recommend you log into the ssa website, and track your progress. Minimally for accuracy.
How the hell are we supposed to retire?
- Thread starter Red Mosquito
- Start date
recommend you log into the ssa website, and track your progress. Minimally for accuracy.
rick81721
Lothar
Alternative pov: http://www.cnbc.com/2016/06/03/dont-make-this-gigantic-social-security-mistake-commentary.html
For the record I haven't decided what I'm going to do yet. Earliest I can start to collect is another 3 years from next month.
in this person's calculation, the break even point was 84, and life expectancy is 85.x - funny how the SSA makes it that close..
It isn't like insurance or investing at all. It is gambling. Die before starting, zero money, Die before break-even, lose.
(yes, i know there is a surviving spouse benefit, but it kicks in either way, and is dependent on their ss $$)
Living to 95, only leaves $150,000 incremental on the table over 10 years - is that worth the gamble?
The only thing i can think of in the insurance world that would come close to this is a deferred annuity with no death benefit, or guaranteed payout of principal.
And nobody buys those, unless you are rich and young. At that point, buy whole or variable life, and keep it under the modified endowment limit (MEC limit) - this is more estate
planning than retirement planning. You borrow back against the insurance contract, the contract pays itself off on death, and the benefit/balance goes to your heirs (tax free, avoids probate).
i'm still on the 'take the $$ while young' wagon. Maximize life rather than $$.(c) yes, i just copyrighted that😀
rick81721
Lothar
I'll have to look at it in more detail in a few years. Right now thinking won't need it so why start collecting early - plus I plan to live to 110!
Anyone who is getting a match with their 401k has to take advantage, it's free money. Last year my investments did over 20%.
Most people are giving great advice
1: live within your means. This is imperative to financial wealth.
2: stay out of debt, especially on the credit card end.
One thing I haven't seen mentioned much, WORK YOUR ASS OFF!!!
Get three jobs or start something on the side or start your own gig, even if you have to move in with the parents while you do it. If you have kids and a mortgage, this might be impossible, but you could always get a second job and use that money for savings or vacation. Embrace austerity while you start something new. It will be worth it in the end. I started a company in 2004 and worked about 18hrs a day for three years. I was able to take a few vacations, but pretty much work was my life, weekends, nights, on call for holidays, but I can't even begin to tell you how worth it it was.
If you're in sales, make sure you always schedule an appointment for Friday at 4:30, you can always meet your friends later in the evening.
Work is like school or working out, you get out what you put in.
And if you haven't refinanced your mortgage since you bought your house, look into it, immediately. I bought my house in 2002, and have refinanced twice, it saved me over 45k in interest, and I have a modest house in Motown. At the very least, you will lower your payment to allow for more savings. Somebody mentioned, don't use any money you get for the refi, unless it's for an upgrade to the house, I couldn't agree more. Don't even take any money, just put it towards the principle.
Most people are giving great advice
1: live within your means. This is imperative to financial wealth.
2: stay out of debt, especially on the credit card end.
One thing I haven't seen mentioned much, WORK YOUR ASS OFF!!!
Get three jobs or start something on the side or start your own gig, even if you have to move in with the parents while you do it. If you have kids and a mortgage, this might be impossible, but you could always get a second job and use that money for savings or vacation. Embrace austerity while you start something new. It will be worth it in the end. I started a company in 2004 and worked about 18hrs a day for three years. I was able to take a few vacations, but pretty much work was my life, weekends, nights, on call for holidays, but I can't even begin to tell you how worth it it was.
If you're in sales, make sure you always schedule an appointment for Friday at 4:30, you can always meet your friends later in the evening.
Work is like school or working out, you get out what you put in.
And if you haven't refinanced your mortgage since you bought your house, look into it, immediately. I bought my house in 2002, and have refinanced twice, it saved me over 45k in interest, and I have a modest house in Motown. At the very least, you will lower your payment to allow for more savings. Somebody mentioned, don't use any money you get for the refi, unless it's for an upgrade to the house, I couldn't agree more. Don't even take any money, just put it towards the principle.
