The “I want to retire soon” thread (2 Viewers)

[Peggy]

The biggest expense I still have to figure out is healthcare since I wouldn't have any until medicare. I'm healthy now but obviously I need some protection in case things change. I could use some advice on this. Someone mentioned in another thread that I could likely qualify for ACA subsidies in retirement since my income would go down so much. After the first retirement year, my income would be very low as it would just be investment income and the majority of that is tax sheltered. Is that correct that assets don't matter, only income? What is the best to get an idea on realistic hypothetical premiums?

I should do an AMA for you guys but I bet healthcare is going to be the main question.

The short answer is, as always, it depends on your state.

The longer answer is that is takes a little work. IMO, the best way to find out what you qualify for is to pseudo apply for healthcare and see what plan you land in for your state. The applications for each state are online and after you answer a bunch of questions (similar to applying for college financial aid), you should end up with a large summary at the end. You can use that summary to look at a chart for your state and see where you land.

You will find many tiered plans, ranging from free health care to reduced cost health care. See which plan you land in and that should help you determine the cost.

Note that anyone who intends to work part time, this will effect your numbers obviously and may push you out of a tier or even out of the program entirely.

I'm 53 and thinking about retiring soon or, at least, taking some years off and working later on if I get too bored. I think I've saved enough to live off investment income perpetually although doing that might be tighter than ideal. I'm naturally frugal, though, so I'd probably be fine.

The biggest expense I still have to figure out is healthcare since I wouldn't have any until medicare. I'm healthy now but obviously I need some protection in case things change. I could use some advice on this. Someone mentioned in another thread that I could likely qualify for ACA subsidies in retirement since my income would go down so much. After the first retirement year, my income would be very low as it would just be investment income and the majority of that is tax sheltered. Is that correct that assets don't matter, only income? What is the best to get an idea on realistic hypothetical premiums?

If you wait to retire at 59.5 and have Roth IRAs/401ks, can't you draw on them during the gap between when you retire and Medicare age? It is my understanding, since drawing on a Roth is tax free and doesn't apply to income, you could qualify for low ACA insurance. Also, if you have an HSA, max it out now and use that savings to help pay for healthcare premiums during the gap years.

Just a thought...

You can’t pay for healthcare premiums from an HSA. You can pay for COBRA premiums if you accept cobra from a now prior employer, though. You can also pay Medicare premiums once you turn 65, but you can’t pay for regular private health insurance premiums.

Circling back around to this. I have to figure out the health care soon.
Does the 60 day cobra kick in automatically when you retire?
You can then pay the company rate to keep the insurance (cobra) up to 18 months, the rate you'd find out from the company/pay stub?
If you retire at the end of 2024 and have zero income in 2025 (living off cash) you'd qualify for the lowest cost in the government provided healthcare store, by state? They don't look back at income?
TIA!

If I’m understanding your questions -
You have 63 (I think) days from your employer coverage ending to decide if you want COBRA or not. If you do, it will be retroactive back to the day you lost coverage. Cost will be the same it’s always been, just without your employer paying their portion (which can be substantial). Take a look at line DD on your W-2 to see how much your employer paid on your behalf for your coverage.

Yes.

If you have zero income n 2925 you wouldnt quality for any subsidy, you’d be eligible for Medicaid. If you want to maximize a subsidy for private insurance, you want your income to be about 150-200% of the poverty line, depending on your filing status. Be careful of on exchange policies, they tend to be extremely small network HMOs with huge max OOPs.

You answered the questions about Cobra, thanks!

Let me clarify about private Insurance. I'm trying to nail down what to do for insurance for 10 years or so before I qualify for Medicare. I thought they looked at your net worth for Medicaid? But yeah, if it helps I can have very low income for the first 5+ years or so before I start drawing from retirement accounts that count as income. But you're saying for private insurance you need to have income? What about the ACA, does it lower the cost for low income? And in either of those is it the expected income for that year or do they look at previous years? Sorry for being all over the place.

