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Personal Finance Advice and Education! (3 Viewers)

Obviously it's unique to everyone's situation, but generally speaking, it's probably a mistake to claim before full retirement age. There are really only a few specific instances where it makes sense to take it early.
I don’t agree with this at all in terms of “probably a mistake.” If I didn’t have a lot of traditional 401k/IRA money that I want to transfer into Roths during low or no income years (either before 62 or 62+ because I have a good amount in taxable accounts to live off that), I would take it at 62 and invest it. I’m still too far away to know how many low or no income years I’ll have to transfer to Roths, but I’ve done a few advanced calls including investment returns from 62 to 70 and as long as you can get 6-7% returns on the money you get from 62-70, you would never catch up starting at 70. That means that the monthly investment income plus your year 62 SS monthly amount would be higher than your 70 SS monthly amount. Add in the fact that you “own” the nut that’s producing the monthly investment income (all the money you got from 62-70) and that nut is yours/your heirs if you pass early. You don’t own the money that’s producing the age 70 SS income above the 62 SS income.

My situation could be much different in that I expect my wife and I to both be getting close to the max SS so no worrying about spousal benefits. If SS was a much bigger nut in my retirement income I would also consider working longer and waiting for SS, but most people who start at 62 do so because they have to not because they want to invest. That said, most people in here don’t appear to fall in that bucket.

*The only reason I don’t want SS and transfer to Roths in the same year is because you can lose up to 50% of your SS benefits pre-67 if you have too much income and the transfer would be considered income.
And what if you lost money on your invested early SS money?
Another example of the inconsistent thinking I regularly see on this topic. People are willing to give up the guaranteed 8% increase every year because they assume they can invest and the market will deliver more than that. The average real return of the market is below that. And historically the real return of a 100% S&P 500 portfolio is negative over a 10 year period 11% of the time. And most people in their 60s aren’t 100% equities, so their actual returns are even lower. So this feeling that 7-8% real returns of a retirement portfolio over 10 years is virtually guaranteed, which is what I typically hear form the “I’ll take SS early and invest it” crowd, isn’t without significant risk.

And again, these tend to be the same people that are worried that a 4% SWR is too aggressive.

ETA: this is also based on people 100% investing that early SS money, even net of taxes on it. Who actually does that?

For me, it isn't at all about believing I can invest it and earn 8%+ by investing. It is more about not having confidence that I will live long enough to come out ahead by waiting... and to a lesser degree not having confidence that the payouts will always be there throughout my life. The latter concern is what started this tangent of discussion.
 
Obviously it's unique to everyone's situation, but generally speaking, it's probably a mistake to claim before full retirement age. There are really only a few specific instances where it makes sense to take it early.
I don’t agree with this at all in terms of “probably a mistake.” If I didn’t have a lot of traditional 401k/IRA money that I want to transfer into Roths during low or no income years (either before 62 or 62+ because I have a good amount in taxable accounts to live off that), I would take it at 62 and invest it. I’m still too far away to know how many low or no income years I’ll have to transfer to Roths, but I’ve done a few advanced calls including investment returns from 62 to 70 and as long as you can get 6-7% returns on the money you get from 62-70, you would never catch up starting at 70. That means that the monthly investment income plus your year 62 SS monthly amount would be higher than your 70 SS monthly amount. Add in the fact that you “own” the nut that’s producing the monthly investment income (all the money you got from 62-70) and that nut is yours/your heirs if you pass early. You don’t own the money that’s producing the age 70 SS income above the 62 SS income.

My situation could be much different in that I expect my wife and I to both be getting close to the max SS so no worrying about spousal benefits. If SS was a much bigger nut in my retirement income I would also consider working longer and waiting for SS, but most people who start at 62 do so because they have to not because they want to invest. That said, most people in here don’t appear to fall in that bucket.

*The only reason I don’t want SS and transfer to Roths in the same year is because you can lose up to 50% of your SS benefits pre-67 if you have too much income and the transfer would be considered income.
And what if you lost money on your invested early SS money?
Another example of the inconsistent thinking I regularly see on this topic. People are willing to give up the guaranteed 8% increase every year because they assume they can invest and the market will deliver more than that. The average real return of the market is below that. And historically the real return of a 100% S&P 500 portfolio is negative over a 10 year period 11% of the time. And most people in their 60s aren’t 100% equities, so their actual returns are even lower. So this feeling that 7-8% real returns of a retirement portfolio over 10 years is virtually guaranteed, which is what I typically hear form the “I’ll take SS early and invest it” crowd, isn’t without significant risk.

And again, these tend to be the same people that are worried that a 4% SWR is too aggressive.

ETA: this is also based on people 100% investing that early SS money, even net of taxes on it. Who actually does that?

