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)
Reply Start New Thread
 
Old 12-05-2018, 07:55 AM
 
Location: Buckeye, Arizona
268 posts, read 107,180 times
Reputation: 282

Advertisements

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?
Reply With Quote Quick reply to this message

 
Old 12-05-2018, 08:12 AM
 
36 posts, read 11,694 times
Reputation: 86
I don't see any bragging, I just see an honest question. I would take the Social Security because you need a reserve fund for emergencies.
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 08:31 AM
 
13,909 posts, read 7,405,593 times
Reputation: 25389
So you have $100K in income, a small 401(k), and a second Social Security check coming.


How are the pensions set up for death of spouse? What does the SSA say you would have for a Social Security check deferring to age 70?


If you die and your pension check stops, the survivor benefit for your Social Security check could matter. If both pensions continue to pay on death of spouse, it's 6-of-one, half-dozen-of-the-other. There really isn't a bad decision. You have too much defined benefit pension income for Roth conversions to make much sense with that 401(k) since it would end up being 22% bracket money.


As Mathjack always puts up, statistically, at least one of you will live to age 90. If the pensions stop on death of spouse, you have to plan for that and deferring Social Security makes sense.


If it were me, I wouldn't touch the 401(k). I'd plan to use it as my long term care policy. 3% fixed return is OK for the next year but after the next recession hits, you really want it all in the market so it can fund private pay assisted living and/or nursing home/memory care. You'll start having to take required distributions from it at 70 1/2 but you can let it pile up until then. If you're paying nursing home bills, that's a medical tax deduction so the 401(k) distribution to pay the bill becomes tax free.
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 08:41 AM
 
Location: Tucson AZ & Leipzig, Germany
2,375 posts, read 7,763,353 times
Reputation: 3571
You live in Iowa, not San Francisco or NYC, so the cost of living must be pretty reasonable. Why not just live off the $8300 per month? Leave the 401K alone as an emergency savings, and don't take SS until full retirement age. You said you don't have any great need for the money right now, so I think you answered your own question. I would rollover the 401K to an IRA after retirement, to remove it from the employer's 401K plan. Many 401K plans tag on extra fees.

If you have health issues now, and don't think you are going to live long, then take SS now. Most people in mid-60s who are in good health have a pretty good chance of living to mid-80s.
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 08:43 AM
 
Location: In the land beyond Ohare!
903 posts, read 465,223 times
Reputation: 1973
Legitimate question and asked all the time. You might want to look at this and many other articles on this issue. Also look at some of the calculators available that let you see the overall picture based on various scenarios. Ultimately it depends on your total savings, tax situation, health and comfort level. Personally, we're tapping into the retirement funds and letting SS grow.

https://www.cnbc.com/2018/12/03/many...oing-this.html
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 09:22 AM
 
71,563 posts, read 71,730,589 times
Reputation: 49156
it all depends if eventually you want to be more dependent on the outcome of markets rates and inflation by taking it earlier or more dependent on longevity by taking it later .

whether you spend down invested assets that will be gone forever delaying or taking ss earlier and having greater compounding on invested dollars vs a higher ss check can work out very close . one is just more dependent on markets ,rates and inflation and the other on your longevity
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 09:26 AM
 
71,563 posts, read 71,730,589 times
Reputation: 49156
no , it was a legitimate question . the bragging accusation is nonsense and is a typical response by some here that is unwarranted in many discussions here. this is a legitimate question the op has .
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 09:33 AM
 
11,128 posts, read 8,540,714 times
Reputation: 28094
Quote:
Originally Posted by recycled View Post
You live in Iowa, not San Francisco or NYC, so the cost of living must be pretty reasonable. Why not just live off the $8300 per month? Leave the 401K alone as an emergency savings, and don't take SS until full retirement age. You said you don't have any great need for the money right now, so I think you answered your own question. I would rollover the 401K to an IRA after retirement, to remove it from the employer's 401K plan. Many 401K plans tag on extra fees.

If you have health issues now, and don't think you are going to live long, then take SS now. Most people in mid-60s who are in good health have a pretty good chance of living to mid-80s.
Yeah, can you live in the pension only? Do you have health concerns that would make you want to get your SS sooner than later?
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 09:39 AM
 
Location: Buckeye, Arizona
268 posts, read 107,180 times
Reputation: 282
to answer the one question our pensions are 100% survivor for both of us, and actually the surviving spouse gets a pension increase of about $200 more a month. As the surviving spouse doesn't have a survivor any more then that pension actually increases a little. We both have what is called a "pop-up" pension upon the spouse's demise.


In other words, the pension total goes UP when one of us passes on. From $6,500 a month to $6,700 a month. I guess that is what is meant by "better off dead"?


Sorry I sound like I'm bragging, just wanted to know what people might do? Take the 401K or take Social Security or now whether to not do either???


I believe my social security at 64 before taxes and medicare premium costs would be about 2,000 a month, at 70 about $3,000 a month.
Reply With Quote Quick reply to this message
 
Old 12-05-2018, 10:22 AM
 
1,266 posts, read 289,073 times
Reputation: 1511
Quote:
Originally Posted by recycled View Post
You live in Iowa, not San Francisco or NYC, so the cost of living must be pretty reasonable. Why not just live off the $8300 per month? Leave the 401K alone as an emergency savings, and don't take SS until full retirement age. You said you don't have any great need for the money right now, so I think you answered your own question. I would rollover the 401K to an IRA after retirement, to remove it from the employer's 401K plan. Many 401K plans tag on extra fees.

If you have health issues now, and don't think you are going to live long, then take SS now. Most people in mid-60s who are in good health have a pretty good chance of living to mid-80s.
I think this is excellent advice. Good post.
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