Hello, first post here. I am 60 years old and trying to figure out when I can/should retire. Part of that is trying to understand a future inheritance from my mother.
Mom is 86 years old, multiple medical problems but all managed well, lives in an assisted living facility.
She currently has:
$992,000 in a traditional (qualified) 401K, of which I am the beneficiary
$640,000 in a (non-qualified) retirement investment vehicle that I understood when it was explained to me but now am fuzzy on the details of- I think the gist is that it consists of a former annuity that got redone recently to extend to age 100 for her + a former Roth IRA. The bottom line is: this money probably won't ever be spent by her, I am the beneficiary, future distributions are not taxed, I can take this $ over my lifetime (not 10 years), and I believe this account is not subject to RMD so she is not planning to spend this down unless she lives to >95 years of age.
$110,000 in a brokerage account, this is Transfer on Death to me
$107,000 in a traditional IRA of which my niece is the beneficiary- this is the accumulated excess of her RMD
She also has a $411,000 "return of capital" provision with her CCRC of which I am the beneficiary
Mom's current expenses after SS are around $120,000/yr, 70% of which is paid by her LTC insurance until Aug 2027, after which the LTC benefit will have been fully paid out and she will start paying all of her expenses out of her traditional 401K. I expect it would take her ~8-9 years to spend that down to $0.
So I think what this boils down to is:
If my Mom passed away tomorrow, I would inherit an ~$1,000,000 401K which I would need to liquidate over 10 years and pay taxes on (this would cover most of my/our living expenses) + $640,000 that I can to liquidate over my lifetime and is not taxable + $110,000 brokerage account + $411,000 return of capital from the CCRC = ~$2.1 million
If my Mom passed away in 10 years, I would inherit $0 in the 401K + the value of the non-qualified retirement investment vehicle with 10 years of returns ~$1.2 million + $411,000 + no idea about the brokerage account but let's say $0 = ~$1.8 million.
If Mom lives >10 years, she will likely be in a nursing home and will spend down that non-qualified account, so let's guess $500,000 would be left + $411,000 = ~$900,000. No one in our family has lived to >95 years so this feels unlikely.
We (husband and I, no kids) have $985,000 in a traditional 401K, ~$150,000 in Roth 403b and 457b, $105,000 in HSAs, $100,000 in cash, house fully paid for and worth around $420,000. Husband is 65 and will enroll in Medicare this year. I am still working. Our annual expenses are around $90,000. Husband will take SS based on my earnings. If I take SS at 62, our total is $4813. If age 67, $6204. If I work to age 67, I also get a pension of $3200/mo.
We are currently putting ~$6000/month into Roth 403b/457b + $812 into HSA (will decrease in June when husband enrolls in Medicare) + contributing to a pension.
It feels like we don't have enough $ ourselves but I think my Mom's situation changes our math compared to other people's math.
Option 1: Semi retire now and work relief 1/4 time which would gross around $120,000 (I would not love this work, but its only 1/4 time). ACA insurance would be $1000/mo for me (Bronze). Medicare is around $360 for husband. Start SS at age 62. I would get a pension and vacation payout of around $53,000
Option 2: Retire at 62 and start SS then. I assume ACA insurance would be slightly more costly then. Pension and vacation payout would be $83,000
Option 3: Retire at 67 and start SS then, take the pension. Obviously we'd be very set financially if I went this route but I don't want to work that long unless I can covert my job into something close to semi-retirement from age 62-67, which is not impossible.
Questions:
1. Is retiring at 60 too soon for my scenario? I worry about not having "extra" for major health care expenses
2. If retiring at 60 is too soon, am I right that I can swing it at age 62? We expect $1.5 million in retirement accounts then, about $550,000 of which will be Roth + $150,000 in HSAs.
Spouse is a househusband and not working.
Mom is 86 years old, multiple medical problems but all managed well, lives in an assisted living facility.
She currently has:
$992,000 in a traditional (qualified) 401K, of which I am the beneficiary
$640,000 in a (non-qualified) retirement investment vehicle that I understood when it was explained to me but now am fuzzy on the details of- I think the gist is that it consists of a former annuity that got redone recently to extend to age 100 for her + a former Roth IRA. The bottom line is: this money probably won't ever be spent by her, I am the beneficiary, future distributions are not taxed, I can take this $ over my lifetime (not 10 years), and I believe this account is not subject to RMD so she is not planning to spend this down unless she lives to >95 years of age.
$110,000 in a brokerage account, this is Transfer on Death to me
$107,000 in a traditional IRA of which my niece is the beneficiary- this is the accumulated excess of her RMD
She also has a $411,000 "return of capital" provision with her CCRC of which I am the beneficiary
Mom's current expenses after SS are around $120,000/yr, 70% of which is paid by her LTC insurance until Aug 2027, after which the LTC benefit will have been fully paid out and she will start paying all of her expenses out of her traditional 401K. I expect it would take her ~8-9 years to spend that down to $0.
So I think what this boils down to is:
If my Mom passed away tomorrow, I would inherit an ~$1,000,000 401K which I would need to liquidate over 10 years and pay taxes on (this would cover most of my/our living expenses) + $640,000 that I can to liquidate over my lifetime and is not taxable + $110,000 brokerage account + $411,000 return of capital from the CCRC = ~$2.1 million
If my Mom passed away in 10 years, I would inherit $0 in the 401K + the value of the non-qualified retirement investment vehicle with 10 years of returns ~$1.2 million + $411,000 + no idea about the brokerage account but let's say $0 = ~$1.8 million.
If Mom lives >10 years, she will likely be in a nursing home and will spend down that non-qualified account, so let's guess $500,000 would be left + $411,000 = ~$900,000. No one in our family has lived to >95 years so this feels unlikely.
We (husband and I, no kids) have $985,000 in a traditional 401K, ~$150,000 in Roth 403b and 457b, $105,000 in HSAs, $100,000 in cash, house fully paid for and worth around $420,000. Husband is 65 and will enroll in Medicare this year. I am still working. Our annual expenses are around $90,000. Husband will take SS based on my earnings. If I take SS at 62, our total is $4813. If age 67, $6204. If I work to age 67, I also get a pension of $3200/mo.
We are currently putting ~$6000/month into Roth 403b/457b + $812 into HSA (will decrease in June when husband enrolls in Medicare) + contributing to a pension.
It feels like we don't have enough $ ourselves but I think my Mom's situation changes our math compared to other people's math.
Option 1: Semi retire now and work relief 1/4 time which would gross around $120,000 (I would not love this work, but its only 1/4 time). ACA insurance would be $1000/mo for me (Bronze). Medicare is around $360 for husband. Start SS at age 62. I would get a pension and vacation payout of around $53,000
Option 2: Retire at 62 and start SS then. I assume ACA insurance would be slightly more costly then. Pension and vacation payout would be $83,000
Option 3: Retire at 67 and start SS then, take the pension. Obviously we'd be very set financially if I went this route but I don't want to work that long unless I can covert my job into something close to semi-retirement from age 62-67, which is not impossible.
Questions:
1. Is retiring at 60 too soon for my scenario? I worry about not having "extra" for major health care expenses
2. If retiring at 60 is too soon, am I right that I can swing it at age 62? We expect $1.5 million in retirement accounts then, about $550,000 of which will be Roth + $150,000 in HSAs.
Spouse is a househusband and not working.
What I am trying to say is that it is perfectly OK to expect an inheritance to help with retirement.
