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Old 04-02-2010, 12:09 AM
 
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Quote:
Originally Posted by mathjak107 View Post
its all about lifestyle and where you live, here in new york 40k after taxes and medical would have you living a life style not many of us would find much fun or care to do
But for most, it's possible for most to move out of New York to somewhere cheaper, since most places are cheaper than NYC.
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Old 04-02-2010, 03:04 AM
 
71,507 posts, read 71,674,131 times
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Quote:
Originally Posted by newenglandgirl View Post
I know I"m dense but here's some questions from my BIL that I can't answer.

1) All while collecting SS monthly from ages 62 - 70, you have to pay income taxes on that, do you not? So don't you basically "lose" that amount that is paid in taxes each year? Where is that made up along the way?

2) Can't you only do a Roth UP TO age 70?

3) What kind of vehicle is the money in, in the Roth? If it's a bank CD Roth, you have to be earning (from actual work) at least the same amount of $ that you put in for the previous year. What if you are no longer earning work income? Are you talking about a specific vehicle.

4) For those on disability SSDI instead of SS, how does this work with your payback plan? Can people do this with SSDI.

5)) Are you saying that you are SPENDING those early SS payments and then just paying it all back at age 70 out of savings. Or--are you socking away the SS payments and holding it all to pay it back? If this is the case, that you are just holding it, why bother to do this at all?

people on ssdi are converted to ss once they reach full retirement age so i guess it works the same for them too but havent read anything on it.

you need to pay back everything by about 69-1/2 to 70 because at 70-1/2 you can no longer convert.

the idea in my case is to take much larger withdrawls early on and have the payback act as if you were buying a annuity with the money that will refill your nest egg

when you pay back ss you have a choice of tax credit for what was paid or a straightline income deduction according to what i read


we are talking roth conversions , not contributing earned income to a roth so earned income isnt a factor.. the conversion is different rules than a roth contibution.

Last edited by mathjak107; 04-02-2010 at 04:17 AM..
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Old 04-02-2010, 04:01 AM
 
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Quote:
Originally Posted by mysticaltyger View Post
But for most, it's possible for most to move out of New York to somewhere cheaper, since most places are cheaper than NYC.
yes but things dont always work as planned in the sence we are leaving nyc for our home in PA.

the fact is while a 2 bedroom apartment in nyc is fine we had to buy a 3 bedroom house in pa. why? because now when the kids visit they have to stay over.. the house costs about the same as the 2 bedroom apartment.

of course i get alot more for the same money in pa but the cost of a home was almost a wash.

we did a cost comparison and while utilities, insurance and food were a little cheaper most of lifes expenses were so close.

healthcare, clothes,cars, repairs,college , all were the same or close..

yes you can find some rural areas down south or west that are very cheap to live but you have to do your homework to make sure the things you use and buy are actually cheaper
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Old 04-02-2010, 08:31 AM
 
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Quote:
Originally Posted by mathjak107 View Post
yes but things dont always work as planned in the sence we are leaving nyc for our home in PA.

the fact is while a 2 bedroom apartment in nyc is fine we had to buy a 3 bedroom house in pa. why? because now when the kids visit they have to stay over.. the house costs about the same as the 2 bedroom apartment.

of course i get alot more for the same money in pa but the cost of a home was almost a wash.

we did a cost comparison and while utilities, insurance and food were a little cheaper most of lifes expenses were so close.

healthcare, clothes,cars, repairs,college , all were the same or close..

yes you can find some rural areas down south or west that are very cheap to live but you have to do your homework to make sure the things you use and buy are actually cheaper
You have hit on a major point regarding housing cost and transplanting. Property taxes may be the same moving a more developed area to the south but you can get more house for the money thus paying less in taxes if you buy a comparable house for half the cost. However if you pay the same amount for a bigger house as you did the cost will be the same. That is a frequent discussion when some transplants said their cost of living was about the same. If you are determined to spend the same amount of money while getting more your expenses will be the same.
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Old 04-02-2010, 03:33 PM
 
