Recommendations for what to do fianacially in retirement...

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Topic Author
Lemonaid56
Posts: 193
Joined: Thu Mar 03, 2016 2:15 pm
Location: Maine

Recommendations for what to do fianacially in retirement...

Post by Lemonaid56 »

Really appreciate all the advice I've gotten and read from this forum. I think I started here in 2016 and through the many great people here I was confident enough to take control of our retirement planning and we have accumulated quite well with very little stress because of the support here.

Now we are looking forward to the next phase. I've been telling my wife for the last few years that she could retire anytime and we'd get by. Now she has decided to retire next year when she will be 59.5. I am on disability pay from my work due to an accident back in '07 so I continue to get half pay and medical and contribute to my 401K for an unspecified amount of time in the future.

My question is where do I turn for advice on what to do with our finances now? Leave her 401K with Merrill? Mine with TRowe? Have a taxable with Fido also.
I have a pension through my company I can collect whenever I want to claim retirement. Was going to start my SS withdrawl at 62 since its only about 1500 a month.
She has no pension and her SS is significantly higher due to being a professional so I'd like to wait until she hits 67. She wants to start claiming asap in case of health problems and wanting to get as much of it as possible.
We have approx 3 mill set aside over all accounts so we could get by on a 3% withdrawl without SS or pension. Definitley less withdrawl if we include SS and pension.
My question is- Where should we draw from first? I thought taxable and at some point take from our 401ks . But when the switch? As others have stated it will seem so strange taking the money out and seeing the amount go down I feel its going to be stressful.
Should we find a fee based financial planner to get us started on a track that I can take over and maintain? What about taxes? When do they get paid? What books are you guys reading that could give me some advice , keeping in mind I'm not the most financially astute but have a grasp on the basics thanks to you people.
WyomingFIRE
Posts: 146
Joined: Wed Sep 12, 2018 10:44 am

Re: Recommendations for what to do fianacially in retirement...

Post by WyomingFIRE »

To begin, congratulations. You are financially astute whether you recognize it or not. And financially you appear to be in fine shape. Maybe the only unknown is how her medical would be covered until age 65.

A fee-based advisor might be perfect in your situation; I have never worked with one, so I cannot answer your specific questions regarding them.

In terms of withdrawal strategies, you might want to spend some time with i-ORP extended: https://www.i-orp.com/Plans/extended.html. If nothing else, it will give you some ideas and perhaps arm you with additional questions to ask if you end up working with an advisor.

Best wishes to you and yours!
Lou354
Posts: 700
Joined: Sun Apr 03, 2016 10:51 pm

Re: Recommendations for what to do fianacially in retirement...

Post by Lou354 »

Jane Bryant Quinn, “How to Make Your Money Last” is a good resource.

This site is a useful tool to help decide when to start Social Security benefits:
https://opensocialsecurity.com/
User avatar
Wiggums
Posts: 4068
Joined: Thu Jan 31, 2019 8:02 am

Re: Recommendations for what to do fianacially in retirement...

Post by Wiggums »

Lemonaid56 wrote: Tue Jun 15, 2021 7:40 am She has no pension and her SS is significantly higher due to being a professional so I'd like to wait until she hits 67. She wants to start claiming asap in case of health problems and wanting to get as much of it as possible.
It’s not unusual for people to express a desire to collect Social Security early with the goal of ensuring that you get out of Social Security what you paid in. From a retirement planning perspective, the higher wage earner should delay Social Security why are they spouse can claim early or full retirement age. You can use a calculator to help you determine the optimum Social Security claiming age.

In terms of withdrawal strategies, you might want to spend some time with i-ORP extended:
https://www.i-orp.com/Plans/extended.html.

If nothing else, it will give you some ideas and perhaps arm you with additional questions to ask if you end up working with an advisor.

Jane Bryant Quinn, “How to Make Your Money Last” is a good resource.

This site is a useful tool to help decide when to start Social Security benefits:
https://opensocialsecurity.com/
User avatar
Topic Author
Lemonaid56
Posts: 193
Joined: Thu Mar 03, 2016 2:15 pm
Location: Maine

Re: Recommendations for what to do fianacially in retirement...

Post by Lemonaid56 »

Thank you so much for the quick responses.

Ordered the book and it will be here in the next 2-5 days , on sale in paperback no less.
Had not seen I-orp Extended version before.Looks like something interesting to play around with.
Open SS I had bookmarked but not taken a look at. This will be something for us to go over.

It bothers me to seek financial advice from a paid source since our experience years ago, just before I joined here with were with this forum we had an advisor - she only made money when we made money she would say just like the commercial. Yet when I did my taxes it seemed she was still making the same chunk or better even when her advice wasn't sound. I know from here that Fee based advisers are supposedly better but I find myself less trustful as I've gotten older. On the other hand taking our money back out of the plan using good tax strategy may not be my strong suit and I don't mind recognizing that.
I tried a Google search of the forum for what others have done but couldn't seem to get anywhere. Any links you guys have found resourceful would help also.
gips
Posts: 912
Joined: Mon May 13, 2013 5:42 pm

Re: Recommendations for what to do fianacially in retirement...

