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Watch out for the Windfall Elimination Provision if you do not work your full allotment of years. Only read the first page, not sure if it was mentioned.
It wasn't mentioned because it isn't applicable.
WEP only comes into play for people who have a pension based on work for which Social Security deductions were not taken. It doesn't appear as if the OP has any pension whatsoever, much less one based on service not covered by Social Security.
Few people will take you serious, that you are retired pre-age 65 (how dare you!)
I have family member(s) with a little more cash than I have telling me I'm out of my mind to even consider it. Some are older but a couple are younger than I. Anyway this was good stuff! thank you.
For what it is worth, without running all your numbers, my sister was widowed at 54 after she had already stopped working. She has basically the same assets/expenses as you do. She is not going back to work and we don't believe she needs to, as well as having that validated by 2 financial planners.
Her plan goes to age 90-95, obviously it cuts out expenses for my BIL, and she has health care covered. She will be delaying collecting her husbands SS to her FRA of 67. She probably will start collecting her own benefits at 62 which are only about $15,000 and then switch to husbands at 67.
I agree with others that your budget is probably what you should focus on. Are you swagging it or have you actually gone over it line by line? Using percent of current income is not a great estimate imo.
Also, I would focus on tightening the belt in the next few years and buying new cars or anything else major that you need so you don't have to deal with those expenses.
As for your social security questions, I would make an appointment with them and go get the answers from the horses mouth. Experience varies, but I found them very helpful and well informed.
One thing I forgot. Consider rolling your 401K over to an IRA and in the early years where you have presumably little to no taxable income, convert to Roth so you will pay little tax on that money and then have it available to grow and withdraw tax free.
Thanks for sharing BLONDY. Having medical coverage I'm sure was (is) a huge win for your sister. The Social Security office is an awesome suggestion for sure that I'll look into.
Our spending is pretty tight at the moment saving 35% of what I make. Still scaling back on cars, homes and loans (family) are already in the works.
Thanks for sharing BLONDY. Having medical coverage I'm sure was (is) a huge win for your sister. The Social Security office is an awesome suggestion for sure that I'll look into.
Our spending is pretty tight at the moment saving 35% of what I make. Still scaling back on cars, homes and loans (family) are already in the works.
Appreciated!
Well, not sure I consider the $10,000 she's paying for medical a win, but she is unwilling to give it up at this point and afraid of ACA; that may change. She decided to cut back in other areas for now.
I will say this has been a challenge for her other than the obvious of losing her husband.
So some of it depends on the relationship you already have with money. For her, her only relationship was earn a small part of what they had, spend, spend, spend, and hand BIL the bills until he said stop.
It has taken her two years to get close to living within her budget and quite frankly its quite generous for the COL here.
If you have more self discipline with money, it will be easier.
Ultimately, if you want to stay retired and not go out to work even part time, most people find a way to live within what they have. You have to pick your priorities.
One thing I forgot. Consider rolling your 401K over to an IRA and in the early years where you have presumably little to no taxable income, convert to Roth so you will pay little tax on that money and then have it available to grow and withdraw tax free.
The problem with rolling it over is I can't access it without penalty until 59.5 and I want to stay away from the 72t at the moment. The year I turn 55 I can have full access to those fund without penalty. That's basically why I've stated retirement at 54.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by MCNE
... The year I turn 55 I can have full access to those fund without penalty. That's basically why I've stated retirement at 54.
Good idea, go for it.
Things may (will) change, but you can adapt, and you have a plan.
Enjoy the final few months of your corporate career. Several of us read the book "Dying Broke" a few yrs before retirement. For some, it was very 'freeing'. "i.e.... Quit your Job, but don't tell your Boss" Co-workers cast aside the previous 'seriousness / worry / performance' of the corporation and finally were FREE to enjoy work, co-workers, and the silly game of corporate 'rules'. they took the message from the book "consider that you are really just a sub-contractor selling hours to your employer" Give them a good value and MOVE ON with your day / life. Just put in what is REQUIRED. No longer fall on the sword for your company or boss. Very interesting that one boss commented... "I don't know what got into you, but KEEP IT UP, you are no longer 'over-focused' on work, and you are a lot easier to manage"... little did he know we were putting about 50% less effort into our job (but getting done minimum required), and focused on preparing for our retirement.
