Waited Too Long... How to Convince Spouse We are OK to Retire

Congratulations!

Now you'll need to convince the spouse that it's okay to actually spend the money! (Still working on that at my house.)
 
Bayarea_engineer said:
Some people are not as stressed by work like us. They enjoy the hurried work, getting lost in details ...etc.from what i observed, People who can see the big picture get stressed more because they see the silliness of lot of things and wasted time/effort....
Click to expand...

Exchme said:
It sounds like spouse has a high prestige job that gives structure, purpose and a built in social circle. Getting him to make abandon all that is a huge change. There is nothing wrong with wanting to continue to work, Warren Buffett is in his mid 90's and seems to enjoy it, but clearly doesn't "need" to work. ...
Click to expand...
Pondering threads like this, I find need to distinguish between work and career. Work is mandatory training, inane meetings, following regulations, writing annual performance reviews, pretending to be alert in an all-hands pep rally or security seminar. Career is watching one's citation-index rise on Researchgate etc. Applause after delivering a keynote address at a scientific conference. Or for some people, seeing updates to their Wikipedia page. Ideal would be retiring from work, but not from career.

People who have careerless-work have an advantage. Retirement is obvious! Once the money works out, with some cushion, that's impetus to retire... no qualms, no regrets. It's harder for career-people, because even if they detest the work and yearn to leave it, they can't leave their careers, any more than they could leave their bodies.
 
Diogenes said:
Pondering threads like this, I find need to distinguish between work and career. Work is mandatory training, inane meetings, following regulations, writing annual performance reviews, pretending to be alert in an all-hands pep rally or security seminar. Career is watching one's citation-index rise on Researchgate etc. Applause after delivering a keynote address at a scientific conference. Or for some people, seeing updates to their Wikipedia page. Ideal would be retiring from work, but not from career.

People who have careerless-work have an advantage. Retirement is obvious! Once the money works out, with some cushion, that's impetus to retire... no qualms, no regrets. It's harder for career-people, because even if they detest the work and yearn to leave it, they can't leave their careers, any more than they could leave their bodies.
Click to expand...
Great way to put it, work is easy to leave, a career is much harder to let go of. I tried retiring completely in 2021 and found that I was bored and I had gotten a lot of satisfaction solving problems at work and teaching and mentoring younger folks.

I was able to rejoin the company part time just doing the technically challenging parts of the job, leaving all the personnel stuff, sales meetings, etc., to others. Now I'm going to try ramping down my involvement another notch to "casual" where they call when they need help, probably just a handful of hours a week, but as long as it's interesting, they're willing to pay me and I can still do the work, I'll probably stay somewhat involved.
 
Thanks all for the congratulations!. Spent the weekend planning an initial trip, which was great. Need to wrap and wind down. I was asked a couple days afterwards if I'd stay and do consulting work, at least part time.

Sat down and updated the financial view, and we may have to double our original target spending to even get below 99/100% success rate in various calculators.
 
Planning to take a trip right after retiring is a great thing to do! I did that - before retiring set up a trip that left a week after retiring - and I was always so glad that I did. And you get to experience returning home from “vacation” and realizing you don’t have to go back to work!

It turned out to be quite a significant trip. We got really excited joining a photography tour of the Oregon coast, and I discovered a love of landscape photography. We also did some independent travel before and after. It just really helped us get our minds around our new life and all the possibilities.

It’s was kind of a lucky break. We did some other trips and projects afterwards that we thought “nyah, not our thing”. During this process I realized taking time to try different things and exploring was pretty important. Afterwards I called it my “discovery” phase.
 
Last edited:
Now fully exited with the last day following some vacation run down! Woo hoo. Spouse is still trailing behind a few months (I know, see original title).

Spouse has a pension(s) with many different options. I know many take a lump sum and counsel that it is best choice, with the most flexibility. In our case, we have a fair amount ($3.5M) in tax advantaged accounts that will create an RMD problem, even waiting until 75. We are thinking an option that pays 90K for 20 years (with 100% survivorship, no COLA) is a better option than a $1M cashout value or any of the lifetime options. Between deferred comp and passive income streams from the regular investment accounts, plus this money and later SS, we would basically not need to touch capital. We are also in a high tax state.

This seems to be the best choice, due to the spread in the payment amounts (or a 15 year payout at even higher annual payout). I had done some limited calculations to confirm this. Anything consideration I am missing here?

The intangible benefit of this is that it provides peace of mind (vs. lump sum) and higher income in the go-go years. This also makes for straightforward initial international visa qualifications, since they prefer a pension vs. investment accounts.
 
oiseux said:
Now fully exited with the last day following some vacation run down! Woo hoo. Spouse is still trailing behind a few months (I know, see original title).

