Plan for retirement if such exists for your future

Administration forums. These are mostly old posts that are no longer relevant. It also contains numerous files that were not located in the proper forums by the original authors. As such, it is a smattering of just about everything. This is a Read Only section. No new posts or replies are permitted.
Locked
User avatar
Richard Hull
Site Admin
Posts: 10473
Joined: Fri Jun 15, 2001 1:44 pm
Real name: Richard Hull

Plan for retirement if such exists for your future

Post by Richard Hull » Sun Apr 12, 2015 8:50 pm

This is about retiring well, but not lavishly. All through the years we are told in reference to the IRA/401K plans that taxes will kill you once you retire. As you are forced to take out a minimum amount from your IRA/401k at 70 and a half. One solution to avoid higher taxes when you retire is a Roth account where your bread is taxed as it goes into the Roth IRA and no tax is due later on when taken out. I did not go for the Roth, because I planned well.

My wife and I are fortunate enough to be absolutely debt free for the past 20 years. (very, very wise move). We were also fortunate enough to never make a lot of money, but lived very comfortably all these 41 years together. We put a little in our IRA/401K at work each payday, but a lot into savings. Now, we have what most would consider a very modest sum in our combined 401k's and a decent savings account. Our combined social security is modest as well but it alone allows for a very nice and comfortable retirement without requiring any dipping into saving or the IRA for the past year and a half. (with a bit left over, too!)

To further prepare for retirement, we re-roofed the house, bought 100% new appliances and a brand new furnace in the final years before retiring, paying for all in cash. Still, no debt.

If this wasn't great news, we just learned that we are in the sweetist of sweet spots.

Our county has personal property taxes, (home, cars, boats, etc.), it is about $1800 per year for us. The county has a tax relief program for retired and poor folks. If your net worth (house excluded) is $XXX,XXX your entire yearly county tax bill is forgiven up to $2500.00 and in 2016 it will be up to $3000! So, we applied, (lots of paper work and hoops), and it appears we got it! Thus we have an extra $1800 each year forever...No more personal property tax, ever!

The federal and state taxes are also a big win. It appears now that we are both over 66, we get 4 deductions on the simple form instead of only 2 and with our social security income level where it is, we not only owe nothing, but get 100% of what we paid in back! Wait! what about the taxes on our forced IRA withdrawals when we are 70 and a half!??. Well it turns out with the mininmum demanded withdrawals, added to our social security income we will never pay anymore taxes, ever!

We are in a very narrow zone of total net worth and total yearly income that all that untaxed 401K/IRA money will never be taxed anyway! Fabulous! Stock market? What stock market? We have not one cent of our 401k/IRA money in any form of investment anywhere! It is all in cash holdings and federally FDIC insured.

We are too poor to pay anymore taxes, but far too well off to get food stamps, housing, obama phones,etc. If one of us passes away, the survivor inherits it all and has a paid for home to reverse mortgage for yet more money each month.

Well done and well planned. The big saving grace....NO CHILDREN.....The best of it all. A life of work from college to retirement lived and played by the rules in a manner where the rules leave us in a good sweet spot.

As many of you are very young, take heed and plan from day one. It is no different from building a fusor....You are building a life....Plan well.

Richard Hull
Progress may have been a good thing once, but it just went on too long. - Yogi Berra
Fusion is the energy of the future....and it always will be
Retired now...Doing only what I want and not what I should...every day is a saturday.

User avatar
Bob Reite
Posts: 240
Joined: Mon Aug 26, 2013 1:03 am
Real name: Bob Reite
Location: Wilkes Barre/Scranton area

Re: Plan for retirement if such exists for your future

Post by Bob Reite » Mon Apr 13, 2015 6:57 am

There is another loophole for avoiding the minimum withdrawal requirement of a traditional IRA. If you are still working and continue working for the same company that you were working for when you turned 70.5 years old, you do not have to take a minimum withdrawal, even if you are no longer adding funds to the IRA.

This works best of course, if you have your own incorporated company, as I do, that pays a modest salary below the taxable threshold.
The more reactive the materials, the more spectacular the failures.
The testing isn't over until the prototype is destroyed.

User avatar
Richard Hull
Site Admin
Posts: 10473
Joined: Fri Jun 15, 2001 1:44 pm
Real name: Richard Hull

Re: Plan for retirement if such exists for your future

Post by Richard Hull » Mon Apr 13, 2015 4:27 pm

Thanks for the info Bob. Nice to know. Another bit of retirement wisdom thrown into the pot. I am free of any company now and wish to continue in that path. Every day is a saturday........Finally.

Richard Hull
Progress may have been a good thing once, but it just went on too long. - Yogi Berra
Fusion is the energy of the future....and it always will be
Retired now...Doing only what I want and not what I should...every day is a saturday.

Locked