Tough ER Enivronment?

[gardenfun]

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Originally Posted by NW-Bound Speaking of inheritance, I am thinking that if/when my stash grows to beyond what we currently spend right now, I will start to divest it to fund the children's Roth IRA, and if I have any grandchildren, their college fund. I will pay for family vacation together like a cruise. I want my children to party with me while I am still alive.

I feel the same way, NW.

Just curious, is there a "special" way to fund a child's Roth or a grandchild's 529 directly yourself? IOW, can you open either account yourself in their names? Or are you just planning on taking withdrawals from your stash and giving the $$$ to your children with instructions to add to their Roth, for example?

Thanks!

[brewer12345]

I for one am happy all you suckers OMYers are continuing to pay my Obamacare subsidies service the national debt. I don't think you can ever have enough money or margin of safety in retirement...

[2B]

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Originally Posted by dtbach Wow! Does your better half read these forums??

My MIL spent two years in a nursing home with a broken hip that wouldn't heal. She was in constant pain. My FIL had Alzheimer's and slowly lost any vestige of dignity over almost 10 years. His last two years were in a semi-vegetative state except for his moans and groans.

I don't think my DW reads this forum but she certainly heard me saying I don't want to live like that. She was also relieved when her father finally passed away but refrained from cheering about it. I certainly had issues with my in-laws but we put our dog to sleep when she was still in better shape than what me in-laws endured.

[2B]

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Originally Posted by brewer12345 I for one am happy all you suckers OMYers are continuing to pay my Obamacare subsidies service the national debt. I don't think you can ever have enough money or margin of safety in retirement...

Well, thank you for your slam heart-felt thanks. I'd tell you where to put it this will continue but I'm going to finally retire in a few months.

I'm only here to avoid a massive tax bill if I retire mid-year.

[NW-Bound]

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Originally Posted by gardenfun I feel the same way, NW. Just curious, is there a "special" way to fund a child's Roth or a grandchild's 529 directly yourself? IOW, can you open either account yourself in their names? Or are you just planning on taking withdrawals from your stash and giving the $$$ to your children with instructions to add to their Roth, for example? Thanks!

I have not done that yet, but when the time comes, will help them with opening an account which they do not currently have. I do not yet know whether to have power of attorney to have access to the accounts, or to trust them to do the right thing. At some point, you need to treat them as adults, and I think that point is already past.

[brewer12345]

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Originally Posted by 2B Well, thank you for your slam heart-felt thanks. I'd tell you where to put it this will continue but I'm going to finally retire in a few months. I'm only here to avoid a massive tax bill if I retire mid-year.

Heheh. Finally going to pull the plug?

Just curious, but how do you avoid big taxes by waiting? Is this related to long term gains?

[Andre1969]

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Originally Posted by W2R I retired at a better time, I suppose, in 2009. But you know, all the news media and everyone else were saying "This time is DIFFERENT", that we would at the very least have a double dip recession, that we would not pull out of it for 30 years, and so on.

Yeah, this time it's different, just like every other time! And FWIW, I saw a double dip in the "Great Recession"...just in rapid succession. Bottomed out in late November 2008, climbed back up about 30% around January or February 2009, only to bottom out again on March 9. I don't know if they classify that as a double dip though...probably just a volatile market.

[Katsmeow]

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Originally Posted by aim-high I'm trying to ignore these types of thoughts as I prepare to ER. But these are the things that have me wondering is 35x enough?

In August 2013, you said you were not quite 50 and that you had 15x to 30x expenses depending on whether you have a lavish or barebones retirement. This apparently did not include college funds separately set aside. And, you weren't including future social security.

I don't know what your expenses are for either lavish or high. If say, bare bones expenses were $50,000 then 30x would be $1.5 million and 35x would be $1.75 million.

But, that doesn't count future Social Security and you are apparently at least 12 years away from it.

I am not a fan of not counting SS. But if you are not quite 50 then you certainly may want to discount it a bit and have to make it until then.

So, I think in your case, it isn't so much where the market is but whether you could live a satisfying life on how much you think you could safely withdraw with possibly a higher withdrawal rate until you get to SS age.

A lot of people at younger ages want to withdraw at a lower rate (but then some spend at a higher rate until they get to SS age and then go sharply lower).

The thing with bare-bones v. lavish budgets is that it doesn't say much about what you are satisfied with. If all you can afford if you retire is bare-bones and you would be miserable with it, then I would be cautious.

[2B]

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Originally Posted by brewer12345 Heheh. Finally going to pull the plug? Just curious, but how do you avoid big taxes by waiting? Is this related to long term gains?

The short answer is I screwed up.

A slightly longer answer is I enrolled in a Supplemental Employee Retirement Plan (SERP) which is for us "highly compensated, key employees." When I signed up, I put down an immediate payout having though I heard that I could change it easily later. When the account started to get seriously large, I went to change the payout to over 5 years. Then I was told it would delay the payout by 5 years for making a change. I decided I didn't want the account to be held captive for 5 years after I leave the company so I made no change to this lump sum. I did change my future SERP contributions to payout over 5 years.

The SERP will make this one time payout amount within a month of my leaving the company. It is for an amount that is safely greater than a full year's pay without any deductions. That's a bunch.

If I retired today, I would be well into the 33% marginal tax bracket, have my personal exemptions partially phased out and probably lose my other deductions to the AMT. Almost all of the payout would be hit with 33%.

If I wait until January 2015 to get it, I would be barely in the 33% bracket. The tax savings would be about $65,000 to $70,000 depending on the stock market between now and then. Most of the SERP payment would fill up the lower brackets in the 2015 tax year.