For me, it isn't at all about believing I can invest it and earn 8%+ by investing. It is more about not having confidence that I will live long enough to come out ahead by waiting... and to a lesser degree not having confidence that the payouts will always be there throughout my life. The latter concern is what started this tangent of discussion.
Totally understood. IMO the key isn’t my living, quite frankly I won’t need it. But I want my wife to have the maximum possible after I die.
 
For me, it isn't at all about believing I can invest it and earn 8%+ by investing. It is more about not having confidence that I will live long enough to come out ahead by waiting... and to a lesser degree not having confidence that the payouts will always be there throughout my life. The latter concern is what started this tangent of discussion.

Yup, that could change things. We just don't know. I think the latest says we'll be able to fund 83% without any changes in that 2033-35 timeframe. So while I believe changes will be put in place, and there are several viable options, we don't know how those might impact us. My guess is for those already in our 50s, changes will be minimal, they'll end up impacting our kids. The 1983 law had things that rolled out over 30+ years (like the increasing FRA). But I still adjust my projections down to 75% of my benefit just to build in a buffer.

If someone has the discipline to take it early and invest it all, good on 'em! If someone wants to rely on SS as longevity insurance, that's a reasonable approach. Some people just need the money to live at 62. If you're looking to maximize your survivor benefit, makes sense to me. I'm not dogmatic on the topic at all, other than wanting people to understand all of the factors that should go into their decision.
 
For me, it isn't at all about believing I can invest it and earn 8%+ by investing. It is more about not having confidence that I will live long enough to come out ahead by waiting... and to a lesser degree not having confidence that the payouts will always be there throughout my life. The latter concern is what started this tangent of discussion.

Yup, that could change things. We just don't know. I think the latest says we'll be able to fund 83% without any changes in that 2033-35 timeframe. So while I believe changes will be put in place, and there are several viable options, we don't know how those might impact us. My guess is for those already in our 50s, changes will be minimal, they'll end up impacting our kids. The 1983 law had things that rolled out over 30+ years (like the increasing FRA). But I still adjust my projections down to 75% of my benefit just to build in a buffer.

If someone has the discipline to take it early and invest it all, good on 'em! If someone wants to rely on SS as longevity insurance, that's a reasonable approach. Some people just need the money to live at 62. If you're looking to maximize your survivor benefit, makes sense to me. I'm not dogmatic on the topic at all, other than wanting people to understand all of the factors that should go into their decision.
For pretty much every financial decision I make, it's about the math. I don't let emotion factor into it. But this is one instance where the "math" isn't as clear because of the ages we're talking about.

If you asked me if I could get SS right now or could get that increase 10-15 years from now and the breakeven point is closer to when I'm 70, then yeah, I'm waiting all day.

But, when the breakeven point is at or past my predicted life expectancy, no thanks. I don't mind foregoing extra money from age 80+, even if it's substantial as long as I'm not at risk of running out at that point. And if I were in that position, I'm likely needed it earlier anyway.

13 years is a ways away for me to have to decide and MANY things could change at that point. I'll evaluate the tax implications, my current financial situation, my current health, and then make a better decision, but ballpark looking at it right now, give me the money starting at 62 and don't think twice about it. I wouldn't regret giving up $$$ at age 80+ as it's likely to be irrelevant for me.
 
But, when the breakeven point is at or past my predicted life expectancy, no thanks.
But is it really? https://www.projectbiglife.ca/life-expectancy-calculator
Fwiw, I answered as if I were a 62yo still doing what I am today. Expectancy was 90 for me. Granted, I might not be training long distance when I’m 62 but many in my team are, if not more so after they retired.
Even if not, we're talking less than 10 years. And functionally that may not matter.

Again, if the breakeven point were at age 70, I'd likely to be looking at this differently. But when the breakeven point is almost 80 years old (assuming no market returns), then I'm not going to worry that I could have been way richer at age 85 or 90.

And yes, my financial analyses assume a life expectancy of age 95. The idea being to be conservative and not run out of money if I make it to there. But, while my goal NOW is to maximize returns to help get me there, my goal at age 80+ isn't the same. As long as I'm in good shape financially, I'll be happy with modest returns and not looking to squeeze out every percentage point of ROI.

Knowing that I'd have lived 80 years maximizing returns, I'll be comfortable and without regret giving up even a sizeable chunk by not waiting to get those payments starting at age 70. I would absolutely regret not taking them if anything happens between age 62 and age 79 (breakeven point) and I feel that's a far likely scenario than the opposite even with my given life expectancy.
 
But, when the breakeven point is at or past my predicted life expectancy, no thanks.
But is it really? https://www.projectbiglife.ca/life-expectancy-calculator
Fwiw, I answered as if I were a 62yo still doing what I am today. Expectancy was 90 for me. Granted, I might not be training long distance when I’m 62 but many in my team are, if not more so after they retired.
Even if not, we're talking less than 10 years. And functionally that may not matter.

Again, if the breakeven point were at age 70, I'd likely to be looking at this differently. But when the breakeven point is almost 80 years old (assuming no market returns), then I'm not going to worry that I could have been way richer at age 85 or 90.

