How Closely Do You Monitor Your 401k / Retirement

[piccolopat]

This is actually a priority of mine on my local city council (where I am an elected). I want to make sure we have an accessory dwelling ordinance in place.

Another problem is some of the laws that dictate who you have to rent to. I have an MIL apartment that I don't rent out because I wouldn't be able to restrict it to a single adult (can't discriminate against children), would have to accept an "emotional support" animal, etc. We are quiet people and would lose that if we were forced, for example, to rent to a family with kids and a dog. Instead we use the space ourselves for when we have guests, for DH's hobbies and also for storage. Eventually it may be used by DD and DSIL but it will never be rented to strangers. Accessory apartments are great if the owner wants to rent. Zoning should also promote building small, single family homes like the ranches and capes with unfinished basements and/or attics that abounded in the post WWII era. This is a much better option than the town houses and condos out there.

 

[NYCgrrl]

Another problem is some of the laws that dictate who you have to rent to. I have an MIL apartment that I don't rent out because I wouldn't be able to restrict it to a single adult (can't discriminate against children), would have to accept an "emotional support" animal, etc. We are quiet people and would lose that if we were forced, for example, to rent to a family with kids and a dog. Instead we use the space ourselves for when we have guests, for DH's hobbies and also for storage. Eventually it may be used by DD and DSIL but it will never be rented to strangers. Accessory apartments are great if the owner wants to rent. Zoning should also promote building small, single family homes like the ranches and capes with unfinished basements and/or attics that abounded in the post WWII era. This is a much better option than the town houses and condos out there.

The scales of economy at work: townhouses are less expensive to build and maintain than single occupancy houses. As well it's easier to include shared recreational facilities and amenities. The trend is going towards building more shared housing over single occupancy at least on the east coast.

 

[tvguy]

When I looked at my minimum amount I have to take our at 70 1/2, I will be paying that amount in taxes based on my pension and SS. It seems that all of my extra income will go to taxes. Does that seem possible? I feel so defeated.

401K and IRA rules have changed vastly in the 40 years I have had them. Lots of restrictions, and the common thing people forget with traditional IRAs and 401ks, they are tax DEFERRED not tax free. My mom put off withdrawals until 70 1/2 and never needed the money. Only good news, as of January 1 of this year, Congress has pushed back the age of mandatory withdrawals to 72.

 

[piccolopat]

The scales of economy at work: townhouses are less expensive to build and maintain than single occupancy houses. As well it's easier to include shared recreational facilities and amenities. The trend is going towards building more shared housing over single occupancy at least on the east coast.

I know - I live on the east coast and see all of the shared housing going up. A lot of it is not built well and you end up hearing (and smelling) everything that your neighbors are involved in. If local zoning would allow for small homes on smaller pieces of property (we're zoned for >1.5 acres per single family), I believe more people would opt for a detached single family over attached.

 

[RamblingMad]

This is a good read.

https://www.berkshirehathaway.com/1999ar/FortuneMagazine.pdf

 

[ThistleMae]

401K and IRA rules have changed vastly in the 40 years I have had them. Lots of restrictions, and the common thing people forget with traditional IRAs and 401ks, they are tax DEFERRED not tax free. My mom put off withdrawals until 70 1/2 and never needed the money. Only good news, as of January 1 of this year, Congress has pushed back the age of mandatory withdrawals to 72.

I didn't know about that change, now I do. But...how does that change anything? I'll still be paying taxes on it, and paying higher taxes on my SS. I feel like I'm screwed. One way people have suggested is to start taking it out between the age I retired and before SS, to save some on taxes. IDK, I'll have to figure it out either way. Why does it have to be so darn complicated!

 

[tvguy]

I didn't know about that change, now I do. But...how does that change anything? I'll still be paying taxes on it, and paying higher taxes on my SS. I feel like I'm screwed. One way people have suggested is to start taking it out between the age I retired and before SS, to save some on taxes. IDK, I'll have to figure it out either way. Why does it have to be so darn complicated!

Well, you should be in a much much lower tax bracket than you are now working. My mom got some good tax advice and got things set up so that in the 19 years she took minimum distributions (from age 70 1/2 until age 90) she only had to pay taxes on her Social Security and distributions one year. She had an investment mature that year that boosted her income. And she didn't even have to file a tax return at all for those 18 years because her taxable income was below the minimum to file taxes. She passed in 2013, so not sure what that dollar amount was the, but it's $12,200 currently for an individual ($24,400 for a married couple).

