401k to an IRA at 59.5 years old

[bdtex]

This is a great thread. Appreciate everyone kicking in with investment and retirement strategies. I turned 65 in November. My wife will be 54 in March. We've been together for 20 years. She's been a stay-at-home wife for about the past 15 years. Our retirement will be from my income and savings. We won't need as much money in retirement as I had anticipated many years ago. In June 2018, on the way home from a road trip to Georgia, she announced to me that she wasn't flying anymore. I said "Okay ." She's had a fear of heights since I met her and it has progressed into travel anxiety. I had planned many years ago to travel the world in retirement. Looks like I might be getting to do a couple of solo Civil War sightseeing trips a year and the rest of our traveling will be close to home.

I'll kick in a little more about me and our retirement nest egg and strategy tomorrow or Monday maybe when I am not so tired.

 

[odanny]

I agree and I've never had a money manager, other than my wife. I have a healthy (unhealthy?) distrust of doctors, money managers, contractors etc. I am a do it yourselfer to the max and that has worked out fine.

Yep, I'm only willing to trust myself with my portfolio, I understand the risk by now, and that my balance is fluid, and I can mismanage it and lose money, but am more comfortable with me doing that than someone else doing it, regardless of the outcome.

 

[Cellblock2429]

if your health is shit at 62 take it....if not, you might get hit by a bus or accident anytime, the chance of life

if you take your ssi at 62 and put it all in an indexed fund and not touch it for 5 yrs.....you'd have way more money while waiting to 67-70

/——/ I did the math and took my wife’s and mine at 62. If we waited until 70, it would take 11 years to make up the lost revenue. Sadly, my wife died at 71 and if she waited, all the money she put in to SS would have been lost.

 

[Harpy Eagle]

I talked to my money manager (the wife) and she has indeed begun transferring SOME of her 401k into a Roth IRA. We will owe ordinary tax on the amount transferred, but any earnings in the Roth will not be taxed.

My wife's contribution to her 401k are ROTH and mine are normal. I transferred all of mine from normal to normal as there is no way I would take the tax hit to convert it to a ROTH right now. Our actual income will be smaller in retirement thus we will be in a lower tax bracket, and if our plan to retire to Panama works out as we are planning we will not have to pay any income tax on the first $110,000 of taxable income.

 

[Harpy Eagle]

This is a great thread. Appreciate everyone kicking in with investment and retirement strategies. I turned 65 in November. My wife will be 54 in March. We've been together for 20 years. She's been a stay-at-home wife for about the past 15 years. Our retirement will be from my income and savings. We won't need as much money in retirement as I had anticipated many years ago. In June 2018, on the way home from a road trip to Georgia, she announced to me that she wasn't flying anymore. I said "Okay ." She's had a fear of heights since I met her and it has progressed into travel anxiety. I had planned many years ago to travel the world in retirement. Looks like I might be getting to do a couple of solo Civil War sightseeing trips a year and the rest of our traveling will be close to home.

I'll kick in a little more about me and our retirement nest egg and strategy tomorrow or Monday maybe when I am not so tired.

If you can, get a nice sized RV and explore the country. I know a couple that when they retired sold their house, put stuff in storage and bought a good sized RV and spent the next 2 years just traveling the back roads of America. They loved it.

 

[WorldWatcher]

This is a great thread. Appreciate everyone kicking in with investment and retirement strategies. I turned 65 in November. My wife will be 54 in March. We've been together for 20 years. She's been a stay-at-home wife for about the past 15 years. Our retirement will be from my income and savings. We won't need as much money in retirement as I had anticipated many years ago. In June 2018, on the way home from a road trip to Georgia, she announced to me that she wasn't flying anymore. I said "Okay ." She's had a fear of heights since I met her and it has progressed into travel anxiety. I had planned many years ago to travel the world in retirement. Looks like I might be getting to do a couple of solo Civil War sightseeing trips a year and the rest of our traveling will be close to home.

I'll kick in a little more about me and our retirement nest egg and strategy tomorrow or Monday maybe when I am not so tired.

Look into train trips there are some pretty good ones out there. Or maybe cruises.

WW

 

[Harpy Eagle]

Look into train trips there are some pretty good ones out there. Or maybe cruises.

WW

There is a 7 day cruise from NY to South Hampton on the QE2 for just about 1200 a person. I am sure there are less expensive ones also.

 

[MarathonMike]

My wife's contribution to her 401k are ROTH and mine are normal. I transferred all of mine from normal to normal as there is no way I would take the tax hit to convert it to a ROTH right now. Our actual income will be smaller in retirement thus we will be in a lower tax bracket, and if our plan to retire to Panama works out as we are planning we will not have to pay any income tax on the first $110,000 of taxable income.

That sounds like the right way to go for you. Our tax situation is the opposite as our projected income will increase in the future.