Spouse has a pension(s) with many different options. I know many take a lump sum and counsel that it is best choice, with the most flexibility. In our case, we have a fair amount ($3.5M) in tax advantaged accounts that will create an RMD problem, even waiting until 75. We are thinking an option that pays 90K for 20 years (with 100% survivorship, no COLA) is a better option than a $1M cashout value or any of the lifetime options. Between deferred comp and passive income streams from the regular investment accounts, plus this money and later SS, we would basically not need to touch capital. We are also in a high tax state.

This seems to be the best choice, due to the spread in the payment amounts (or a 15 year payout at even higher annual payout). I had done some limited calculations to confirm this. Anything consideration I am missing here?

The intangible benefit of this is that it provides peace of mind (vs. lump sum) and higher income in the go-go years. This also makes for straightforward initial international visa qualifications, since they prefer a pension vs. investment accounts.
Click to expand...

Have you compared what her company offers for a 20-year payout versus what you could get with the lump sum plugged into immediateannuities dot com?

They offer quotes for period certain annuities as well.
 
oiseux said:
Spouse has a pension(s) [. . .] We are thinking an option that pays 90K for 20 years (with 100% survivorship, no COLA) is a better option than a $1M cashout value or any of the lifetime options. [. . .] This seems to be the best choice, due to the spread in the payment amounts (or a 15 year payout at even higher annual payout). I had done some limited calculations to confirm this. Anything consideration I am missing here?
Click to expand...
Managing AGI for ACA PTCs. May not change the decision, but something to consider.
oiseux said:
This also makes for straightforward initial international visa qualifications, since they prefer a pension vs. investment accounts.
Click to expand...
That's a factor for taking the $90k/20yr option, and one I wouldn't have thought about. 👍
 
ncbill said:
Have you compared what her company offers for a 20-year payout versus what you could get with the lump sum plugged into immediateannuities dot com?

They offer quotes for period certain annuities as well.
Click to expand...
Yeah, thanks for the reminder, I did this in the past and updated the calcs. its a wash for the 15/20 year guaranteed options, but the company lifetime options are better.

Then I must consider if 20 years earlier, at a higher level, is better than a lifetime with 100% ownership. The extra incremental income earlier in the period will conserve capital until later, in accounts with no RMD. At the end of the 20 year period it produces an incremental 500K (at a 6% earnings rate and about a 5% delta on taxes between sources). Net-net of tax deltas for me it seems to push the "break even" to 29 years for when the lifetime option begins to outpay the 20 year, more up front, option.
 
TickTock said:
Managing AGI for ACA PTCs. May not change the decision, but something to consider.
👍
Click to expand...

Thanks for the reminder on this. I was uncertain if the expansion of the credit beyond the 400% limit was going to persist. But I checked again and sadly (or rather, due to good fortune), in our MAGI situation, it has a small difference, if at all. And that is before I do any potential Roth conversions. Plus the pension also has a partial health care benefit that further limits any benefit.

I do have an option to take a part time contract position that enables an at-cost group plan access that is less than any ACA plan but that involes w@&$ and we all know that is NOT a preferred option.
 
Looks like you've covered all the bases. Enjoy retirement!
 
I would only suggest a sit down with a good tax professional and see if there are ways to blunt the tax bomb that may await you. Other than that, you have great problems! Enjoy your retirement.
 
With $3.5M in tax deferred, Roth Conversions may be more advantageous even than ACA premium credits, but to do either, you need to control your income between now an age 75. So take the pension as a lump sum, put it all in equities, get rid of any fixed income in taxable and hold all your fixed income in tax deferred.

Get one of the good planner programs to make a plan or hire a by-the-hour CFP to make you one - many of the commonly discussed products have advisors that can make a plan for you and then deliver you a working model that you can update and test ideas yourself.

With this giant tax deferred balance, but with some time to work it down, you can save hundreds of thousands of $ doing it that way and that is going to dominate the pension decision.
 
oiseux said:
Wow this took forever, looking back at my posts.... but I've given my notice today! Starting 2025 with a clean slate. A lot of detours along the way....
Click to expand...
Congrats on finally pulling the trigger.

If your invested assets were $8.7M at the start of 2021, you worked and continued to contribute through the 2022 downturn, and then considering how the market has done the past two years, I'm curious where your NW value stands now (and that's not even factoring in appreciation of home values).