You can buy a full price private individual insurance policy without any regard to income/assets - but like I said, it’s full price.

If you want a subsidy, the amount of that subsidy is on a sliding scale depending on your expected income (which you’ll need to square up at end of year when you do your taxes). You need to be over (I think) 133% of the poverty live, depending on your filing status. Sweet spot is between 150-200% of poverty line.

Got it!
150% poverty line is only like $22K so it should be easy to make that happen. Coincidently, that's around the same number before it's starts eating into SS if you were trying to walk that tightrope between ages 62 and 65.

That’s $22k as an individual. Do you file “single” or “married filing jointly “?

Married jointly. I understand it now. Appreciate it as I wouldn't have known there was a sweet spot. Just need to run the numbers vs. cost vs. taxes in the whole picture to pay as little as possible.

ETA: I'm educated enough now to ask the right questions to my financial advisor next time we meet so we can have a plan for later this year.

 

[mr. furley]

how the hell does one project monthly budget in retirement?

do you budget for 30 years? 10 years? 13.5 years?

are you spending with no regard for leaving any potential inheritance?

Firecalc was discussed at length in the past here - its free and you can make as detailed or as simple as you want. I loved this thing and used it quite a bit in my retirement planning. You can run all kinds of scenarios with Monte Carlo simulations and get % level of confidence of success for your proposed scenario.

* do you track your expenses already? if not, you're going to at least need to do that

* if you like to dream about your retirement and yet plan for reality? if so, this is for you.

FIRECalc: A different kind of retirement calculator

www.firecalc.com

 

[General Malaise]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

Ahhh. OK, that does make sense. Any thoughts on retiring elsewhere?

We love where we live but we are about 20 miles or so to the state of Washington which has no state income tax. Might retire there instead of Oregon to save some $$.

 

[General Malaise]

Don't you HAVE to register for Medicare at 65 whether you want it or not?

 

[JohnnyU]

I’ll be 65 in June. I plan to retire when I’m 66. Been a Sr. Programmer / Analyst and now doing Data Engineer work in Google Cloud. I have a 403B and a nice pension. I can draw SS at 66 and 10 months. My wife is drawing SS now. We owe about 100k on our hose, but other than that, no debt. Downside are some health issues. In addition to Medicare I will need to add supplemental health insurance and that is expensive.

 

[⚡DEADHEAD⚡]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

Ahhh. OK, that does make sense. Any thoughts on retiring elsewhere?

We love where we live but we are about 20 miles or so to the state of Washington which has no state income tax. Might retire there instead of Oregon to save some $$.

California state income tax is a killer, so YES, thinking about that a little bit. Maybe the Nevada side of Lake Tahoe.

 

[General Malaise]

I’ll be 65 in June. I plan to retire when I’m 66. Been a Sr. Programmer / Analyst and now doing Data Engineer work in Google Cloud. I have a 403B and a nice pension. I can draw SS at 66 and 10 months. My wife is drawing SS now. We owe about 100k on our hose, but other than that, no debt. Downside are some health issues. In addition to Medicare I will need to add supplemental health insurance and that is expensive.

I don't think it is that expensive.

Let's say you get on Medicare and they take the premium out of your social security check each month. You can pay out of pocket for a Medicare Advantage Plan to supplement Medicare and a plan from Regence Blue Cross might be $200/month?

Went through this exercise with my boss (70) in the fall and I was surprised how little it was vs the premium he and his wife were paying for our private plan.

But I'm an idiot, as you well know.

 

[General Malaise]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

Ahhh. OK, that does make sense. Any thoughts on retiring elsewhere?

We love where we live but we are about 20 miles or so to the state of Washington which has no state income tax. Might retire there instead of Oregon to save some $$.

California state income tax is a killer, so YES, thinking about that a little bit. Maybe the Nevada side of Lake Tahoe.

The Incline Village plan. Nice.

 

[matttyl]

Don't you HAVE to register for Medicare at 65 whether you want it or not?

