your tax strategy for retirement....

[Wolf359]

Originally Posted By: Oldtom
I have 4 years until Social Security, assuming that Ponzi scheme survives. By that time I will have a paid for home and 3 rentals paid for and generating income. Dealing with low income rentals is rough, but, there is money in it.

I am worried social about security surviving long enough for me to collect. The national debt and the free spending morons of both parties may kill it.

I can see our fearless leaders cutting the ss benefits, or hyperinflating the currency so your SS check buys a bag of groceries once a month.

The only tax strategy I have is live on as little as possible, and seek the advice of good CPA

Most people seem to think Social security will just implode and you get nothing, but it will still be around and you'll still get something. If nothing is done, it will be insolvent in 17 years. So at least you could collect for 13 years. At that point in 2034, SS will just be able to pay out about 77% of what is owed. That's assuming if nothing is done about it. As we get closer to that date, maybe someone will do something but the longer they wait, the tougher it will be to make the numbers work.

 

[Kestas]

Originally Posted By: javacontour
Originally Posted By: Danh
As Illinois is one of the few states that doesn't tax retirement income (pension plans, 401k and IRA withdrawals, social security, etc.), this answer may not be quite so simple for retirees.

So far. They are so far in the hole, I would not count on this continuing.

Not to mention, the property tax burden and other taxes are pretty high. Meaning IL isn't a fiscal paradise for retirees. And isn't about to get better in the next generation or so.

Keep in mind Michigan recently took away the tax free entitlement for pensions to help with the hole we're in. Our governor essentially told pensioners "we don't need you anymore, move to Florida." I would expect the same for Illinois in the near future.

 

[Danh]

Originally Posted By: javacontour
Originally Posted By: Danh
Originally Posted By: SevenBizzos
Move out of IL.


As Illinois is one of the few states that doesn't tax retirement income (pension plans, 401k and IRA withdrawals, social security, etc.), this answer may not be quite so simple for retirees.


So far. They are so far in the hole, I would not count on this continuing.

Not to mention, the property tax burden and other taxes are pretty high. Meaning IL isn't a fiscal paradise for retirees. And isn't about to get better in the next generation or so.


Fiscal paradise? No. But the weather makes it worth it.

 

[Shannow]

Same as I've done all my working life, get done over.

Every two years they change the rules for retirement savings, and the tax implications now and then.

 

[zzyzzx]

Move to a state with no or lower income taxes (FL, DE, SC). Wait until 70 before getting SS.

 

[ArrestMeRedZ]

Jeff, move to Nevada. You can spend 49% of your time in California with the better weather and still not have to pay their high taxes.


Danh, LOL.

 

[Linctex]

Originally Posted By: Brybo86
I am currently adding to 401k up to % matched.
Maxing a Roth for wife and I.
Any extra goes to pay off mortgage.
After that will Max 401k.


good plan..... more youngin's need to take this advice

 

[grampi]

Originally Posted By: opus1
Originally Posted By: SevenBizzos
Move out of IL.

Working on this as well.


I will be doing the same...

 

[Mr Nice]

I'm not saying Florida is the best state, but you can really stretch your income when retiring to a low cost state. Places like Gainesville is a great place with lots of things a big city has problems with (crime, drugs, traffic, trailer park trash, etc...) they don't have. Excellent VA hospital, near the beaches, away from Orlando tourists, housing very affordable. Tallahassee is also another nice smaller town in Florida.

55 degree winters are also very nice.

 

[Mr Nice]

Double post.

 

[02SE]

Continue doing what I have been doing for the last 15 years: Minimize tax liability through all legal means.

 

[supton]

Not sure I have much of a choice--the laws won't be what they are today, and ultimately I can only save just so much for retirement beforehand. Since it's 20 years off I'm honestly just not going to think about it. When the time comes, then I'll figure out my options.

 

[Californiabob]

there's so much bad advice out there.

70% take SS at 62, 4% take it at 70, here's how to decide
1. will you live to 70 (none of my inlaws father mother, brothers made it to 62)
2. take it at 70 - the breakeven is mid 80's (think you'll live that long? - 30% chance if all parents and grandparents did)
3. average 1400 per month - walk away from 17K per year you could buy index options with
or if you're maxed out at about 2450/month (plus increases) - 30K per year times 20+ years. about 600K

4. bonds - 5 year T notes are 2.5% - you could buy any F500 stock with better dividends and have cap appreciation
5. real estate - better not be in the blue states hammered by new tax plan

now for the good news. high tech and biotechs will drive that IRA to new heights.
do not go safe at retirement if you intend to live longer. bonds flatline your returns
and there's no plan B if at 80 your expenses is more than the return.

the idiot FA tell you to generate 4% per year. they don't tell you that the very FIRST
required mandatory distribution (MRD) from your IRA/410K at age 70 1/2 is already 3.65%
and with only bonds you'll be negative in three ways by the time 72 rolls around. add taxes
and 4% forever starts to sound like leaky valve.

two things to do
1. learn to invest and invest in those stox that will appreciate far more than the RMD
percentage as it increases. that way your capital increases even as you withdraw more and more
2. plan for the occasional crash. we're due. make money on the way down and on the way back up
you can easily double your capital. no need for options, futures, straddles, naked straddles, etc

but to each there own, every is convinced their system is the best
until it's not