How Much Do You think You Need to Retire? What Age Will You/Spouse Retire? General Retirement Issues (Part 2)

Parent Cafe
7361

The health changes are mighty! Congrats!

A friend of DD1 was pre-diabetic in middle school; her older sister was thin, while the parents are apple shaped overweight/obese. This gal changed her dietary/exercise and has been at terrific weight from HS and beyond. She made the decision and made the life change.

My brother who is 13 months older than me was in a high responsible, high stress job. He walked away from last year of income ($1M) - I believe his wife (13 years older than him, and needing him available to her medical needs) thought he might not live the year and they had plenty of money. As soon as he retired (early at 59, but had insurance benefits negotiated through the company till he turned 65), he lost 40 lb and quit smoking.

Now that I have my latest health issue resolved (removal of a parathyroid gland with a tumor on it causing a cascade of issues now finally diagnosed and put to bed with surgery), as soon as have incision healed and general recovery, getting back on the diet/exercise routine to lose weight. Since having cancer in 2009/2010 (and treatments that ran through last IV 1/31/2011 and 10 years of oral medication which has now given me fatty liver disease, hey I’ll take that and continue to be cancer free) the closest I have weighed to my healthy weight range has been 11 pounds over my weight range for my height (5’8"). My average weight has always been on the lower part of my weight range. I am going to have to devote more time in the day to exercise, and if I do so, will stay away from the refrigerator and too high caloric intake. Much easier to lose weight when young and healthy.

Once DH recovers from his broken leg (fell on ice), he can get back to his walking (at full recovery, he will walk 4X a week and walk 6- 8 miles at pretty vigorous pace). DH wants to get to a particular weight at his next cardiology visit, and he will attain that. Out of all the cardiology patients, he is the one that is following the ‘lose weight’ recommendation.

In ‘living the dream’ - main thing one has is the time during the day that would have been taken up with work. Some people have plans to do a lot of travel (a couple I am friends with are visiting every national park, and have done a fair share of them already). DH did a lot of national and international travel with work, so he desires as little travel as possible. He doesn’t mind me going with others, and I have done so in the past as well as with future plans. We recently did a trip which included Christmas through New Year’s with DD1/SIL/kids - and we were a child care help between Christmas and New Year’s on days or half days where both parents had work obligations.

SIL has some weeks of training, and I will be traveling to be the other adult in the household helping with kid/meal/transport/family duty – mom’s vehicle has 4 car seats and dad’s vehicle has 2 car seats; I will be doing the pick up of the older 2 kids after their school day ends at 3 pm (keeping the kids’ morning routine the same with mom doing the drop off at 2 places before she gets to her work place at 7:20 am and begins work at 7:30 am) – plus then I have all day to do chores/grocery and prepare the evening meal, so I will have some of my retirement time during the day. Currently DD1 does the grocery order and SIL does the grocery pick up, and I can continue to do the grocery pick up as she has this system worked out. I will learn to navigate their city - I just get the visual idea and follow the electronic aps getting me around. I have a pretty good sense of direction as well as remember visuals with the learning of their city destinations. I just plan enough time, especially with children pick up - but am pretty familiar with that one location already.

My parents died young/fairly young (dad at 64 due to cancer, mom at 77 due to dementia) while DH’s parents both died at 92. Learned about ‘parents caring for parents’ from 1995 - 2021. DDs saw and learned as well. SIL’s parents are about DH and my ages, but he has progressive Parkinson’s Disease, and she has some issues but is really overwhelmed with his issues. They desire to fly to a significant family event coming up, but I don’t think they can manage it. They did fly to a nephew’s funeral a few years ago, but didn’t plan another airplane stop to see new grandchild
 DD1/SIL have found they can depend on DH and me - which first came out when Covid started. We first thought it would be limited, and I figured his parents would come for a week, and alternate what we could do — no, SIL’s mother had pneumonia in the past and absolutely were not coming to help (at that point SIL’s dad was doing OK with Parkinson’s). So I became live-in Nanny for GD1/GS1, ages almost 3 and almost 2, for 6 weeks while day care was shut down (we live 100 miles away, so I would come Sunday afternoon and leave Friday when DD1 returned home from work).