You don’t, but I do recommend it for most (in a health insurance agent). It’s a semi rare circumstance when it doesn’t make sense.

For clarity - what I mean is signing up for part B. Typically you’re signed up for part A automatically if you’ve worked for at least 10 years (40 quarters).

 

[matttyl]

I’ll be 65 in June. I plan to retire when I’m 66. Been a Sr. Programmer / Analyst and now doing Data Engineer work in Google Cloud. I have a 403B and a nice pension. I can draw SS at 66 and 10 months. My wife is drawing SS now. We owe about 100k on our hose, but other than that, no debt. Downside are some health issues. In addition to Medicare I will need to add supplemental health insurance and that is expensive.

Medicare should be $175ish a month for part B (depends on income, IRMAA). A part d drug plan is between $20-50 a month, maybe more, depending on your drug needs.

A decent supplement (to supplement parts A and B)(plan G) should only be about $100-120 a month at 66.

 

[JohnnyU]

I’ll be 65 in June. I plan to retire when I’m 66. Been a Sr. Programmer / Analyst and now doing Data Engineer work in Google Cloud. I have a 403B and a nice pension. I can draw SS at 66 and 10 months. My wife is drawing SS now. We owe about 100k on our hose, but other than that, no debt. Downside are some health issues. In addition to Medicare I will need to add supplemental health insurance and that is expensive.

I don't think it is that expensive.

Let's say you get on Medicare and they take the premium out of your social security check each month. You can pay out of pocket for a Medicare Advantage Plan to supplement Medicare and a plan from Regence Blue Cross might be $200/month?

Went through this exercise with my boss (70) in the fall and I was surprised how little it was vs the premium he and his wife were paying for our private plan.

But I'm an idiot, as you well know.

We estimate about $600 month for the two of us for Medicare and supplement

 

[tri-man 47]

What I know about Medicare you can fit inside a shot glass, but it seems like $2,000 a month is on the very high side if you have Medicare and buy a supplemental policy to go with it.

Or is this what you pay now, @guru_007?

Good point. I just started on Medicare Part B in January as it was just slightly more than my employer coverage but with a much, much larger network. Part A is free (signed up for that when I turned 65; I pay about $175/month now for Part B. I then added a $30/month supplement from Humana, so all-in is $205/month. [Note: This is not Medicare Advantage, which is a costlier option.]

That $30 a month for the supplement seems extremely low. Is that a traditional Medicare supplement, or a part D (drug) plan?

It's a Medicare Advantage PPO (they describe it as a "Medigap" plan). I find it really hard to navigate around the Humana site in trying to distinguish a plan like this from the higher priced Advantage plans. FWIW, this plan is H5216-283 (and I'm in Illinois, which might matter for pricing). Some out-of-pocket costs can occur, and there's an annual $3,100 cap on those.

Here's a link: Humana plan I just started a blood pressure prescription (my first med!), and there's no cost.

 

[tri-man 47]

how the hell does one project monthly budget in retirement?

do you budget for 30 years? 10 years? 13.5 years?

are you spending with no regard for leaving any potential inheritance?

Step #1 is to know how much you are spending. Once you know that all the projection does is take into account inflation.
We've been tracking our spend for 5 years or so now so we have a very good idea what it cost for us to live in today's dollars.

There are apps and all sorts of way to track spending. We do it old-school using a spreadsheet hung on the refrigerator each month and we turn in paper receipts and/or bills for everything we spent money on.

Same here. I have a excel file on my computer called "retirement estimator" where I calculate out my current wage, the current tax rates, my contributions to our HSA and 401k, what our 401K and investments are at, as well as the current expected SS income if we start to draw as planned(me at 62, wife at 67). I update the SS each year, and project a modest COL Increase annually. On a separate tab, I have our budget numbers, or at least expected budget numbers. We are using the 4% rule for our 401K withdrawls.
I should add. I also calculate what our tax burden would be when we hit 62 and 67 and don't count any savings or possible inheritance dollars.

good stuff, both you and @Peggy, thank you

haven't, to this point, considered any of this stuff and don't really know where to begin. still a ways off but never too soon to start projections. feeling way behind on savings and trying to get my arms around how much i should be worried but hadn't really come up with a way to calculate short of paying a financial advisor.

