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Old 12-05-2018, 04:15 PM
 
Location: Washington State
18,635 posts, read 9,625,296 times
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Quote:
Originally Posted by 4khansen View Post
I will be re-retiring from a part-time position soon and have been putting $24,000 a year into a 401k for the last 4 years. Will have about $106,000 in that fund when I retire for good. (at 3% guaranteed interest income)


I will be 64 and wife and I currently have pension income of $6,600 take home a month along with her social security of $1,700 take home after deductions for Medicare premiums. So total take-home income runs around $8,300 a month.


I could take my social security of around $1,500 take home at 64 OR should I take $2,000 a month out of my 401k I funded and put about $400 a month into prepaid income tax a month and use $1,600 a month as income stream? That should last about 55 months.


This is my quandary . . . I could hold off on social security until around age 69 and let my social security grow until my take home SS is around $2,500 a month and pay down my 401K to myself, or start social security now and not use my 401k.


Either way I am not in any great need of the money, and I know if I use the 401k its gone and it would not go away if I didn't use it. Social Security, on the other hand, is a crap shoot. I could die tomorrow and my wife gets nothing from it. (as her social security almost matches mine exactly).


It's not an exact science I know, but what would you choose to do?
My first thought is why can't you live on $8300/mo in Iowa? You need that 401K fund as a backup so I wouldn't recommend tapping into it. I would recommend you do your own analysis and then see a paid expert in your area to get advice on the best scenario for your situation given the tax implications. You're going to get varied and often uninformed opinions on a forum like this.
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Old 12-05-2018, 04:21 PM
 
71,811 posts, read 71,896,917 times
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why does anyone in iowa earn more than 8300 a month when working ? because they can and want more choices in life
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Old 12-05-2018, 04:31 PM
 
Location: SoCal
13,305 posts, read 6,369,679 times
Reputation: 9937
Desert landscaping is mostly cactus, need very minimum watering, if you water too much, it will grow leaps and bounds. You can’t kill cactus around here. Very hard.
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Old 12-05-2018, 04:38 PM
 
Location: Omaha, Nebraska
7,330 posts, read 4,176,914 times
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Quote:
Originally Posted by 4khansen View Post
I think I may try to wait on the social security until as close to 70 as I can. We can always use a little of our 401K or other funds sporadically and not monthly until then if needed. Otherwise, leave them alone.
The only problem with using the 401k as a backstop is the RMDs that will kick in at age 70 1/2, before you actually may need the money. I'd check with a tax professional to see if rolling it into an IRA and then doing a series of partial Roth conversions would be worthwhile.
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Old 12-05-2018, 04:43 PM
 
Location: SoCal
13,305 posts, read 6,369,679 times
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I wouldn’t do Roth conversion, I read you need about $800K in traditional IRA to make sense. Bogglehead had a thread on this. The 401k should be rollover to an IRA.
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Old 12-05-2018, 04:45 PM
 
2,631 posts, read 1,940,947 times
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I retired when my net worth was $1.5 million.


With those pensions, you're doing better than me.


I'd take the SS next year. Why? About 1 in 3 of my friends/relatives never made it to age 70. That's where the real question lies.


Assume nothing.
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Old 12-05-2018, 04:53 PM
 
Location: Scottsdale, AZ
7,737 posts, read 4,750,544 times
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Quote:
Originally Posted by NewbieHere View Post
Desert landscaping is mostly cactus, need very minimum watering, if you water too much, it will grow leaps and bounds. You canít kill cactus around here. Very hard.

Depends on who's doing the landscaping.


Our new home has lots of plantings, fruit trees and only a few saguaros. But the OP may be planning on xeriscaping, who knows?
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Old 12-05-2018, 04:56 PM
 
Location: Buckeye, Arizona
273 posts, read 109,571 times
Reputation: 282
Quote:
Originally Posted by Tall Traveler View Post
My first thought is why can't you live on $8300/mo in Iowa? You need that 401K fund as a backup so I wouldn't recommend tapping into it. I would recommend you do your own analysis and then see a paid expert in your area to get advice on the best scenario for your situation given the tax implications. You're going to get varied and often uninformed opinions on a forum like this.
Of course I can live on $8,300 a month in Iowa or in Arizona in a few months.... just want to live as well as I can basically anywhere I decide to live ;-).


As I mentioned, we don't necessarily need to take the money either way and may just decide to do neither until I am 70. We have other stocks, savings, 403b accounts, Roth IRA, regular IRA etc. that we don't plan to use on a regular basis until RMD's start. I'm glad I didn't mention those accounts, etc lol. Who knows what reaction that would have gotten me. I was just getting some feedback and what people think about extra income for those years between 64 and 70.


Looking at just those two income streams (that particular 401k and social security) I just thought one of the two would be nice extra money to have in my monthly spending budget. How to decide between each and how that affects our current and ongoing spending habits until I turn 70.
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Old 12-05-2018, 05:01 PM
 
Location: SoCal
13,305 posts, read 6,369,679 times
Reputation: 9937
If you have other money then it’s much easier answer, take the 401k and delay taking SS until 70. That’s what I would do. It’s wise you didn’t mention the rest. I was wondering how you could have such high pension(means high income when you’re working) and not have other savings, now it makes much more sense.
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Old 12-05-2018, 05:10 PM
 
2,871 posts, read 1,015,737 times
Reputation: 3291
Quote:
Originally Posted by TwinbrookNine View Post
I retired when my net worth was $1.5 million.


With those pensions, you're doing better than me.


I'd take the SS next year. Why? About 1 in 3 of my friends/relatives never made it to age 70. That's where the real question lies.


Assume nothing.
This as well as doing my calculations that it would take me 22 years at a 4% return on investment for taking SS at FRA plus the fact that no male in my family has gone past 82 due to heart issues changed my opinion and I will take mine early at 62. If I make it past 84 then Iíll be more than happy and still have enough between pension,SS and investments to live well.

Enjoy life we donít know how long we have or how much of it we will have healthy enough to enjoy it.
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