 

[ThistleMae]

Well, you should be in a much much lower tax bracket than you are now working. My mom got some good tax advice and got things set up so that in the 19 years she took minimum distributions (from age 70 1/2 until age 90) she only had to pay taxes on her Social Security and distributions one year. She had an investment mature that year that boosted her income. And she didn't even have to file a tax return at all for those 18 years because her taxable income was below the minimum to file taxes. She passed in 2013, so not sure what that dollar amount was the, but it's $12,200 currently for an individual ($24,400 for a married couple).

I'll be paying on 80% of my SS when I collect it and my mandatory distribution, no way around that at all. My lowest income will be before I collect SS. What I need to calculate is by taking out my deferred comp now, and reducing the rate of return by lowering that amount, what will the difference be. Too much math! I will be looking to my accountant for that figure for sure.

 

[RamblingMad]

I'll be paying on 80% of my SS when I collect it and my mandatory distribution, no way around that at all. My lowest income will be before I collect SS. What I need to calculate is by taking out my deferred comp now, and reducing the rate of return by lowering that amount, what will the difference be. Too much math! I will be looking to my accountant for that figure for sure.

Yeah. The way I see it is if I can live off of dividends, then my tax rate is 0%, 15%, or 20%. If I sell anything for long term gains, then right now I pay 15%. I’m just going to assume 15%. And these rates haven’t changed for a long time.

I have no idea what income tax rates will be when I retire.

What scares me more is what home repairs and car purchases will I have to make during retirement.

 

[runwad]

I'll be paying on 80% of my SS when I collect it and my mandatory distribution, no way around that at all. My lowest income will be before I collect SS. What I need to calculate is by taking out my deferred comp now, and reducing the rate of return by lowering that amount, what will the difference be. Too much math! I will be looking to my accountant for that figure for sure.

This is what I'm in the midst of trying to figure out for my DH and I. We are going to go see a CFP next month. I just got done gathering up all my documents (A LOT OF WORK!) to upload to his portal. This is exactly what I'm most interested in, how to draw down tax efficiently. We still have 8 to 10 years till we retire, so I think we have time to do some strategizing,

 

[MillauFr]

I know - I live on the east coast and see all of the shared housing going up. A lot of it is not built well and you end up hearing (and smelling) everything that your neighbors are involved in. If local zoning would allow for small homes on smaller pieces of property (we're zoned for >1.5 acres per single family), I believe more people would opt for a detached single family over attached.

1.5 acres per single family home???? That would never work in Seattle were undeveloped residential property goes for $40m an acre.

 

[ThistleMae]

Yeah. The way I see it is if I can live off of dividends, then my tax rate is 0%, 15%, or 20%. If I sell anything for long term gains, then right now I pay 15%. I’m just going to assume 15%. And these rates haven’t changed for a long time.

I have no idea what income tax rates will be when I retire.

What scares me more is what home repairs and car purchases will I have to make during retirement.

Yes, definitely many considerations. I paid everything off before retiring so I have no bills except taxes and the usual living expenses. I will need a new car, which I can pay for in cash. But homeowner repairs are an unexpected expense that can be costly. Also, dental. I don't have dental coverage or eye coverage, so that's all out of pocket. But you know what, it all seems to work out. We just never know what will change.

 

[tvguy]

Yes, definitely many considerations. I paid everything off before retiring so I have no bills except taxes and the usual living expenses. I will need a new car, which I can pay for in cash. But homeowner repairs are an unexpected expense that can be costly. Also, dental. I don't have dental coverage or eye coverage, so that's all out of pocket. But you know what, it all seems to work out. We just never know what will change.

I consider homeowner repairs an expense you can budget for, you just don't know when you will need to spend the money. I hope to retire this year, and I have money set aside for a new HVAC system as mine is 29 years old, but well maintained. I could replace it now, but who knows, it could go many more years. I sold my parents house with the original 53 year old Lennox HVAC, and I talked to the buyers and it is still going strong coming up on 60 years old. I also have money set aside for a water heater, but being it is electric, unless we crash the car into it in the garage like we did with the one it replaced, a couple of $25 heating elements and a $125 service call should get it back on line. We bought a car in 2018 that should carry us through retirement, and we are considering trading in our 2 commute cars on one small run around town car before we retire.

 

[RamblingMad]

I consider homeowner repairs an expense you can budget for, you just don't know when you will need to spend the money. I hope to retire this year, and I have money set aside for a new HVAC system as mine is 29 years old, but well maintained. I could replace it now, but who knows, it could go many more years. I sold my parents house with the original 53 year old Lennox HVAC, and I talked to the buyers and it is still going strong coming up on 60 years old. I also have money set aside for a water heater, but being it is electric, unless we crash the car into it in the garage like we did with the one it replaced, a couple of $25 heating elements and a $125 service call should get it back on line. We bought a car in 2018 that should carry us through retirement, and we are considering trading in our 2 commute cars on one small run around town car before we retire.

