Sounds like you need to seek out an advisor to guide you through estate planning then as opposed to worrying too much sbout a 4% withdrawal.
As far as I understand, once you have Medicare, Medicare is primary and your other insurance is secondary.
âIt depends.â For example, if you leave some retirement accounts to kids, they have to pay taxes/take it out of âyourâ accounts within a certain number of years, and it may be during a time that THEIR tax rate is very high.
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Yeah, and it jumps up pretty quickly to 20%. Think of how much the estate could shrink if one has to pay 40% federal (and who knows what amount that will start at), 20% state, and then whatever someoneâs income tax rate is on IRAs or 401Ks. Better to gift early, I think.
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Would this be similar to the simulations done at the web site https://www.firecalc.com/ where you put in the amount of money, the yearly spending, and the number of years to get an estimate of the chance of depletion before the number of years?
Similar, but with more fine-grained assumptions about spending (how much now, how much for travel when you retired, how much when you hit slow-go and then no-go years, health care costs, long term care if needed), gift plans (downpayment or education for kids or grandkids), when do ShawWife I plan to stop working, income assumptions (stay the same or decline), mix of investments and assumptions about the interest rates available. Also, I canât see that firecalc distinguishes between pre-tax and post-tax income, which is critical as I have a high percentage of my assets in a 401k, but their model includes the tax status of the investments. Then they make draws from distributions of assumptions about interest rates, inflation rates etc. and get a distribution of outcomes.
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I think itâs safe to say⊠if you run out of money, the rest of us have bigger problems⊠
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You are probably right @1214mom. When this thread started 10 years ago or so, I was worried (natural risk aversion combined with experience with dropping markets and income solely from my own business), although I figured there was always a way for us to cut expenses if income dropped. Plan B for us was either to move to a low cost of living area or to ShawWifeâs native Canada.
Things became financially simpler once the kids were out of school. And, on the income and investment side, things have worked out OK for us in the last decade. Although I am still insecure, we have lots of room to cut expenses if we need to. On the other hand, I have noticed that we have become less frugal over the last few years. That would take a bit to reverse.
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Helpful link, on a topic that keeps confusing me. (One kid lives in MA.)
What's the Difference Between Estate Tax & Inheritance Tax?.
helpful excerpt
- Only six states currently impose inheritance taxes: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.
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@MarylandJOE and @Aejmom Thank you! Exactly what I was looking for. One more question. How do you calculate the income generated by this yearâs contribution? It is mixed in with previous yearsâ contribution. The sum was invested in one fund. Do I use the income from that fund since the contribution?
Firecalc doesnât do Monte Carlo, instead they run through actual market performance starting every year since 18-whatever, and calculate what %age of the time you run out of money.
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OK, get ready for a bit of calculating. This article explains it pretty well. Hopefully you can easily get the necessary numbers for the calculations.
???
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Calculating is my bet!
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I guess some questions are funny 
DH gets his first pension check next month. Not expecting much.
Thank you!!! Itâs in the brokerage account and pretty standard investment. I can get the necessary numbers.
@jym626 and @thumper1 Geez guys, u and i are next to each other on the keyboard. Wish I overshoot only that little.
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With all the discussion weâve had here about the repeal of GPO/WEP, I was ecstatic when it was approved by the Senate, but now I am watching with baited breath for the news of Biden signing the billâJoe, letâs get this done!!!
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True. Simply asked with question marks as it was pretty darned early in the morning when I looked. And lol it read as â you and I are next to each otherâŠ.â Had to look twice!
Certainly things to think about in the go-go, slow-go, and no-go timeframes. The age one retires can also be determined by the activities one wants to do - we know people that keep working to fund some of the things they want to do with cash flow, or they want to have their home paid for before retiring. Some have a certain date in mind, either before 65 or after 65. We certainly gauged our retirement with Medicare. If we had to, we had COBRA 18 month time frame. As I have said prior in this thread, DH saw the amount we had with retirement funds, and was so emotionally spent with his boss that he retired 11 months before our plan â even with the option of 30 hours a week because he didnât want to email his boss a list of what needed to be done by others, somehow that wasnât his âstyleâ or he didnât want to hear the feedback from his non-engineer boss plant manager who didnât understand engineering or how to delegate to highly qualified personnel in the engineering department. It was worth DHâs emotional health to retire at that time â I was able to pick up health insurance with my job and we saved over $1000/month from the COBRA rates, and I retired right at age 65.
If one is a parent or grandparent, one thinks about those before or in retirement - if the retiree has enough funds (and energy) to be involved physically and financially with their kids and grandkids. People delay retirement for a number of reasons, financial and otherwise. We found our nest egg was enough for us and to also use along way (as we are now 3 years into retirement), and continuing to think about how we can spend our money most effectively now and in the near future.
Having the funds for home remodeling. Right now we are trying to figure out the best way to eventually transition from our home to being near the grandkids (if that can work out with the parent careers continuing in their current city). DH has activities that keep us in our current area and it is not cost effective or worth the energy to move from our home to another home in our area â but it is certainly smart for us to do upgrades and have the home decluttered so when it is time to âpull the triggerâ we are ready. Some people do delay retirement to purchase a 2nd home or vacation home first before they transition out of their home near jobs.
All these kind of thoughts do go through oneâs mind when one plans to retire and the age. Some have insurance options with employer or Government (or can afford off the common market) to retire before Medicare. Some have a younger spouse and may have a choice for one insurance while the older spouse qualifies for Medicare. Some slowly do home remodeling and home upgrades during their working years for cash flow these things.
People generally on this thread are in go- go years, before or already retired. My very good friend started this thread. She absolutely hit a topic that is very popular - and people contribute all kinds of thoughts related to this.
The reason I bring up high SAT scores is that the exceptional private school that grandkids are in is affordable for DD/SIL and is available in their city where their current jobs are. If the school was out of their financial reach, sometimes grandparents do pay for tuition, daycare, or other expenses during their childrenâs career start or situation. This can be a consideration to determining how much one will âneedâ in retirement, along with the age retiring.
Some close to retirement may be providing care for their parents or in-laws, or other relatives that need care/help - and that can possibly determined at what age they retire and what they financially believe they will need in retirement.
There is a lot of wisdom shared on this thread, observations, information from print and other sources.
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It seems like itâs sure to be signed. Iâm wondering if president Biden is waiting for a large signing ceremony after the 1st of the year. A bipartisan group with a photo op for all those who were instrumental in getting it passed.
Thatâs the only reason I can think of.
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