 

[Harpy Eagle]

That sounds like the right way to go for you. Our tax situation is the opposite as our projected income will increase in the future.

That sort of amazes me, I cannot imagine our "not working" income being more than our both working income.

but then again we just started saving for retirement about a decade go so outside of my pension, we were a tad behind the power curve

 

[MarathonMike]

That sort of amazes me, I cannot imagine our "not working" income being more than our both working income.

but then again we just started saving for retirement about a decade go so outside of my pension, we were a tad behind the power curve

I'm retired and the wife is still working but deferring most of her salary to 401K. We have a simple "lifestyle" (not much style involved) rental/dividend income and no debt. When she retires, pension plus RMDs plus her SS will increase our income.

 

[Cellblock2429]

If you can, get a nice sized RV and explore the country. I know a couple that when they retired sold their house, put stuff in storage and bought a good sized RV and spent the next 2 years just traveling the back roads of America. They loved it.

/——/ Do it today because the market dropped out of the RV business. They can’t give them away, at least that is what a YouTuber claims.

 

[Harpy Eagle]

I'm retired and the wife is still working but deferring most of her salary to 401K. We have a simple "lifestyle" (not much style involved) rental/dividend income and no debt. When she retires, pension plus RMDs plus her SS will increase our income.

That makes sense. We are in a different boat. I have been fighting with the IRS for a couple years now and was looking at back tax returns and in 2023 the wife and I made more than 4 times what we did in 2013. That year we had no savings, no retirement savings except for my Marine Corps retirement.

As the old ad used to say 'you have come a long way baby", in 5 years we will retire and never look back. By my estimates our retirement will be about what our "bring home" pay is now since we will not be putting into retirement accounts and the like. Add in we will not have 3 car payments or be paying for our son's college or a great many things we do now.

And if Panama turns out to be what we hope, 1 year after we retire there we will be paying just about zero income tax.

 

[MarathonMike]

That makes sense. We are in a different boat. I have been fighting with the IRS for a couple years now and was looking at back tax returns and in 2023 the wife and I made more than 4 times what we did in 2013. That year we had no savings, no retirement savings except for my Marine Corps retirement.

As the old ad used to say 'you have come a long way baby", in 5 years we will retire and never look back. By my estimates our retirement will be about what our "bring home" pay is now since we will not be putting into retirement accounts and the like. Add in we will not have 3 car payments or be paying for our son's college or a great many things we do now.

And if Panama turns out to be what we hope, 1 year after we retire there we will be paying just about zero income tax.

Wow, Panama that's a gutsy move! From what I hear it's a pretty ex-pat friendly place and cost of living is low while still being "nice" by American standards.

I like to hear about people who work hard, stick with it and eventually get to where they want to be.

 

[Harpy Eagle]

Wow, Panama that's a gutsy move! From what I hear it's a pretty ex-pat friendly place and cost of living is low while still being "nice" by American standards.

It is very ex-pat friendly and there is a large enough group of Veterans they even have a VSO in Panama City. We are making our first trip there in about 25 days, if that goes well we plan to go back in the summer with our adult children.

I like to hear about people who work hard, stick with it and eventually get to where they want to be.

As do I.

 

[Lisa558]

It is my understand is if you do it before 59.5 there is a penalty involved and you lose money.

I retired at 58 and rolled my employer’s 403B into my IRA right away. No penalty for rollovers.

 

[Harpy Eagle]

I retired at 58 and rolled my employer’s 403B into my IRA right away. No penalty for rollovers.

Thanks. I think the rules are a bit different when you are still employed but either way I did it last week and there is no penalty at all for moving it. Left 5 grand it in and will still be putting money in it for the next 5 years and getting the employer match.

 

[WorldWatcher]

I retired at 58 and rolled my employer’s 403B into my IRA right away. No penalty for rollovers.

Just curious, when you say IRA I'm thinking like my IRA with the credit union (which pay's crap for interest) or does this mean an IRA which is a different investment vehicle giving investment type returns?

WW

 

[Harpy Eagle]

Just curious, when you say IRA I'm thinking like my IRA with the credit union (which pay's crap for interest) or does this mean an IRA which is a different investment vehicle giving investment type returns?

WW

I cannot speak for her, but most of us in here are speaking of the latter.

 

[WorldWatcher]

Thanks.

 

[Lisa558]

Just curious, when you say IRA I'm thinking like my IRA with the credit union (which pay's crap for interest) or does this mean an IRA which is a different investment vehicle giving investment type returns?

WW

It was my rollover IRA, which I had with an investment firm, and into which I rolled over EVERY employer retirement fund (after leaving that particular employer) over my 40-year career. I then could choose to invest however I wanted - mutual funds, ETFs, bond funds, individual stocks, etc.