Introduce yourself here!

I read an article in 'Money' or 'Kiplinger' or one of those
recently which interviewed several couples regarding how they combine or keep financial stuff separate.
A number of the interviewees kept completely
separate records for everything. I recall one couple
who had no idea what the other had, even after 26 years of marriage. My wife and I keep everything
separate (2nd marriage for both of us). No combining
whatsoever including separate tax returns. Whatever works I guess.

Thanks for the opnions gentleman. I think we're going to split it up the middle and go with a combined account to pay bills, while keeping our separate accounts for that sense of control and independence.

I agree with you as well Cut-throat in the fact that I don't want to give up my life just to save for a date in the future, but I also want to be secure and have my family secure. I guess growing up in a household where all you ever heard about was how broke we were will do that to you. So like everything else it seems to be about balance. Go for your goals and enjoy the process.

[cfcf]

Joint accounts have worked well for us from the get-go, I think because we're so similar in our financial tastes and habits - a lucky thing! We both tend to use the (free) ATM to get cash for small purchases, use credit cards for most things, and rarely use checks except to pay the monthly bills. The checkbook stays on the computer desk most of the time! To retain individual credit-worthiness, we each have our own credit card accounts - but the money to pay those separate bills comes from our joint account. We've simply learned to trust each other's judgement and honesty with money - not something everyone can do, I guess.

I agree about not being a tightwad and then croaking with a heap of cash under the mattress - that would be a sad mistake. So far we think we've balanced out frugality and having fun with stuff/life fairly well, though I'd like to travel more than she does - I'm more adventurous!

We're thinking of buying a used camper van in the near future, once we free up enough time to take longer trips. Flying is such a hassle these days, and all the associated expenses of fly-drive travel (car, rooms, restaurants, etc.) add up quickly. When we fly to visit national parks and other interesting areas we often save some cash by tenting and using hostels - usually more interesting than a sterile hotel room. But not always an option in some locations or times of year, and as we get older sleeping on the ground probably won't be so appealing!

We plan to die broke, though our wills' specify a generous distribution to family and our favorite charities should our demise occur sooner than we'd like. (I think they'd be surprised at what we've saved - we haven't told family or friends about our financial situation so as to avoid hard fealings/jealousy/anger and the inevitable comments about being lazy/slackers cuz we soon won't work for a living - this anonomous forum is the first time I've exposed it!).

At some point we may need to explain ourselves - that we make our living by managing/investing our savings. Unless someone is ready to hear that mere mortals can accomplish such a thing, it can be a touchy topic. I suspect most people will assume we got a handout or something. No, it's just consistency, perseverence, and good/lucky choices over many years.

In the meantime, we give to many environmental charities and causes, and work feverishly to oust "Dubya" before he destroys everything we cherish and believe in. Sorry, didn't mean to get so political in this forum!

[MRGALT2U]

Yeah, you gotta be careful about those politics, as there
are many others working just as hard to keep "Dubya"
right where he is, a condition I wouldn't mind except
for 2 things:

1. He is waaaaaaaaaaaaay too liberal for my taste.

2. I no longer vote, having opted out of political
participation just as I opted out of the world of work
(and for some of the same reasons).

We now resume our regularly scheduled program.

CFCF,

Don't let the far right scare you away from here. I am also on the Anybody but 'W' campaign. We have gone from peace and prosperity to War, Depression and Debt.

The far right tried to run Clinton out of office for getting a little 'BJ' on the side. This was only Hillary's problem not the country's. Keep the government out of our private matters!

[MRGALT2U]

Hey Cut Throat; more common ground! Above all else
I want to keep government out of our private matters,
just like you. It ain't happenin' and won't. You are
younger than I am, but you're a smart guy and I know
you will see this in time.

[Ol_Rancher]

Howdy Buckaroos
The Ol' Rancher here. I have enjoyed reading the posts on this freat forum. I retired early 5 years ago at age 53 and am very happy. I currently live in Austin, Texas but will move to a new home 60 miles west to a small ranch in Texas hill county. You all are invited to visit the ranch and see one version of the good life in retirement!

www.PictureTrail.com/OlRancher

I plan to be an active participant. I have developed some stratagies and some 'rules of thumb' that may help others. I have a few questions that I plan to ask the regulars here.