Post by gips »

if you’re willing to invest time reading, learning and asking questions, there’s no need for a fee-based advisor. otoh,
if trust is the issue, rick ferri is a respected long-time member here who provides fee-based planning. if i wanted a second opinion on our strategy, i wouldnt hesitate to reach out to rick (and we are considering doing so).

best,
esteen
Posts: 339
Joined: Thu May 23, 2019 12:31 am

Re: Recommendations for what to do fianacially in retirement...

Post by esteen »

Watch out for confusing lingo - "fee-based" advisors include commission-based salespersons. Fee-only advisors are better, but include AUM-based fees which are probably not worth it at your stage. If I were you I'd look for an advisor who will charge an hourly rate or fixed retainer, with no commisions, no matter what your asset base. Those are not as easy to find.
backpacker61
Posts: 769
Joined: Wed May 20, 2020 6:36 am

Re: Recommendations for what to do fianacially in retirement...

Post by backpacker61 »

Lemonaid56 wrote: Tue Jun 15, 2021 7:40 am My question is- Where should we draw from first? I thought taxable and at some point take from our 401ks . But when the switch? As others have stated it will seem so strange taking the money out and seeing the amount go down I feel its going to be stressful.
Should we find a fee based financial planner to get us started on a track that I can take over and maintain? What about taxes? When do they get paid? What books are you guys reading that could give me some advice , keeping in mind I'm not the most financially astute but have a grasp on the basics thanks to you people.
I think that you can do just fine managing this on your own.

Even if you make some mistakes, they will be your mistakes, and at least you aren't paying someone else to implement their mistakes.

I like this simple brochure that I think has a lot of good sense ideas.

http://crr.bc.edu/wp-content/uploads/20 ... k_0721.pdf

If I were in your situation, I would consider filing for your pension to age 72 (actually, to receive your first pension payment by April 1 of the year following the year you turn 72; assuming the amount you would receive will go up each year you delay), and your wife should probably delay Social Security to age 70.

Your first source of retirement income should be the dividends, capital gains distributions, and interest you are already receiving (and paying taxes on). Then sell securities for income you need beyond that. Depending on your tax bracket, it might make some sense to take distributions from your pre-tax accounts (traditional IRA's, 401K's, etc).
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
User avatar
Topic Author
Lemonaid56
Posts: 193
Joined: Thu Mar 03, 2016 2:15 pm
Location: Maine

Re: Recommendations for what to do fianacially in retirement...

Post by Lemonaid56 »

backpacker61 wrote: Tue Jun 15, 2021 12:55 pm
Lemonaid56 wrote: Tue Jun 15, 2021 7:40 am My question is- Where should we draw from first? I thought taxable and at some point take from our 401ks . But when the switch? As others have stated it will seem so strange taking the money out and seeing the amount go down I feel its going to be stressful.
Should we find a fee based financial planner to get us started on a track that I can take over and maintain? What about taxes? When do they get paid? What books are you guys reading that could give me some advice , keeping in mind I'm not the most financially astute but have a grasp on the basics thanks to you people.
I think that you can do just fine managing this on your own.

Even if you make some mistakes, they will be your mistakes, and at least you aren't paying someone else to implement their mistakes.

I like this simple brochure that I think has a lot of good sense ideas.

http://crr.bc.edu/wp-content/uploads/20 ... k_0721.pdf

If I were in your situation, I would consider filing for your pension to age 72 (actually, to receive your first pension payment by April 1 of the year following the year you turn 72; assuming the amount you would receive will go up each year you delay), and your wife should probably delay Social Security to age 70.

Your first source of retirement income should be the dividends, capital gains distributions, and interest you are already receiving (and paying taxes on). Then sell securities for income you need beyond that. Depending on your tax bracket, it might make some sense to take distributions from your pre-tax accounts (traditional IRA's, 401K's, etc).
I prefer making my own mistakes as I can learn from them hopefully.
My company froze our pensions a few years back and it seems from projections I just recieved over three different dates in next six years the amount does not change.
Looking through our taxable account at dividends and interest is does not add up to much money to live on. I've seen people mention that in posts but I don't find where it adds up to much for us.
Sell securities? You mean the Index funds or Bonds? Selling anything triggers capital gains taxes right? Wouldn't the same be true taking money from the 401K's? I think its the tax portion of this equation that has me concerned I'm going to screw this up.
I really appreciate the input.
User avatar
Topic Author
Lemonaid56
Posts: 193
Joined: Thu Mar 03, 2016 2:15 pm
Location: Maine

Re: Recommendations for what to do fianacially in retirement...

