Retirement Calculator Suggestions

<p>I have heard good things about this website for social security planning. There is a fee, but the choices are so darned complex that it seems worth the investment to me. I haven’t run it yet, but have been saving the link:</p>

<p>[When</a> Should I Take Social Security to Maximize My Benefits? | Maximize My Social Security](<a href=“http://www.maximizemysocialsecurity.com/]When”>http://www.maximizemysocialsecurity.com/)</p>

<p>As far as social security planning goes, I’m leaning towards taking it as early as you can get it. As long as you have other sources of income in retirement, and aren’t planning on it as your complete source of income. You don’t know how long you will live, and when you’re dead, it’s gone. Plus if you have a pension or income from other sources, it could easily be income limited, and disappear as an income source entirely.</p>

<p>“I’ve tried a variety of calculators from time to time.
I find they give wildly divergent answers. Either I’m sitting pretty, or I need to save $350K/month or I’ll die a pauper.”</p>

<p>Sadly hilarious. I guess if you die young, no worries.</p>

<p>I would think this depends on your health and possible longevity. My parents are still around in their mid-80s, and my MIL is still going strong at 95 (obviously no impact on my genetics, but for my ex-H it matters). If I am still in good health in my early 60s, I will assume I will be like them and have a pretty long retirement. In that case most people maximize their benefits by waiting to take them. </p>

<p>Regarding worrying about income limits being put on, I assume if I am eligible to draw benefits but am not doing so yet, they aren’t going to yank the rug out from under me. Every time they talk about revising the system they try to talk about affecting younger people so they have more time to “prepare” for the changes in retirement planning. I assume that will be the case when they finally get around to revising it. Of course they will probably do that when I am 59 and apply it to everyone under 60. But I highly doubt they will apply it to people already drawing benefits or of an age to draw benefits.</p>

<p>I don’t know, intparent, I hope you’re right. But they have made all sorts of tax law changes and are always talking about more changes without grandfathering people in. I guess I have no trust. I don’t count on social security, and sadly, even though we supposedly have a great pension, I don’t count on that. Anything can happen, companies can declare bankruptcy and shed their pensions, the govt can go close to broke and shed paying benefits to whomever is out of favor at the moment. The only thing I trust is my dog’s love. And then again, I don’t know if I trust that. They’d ditch me for someone else with a scrap of beef jerky in a minute.</p>

<p>I found this calculator useful to help sort through when to start taking SS benefits.</p>

<p>[Social</a> Security Calculator ? Estimate Benefits, Retirement Income, Age… - AARP](<a href=“http://www.aarp.org/work/social-security/social-security-benefits-calculator/]Social”>Social Security Calculator: Estimate Your Benefits)</p>

<p>We have waited until H was 70.5 years old before drawing mandatory minimum distributions. They were added to our savings as H was still working AND drawing a retirement pension. He has finally fully retired and the general consensus from the CZpA and the woman we sometimes speak with at Schwab is that we should have more money than we need, regardless of how long we live, even leaving the kids a nice sum. :)</p>

<p>I did go to a fee based planner years ago, who was OK, but I didn’t follow her advice (to move around my investments). At the time she didn’t think we’d be able to comfortably retire soon, but circumstances have changed for us for the better, increasing H’s pension and having S finish college and get a nice career started and good income. Those things have made a significant difference, as well as a substantial inheritance that is producing a stream of income and more. </p>

<p>According to a former employer, there are only two fee based financial planners in our state and I’ve seen one of them. I didn’t find that she told me much more than I already knew, but she forced me to organize info about our finances and articulate assumptions about the future.</p>

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<p>I have not heard these types of discussions. Of course, there are hundreds of house members and 100 members of Congress, so who knows who is saying what. But every time there is a semi-serious discussion of it, they grandfather those who are already of an age to get benefits. And at least with the current setup, rushing to take early benefits is not in your best long term interest if your health is good. So… your ‘lack of trust’ could cost you a bundle if you live a long time. But go to town… more benefits for the rest of us if you make that choice.</p>

<p>“So… your ‘lack of trust’ could cost you a bundle if you live a long time. But go to town… more benefits for the rest of us if you make that choice.”</p>

<p>Well, who knows. I guess as it’s closer to the time, I can make a decision, it’s a long ways away. It is very logical to me that as we fall deeper into debt, SS and medicare will be means tested, not just for future beneficiaries. Though I am healthy and my family history is good, it’s depressing to see so many people that I work with dropping dead in their fifties, so it’s hard to tell. It’s unlikely I will ever collect a fraction of what I have put into SS and medicare, but I’m glad you will benefit.</p>

<p>I find this calculator very interesting:</p>

<p>[FIRECalc:</a> A different kind of retirement calculator](<a href=“http://www.firecalc.com/]FIRECalc:”>http://www.firecalc.com/)</p>

