Retirement Thread

[Mosbonian]

After the positive responses and congratulations on my Retirement thread, the idea came to me that there should be a thread that helps everyone prepare for the eventuality of retirement.

There were many great ideas, comments and great suggestions that came out of the conversation. What I would like to do is put this here as a repository for information for anyone who is:

• Ready to retire
• Close to retirement
• Beginning to plan for retirement

One of the things I came to find out is that no matter how much I had thought I was prepared for retirement, there were still things I had not pondered or prepared for.

So this thread is for all your questions, comments, advice to help others that are close to retirement.

I mean....this board is about a year and a half away from being around for a quarter of a century, and many of us who have been around are there already.

So, please feel free to contribute!

[philfree]

I'm looking at early retirement. Not really by choice as the business I'm in has pretty much run it's course and it's time to shut it down. I'll be 63 in August and I wish I had four more years of business for the income but more importantly at this point the health insurance. I'm going to end up paying for my health insurance out of my pocket for a couple of years and that sucks. I own my home and cars outright, I don't have a lot of bills and I do have a substantial amount of cash in investments and my retirement fund. I should be able to live off dividends alone for four years till I'm 67 so that's good. We're going have to learn how to live on a budget though and we haven't really ever had to do that.

How much a month is enough for a comfortable retirement? $5,000.00, $10,000.00 or somewhere in between?

[excessive]

It doesn't end at 80. Read closer. After 80, the amount received is determined by when you began receiving benefits. Start taking benefits early, receive less after 80 than if you had delayed because your payout is fixed at that number. Delay, receive more after 80 because you set payout at a higher number. Between retirement and age 80, benefits received are the same regardless when you begin taking them. So, if you start at 62 or 70 doesn't matter, up to age 80. Because the amount is fixed, you will receive the same. After 80 is when you gain benefit from delaying, as now you receive the benefit of setting your lifetime number at the higher payout from waiting.

[Mosbonian]

Originally Posted by BigRedChief

SS rant

Holy shit navigating signing up for Social Security is a mess. So complicated and every sentence written, paperwork must be exact, no help with their ****ed up system. Beyond that....

Because my wife is a teacher of 40 years, she is going to get a fraction of my SS when I die. She'll get about $500 a month. I'm close to maxing out on SS so thats significant money when I'm gone.

And even though she paid in SS taxes just like everyone else all those decades, she only gets $800 a month. Thats $2K less a month than what she earned. Seems like its a "need" based system. But, billionaires still get SS, who came up with this idea that teachers don't deserve their full SS just like everyone else?

We have enough money for a comfortable retirement. It just seems unfair that you paid in for decades just like everyone else but you get 80% less than billionaires receive.

I don't know about that....we were told that both my wife and disabled son will receive my full amount of my benefit upon my death....now she does lose her current retirement benefit which is much less than mine.

And as for the whole Social Security paperwork mudhole, been there felt that! And even if you get it right it doesn't mean someone at SS won't enter incorrect data that will cause you to be rejected.

I always tell everyone to start your paperwork at least 6 months before you retire the first month you are eligible.

[BigRedChief]

Originally Posted by scho63

I never heard SS ends at 80.

What the ****?

I dont think he knows what he is talking about.

Originally Posted by excessive

It doesn't end at 80. Read closer. After 80, the amount received is determined by when you began receiving benefits. Start taking benefits early, receive less after 80 than if you had delayed because your payout is fixed at that number. Delay, receive more after 80 because you set payout at a higher number. Between retirement and age 80, benefits received are the same regardless when you begin taking them. So, if you start at 62 or 70 doesn't matter, up to age 80. Because the amount is fixed, you will receive the same. After 80 is when you gain benefit from delaying, as now you receive the benefit of setting your lifetime number at the higher payout from waiting.

70 is the age you wont get a bigger check by waiting. 80 years old is never even mentioned in anything I've seen Show your work.

[BigRedChief]

Originally Posted by Mosbonian

I don't know about that....we were told that both my wife and disabled son will receive my full amount of my benefit upon my death....now she does lose her current retirement benefit which is much less than mine.

