Glad @BunsenBurner added the part about the recalculation this year‘s income earnings. Because the person’s Social Security earning could readjust as they are still earning income, and if it’s a high amount, it could make a difference.
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I think we have the answer to our question as to why SS gets so much discussion here even though many don’t count on it as the primary income source in retirement! Because it is complicated and can be as clear as mud! 
FYI, here is the SS PIA calculator where one can estimate the monthly amount:
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I don’t believe that is correct. Once you claim, DRC’s stop.
What can change is the benefit calculation as another year working (at a higher salary) can replace a year of earlier, lower earnings in the calc.
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Lots of things in life are not fair. ( heck, no one should be a trillionaire).We all know that. But H paid into SS and so did I. We both worked for that money. And we both paid in.
The system was set up when men were generally the breadwinners and if women worked outside of the home it was usually for much lower wages. As times changed and more women worked for pay ( and higher pay )system did not change to reflect that.
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I will fess up that only started engaging FAs recently. My Fidelity FA did a very good presentation of how to balance my portfolio so I could have enough assets to last me until 100. When I asked the team about how to minimize my taxes when I retired, it was one one of those commercials, “oh, that’s not what we do. You need to consult your accountant.”
How could that be. My biggest spend is on taxes, and it should drive my investment strategy. So they have lost me at that statement. I am now interviewing D1’s advisor. He is an accountant and also FA. D1 said he has minimized her capital gains with the stocks her firm has granted to her and he supposedly takes on a more holistic view of her investments.
That’s what I was trying to say just not very well
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As you, we have had legitimate reasons for spending. Your things have been very reasonable and worthy spending. Congrats on the weight loss and your ways to rehab and incorporate exercise.
Also agree with @Colorado_mom about extra spending on extras - “I’ve decided that (if affordable), any extra costs for fitness, healthy food, good health etc. are good investments. That is why I decided to get another Ikon season ski pass for next year.” Glad you enjoy skiing and pickleball.
With taxes, I also anticipate FA to provide some guidance on this and I agree with @oldfort “My biggest spend is on taxes, and it should drive my investment strategy. So they have lost me at that statement. I am now interviewing D1’s advisor. He is an accountant and also FA. D1 said he has minimized her capital gains with the stocks her firm has granted to her and he supposedly takes on a more holistic view of her investments.”
We are not in a high tax area, but keeping aware of taxes as part of decisions in retirement is important. Some on this thread have a great handle on both investments and taxes. I am absorbing as much as I can and plugging along.
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Thanks much for the thoughts on the ‘high cost early years’ of retirement.
We’ve opted to keep my employer’s health insurance (it’s incredibly good) - but have to pay at market rate - about $2100 for a high deductible plan. But an insurance broker said a comparable plan on the ACA (permitting us to go doctors out of state) would be the same or more.
We are near multiple world-class medical centers that are outside our state lines and want to kept the doctors.
Appreciate the encouragement to do other ‘splurge’ things (like travel). Knowing mobility and health are not unlimited is what’s pushing me to move ahead with these fun (but pricey) ideas…
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@oldfort My Fidelity advisor poses the questions that I direct to my CPA. In doing so, we have emails with all three of us.
My fidelity advisor has a good idea of my overall pictures, what we can do to save taxes, concerns about changes to Virginia’s tax laws, etc. I don’t mind running these correctly-phrased concepts to the CPA.
I’ve had this advisor since 2018, so we have a pretty good comfort level.
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I was going to give them more assets to manage, but not after that response. They said they didn’t want to be liable if their tax advice was incorrect. Their job was to manage my money. Not sure how they could do that without knowing tax implications.
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@oldfort I fully agree with you. Fortunately, our CFP is very well versed on tax implications. If he hadn’t been able to answer my questions about tax brackets, IRMAA, RMD and how that was going to affect our tax situation, etc…I would have found someone new.
I understand that the poster above doesn’t mind being sort of the middle man, but I want one person who understands and can help us with our finances.
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I understand your perspective and would probably feel the same way if we didn’t have our system working well enough for me.
He/Fidelity doesn’t want to be liable for bad tax advice and so I’m ok with looping in the CPA.
At this point my concerns and the structure are:
— Roth conversions
— Gifting
— charitable giving
— In the fairly near future, I need to go back to the estate attorney to make sure I understand how I “want” the money to flow to heirs vs the tax implications.
— one of my Ds lives in PA and her portion of my estate will be subject to an inheritance tax of 4%.If I move to PA, my whole estate will be subject to the 4%,
My estate is tidy enough right now. It may note be perfect (if something happens tomorrow) but it is all fairly well organzed. (Reminder that I’m a widow and we had done a lot of this before my husband died, but it is my responsibility to carry it forward).
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I’m sure my biggest expense item is taxes. Much of that is income tax from income I earn, so hard to do much about that. But, I want my FA’s to be thinking about taxes on returns, on RMDs, on our estate, etc. As I mentioned, one of my FAs brought in the head of wealth planning for the firm, who had very sophisticated ideas, some of which involved ways to reduce taxes.
I think our second biggest expense item is FA fees. I am going to consolidate and reduce that expenditure by roughly 40%.
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That’s the case with my mom. I took her shopping this weekend for some summer clothes. She bought 4 outfits. She kept on saying she was spending too much money. I told her that she could buy 40 outfits and it would be fine.
I probably shouldn’t make fun of my mom because I may be the same when I retire.
While I am working and getting a W2 there isn’t much I could do about my reported income.
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Make sure you factor in any subsidies you might get from an ACA plan. We were on the exchange for 3 years and the subsidies covered at least half of the cost.
The out of state restriction is an issue in some markets - like the tri-state area. Your NJ or CT plan won’t cover those top medical facilities in NYC.
As I have noted before, the insurance subsidies are based upon your actual income in that calendar year. When you fill out your tax return, you will have to repay any premiums you got that you now don’t qualify for.
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Based on advice from insurance broker - likely not going ACA route. The ‘retirement version’ of my current employer provided healthcare has such incredibly wonderful options (world class medical choices) that the ACA would have to be a gold (expensive) version.
Although will definitely raise the issue of taxable income w/financial planner to see if there is a way we might possibly qualify for subsidies…
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We are actually traveling less, but that is largely because I am traveling so much less. ShawWife does have a show in Italy in February, so we will create a trip around that. And, I was thinking of a trip to Asia. We had a great time going Japan/Korea with ShawD last year. But fitting travel in is always hard. I’ve got a worktrip to Brazil coming up and then we go up to Canada for a month and have ShawD’s wedding at the end of the summer. We should make two trips a year to visit ShawSon and DIL. When to fit in a two-week trip to Asia? Plus, I want to go to FL for part of the winter. Life is tough but @Jolynne_Smyth, you are right: We can’t take mobility or even longevity for granted.
One thing that the wealth planning guy at our FA suggested was that we should be giving our assets beyond the existing dynasty trust (and hence are in our estate) to our kids in trust as the sums are a lot larger now than they were in 2006 or 2013 when we did our previous documents. We had not thought about that. Food for thought.
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Since the extended subsidies from Covid era expired, the income threshold is pretty low.
I’m not sure about a tax break.
I will say that my ACA plan is $1250 a month with a $10,000 deductible. I would forgo any subsidies or tax breaks to have what we had with a good employee healthcare plan
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