So lots of financial talk, What about what about physically and mentally? Those already retired,what are you doing to stay sharp.I’ve definitely have clean up the diet and hit the gym 4 times a week trying to add Some yoga and cut back on the alcohol.mentally I come up with a plan to pick a subject or interest do some research on it .also looking to get in some volunteer work with veterans
OT:Retirement
- Thread starter Duneaux Harm
- Start date
With all the extra time, I hope everyone is exercising regularly. It will keep you active. I do a lot of trading, watching movies and some reading to keep my mind active. Definitely changed my diet to stay slim and cut out most of my alcohol consumption. I might have a medical condition due to the drinking in the past. Alcohol might not affect you when you are in your 20-30 drinking but the body will feel the effects in your 60-70.
I stand partially corrected. If you are making CONTRIBUTIONS to a Roth IRA then the January 1st of the tax year of your first contribution is when the 5 years starts. However, if you are doing a Traditional IRA to Roth CONVERSION the 5 years starts anew for that Conversion. Of course, with a Roth you have already paid taxes on your conversions or contributions so you can always take that money out. What the 10% penalty (plus your marginal rate) applies to is any EARNINGS you also take out. Here is a great article on the 5 year rules. Note the info on the inherited Roth IRAs.
5 year rule info
Second on the keeping your mind sharp. As many of you know, I take real classes at UGA in Athens. Right now I'm taking Taxation 5400 in the Terry School of Business at UGA along with a bunch of 20 year old's. I've also taken most of the Financial Planning Courses in the Financial Planning major as I've just always been interested in this stuff - even passed the SIE which is a very basic licensing exam. In the Fall I'll be taking Corporate Taxation.
Trying to keep the mind going strong before it just goes away....LOL
Trying to keep the mind going strong before it just goes away....LOL
We have gone since 2010? I am not sure I would say it’s run down anywhere but like any rural road to a country club like locale.
Thanks for the clarification. I guess I just reacted to the five years and thought it was some kind of caveat for you to be able to take earnings tax free By not being able to touch any Money through the conversion. That makes me less antsy about it.
Didn't see this for a while.
I won't be able to work it out to convert all of it.
Too much to bite off in that short of time.
It will lessen the amount for the required disbursements.
I’ve been retired for 8 years. If you can do whatever you want every day, then you got it made. In my case that’s not doing much.Just curious. At the end of May, I will be retired for two years and a I am still adjusting to many things. It feels like now I am moving into a more sustained phase where things won’t change much.
The first months were all about Covid and then the election, Then we decided to move out west and in reality, settling in hadn’t occurred yet.
Occasionally I think about a part time job, but to be honest, why pay for gas at todays prices to go to a part time gig. If there would be remote work for CIA type monitoring of countries around the globe that would be fun. LOL. Any secret agents for the U.S. please direct message me for any opportunities.
But in all seriousness waking up, reading the news, reading the sports, reading this damn website, stretching to start my day, bicycling, running (after Achilles recovery), hiking, swimming, enjoying all the sunny weather has to offer pretty much fills up my day. At my neighborhood we have a Mens coffee three days a week that essentially is this board live and in person. Politics, sports, complaining.
Th couple of things I am still a bit mystified with right now is not having any actual active income. I have a pension (thank God for working at a place that does that). Social security in a few years (don’t always believe waiting longer is actually better). And finally a 401K that I stopped looking at recently because market guys get spooked by butterfly farts so they get really spooked by global world wars. I know that between my pension and social security I should have no worries in my life. The 401K is being treated as a fund that I don’t want to have to touch until required withdrawals if possible. And even then I will mostly want to look at other investment options.
So, just asking opinions of folks who have been retired longer if I am missing anything? I enjoy what retirement is but I am still so new to this I Am wondering what else comes up. By the way, I am pretty healthy. I take no medicines for anything which always shocks any doctor I see.
One thing that keeps nagging me is that if we are facing an end of days war with Russia, China, India, Iran and North Korea, I am trying to figure out what bucket list stuff to do before I am melted away. Crazy times.
Not an expert on this but I think if you no longer work you can get 401K at 55. But ya just started hoarding cash and investing. W hav had an insane run on the market the last 6 years, guess we will see where it goes from here.
I feel like you are playing two opposite ends against the middle here. The IRMAA penalty can go up but that is more likely when taking RMDs than with any social security increase. Realistically the threshold is reasonably high that probably won‘t happen for most people. And the Social Security taxation threshold is pretty low so most earners will get taxed at some rate on social security.
Everyone’s case is different and there are too many factors to make ANY blanket statement on what the right thing to do is with social security.
