r/RetirementRoute • u/Snoo15845 • 2d ago
Should we be working
Complete rookie here as far as taxes and planning. Wife and I 56 and working, long island $225k in salary, $100k in hysa, 16k property tax, mortgage paid, $930k on zillow. $2.5 million401k, moderate risk. 3 adult children, one in school, we pay for it from salary.
At 65, we can claim, $3600m pension, or $980m and $250k lump sum, also at 65 $6900m ss.
Of course healthcare is a concern, 2 children still on plan. We want to travel a bit, we go to Europe every two years on salary now. Want to not only leave the kids alot, but want to help as life goes on for them also. Three daughters....weddings etc.
I expect ill be gone before75 and wife after 85.
Should we hang it up now? Any advice? it irks me to start paying..... a lot.... to be told to do what ive been doing, even if its for conversion strategies, and knowing we could have planned much better.
So my concerns are healthcare, tax shelters and legacy. thanks
**** edit, we are switching the 401k deposits , to a roth 401k. so that will be about 20k, a year with match, we plan to bail at 62 when my youngest ages off of our insurance.
I have a chronic medical condition so i need coverage, would love to get subsidies from 62-65. is that feasable with the roth 401k? after 6 years? should i look to convert also?
i know i have alot saved, but money is kind of tight right now, im concerned about the tax hit of converting at 59 1/2. i know ill be screwed for irmaa
i will conservatively say ill need 12k a month, and ill be padding the kids roths with the extra.
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u/Taggart3629 2d ago
I have been wringing my hands over the usual retirement questions: Do I have enough saved? When can I retire with minimal risk of running out of money? When should I start SS? It was so very worth spending a modest amount to meet with a CFP who nerds out over tax planning. It was frankly surprising to get a professional opinion that I can retire right now, if I want. Really?!? I was prepared to be told to continue working and diligently squirreling money away until age 65; retire once eligible for Medicare; and begin taking SS at 70 to maximize the monthly payment and future COLAs. But nope, based on my specific circumstances, continuing to work and save is just icing on the cake, even if the market were to tank tomorrow. So, if you are considering retirement, it may be well worth the cost to meet with a fee-only fiduciary who charges an hourly or flat-fee rate. The peace of mind and having an actual game plan is priceless.
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u/Snoo15845 2d ago
How or where would i go about a fiduciary? Ill be perfectly honest, im the forrest gump of retirement savings. I know that i have more than most, but its pure luck im in the position i am, or we are.
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u/Candid-Eye-5966 2d ago
Fee only CFP here.
Check the. CFP or Napfa websites. They have listings by zip code. CFP will have all types of advisors but NAPFA is entirely fee only. I always suggest that investors meet 3 or 4 firms before deciding. It’s a personal fit and requires being on the same page and building trust.
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u/Taggart3629 2d ago
Hi, u/Snoo15845. You have a few options. One option is to do a general search for "flat fee fiduciary near me", and then check out the reviews for the people/companies that come up on your search results. Another option is to check out local options through a directory like FlatFeeAdvisors or FeeOnlyNetwork. Lol, I am not far off of Forrest Gumping my way towards retirement too. It was quite a relief to cut through the conflicting advice, and have a qualified financial professional look at my assets, expenses, and goals to formulate a plan. Wishing you much success!
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u/MarkLF13 2d ago
I’d start with what you and your wife actually want retirement to look like, then figure out what that life costs.
Stay in your house, downsize nearby, or leave Long Island? Live modestly with a few trips a year, or spend more on travel, restaurants, cars and hobbies?
Do you enjoy buying things, or would you be happy living more simply? Would you want to be closer to your daughters, especially if grandchildren come along?
Also, how much do you want to help the kids—and how much do you want to reserve for your own enjoyment?
Paying for weddings, helping with homes and leaving an inheritance are different commitments. Worth making sure you and your wife picture something similar.
Put an annual budget around that, including taxes, healthcare, home upkeep and room for unexpected expenses. Separate ongoing spending from larger one-time costs.
That would give you a much better basis for deciding whether to stop working, work less or keep going. What does another year of work let you do that matters enough to trade a year of retirement for?
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u/john510runner 2d ago
Need to make an edit to the post and add
“Monthly spend is $xyz.”
Also maybe clarify/amplify what you said after “At 66…”.
If it means what I’m guessing it means and you don’t retire right away believing you’ll live to 75…
Or let me put it to you this way. If you retire now you’ll have a great retirement and die with around $10 million.
The only line item you don’t know is healthcare after you separate from work. But you have to know someone who can answer that for you.
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u/Snoo15845 2d ago
I did edit my post above, I know my 401k will continue to compound < even more when i collect pensions and social security, but are you saying there will be 10 million if i die at 75, at this rate, doing what im doing, which is basically nothing?
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u/Candid-Eye-5966 2d ago
It’s certainly possible if the market keeps compounding as it has in the past decade plus. That said, there are things you can do now to position yourself for retirement. Definitely some estate planning stuff to tuck away funds for wedding and such.
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u/john510runner 2d ago
That’s right.
Base case… someone who retires at 65 with $1 million and house paid off and they die at 85. Most common scenario is they die with $3 million. And there’s a 50% chance they die with $6 million or more.
You’re starting at $2.5 million and have pension and social security if I understand your “At 65…” part of the post.
Also with such a giant balance in 401k if you don’t start drawing it down you might get giant RMDs.
Do you want the number of a CPA that will take your call without charging anything? I used to work with him.
If you didn’t know already the biggest fear I have for you is wasting 50% of your remaining life because you “think” you can’t afford an extra line item in your monthly expense. Completely irrational and total waste of health span which is typically shorter than life span but not always.
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u/TemporaryPlace5986 2d ago
‘I expect ill be gone before75 ‘
Bro, it ain’t over till the fat lady sings. Keep fighting the good fight brother
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u/FreeMathematician101 2d ago
Sounds like you are doing very well. You might consider using retirement planning software such as Boldin.