<p>Seriously? $260K tax free plus soc sec and rental income?? Holy moley-- sign me up!!</p>
<p>For a calculator, I use ESPlanner.com for consumption smoothing (ie, you don’t want large discontinuities in your standard of living). Worth every penny (I think it’s $100). </p>
<p>Vanguard also lets me use Financial Engine for free. </p>
<p>For great and free advice, go to Bogleheads.org forum.</p>
<p>My DH thinks that many of these calculators are data mining for personal financial information ( to see investment/net worth perhaps to try to sell products maybe?) any truth to that?</p>
<p>I forgot to mention: any calculator that uses a percentage of income to determine your retirement needs is deficient. You have to look at your spending and determine which categories will go up (eg healthcare, typically) and which go down (eg child care, typically). I personally find Quicken very useful for this. </p>
<p>Using ESPlanner and Financial Engines in conjunction with Quicken, I can see if my expected income and expected expenses are on a comfortable trajectory.</p>
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Don’t believe she said that was tax free. And at that income level, the social security would also mostly taxable. The only unknown is what the tax rates would be. My father converted his entire IRA into a Roth in 2010 when the market was low and the tax rates reasonably low. Took a huge hit, but it has rebounded tax free and since it is no longer subject to mandatory withdrawals, his social security is also now tax free. He is one happy man.</p>
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Possibly. The ones I recommended either keep your data local (on your PC) or are offered by, in my case, Vanguard (who already has my financial data because they have my money 
).</p>
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Took this to mean low or no taxes. I could be wrong</p>
<p>We also converted a bunch of IRS $ to Roths. The tax implication for the past 2 years has been painful.</p>
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There’s also the “go-go, slow-go, no-go” model of spending to consider, where they’ve found that, as a rule, the older you get the less you spend - by as much as 30%/year when you hit your upper 70’s/80’s.</p>
<p>The firecalc calculator has a mode for this.</p>
<p>As a point of information: pensions (as that term is normally applied) are never free from federal income tax obligations. There are some states that exempt pension payments from their income taxes, but its the federal item that is the biggest bite. </p>
<p>Generally, though, whether you have enough money depends on how much you spend, and how much you have saved. For most people, unless you have been a steady saver all of your life, it will be hard to get to where you need to be if you decide to increase your savings rate in your 50s or 60s. </p>
<p>I think there could be some general rule that might be applicable, such as the level of your liquid assets saved relative to your unmortgaged home value at retirement age. It appears to me from looking at family members situations, that if you have 3+ times the value of your home in liquid assets, you will probably be ok…as long as you don’t encounter the need for skilled nursing care, or other major health expenditures. At that level, if you can earn 4-5% on your investments, you’ll generate pre-tax investment income of 12-15% of your home value. For normal people, add social security to that, and some pension, and they’re probably ok. But in the future, with more workers not involved in defined benefit plans, my multiple of home value gauge probably should be revised upward.</p>
<p>Edit:
As an aside, I think the record tax collections and so-called fall in the federal deficit is likely the result of the one-time event of people paying taxes ahead of time to avoid the 2013 tax increases. Roth conversions are going to have been a large part of that.</p>
<p>Pension income IS taxed in most states…not all, but most. I pay state and federal taxes on my pension income, as well as my $151 a month (no that is not a typo) SS income.</p>
<p>Here is a link to a relatively recent survey of state taxation of government, private, and social security pensions. There is a table beginning on page five that lays it out. I’m slightly surprised at the differentiation of taxation based on the different sources of the income.</p>
<p><a href=“http://www.ncsl.org/documents/fiscal/taxonpensions2011.pdf[/url]”>http://www.ncsl.org/documents/fiscal/taxonpensions2011.pdf</a></p>
<p>I looked at my social security options just looking at my payments … not including the complicated variations of including my wife into the picture.</p>
<p>For me it is clear the right thing to do is to take the payments as soon as possible. I looked at this by comparing the cumulative social security payments through that age. This is what I found.</p>
<p>If I start taking payments at 62 this leads to the most cumulative payments for ages 62-77</p>
<p>If I start taking payments at 66 this leads to the most cumulative payments for ages 78-81</p>
<p>If I start taking payments at 70 this leads to the most cumulative payments for ages 82 and on.</p>
<p>So yes, if I live long enough waiting makes sense … but if I wait to 70 to start taking SS (the advice typically given) it will take <strong>20</strong> years to catch up compared to starting at 62 … and these 20 years are the years I am most likely to active and actually spending money for fun stuff. </p>
