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Old 11-09-2018, 10:01 AM   #15
mpsgolf
 
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Drives: 2012 Camaro SS Transformer
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Congrats!

Retired myself about 2 years ago and loving it! First activity was a 3” SW retro cat back exhaust.
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2012 Camaro SS Transformer
Mods: trunk subwoofer and amp, LED lighting (fogs, interior, trunk), skip shift eliminator, CAI cold air kit, Vmax ported throttle body, Stainless Works retro chambered cat back, JBA Cat4ward SS ceramic coated headers
Potential Next Mods: Tune, F&R sway bars, rear cradle bushing inserts and trailing arms
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Old 11-09-2018, 10:34 AM   #16
spike III


 
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Originally Posted by el ess A View Post
Be prepared for "sticker shock". I retired this past April in my mid-50s and I've found out that I still have a propensity to think I'm still making bucks I used to.

We've invested wisely over the years so our retirement income at the moment is almost the same take home pay as before, but I need to wait on taking IRA dividends until 59 1/2 because I don't want to pay that 10% penalty for no good reason. Plus, we are pushing out taking social security for a few years past 62 because we can. It's about an 8% "raise" every year past 62 if you can wait it out.

This "Social Security supplement" - sounds like "income leveling" where they pay you almost the equivalent of your expected SSA income at 62 now until you reach 62, then pull that back when your SSA check comes in, thus "leveling" your income. If you live a good long time past that, you might lose out. Is that it? My wife and I both had that offered to us at retirement (different employers) and we both turned it down. If SSA gets cut in the future, we don't want our company retirement checks to get tagged. Plus that's just a big gap from 62 to whenever we decide we want to retire.

That's all drivel though. Prepare quickly though. These couple months will ZIP by quickly. I'm just now starting to forget what day of the week it is. Retirement is great if you're prepared for it.

I don't know about where you live. But We have to pay Federal tax on are SSI plus Medicare. That stupid Cost of living percentage they might give you for increase on SSI if they feel like it is a big Farce.
Just say you get a 3% increase on your SSI. They will take Fed Tax plus medicare out of your increase.
So what it leaves you from the increase is basically enough increase to buy 1 piece of toilet paper. Try not to use it all at once.
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Old 11-09-2018, 11:33 PM   #17
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I don't know about where you live. But We have to pay Federal tax on are SSI plus Medicare. That stupid Cost of living percentage they might give you for increase on SSI if they feel like it is a big Farce.
Just say you get a 3% increase on your SSI. They will take Fed Tax plus medicare out of your increase.
So what it leaves you from the increase is basically enough increase to buy 1 piece of toilet paper. Try not to use it all at once.

You pay taxes on your SSI and your pension and other retirement plans, like a 401K, because you didn't pay taxes when you earned that money.
Theoretically, you will be in a lower tax bracket when you begin to withdraw the funds so the tax won't be as much as when you earned it.
And for SSI, last year I was taxed on ~62% of what I collected. Since I have money withheld every month I received a refund. That may depend on your total income though.
They don't take money for your Medicare, they take money for any supplemental plan. If you join a Medicare Advantage plan they deduct for that. You can refuse the supplemental insurance if you wish, but if you join a plan later in your life the cost will be higher than joining ASAP.

There are a lot of doctors who won't accept Medicare patients but will accept patients with an Advantage plan. And you will probably never pay a deductible.
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Old 11-10-2018, 12:11 AM   #18
spike III


 
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Originally Posted by CamaroFred View Post
You pay taxes on your SSI and your pension and other retirement plans, like a 401K, because you didn't pay taxes when you earned that money.
Theoretically, you will be in a lower tax bracket when you begin to withdraw the funds so the tax won't be as much as when you earned it.
And for SSI, last year I was taxed on ~62% of what I collected. Since I have money withheld every month I received a refund. That may depend on your total income though.
They don't take money for your Medicare, they take money for any supplemental plan. If you join a Medicare Advantage plan they deduct for that. You can refuse the supplemental insurance if you wish, but if you join a plan later in your life the cost will be higher than joining ASAP.

There are a lot of doctors who won't accept Medicare patients but will accept patients with an Advantage plan. And you will probably never pay a deductible.

Well I'll put it this way. The wife and I worked real hard so we could retire at an early age. I retired at age 59 from driving truck 38 years and 49 states. I retired on the day I turned 59 so I didn't lose and money. got me a good pension of $55,000 after federal & state taxes.
Started drawing my SSI at 62 with a reduction of $725 a month for taking it early. The wife retired at 65. When I retired everything was all payed off.
But here is the kick in the A$$ last October My pension was cut $1,130 a month. Because the pension fund was going broke. But we set are self early in life so were OK.
But I been retired fourteen years now and in good health and enjoying life at 73.
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Old 11-10-2018, 12:50 PM   #19
el ess A
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A word of advice with only a couple months to go- whatever you need to do as far as your job is concerned, DO IT ASAP! If your home office is in another state like mine is, after retirement it's a PITA to get stuff done. Also, determine if your retirement health insurance is still affordable. I am under my wife's health plans already, so I already knew which way I was going, but that's something to consider unless you have no other options.

Investigate and completely understand ANY investment vehicle anyone offers you. Like an annuity. Be mindful that annuities aren't always the best option.

When you turn 62 or full retirement age and have to deal with SSI, at the moment you can be taxed on UP TO 85% of your SSI income. It just all depends on how it fits into the income formula. If you work while receiving SSI, you can only earn a certain amount before it starts costing you 1 dollar of SSI out of every 3 you earn above that limit. Keep in mind you're not losing that money, just deferring it because your SSI actually keeps going up the longer you have earned income. If you're already full retirement age for SSI, then there's no deductions or earnings limits.

One of the key elements entering into retirement I've found, is at first, do income preservation. We're doing a modified "3-bucket" system (look that up if you haven't heard of it- basically puts your money in 3 different buckets, as it were) where we actually have 2 401Ks and an IRA.

Using the IRA (bucket 1) to invest in mostly dividend stocks where the dividends will be paying us enough to live on and never touch the principle. Obviously this is the riskiest bucket (up 20+% for the year so far as of today) and still need to keep an eye on things. I have automated exit strategies, but if it hits those, it'll still hurt. But so far, it's pouring more stock every month back into the kitty from reinvested dividends. Got to wait until next year when I'm 59.5 to start taking the dividends from that without paying a 10% early withdrawal penalty. Reinvesting the dividends until then will just pump that up even further.

I've got enough saved in the bank plus our pensions to get us through next year as far as cash needs like we never even retired. Even got an emergency fund. A long downturn or big string of bad luck could screw it up though.

My other 401K (bucket 2) is moderately invested, and continues to grow (now about 7% up for the year), and the wife's 401K (bucket 3) is invested mainly in risk averse bonds mostly with after tax funds. It's only doing 3-3.5% average return right now, but the thing is, we probably won't need to even look at it for another 10-15 years. Slow but constant growth piles up after a while.

We'll hold off for as long as we can on SSI (if it's still there), because we know we're going to be getting taxed on 85% of that right off the bat.

Additionally, I never thought I'd be clipping coupons, but if you're a cheap bastage like me, you learn that they can be your friend.

The key to everything retirement is that no matter how much income you have, if you have money left over every month after paying the bills, you're winning.

We're not billionaires (yet) but suffice it to say, if we got any closer to Easy Street, we'd have to change our zip code.
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