And yes, my financial analyses assume a life expectancy of age 95. The idea being to be conservative and not run out of money if I make it to there. But, while my goal NOW is to maximize returns to help get me there, my goal at age 80+ isn't the same. As long as I'm in good shape financially, I'll be happy with modest returns and not looking to squeeze out every percentage point of ROI.

Knowing that I'd have lived 80 years maximizing returns, I'll be comfortable and without regret giving up even a sizeable chunk by not waiting to get those payments starting at age 70. I would absolutely regret not taking them if anything happens between age 62 and age 79 (breakeven point) and I feel that's a far likely scenario than the opposite even with my given life expectancy.
Are you factoring in survivor benefits? Our life expectancy may be less but they may live a decade or two longer. To me it's not just about your own personal math/benefit
 
But, when the breakeven point is at or past my predicted life expectancy, no thanks.
But is it really? https://www.projectbiglife.ca/life-expectancy-calculator
Fwiw, I answered as if I were a 62yo still doing what I am today. Expectancy was 90 for me. Granted, I might not be training long distance when I’m 62 but many in my team are, if not more so after they retired.
Even if not, we're talking less than 10 years. And functionally that may not matter.

Again, if the breakeven point were at age 70, I'd likely to be looking at this differently. But when the breakeven point is almost 80 years old (assuming no market returns), then I'm not going to worry that I could have been way richer at age 85 or 90.

And yes, my financial analyses assume a life expectancy of age 95. The idea being to be conservative and not run out of money if I make it to there. But, while my goal NOW is to maximize returns to help get me there, my goal at age 80+ isn't the same. As long as I'm in good shape financially, I'll be happy with modest returns and not looking to squeeze out every percentage point of ROI.

Knowing that I'd have lived 80 years maximizing returns, I'll be comfortable and without regret giving up even a sizeable chunk by not waiting to get those payments starting at age 70. I would absolutely regret not taking them if anything happens between age 62 and age 79 (breakeven point) and I feel that's a far likely scenario than the opposite even with my given life expectancy.
Are you factoring in survivor benefits? Our life expectancy may be less but they may live a decade or two longer. To me it's not just about your own personal math/benefit

I'm sure I'm in the minority, but that doesn't apply to everyone.
 
But, when the breakeven point is at or past my predicted life expectancy, no thanks.
But is it really? https://www.projectbiglife.ca/life-expectancy-calculator
Fwiw, I answered as if I were a 62yo still doing what I am today. Expectancy was 90 for me. Granted, I might not be training long distance when I’m 62 but many in my team are, if not more so after they retired.
Even if not, we're talking less than 10 years. And functionally that may not matter.

Again, if the breakeven point were at age 70, I'd likely to be looking at this differently. But when the breakeven point is almost 80 years old (assuming no market returns), then I'm not going to worry that I could have been way richer at age 85 or 90.

And yes, my financial analyses assume a life expectancy of age 95. The idea being to be conservative and not run out of money if I make it to there. But, while my goal NOW is to maximize returns to help get me there, my goal at age 80+ isn't the same. As long as I'm in good shape financially, I'll be happy with modest returns and not looking to squeeze out every percentage point of ROI.

Knowing that I'd have lived 80 years maximizing returns, I'll be comfortable and without regret giving up even a sizeable chunk by not waiting to get those payments starting at age 70. I would absolutely regret not taking them if anything happens between age 62 and age 79 (breakeven point) and I feel that's a far likely scenario than the opposite even with my given life expectancy.
Are you factoring in survivor benefits? Our life expectancy may be less but they may live a decade or two longer. To me it's not just about your own personal math/benefit
Once I'm gone, she can fend for herself!
 
I ignore SS for retirement purposes. If it is there great, more money won't hurt. If it isn't or not as much etc then I won't be hurting.
 
I have 2 HSA's that I need to move to Fidelity. Both HSA's have monthly fee's. 1 has a really ridiculous investing platform. I've been dreading it and putting it off. But I got an e-mail from one of them saying they're doing another new annoying thing, so now I feel like it's go time.

On a very cool note, Fidelity will actually link up to their websites to facilitate the transfer of funds, which is super cool and convenient.
 
I have 2 HSA's that I need to move to Fidelity. Both HSA's have monthly fee's. 1 has a really ridiculous investing platform. I've been dreading it and putting it off. But I got an e-mail from one of them saying they're doing another new annoying thing, so now I feel like it's go time.

On a very cool note, Fidelity will actually link up to their websites to facilitate the transfer of funds, which is super cool and convenient.
Not to discourage you but I’ve been trying to transfer HSA funds from Navia to Fidelity for two months now. As far as I can tell the delays and issues are all on the Navia side, but still……
 
Worst experience of my life transferring a 401k out of Fidelity to Vanguard. 100% incompetence on Fidelity side. I may actually still pursue litigation on it.
 