In terms of costs, I keep it simple. I know what we spend via credit cards every month (a primary card; a secondary card; and the Costco card) ...I do that instead of diving into the details. Beyond that, as others do, I add the other items (utilities, insurance, etc.).

 

[SFBayDuck]

how the hell does one project monthly budget in retirement?

do you budget for 30 years? 10 years? 13.5 years?

are you spending with no regard for leaving any potential inheritance?

Firecalc was discussed at length in the past here - its free and you can make as detailed or as simple as you want. I loved this thing and used it quite a bit in my retirement planning. You can run all kinds of scenarios with Monte Carlo simulations and get % level of confidence of success for your proposed scenario.

* do you track your expenses already? if not, you're going to at least need to do that

* if you like to dream about your retirement and yet plan for reality? if so, this is for you.

FIRECalc: A different kind of retirement calculator

www.firecalc.com

If you're a podcast guy and want to get better educated on this stuff (that's how I started), check out Retirement Answer Man, Catching up to Fi, Choose Fi, or a myriad of others on the topic. You may weed through some that are thinly disguised sales pitches for annuities or other products, but there are a lot of good ones. I found some guests and bloggers that I liked, like Big ERN (Early Retirement Now) and Fritz Gilbert, and then just searched their names in the podcast app to find new shows.

 

[snogger]

I've broken the double digit countdown..
I plan to retire in 6 to 9 years..

Packing my 401k to get full match plus 2%.
We also can set our yearly bonus up to add to the 401k, with company match.
I also have a Roth that i've been putting money into for about 25 years.

We have no car payments, and our house should be paid off in 6 years.
Wife hates flying, so no big travelling other than driving around the US.
so close

 

[matttyl]

What I know about Medicare you can fit inside a shot glass, but it seems like $2,000 a month is on the very high side if you have Medicare and buy a supplemental policy to go with it.

Or is this what you pay now, @guru_007?

Good point. I just started on Medicare Part B in January as it was just slightly more than my employer coverage but with a much, much larger network. Part A is free (signed up for that when I turned 65; I pay about $175/month now for Part B. I then added a $30/month supplement from Humana, so all-in is $205/month. [Note: This is not Medicare Advantage, which is a costlier option.]

That $30 a month for the supplement seems extremely low. Is that a traditional Medicare supplement, or a part D (drug) plan?

It's a Medicare Advantage PPO (they describe it as a "Medigap" plan). I find it really hard to navigate around the Humana site in trying to distinguish a plan like this from the higher priced Advantage plans. FWIW, this plan is H5216-283 (and I'm in Illinois, which might matter for pricing). Some out-of-pocket costs can occur, and there's an annual $3,100 cap on those.

Here's a link: Humana plan I just started a blood pressure prescription (my first med!), and there's no cost.

That’s a Medicare advantage plan, which you stated it isn’t in your initial post. This isn’t a Medicare supplement plan (nor is it a medigap plan - which is another name for Medicare supplement plans).

A Medicare advantage plan replaces Medicare (parts A and B and D). They are built to look/act like coverage you had prior to 65 with deductibles, copays, out of pockets. The biggest issue tends to be networks. You’ll not ask doctors if they take Medicare patients - you’ll ask if they accept Humana.

 

[Judge Smails]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

You are going to “need” over $200K a year in retirement?

 

[Desert_Power]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

You expect to have a mortgage payment during retirement?

Even with all this, it sounds like you are already overshooting your goal.

 

[⚡DEADHEAD⚡]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

You expect to have a mortgage payment during retirement?

Even with all this, it sounds like you are already overshooting your goal.

I do. We're maybe 4 years into a 30 year mortgage. Long story but the gist of it is, we moved to a pretty affluent community with outstanding public schools. We both work for federal government contractors and managed to get here thanks to the increase in value of our previous home.

