Retirement Q&A

[Orangesmokey]

https://finance.yahoo.com/news/90-americans-plan-skip-no-144159979.html

Reading the above article made me think about my retirement and what I have saved. It also made me wonder what you guys are doing. I know some of our posters have rental property which I am sure is a way to supplement income and possibly a way to add money or value at retirement. So what are you doing for your retirement?

 

[Thunder Good-Oil]

Social Security:

6% reduction for every year SS is taken before the Full Retirement Age (FRA).

8% addition for each year SS is delayed beyond the FRA.

Adjusted monthly.

62 years, 0 months: 70.0%

62 years, 1 months: 70.417%
62 years, 2 months: 70.833%
62 years, 3 months: 71.25%
62 years, 4 months: 71.67%
62 years, 5 months: 72.08%
62 years, 6 months: 72.5%
62 years, 7 months: 72.917%
62 years, 8 months: 73.33%
62 years, 9 months: 73.75%
62 years, 10 months: 74.167%
62 years, 11 months: 74.58%

63 years, 0 months: 75%
63 years, 1 months: 75.417%
63 years, 2 months: 75.83%
63 years, 3 months: 76.25%
63 years, 4 months: 76.67%
63 years, 5 months: 77.083%
63 years, 6 months: 77.5%
63 years, 7 months: 77.917%
63 years, 8 months: 78.33%
63 years, 9 months: 78.75%
63 years, 10 months: 79.167%
63 years, 11 months: 79.583%

64 years, 0 months: 80%
64 years, 1 months: 80.55%
64 years, 2 months: 81.11%
64 years, 3 months: 81.667%
64 years, 4 months: 82.22%
64 years, 5 months: 82.776%
64 years, 6 months: 83.33%
64 years, 7 months: 83.88%
64 years, 8 months: 84.44%
64 years, 9 months: 85.0%
64 years, 10 months: 85.55%
64 years, 11 months: 86.11%

65 years, 0 months: 86.67%
65 years, 1 months: 87.22%
65 years, 2 months: 87.776%
65 years, 3 months: 88.33%
65 years, 4 months: 88.88%
65 years, 5 months: 89.44%
65 years, 6 months: 90.0%
65 years, 7 months: 90.55%
65 years, 8 months: 91.11%
65 years, 9 months: 91.67%
65 years, 10 months: 92.22%
65 years, 11 months: 92.776%

66 years, 0 months: 93.33%
66 years, 1 months: 93.88%
66 years, 2 months: 94.45%
66 years, 3 months: 95.0%
66 years, 4 months: 95.55%
66 years, 5 months: 96.11%
66 years, 6 months: 96.67%
66 years, 7 months: 97.22%
66 years, 8 months: 97.776%
66 years, 9 months: 98.33%
66 years, 10 months: 98.88%
66 years, 11 months: 99.45%

67 years, 0 months: 100% (FRA)

67 years, 1 months: 100.67%
67 years, 2 months: 101.33%
67 years, 3 months: 102%
67 years, 4 months: 102.67%
67 years, 5 months: 103.33%
67 years, 6 months: 104%
67 years, 7 months: 104.67%
67 years, 8 months: 105.33%
67 years, 9 months: 106%
67 years, 10 months: 106.67%
67 years, 11 months:107.33%

68 years, 0 months: 108%
68 years, 1 months: 108.67%
68 years, 2 months: 109.33%
68 years, 3 months: 110%
68 years, 4 months: 110.67%
68 years, 5 months: 111.33%
68 years, 6 months: 112%
68 years, 7 months: 112.67%
68 years, 8 months: 113.33%
68 years, 9 months: 114%
68 years, 10 months: 114.67%
68 years, 11 months: 115.33%

69 years, 0 months: 116%
69 years, 1 months: 116.67%
69 years, 2 months: 117.33%
69 years, 3 months: 118%
69 years, 4 months: 118.67%
69 years, 5 months: 119.33%
69 years, 6 months: 120%
69 years, 7 months: 120.67%
69 years, 8 months: 121.33%
69 years, 9 months: 122%
69 years, 10 months: 122.66%
69 years, 11 months: 123.33%

70 years, 0 months: 124%
70 years, 1 months: 124%


Edit: actually there’s a 30% reduction if SS is taken 5 years before the FRA, but the formula is blended to reduce the amounts taken at ages 62 and 63.

What if I take Social Security benefits early? Age 62 through 67

If you choose to take your own (not your spouse's) Social Security benefit early, be aware that the payments will be permanently reduced by five-ninths of 1% for each month before your full retirement age. If you start more than 36 months before your full retirement age, the worker benefit decreases further by five-twelfths of 1% per month for the rest of retirement.

