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I'm not a money person.
I can see where annuities can be attractive to provide a fixed monthly income.
However, we (my wife and I) will have multiple revenue streams in retirement and may not need to touch are 401K's. I was hoping to "let it ride" and continue to grow based on inertia (dividends/interest) for as long as possible. Providing a funding source for later in life with health events, assisted living, long term care, etc. (Or hell pulling it all out and taking one hell of a trip to Vegas.)
RMD's (when we get there) would be, pull the required amount, pay the taxes, then stuff the remainder into a sister non-tax deferred account with a similar profile.
WW
/——/ My SIL has a FP who put him into loaded mutual funds then charges him a fee. You have to be careful. Bad Advice From Financial Advisors
That is very much like the plan my wife and I have. We have a lot of little pots of money and should be able to avoid touching the IRAs till they make us start taking money out.
The other big choice is when to start taking Social Security. I will be 65 and my wife 62 when we retire. I have played with the numbers with each possible scenario and I think for us we will start as soon as we retire and not wait for more later.
My wife and I are in the situtation where I've been the higher wage earner and she's been the primary familiy person (in addition to he own working).
So my SS will be higher. We are actually playing around to delaying my SS as long as possible for the higher checks.
If something happens to my wife, her revenue streams go away. I'll have mine which is the higher of the two. However if something happens to me, then she gets a higher social security based on my earnings. That along with the Navy's Survivor Benefit plan annuity will bring her single person retirement income pretty much equal to what I would have if she passed.
Delay my SS so that it is available to her if something happens to me.
WW
We are pretty much in the same boat, though we did not do the SBP, just too much taken each month for so long before she would need it. I have already been out for going on 13 years so I would have lost 6.5% of my pension each month for those years so that my wife might get a stipend from them if I die first. Assuming I live to be 85 (which both my parents beat) I will have paid out 6.5% for 40 years so she could get something extra for a few years. Just did not make sense for us. But I also know that everyone is in a different boat.
I will also tell you the the difference may not be as much as you think. On your SS statement where it shows how much you will get if you wait till 70, that figure is determined with the assumption you will work till then, not that you have quit working and are just waiting to take it. Once I found this out it changed our strategy.
This is interesting. Anything you can link to that explains this.
The SS pages imply that benefits will increase based solely on delaying retirement. Now if you continue to work and have additional quarters of higher income, it could increase it further. But you would still have the base percentage increase each year you delay just based on the delay even if you aren't working.
I will see if I can find a link. I did not know about this till I heard it on a retirement podcast I was listening to, they stated the SSA does not make this fact easy to know as they want people to wait. As with everything the Govt does, you have to question why they really want you to wait.
Just suffice it to say that the number they show you for age 70 is calculated under the assumption you working till the time you start to take it. if you do not work till then you will still receive more than you would at age 65 but not as much as what they are showing.
Once I am home on my own computer I will see if I can find a link.
I will see if I can find a link. I did not know about this till I heard it on a retirement podcast I was listening to, they stated the SSA does not make this fact easy to know as they want people to wait. As with everything the Govt does, you have to question why they really want you to wait.
Just suffice it to say that the number they show you for age 70 is calculated under the assumption you working till the time you start to take it. if you do not work till then you will still receive more than you would at age 65 but not as much as what they are showing.
Once I am home on my own computer I will see if I can find a link.
/----/ I trade covered calls in my IRA. My goal is to replace the Minimum Distribution that starts in 2025.We are pretty much in the same boat, though we did not do the SBP, just too much taken each month for so long before she would need it. I have already been out for going on 13 years so I would have lost 6.5% of my pension each month for those years so that my wife might get a stipend from them if I die first. Assuming I live to be 85 (which both my parents beat) I will have paid out 6.5% for 40 years so she could get something extra for a few years. Just did not make sense for us. But I also know that everyone is in a different boat.
I will also tell you the the difference may not be as much as you think. On your SS statement where it shows how much you will get if you wait till 70, that figure is determined with the assumption you will work till then, not that you have quit working and are just waiting to take it. Once I found this out it changed our strategy.
age has never affected me at all in money regardsI am now past the mythical 59.5 years old and can pull the money out of my employee 401k and put into an IRA with my personal investment broker with no penalties or fees other than the tad bit higher maintenance fee.
I cannot really see a downside doing this as the options with the 401k are so limited.
Has anyone else done this?
Anyone think of a good reason not to do so?
age has never affected me at all in money regards
what if you don't make it to 70Code of Federal Regulations § 404.313
What are delayed retirement credits and how do they increase my old-age benefit amount?www.ssa.gov
This shows how the calculation works for delaying retirement until after full retirement age (FRA).
You are correct, thank you for pointing this out.
At my FRA of 66y 10m the monthly increase factor * 12 = 8% per year.
If I stop working at 65y 10m and DON'T draw social security. Then earnings are fixed and don't continue. However because of not taking SS early there is no decrease. So at 66y 10m at FRA you still draw 100% FRA, but just based on earnings frozen at the point you stop working.
However, SS will still continue to increase by 8% at 67y 10m, 68y 10m, and 69y 10m (total 24% over the three years).
But you are correct, in my napkin calculations show that if you continued to work (assuming you are still in your high income years) the increase in the amount from 66y 10m to just before 70y would be greater than 24% because as you continue to work you have older "credit" months dropping off being replaced by higher "credit" months. However if you stop working you are still getting the 24% increase, just not the additional increased based off factoring in higher wages.
From my SS statement:
- Black Box = Redacted
- Yellow Highlight - this is the important part that confirms your previous input.
View attachment 889355
WW
Why?/——/ Avoid annuities at all costs.
i've contributed my max to 401k in indexed funds for 45 yrs...like a couple yrs after it beganCorrect me if I'm wrong, but aren't RMD a divisor into the account balance at the end of the previous year?
That means as the years pass you have to take the balance and divide is by a smaller number. That causes the account balance to decrease over time.
Uncle Sugar want's his tax money.
WW
View attachment 889361
what if you don't make it to 70
Why?
they have advantages if you know you WILL NEVER need the money in 20 yrsWhy?
www.linkedin.com
lol..........i've probably written about 200 in a career................so much to learn yetI'll send flowers?
[J/K]
This is why the determination is complex as a personal decision.
What is your heath, what is your expected health?
Do you come from a family with longer lives or did your parents/grandparents die from health issues at a younger age?
Are you single or married?
Are you the higher income earner or was your spouse the higher earner so that the SS Spouse Matching provision is in play?
What is your retirement financial situation? Do you need SS to pay the bills or can you afford to put it off.
.
.
.
An examination of these factors can help arrive at an determination of:
- Take SS early even though its a reduced amount,
- Wait until Full Retirement Age, or
- Delay SS for larger checks later.
WW
i've contributed my max to 401k in indexed funds for 45 yrs...like a couple yrs after it began
i have not looked at the statements but at a glance......there is no way i'll ever see that money.......when i'm forced to chop it down, i'll put it in a mutual fund
Why?
