RETIREMENT? PLANS, QUESTIONS, ANSWERS, DISCUSSIONS

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Comment by CWO3ROBBIE on December 17, 2009 at 7:38pm

Lynn, didn' realize that the rent to motgage diference was that great in our area. My son was able to rent his condo for about what his payments are. But, we bought it in 2002 so that was before the really big runup in Leesburg.

Comment by lynn on December 17, 2009 at 6:25pm

Robbie, thx for the thought. i'd need $10K to get it presentable for anyone else, and local rents are about 1/3 of what i'm paying out monthly. i'll look further, but that's not a "negative cash flow" i could sustain, regardless of tax benefits!

Comment by Stir Young on December 17, 2009 at 6:03pm

As I have no wife and no heirs, I really want to spend down to nothing by the time I kick the bucket. I realize that may be easier said than done. My IRA took a tremendous beating last year, but with cautious use of money I should be OK.

I also elected to take Social Security at 62. My Plan A had always been to wait until age 66 because there was a nice increase in SS then, and because I wanted to work that long. I have to admit, I don't really know if I could have made it that long....I was starting to lose my edge in the workplace.

I paid off my house a few years ago....I knew I didn't want to make that payment when I retired. It gives me peace of mind to know its mine, although it may not be the correct textbook example thing to have done.

The bottom line is, I'm performing without a net....since there is just me, I don't have the luxury of combining a spouse's finances with mine. I'll be alright, I don't ponder over it. I can change directions quickly, not having to worry about how it impacts others. I also plan on working some, as the situation presents itself, or as I am so motivated.

Comment by CWO3ROBBIE on December 17, 2009 at 4:18pm

Gary, I understand you comment about not knowing if you are retired or just unemployed. I did retire from the military, but the Contractor that I worked for didn't have a retirement plan as such. We did have a 401K plan and I dumped as much money as was possible in it. At 60 years of age I figured out that I had enough money to get me to 62 when I could start drawing SS. At the time I was Managing a contract on an Army post that was on the Base Realignment and Closure List. Or BRAC for short. I had to make a decision. I could have moved to Ft. Monmouth, NJ, Or stayed with the company at HQ in Mclean,VA and wrote proposals until I won another contract. I chose to Quit/Retire instead. I know that I am one of the luckest people that ever lived, in that my life has worked out pretty well without to many setbacks. But it wasn't entirely luck. I happened to make more right decisions than wrong ones along the way. One reason I started this discussion is that I hope to gather the necessary information to keep making those lucky decisions and maybe help some not make some of the wrong decisions that I made. For example, I have a conventional Roll over IRA. I could have converted to a Roth IRA at little cost when the Roth IRA was started. I could not see the advantage. Here is the major disadvantage with a conventional IRA. The money that you draw back out is considered as fully taxable income. That means, if you have other income and can adjust how much you draw out of your IRA each year you can possibly stay in the lower tax brackets. But, Last year I needed to draw out a sizeable amount to pay down a mortgage as part of a divorce process. That sizable amount(to me, maybe not to everyone) Kicked me up into a higher tax bracket. So, This coming year I will have to draw additional money out of the IRA to pay the taxes on the amount I drew out last year. Which means that my taxable income next year will be higher than I had planned. Hopefully by the next year it will be down to the amount that the Manditory Minimum Withdrawal will cover it. (The amount that you are required to withdraw each year after you reach 70 1/2). I'm not telling this to try to get anyones sympathy, but to show why you need to gather all the information possible while making retirement plans.

Comment by CWO3ROBBIE on December 17, 2009 at 3:40pm

Baia, I too have already passed on the money to my kids. Did it by buying and selling real estate to each other at inflated and deflated prices during the boom years. I think I have enough to live on, and have some fun. But like you, I do not plan to leave any large estate.

Comment by CWO3ROBBIE on December 17, 2009 at 3:34pm

Lynn, Have you considered renting out your place in Northern VA. If you found a place that had cheaper living costs, just about anyplace, except New York City, Calif. and New England, you might be able to have a neg cash flow on your equity and still break even, or come close. There are a number of Real Estate Managers in Northern VA. I don't know what the fee structure is now but it might be worth investigating. I know a few of my Military buddies bought a house every place they were stationed and held on to them over the years. Ended up well off.

Comment by Baia on December 17, 2009 at 12:57pm

Thanks for starting this group, Robbie. I'm looking forward to reading what others have to share.

When I was 59 and a half, I started cutting back my hours at work gradually. I am now at 80% time which means I don't come in on Fridays. At the same time, I bought a condo in a seaside community not far from my home where I planned to retire eventually. My family all live nearby, so I thought to eventually sell my primary residence to one of my daughters. We are still working on that idea. The mortgage is on the house and the condo is free and clear.

In May I had planned to retire completely, but my project is flatteringly reluctant to see me go completely, so I am going to 50% time with options to take leave without pay for long trips that are not covered by vacation time. I will have health insurance with that plan, although I am now Medicare eligible.

I seem to have enough money to live and play on right now and for the future. My biggest immediate problems are biting off more than I can chew and finding reliable travel buddies. This year I traveled alone to Florida and Las Vegas where I met some TBD friends for the first time off-line. A couple of weeks ago one came here to visit and we spent a lovely day together with her daughter riding the ferry to my other community.

So I'm easing into this new life gradually and so far, seamlessly. I am blessed with fairly good health and a family history predicting at least 20 more years.
I have plans to develop my writing skills to produce some additional income which will help pay the mortgage, but I really have no intention of leaving a large estate on purpose. I spent my youth raising my kids and now it's time for us to play.

Comment by CWO3ROBBIE on December 16, 2009 at 4:35pm

AS I have said before, retirement means different things to individuals. It is up to the individual to decide what he/she wants the "Retirement" years to be. As with many things in life, how secure you need to feel will dictate what you do. We each have a diferent security threshold and there is nothing wrong with that. Something that causes many people have trouble making decisions about retirement is feeling that they have be as secure as others. Of course the retirement planning industry really play this desire. It is up to you to decide how much security you must have, both economic and physical. You will not be happy unless you have the level of security that you feel you need. But, how much security you must have is something you should decide, not some financial planner who makes their living planning your security. Just be aware that what is right for someone else might be what you need. And there is nothing wrong with that.

Comment by lynn on December 16, 2009 at 10:31am

where to live...for 3+ years, i'm "stuck" with my upside down equity loan, that educated the kids, so won't be able to reduce housing costs unless i just walk away, which is tempting but troublesome to actually do. i like Virginia, and do plan to stay here, barring the appearance in my life of some wonderful mate who already has a home i'd care to share.

i feel strongly about being within 20-30 minutes of health care services -- not just a doc, but also a good, decent-sized hospital and the kinds of services that one might need as i age. this rules out much of Virginia's tidewater and the eastern shore, which would otherwise be appealing.

Comment by WS on December 16, 2009 at 7:22am

I was hoping to retire early and do it this year, but since the stock market tanked, It now looks like I won't retire for a while and since the government keeps pushing the age back for maximum benefits, who knows when I can retire!

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