Location: Near a river
16,042 posts, read 18,969,510 times
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Quote:
Originally Posted by mathjak107 View Post
people on ssdi are converted to ss once they reach full retirement age so i guess it works the same for them too but havent read anything on it.

you need to pay back everything by about 69-1/2 to 70 because at 70-1/2 you can no longer convert.

the idea in my case is to take much larger withdrawls early on and have the payback act as if you were buying a annuity with the money that will refill your nest egg

when you pay back ss you have a choice of tax credit for what was paid or a straightline income deduction according to what i read


we are talking roth conversions , not contributing earned income to a roth so earned income isnt a factor.. the conversion is different rules than a roth contibution.
OK, thanks, I think I get it. Three q's:

- what if you die shortly or later-soon after the payback and your spouse or partner (if you have one) loses all that cash that you paid back with

- is there a limit on how much you can convert to a Roth before age 70 1/2

- what is the best Roth vehicle to use at senior age - a regular old Roth IRA-CD adequate?
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Old 04-02-2010, 04:33 PM
 
71,507 posts, read 71,674,131 times
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any amount can be converted to a roth, you just need to pay or offset the taxes...

as far as what to put it in? well i cant give financial advice but most retirees still need there money to grow. even at 70 you may have 30 years of life left to fund.

depending on how much you need from your nest egg and your tolerance for risk will determine what you put it in.

for myself i keep most of the money i will use to eat in 15 years or more in equity funds.... i keep money to eat in the next 7 years in cd's,immeadiate annuties and the bank and money to eat in 8-14 years in bonds, un-traded reits paying 7% and bond funds

any of the above can be bought in your roth.


at least if you die and you paid back the ss your spouse will get that much higher ss payment now for life. that may be worth way more then the money that was payed back...
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Old 04-03-2010, 02:30 PM
 
Location: Near a river
16,042 posts, read 18,969,510 times
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Thanks.

What is the yield on equity funds and where/how to purchase - on your own or through a broker? Is there a minimum on this?
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Old 04-03-2010, 08:00 PM
 
Location: Great State of Texas
86,093 posts, read 72,479,637 times
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Quote:
Originally Posted by mathjak107 View Post
yes but things dont always work as planned in the sence we are leaving nyc for our home in PA.

the fact is while a 2 bedroom apartment in nyc is fine we had to buy a 3 bedroom house in pa. why? because now when the kids visit they have to stay over.. the house costs about the same as the 2 bedroom apartment.

of course i get alot more for the same money in pa but the cost of a home was almost a wash.

we did a cost comparison and while utilities, insurance and food were a little cheaper most of lifes expenses were so close.

healthcare, clothes,cars, repairs,college , all were the same or close..

yes you can find some rural areas down south or west that are very cheap to live but you have to do your homework to make sure the things you use and buy are actually cheaper
Again..mathjak107 is right on the mark. I believe I'm the one who posted the $40K annual after retirement.

Took me 2 years of looking and reading and investigating before I "found it". 3/2 in a rural area. Ag exempt and will be paid off when I retire, so property taxes are very low, septic and well. Electric is from a co-op and they are priced lower than the big boys here in Texas (TXU) and phone..well AT&T is AT&T. So my expenses will be much lower then where I am now. It's located in a conservative agricultural county here in Texas so they have the basic services but don't go hog wild with "let's pass a bond to build this and that".
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Old 04-04-2010, 04:08 AM
 
71,507 posts, read 71,674,131 times
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Quote:
Originally Posted by newenglandgirl View Post
Thanks.

What is the yield on equity funds and where/how to purchase - on your own or through a broker? Is there a minimum on this?
if you are asking all these types of questions then you need a good basic education about investing before anything.

mutual funds are not a specific investment, they are merely a collection of many many types of investments and asset classes. each are different and invest in different things . they have different goals,risks, returns and yields.
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