For example, if your full retirement age is 67 and you elect to start benefits at age 62, the SSA will calculate your payments based on the fact that you are taking the benefit 60 months before full retirement age—a 20% reduction for the first 36 months (five-ninths of 1% times 36) and another 10% (five-twelfths of 1% times 24) for the remaining 24 months, cutting your monthly Social Security benefits by a total of 30%.

 

[McDad]

https://finance.yahoo.com/news/90-americans-plan-skip-no-144159979.html

Reading the above article made me think about my retirement and what I have saved. It also made me wonder what you guys are doing. I know some of our posters have rental property which I am sure is a way to supplement income and possibly a way to add money or value at retirement. So what are you doing for your retirement?

My wife has a 401k through her employer. I am self employed and have all of "my" retirement in residential rental property. We are in mid 50s. In our late 20s, we assumed SS would be insolvent by the time we retired. So we prepared as if it wasn't a factor. If SS is still available, we hope it will be icing on the cake for us.
I love what I do. I am 100% remote and will continue to work as long as I am able and effective. I'll take less in payroll for the years I have a limit while taking SS. Our tastes are not extravagant. I think we live a simple life. About the only thing she wants to do more in retirement is travel. We also want to leave something for our future grandchildren and continue to support our church and charitable giving.

 

[Orangesmokey]

My wife has a 401k through her employer. I am self employed and have all of "my" retirement in residential rental property. We are in mid 50s. In our late 20s, we assumed SS would be insolvent by the time we retired. So we prepared as if it wasn't a factor. If SS is still available, we hope it will be icing on the cake for us.
I love what I do. I am 100% remote and will continue to work as long as I am able and effective. I'll take less in payroll for the years I have a limit while taking SS. Our tastes are not extravagant. I think we live a simple life. About the only thing she wants to do more in retirement is travel. We also want to leave something for our future grandchildren and continue to support our church and charitable giving.

I started my 401k way too late. I was not smart and didn't really have someone to guide me. Since starting my 401k I have upped how much I put in but its still not going to be enough. I need to find another way to save more for retirement. I could find a rental property if I found the right one as I don't have enough capital to buy one that needs a ton of work.

 

[vols 30]

Hopefully 401K, pension, SS, and a little from the VA is enough.

I can retire in 2 years at 57. I'm still undecided

 

[Thunder Good-Oil]

Don’t buy an annuity from an insurance company. Especially if you’ll have heirs. There’s no stepped up basis. The tax advantage is BS.

 

[Thunder Good-Oil]

Convert IRAs and 401(k)s to the Roth versions if the taxes owed can be paid with cash outside of the accounts.

 

[Orangesmokey]

Convert IRAs and 401(k)s to the Roth versions if the taxes owed can be paid with cash outside of the accounts.

I did change my contribution to a higher percentage to Roth

 

[McDad]

I started my 401k way too late. I was not smart and didn't really have someone to guide me. Since starting my 401k I have upped how much I put in but its still not going to be enough. I need to find another way to save more for retirement. I could find a rental property if I found the right one as I don't have enough capital to buy one that needs a ton of work.

VN have several members who are well versed in all things retirement. I have no doubt people will come along with some good, applicable strategies to supplement your retirement.

Rental isn't for everyone. Managing tenants is a real pain in the butt, sometimes. It works for us but it has not been easy. If you're new to it, find someone you trust who can give solid advice about the business.

 

[vols 30]

Convert IRAs and 401(k)s to the Roth versions if the taxes owed can be paid with cash outside of the accounts.

I'm leaning just staying with the traditional TSP. Isn't that better tax wise?

 

[McDad]

I started my 401k way too late. I was not smart and didn't really have someone to guide me. Since starting my 401k I have upped how much I put in but its still not going to be enough. I need to find another way to save more for retirement. I could find a rental property if I found the right one as I don't have enough capital to buy one that needs a ton of work.

Also, don't forget about your residence. If sold, like for downsizing or to free up capital, there are no capital gains tax up to 250k/500k depending on marriage status. That money converted to investment could give a substantial boost in your retirement income.

 

[Orangesmokey]

VN have several members who are well versed in all things retirement. I have no doubt people will come along with some good, applicable strategies to supplement your retirement.

Rental isn't for everyone. Managing tenants is a real pain in the butt, sometimes. It works for us but it has not been easy. If you're new to it, find someone you trust who can give solid advice about the business.

I had a rental property a while ago but I was not in good financial shape to be able to do it the proper way. I am much much better off now and I can handle it better now financial. I have heard plenty of horror stories about tenants.

 

[McDad]

I had a rental property a while ago but I was not in good financial shape to be able to do it the proper way. I am much much better off now and I can handle it better now financial. I have heard plenty of horror stories about tenants.

20% of tenants give the other 80% a bad reputation. The secret, as you know, is keeping the bad 20% as far away from your place as possible.