I had zero issues transferring 1 brokerage account and 2 IRA accounts from Fidelity to Empower (Personal Capital at the time) a couple years ago.
 
No issues here going from E*Trade or TSP to M1 or M1 to Robin Hood for my traditional IRA (say what you will, I figured the 3% bonus on $400k was worth it). Although with the TSP they needed a check for the deployed tax free traditional funds. But that’s an oddity anyway.
 
Worst experience of my life transferring a 401k out of Fidelity to Vanguard. 100% incompetence on Fidelity side. I may actually still pursue litigation on it.
a huge PITA going from ameriprise to vanguard as well. i think they think if they give you the runaround and make it difficult that you will just stop and stay with them.
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
Whenever I start SS, it will hopefully be when I don’t have income if it’s before 67 due to the 50% cut for too much income.

Right now, for married jointly, the effective tax rate for Roth conversions would be 10-12% for anything up to about $130k. The effective tax rate is about 18% if you hit the next max of $240k. My wife and I have almost a decade left before we could even take SS so it really depends on how long we work. We are planning to move to our semi-retirement home in about 2 years. I’m hoping our current home equity, which is a lot, covers the build as we own the land and will have the dock/HELOC paid off before we build. If that’s the case, we should be retiring pre 62. Just don’t know how long the Roth conversion will take and if I’ll try to speed it up converting $240k instead of $130k so we can get SS earlier. The other benefit is that all investment gains in the Roth will no longer be taxed.

There will be math, lots of math. First step will be figuring out when we are done working (me first, lol).
 
Oh, forgot one other thing. We’ve got a substantial amount of long term capital gains that we’ll have to work in. Having the taxable account will be a nice benefit for letting us wait a bit for SS to game the rates the best but it also presents a when do we do it. The gains are not high enough to trigger the 20% rate but way more than the limit to get it at 0%. Going to have to manage that too. SMH, too much work. Fair Tax would be nice and easy if there was actually no income tax on conversions and capital gains.
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Just looking at 65-70 since ideally 60-65 are the aca years so gotta keep that magi low low low.
Damn, the healthcare stuff too! Gonna be a lot of hard work to keep Uncle Sam at bay. Feels like there’s almost no chance of starting SS at 62.
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Same except we’re not massive by any stretch - 14 years from now we’d be lucky to have $2-2.5 in traditional accounts. Use traditional / convert to Roth, use some of the regular brokerage.
 
After 25+ years of buying and holding all my retirement money in an S&P 500 Index Fund, I just went ahead and rebalanced a little for the first time ever at age 55

Every time I almost did this before, I held off and have been happy that I have. But now I'm older and also the hodgepodge of economic policies coming out of the White House (freezing federal spending, tariffs, possible depletion of the labor force) have my confidence wavering a bit

Plus with the S&P up 23% in the last year, and 88% in the last five, I figured it was time to take some winnings off the table. Still have almost three-quarters in the Index Fund, so this was probably long overdue and I'll sleep better given my current uncertainty

This is probably a good indicator the market is poised for a 10% jump
 
After 25+ years of buying and holding all my retirement money in an S&P 500 Index Fund, I just went ahead and rebalanced a little for the first time ever at age 55

Every time I almost did this before, I held off and have been happy that I have. But now I'm older and also the hodgepodge of economic policies coming out of the White House (freezing federal spending, tariffs, possible depletion of the labor force) have my confidence wavering a bit

Plus with the S&P up 23% in the last year, and 88% in the last five, I figured it was time to take some winnings off the table. Still have almost three-quarters in the Index Fund, so this was probably long overdue and I'll sleep better given my current uncertainty

This is probably a good indicator the market is poised for a 10% jump
What did you rebalance into?
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Just looking at 65-70 since ideally 60-65 are the aca years so gotta keep that magi low low low.

Speaking as an insurance agent, if you’re u der 60 right now, I wouldn’t be planning with the above in mind. Stuff is going to change, perhaps drastically. The ACA (and its subsidies) are in effect today, but that might not be the case 2-3 years from now. 5-10+ years away is too far to be planning around it.
 
Another downside to taking SS early?

If you take it before full retirement age, there is a pretty small cap on how much you're allowed to earn in wages each year before they start withholding a big portion of your benefits.

If you're considering taking SS early and plan to work too, you definitely better understand that piece of it.
 