And as for the whole Social Security paperwork mudhole, been there felt that! And even if you get it right it doesn't mean someone at SS won't enter incorrect data that will cause you to be rejected.

I always tell everyone to start your paperwork at least 6 months before you retire the first month you are eligible.

You were not a teacher. It only applies to that profession. Other people who have a pension get their regular SS payment.

She will only get $500-$800 a month when I die.

[Mosbonian]

Originally Posted by philfree

I'm looking at early retirement. Not really by choice as the business I'm in has pretty much run it's course and it's time to shut it down. I'll be 63 in August and I wish I had four more years of business for the income but more importantly at this point the health insurance. I'm going to end up paying for my health insurance out of my pocket for a couple of years and that sucks. I own my home and cars outright, I don't have a lot of bills and I do have a substantial amount of cash in investments and my retirement fund. I should be able to live off dividends alone for four years till I'm 67 so that's good. We're going have to learn how to live on a budget though and we haven't really ever had to do that.

How much a month is enough for a comfortable retirement? $5,000.00, $10,000.00 or somewhere in between?

That is a tough one to answer....my immediate response would be to tell you to find a job to work for 4 more years but that may not be possible for you. That could at least be a job that has company supported health insurance and a monthly wage to alleviate your need to dip into your post retirement funds that early.

I worked until March of this year...but in October of 2022 I hit the "Full Retirement Age" for my birth year and after talking with my retirement counselor, I started drawing my Social Security benefits along with continuing to work. I used that monthly SSI benefit as a supplement to my income without any restrictions...so basically we were adding to our retirement fund a little extra money each month.

As for how much it takes to live?? That depends on your needs and retirement plans...we always lived modestly and as such, our budget for retirement is nothing extravagant but we are happy. We did most of what people call "extravagant travel/vacations" while the kids were Middle school and older...so not only could we enjoy them in good health, but so the kids could also.

Now our travel plans are less extravagant and more about what we see as what we enjoy. I doubt we will travel anywhere overseas (been there done it and not impressed in some cases) or to places we have already journeyed. To be frank...anything above NC/TN is probably not on our radar and most of our journey's will be southern and to my daughter and son in law who live in Walmart Land.

What your needs are....is what you set them at. (Budgeting is the one thing many people stop doing at retirement, when it should be the most important thing you do)

[Mosbonian]

Originally Posted by BigRedChief

You were not a teacher. It only applies to that profession. Other people who have a pension get their regular SS payment.

She will only get $500-$800 a month when I die.

Damn....that sucks! I was not aware of that exemption for them.

Just another way we screw the teaching profession.

[BigRedChief]

Originally Posted by philfree

I'm looking at early retirement. Not really by choice as the business I'm in has pretty much run it's course and it's time to shut it down. I'll be 63 in August and I wish I had four more years of business for the income but more importantly at this point the health insurance. I'm going to end up paying for my health insurance out of my pocket for a couple of years and that sucks. I own my home and cars outright, I don't have a lot of bills and I do have a substantial amount of cash in investments and my retirement fund. I should be able to live off dividends alone for four years till I'm 67 so that's good. We're going have to learn how to live on a budget though and we haven't really ever had to do that.

How much a month is enough for a comfortable retirement? $5,000.00, $10,000.00 or somewhere in between?

Create a SS account. You don't have to file. You can do that at anytime later. But, they have a calculator on their site that will tell you how much you will receive if you retire on "X" date. You can move the slider over to see what it would be at 62 years of age when your eligible all the way to your FRA(Full retirement age) and beyond all the way up to 70.

I was going to "retire" in the SS system but using that slider I was able to figure out I was gaining $17 a month by waiting. Then you just do the math that worked for you. $17 per month X 12 months etc. I "retired" officially this month. Was going to wait until FRA but did the math and we decided we would have more money in our pocket in the long run to take the SS now.

Redditt has the most SS feedback from any of the other sites I've visited. Just join the sub-reddit's and you will see lots of varied opinions and you can decided what's BS and what's not. Or this thread gets used by posters here, then you can already know if this poster posting in here is FOS.