I am surprised we are overshooting. This is all based on a conversation I had last Friday with Fidelity, and I have a follow-up this Friday to make sure I'm maximizing my contributions to various retirement accounts.

Big X factor is kids college in 5 and 7 years. Crossing fingers they want to go to and can get into the UCs.

 

[Desert_Power]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

You expect to have a mortgage payment during retirement?

Even with all this, it sounds like you are already overshooting your goal.

I do. We're maybe 4 years into a 30 year mortgage. Long story but the gist of it is, we moved to a pretty affluent community with outstanding public schools. We both work for federal government contractors and managed to get here thanks to the increase in value of our previous home.

I am surprised we are overshooting. This is all based on a conversation I had last Friday with Fidelity, and I have a follow-up this Friday to make sure I'm maximizing my contributions to various retirement accounts.

Big X factor is kids college in 5 and 7 years. Crossing fingers they want to go to and can get into the UCs.

Yeah, having a relatively recent mortgage in the Bay Area does square the circle a bit. One of the most beautiful and expensive parts of the country. It's very worth the cost IMO.

My next questions are about what your current age is and to what extent you have estimated your retirement expenses on your own. Not what Fidelity thinks, but what your recent history and future expectations are.

These type of estimates from brokers are going to be necessarily self-serving to a degree. Their incentive is for you to invest more. I don't think having a plan where you have 115% of your number at 67 is at all reasonable.

I'd encourage you to reflect on what you would like that 67+ life to look like. A book like Die with Zero could be an interesting thought experiment.

 

[PIK95]

I have to wake up at 7am tomorrow to be at a car dealer appointment for 9am. Its over the broken Washington Bridge, so the usual twenty minute ride takes well over an hour at that time. I am posting this here because getting up at 7am is HARD when you have been retired for a while and stay up to 3am on the reg. I'm kinda scared. At least I can probably nap at noon for a bit when I return home. Wish me luck.

 

[⚡DEADHEAD⚡]

Had a chat with a Fidelity rep recently, which is who manages my employer's 401k. We are going to need ~$18k/month, a shocking figure. But given we have a defined benefit and a defined contribution, I can retire at 67 and my wife at 61 and we will have 115% of our need.

If you are a Fidelity person, suggest you make an appointment with their people. Very bright folks and they have built tools that seem pretty sharp, detailed.

I'm lucky in that I love my job. I'm ok working until 67.

$15,000 a MONTH??? Why?

Embarrassed to say mortgage and property tax are about $10k. The Bay Area...

(Note I had to edit my estimate in my post. I thought it was $18k, convinced myself that was absurd and I meant $15k so I changed it, and then logged into Fidelity to doublecheck, and it actually is $18k).

You expect to have a mortgage payment during retirement?

Even with all this, it sounds like you are already overshooting your goal.

I do. We're maybe 4 years into a 30 year mortgage. Long story but the gist of it is, we moved to a pretty affluent community with outstanding public schools. We both work for federal government contractors and managed to get here thanks to the increase in value of our previous home.

I am surprised we are overshooting. This is all based on a conversation I had last Friday with Fidelity, and I have a follow-up this Friday to make sure I'm maximizing my contributions to various retirement accounts.

Big X factor is kids college in 5 and 7 years. Crossing fingers they want to go to and can get into the UCs.

Yeah, having a relatively recent mortgage in the Bay Area does square the circle a bit. One of the most beautiful and expensive parts of the country. It's very worth the cost IMO.

My next questions are about what your current age is and to what extent you have estimated your retirement expenses on your own. Not what Fidelity thinks, but what your recent history and future expectations are.

These type of estimates from brokers are going to be necessarily self-serving to a degree. Their incentive is for you to invest more. I don't think having a plan where you have 115% of your number at 67 is at all reasonable.

I'd encourage you to reflect on what you would like that 67+ life to look like. A book like Die with Zero could be an interesting thought experiment.