After 25+ years of buying and holding all my retirement money in an S&P 500 Index Fund, I just went ahead and rebalanced a little for the first time ever at age 55

Every time I almost did this before, I held off and have been happy that I have. But now I'm older and also the hodgepodge of economic policies coming out of the White House (freezing federal spending, tariffs, possible depletion of the labor force) have my confidence wavering a bit

Plus with the S&P up 23% in the last year, and 88% in the last five, I figured it was time to take some winnings off the table. Still have almost three-quarters in the Index Fund, so this was probably long overdue and I'll sleep better given my current uncertainty

This is probably a good indicator the market is poised for a 10% jump
What did you rebalance into?
I was up 22% last year, so I decided that’s the percentage I’d take off the table

11% into Money Market, thinking for 60 or 90 days to make sure the economy doesn’t crash with tariffs or a government shutdown

11% into a 2025 TIAA target date fund, which is a mix of fixed income, bonds and about one-third equities

Going to continue to put new contributions / employer match into the S&P Index Fund
 
Obviously it's unique to everyone's situation, but generally speaking, it's probably a mistake to claim before full retirement age. There are really only a few specific instances where it makes sense to take it early.
I don’t agree with this at all in terms of “probably a mistake.” If I didn’t have a lot of traditional 401k/IRA money that I want to transfer into Roths during low or no income years (either before 62 or 62+ because I have a good amount in taxable accounts to live off that), I would take it at 62 and invest it. I’m still too far away to know how many low or no income years I’ll have to transfer to Roths, but I’ve done a few advanced calls including investment returns from 62 to 70 and as long as you can get 6-7% returns on the money you get from 62-70, you would never catch up starting at 70. That means that the monthly investment income plus your year 62 SS monthly amount would be higher than your 70 SS monthly amount. Add in the fact that you “own” the nut that’s producing the monthly investment income (all the money you got from 62-70) and that nut is yours/your heirs if you pass early. You don’t own the money that’s producing the age 70 SS income above the 62 SS income.

My situation could be much different in that I expect my wife and I to both be getting close to the max SS so no worrying about spousal benefits. If SS was a much bigger nut in my retirement income I would also consider working longer and waiting for SS, but most people who start at 62 do so because they have to not because they want to invest. That said, most people in here don’t appear to fall in that bucket.

*The only reason I don’t want SS and transfer to Roths in the same year is because you can lose up to 50% of your SS benefits pre-67 if you have too much income and the transfer would be considered income.
And what if you lost money on your invested early SS money?
Another example of the inconsistent thinking I regularly see on this topic. People are willing to give up the guaranteed 8% increase every year because they assume they can invest and the market will deliver more than that. The average real return of the market is below that. And historically the real return of a 100% S&P 500 portfolio is negative over a 10 year period 11% of the time. And most people in their 60s aren’t 100% equities, so their actual returns are even lower. So this feeling that 7-8% real returns of a retirement portfolio over 10 years is virtually guaranteed, which is what I typically hear form the “I’ll take SS early and invest it” crowd, isn’t without significant risk.

And again, these tend to be the same people that are worried that a 4% SWR is too aggressive.

ETA: this is also based on people 100% investing that early SS money, even net of taxes on it. Who actually does that?
You are also missing the fact that after 8 years, people have potentially hundreds of thousands of dollars sitting in their account. You aren’t making 8% on some pot of money if you wait. You get nothing until you’re 70. I understand your point of people not investing 100% but you have to model that because if you wait to 70, you got nothing from 62 to 70 so it’s OK to model a situation where you invest 100%. Just eating away at that 62-70 nest egg extends the break even point out years so the “catch up” models saying you catch up at 77 or 79 are way off IMHO. Then you are discussing 20 years of investing extra and there are no negative periods in history and there are amazing periods as well.

It’s not a one size fits all and I agree that if you have to spend a chunk of the 62-70 money that you should try to wait and keep working. I think the take at 62 is 90%+ people that have to do it but let’s be honest in all the discussion here how many people are in that boat. The people discussing all these options in here aren’t having to start at 62 to survive.
I agree with you. My back of the napkin math says break even isn't until late 80s.
The wife is going to be collecting at 62 (63 actually for other reasons) no matter what and we'll play mine (higher) by ear. No reason not to. Even if we end up paying 50% tax it's still free money s compared to her waiting.
 
After 25+ years of buying and holding all my retirement money in an S&P 500 Index Fund, I just went ahead and rebalanced a little for the first time ever at age 55

Every time I almost did this before, I held off and have been happy that I have. But now I'm older and also the hodgepodge of economic policies coming out of the White House (freezing federal spending, tariffs, possible depletion of the labor force) have my confidence wavering a bit

Plus with the S&P up 23% in the last year, and 88% in the last five, I figured it was time to take some winnings off the table. Still have almost three-quarters in the Index Fund, so this was probably long overdue and I'll sleep better given my current uncertainty

This is probably a good indicator the market is poised for a 10% jump
What did you rebalance into?
I was up 22% last year, so I decided that’s the percentage I’d take off the table

11% into Money Market, thinking for 60 or 90 days to make sure the economy doesn’t crash with tariffs or a government shutdown

11% into a 2025 TIAA target date fund, which is a mix of fixed income, bonds and about one-third equities

Going to continue to put new contributions / employer match into the S&P Index Fund
That's not really rebalancing, thats just adjusting your allocation.
Good for you though, sounds smart.
Now you can take advantage of real reballancing by going back to those percentages any time things get out of whack. That let's you take advantage of selling high and buying low during the natural ups and downs of the market.
 