<p>It has the ability to plug in things like multiple pensions and when you will start to draw from them, SS, different spending models, how much you want to leave to your kids, asset allocations, etc. </p>

<p>This lets you run a lot of different scenarios. It doesn’t make recommendations for when to start taking pensions, but you can try different possibilities and see if your money is going to run out.</p>

<p>notrichenough, that link could keep me occupied all afternoon if I didn’t have a couple of meetings coming up. How do taxes figure in to it?</p>

<p>For example (round numbers),
if I want to spend $100k per year
-and have $60K expected from SS and pension
-I’ll need to take out how much from my regular and Roth IRA?<br>
-If I take out $40K from my regular IRA, I’ll have $100K income, but only ??$80K to spend after taxes
-So I need to take out $65K? Some other number? </p>

<p>Just curious if this or other calculators you’ve seen covers this. I can assume a composite tax rate, and just up the projected spending to a pre-tax number instead of an out-of-pocket number if necessary.</p>

<p>I think people’s tax situations are so wildly different, and change so often, it is impossible to reasonably calculate.</p>

<p>Just think how much, and how many times the tax rates have changed over the last 40 years. There’s just no way to predict.</p>

<p>So I think assuming a rate and upping the spending is about all you can do. Or just assume the taxes are already baked in, i.e. if your pre-retirement income is $100K and you assume you need 80% of that in retirement, there’s an implicit assumption that the $100K figure is pre-tax.</p>

<p>I can’t even get a straight answer from dh what his retirement plan is worth. It’s not that he won’t tell me, it’s just that he’s clueless and the rules change regularly. I know what it’s in the IRA’s my SEP account and some investments we have, and am pretty sure that we don’t have enough to retire any time soon. I joke that our best retirement option is to move in with our oldest! He’s got plenty of money, shows no signs of a significant other and he likes my cooking. :)</p>

<p>My ultimate goal is to work like crazy on paying everything off before retirement (except for the house, that isn’t happening), and get set up so we can live off of pensions, SS and rental income alone (if any of that continues to exist), without planning on dipping into savings. That’s merely a goal, probably not reality, though. It would make the calculations pretty simple. Then again, I guess you have to get 401K distributions at 70 1/2 or you’re paying through the nose in penalties</p>

<p>I am really interested in this topic. We go round and round with this issue.</p>

<p>If you are able to live off of social security, pensions, and investment income, that is pretty good for normal people. It’s also pretty hard to do, especially if you’ve not always saved a major portion of your earnings (lived below your means).</p>

<p>Most retirement “models” contemplate that you’ll “draw down” (slowly liquidate) your investments over your lifetime, which is what makes for the interesting part of it. You just don’t know how long you’ll live. There are a couple of rules-of-thumb which suggest that you ought to be able to spend about 4% of your assets yearly without running out (assuming that you retire sometime around age 65ish). All of those rules have some underlying assumptions about longevity and investment returns, so they may not be perfect. However, what does seem to be inescapable is that if you spend much more than 5% of your assets, and you live a reasonably long life, you’re at risk of running out.</p>

<p>Its useful to first realize how much you spend yearly, and on what. I’ve gone through our check registers, looked at all the cash withdrawals, and have a pretty good idea of what we currently spend, and on what categories. You just put it all into excel and sort it by payee, and add up the groupings. It will take you a couple of hours to do one year. Once you get an idea of where it all goes, you can start logically reflecting on how it might/could change if you wanted to.</p>

<p>I find most of the calculators far too general. Plus some of them make assumptions about investment earnings that I believe are likely too high.</p>

<p>If you have 401K and IRA, can you take distributions from 401K alone or do you have to take a portion form 401K and a portion from IRA?</p>

<p>“If you are able to live off of social security, pensions, and investment income, that is pretty good for normal people. It’s also pretty hard to do”</p>

<p>That’s true, but our pension pays about 260K between the two of us if we retire at 60. With ss (if it still exists) and we have some rental income, I’d think we could live off of that. Of course, that is based upon not paying a huge amount of the retirement income in taxes, and hoping that the pension plan and we survive. That could be a tall order, based upon the history of pension plans and possible longevity. I guess I don’t know whether to go with best odds, what is most likely, or my natural pessimism to distrust any entity to fund our retirement.</p>

<p>Is that a typo? $260K pension sounds pretty good to me … it would increase our standard of living :wink: </p>

<p>A huge factor with any projection is interest rate. Run a few different interest rates to appreciate the impact. (Of course, higher interest rates won’t benefit anything unless the gap between interest rate and inflation increases.) My thought is that if interest rates are low for our retirement, at least mortgate rates will be lower for our kids.</p>

<p>Busdriver, $260k pension/year? You don’t need to worry about your 401k investment’s paltry single digit % return as per your post in the investment thread a few months ago.</p>