It goes to family mentality and flexibility on having family close and making some arrangements so parent(s) can live outside of AL/Skilled Care. How much independent living parents can have, with help coming in as needed. My mom had live in housekeeper/cook, with brother living a house away - she was a calm dementia, didn’t wander, was content in her own home. MIL needed skilled care at the very end, but was delayed a bit while DH lived in and was 24/7 care taker; once MIL did go to skilled care, the first week went great, but the second week her meds really stopped working and she died of hypertensive heart disease within a week of the sharp decline. So DD’s grandmother’s assets were almost fully intact - the house is staying with the family, and the sons all received some small funds, while other funds are maintaining the house/taxes. Down the road, one GD is purchasing the house - one of the sons already sold his ‘share’ in the house. It is a great place for summer stay, as well as if some of us want to gather at Christmas Holidays. Last summer, the sons stayed there and did some home maintenance while also reminiscing together.

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7362

A year or two ago, Kiplinger’s had an article about LTC insurance, and that gave a good perspective on not only the expense, but the limited benefits.

I had disability insurance, and during my cancer, I actually had to fight to get the insurance company to pay.

With some LTC insurance, some of it is straight-forward, yes they have to pay. But IMHO many insurance companies will make the beneficiaries jump through hoops to get the payments for the coverage set out.

Before I got my coverage on disability, the claims person talked about their MD not agreeing with my MD assessment (my MD, board certified Oncologist, rating me with pain nausea and weakness). Their MD just looking at paperwork. I said “well I guess I am going to have to contact my lawyer”. The next day they called back with approving my disability coverage. And this is a very good/well known insurance company. They even hired a retired FBI agent to come to my home to assess me. I had a retired government worker here as my advocate (she was better with the situation than my DH who I sent on to work) - I believe his report was favorable. At that point, I was sitting at the kitchen table with him and my advocate, and I said I have so much fatigue, all I want to do is lie on the couch I am so weak and tired.

My body weakness was at such a level - especially the four weeks after the ‘old’ chemo treatments to kill off what first line treatments didn’t kill off, that often on the couch (and some may not believe me) I would feel the presence of my parents hovering over me - and one time I actually saw angels swooping away.

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7363

I am kinda paranoid to put everything in one place. We have our investments and some retirement accts at Merrill Lynch, but when I rolled over a large chunk of my 401k from a former employer, I put it with another firm.

I do roll over my retirement when I leave a company to my new one or an existing one, so it is not like I have 5 different 401ks.

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7364

One of my former employers had a pension plan and a 403b. They eventually got rid of the pension plan it - it took like 3 years to dissolve it! My understanding is that pension plans are costly and an administrative nightmare.

7365

More than one I believe is just fine. One place with DH’s sizable 401k (which employer continues to pay overhead fees), and one place with our Financial Advisor.

We worked to consolidate various funds under FA, and then did the conversions from IRAs to Roth IRAs there as well. We did all that over time, and over time we also then did rollovers from 401k into annuities (we hold 5 annuities now, with various time periods - 6 year, 10 year, 12 year maturity – we had two annuities mature and we now have them reinvested in 10 year maturity).

One of the questions we had for our FA at our meeting yesterday was “what do people older than us do on the footing that we have now?” and his answer was purchasing more annuities when it is prudent on the annuity benefits.

The investments we choose with the 401k have had the fund grow to where we have the FA look for annuities (one wants to sometimes wait for the right kind of annuity ‘deal’). The president of our FA group has been terrific at finding the right annuities (he was our FA before the growth of the firm, and our current FA is ‘learning the ropes’).

One issue we also asked about was in the event of one of us dying, and the adjustments with the investments. FA said he now is working with two widows - their spouses died over recent period.

IDK how much of a factor it is with the RMD factoring and one person facing the tax consequences instead of two. Maybe someone on this thread has had experience with this either with their parents or themselves.

7366

Perhaps I do not understand your question, but my initial response is that the widowed person will need to file as single going forward instead of MFJ while still taking the same RMD that the couple had taken.