This SERP payout mistake is one of my bigger financial mistakes.

[FIREd]

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Originally Posted by brewer12345 I for one am happy all you suckers OMYers are continuing to pay my Obamacare subsidies service the national debt. I don't think you can ever have enough money or margin of safety in retirement...

So I take it you are not going back to work anymore?

[2B]

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Originally Posted by Katsmeow A lot of people at younger ages want to withdraw at a lower rate (but then some spend at a higher rate until they get to SS age and then go sharply lower). The thing with bare-bones v. lavish budgets is that it doesn't say much about what you are satisfied with. If all you can afford if you retire is bare-bones and you would be miserable with it, then I would be cautious.

I have a sinking fund represented by laddered CDs that will pay several years of deferred SS and Medicare medical savings. My withdrawl rate is higher during this period but I've accounted for it in my plan.

I plan to start off spending what I want to. Most of my spending is considered variable so the amount of money available would decrease as the size of my portfolio (ex sinking fund) decreases.

[NW-Bound]

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Originally Posted by Andre1969 ... I saw a double dip in the "Great Recession"...just in rapid succession. Bottomed out in late November 2008, climbed back up about 30% around January or February 2009, only to bottom out again on March 9...

Whether the recession is U-shaped, V-shaped, or W-shaped, I can handle it. But if it is L-shaped we are all dead meat.

Well, maybe not myself. Got myself a comfortable RV, ready to drive into the woods... Not trying to scare anybody or anything.

[explanade]

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Originally Posted by Mulligan I don't mind my heirs having a party when I'm gone. I'd like to help fund the grandkid's college and do things that my parents weren't able to do with us and our kids. Nothing wrong with a good party, but hopefully they will have a little class and not be standing over you saying.... "Just hurry up and die would ya!" Sent from my iPad using Tapatalk

Heard that children who are spoiled tend to be less responsible with money, get into debt when they're adults.

Not saying leaving money for college would spoil them. But if they didn't have any worries about paying for college, maybe they're more likely to spend for other things?

I didn't have a credit card when I went to college but these days, the banks are chasing college students.

[Andre1969]

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Originally Posted by NW-Bound Well, maybe not myself. Got myself a comfortable RV, ready to drive into the woods... Not trying to scare anybody or anything.

In my case, if the kitty litter hits the fan, I have a few options. Catalina, Park Avenue, Fifth Avenue, or even Le Mans would be really Grand... Unfortunately, these are cars I'm referring to, rather than the locales...

[CaliforniaMan]

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Originally Posted by explanade Heard that children who are spoiled tend to be less responsible with money, get into debt when they're adults. Not saying leaving money for college would spoil them. But if they didn't have any worries about paying for college, maybe they're more likely to spend for other things? I didn't have a credit card when I went to college but these days, the banks are chasing college students.

Recently went over my son's college funds, he has enough to finish (just enough) by also working a little for gas and spending money. He said it would really be easier if he didn't have to work while studying. I didn't take the bait.

If he really had an emergency I would of course help him out, but this is just normal planning, spending control, and time management. His learning now will help him out much better for his future than if I just handed him some extra cash. I had to work part time through college too, and believe it is part of the reason I am now better off than friends who had it much easier than me.

[CaliforniaMan]

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Originally Posted by NW-Bound Whether the recession is U-shaped, V-shaped, or W-shaped, I can handle it. But if it is L-shaped we are all dead meat. Well, maybe not myself. Got myself a comfortable RV, ready to drive into the woods... Not trying to scare anybody or anything.

Planned for U or V, but what the L if it occurs, got a paid off house, will batten down here, petition to get property taxes reduced as my house value plummets, and enjoy sitting outside watching the humming birds in the summer, walking deserted beaches in the winter, and being better off than the worst.

[REWahoo]

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Originally Posted by CaliforniaMan If he really had an emergency I would of course help him out, but this is just normal planning, spending control, and time management. His learning now will help him out much better for his future than if I just handed him some extra cash. I had to work part time through college too, and believe it is part of the reason I am now better off than friends who had it much easier than me.

+1

I've always found it difficult to understand parents who provided their children with a full-boat ride all the way through college, then complain about their adult children's lack of money management skills.

[JDARNELL]

I will have one entering college in 2-3 yrs. He will go to an instate 2 yr school at first. If its local he will live at home. If it not local he will be playing baseball and living with the team in the dorms. The latter will cover everything but 1K a semester. The previous will cost more however with the $2500 America ?? Tax Credit and with the phasing out above that tuition will cost about $1500 more plus books, etc. I am going to have him pay a % so he is vested in the whole school thing no matter what. Now I will take those $$ and set it aside for him but he doesn't need to know that. I have been having him umpire this summer and he makes about $18 per hr. Plus I am going to teach him to build and repair screens. Pretty easy work and not a bad return.

JDARNELL

[brewer12345]

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Originally Posted by FIREd So I take it you are not going back to work anymore?

Eh, I am going to talk to a megabank about a consulting opportunity late this month. I have some heartburn about this, to say the least. If I do it, it will be full time pay for part time work with minimal travel and a hard end date. I will also structure it to be highly tax efficient. If it does not happen, I will be somewhat relieved.

[REWahoo]

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Originally Posted by brewer12345 Eh, I am going to talk to a megabank about a consulting opportunity late this month. I have some heartburn about this, to say the least. If I do it, it will be full time pay for part time work with minimal travel and a hard end date. I will also structure it to be highly tax efficient.

You'll be doing a great service for us SS and Medicare recipients, but our gratitude will pale in comparison to that of the Colorado squirrel community.