 

[BigOrangeMojo]

You have to save 15-20% of what you make. You have to make it automatic before you spend anything else.

Roth is the way to go

 

[McDad]

https://finance.yahoo.com/news/90-americans-plan-skip-no-144159979.html

Reading the above article made me think about my retirement and what I have saved. It also made me wonder what you guys are doing. I know some of our posters have rental property which I am sure is a way to supplement income and possibly a way to add money or value at retirement. So what are you doing for your retirement?

I googled, "I started my 401k late and i will not have enough to retire, what should i do now"

google ai provided:

Facing a retirement savings shortfall after a late start is manageable with strategic planning and aggressive action. By maximizing savings, reducing expenses, and possibly adjusting your timeline, you can still build a secure financial future.
Boost your savings

1. Utilize catch-up contributions. If you are age 50 or older, you can make additional "catch-up" contributions to your retirement accounts. For 2025, the limits are:
   • 401(k) and similar plans: An extra $7,500, for a total of $31,000.
   • IRAs: An extra $1,000, for a total of $8,000.
   • "Super catch-up" for ages 60-63: Those in this age bracket may be eligible to contribute even more to their workplace plans, up to an extra $11,250 in 2025, if the plan allows.
2. Max out your 401(k) match. Contribute enough to your employer's plan to get the full company match. Not doing so is leaving free money on the table.
3. Consider a Roth account. A Roth IRA or Roth 401(k) allows you to contribute after-tax dollars in exchange for tax-free growth and tax-free withdrawals in retirement. This can be a smart move, especially if you expect to be in a higher tax bracket later.
4. Open an IRA. If you are already maxing out your 401(k) or want more investment options, open and contribute to an Individual Retirement Account (IRA).
5. Start a side hustle. A secondary source of income from a freelance gig or part-time job can provide extra cash flow to put toward retirement savings.

Reduce your expenses and debt

1. Create a detailed budget. Track your income and expenses to find areas where you can cut back. Eliminating unnecessary spending, like unused subscriptions or frequent dining out, can free up significant funds for savings.
2. Eliminate high-interest debt. Pay off high-interest debt, such as credit card balances, as quickly as possible. This prevents interest payments from eating into your potential savings.
3. Re-evaluate housing costs. Downsizing to a smaller, more affordable home or moving to an area with lower property taxes can dramatically lower your monthly expenses.
4. Consider monetizing assets. You can generate extra income by renting out a spare room on a site like Airbnb or selling items you no longer need.

Adjust your timeline and strategy

1. Work a few extra years. Delaying your retirement, even by a couple of years, provides more time to save and allows your existing investments to grow. It also shortens the total number of years you will need to rely on your savings.
2. Delay Social Security. Waiting until your full retirement age or age 70 to collect Social Security benefits can significantly increase your monthly payout. This can provide a larger, more stable income stream in retirement.
3. Explore investment options. Reassess your asset allocation to ensure it still aligns with your goals. While older savers often move toward conservative investments, a portion of growth-oriented assets can help your portfolio keep pace with inflation. A financial advisor can help determine the right mix for you.
4. Consider a "semi-retirement." If full retirement is not financially feasible, consider working part-time. This provides extra income while still allowing you to enjoy more free time.

 

[BigOrangeMojo]

I started my 401k way too late. I was not smart and didn't really have someone to guide me. Since starting my 401k I have upped how much I put in but its still not going to be enough. I need to find another way to save more for retirement. I could find a rental property if I found the right one as I don't have enough capital to buy one that needs a ton of work.

How old are you?

What have you saved?

Range (you dont have to give exact) what you make each year?

House paid for?

Kids out of house?

Any debt?

You in decent health? Does enployer have HSA option?

Does employer have 401K?

 

[GVF]

I had some really good 401K building in my two previous jobs from 15 years ago and beyond. Timken was a gold mine for 401K if you kept your funds 100% company invested because they were notorious for stock splitting every 4-5 years when hte value hit about $50. I ammassed roughly $30K in 18 months from scratch. Freudenberg was similar performance and piled up $18Kish in roughly same time.

Down side is my textile company I spent almost 20 years with closed in '05, so I became the proverbial new guy in managment from there on in automotive world. And in the '08 aftermaths. So, I have endured multiple layoffs regardless of outperforming 25 year good ole boys. And with each layoff it became more diffcult and longer in between suitable jobs. Twice, up to 7 months. Everything we had was withdrawn to pay mortgages, so now only a few years out from possible retirement, we got nothing and I won't be. But, I have acquired a seond job doing takeoffs and estimating for a quartz tops company that will be very beneficial and will allow me to pass on the farm to my two debtr free someday. My day job is basically the same stuff for a commercial casework provider and installer. And two guys I'm associated with through the quartz company are getting another business off the ground. It's coming late in life, but all 3 are jobs I can perform with a sharp mind as long as I wish. And the other two are remote and will hopefully in teh next two years get me out of reporting to a day job.