Professional help will be beneficial for most people BUT you have to find an advisor that will listen to you. So many do not. Financial advisors should take sociology classes to better understand the various human conditions people live with. So many are interested in a high end life style that they always believe their clients are interested in that as well. i have had friends that have gone to advisors and have been told they cannot retire adequately. But the truth is they dismissed that individuals lifestyle and substituted their own for that person. When that friend hinted at how much they had and I knew how they lived, I do for certain they could readily retire and have a huge nest egg to leave for their kids or grandchildren. People get fooled into believing that their lifestyle in retirement is going to be vastly different than while working. It isn’t. What you no longer spend to get to work you probably spend going out to breakfast or lunch or travel.
Learn a bit and trust YOURSELF!!.
Yep. Its an individual thing. That's why I had to comment on a blanket statement. You're right that it isn't a concern for most people, too. My biggest concern is the RMD withdrawals are going to kill us with taxes and IRMAA. I've been trying to manage it by drawing from our IRAs before RMDs kick in. I'm managing the amount to keep from jumping to a new tax bracket. But the market growth has been outpacing my withdrawals. Between that effort and and an installment sale income from the sale of a business, I can't take SS. The installment sale ends when I'm 70 so I'll start it then. I'm not complaining as its a good problem to have but I was just making the point that starting SS early is not a good blanket recommendation.
Also, my lifestyle and expenses changed considerably from work years to retirement. I spend significantly less in retirement. Frankly, wardrobe expenses for suits probably aren't the same for today's generation as it was for us so that may not matter but it did for us. Our biggest savings resulted from moving out of a city (Houston) to rural NC.
Hendersonville area. In the mountains for the cool weather but 30 miles from Greenville, 20 miles from Asheville, 4 1/2 hours to the the beach, and 9 hours to WPA home.
That’s a pretty area.
Have you ever been to one of the places where you can pan for gem stones? I always thought that would be fun to try.
No. I always thought it was more for kids. It is the # 1 place to go on Tripadvisor, though.
I hope to never retire, just control my activities and stay busy with other things I enjoy. Nice to be my own boss.
Went to one of those places in northern Georgia. It was OK, kids liked it. Not something I would be interested in doing on my own.
As explained to me by my financial planner,
you can’t let your IRA pile up to high because you didn’t start drawing down on it or you delayed drawing down on it. Reason being if you pass away and your wife is left to face large mandatory withdrawals she could be elevated to a much higher tax bracket than the 22 or 24 percent. That would be very unfortunate to pay extreme tax rates as a single person. I started a Roth conversion to pull more out of my IRA last year. My accountant and financial planner have worked well together and we consult regularly.
you can’t let your IRA pile up to high because you didn’t start drawing down on it or you delayed drawing down on it. Reason being if you pass away and your wife is left to face large mandatory withdrawals she could be elevated to a much higher tax bracket than the 22 or 24 percent. That would be very unfortunate to pay extreme tax rates as a single person. I started a Roth conversion to pull more out of my IRA last year. My accountant and financial planner have worked well together and we consult regularly.
Clearly that is true. However one thing you have to ensure you do is put all of your money from the IRA and convert it to the Roth. If you don’t you will lose whatever tax savings you hope to gain through diminishment of your nest egg. i truly hope the advice from your guy was not to just have a smaller IRA.
Ignoring the tax consequences, taking money out early from an investment vehicle will always effect the final value of gains you could make in that vehicle. Between the extra taxes on the RMDs vs taking it out early there probably is not a ton of difference between how much cash you would have in your pot on the day you died and the day your spouse died. The person that really pays for what you did is the secondary inheritor, probably your child.
There would be obvious issues with Medicare But you could run into those early as well or even later if you find it impossible to convert your entire IRA due to fear of taxes.
By the way these are nice problems to have if you haven’t figured that out.
Last edited:
And the other thing is try to pay the taxes on the conversion with funds from taxable accounts if at all possible.
Don't just use converted funds to pay the taxes. The key is trying to PRESERVE all the benefits of having as much tax shielded growth as possible.
As far as heirs, you are right here too. I think an inherited tax deferred account has to be totally liquidated in 10 years from when it is acquired. If it is Roth, don't have to pay taxes on the principle, but do need to get it into a taxable account.
Lots of tricks and twists and turns to figure out!
I won’t ever have to touch the money going into the Roth. It will go to my survivors. I am a nice guy as my kids say. They appreciate the fact that I will leave them something and will have paid much of the taxes also.
I would say yes unless you are withdrawing from your Roth from income anyways. I calculate that in my 50s, I'll be in the middle of my conversion ladder and converting 40K/withdrawing 40K yearly. Yes, I'll have some additional, taxable funds to supplement. But at that point it won't really matter where I pay my taxes from.
My father passed last year, and almost all his assets were left to the kids instead of my mom. That is something that should be considered to reduce taxes. He didn’t have 401k or IRA when he was working but he left a boat load of EE bonds with 7.5% yield over 30 years old. They weren’t collecting anymore interest but he didn’t want to pay the taxes for the interest accrued.
