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Old 10-03-2017, 04:29 AM
 
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the problem is at that age it can be very expensive to buy a single premium life policy as getting a policy where you can pay premiums out over time for whole life is not likely in your 70's . over 70 is almost always going to be single premium requiring lots of money and you will still have rmd's next year . .
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Old 10-03-2017, 09:23 AM
 
Location: Ypsilanti, MI
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Quote:
Originally Posted by mathjak107 View Post
the problem is at that age it can be very expensive to buy a single premium life policy as getting a policy where you can pay premiums out over time for whole life is not likely in your 70's . over 70 is almost always going to be single premium requiring lots of money and you will still have rmd's next year . .

Yes, I should have added the caveats of being insurable, and insurable at a reasonable cost. I wasn't limiting it to single premium insurance only, policies with annual premiums would provide a legacy and eliminate the question of "What to do with next year's RMD proceeds?" But those policies may be harder/impossible to obtain.


EDIT: I just did some quick internet sleuthing and indeed, SPL policies from all underwriters have maximum age limits. These maximum age limits range from 75 to 80 years of age, and very few guarantee that all applicants will be accepted. The companies making those guarantee claims also have low maximum policy amounts, $15K to $25K. Still an option but with few instances of applicability. Hypothetical scenarios were offered of a 50 year old being able to buy a policy with a death benefit of four time the premium payment, and a 60 year old buying a policy with a death benefit of twice the premium amount. And the differential will only go down from there as the purchaser gets older.

Last edited by MI-Roger; 10-03-2017 at 09:36 AM..
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Old 10-03-2017, 01:00 PM
 
29,775 posts, read 34,863,854 times
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Quote:
Originally Posted by Nefret View Post
Well, I do want to treat it as found money. Our SS and pensions are more than enough to cover our living expenses and it would be nice to do something different with this "extra" money.

I have Vanguard make an automatic transfer into a taxable fund and with my other account at Rowe Price, I've put the money into granddaughter's college fund. This year we remodeled our bathrooms.

I like the idea of paying off our kids student loans. I'm also thinking it would be nice to purchase a vacation place, convenient to the whole family, where we could have family gatherings, hubby and I could spend part of the year there, and something to pass on to our 2 adult kids when we are gone. The yearly RMD's would cover the mortgage.

As I said in my OP, not knowing how many "good" years we have left, perhaps it is time to live it up a little. When I said that we live below our means---live frugally--I don't mean that we deprive ourselves. We just don't have expensive tastes. Also we live in a low cost area with relatively inexpensive golf, skiiing, etc.
Ok, now that you said this I go back to my previous post about our situation. They are very similar including Vaguard and TRowe Price. We have a third fund. All with a specific possible purpose in mind. Your question is similar to a comment my wife made the other day. This isn't the best place for your question. Look at it this way buy the vacation hone. Just as easily in your mind it could be a SS income paying for it. My wife's covers the cost of our place at the beach.

If you gave specific dollar amounts the thread might melt down. In summary go for it.
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Old 10-03-2017, 06:49 PM
 
535 posts, read 249,837 times
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Quote:
Originally Posted by Larry Siegel View Post
With the stock market up more than 200% since 2008, of course some of it feels like found money.

Buy a QLAC to the maximum permitted (to avoid income tax on the distribution), then invest in after-tax accounts or else just spend it.

QLAC: qualified life annuity contract.
I've begun reading a little about QLAC's which I'd not heard of before. Certainly worth looking into. I hate having to withdraw and pay taxes on money that I don't need right now.

Thank you for telling me about this.
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Old 10-04-2017, 03:09 AM
 
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but don't put them in an ira because you can delay rmds to 85 . they become a terrible deal doing that . you would do better with the money in a mattress .at least odds are you will get out what you put in . qlacs should be taken way sooner . they are not priced like longevity insurance would be which is dirt cheap .

you are paying full fare but not using much of the product delaying until 85 because you can . delaying social security is a far far better deal if you want an annuity product .

you can't find any commercially available annuity that gives you what ss does for the amount you will layout while delaying .

as a general rule no one should buy an annuity product without delaying ss first as there are very few exceptions to that .

https://www.kitces.com/blog/why-a-ql...md-obligation/

Last edited by mathjak107; 10-04-2017 at 03:28 AM..
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Old 10-04-2017, 07:51 AM
 
Location: Columbia SC
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Originally Posted by TuborgP View Post
Reinvested in after tax accounts for any future needs etc etc. Still investing independent of RMD's.
I have been doing the same thing. They are my rainy day fund.
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Old 10-04-2017, 09:55 AM
 
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This is why life is not all about racing to highest savings. Life should be about enjoying life in all stages.
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Old 10-04-2017, 03:41 PM
 
5,426 posts, read 3,448,244 times
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I need to read this thread - I need to start taking RMD's very soon and I do not need this money to live on right now.

(not that I maybe won't need it in the future)

I'm wondering what I should do with it and what would be the best use of it.
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Old 10-04-2017, 04:30 PM
 
29,775 posts, read 34,863,854 times
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Quote:
Originally Posted by matisse12 View Post
I need to read this thread - I need to start taking RMD's very soon and I do not need this money to live on right now.

(not that I maybe won't need it in the future)

I'm wondering what I should do with it and what would be the best use of it.
Reinvest in a taxable account. Realize you can probably if you can tolerate it take on more risk than most retirees who need their next egg. As noted approaching age 70 we are about 70/30. What this has done is to enable us to realize a higher rate of return over our first ten years of retirement. We staggered income coming in by taking SS at different ages. I just started mine post age 69 having taken spousal from 66 until then.

Are you still investing or are you breaking even now with income and expenses? Makes a big difference.
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Old 10-04-2017, 06:35 PM
 
6,353 posts, read 5,158,773 times
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[quote=mathjak107;49717783]but don't put them in an ira because you can delay rmds to 85 . they become a terrible deal doing that . you would do better with the money in a mattress .at least odds are you will get out what you put in . qlacs should be taken way sooner . they are not priced like longevity insurance would be which is dirt cheap.]

Can you please explain? (1) QLACs *are* longevity insurance - they are just a tax status for a longevity insurance product. (2) You can't put a very large fraction of your IRA into a QLAC anyway, so you're not deferring much of the tax past age 85. (3) You are right that QLACs should be bought younger, but if you're already older that is not an option but they still defer the tax and provide longevity insurance at the same time.

Quote:
you are paying full fare but not using much of the product delaying until 85 because you can . delaying social security is a far far better deal if you want an annuity product.
QLACs are very cheap if the income deferral is to age 85. For a 65 year old male, a $240,000 QLAC purchase will get you $100,000 a year starting at age 85 and ending at death, contingent on living to age 85.

Quote:
you can't find any commercially available annuity that gives you what ss does for the amount you will layout while delaying .

as a general rule no one should buy an annuity product without delaying ss first as there are very few exceptions to that.
I've already done that, and still am facing a large RMD.

I'll read this - MK is usually pretty good.
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