 

[95 Vol Alum]

You have to save 15-20% of what you make. You have to make it automatic before you spend anything else.

Roth is the way to go

I'm not completely sold on Roth being the way to go. The majority of my IRA savings are traditional/401K, but I do have an small individual Roth as well. It feels like if I had started Roth in my 20's, yeah that would have been better - wasn't a thing when I started.

I look at my parents and their "income" levels at retirement and they were in a lower tax bracket than when working.

I don't mess with income outside of investments/salary for the reason McDad noted - don't want to deal with the hassles, my work and dealing with the fine people of VN is hassle enough.

 

[GVF]

I'm not completely sold on Roth being the way to go. The majority of my IRA savings are traditional/401K, but I do have an small individual Roth as well. It feels like if I had started Roth in my 20's, yeah that would have been better - wasn't a thing when I started.

I look at my parents and their "income" levels at retirement and they were in a lower tax bracket than when working.

I don't mess with income outside of investments/salary for the reason McDad noted - don't want to deal with the hassles, my work and dealing with the fine people of VN is hassle enough.

Seems as though a savvy investor would build wealth just copyng Pelosi stock trades and others in Congress.

But, from experience and mistakes, I can say to the younger folks in here, be frugal and live within your means. Don't eye shop. The only thing you take with you when you die is your name. The easiest way to build wealth long term for late life and kids is to keep it in your pocket so you can do something with it and have it. At 60, I can truly say I have never sat around in awe of Vette's and Lambo's passing me in the street, or driving by a mansion and thinking how envious I must be. so, no one really cares what you got. There is nothing to prove in life beyond your own household, no eyetests to win. And for God sakes, don't live a life enslaved to excessive debt. Free people cannot be exploited. Plan for you and your family as cost effectively as you can. Me and mine has wasted enough money to have retired early.

 

[Thunder Good-Oil]

I'm leaning just staying with the traditional TSP. Isn't that better tax wise?

If your taxable income falls at retirement then a case can be made to NOT convert to Roth.

If you’re going to live for a long time, then converting is more advantageous.

If you plan to leave those assets to a charity then NOT converting makes sense (the gains wouldn’t be taxable to the charity/church).

Generally the longer the time frame, the benefits of converting are more favorable.

 

[95 Vol Alum]

Seems as though a savvy investor would build wealth just copyng Pelosi stock trades and others in Congress.

When it comes to retirement investments, I am a Boglehead and just want to be the market through index investing.

 

[GVF]

When it comes to retirement investments, I am a Boglehead and just want to be the market through index investing.

There's apps for that too. lol.

 

[BigOrangeMojo]

I'm not completely sold on Roth being the way to go. The majority of my IRA savings are traditional/401K, but I do have an small individual Roth as well. It feels like if I had started Roth in my 20's, yeah that would have been better - wasn't a thing when I started.

I look at my parents and their "income" levels at retirement and they were in a lower tax bracket than when working.

I don't mess with income outside of investments/salary for the reason McDad noted - don't want to deal with the hassles, my work and dealing with the fine people of VN is hassle enough.

If you are below Roth income limits, it makes sense in almost every circumstance to put it there from 20s to 40s.

If you are having to do backdoor Roth IRAs at 60 because you are in 37% bracket plus state, then sure....

 

[Orangesmokey]

How old are you?

What have you saved?

Range (you dont have to give exact) what you make each year?

House paid for?

Kids out of house?

Any debt?

You in decent health? Does enployer have HSA option?

Does employer have 401K?

44

I have 401k but I know it's not enough less than 100k

Pay depends on business but 80k or more

House is not paid for (went through a divorce five years ago and had to refinance to get her name off)

Two kids 16 and 12

House and truck are only debt right now. No credit card debt

I would say health wise I am on the better side of health for someone my age (workout six to seven days a week and eating properly 80% of the time) I have health insurance through work but its not the best

Employer does have 401k that's where it started from.

 

[Thunder Good-Oil]

The Full Retirement Age is a confusing concept.

You can begin taking Social Security at age 62. Don’t begin beyond age 70 as the monthly benefits no longer increase for waiting.

The biggest FRA rule affecting most people is that if you continue working after taking early SS the government will possibly take a large chunk of it. Working a few hours per week usually won’t affect the monthly SS benefit unless your hourly wage is substantial. After your FRA the work penalty no longer applies.

Social Security benefits ought to be tax free. Trump wants that to happen. The other party opposes the change in the legislation. However, tax free SS benefits would make it more difficult to balance the budget and reverse the growing National Debt level.