I was up 22% last year, so I decided that’s the percentage I’d take off the table

11% into Money Market, thinking for 60 or 90 days to make sure the economy doesn’t crash with tariffs or a government shutdown

11% into a 2025 TIAA target date fund, which is a mix of fixed income, bonds and about one-third equities

Going to continue to put new contributions / employer match into the S&P Index Fund
Why the target date fund? Those are designed to be your only holding, outsourcing the asset allocation choice. They were really created to be a default option inside of a 401K for those that didn't want to think about what to invest in. There's nothing "wrong" with them, but they limit your flexibility a bit and they often have higher fees than if you just bought inexpensive ETFs to match the allocation inside of them.

If you're going through the reallocation process I'd suggest figuring out what mix you want - 10% cash, 20% bonds, 70% stocks or whatever it is you're comfortable with. Pick a mix that matches your risk tolerance and capacity, and lock it in. Then as @Peggy mentioned you can actually rebalance going forward by checking in once a year and bringing everything back to the allocation you initially chose.
 
Another downside to taking SS early?

If you take it before full retirement age, there is a pretty small cap on how much you're allowed to earn in wages each year before they start withholding a big portion of your benefits.

If you're considering taking SS early and plan to work too, you definitely better understand that piece of it.
This is why I asked this morning if those planning on claiming at 62 were going to be no longer working at all. If that's not the case and you're earning wages over $23,400, you're giving up $1 for every $2 you earn above that amount.

Let's say your benefit at 62 is $34K a year, and you're doing some consulting that brings you $100,000 a year. That $34K drops to zero! If you make $50K, it drops to about $21K.

This issue goes away at FRA. You can earn as much as you want at that point and you'll still get your full SS benefit.
 
Another downside to taking SS early?

If you take it before full retirement age, there is a pretty small cap on how much you're allowed to earn in wages each year before they start withholding a big portion of your benefits.

If you're considering taking SS early and plan to work too, you definitely better understand that piece of it.
Yeah, that’s what I mentioned that might keep me from taking it at 62. Losing 50% makes the calculations change so not worth starting until the income is gone. That might also push me to covert more earlier since you could convert 240k a year at 18% effective rate. That’s not 10-12% but still way less than the rate it would have been taxed over the years.
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Just looking at 65-70 since ideally 60-65 are the aca years so gotta keep that magi low low low.

Speaking as an insurance agent, if you’re u der 60 right now, I wouldn’t be planning with the above in mind. Stuff is going to change, perhaps drastically. The ACA (and its subsidies) are in effect today, but that might not be the case 2-3 years from now. 5-10+ years away is too far to be planning around it.
Absolutely. Nothing is in stone. All I do is plan based upon what I know now (whether its aca subsides, tax rates, ss benefits, etc) and adjust accordingly. There's a lot of wiggle room in my retirement plan.
 
I need a tax specialist that can help with my 2024 returns. Prior to this, I did it myself. I got a recommendation from someone here in Switzerland and they want to charge "starting at $3500". Hellz no, I'd rather do my taxes wrong than pay that amount.

Anyone got any recs for a tax specialist that has international clients and doesn't charge a boatload?
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Just looking at 65-70 since ideally 60-65 are the aca years so gotta keep that magi low low low.

Speaking as an insurance agent, if you’re u der 60 right now, I wouldn’t be planning with the above in mind. Stuff is going to change, perhaps drastically. The ACA (and its subsidies) are in effect today, but that might not be the case 2-3 years from now. 5-10+ years away is too far to be planning around it.
Absolutely. Nothing is in stone. All I do is plan based upon what I know now (whether its aca subsides, tax rates, ss benefits, etc) and adjust accordingly. There's a lot of wiggle room in my retirement plan.

I guess what I meant to say is that while of course there should always be room for change and adaptation - there are certain things that we can be extremely confident we’ll still have in 10-20 years when planning for one’s retirement. Things like a progressive tax system, a standard deduction, tax deductions, Medicare, some type/amount of social security. Then there are things we can be fairly confident of - tax free withdrawals from roth accounts and from HSA accounts for eligible expenses. There are things that may or may not still be around - like the ACA in its current form, and the subsidies for them. I have much less confidence in those for my planning than other things.
 
I need a tax specialist that can help with my 2024 returns. Prior to this, I did it myself. I got a recommendation from someone here in Switzerland and they want to charge "starting at $3500". Hellz no, I'd rather do my taxes wrong than pay that amount.

Anyone got any recs for a tax specialist that has international clients and doesn't charge a boatload?
Honestly, I do exactly this for a living, and that price isn't out of the realm of normalcy these days. You can surely find people to do it cheaper, but no guarantees of the specialized international knowledge, especially specific to Switzerland. I've seen a lot of people get a lot of very bad international tax advice over the years.
 