[sgeeeee]

Quote:

Howdy Buckaroos * * * * * * * * * * * * * * *The Ol' Rancher here. . . . * * * * * * * * * * * * * * * I plan to be an active participant. I have developed some stratagies and some 'rules of thumb' that may help others. I have a few questions that I plan to ask the regulars here. * * * * * * * * * * * * * *

I look forward to hearing some of your stratagies, Ol' Rancher. It's always good to hear new voices.

I raised longhorns myself several years ago. Had one that made it to the World TLBA show and finished in the top 10 in her class. I considered getting into Buffalo a few years back, but the upgraded fence requirements would have cost me more than I wanted to invest. Don't know anything about Llama. I hiked with some in the Andes several years ago, but didn't learn too much about them since I didn't speak Quechuan.

[Stephen_C]

Good evening, all.

I have read and enjoyed the posts on this board, and learned a great deal!

I thought I would start by introducing myself briefly, and then ask a question.

I am 52, married to a wonderful lady, and hopefully in the last stages of planning my ER. We have not been scrupulous savers, but have managed to save about $800,000 roughly divided between tax deferred and tax paid savings. We have a couple of corporate pensions (about $20,000 annually) that start paying when I'm 65. And of course, we can get SS at 63. We already have retirement homes, one in Canada and one in Florida. We expect our base living expenses to be about $25,000/yr excluding medical insurance.

Our plan is to take a draw from the IRA to supplement investment income from the savings. My first question is there any advantage to taking a larger or smaller draw from the IRA? My initial reaction is to take as much as possible, not to spend, but to sock away in savings during the 52 -591/2 first stage when my taxable income will be lowest.

Any thoughts?

best, Steve

Hi Stephen,

Welcome to the forum

you said:

Quote:

Our plan is to take a draw from the IRA to supplement investment income from the savings. My first question is there any advantage to taking a larger or smaller draw from the IRA? My initial reaction is to take as much as possible, not to spend, but to sock away in savings during the 52 -591/2 first stage when my taxable income will be lowest.

Either you have a smart strategy which has never occured to me or I totally misunderstand your question.

As I understand it, you cannot take anything from your IRA until you're 59 and 1/2 (with some minor exceptions) and usually a lot of retirees will try and postpone this until they over 70 when they are forced to.

There are a lot more smarter financial people on this forum than myself and maybe someone else will be able to answer your question.

[wzd]

Hi Stephen,

One view, which I agree with but have not done sufficient planning to optimize, is that you should take income in a manner to maximize use of the lower tax brackets. This means that if you are currently in a 10% bracket or a 15% bracket, and expect to be in a higher bracket in the future, then you should withdraw sufficient funds from an IRA to put you at the top of your current bracket. Paying 15% tax now is better than paying 25% tax later. Rolling over to a Roth IRA might be a better alternative to simply withdrawing funds because of the tax treatment of earnings.

I would suggest that you run the orp calculator at http://www.i-orp.com/ and see what it suggests. Take a close look at the tax bracket page (the last one I believe) and that may give some insight to it's recommendations. I used it, studied the output long enough to understand why it was making the recommendations it did, and then setup my own plan based on that knowledge.

Unfortunately, if I remember correctly it does not handle 72t withdrawals very well. But you can use it to see it's forcast for your tax bracket. It's tax assumptions is that todays brackets will be adjusted for inflation, but no other changes. Guessing the future of tax brackets is probably akin to gambling....

Gummy also has some information that highlights and mathmatically 'proves' that paying 15% now is equilient to paying 15% later - I'm not sure where it was, but his page is http://home.golden.net/~pjponzo/gummy_stuff.htm. The conclusion I remember (memory subject to distortion) was that tax deferral does not necessarily make sense unless you can defer to a lower tax bracket. I'm not sure I completely agreed with his calculations, but I do think that deferring income to a higher tax bracket is not a winning move.

Wayne

[Stephen_C]

Thanks Cut-Throat, and thanks Wayne. You got it exactly right. What I was trying to say, that is. I know that the conventional wisdom is not to withdraw $$$ from an IRA, but it just seems to me that if people's expectations are that their future income will put them into a higher tax bracket, it might make sense to withdraw in the lower income years. You could then put the money into taxexempt bonds, for example. I will look at the calculator you mentioned, Wayne, and thanks for the reference.

