Retired at 46, have pension question

[sfl109415]

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

 

[2B]

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.

 

[Alan]

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.

 

[Spanky]

For tax efficiency, consider tax-exempt short-term bond funds for short-term and ETFs or index funds for longer term.

 

[sfl109415]

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

 

[Nords]

Welcome to the board, Sammy.

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.

 

[travelover]

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

 

[sfl109415]

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

 

[2B]

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.

 

[sfl109415]

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