Another downside to taking SS early?

If you take it before full retirement age, there is a pretty small cap on how much you're allowed to earn in wages each year before they start withholding a big portion of your benefits.

If you're considering taking SS early and plan to work too, you definitely better understand that piece of it.
This is why I asked this morning if those planning on claiming at 62 were going to be no longer working at all. If that's not the case and you're earning wages over $23,400, you're giving up $1 for every $2 you earn above that amount.

Let's say your benefit at 62 is $34K a year, and you're doing some consulting that brings you $100,000 a year. That $34K drops to zero! If you make $50K, it drops to about $21K.

This issue goes away at FRA. You can earn as much as you want at that point and you'll still get your full SS benefit.

In my case wife is going to jump on 1/2 my SS when I apply. She's older than me so even getting 50% is better than 0 by waiting. And we will be making money because I have to do 401k to Roth rollovers, as much as I can without loosing obamacare.

You make a good argument for me to wait until FRA tho. Plus her benefits will be bigger when I die.
 
Another downside to taking SS early?

If you take it before full retirement age, there is a pretty small cap on how much you're allowed to earn in wages each year before they start withholding a big portion of your benefits.

If you're considering taking SS early and plan to work too, you definitely better understand that piece of it.
This is why I asked this morning if those planning on claiming at 62 were going to be no longer working at all. If that's not the case and you're earning wages over $23,400, you're giving up $1 for every $2 you earn above that amount.

Let's say your benefit at 62 is $34K a year, and you're doing some consulting that brings you $100,000 a year. That $34K drops to zero! If you make $50K, it drops to about $21K.

This issue goes away at FRA. You can earn as much as you want at that point and you'll still get your full SS benefit.

In my case wife is going to jump on 1/2 my SS when I apply. She's older than me so even getting 50% is better than 0 by waiting. And we will be making money because I have to do 401k to Roth rollovers, as much as I can without loosing obamacare.

You make a good argument for me to wait until FRA tho. Plus her benefits will be bigger when I die.

I'm pretty sure income from Roth conversions doesn't count in calculating whether your benefit would be reduced if you claim it 62-FRA. It would have an impact on how much of your benefit is taxed, though. And it counts in MAGI when figuring subsidies, as you called out.

Good thing this stuff isn't complicated......
 
I need a tax specialist that can help with my 2024 returns. Prior to this, I did it myself. I got a recommendation from someone here in Switzerland and they want to charge "starting at $3500". Hellz no, I'd rather do my taxes wrong than pay that amount.

Anyone got any recs for a tax specialist that has international clients and doesn't charge a boatload?
Honestly, I do exactly this for a living, and that price isn't out of the realm of normalcy these days. You can surely find people to do it cheaper, but no guarantees of the specialized international knowledge, especially specific to Switzerland. I've seen a lot of people get a lot of very bad international tax advice over the years.
You have no idea what his tax situation is, how could you comment on what's normal when price varies so widely?
 
Those of you planning on starting SS at 62, I assume you will be fully retired without earned income?
If things go well, I’ll be using from 60-70 for massive Roth conversions. Max SS at 70 as a nice insurance policy.
Just looking at 65-70 since ideally 60-65 are the aca years so gotta keep that magi low low low.

Speaking as an insurance agent, if you’re u der 60 right now, I wouldn’t be planning with the above in mind. Stuff is going to change, perhaps drastically. The ACA (and its subsidies) are in effect today, but that might not be the case 2-3 years from now. 5-10+ years away is too far to be planning around it.
Absolutely. Nothing is in stone. All I do is plan based upon what I know now (whether its aca subsides, tax rates, ss benefits, etc) and adjust accordingly. There's a lot of wiggle room in my retirement plan.

I guess what I meant to say is that while of course there should always be room for change and adaptation - there are certain things that we can be extremely confident we’ll still have in 10-20 years when planning for one’s retirement. Things like a progressive tax system, a standard deduction, tax deductions, Medicare, some type/amount of social security. Then there are things we can be fairly confident of - tax free withdrawals from roth accounts and from HSA accounts for eligible expenses. There are things that may or may not still be around - like the ACA in its current form, and the subsidies for them. I have much less confidence in those for my planning than other things.
I hear ya and that's a pretty accurate list. I'm not dependent on it existing. If it goes away, I would just pay out of pocket . That might mean eating into my discretionary funds. That might mean working a year longer. That might mean moving to a cheaper location. Lots of options. But as long as it exists and I can take advantage of it, I'm going to plan on doing so.
 
I need a tax specialist that can help with my 2024 returns. Prior to this, I did it myself. I got a recommendation from someone here in Switzerland and they want to charge "starting at $3500". Hellz no, I'd rather do my taxes wrong than pay that amount.

