The mortgage deduction would remain under Trump’s proposal, but the standard deduction would be greatly increased, to the point where most people will be better off taking the standard deduction instead of itemizing.
This is being spun by certain parties (looking at you NAR) as “eliminating” the mortgage deduction, in an effort to stir up FUD (IMO) and get people to want to preserve the status quo.
Trump’s proposal will also eliminate being able to deduct state and local taxes (which I am in favor of - why should low tax areas subsidize high tax areas?), but again, the much higher standard deduction benefits most people more than itemizing these deductions.
I’m really hoping AMT gets the ax.
Chances of any of this stuff actually happening are probably slim, though.
Healthcare is s huge issue, especially as everyone ages. Chronic medical conditions can require increasingly costly care and the older we get the more conditions we are likely to be diagnosed with.
hubby and I just hit the big “65” and boy are we relieved!
Both of us are self employed and the cost of the DEDUCTIBLE alone on our health insurance in Calif was over $24000/ year. now with Medicare we pay just $200/month for each of us. phew!
fortunately, both of us, knock on wood, are very healthy ,exercise daily , eat right and weigh just a few pounds more than we did in HS.
I’m taking SS next year and he’s waiting until 70 to do so.
we are planning on staying in our nice, remodeled 1 story ranch - no reason to move, either financially or for other reasons, unless DS land a tenured position somewhere else in the country and settles down .
thats too far into the future for me to think about at this point.
“do most people figure out the NPV of pension payments” - Sigh… once upon a time for “Plan A” we had two defined benefit pension plans. Not sure how we would have shown it in the spreadsheet. These days we are on “Plan D” - but that’s OK, since we will still be OK. Just working longer than originally planned.
I don’t know. Something that seems to be guaranteed, like a pension, can disappear in the blink of an eye, as companies go bankrupt and underfund them. Though it seems harder to underfund them now, who knows what rules could be changed? We have a good pension, but it is never adjusted for inflation, it’s worth goes down every year. We definitely take it into account, as far as retirement planning, but it’s not like having that in your retirement account. And when you die (we won’t take a survivor benefit), it’s gone.
So I have a coworker who is retiring at the end of next month and it is interesting to me how little of a plan she has compared to many of us! Her H is working until the end of the summer and they are both 65. She has stated that they will need to sell their house as they can’t afford to keep it in retirement. She has lived in SoCal her whole life and most of her family is still here. She visited Oregon last year and thought that would be a good place to move, but her H has said no. She told me yesterday at lunch that she will spend the first few months getting the house ready to sale and then try to figure out where they will move once her H is retired. Her last comment to me was that they have almost a million dollars in their 401K so she feels they will be fine. I guess if I was where she is I would be a bit more freaked out, but I’m a bit of a planner and she is definitely not!
Well, if she has a million in a 401K and a house to sell in SoCal, even though they haven’t planned…she’s probably better off than most, if they’re moving to a lower cost area.
People are right to be worried. Medicare enrollee premiums cover about 1/8 of the current cost of the program, and medicare payroll taxes (on mostly younger workers) cover almost another 3/8 of the cost (which is about eight thousand per year per enrollee). The other half comes from general revenue (collected in income taxes, or borrowed). Far too expensive and unstable in its current form to survive the baby boom generation.
Speaking of pensions, does anyone know if the University of California’s is still intact? My husband and I left years ago but were employed long enough to be vested and last I checked, we could start receiving (our very small) pensions at age 60.
I am so proud. Kid signed up for a retirement plan today! With the maximized salary match from the employer, she will be putting 10% of her salary away. That’s a good start. The rest will be enough to keep her in food and fun in this not so inexpensive city.
Congrats, bunsen! My S has been working for 3 years and has not joined his 401k, which does match. So I made him start a target date retirement fund, and I make sure money goes in there on a monthly basis. It makes me crazy. (I also made him start a Roth IRA when he had his first HS job, and still make sure he adds to that when he is home at Christmas time.)
My H retired a few weeks ago, last kid graduated from college, his employer provides retiree health benefits, but he is 8 years older than I and I am not sure what happens when he turns 65. But we have a few years to figure that out.
Congrats to your husband on his retirement, mamabear. And to you, too, on sending the chicks out of the nest.
Showed this calculator to kid; and it was very motivational for her to see if she continues putting away just a small portion of her salary, she will have a ton by the time she is 65 (65? Do people live that long? Lol!!)
@mamabear1234 I’m perplexed why your son is willing to contribute t both a target date fund and a Roth but is giving up the employer match in the 401K. Am I missing something or is it just as irrational as it appears?
Our son is 5 yrs into career mode, has a pension and contributes 10% to a 403b.
He’s also a new homeowner, so we feel he’s doing ok.
I don’t think I got serious until about age 35…but have been contributing 15-20% per year for last 25 years. With pension and SS, I guess we’ll be fine.
S has been funding his 401k since he started. His company has a great match - 150% of 6% of his salary.
D will not be eligible to participate in her company’s 401k until this summer (for some reason they only allow enrollment once per year) but I got her to fully fund a Roth IRA last December.
S1 has always maxed out his retirement contributions, even when he was living on a grad student’s salary.
S2 is starting to get more serious about contributing to his RothIRA. He hasn’t felt the need to contribute since his employer funds his 403(b) at at least 9% of his salary (it may be 12% by now), but he’s starting to listen to us about the power of saving for retirement at an early age (he’s 27).
I am the opposite of some of you about my son contributing to a 401K. While the older one maxes his out, the younger one is contributing 4% (employer match), and I don’t actually think he should at this point. The company is delaying paychecks, reimbursements, I don’t know that they will be around for long. Though I would always say to contribute the max, particularly to your employer match, if your company might be going under, maybe you’d be better off saving that money than having a tiny 401K that might magically disappear because of fees, etc.
However, I’m keeping quiet on this one because I like the desire to contribute, even if you’re broke and even if it’s not much. It’s more important to get in the habit.
With the maximized salary match from the employer, she will be putting 10% of her salary away. That’s a good start. The rest will be enough to keep her in food and fun in this not so inexpensive city. 