Quick example. A couple with $89K AGI last year would have been in the 12% marginal bracket for the amount from $22K to $89K but the widow will be in the 22% marginal from $45K to the $89K example. Also, the std deduction drops in half so the higher marginal brackets will be reached sooner.

IRMAA surcharges will be triggered sooner.

If one spouse claimed on other’s SS benefit, SS income will now be 2/3 of what it had been.

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7367

I don’t think Fidelity is going anywhere. We do diversify within Fidelity.

My H was the executor of his brother’s trust. BIL is difficult, worked many jobs and had retirement accounts at all of them. H asked him to consolidate. He said no, wouldn’t tell him where they were, said, “I don’t care, I’ll be dead.” Other shenanigans like hiding from his wife that she was not a beneficiary of his trust and more. H withdrew as executor.

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7368

We just had breakfast with a friend of DH. Bachelor professional who is close to retirement. Still in apartment - I told him if we knew him 10 years earlier, we would have helped him get into a his own condo/townhouse (his main hang up is wanting all external things taken care of). Rent increases have been dramatic recently, but is now calming down.

He recently got a ‘reach out’ contact from Fidelity. He had a IRA there from a long ago employer, who he only worked 4 months for - but the IRA has grown to $86,000! Wow. He had 10 years with another company (so he has funds from that stint), and his primary retirement will be with full government pension (NASA).

7369

My late father had a full pension from NASA! (I grew up in the Houston area.) They moved to the LA area and he worked on the B2 with Northrop when the Apollo program ended.

My mom still gets something from his pension, and we’re not sure why. It’s been many years.

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7370

That video above talks about the situation where one person dies, but the survivor is stuck with the high RMD. I hadn’t considered that and made me that much happier that we are doing Roth conversions now.

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7371

Ah, I didn’t watch the video. I haven’t the patience for videos or podcasts and also don’t seem to retain as well as when I read. (I am not sure what that says about me!)

But yes, the inevitable surviving spouse situation is a huge incentive to complete Roth conversions.

7372

It was a lot to absorb, and I probably didn’t catch everything, but the guy had a great explanation for why it’s all so confusing. He says that many people use spousal benefit and survivor benefit interchangeably and that they are totally different. He says SS people answer the question they are asked not the question you think you asked. I believe that.

Earlier this week, I posted a question that got flagged and removed, because I said that I was asking for a friend. I mean, I was, but I wouldn’t have had to ask if I could’ve answered her question, which is why I posted, but whatevs. :woman_shrugging:t4: I sent her that video as it addressed much of what she was asking. I mainly used it to confirm what I thought was accurate. I think I’ll continue to hold off on SS for as long as I can.

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7373

My educated guess is the following -
Your dad had to make a choice when he retired from NASA. He could take a cut in his pension at the start, so your mom would receive (probably half, but other choices are available) of his pension amount if he were to die. She should receive it for the rest of her life.
ETA - and it probably is adjusted for inflation each year, although it may not be the entire inflation amount.

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7374

My first job was with the Federal government (and I really enjoyed my last couple of positions). It was long enough ago that I was grandfathered into the Federal pension system instead of being switched to Social Security. When I saw what my monthly amount would be, and that it would be frozen for the next (I think) 25 years, I cashed it in instead and gave up the pension. Then I used most of it for Illinois college bonds (I was pregnant when I left). It really helped pay for son’s college!

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7375

No, he didn’t – so that’s why my brother and I are scratching our heads on why she’s getting anything, and it’s not a lot. To clarify, Dad was subcontracting at NASA through Northrop (or Brown & Root, they changed names many times through the years) from Project Mercury through Apollo, then moved to LA to work on the B-2 as a test engineer. He called himself a migrant missile worker. Those were the days you stayed with the same company and moved with the assignment. Houston was the longest time in one place.

Mom does get Social Security, and at 89 has enough savings to be comfortable. She lives in a great senior living facility in a low cost of living area. We tell her to keep enough money liquid in case they decide it was a mistake!

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7376

I admit that I am conflicted and will not truly ponder the SS filing age until I am at least within a year of being eligible to file early. On the one hand, if you think you will live beyond 82, then the easy answer is to wait for full eligibility age to file, however, I wonder about the potential looming benefit cutbacks. If they really happen as projected in 2035, would we not be better off claiming early? Bird in the hand


Since I am still a few years from 62, I will wait to see if there is any more clarity on the pending cutbacks before deciding.

