exactly it takes 3 months or more.
I bought in 2003 – granted a HOT sellers market (which you would think put me as the buyer at a disadvantage.)
I was literally checking listing MULTIPLE times a day. (MD suburbs of DC)
Saw the house listed Feb 18th, walked through Feb 20st, next day made and offer (even tussled with the sellers’ agent over having them fill out a disclosure form instead of a disCLAMER. Told them we’d walk.... they bluffed saying they have a better offer. I held firm on the disclosure (MY agent wasn’t so sure)......1/2 hour later after their agent reamed my agent’s ear off, we had a deal.
Had an inspection in about a week (one minor issue was fixed) -- and were at the settle table for closing March 31st.
And just two month's ago in July, friends in the VA suburbs of DC recently just sold their house before it was listed, and closed in about a month.
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As for when in the year to sell, a co-worker who's a RE agent says the spring market really IS THE market you want to be part of if eat all possible.
I wondered where you were located that you could talk about listing and selling your house at will. That explains that! Good luck! I have about 4 years to get to where I am at that planning stage, plus we are not selling or relocating for at least 5-7 years after my retirement.
^^ The DC market has its slow periods, and dead times. It's not all roses and gravy. (Well you know what I mean)
I want to retire as soon after 65 as I can. I want to get on Medicare by July/August at the latest. And hope to be done by the following Jan 2. (or actually Jan 4th) I'm laughing now but yes I DID -- just for you -- check the calendar date for the end of the first work week in Jan 2026!!! Our work weeks end on Sundays so that would be Sun. Jan 4th! That vacation week (and 01/04 retirement date) will earn me five more weeks of vacation payout and one last defined contribution deposit! AND….the payout taxed at my new 2026 lower tax bracket!
selhars - although it's quite a ways away check with your HR on your retirement date. At my former company you could only retire on the first of the month.
Maybe I missed it but it appears as if the OP's plan assumes the primary house sells quickly. As we all know this is not always the case, it could be a year or longer.
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