When Is A Retiree Considered Wealthy?

[ShokWaveRider]

It’s just for fun. If folks don’t find it fun, that’s fine too, don’t do it.

Like most everything we do on this site and others too.

 

[pacergal]

We don't have "millions" saved, but we have enough. Enough for us, and that's all that matters.
And our pensions + social security would move us up a couple notches.
We are definitely Blessed and Thankful.

 

[GenXguy]

People?
What do PEOPLE have to do with it?
It's a matter of whether YOU think you are wealthy, with income and assets that exceed your needs...

No, it doesn't mater whether you think you are wealthy, either. Just make sure you live within your means and enjoy life without worrying about some threshold of wealthiness you think you should meet.

 

[ShokWaveRider]

I think it is a karma thing. It makes one feel better inside to know they are doing just fine, no matter where on the actual scale one may fall. Personally, I sleep better, and the scales give me an idea of where we are with reference to the median, giving us that much more confidence.

 

[aja8888]

We don't have "millions" saved, but we have enough. Enough for us, and that's all that matters.
And our pensions + social security would move us up a couple notches.
We are definitely Blessed and Thankful.

No real big pot of gold here either.....

We were OK with just SS (two of us), savings and no debt until DW passed away last December. Now I am faced with double the income tax cost and 1/2 the income going forward. I'll be OK but that event was a wakeup call.

 

[jazz4cash]

We had our kids late in life. So, I had the Vette, Opal Rallye Manta, a Mazda RX2 (rotary - a real stealth stormer) and '56 Chevy with a Corvette engine early in life. ren't ashamed to be taken to school in that. Ah, memories.

Sheese, from that list I could barely muster the Opel Manta Coupe. The paint job, rallye guages, and rear axle package to make it the Rallye version was too rich for my pocket.

 

[Freedom56]

All that matters now for retirees is staying healthy. If you retired early, you won the game. Just enjoy life.

 

[TheWizard]

No real big pot of gold here either.....

We were OK with just SS (two of us), savings and no debt until DW passed away last December. Now I am faced with double the income tax cost and 1/2 the income going forward. I'll be OK but that event was a wakeup call.

I don't understand how you can have double the income tax AND half the income going forward.
Usually it's one or the other, more or less...

 

[Romer]

I don't understand how you can have double the income tax AND half the income going forward.
Usually it's one or the other, more or less...

I am guessing 1 SS check vs two and single rates vs married. That would be half the income and double the taxes

 

[Dtail]

All that matters now for retirees is staying healthy. If you retired early, you won the game. Just enjoy life.

That's it.
I always tell my fellow retirees that if the money and health is fine, then mostly everything else falls into place.

 

[aja8888]

I am guessing 1 SS check vs two and single rates vs married. That would be half the income and double the taxes

Exactly within a few percent is my estimate. Since most of the "savings" was in my fairly large IRA, the RMD amount is up a bit as when you get older, the IRS requires you take a bigger percentage draw each year. Throw in the "single' penalty and I about pay double in Federal tax this year.

 

[statsman]

Exactly within a few percent is my estimate. Since most of the "savings" was in my fairly large IRA, the RMD amount is up a bit as when you get older, the IRS requires you take a bigger percentage draw each year. Throw in the "single' penalty and I about pay double in Federal tax this year.

Speaking of RMDs, if the IRA balance(s) of the survivor increases substantially due to inheriting the deceased spouse's IRA(s), the survivor's RMD is also applied to the higher single rax rates.

 

[audreyh1]

FWIW that’s half the SS maybe (depending), but not half the total income.

 

[GenXguy]

For a single person in their mid 50's with no pension, I will say $2M in stash is not wealthy, even if the house is paid for. Maybe $4M, particularly if a lot of it can be drawn from without generating taxable income.

 

[GenXguy]

Exactly within a few percent is my estimate. Since most of the "savings" was in my fairly large IRA, the RMD amount is up a bit as when you get older, the IRS requires you take a bigger percentage draw each year. Throw in the "single' penalty and I about pay double in Federal tax this year.

