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Old 11-25-2017, 05:29 PM   #21
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Some of the things that I was tipped off, by posts here, to investigate prior to retirement:

* Not a bad idea to put a HELOC in place prior to retirement. Even if you never use it - it's nice to have a line of credit you can use if needed... especially if you want to tap IRA/401k (taxable) spending over multiple years. (A lot of our funds are in pretax accounts... so withdrawing a big chunk has tax consequences AND could eliminate our ACA tax credits.) We haven't had to use it - but it's there... just in case.

* As someone else mentioned - get any expensive medical/dental/eye exams/glasses taken care of while you have employer benefits for this stuff. We moved a replacement crown in sooner for DH since we knew we'd be going off of the cobra dental.

* Along the same lines - consider doing any expensive planned home improvements while you can cash flow them from employment income. We finished the bulk of our kitchen remodel before I pulled the plug.

Quote:
Originally Posted by 43210 View Post
FAFSA/CSS issues may rarely affect retirees, but it will affect me (I'll do a thread on it some time), and it can add up to 47% to marginal rates on income, and may interact with other stuff, and there's up to 5.64% per year asset tax, so fo me this is the biggest tax bomb of them all (but at least I know it exists).
You're not alone having kids college expenses ahead of you. I don't know that I'd consider FAFSA/CSS stuff a "tax" - but there is a system and sometimes you can structure your assets/income to reduce the college costs and increased the amount of financial aid offered by a school. We recently met with a specialist on EFC/FAFSA/CSS stuff. Our low retirement income helps us. Unfortunately, on the CSS profile - our granny flat rental in our backyard counts heavily against us. We've got enough in their 529's to mostly cover the public UC/CSU colleges... if that's where they end up.

I'll be interested in your thread on the topic. There are several regulars looking at this stuff in the nearterm or just through it. I've got a HS Junior and a HS Freshman - so this is a subject I'm really focused on these days.
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Old 11-25-2017, 07:01 PM   #22
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Part of our planning has been to actually live on our planned retirement budget. We did it for a couple of quarters a year starting around 3 years ago, and since the end of 2016 have been living on it. This has helped us fine tune our spending categories. Certainly not an exact science but, along with looking at our past spending trends, it has made us a lot more comfortable with our retirement spending plans.
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Old 11-26-2017, 07:37 PM   #23
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Quote:
Originally Posted by 43210 View Post
FAFSA/CSS issues may rarely affect retirees, but it will affect me (I'll do a thread on it some time), and it can add up to 47% to marginal rates on income, and may interact with other stuff, and there's up to 5.64% per year asset tax, so fo me this is the biggest tax bomb of them all (but at least I know it exists).
Quote:
Originally Posted by rodi View Post
You're not alone having kids college expenses ahead of you. I don't know that I'd consider FAFSA/CSS stuff a "tax" - but there is a system and sometimes you can structure your assets/income to reduce the college costs and increased the amount of financial aid offered by a school. We recently met with a specialist on EFC/FAFSA/CSS stuff. Our low retirement income helps us. Unfortunately, on the CSS profile - our granny flat rental in our backyard counts heavily against us. We've got enough in their 529's to mostly cover the public UC/CSU colleges... if that's where they end up.

I'll be interested in your thread on the topic. There are several regulars looking at this stuff in the nearterm or just through it. I've got a HS Junior and a HS Freshman - so this is a subject I'm really focused on these days.
I've just started a thread on the topic
Kids in college after retirement (lower income version)
http://www.early-retirement.org/foru...ion-89513.html
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Old 11-26-2017, 10:16 PM   #24
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Quote:
Originally Posted by 43210 View Post
I've just started a thread on the topic
Kids in college after retirement (lower income version)
http://www.early-retirement.org/foru...eply&p=1970102
Thanks for starting the thread.

The link above didn't go to the right place for me.

The link I think you want is:

http://www.early-retirement.org/foru...ion-89513.html
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Old 11-26-2017, 11:07 PM   #25
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^ (link fixed)
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Old 11-27-2017, 11:14 AM   #26
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Thanks for the comments/suggestions everyone. This is very helpful.
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Old 11-27-2017, 11:25 AM   #27
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The retiree health care thing is pervasive at my Megacorp. Very few people know it exists. It is full pay, no discount, but the network is excellent compared to similar ACA plans. Well worth it if you don't need the subsidy. I'm not sure why Megacorp doesn't talk about it. They used to list it in the benefits booklet, now it is buried on some web page somewhere. I guess not too many people retire, they leave first.

The other thing to mention is possible access to 401k at 55. Not all plans allow it, but those that do it can really be a huge help.
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Old 11-27-2017, 02:19 PM   #28
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OP....I see where you said you will not have a pension ....nor SS. How is this possible? I may have missed it but even self employed people pay into the SS system. How is it that you will not qualify for SS? Do you not have 40 quarters of employment? Just curious and I must be missing something?
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Old 11-27-2017, 04:22 PM   #29
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Quote:
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OP....I see where you said you will not have a pension ....nor SS. How is this possible? I may have missed it but even self employed people pay into the SS system. How is it that you will not qualify for SS? Do you not have 40 quarters of employment? Just curious and I must be missing something?
I have never paid into SS, (nor pension). Instead my employer has a 401a. Probably about 5% of workers are not in SS.
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Old 11-27-2017, 10:25 PM   #30
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One thing I didn't plan on was my wife's reaction to getting subsidized health care - she hates it, especially having our kids on medicare. Fortunately for her, but unfortunately for me, we sold a few rental houses this year and the capital gains kicked us out of the subsidy for next year so we will get to pay an additional $500'ish per month.
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Old 11-28-2017, 05:34 AM   #31
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One thing our fee based FA did was to force us to admit the probable need for a line item in the budget for"helping out" adult kids. As much as we'd like to think that they all are over 21 and on their own, several of the 5 still seem to need the odd extra 300-500 bucks once or twice a year. Not major but still rather than being in denial about it we put it in the budget. I really hated that he was right 😁.
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Old 11-28-2017, 07:06 AM   #32
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Quote:
Originally Posted by Backpacker View Post
One thing our fee based FA did was to force us to admit the probable need for a line item in the budget for"helping out" adult kids. As much as we'd like to think that they all are over 21 and on their own, several of the 5 still seem to need the odd extra 300-500 bucks once or twice a year. Not major but still rather than being in denial about it we put it in the budget. I really hated that he was right 😁.
Ugh....I guess I need to revise my retirement budget as well as we have 3 over 21 adult kids 'living on the edge'. In fact, we just heard 'through the grapevine' that one of them isn't driving his own car because he allowed his license tabs to expire.
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Old 11-28-2017, 08:38 AM   #33
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I think tax diversification is often over looked. Many discussions on the ER forum have people disagreeing because one is using after tax funds and the other TIRAs. Both have good points from their perspective. I think many people don't really plan out there ER tax diversification, myself included.
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