Appreciate this DP. I am 51 and I've ballparked my estimate and not nearly as well as others have in earlier posts. I plan to do that more closely in the next few weeks.

Should I be targeting a different %? Do I want to be at 100%? I like the idea of being over target, a cushion that might allow for trips and maybe unexpected expenses?

I'll take a hard look at the book, though we will want to leave $ for our kids. If we live in the Bay Area, I suspect we will need to help them settle here. Down payments or things like that. Not even sure that's realistic.

I appreciate you and this thread. I'm starting to give retirement a much harder look. I have a 401k with a strong employee contribution, and my wife has a pension.

 

[⚡DEADHEAD⚡]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

 

[NewlyRetired]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

Decision Making Talking Points:

Life expectancy
Growth rate of investments if you take lump sum
Financial security of company backing the monthly payments

 

[Mrs. Rannous]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

Decision Making Talking Points:

Life expectancy
Growth rate of investments if you take lump sum
Financial security of company backing the monthly payments

Also, does the surviving spouse get something like a half pension? My mom got an amount that was half of my dad's every month until she died.

 

[-OZ-]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

 

[NewlyRetired]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

My parents took a reduced monthly payment which insured that my dads pension survived both of them.

They have lived a very long life so the monthly payment vs lump sum probably worked out decent for them but I don't know if the reduced payment worked out as my dad is still alive at almost 92. I guess it will depend on how long my mom outlives my dad.

I never saw the numbers when they made this decision so I can't say for sure.

 

[matttyl]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

Decision Making Talking Points:

Life expectancy
Growth rate of investments if you take lump sum
Financial security of company backing the monthly payments

Also, does the surviving spouse get something like a half pension? My mom got an amount that was half of my dad's every month until she died.

As I mentioned in the other thread, this can often be accomplished better with a life insurance policy. Your dad received a lower pension amount so that your mom would have something from the pension if/after he passed. That’s just a type of a life insurance policy.

 

[matttyl]

General question for you pensioners. Do/Did you take the lump sum payout or do you take the monthly benefit? What goes into the decision making?

My parents took a reduced monthly payment which insured that my dads pension survived both of them.

They have lived a very long life so the monthly payment vs lump sum probably worked out decent for them but I don't know if the reduced payment worked out as my dad is still alive at almost 92. I guess it will depend on how long my mom outlives my dad.

I never saw the numbers when they made this decision so I can't say for sure.

Great example of why a life insurance policy may have been the much better choice.

 

[Al Czervik]

You don’t, but I do recommend it for most (in a health insurance agent).

Hey Matty, what is involved with becoming a health insurance agent? Do most work independently or for an agent/company?

Wife and I are going to be 55 this year. It's looking like we could possibly make a move in the next 2-3 years to a location that is warmer than Michigan to be near our kids. At 55, I won't quite be ready to call it retirement and have been thinking about potential next careers as I doubt I will be able to continue my current gig remotely. Helping people navigate the medicare/medicaid, etc insurance arena as they get older seems like a valuable and needed skill.

 

[PIK95]

I have to wake up at 7am tomorrow to be at a car dealer appointment for 9am. Its over the broken Washington Bridge, so the usual twenty minute ride takes well over an hour at that time. I am posting this here because getting up at 7am is HARD when you have been retired for a while and stay up to 3am on the reg. I'm kinda scared. At least I can probably nap at noon for a bit when I return home. Wish me luck.

I did it! Slept an extra half hour, still somehow made it on time. Now I'm sitting in the Acura dealer for the next three hours. These clowns acting like they have no idea about the steering issue all the Civics and Integras are having ffs. It will be a recall sooner or later. Grabby steering on turns.

 

[General Malaise]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

 

[matttyl]

You don’t, but I do recommend it for most (in a health insurance agent).

Hey Matty, what is involved with becoming a health insurance agent? Do most work independently or for an agent/company?