A few more tidbits of free advice.
Don't buy stuff for your kids you can't afford!!
Don't take out a second mortgage to pay for your kids school, I know we all want the best for our kids, being fiscally sound, so they don't have to worry about you when they get older will be a blessing for them.
Don't buy stuff for your kids you can't afford!!
Don't take out a second mortgage to pay for your kids school, I know we all want the best for our kids, being fiscally sound, so they don't have to worry about you when they get older will be a blessing for them.
qclabrat
Well-Known Member
has anyone considered retiring outside of the US?
It used to be popular to retire in Cabo Mexico,then it was Costa Rica and more recently Nicaragua and other SA countries.
A few high profile celebs have also renounced their US citizenship to skip taxes.
are there any realistic advantages to living abroad part-time anymore? giving up your US rights is just silly unless you're ridiculously wealthy
It used to be popular to retire in Cabo Mexico,then it was Costa Rica and more recently Nicaragua and other SA countries.
A few high profile celebs have also renounced their US citizenship to skip taxes.
are there any realistic advantages to living abroad part-time anymore? giving up your US rights is just silly unless you're ridiculously wealthy
rick81721
Lothar
That's a huge twist. In your example if you made $50k per year your ss benefit before age 67 is reduced to ~ $5k per year - no point in collecting early. My earned income from stock options will end the year before I turn 62 so won't have to worry about it. You also have to calculate what retiring early does to your benefit - they assume you earn the same amount until full retirement age. I did the calc for collecting at 62 and the difference is very small, will have to see what 66.75 looks like.
Are NQ options considered wages? They are taxed like income, but i'm not sure (as there is no corporate match of taxes) @clarkenstein
rick81721
Lothar
Yeah I don't get it. Health care is a huge issue too. If you get sick (and you will), you'll have to pay out of pocket, unless you want to return to the US for treatment. In an emergency tho..
rick81721
Lothar
I think they are. I just exercised some and they took out SS and Medicare tax.
my gut is don't take SS early if you don't have to.
yes - it will hit the W2. if my employer gives me a chocolate bar and i earn $75k/year, technically speaking, that chocolate bar is part of my earnings. of course real life happens and we don't count that crap, but anything given during employment is a wage. there is different tax treatment for different stuff. the general catch-all rule (without going nuts on info) is its income.
if you aren't working for the employer any longer and you have vested non-quals - different story i believe. get some ISOs - better tax treatment!
yes - it will hit the W2. if my employer gives me a chocolate bar and i earn $75k/year, technically speaking, that chocolate bar is part of my earnings. of course real life happens and we don't count that crap, but anything given during employment is a wage. there is different tax treatment for different stuff. the general catch-all rule (without going nuts on info) is its income.
if you aren't working for the employer any longer and you have vested non-quals - different story i believe. get some ISOs - better tax treatment!
out of your share - it is income, like a retirement account, but it might not be wages.....as an employee, the company matches salary deduction $$ (without limits)
making it wages.
see above - we hit post at the same time.
just watch the % withheld. there are rules which only allow employers to withhold a certain amount of tax - it may not be enough to cover your tax rate. in your case (retirement) its prollly (hopefully) too much. i believe the rate is 25% for options/exercises, but don't quote me on that.
rick81721
Lothar
Yeah not really sure. All I know is they took out 6.2% for SS.
25% for fed tax is the min withholding which will be fine but next year is gonna be a cap gains shit show.
rick81721
Lothar
This seems to indicate they are wages but I'm no lawyer (or accountant!)
https://secure.ssa.gov/poms.nsf/lnx/0301401340
be careful here - i'm assuming you 'sold to cover taxes' ? and are holding the rest? the gain will only be what it does this year,
not the option price - cause your basis is the price on the day of exercise (that is why you paid income tax on it. imputed gain.??)
rick81721
Lothar
Cap gains aren't from options, from co stock I had in the 401k - NUA