Anyone got any recs for a tax specialist that has international clients and doesn't charge a boatload?
Honestly, I do exactly this for a living, and that price isn't out of the realm of normalcy these days. You can surely find people to do it cheaper, but no guarantees of the specialized international knowledge, especially specific to Switzerland. I've seen a lot of people get a lot of very bad international tax advice over the years.
You have no idea what his tax situation is, how could you comment on what's normal when price varies so widely?
Because that minimum invoicing number "starting at $3,500" is roughly what I'm hearing from a lot of people, for a new client looking for some international tax work these days.
 
I am turning 50 this year. Am I eligible for the $7,500 Catch-up?

I will be maxing out my 401k contribution at $23.5. How does my employer match impact my total contribution?

In my 401k provider (Voya), I see an option for "Roth" next to my "Employee PreTax". Is this a 401k Roth, standard Roth, or something different? How does this work and what are the financial implications?

ty
 
I am turning 50 this year. Am I eligible for the $7,500 Catch-up?

I will be maxing out my 401k contribution at $23.5. How does my employer match impact my total contribution?

In my 401k provider (Voya), I see an option for "Roth" next to my "Employee PreTax". Is this a 401k Roth, standard Roth, or something different? How does this work and what are the financial implications?

ty
Yes - 31K 401K and 8K for IRA. Employer match isn't considered in the 23.5/7.5 catchup. It is considered in the total (60Kish). I don't pay much attention to that number as I'm not at risk of it applying to my situation.
 
I am turning 50 this year. Am I eligible for the $7,500 Catch-up?

I will be maxing out my 401k contribution at $23.5. How does my employer match impact my total contribution?

In my 401k provider (Voya), I see an option for "Roth" next to my "Employee PreTax". Is this a 401k Roth, standard Roth, or something different? How does this work and what are the financial implications?

ty
as to your 2nd question...i don't think any of your employer contributions count towards the 23.5.
 
Thank you. I just saw this for the Roth in my plan details:

Roth Contributions
Your plan permits Roth after-tax employee contributions. You may contribute a minimum of 1% and your total employee contributions (Roth after-tax and Traditional pre-tax deferrals combined) may not exceed $xxx annually ($xxx if you are at least age 50 and your plan has a catch-up feature). If permitted by your plan, you may be able to make additional catch-up contributions between the ages of 60 - 63. Annual limitations are set by the IRS and are subject to change.

Is this recommended here? I know no one knows my financial situation, but I am looking to save a bit more. Is the Roth a good conduit for this?

Edit: I just edited out the numbers, werent completely sure if they were particular to me or not
 
Thank you. I just saw this for the Roth in my plan details:

Roth Contributions
Your plan permits Roth after-tax employee contributions. You may contribute a minimum of 1% and your total employee contributions (Roth after-tax and Traditional pre-tax deferrals combined) may not exceed $xxx annually ($xxx if you are at least age 50 and your plan has a catch-up feature). If permitted by your plan, you may be able to make additional catch-up contributions between the ages of 60 - 63. Annual limitations are set by the IRS and are subject to change.

Is this recommended here? I know no one knows my financial situation, but I am looking to save a bit more. Is the Roth a good conduit for this?

Edit: I just edited out the numbers, werent completely sure if they were particular to me or not
Saving more is good - where to put it is highly dependent on your situation. I am continuing to put into traditional 401K - my marginal tax rate is 24% and I think i can do Roth Conversions in my 60s at a lower tax rate. I also save in a Roth IRA, a brokerage account, and some iBonds. I'm hoping these give me more options to control my income later in life. But in general, more savings is better. I know I over think things.
 
Thank you. I just saw this for the Roth in my plan details:

Roth Contributions
Your plan permits Roth after-tax employee contributions. You may contribute a minimum of 1% and your total employee contributions (Roth after-tax and Traditional pre-tax deferrals combined) may not exceed $xxx annually ($xxx if you are at least age 50 and your plan has a catch-up feature). If permitted by your plan, you may be able to make additional catch-up contributions between the ages of 60 - 63. Annual limitations are set by the IRS and are subject to change.

Is this recommended here? I know no one knows my financial situation, but I am looking to save a bit more. Is the Roth a good conduit for this?

Edit: I just edited out the numbers, werent completely sure if they were particular to me or not
Saving more is good - where to put it is highly dependent on your situation. I am continuing to put into traditional 401K - my marginal tax rate is 24% and I think i can do Roth Conversions in my 60s at a lower tax rate. I also save in a Roth IRA, a brokerage account, and some iBonds. I'm hoping these give me more options to control my income later in life. But in general, more savings is better. I know I over think things.
Agree

I guess I should ask if that Roth thing there is better than just some other medium? Im just planning on buying VTSAX where possible for the next 10 years anyway.
 
It sounds like I cant exceed 23.5+7.5 across both the 401k and Roth 401k? So if I max out 401k, then I cant touch Roth 401k. Correct?

Any benefit to splitting here? Is there a case where all of it should not go into a traditional 401k?
 

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