Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Retired at 46, have pension question
Old 09-20-2008, 01:31 AM   #1
Confused about dryer sheets
 
Join Date: Sep 2008
Posts: 4
Retired at 46, have pension question

Hello all, I am now 49 yoa and have been living off my state goverment pension of about 4k monthly for the last 3 years.

I have a single question that weeks of googling can't seem to get me the answer to. What can I invest pension money in? It seems like everything I find such as IRAs and the like require you to use wages and salaries not retirement money.

I have mutliple online savings accounts earning 3 to 4 percent and have a 457k that I will likely not starting pulling out of for another 10 years. But I cannot contribute to it anymore either because it requires salaries or wages as well, no pension money.

SO I am a guy who has no job and doesn't want one. So I have not wages or salaries, just pension. What if anything is available to me especially tax free such as my 457k was.

I have to believe there is something out there I could get in to but I just cannot find it.

Thanks for any help and thoughts on the matter.
Sammy
__________________

__________________
sfl109415 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-20-2008, 09:41 AM   #2
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
You need earned income to invest in any of the tax deferred vehicles like a 401k, IRA or even a Roth. I suggest you consider tax efficient index funds for excess pension money. Maintain a solid emergency fund in safe CD's or similar items.

I suggest you stay away from the variable annuity products. They will tout their "guaranteed high returns" and "no chance for market loss" but you will give away a lot of performance due to their high fees.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-20-2008, 09:51 AM   #3
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,146
I-Bonds are tax deferred and easy to buy & redeem online. (currently paying 4.84%). You can stick $5k/year away and won't pay taxes on the gains until you redeem. Note that you have to hold them a minimum of 1 year and if you withdraw before 5 years you lose 3 months interest.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 09-20-2008, 09:58 AM   #4
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
For tax efficiency, consider tax-exempt short-term bond funds for short-term and ETFs or index funds for longer term.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 09-20-2008, 11:31 AM   #5
Confused about dryer sheets
 
Join Date: Sep 2008
Posts: 4
Thanks to everyone for the great suggestions. That is what I needed, a direction to go in. I will start researching all of these options. Plan on hanging around this forum for some time as well, a lot of great information.

Thanks again
Sammy
__________________
sfl109415 is offline   Reply With Quote
Old 09-20-2008, 06:06 PM   #6
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Welcome to the board, Sammy.

Quote:
Originally Posted by sfl109415 View Post
It seems like everything I find such as IRAs and the like require you to use wages and salaries not retirement money.
But I cannot contribute to it anymore either because it requires salaries or wages as well, no pension money.
That's because the legislation for those accounts was written to require them to be funded with wages & salaries. If it's not from a W-2 or a 1099, or if you didn't declare it and get ready to pay taxes on it, then you can't contribute it to a tax-deferred retirement account.

Looks like you're already getting plenty of answers about the types of assets you'd want to invest in.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 09-20-2008, 07:15 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,906
Perhaps I missed it , but did you say if you are married? If your spouse still works, you can also sock away cash in a spousal IRA as long as the combined IRA contributions don't exceed the spouse's income..


Contribute to an IRA for Your Spouse - Kiplinger.com
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 09-20-2008, 09:27 PM   #8
Confused about dryer sheets
 
Join Date: Sep 2008
Posts: 4
Yes I am married but she always just ran a little hobby business out of our home and does none of that anymore so can't do an IRA for her either. Looking back I should have done more when she had income. But for right now we live just fine off of my pension.

I will likely pick up a job of some kind in the next 16 years before I turn 65 for the sole purpose of picking up my 40 quarters for Medicare. My current insurance will drop me at 65 so I must do that. I started my job when I was 21 and never had SS withholdings with the exception of minimum wage jobs I had as a teenager. I think I have about 20+ quarters at this point.

Anyway thanks for the welcome and the suggestions. I do appreciate it.

Sammy
__________________
sfl109415 is offline   Reply With Quote
Old 09-21-2008, 07:57 AM   #9
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by sfl109415 View Post
I will likely pick up a job of some kind in the next 16 years before I turn 65 for the sole purpose of picking up my 40 quarters for Medicare. My current insurance will drop me at 65 so I must do that. I started my job when I was 21 and never had SS withholdings with the exception of minimum wage jobs I had as a teenager. I think I have about 20+ quarters at this point.
You might want to double check that. DW had a non SS paying position with a school district but still had medicare taken out.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-21-2008, 10:37 AM   #10
Confused about dryer sheets
 
Join Date: Sep 2008
Posts: 4
Yes I did confirm it. I had actually known about if for the last 10 years or so but never did anything about it. Actually during my last 2 years at work they begn holding out for it as they determined that hundreds of retiring employees would not have their quarters when they retired. So they worked out a plan where it could be done but it was too little too late for me. Worse case scenario for me is that I just have to pay the full premium.

Thanks
Sammy
__________________

__________________
sfl109415 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Pension question!! Donzo Other topics 7 02-01-2008 11:44 AM
Pension question ylm23 FIRE and Money 16 08-26-2007 05:34 PM
Question for those who are retired to another country FlyingNorth FIRE and Money 17 04-13-2007 12:17 PM
Pension Question ADJ Other topics 4 11-13-2006 10:14 AM
Pension Question Beststash FIRE and Money 20 11-20-2003 07:01 PM

 

 
All times are GMT -6. The time now is 07:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.