Oh, another idea, is with the extra cash that is already taxed, invest in stocks for the long term and when you pass, your beneficiaries can cash out the stocks at the step up stock price and not pay any taxes. My father, about 3-4 years before he passed, started investing with my help, in a few stocks and the balance started at $30k and cashed out at $120k mostly FB, PYPL and AMD before they crashed. I created a brokerage acct for my mom and will invest it after I think the crash is over. I like paying no taxes for the step up prices.
Last edited:
One thing about the EE bonds is that you can declare the interest on the Final Estate Tax return of your Dad. Do the math to see whether that would be cheaper than continuing to hold and paying the taxes when you cash in the bonds. It seems like false economy to me not to cash in the bonds as he is losing any income gained since they are no longer earning interest. Since the paid up bonds were left to the kids they could cash them in and they would get a standard deduction of about $1100 to cover that much in interest and pay no taxes. There are some specific rules that you need to read up on but they may be able also to use them for educational expenses and pay no taxes on the bonds. Note that there is no "stepped up basis" for EE Savings bonds.
In my case, my parents were in a very low tax bracket (10-12%) so I declared the interest as it accrued when I filled out their tax returns. After my Dad died my Mom paid virtually no taxes on the interest declared each year as all she was bringing in was social security and dividends and distributions so her enhanced standard deduction (she was over 65 and blind) pretty much covered everything as none of her social security was taxable since she was below the minimum. When she died a five years ago my sister and I inherited the bonds and continued to declare the interest each year on our own returns and paid the taxes on them. Remember the interest is not subject to state taxes. Next year the EE bonds will quit earning interest so Treasury will send me a large check - none of it will be subject to taxes other than the last 6 months interest!
They also left me some I bonds but they don't mature until 2031 so I'm declaring the interest on them as income each year since I think sooner or later tax rates are going up and this my wife and I are in the interlude before having to take RMDs from our traditional IRAs. In this way those I bonds will be in the "no tax" zone almost like a Roth when they mature.
Bipartisan retirement bill would extend 401(k) withdrawals, boost auto-enrollment in saving plans
The House overwhelmingly passed the Securing a Strong Retirement Act on Tuesday with a bipartisan vote of 414-5. The legislation now heads to the Senate.
That would be awesome because it would move me to 75 before needing RMDs and I can get all of my 401K moved over to a Roth at a more leisurely (Lower tax hit) pace.Bipartisan retirement bill would extend 401(k) withdrawals, boost auto-enrollment in saving plans
The House overwhelmingly passed the Securing a Strong Retirement Act on Tuesday with a bipartisan vote of 414-5. The legislation now heads to the Senate.www.foxbusiness.com
My income never let me qualify, and contribute to a Roth plan. My broker said keep maxing out your 401k and do the “catch up”contributions that I qualified for after, I think when I was 55. My wife and I combined to have a nice nest egg, by our 65th birthdays, and retired. We contributed paying 30+ % in taxes, and in retirement, we are withdrawing 4% of our total at 12% in taxes.
We have no debt, which means one can live rather conservatively in retirement.
“Pay off your mortgage”, was the best advice I ever received.
We live in HHI, SC. Surprisingly inexpensive place to live. Tourism pays a lot of bills here.
My property tax, on my $600k home, is half of what I paid living in Greensburg.
We have no debt, which means one can live rather conservatively in retirement.
“Pay off your mortgage”, was the best advice I ever received.
We live in HHI, SC. Surprisingly inexpensive place to live. Tourism pays a lot of bills here.
My property tax, on my $600k home, is half of what I paid living in Greensburg.
You can always put your $ in an ira.regardless of income. You may not get a tax deduction but you can then transfer your ira $ to a Roth and pay the taxes on the transfer. In effect it’s the same as a direct Roth contribution.
I will be doing the backdoor Roth. So limits aren’t an issue as much as taxes would be. My goal is a legacy for my daughter, hopefully.
Yeah, I too live in a vacation land of Arizona and my property tax is half of what I paid in North Huntingdon.
@HailtoPitt
Went to Jordan Pond House Restaurant for popovers today. Meh. Completely hollow buns. They tasted OK with butter and jam, but not something I would write home about.
Perhaps I remember them as being better because it was a fun vacation. I'm sure you can find a good Lobster roll somewhere!
Last edited:
Ahhh, Kiawah. One of my favorite places to vacation. My wife and I have been doing that since 1981. I couldn't help but comment. Sorry.
I've only been retired now for 3 months so I can't really give a bunch of profound advice. Other than to stay active, keep moving, and do what you enjoy. Give to others and help them. Oh, and don't forget to get a good attorney, tax accountant and financial adviser. You'll need all of them at some point.
I've had plenty of lobster - both lobster rolls and live cooked at our house. Delicious.