I feel your pain. I've been paying that single penalty (and no tax credits for kids, either) all my w*rking years!

 

[aaronc879]

You can be wealthy at $500k too if your expenses satisfy your lifestyle.

Yes, it is all relative. If you have $3M then $3.2M is probably not wealthy in your eyes but if you have $200K then $3.2M is probably wealthy. I have less than $500K and will probably never work again. I am 43. I don't consider myself wealthy but if I had $1M I would and $3.2M is stupid wealthy. If I had that money I would be sharing it.

 

[Koolau]

No real big pot of gold here either.....

We were OK with just SS (two of us), savings and no debt until DW passed away last December. Now I am faced with double the income tax cost and 1/2 the income going forward. I'll be OK but that event was a wakeup call.

Thanks for sharing this. It's something all of us "coupled" people need to keep in mind and plan for.

 

[aja8888]

Thanks for sharing this. It's something all of us "coupled" people need to keep in mind and plan for.

While my tax rate increased and I will pay substantially more in taxes for 2023, I am not spending to pay for her Medicare, Supplemental, and drug costs. Due to her poor health, we were spending several $K per year for some fancy drugs over and above Part D. There are pluses and minuses, but for the most part, being single is costlier than being a couple, tax wise.

 

[TheWizard]

While my tax rate increased and I will pay substantially more in taxes for 2023, I am not spending to pay for her Medicare, Supplemental, and drug costs. Due to her poor health, we were spending several $K per year for some fancy drugs over and above Part D. There are pluses and minuses, but for the most part, being single is costlier than being a couple, tax wise.

Perhaps, but that depends on how they arrange their finances.
A couple might each bring $60,000 of Income into the marriage.
But if the first to pass leaves 100% of tax-deferred assets to survivor and 100% of pension/annuity to survivor, then yes, the survivor will have way more than 50% of the previous joint income.

So plan ahead to impoverish the survivor and reduce the taxes to be paid...

 

[aja8888]

Perhaps, but that depends on how they arrange their finances.
A couple might each bring $60,000 of Income into the marriage.
But if the first to pass leaves 100% of tax-deferred assets to survivor and 100% of pension/annuity to survivor, then yes, the survivor will have way more than 50% of the previous joint income.

So plan ahead to impoverish the survivor and reduce the taxes to be paid...

Neither one of us would have impoverished the other in our situation, no matter who passed first. I am really not complaining, and I would love to have my wife be here instead of just looking at her belongings. I'm just mentioning the tax situation if one spouse leaves the party at an advanced age. None of this was fun getting to this point.

And good point about the planning for this. Not many people think through all the possibilities until it's too late.

 

[Koolau]

While my tax rate increased and I will pay substantially more in taxes for 2023, I am not spending to pay for her Medicare, Supplemental, and drug costs. Due to her poor health, we were spending several $K per year for some fancy drugs over and above Part D. There are pluses and minuses, but for the most part, being single is costlier than being a couple, tax wise.

This fact has been gnawing at me of late. I assume I'll go first and DW will be "rich" (scratch that) in possession of a lot of taxable financial vehicles. Even if she doesn't think she's rich, the IRS will thinks so. I need a plan. Scratch that. SHE needs a plan.

 

[aja8888]

This fact has been gnawing at me of late. I assume I'll go first and DW will be "rich" (scratch that) in possession of a lot of taxable financial vehicles. Even if she doesn't think she's rich, the IRS will thinks so. I need a plan. Scratch that. SHE needs a plan.

Sometimes, when the husband passes before the wife, her next husband can help her manage what funds and assets you left her.

 

[Car-Guy]

^^^^^
That works exceptional well when the husband leaves the wife really well off. That way she can find lots of help.

 

[Koolau]

Sometimes, when the husband passes before the wife, her next husband can help her manage what funds and assets you left her.

You HAD to bring that up.

 

[Gumby]

I'm assuming Lorenzo the pool boy will have some good ideas.