Questions on Roth conversions and when to spend

[Nords]

Thank you so very much for your exhaustive reply - to be honest there were parts where I will need to do more research, however, I don't mind that. You have always been so generous with your knowledge and advice and I really like that about you and appreciate it especially when you help me.

You're welcome! Thanks again for all the help with the book and the financial talks you've given with your units.

I have actually run my numbers in ORP with several scenarios. I also used Vanguard's Financial Engines service (I get access free through a previous employers 403B - I kept some of my tax-deferred savings in their retirement area mainly due to the very low fees) and it came up with a very similar number for my 'yearly spending.' It is mind-boggling to me....I try to have a decent lifestyle on 20-25% of what is projected. I will probably be donating a bit of it to organizations I deem worthy. As for other pursuits, no, not yachts, but I could probably own a small private plane and indulge in my flying hobby, if I wanted to. And more travel while I can do it.

I think ORP and Financial Engines are some of the most robust and reliable retirement calculators out there, although they're correspondingly more complicated for the average user. (NewRetirement.com might be up there now with all of their recent innovations.) I remember beta-testing FE in the late 1990s, and their Monte Carlo gives you a lowball conservative projection of all the other parameters that you had to enter in.

If you're getting relatively consistent results between those two calculators then you're free to expand your spending with confidence. Or to self-insure for long-term care expenses.

I've learned to travel while I can...

As for spending the ROTH last, a lot of what has been bandied about here now makes sense. I don't have a spouse or dependents, so that means I will probably have to pay someone to take care of me when I am older. I know those costs can be prohibitive after having just gone through that with my mother. Being able to withdraw it with minimal tax consequence is a good goal.

I'm not sure what the recent change to the tax laws did to medical deductions. Most payouts from long-term care insurance are not taxable (they're reimbursements of expenses). When my father used up his LTC insurance and was paying his own money at the care facility (and deducting $100K/year in medical expenses), his taxable income plummeted to zero. He paid no federal or state taxes for the final three years of his life.

In your situation it might make sense to spend the Roth IRA money when you want to hold down your taxable income, and then spend your taxable assets when you have large medical deductions. Assuming large medical expenses are still deductible.

Doug, I was a Reservist so I don't think I am eligible for the VA rating - I have not done anything towards that. Most of my injuries occurred when I was not on status, so I don't know that I would have a case for a disability rating. However, I guess I could go visit my local Legion and find out...I've had issues getting the VA to even issue me a card, even though they spam me about everything else.

Yes you are eligible for a VA disability screening, and yes you should talk to an AL Veteran Service Officer.

When it comes to VA disability, affiliating with a Reserve unit is the same as leaving active duty for total civilianhood. Ideally you'd start the VA disability screening in conjunction with the active-duty separation physical (as is common today) and your date of VA disability rating would be the day after you separated from active duty.

For those who entered the military as a Reservist, they're certainly eligible for a screening when they retire awaiting pay. They might even be eligible to file a VA disability claim when they demobilize from a set of active-duty orders-- I'm not sure about that one.

I know a number of Reservists who affiliated with their units while receiving disability ratings of 30%. A few were even higher (depending on the nature of their Reserve/Guard duties.) Reserve/Guard members in the California units are warned to get a VA disability screening as soon as they leave active duty so that they can be eligible to send their kids to CA state universities on the CalVets full tuition scholarship.

It's not simply whether you were injured on status, but whether the requirements of your service exacerbated any injuries received in the line of duty. I don't think I'll ever understand the full details of "service-connected" but I know enough to let the VSO and the C&P doctors sort it out.

Even if you don't "qualify" for compensation now (possibly by not having enough active duty?), by doing the claim now you'll still establish a baseline for any future change in your health. That's especially important when the details of your service (and possible exposures or injuries) start to fade from memory and there's nobody else around to help discuss it with the VA.

Here's the first of a series of posts on not just how but *why* you should file your disability claim.
http://the-military-guide.com/file-veterans-disability-claim-not-just/

Beyond those posts you can also find a copy of the rater's criteria at this link:
The Original Legal Text of the Schedule for Rating Disabilities
You know better than most how to discuss the criteria with the doctor to make their C&P exam even easier to write up. If the doctor leaves out something then the rater just shrugs their shoulders and moves on.

I know that you did your rating assessment way after your retirement started. I was going to see what I could do after I truly have my pension. However, if you advise otherwise, I'm all ears.

I was afflicted with Tough Guy Syndrome. In late 2001/early 2002 I felt embarrassed to show up at the VA clinic when people were returning from Afghanistan with severe injuries.

I also didn't understand that VA disability compensation was based on a table of figures, not strictly on the degree of disability. I didn't feel "disabled enough" to go through the hassle of filing the claim and doing the exams. Let's just say that by 2012 JDarnell had clued me in to the process, my knees were a lot worse than in 2002, and my thinking had evolved.

The VSO support makes all the difference. If the AL doesn't have a good one (or if they're booked for six months) then ask around for other VSOs with other chapters or at the VA clinic. Your state veterans office might also be able to help, and they'll certainly let you know about state benefits like reduced property taxes.

I am *so* lucky to have decided early to retire early and therefore work to embody the live below your means lifestyle.

In the manner of "the harder you worked, the luckier you got"?

But yes, I'm getting more questions these days from people approaching FI and worrying about having to support their parents.