[BigRedChief]

Originally Posted by Mosbonian

What your needs are....is what you set them at. (Budgeting is the one thing many people stop doing at retirement, when it should be the most important thing you do)

Thats the advice I've seen the most from people. Get a budget immediately. You'll be surprised where your money is going. Decide what to do next when you know what you are spending money on now and what you'd like to spend your money on in retirement.

[Mosbonian]

Originally Posted by BigRedChief

I was going to "retire" in the SS system but using that slider I was able to figure out I was gaining $17 a month by waiting. Then you just do the math that worked for you. $17 per month X 12 months etc. I "retired" officially this month. Was going to wait until FRA but did the math and we decided we would have more money in our pocket in the long run to take the SS now.

This is where I was.....I would get $19 more per month at age 70 and it made no sense waiting to start drawing for that extra dollars at that time.

[Mosbonian]

Not to de-rail the conversation, but this somewhat pertains to retirement.

After years of watching American Pickers, Flea Market Flipping and a few other shows, while talking to friends who have gotten into it.....I decided to let one of my hobbies/part time jobs be flipping. (Not house flipping...I am not that crazy!)

What I would love to know is if anyone else has ever ventured into flipping before and what success/failures you might have had?

I am just now doing garage sales, estate sales and flea market shopping....have found a few items that I have flipped...or just purchased and resold for a profit. I am not in it to become the next HGTV/Magnolia Channel/History Channel TV show...just in it to have some fun...make a little money and keep my butt off the couch. I have honestly enjoyed it thus far...but too soon in the process to think I have all the handles on it.

Any input?

[philfree]

BRC and Mos, without quoting I'll just say thanks for the responses.

I'm not sure how it works in regard to how much I'll get based off my income. I always had a smaller salary but received a lot of income in k-1 disbursements. If what thinking is correct I'll probably get my SS based on my salary and not my total income. Please tell me I'm wrong.

[Icon]

My wife is a retired teacher (Kansas) and her SS is not affected by being a teacher. She gets her KPERS pension plus SS of about $2500/month. Combined total of about $4500. Very nice!

[Rain Man]

Originally Posted by philfree

BRC and Mos, without quoting I'll just say thanks for the responses.

I'm not sure how it works in regard to how much I'll get based off my income. I always had a smaller salary but received a lot of income in k-1 disbursements. If what thinking is correct I'll probably get my SS based on my salary and not my total income. Please tell me I'm wrong.

Unfortunately, you're not wrong.

I'm assuming the K1 is owner distributions or some such thing. The easy way to check is to see if you paid self-employment tax on it, and I really doubt that you did. I think one purpose of having a K1 is to avoid paying that tax, which means you don't get the benefit later.

People always say to maximize your K1 to minimize taxes, but I never really saw a huge advantage in that. Other than medicare where you're going to get the benefit anyway, paying self-employment taxes on income is going to give you more social security income later. It's probably slightly better to take K1 income over regular income, but paying on regular income kind of creates a forced savings with regards to social security.

[Buehler445]

Originally Posted by Rain Man

Unfortunately, you're not wrong.

I'm assuming the K1 is owner distributions or some such thing. The easy way to check is to see if you paid self-employment tax on it, and I really doubt that you did. I think one purpose of having a K1 is to avoid paying that tax, which means you don't get the benefit later.

People always say to maximize your K1 to minimize taxes, but I never really saw a huge advantage in that. Other than medicare where you're going to get the benefit anyway, paying self-employment taxes on income is going to give you more social security income later. It's probably slightly better to take K1 income over regular income, but paying on regular income kind of creates a forced savings with regards to social security.

K-1 can be SE income. For instance if you have a LLC that has an active farming operation, it will flow through to the personal as SE income.

I think you can get your earned income and projected payments from the SSA. That's probably better than estimating.

RE: reducing SE income. Not to distract from the retirement thread, but it matters what you do with the tax savings. If you invest it, either in other instruments or reinvest it in the business, it's probably better to reduce SE income. If you're just going to consume it, it's better to pay SE tax.

The return on SE tax (Social Security) is shit, but it's not 0. If it's just going to consumption, it is definitely 0.