Wife and I are going to be 55 this year. It's looking like we could possibly make a move in the next 2-3 years to a location that is warmer than Michigan to be near our kids. At 55, I won't quite be ready to call it retirement and have been thinking about potential next careers as I doubt I will be able to continue my current gig remotely. Helping people navigate the medicare/medicaid, etc insurance arena as they get older seems like a valuable and needed skill.

I’m an independent agent working for an independent agency. You can set up your own agency if you want. You’ll need to have a health insurance license in each state you’ll be selling in, and be appointed with each carrier you’ll be selling. You’ll also need to obtain insurance for yourself (called errors and omissions, or E&O for short). It’s a rough gig that doesn’t pay well. On the exchange I think I make $14 or so per contract per month (and a contract could be an individual or a whole family). 60% of that goes to my agency, 40% to me. So if they keep their plan all year, I made less than $70.

 

[-OZ-]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

It’s all relative.
In our case, we created many relatives.

 

[General Malaise]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

It’s all relative.
In our case, we created many relatives.

I guess. My monthly nut isn't anywhere near $15K now and I REALLY hope it's not anywhere near $15K a month when I retire or I'm hooped.

My retirement plans involve living in a house that's completely paid off, whether that's our home now or something smaller. I don't plan on having a car payment or any other debts either. I buy used cars, pay them off, drive until they get near death and sell. The months of my life to date without a car payment are on par with the months I've had them. I like living lean and mean.

But who knows what the future holds.

 

[-OZ-]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

It’s all relative.
In our case, we created many relatives.

I guess. My monthly nut isn't anywhere near $15K now and I REALLY hope it's not anywhere near $15K a month when I retire or I'm hooped.

My retirement plans involve living in a house that's completely paid off, whether that's our home now or something smaller. I don't plan on having a car payment or any other debts either. I buy used cars, pay them off, drive until they get near death and sell. The months of my life to date without a car payment are on par with the months I've had them. I like living lean and mean.

But who knows what the future holds.

I’ll give our brief breakdown.

First, we plan to move to the lake after our youngest graduates HS. More likely than not, that means adding a mortgage. Using VA, Zero down, probably $4-5k monthly. Possibly pay it off and cut monthly expenses but that really depends on the rate.

Second, we’ll travel a lot in the first decade at least, hopefully longer.

Third, with five kids and no desire to leave them money when we die, we’ll give along the way. Grandkids 529, vacations together, etc are possibilities. Others see these goals differently but I’d rather help while they’re young than give much when they’re 60 (God willing)

We haven’t had a car payment in 14 years and drive vehicles ranging from 2007-2018. If the rate is below 4%, I’m not opposed to a loan but generally prefer not to have one.

 

[General Malaise]

If the stars align, we want to buy a 2nd home on the coast as a rental property and one we can also use but that's a stretch goal. Some passive income when I am retired would be the dream. My kids can help manage the rental and it'll be their's when I'm gone.

I'm also an active investor and will manage a portfolio of stocks until I can't any more. On top of keeping me busy, I'd be looking for dividend paying stocks that supplement income. You can find 5-6% dividend yields out there and fixed income is finally an option again for risk adverse. If you have a million bucks just sitting around collecting yield at 5%, that's 50K a year for doing nothing.

I also plan on selling weed edible products to friends for a little side hustle money. I've gotten really good at this.

 

[SFBayDuck]

Yeah, having a relatively recent mortgage in the Bay Area does square the circle a bit. One of the most beautiful and expensive parts of the country. It's very worth the cost IMO.

It sure is, spent 25 years there. But it's such a challenge financially. We moved back to Oregon 2 1/2 years ago (I've worked remotely for 15 years so brought the job with me) for a combination of lower cost of living and to move back to a college town to have stuff (sports) to do during retirement (which is still a few years away). I definitely miss it at times, but then I pay my mortgage which is 30% less than my rent was in Marin.

I'd encourage you to reflect on what you would like that 67+ life to look like. A book like Die with Zero could be an interesting thought experiment.

Heard the author on a podcast recently and ordered the book, haven't started it yet though. Like @-OZ- and others have mentioned, I'd rather help my kid out financially during her early adulthood years than worry about leaving her something when I die.

