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No, but, if you can do it delaying can be used as a tax strategy.
it can be , unless the reverse is true and the higher ss propels you into iirma surcharges or a higher tax bracket or worse , get your ss taxed when it wasn’t
I was just talking to one of my friends who retired in 2000. Her husband had a good pension. They are frugal and saved I don't know how much. Her money from working for 11 years was all invested with T Rowe Price (and she told me it is still set up exactly the same).
They took SS at 62 and saved it. Not sure if/how they invested that chunk. I remember she did spend the first year on solar panels/free electricity in CA.
They can live on the pension and they travel extensively.
They're not "rich" they just saved their money and are frugal people. They have at least $1M in equity in the house they paid $27,000 for and $1,200 a year property taxes due to Prop 13.
I think taking SS at 62 and saving every penny of it and investing it conservatively is also a strategy worth considering. But, the no brainer option is to delay if you are able to (for whatever reason).
Some of their luck is timing. She is 77 and he is 80. They have had 23 years of retirement so far and stayed in good enough shape to enjoy international travel for at least 15 of those 23 years.
it can be , unless the reverse is true and the higher ss propels you into iirma surcharges or a higher tax bracket or worse , get your ss taxed when it wasn’t
No, unless I sell my house or win the lottery I will probably be okay. However, SS is going to be taxed no matter what due to the small pension. I don't think I can save myself from that. All I can do is shave a few percentage points off the brackets. I'll already be paying a lot for health insurance with my work plan plus Medicare (about $500 now). However, then there should not be much out of pocket.
Single Couple MAGI Part B
< $103,000 < $206,000 $174.70
$103,000 to $129,000 $206,000 to $258,000 $244.60
$129,000 to $161,000 $258,000 to $322,000 $349.40
$161,000 to $193,000 $322,000 to $386,000 $454.20
No, unless I sell my house or win the lottery I will probably be okay. However, SS is going to be taxed no matter what due to the small pension. I don't think I can save myself from that. All I can do is shave a few percentage points off the brackets. I'll already be paying a lot for health insurance with my work plan plus Medicare (about $500 now). However, then there should not be much out of pocket.
Single Couple MAGI Part B
< $103,000 < $206,000 $174.70
$103,000 to $129,000 $206,000 to $258,000 $244.60
$129,000 to $161,000 $258,000 to $322,000 $349.40
$161,000 to $193,000 $322,000 to $386,000 $454.20
with better tax planning and delaying socal security , a couple can draw out 27,700 a year tax free from ira money with the standard deduction alone as a minimum for up to 8 years and more if over 65 .
one could set a side a few years cash , some roth accounts ,as well as over fund a life insurance policy and borrow it out and have very low income while delaying ss .
had i planned better we could have had a 100k income while delaying ss and taken hundreds of thousands of dollars out tax free over 8 years
but all those years before retirement i thought i knew all i needed to know because i was doing well as an investor AND DIDNT NEED PROFESSIONAL HELP
wrong
up to now our taxable income was in the 12% bracket but with all the interest now generated and me working a bit that will likely change .
however only the portion above the 12% bracket will be taxed higher .
we will definitely take a jump in two years when my rmds start
Quote:
Originally Posted by mathjak107
that’s you , not others
My comment had to do with what you wrote about your situation and how you have come to realize had you done some tax strategy/planning you could have saved some money. All I have been doing is agreeing with that.
I dread RMD's that will force me to take more money out of my 401k than I want to. That's why I would rather use some of that money to delay social security between 66/67 and 70.
going back in to my old plan and looking at total costs , the 401k ran .52% with all administrative fees and fund fees.
but remember that is on a fidelity s&p 500 fund which can be had from vanguard or fidelity on your own for zero if you take some thing close to an s&p fund but not an s&p fund from fidelity and .03% from vanguard with voo .
so definitely higher costs doing it in a 401k but not terrible.
fidelity zero fee funds which you can buy thru an ira use their own proprietary index’s so they don’t have to pay licensing fees .
they are close enough to the actual indexes to be used as such
there can be some other fees too , like when i took my money there was a 50 dollar close out fee and 35 dollar over night mail fee to get it to fidelity quickly.
best way to do things may be to do the 401k up to the match , do the ira to the max , go back to the 401k for any excess.
Last edited by mathjak107; 12-07-2023 at 03:10 AM..
it can pay to watch the tax levels of those who may inherit your ira’s too.
our kids are in much higher brackets then we are so anything passed on can get hit very hard .
usually the kids are lower when they are younger but in my son and his wife case they both are very highly paid professionals so anything they inherit in ira’s will be hit high
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