Post by Lemonaid56 »

esteen wrote: Tue Jun 15, 2021 12:30 pm Watch out for confusing lingo - "fee-based" advisors include commission-based salespersons. Fee-only advisors are better, but include AUM-based fees which are probably not worth it at your stage. If I were you I'd look for an advisor who will charge an hourly rate or fixed retainer, with no commisions, no matter what your asset base. Those are not as easy to find.
Those are some finer points I would not have taken into account. Thanks for that. Looking in our area there seems to be only three fee based CFP in the state of Maine? Seems like a small number.
I've never used an accountant but does anyone use them for tax advice in retirement?
Jablean
Posts: 748
Joined: Sat Jun 02, 2018 2:38 pm

Re: Recommendations for what to do fianacially in retirement...

Post by Jablean »

You have 3 million and are on a regular age retirement time. It really doesn't matter what you do as long as long as you have a decent asset allocation. If you want to take SS now, do it. They only reason to wait is when people need that higher amount. You won't. Get it out of the way if it makes you feel better. Worried about taxes - so what if you pay a couple thousand more a year than you would have if you were really tax efficient. Pay yourself $100,000 every year, throw whatever you don't use into a taxable bond account. Your problem is going to be using up the money, not running out of it.
HomeStretch
Posts: 6509
Joined: Thu Dec 27, 2018 3:06 pm

Re: Recommendations for what to do fianacially in retirement...

Post by HomeStretch »

Consider posting your complete financial picture in the “Asking Portfolio Questions” format found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions.
- Include details on each source of retirement income.
- Include an estimate of your annual retirement expenses (includes living expenses, income taxes, healthcare and lumpy expenses such as a car purchase or major home repair).
h82goslw
Posts: 289
Joined: Fri Jun 17, 2016 5:44 am

Re: Recommendations for what to do fianacially in retirement...

Post by h82goslw »

I have to disagree with those who are saying to just figure it out and live with your mistakes. I’m a huge DIY person but when it comes to withdrawals and minimizing taxes, as well as planning for ACA (if needed), planning for Medicare and IRMAA, you’d be better off hiring someone for a single set fee to guide you on the withdrawal process, as well as Roth conversions etc. Rick Ferri is someone like that….and I’m sure there’s more than a few well qualified, trustful folks like him who can do the job.
Congratulations on your success thus far, and in this next phase in your lives.
backpacker61
Posts: 769
Joined: Wed May 20, 2020 6:36 am

Re: Recommendations for what to do fianacially in retirement...

Post by backpacker61 »

Lemonaid56 wrote: Tue Jun 15, 2021 1:54 pm Looking through our taxable account at dividends and interest is does not add up to much money to live on. I've seen people mention that in posts but I don't find where it adds up to much for us.
Yes, in your taxable accounts, direct the dividends, capital gains distributions, and interest to go to your sweep account instead of reinvesting. You are already paying taxes on these amounts, so might as well use them to supplement your disability pay for your retirement living expenses.

You can also turn off the 401K contributions you make from your disability pay and then use the full amount of the disability pay for servicing retirement expenses.
Sell securities? You mean the Index funds or Bonds? Selling anything triggers capital gains taxes right? Wouldn't the same be true taking money from the 401K's? I think its the tax portion of this equation that has me concerned I'm going to screw this up.
I really appreciate the input.
Yes, sell index or bond mutual fund shares needed to cover your retirement expenses beyond what you can service already from your disability pay plus the dividends, capital gains distributions, and interest that you are directing to your sweep account.

One other thought:
My question is where do I turn for advice on what to do with our finances now? Leave her 401K with Merrill? Mine with TRowe? Have a taxable with Fido also.
If it were me, I would consider consolidating your investments at one provider. My top choice is Vanguard, but among the ones you've listed here (and so already have a relationship with), my choice would be Fidelity. Have you considered transferring you and your wife's 401K accounts to rollover IRA's at Fidelity? Alternatively, you could move the 401K and taxable accounts to rollover IRA's and a taxable brokerage account at Merrill Edge.

Fidelity has excellent low cost index mutual funds, or you can buy index ETF's from iShares, Vanguard, or others on their brokerage platform.
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
The Stone Wall
Posts: 120
Joined: Thu Mar 22, 2018 1:18 pm

Re: Recommendations for what to do fianacially in retirement...

Post by The Stone Wall »

It is difficult to say too much about your spending plans without knowing the percentage of money in 401k, Roth, taxable, and cash. If any of those is out of balance, it really affects the way you should be spending.
Outer Marker
Posts: 1976
Joined: Sun Mar 08, 2009 8:01 am

Re: Recommendations for what to do fianacially in retirement...

Post by Outer Marker »

With $3M in assets you have plenty to get by on in early retirement.

This is the simplest and best explanation of why you should delay claiming SSI until 70: viewtopic.php?t=102609
Post Reply