One of my kids writes a 'skit' of his workplace (in secret of course); he names and casts the characters, it is all just a game / stage-play. He actually gets a kick out of the 'drama' of it all, and the ongoing 'saga' that he only participates in "From a distance / as an observer / screenwriter". Yet it is his very stressful and intensely responsible corp employment 'job' to put in his long hard days and deliver superior company results. He will retire LONG before my 'retirement age' of 49.
Hint: disassociate yourself from your 'work-identity' sooner than later, just don't tell anyone at work.
My hiring manager accrued 9 weeks of vacation and just 'disappeared' 9 weeks prior to retirement. (never even cleaned out his desk, or set foot in his former great and benevolent employer). I talked to him this summer (26 yrs AFTER he left). He claimed he had got an idiot as a boss (tho this guy was at senior level too), so... he went home one weekend (at age 54) calculated his nest-egg, and determined enough was enough!.
in 26 yrs he has not touched his principle, and lives very well. He just bought a new car!. (they chose to move out-of-state to a Del Webb community, felt very YOUNG for 20 yrs, but now beginning to 'fit-in'
Last edited by StealthRabbit; 10-10-2016 at 08:06 PM..
Awesome story and so close to home. I know it's time just trying to pull it all together and deal with these last two year or so. Looking forward to it and what I'm sure will be a challenge at times.
I'll go work at Starbucks (or someplace) part-time to get medical before I ever pay 30k per yr on medical.
I hope you realize that RIGHT NOW a good assisted living or memory care facility is running around $6,000 per month. In an average place like Florida. Your insurance won't pay a penny unless it's LTC insurance.
And that's IF you can find one that's high quality. Skilled Nursing Facility is another story and can be slim pickings when the emergency happens.
It's all fun and games until you get a diagnosis and it's too late to realize the "I'll never go to one of those places" strategies.
And formerly braggy Starbucks is now cutting it's healthcare plans to basically catastrophic. For example.
Just sayin'. It's a trend.
The good news is you can probably afford a Continuing Life Care Community at an age you'll need to think about that (start NOW LOL)...which offers Independent Living (which is just a normal house or apartment like an HOA set up), for an equity payment to enter - then a monthly "rental" fee (call it your Long Term Care coverage) which allows you and your spouse to move to Assisted or Skilled and Hospice or Rehab and Home Health (or Memory Care if they have it at the one you chose) for the same monthly amount forever if you should ever need it. They don't have a hospital with doctors but they have nurses. So you still need healthcare coverage. But you won't have to liquidate your assets for medicaid to go to a crappy SNF long term. Short term insurance will pay but only , like, a month.
It covers all your housing, amenities and one daily meal. Not sure if the transportation is free or not but they have all that, too. You don't need homeowners, landscaping, utilities, repairs etc. They do it all. AND you can do anything you want with the house you chose. Like flooring, etc. The one I know - you pick out what you want and they reno it for you before you move in. One woman I know knocked out walls and stuff like on HGTV LOL.
The trick is to move to one in time BEFORE you need the ALF or SNF because they won't generally let you move into those facilities - they're reserved for residents who already live there in Independent.
Don't laugh or think it's premature to think about it. It's priceless when you get a dementia diagnosis (for example) out of the blue at an early age. There's no Magic Eight Ball to predict if you'll be healthy at 60 or suddenly not.
I work at this one every day (dog walking business) and they do allow outsiders to use the more advanced facilities like the ALF or REhab IF they have vacancies, I heard, but last year they didn't. Last year one of my clients had to go to Memory Care and they wouldn't take her and it was tough finding the "right" place for the family.
They actually even have snow birds who've bought into the place for future use but only come down here and use it in winter. And because they allow reciprocal travel to any property in the country they do that too. They're only on the East coast though. The entry starts for a small 1/1 is $80,000 and around $2300 per month I think. Then of course it graduates to a single or attached twin large house like 3/2 for more.
Last edited by runswithscissors; 10-10-2016 at 09:17 PM..
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(how dare you!)