I know a lot of retired people now. One couple I know is on their sixth car post retirement. They’re in their 90s. And they always buy Lexus. They keep their cars around 10 years.

I have no clue how long I’m going to live.

 

[tvguy]

I know a lot of retired people now. One couple I know is on their sixth car post retirement. They’re in their 90s. And they always buy Lexus. They keep their cars around 10 years.

I have no clue how long I’m going to live.

I know a lot of retired people now. One couple I know is on their sixth car post retirement. They’re in their 90s. And they always buy Lexus. They keep their cars around 10 years.

I have no clue how long I’m going to live.

LOL. My mom had 4 cars in her entire life. One she purchased after retiring. She didn't even get a driver's license until 1957 when she was 34.
1) 1960 Buick Le Sabre purchased new. Kept 14 years and 56,000 miles
2) 1974 Buick Apollo. A demo car with 1,776 miles on it when purchased, kept 2 years and 16,000 miles, a lemon.
3) 1976 Ford Pinto Station wagon purchased news. Kept 27 years and 77,000 miles
4) 2003 Ford Focus purchased new, had it 10 years and drove it 10,000 miles before she passed. She had been retired 18 years when she bought it.

 

[ThistleMae]

I'm 66 and have a 2012 Prius with 70,000 miles. I did buy it used. I hope to live long enough to spend all my money....LOL. It's all a gamble at some point. I just paid $ 1000 to put a new furnace pipe on my roof. I need a crown at
$ 1400. I've had other similar expenses since retiring. The thing is, people to need consider that the cost of everything keeps going up, and your income will be fixed. Everyone just needs to figure this in as best you can. And the tax brackets do change as well. It would be nice if they changed to my advantage. Here's hoping. I do have two part time jobs, very part time, but at some point, I may not be able to continue with working....who knows.

 

[RamblingMad]

I'm 66 and have a 2012 Prius with 70,000 miles. I did buy it used. I hope to live long enough to spend all my money....LOL. It's all a gamble at some point. I just paid $ 1000 to put a new furnace pipe on my roof. I need a crown at
$ 1400. I've had other similar expenses since retiring. The thing is, people to need consider that the cost of everything keeps going up, and your income will be fixed. Everyone just needs to figure this in as best you can. And the tax brackets do change as well. It would be nice if they changed to my advantage. Here's hoping. I do have two part time jobs, very part time, but at some point, I may not be able to continue with working....who knows.

It sucks, right? My biggest stressor while still working is stuff breaking in my home. It’s a stressor because these expenses aren’t cheap. For example, I went on a Disney Cruise. When I came back home, the main water line to my home had burst. I ended up having to replace it after trying to have it patched twice. The builder had used a material now known to degrade. FML. It’s stuff like that that I fear in retirement.

My significant other got 160 thousand miles out of her Prius before being told the main battery needed replacement. You should be good for a while.

 

[Searc]

LOL. My mom had 4 cars in her entire life. One she purchased after retiring. She didn't even get a driver's license until 1957 when she was 34.It
1) 1960 Buick Le Sabre purchased new. Kept 14 years and 56,000 miles
2) 1974 Buick Apollo. A demo car with 1,776 miles on it when purchased, kept 2 years and 16,000 miles, a lemon.
3) 1976 Ford Pinto Station wagon purchased news. Kept 27 years and 77,000 miles
4) 2003 Ford Focus purchased new, had it 10 years and drove it 10,000 miles before she passed. She had been retired 18 years when she bought it.

It has been well-established you and your mother are far outside the norm.

 

[tvguy]

It has been well-established you and your mother are far outside the norm.

Why do you say that? All those miles fall within established mileage ranges with auto insurers, so there are enough other people driving those ranges to justify those classifications. My dad was a salesman he drove about 100,000 a year, so it all averages out.

 

[ThistleMae]

It sucks, right? My biggest stressor while still working is stuff breaking in my home. It’s a stressor because these expenses aren’t cheap. For example, I went on a Disney Cruise. When I came back home, the main water line to my home had burst. I ended up having to replace it after trying to have it patched twice. The builder had used a material now known to degrade. FML. It’s stuff like that that I fear in retirement.

My significant other got 160 thousand miles out of her Prius before being told the main battery needed replacement. You should be good for a while.

Exactly....all good points. And stuff does happen that can be quite expensive. We all have to have some type of nest egg to cover extra expenses for sure. Thanks for the good news on the Prius! Fingers crossed.