Did you post a question on this page that was flagged?

** Edited to change 72 to 82 as breakeven should be around 82, not 72.

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7377

A trick I learned while studying for my MSW: any Youtube video can be watched at double speed, with no sound and subtitles. The subtitles are autogenerated but much better than nothing.

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7378

Yes, I used to do a lot of work with pension plans. The pension plan termination must be submitted to the IRS for a determination letter which authorizes and includes the provisions for terminating the pension plan. Three years is not unusual. We have to submit all kinds of info on assets, participants, years of service, etc.

Every year a pension plan requires actuarial certification. The biggest issue is that pension plans are funding a specific dollar benefit for you at retirement, based on average earnings, years of service and the plan formula – for example – 1% of the average of the highest five years of salary times years of service.

The actuary uses various life expectancy rates and actuarial tables to determine how much the employer has to contribute to fund each year to have enough to pay those benefits as employees reach retirement age. There can be a lot of play with the interest rate assumptions for how much that proposed funding number will grow over time. So, when the projected interest rate assumption is high, less funding is required. But
if the market doesn’t meet projected interest assumptions, the plan can become underfunded and then the employer will have to throw money in the pot. If they can’t fund the plan, it may end up with the Pension Benefit Guaranty Corp (PBGC), who handles the plan termination and distribution of benefits.

These plans tend to pay out as annuities, so you have an income stream. If you’re unmarried, the standard payout is a single life annuity (SLA), for your life only – no survivor benefit. If you’re married, it’s a reduced benefit for you – called a 50% joint and survivor (50%J&S) benefit, with 50% going to your spouse after your death. It’s “reduced” so that the income stream from a SLA or a 50% J&S are equivalent numbers – not necessarily on an individual basis, but over life expectancy tables.

In a nutshell, in a defined benefit pension plan, the EMPLOYER bears the investment risk that what they contribute will be enough to fund your benefit at retirement based on the plan formula. In a defined contribution plan (ie, 401k/403b), you/the employer can contribute to the plan and invest it in the plan’s options. There is no guarantee what your balance will be when you retire. You can take it out in a lump sum, take regular distributions/RMDs, or buy an annuity. However, the EMPLOYEE is taking the investment risk in these kinds of plans.

This is probably more than anyone wanted to know, but understanding how these things work can help you understand what kind of investment choices and plan distributions you will want to make over your career and into retirement.

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7379

No, for me it’s good to have all that explained.

Most of my working career I have had only the option of 401k plans. Except a few years early on I have taken advantage of these plans and personally ensured I contributed enough to have a good nest egg in retirement. I personally like to have this option where I am in control of my retirement funds and can have an effect on the outcome.

Recently I’ve been involved in two pension plans. One small pension is through a union job and is tied to that union. Honestly I’m not exactly hopeful for the outcome of that pension. I keep getting letters regarding it being underfunded. To me it appears to be on a similar track as Social Security, not sustainable at current levels. I’m not counting on this small pension at all. I’m glad I contributed minimally to it and don’t have much skin in the game.

Currently I am in a well funded, reliable pension plan. Coming in later in life it won’t be as lucrative as it could have been but it will afford a nice dependable monthly payout and I am glad to be involved in it. It does require a certain amount of employee contributions though so that probably makes it less reliant on the employer in the first place.

As an individual, I have realized from early on that retirement funding was my responsibility. I knew that Social Security was not going to provide me a comfortable retirement (it was not meant to). I have worked hard and saved to afford the retirement funding that I feel I will need. I’m still years away from leaving the workforce and still making sure I am funding my goals. It has certainly been a big responsibility. In another scenario I would have preferred to splurge and spend that money on anything and everything else but I knew that I wanted to provide for my older self. I have no regrets and hopefully myself and my family will benefit greatly from my lifetime of planning and execution.

I appreciate the information shared in this thread and the opportunity to learn more about different options and situations.

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7380

Thanks! I had no idea, so I will have to try that.