Hello from Phoenix

[crazy connie]

Been enjoying all the insights and humor here for a few months.  Time to jump in now!  So, I will share the basic and perhaps not so astounding tidbits about me.

Widowed 16 years, raised 2 kids (son 24 in college, daughter 22 graduated and job hunting now).  Worked 27 years for same outfit which had numerous name changes and once I was pension eligible for 30 days...  TOOK THE MONEY and RAN!!!

Enjoyed 7 months off and made the yard pretty!  Friend asked for some help and I jumped in...  Got enough $$'s and picked up a new car to enjoy the ER times with.

Not taking dist from pension rollover or 401K funds yet.  Still gathering info and working on decisions.  Really lucky and have good Health Insurance for reasonable premiums (unless the company goes BK).

Debating IRA conversion to Roth, when to sell home (equity rich with more of a payment than I want to make), where to settle, how to make new friends, how to pass $$ to kids...  All the usual ER decisions!!!

Love to cook and looking forward to enjoying a more simple life.

Crazy Connie in Sunshine Land 

 

[Dawg52]

Congrats! I will be in your shoes before long and look forward to it. I bet it is hot in Phoenix.

 

[crazy connie]

Thank you! Once you get there... It seems to have taken no time! Hot? Only 112 today with 5% humidity... Yea, it's a dry heat!!!

 

[Leonidas]

Gee Connie, it seems like you've got it wired pretty well. Shouldn't you have named yourself Cool Connie or something like that?

I'm curious what your plans are for passing money on to your kids. Mine are younger than yours (17 & 14), but I plan to live to see them to at least the same place where yours are now. Other than the usual tax concerns, I'm concerned that anything they get is a good thing in their life rather than a bad thing.

 

[AltaRed]

I'm curious what your plans are for passing money on to your kids.  Mine are younger than yours (17 & 14), but I plan to live to see them to at least the same place where yours are now.  Other than the usual tax concerns, I'm concerned that anything they get is a good thing in their life rather than a bad thing. 

Depends on timing. Getting a windfall before people (children) have established their careers is a huge disincentive to tough it out. Certainly, you would want minors and college age children to receive a 'living allowance' in order to position themselves for the working world, i.e. college education, and that can be done via instructions in your will and setting up of a trust for that purpose. But a windfall could stop education efforts in their tracks except for perhaps majors in good parties and fast cars. DW and I purposely made provisions for our children's well being, but no windfall transfer until 30.... and we are now debating that once again since they have now turned 30!

 

[crazy connie]

Leonidis,
Crazy Connie was a nickname from the work world when we had 4 Connie's in the office and had calls coming in. Way back in the blue collar days. It worked then and I figured I can now be "crazy like a fox" Connie... Simple for me!

As for my kids getting the funds when I am done, that will be a multi pronged approach. Debatining buying down in housing within the next 3 to 4 years (tired of cleaning & mtc on 3600 sq feet!). That will eliminate all payments from my life and leave me with more money to live off of. Looking to transistion a good chunk say perhaps 300K from TIRA to Roths with each child as beneficiaries. Still gotta nail that one down on the taxes aspect. As I am now 51, that can be done at my leisure over several years. If I never have to touch those, well we all know the power of compunding!!! With current cash pile and additional infusion from home sale that may be enough to live off of and pay conversion taxes with. If not I would still have in excess of $500K in my TIRA and could do a 72T. Then as a widow, I can collect 1/2 on my husbands SS at age 60.


I will be looking here for advice on this in the coming months as well as meeting with my CPA. Right now I am on a collision course with the IRS and the Estate Tax limit of 2M. My thought is 2 ROTHs allowed to compound will be best for a stretch for the kids and the life insurance will cover any overage for taxes. When I am done with life and no longer need it the housing can be disposed of and they would both get a nice mid-life infusion of cash.

I would also like start the annual gifting of up to 12K (land, stocks or cash) each within the next 2 or 3 years. That way I can offer guidance and observe.

Leonidas,

I guess I am pretty lucky with kids. They are both level headed and we have lots of financial discussions. I am a firm LBYMer and they also value that. My daughter is working to pay off some CC debt from her final year of schooling and has an eye to get a Masters on her employer's dime. My son lived on 8K last year and only came pantry shopping a few times! All of us enjoy shopping at yard sales and thrift shops. Daughter is targeting ER at 40. Son is artistic and may always create which does produce income.

I may re-evaluate and tie up some funds till later in their life... Not sure yet. Probably ought to create a trust for the house and coach the kids on that for their future as well. One concept I know they both have down rock solid is "SOLE & SEPARATE PROPERTY". They know that what they inherit (unless I spend all or give to the Humane Society!) is for their long term benefit... Not to ever be co-mingled and lost in a divorce action!

 

[Ed_The_Gypsy]

CC,

I like the idea of setting up retirement accounts for the kids. At first blush, two Roths looks like a good idea to me. Or, simpler still, make them benficiaries of your Roth. Convert your other retirement assets to your Roth.

Based on my experience, giving money to kids before they are 55 is a bad idea.

Ed

 

[crazy connie]

CC,

I like the idea of setting up retirement accounts for the kids.  At first blush, two Roths looks like a good idea to me.  Or, simpler still, make them benficiaries of your Roth.  Convert your other retirement assets to your Roth.

Based on my experience, giving money to kids before they are 55 is a bad idea.

Ed   

Ed,
The Roth conversion will be into 2 accounts with each child as a beneficiary... that way the kids (with inherited Roths) can stretch them. My kids are more financially savvy than the vast majority of 50 year olds! That is only reason I am going down this road. May tie up other assets until they are over 40. Trying to make a plan for now & later!

We are all going to take a class at community college this fall or winter that daughter took 2 years ago. Family & Financial Fitness is the name and hope we get the same instructor. She came home after every class and we discussed it when she took it 2 years ago. She was amazed at how much of the info I was right on with and had already intro'd her to!

 

[Nords]

Right now I am on a collision course with the IRS and the Estate  Tax limit of 2M.

Eh, you should be even more worried about watching your back in 2010...

 

[crazy connie]

Nords,

How so? I know then (unless they change it) we can convert any amount we can afford the tax on regardless of income limits and spread the tax over the next 2 years isn't it? Am I missing something?

Thanks,

Crazy Connie

 

[Nords]

How so?  I know then (unless they change it) we can convert any amount we can afford the tax on regardless of income limits and spread the tax over the next 2 years isn't it?  Am I missing something?

Sorry, I was making an older joke from 2003's tax legislation. I forgot that the new Roth IRA conversion limit removal is also 2010.

I was referring to the fact that millions of wealthier Americans are going do die in 2010, whether or not they're helped along by their heirs' realization that the inheritance tax will be repealed for that year... before being reinstated in 2011.

 

[crazy connie]

Nord,

AHHHHH Ok I gottcha! I figure there will be mass suicide party in the final months of 2010 if the feds don't change that! But then the SS system would not pay bennies to all those who check out!