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.
so will dividends and equity gains if you can plan well enough to stay in the zero % capital gains brackets and unlike depreciation never gets recaptured .
I'm not retired yet. Currently we have the following set up for our retirement years:
1. Social Security - I will begin at age 62, my husband will take spousal on me and then take his at age 70.
2. Pensions
3. Annuities - Currently we each have an annuity. I plan to also purchase another DIA or a SPIA
4. Dividend Stock
5. Very small IRA - I don't really consider this income (except for tax purposes). To my mind it is just spending my savings.
6. Savings
One thing that people haven't mentioned in this thread is the reverse mortgage. That is a possibility if the need arises and you own your home.
Rental income is not subject to the $15,760 limit after which the $1 SS deduction for every $2 earned over the $15,760 kicks in. It is subject, however, to income taxes and may cause some of your SS (up to 85%) to be taxed, depending on your total income. But rental income does come with tax deductions of its own.
We have multiple cash flows that start and stop at various times to approximate a level income with increases for COL.
DH has a defined benefit pension (with COLA), plus TSP account (which will be exhausted in about 3 years), plus rental income. When the TSP is exhausted, he will be FRA for his SS and will file then.
I have a defined benefit pension (with COLA), a temporary annuity (thru my former employer), and stock investments (still untouched). My annuity will end around the time DH reaches SS FRA. My SS won't kick in until at least 3 years later.
I used the temporary annuity as a bridge to fill the gap between our retirement date and DH's FRA, it was offered in conjunction with my pension. My pension was reduced, in exchange for 8 years of annuity. If I had known then what I know now, I would not have taken the annuity. We really don't need that cash and are putting it back into savings. We didn't realize just how much our COL would go down when we moved out of CA. On the other hand, it does act as a cushion against unexpected expenses and has allowed us to leave my investments untouched.
It got me to thinking about how diversified most folks at in retirement.
When we do retire, my best calculations going forward, and on the assumption the Feds don't cancel Social Security for more damn foreign escapades, we can simply pull from two pots. I haven't included the house in as it is basically a emergency fund based on the equity. But, that said it looks like we will have in place:
1. Social Security at 78% of what we need.
2. 401Ks at 22% to fill in the blanks.
Perhaps some real estate beyond the homestead might be a good idea as was indicted for tax purposes.
I might tap the paid for home equity to get some income property. Any ideas?
you are not getting an 8% return by delaying , you are getting an 8% increase but giving up checks and spousal benefits to get that additional 8%. your actual roi does not start until you pass break even . roi wise you are still at a loss .
All you say is true of course but if I elected to take benefits at my FRA while still working I would lose 25% of 85% of my benefits to federal income taxes.
What I did was figure what taxes I would have paid on my benefits and it had the effect of moving my break even point several years ahead.
Down the road I will probably pay taxes anyway because it is hard for me to envision actual quitting work. Maybe go part time but actually quitting? No, that I don't see yet.
Also, my wife is collecting her full spousal benefits having turned 66 in April just before they ended the file and suspend. We got real lucky by about a week.
Rental income will generally bring with it some nice tax benefits.
ONLY if you don't ALREADY have an appreciable taxable income. Once your AGI is something over 100k you get nothing for depreciation. I bought rental property and it's netted me nada while working. I MAY get some of the depreciation once I retire in 3 years
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.
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.
