Retirement Financial Planing

[CamilleHarris]

how do you make your money?

I work at a bank in asset management. The pay is pretty good and I would say it is a solid middle class income. Of course I also use my experience in the industry to make some investments of my own so overall I do pretty well financially.

I believe that even when you retire you still need to make sure you have enough money to support the life you need. Some people think 500 thousand or a million dollars is enough to retire on but what they often do not consider is the unexpected. If something unexpected happens will that money really be enough to handle it?

I have seen too many people who thought they had enough money to retire only to end up looking for work again in their 70s or 80s. Usually they have to find jobs with fewer age restrictions and lower pay just to support themselves.

 

[CamilleHarris]

They say that 15 years after you retire ( good pension ) you are on the edge of poverty income.-----Perhaps more true today with everyday expenses rising fast.

That’s why so many people end up going back to work a few years after retiring. Things are changing fast these days. Prices keep going up and wages just aren’t keeping pace. For example ten years ago you could make 50 thousand dollars a year live pretty comfortably and still save some money. Now even if you make 80 thousand a year after everyday expenses and all the other bills add up how much can you really save? Looking at the data only a small percentage of people are seeing their wealth grow while most people are slowly seeing theirs shrink.

 

[CamilleHarris]

how do you make your money?

 

[Sprig]

If you run out of $$$ in retirement and have to go back to work then you did not plan well or did not plan at all. A possible exception to that is if a person had something catastrophic happen like hundreds of thousands in unforeseen medical bills.
If you retire with just a small pension and SS and maybe a 401k, you’ve already failed. You’ll be hurting within 5 years. To retire successfully you need a plan that you started 10 to 20 years before retirement. And most importantly you need a good financial advisor/planner. Retirement planning and investing is quite complex. And successful investing is way beyond the average person. Years ago I had 3 national association of security dealers licenses (I did not sell securities but needed the licenses to perform some of the requirements of my job). I thought I knew securities and investing. I found I wasn’t the hot shot I thought I was. A great financial advisor saved me from making additional costly investment errors. I’ve had a financial adviser for 20+ years . Wouldn’t be in the great financial shape we are in without him.
Another thing we did way before we retired was to pay everything off. The house, the cars and boat, credit cards etc. we use credit cards but they are 100% paid off monthly. Just before we retired we had our dream house built and paid cash for it. Last few vehicles we bought new we paid cash. We are also fortunate we had good paying jobs and great benefits. I was a corporate VP and my wife was a project manager for a mid sized construction firm.
So for a successful retirement at least 3 things 1) start planning, saving and investing 10+ years before retirement. 2) Get a good financial adviser. 3) Retire debt free, have everything paid off. Enjoy the golden years.

 

[alldodge]

I'm not sure converting IRA to Roth at a late stage in life is all that worthwhile, given the one-time tax hit. Makes good sense earlier on since the money has plenty of time to grow.

Like you @alldodge I am 70 years young, as are a few other regulars on the forums.

About 10 years ago, I started converting a growth/value oriented portfolio to more of a dividend earning portfolio. Only a small portion of my is in an IRA, so when I have to start withdrawing it in a few years, I will take that money and put it in something that earns decent dividends, and just keep moving things it that direction.

I had a 'magic number' in mind when I would be able to retire. When our overall savings hit that number, I just needed one bad day at the office and that would do it. . . . and here I am.

I was planning to do about the same but found out I didn't need to be so careful. I still have my IRA in Vanguard money market so it has lost a lot if it moved directly back into VOO with S&P jumping up. Still believe the the S&P will take a hard fall because it's being driven by greed, time will tell

I have pretty much a solid plan just hoping it works out. Last thing I want to happen is be moved into the 50+% tax bracket and only way out is to dump almost everything from IRA to Roth IRA, take the tax hit for a year or 2 until we get back on track

 

[tpenfield]

Is there a 50% tax bracket? Seems like it is more like 37% . . but add any state tax and you are close to 50%.