<p>For me … given our IRA, 401k, and home equity picture … the lower social security payment at 95 (if I make it that far) is worth the added income at 62-77</p>
<p>To me a no brainer … that said, I have to figure out how to add the permutations a spouse add to this.</p>
<p>I expect DW to outlive me and live far past 82, and my SS benefit will be larger, so my thinking now is to wait until I am 70 so that when I go down for the eternal dirt nap, she will get more for the rest of her life.</p>
<p>Not sure when she should start taking benefits.</p>
<p>“Don’t believe she said that was tax free. And at that income level, the social security would also mostly taxable. The only unknown is what the tax rates would be.”</p>
<p>Not tax free. I wish. I expect tax rates to go up so much that we’d be lucky to take home half of what we get. I realize it’s a good pension (because it’s for both of us), but what are the odds that any company is still going to be paying a pension 30-40 years from now? How do you count on that? So many pension plans have gone bust, especially in certain industries, leaving people with far less than they expected.</p>
<p>“My father converted his entire IRA into a Roth in 2010 when the market was low and the tax rates reasonably low. Took a huge hit, but it has rebounded tax free and since it is no longer subject to mandatory withdrawals, his social security is also now tax free. He is one happy man.”</p>
<p>That is really smart, especially if he did it when both the market was low and rates were low. Painful at the time, but I’ll be he’s loving life now! Along with jym, we did the same thing, but we didn’t have the money for the taxes on the conversion, and are now paying it via our HELOC. I don’t think any financial planner would recommend that, but it seemed like a good idea at the time.</p>
<p>I think it costs around $40 to run the software I posted a link to earlier in this thread. It handles all of the permutations for spouses, ex-spouses, filing and suspending, whether the earnings cap applies at different ages, etc. I can’t find the number now, but I read somewhere that there are a huge number of permutations in the possible ways to take benefits. </p>
<p>I read this “Ask Larry” column PBS has, and every time I do I am staggered by the number of options and stuff I had no clue about regarding collecting SS. Sample column below:</p>
<p>[What</a> Happens to My Spouse’s Social Security Benefit If I Die? | PBS NewsHour](<a href=“http://www.pbs.org/newshour/rundown/2013/07/what-happens-to-my-spouses-social-security-benefit-if-i-die.html]What”>http://www.pbs.org/newshour/rundown/2013/07/what-happens-to-my-spouses-social-security-benefit-if-i-die.html) </p>
<p>I think I got the link from one of these columns. After reading some of this stuff, I have concluded it would be money well spent to use something like that software to figure out what the best options will be for me. I don’t think this is a “do it yourself” activity – or at least it could cost you a ton if you miss something.</p>
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<p>It’s by the same people (Lawrence Kotlikof, Econ prof at BU) as ESPlanner, which I also recommend. Easily worth $40.</p>
<p>There is a permutation for me, whose younger children are sufficiently young, unmarried, and in HS that I can get some money for them by filing early (roughly $1k per child for 10 months for one of them and 34 months for the other). My wife will get spousal benefits on my history at her full retirement age, but will defer her own filing until age 70. I would not have figured this out by myself.</p>
<p>Depending on personal situation, spousal income history, family health history, tax situation, etc., everyone will find a different optimal strategy.</p>
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I find this kind of stuff irksome.</p>
<p>Why should you be rewarded to the tune of $44,000 for a personal decision to have children when you are older?</p>
<p>I would certainly be availing myself of this if I was in this situation, but this should not be a thing.</p>
<p>Notrichenough…actually this is true. I know a family who had triplets at a later age. They are doing just as was posted her…and will be banking the money for their kids to go to college.</p>
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<p>I understand how you feel. I get upset when people game their FAFSA, claim URM status that is a misrepresentation, etc. </p>
<p>If it is any consolation, we are paying full freight for the kids’ private HS in NJ, make charitable contributions to the school and other educational institutions, pay exorbitant property taxes even though our children don’t use the public school, will pay full freight for the kids’ college, have paid more in taxes (payroll and income) than we’ll ever get back, etc. The SS money goes to the “college fund” for the kids; I’m not spending it at the track. </p>
<p>Money is fungible. I thought about taking/not taking the SS money for a while, and decided that it would be an empty gesture not to optimize my family’s SS benefit. It took me a while to conclude that I was not a dirtbag to take the money, since it is really my children’s money.</p>
<p>I hope that you understand.</p>