Cut-Throat: I gotta ask (although it must have been asked before) how you got your name. Were you previously a barber, a banker, a used car salesman or a shakey surgeon?

best,
Steve

Quote:

Cut-Throat: I gotta ask (although it must have been asked before) how you got your name. Were you previously a barber, a banker, a used car salesman or a shakey surgeon?

Steve,

None of the above. - My favorite trout is the Cutthroat trout and I am a fly fisherman. If somone's messing with me, I kinda like the double entendre though.

[wzd]

Cutthroat - I thought for some reason you were further east. Cutthroat, rainbow and browns out here in Colorado, and I think just here and further west. I don't really fish much but head up to the mountains with friends who do. I enjoy moseying up the mountain (well, sometimes it is well outside of the technical definition of mosey, but that's the attitude at least) rather than the fishing.

Wayne

[AltaRed]

Just found this website yesterday and have spent a number of hours perusing the site and these forums. Looks like a great place to learn about experiences of ER's and those planning to ER.

I am an ex-pat Canadian working in Texas and spouse and I are about to turn 55. Spouse and I are in the serious discussion stage about ER and have been saving and investing to enable retirement at 55 for the past 15 years. While we can retire now comfortably financially, we have a number of the same anxieties expressed by others regarding where to retire, and of special concern what we will do with all of our time since our lives have been pretty focused around my career of long hours in a high stress job. Another factor is whether we really can wean ourselves off a healthy salary right now and because I would have a 25% discount to my DB pension this year (versus 20% next year).

We believe we will retire on Canada's west coast to get away from the snow elsewhere. Most of our family is in BC or Alberta. We will have to establish a new sense of community and friends since frequent transfers over the years pretty much precluded establishing close friends.

A lot of things to be considered and we will likely take one more year to sort through them. But I am more than ready to retire given the heavy workload and stress at work. Looking forward to contributing to the forums here. While some of the financial issues are a little different in Canada than USA, there are many similarities.

[renferme]

Hello everyone,
I've been posting for several months now and enjoy reading other's comments. My real name is Ray, but posting under the logo of Bennevis.
I'm 57, have been working in the Computer Departments of several companies for the last 33 years, most recently 24 years at a large multinational chemical and pharm. corporation. Planning to retire sometime in the 2nd qtr. this year and begin to live off pension, 401k, and personal investment accounts (hobby stocks dividends and cds ). My wife is still working so her income, needless to say, will be a big help. My kids are all grown up, so all we have left is 2 min. schnauzers to take care of.
Why am I retiring: I want to end the STRESS of work mostly, and believe I can handle it financially. Can pay my share of the bills, etc., and hope to pay off the house before collecting social security, and still continue with my favorite hobby - golf. Until my wife retires, we'll stay here in the Pittsburgh area (golf is cheap here), which is nice, except for the winters. I really like AZ and hope to convince my wife to move there someday. I think she's partial to FL right now.
This is a great website; enjoy it much and hope to contribute in the future.
Ray

About to Retire Municipality, Police Dep. DROP Program, Lump Sum Rollover to 457b program and my age 51 ,Deferred compensation rules have no age penalty, I was told age 55 no penalties on DROP from 401a pension option, and if I were to take early distribution , I could avoid penalty using substantial equal payments. Is this True

Steven, since no one else has answered I'll tell you what little I know. I don't know the specifics of your situation -- 401a, DROP, etc. -- but you need to look into 72(t) for the Substantially Equal Periodic Payments (SEPP).

[dory36]

A pretty thorough discussion of early withdrawals without penalty at
http://retireearlyhomepage.com/wdraw59.html

Dory36

[Nords]

GDER,

Yes, you're absolutely right, I'm planning to use that strategy in a couple years.

The idea is to pay the taxes out of your own money-- not the IRA conversion funds!-- which effectively boosts your Roth IRA account with a tax-free donation. This was a hot topic at M*'s "Investing DURING Retirement" board and Bruce Steiner explained it best at http://www.irahelp.com/cgi-bin/forum/index.cgi/read/729, a discussion at Ed Slott's IRA board.

Roth conversion is tailor-made for ERs whose income drops off before SS or spouse pensions kick in. It's especially good when there's 10-20 years of compounding to compensate for having to pay the conversion's up-front tax bill. We'll start our conversions when my spouse stops pulling so much part-time pay, we'll do it each year up to the 25% tax limit, and hopefully we'll finish before the second pension kicks in. With our frugal lifestyle and hopefully empty-nesting by then, two pensions may make Roth withdrawals superfluous.