 

[SFBayDuck]

If the stars align, we want to buy a 2nd home on the coast as a rental property and one we can also use but that's a stretch goal. Some passive income when I am retired would be the dream. My kids can help manage the rental and it'll be their's when I'm gone.

That's another reason we moved back, to have regular access to my family's cabin on the coast. Hopefully my parents will either leave it to me or I'll be in a position to take it off their hands at an attractive price if they decide to sell.

 

[NewlyRetired]

This is probably a long shot but is anyone planning on a retirement that covers more that 2 people? Our daughter will be with us for the rest of our lives.

Outside of slowly moving assets into her name as we age, I am unsure what else I should be looking at.

 

[⚡DEADHEAD⚡]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

 

[General Malaise]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

I get it. I guess in my head, I'm eyeballing living like a college sophomore as a retired person. No mortgage, no car payment, no golf memberships, no yachts....etc. But if I HAVE the means, then I can live a little and spend money on my family on things like vacations, etc.

 

[supermike80]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

I get it. I guess in my head, I'm eyeballing living like a college sophomore as a retired person. No mortgage, no car payment, no golf memberships, no yachts....etc. But if I HAVE the means, then I can live a little and spend money on my family on things like vacations, etc.

In retirement I wouldn't mind a golf membership. But will play that by ear

 

[General Malaise]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

I get it. I guess in my head, I'm eyeballing living like a college sophomore as a retired person. No mortgage, no car payment, no golf memberships, no yachts....etc. But if I HAVE the means, then I can live a little and spend money on my family on things like vacations, etc.

In retirement I wouldn't mind a golf membership. But will play that by ear

I switched over to disc golf only. That's mostly free. I plan on playing every day of retirement as long as the weather is decent. With my dog. I will always have a rescue dog who plays disc golf with me.

 

[supermike80]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

I get it. I guess in my head, I'm eyeballing living like a college sophomore as a retired person. No mortgage, no car payment, no golf memberships, no yachts....etc. But if I HAVE the means, then I can live a little and spend money on my family on things like vacations, etc.

In retirement I wouldn't mind a golf membership. But will play that by ear

I switched over to disc golf only. That's mostly free. I plan on playing every day of retirement as long as the weather is decent. With my dog. I will always have a rescue dog who plays disc golf with me.

Sounds fun. i love golf..LOVE golf. Not something I wanna give up. But who knows. My body may not allow me to play as much as Id like when I retire. And that would be sad

 

[JohnnyU]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

You can’t draw SS rom both spouses, only the highest amount

edit I was thinking if one died

 

[-OZ-]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

Exactly. My current estimate puts me at over $4500 in SS, my wife will get half of that (SAHM most of our adult lives) so that’s $6750 if I wait until I’m 70 to claim in today’s dollars (presuming SS in its current form). Military pension plus VA gives us another $6000 today. Assuming I don’t quit early, my federal civilian pension kicks in another $3k monthly. That’s $15,750 at 70 in today’s money without touching investments.

 

[-OZ-]

You can’t draw SS rom both spouses, only the highest amount

What are you talking about?

 

[supermike80]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

You can’t draw SS rom both spouses, only the highest amount

I don't believe that's accurate.
If it is, then I am divorcing my wife and we still live together. Seriously

 

[JohnnyU]

$15,000 a MONTH??? Why?

Why not? That’s what we plan, after adjusting for inflation.

You expect to have a mortgage payment during retirement?

We do. We’ll move at retirement. The rate will be the deciding factor regarding paying it off quickly or taking the mortgage.

Just seems like a lot. I guess I'm poor.

You know, from social security alone, I think we will bring in around $8500/month, so maybe $15k is not the stretch you think it is?

You can’t draw SS rom both spouses, only the highest amount

I don't believe that's accurate.
If it is, then I am divorcing my wife and we sill live together. Seriously

Oh, I’m right on that.

edit I was thinking if one died