You said back in 2021 that your minimum annual spend was $120k, and that surely has gone up over the past 4 years, but with invested assets that are approaching what I can only guess is in the $13-15M range and being DINKS, what's the spending plan look like?

Even if the annual spend increased 50% to $180k, a 4% WR puts you at needing a $4.5M portfolio, and you're likely easily double, maybe close to triple that (and that's not even accounting for the $50k pension).
 
Koolau said:
I would only suggest a sit down with a good tax professional and see if there are ways to blunt the tax bomb that may await you. Other than that, you have great problems! Enjoy your retirement.
Click to expand...
Thank you! Our longtime CPA just had to let us go as they suffered a big medical emergency. So a new one will be ramping

Exchme said:
With $3.5M in tax deferred, Roth Conversions may be more advantageous even than ACA premium credits, but to do either, you need to control your income between now an age 75. So take the pension as a lump sum, put it all in equities, get rid of any fixed income in taxable and hold all your fixed income in tax deferred.
snip
Click to expand...
This is an interesting alternative. We you thinking of taking the lump sum not as a rollover? The financial plan was refreshed which highlighted the tax problem that grows over time. If the bands stay relatively the same and grow per projections, I still have a post 75 problem.

One problem is that I did a bunch of deferred income the last 4 to 5 years that leave me with about 90 to 100K in income for 5 years, plus some more for a couple more. I took a few steps to control the peak, but it forms a baseline of revenue. I will have to examine how much reducing the fixed income portion and increasing the depletion of cash/CG to enable more conversions will net overall. The problem was the portfolio was set to generate quite a bit of fixed income and the target spending already doesn't leave a lot of room to keep conversions in the 24% band.

REIJM said:
Congrats on finally pulling the trigger.

You said back in 2021 that your minimum annual spend was $120k, (snip) and being DINKS, what's the spending plan look like?

Even if the annual spend increased 50% to $180k, snip
Click to expand...
The 120K was a bit of a current minimum required (it drops to 60K in a couple of years). We had targeted 180K but are revising that upwards, past 300K to 400K, all at the lowest risk. The portfolio was conservative with below average gains/losses but yes, we exceeded goals considerably and have a nice problem. Moving from where we were to a fatter life is uncomfortable for now (still naturally frugal), but that is a psych problem for other threads. We also need to look at future giving more closely. But perhaps trying to over manage or save too much to optimize future taxes is not a good thing either.
 
I think you're just going to need to prioritize the "issues" you face, tax wise/high-MAGI-wise. That's why I suggested a Certified Financial Planner/tax expert.

One issue I think you can probably forget about is taking advantage of ACA. I think that ship has sailed in your case.

My SWAG is that Exchme has suggested a good path forward. It will give you a bit of breathing room to do a LOT of Roth conversions before RMDs kick in.

Let's face it. You have a wonderful "problem" to deal with here. There ARE good, bad and middling ways to deal with it, but you need to either put pen to paper with a good tax reference book OR get a professional to help you look for the best of a "bad" tax situation. Heh, heh, I'll trade you tax situations/retirement stash if you would like. :cool:


Or you could ignore it all and just pay whatever taxes and enjoy your "Fat FIRE" retirement. I recommend you explore tax "control" but you have plenty of money to ignore it all. Enjoy!!
 
Koolau said:
snip

My SWAG is that Exchme has suggested a good path forward. It will give you a bit of breathing room to do a LOT of Roth conversions before RMDs kick in.

Let's face it. You have a wonderful "problem" to deal with here. There ARE good, bad and middling ways to deal with it, but you need to either put pen to paper with a good tax reference book OR get a professional to help you look for the best of a "bad" tax situation. Heh, heh, I'll trade you tax situations/retirement stash if you would like. :cool:
Click to expand...

The CFP is in place but the CPA is being swapped out (due to a medical crisis). The Roth conversions were on the horizon but this year will be the year to get serious (too much regular income this year to act). I'll be looking at Exchme's suggestions on the rest of the passive income and see with a new CPA what makes sense to expand the room for conversions. The taxable interest is a clear one, for me

Oh and sorry, don't expect a call on where to transfer the balances :D
 
You must log in or register to reply here.

Similar threads

F
Why Wouldn't I take Social Security Early for me and my Spouse
2 3
Koolau
Koolau
J
50 yo, ready to retire, two teens, wife will continue to work.
NeilDH
NeilDH
H
Keep Doing the Math
2
RetiredHappy
R
J
French, 58, willing to retire in France in coming years
jmf11
J
C
Retire at 58 w/ $4M or retire at 60 w/ $5M?
4 5 6
Closet_Gamer
C

Latest posts

Back
Top Bottom