That’s good to know! As noted, I suspect they’d have to liquidate some of mine, if I do a rollover (vs leaving it all in place) since there are funds that are customized for my employer. But it’ll be nice to not have to deal with the hassle of a mailed check etc.
Today was the day. I called my boss and gave him one month’s notice and then called my HR rep who warned me that it usually takes two months for pensions to kick in. She then emailed me the company’s retirement checklist. So I updated my boss that my departure date will be a bit open-ended.
It was all very positive, however, as my company has been a great place to work, my boss is a really good guy, my colleagues are bloody smart and a blast, and the work is generally fascinating at best and maybe a bit annoying and frustrating at worst. So an extra month is not a problem by any means.
It does feel a bit strange because I’m very familiar with a three to five year military posting cycle and this feels like I’m being posted out but not into anywhere.
Congrats on making the next move.
I’ve been retired 7-1/2 months from a high-paying job with great benefits that I really enjoyed doing. I don’t miss that crap even a bit.
The transition to a life of ease has been easy. Yes, a couple of admin vexations, but everyone you’re dealing with has done this countless times before. It’s only you who’s a rank noob at the transition process.
You’re gonna love it.
Oh, I think you’ll discover that you’re being posted to a delightful place. Though I do understand your feeling a bit, my when my father-in-law retired from military life it took him a while to find his feet.
Thanks for the update, and congratulations again!
Today is the four year anniversary of my retirement. Not a moment of regret.
Belated congrats. I hope your first weekday of freedom tasted especially fine.
I was reading up on my company’s intranet about retirement planning, and they spent a bit of time talking about the psychological part of it. Good point.
One piece of advice I’d heard was to retire TO something, not FROM something. In other words, have plans for what you want to do. If those plans entail “Sleep as late as I want to, then putter around”, that may not be ideal, as I can definitely see the tendency to become more and more isolated - my in-laws never saw anyone outside their household, the last couple years. In their case, it was partly due to their lack of mobility, but it would stink to be in that position at age 66.
I could definitely see myself going that route, unfortunately. I’ll go all week without seeing anyone outside the house, and can be a major couch potato. Gotta make plans to avoid spudhood.
My father did very little, after he retired. He worked up to age 72 or so (his choice). And after that, aside from the occasional golf game, he did nothing. I tried persuading the parents to get another dog, hoping this would at least be companionship for him; he and Mom basically lived at opposite ends of the house and saw each other only for meals.
Just as well they didn’t do so; Dad passed away within 3 years of retiring (was diagnosed with “you’ll die WITH it, not OF it” prostate cancer; didn’t quite work out that way).
My husband made the joke-but-not-joke observation once that when you retire, going to doctor’s visits becomes a full-time job in itself. There’ve been weeks where it’s seemed that way just for us!
And thank you.
And unlike some folks I’ve heard of (mostly through their wives), I don’t plan on being bored. I have three bicycles that I plan on using a lot more (I live across the river from the Gatineau hills, which offer great climbing opportunities), and three guitars which I also plan on practicing a lot more. And my wife and I plan on doing a lot of day trips to a wealth of charming small towns in our part of the world (Kingston, Perth, Almonte, Arnprior Ontario), as well as travel to Europe.
I’m fortunate in that my moderate ambition let me chug along in the military for 30 years and get a really nice pension followed by staying in my civilian job long enough to get a reasonable pension. So we can have a comfortable and secure life.
We had a rather sharp reminder today about how we’ve only got so much time on the earth, and it’s silly to keep putting retirement off “as long as possible”.
You hear all the stories about “retired, then gone in 6 months”.
Today, we found out that a friend literally was able to call in dead at work. Well, she got better - a slight case of cardiac arrest over the weekend. Luckily people nearby did CPR, and she was revived. Apparently she had a blockage in a major blood vessel. “Widowmaker”.
She is 10 years younger than I am. In very good health for the most part - very active. Expected to make a full recovery.
A neighbor, of a similar age to that friend, had a major cardiac event last fall. Doc said “except for xxx, your heart is in GREAT shape”. I don’t recall what his issue was.
Life is too short. Nearly waaaaaay to short for those folks. I told my husband tonight that I definitely don’t plan to wait until full retirement age (2 years from now).
Before I retired I walked around the house and made a list of all the things that I had wanted to do but was too busy working to get to. I made a spreadsheet from it. That meant I never missed work, no matter how much I enjoyed working (if not the commute.)
And I’ve done plenty of things since not on the list.
I am still in close contact with two childhood friends. I’m the only retired one and my hobby is live music and I have been able to go to many more shows. One of the others loves golf. He’s not retiring any time soon but he can play way more golf. The third retires in June and he has no idea what the hell he’s going to do. He’s sick of his career but struggling with the next thing. He’s considering local politics.
You definitely need something.
I don’t know if I should start a new thread about this. I guess I’ll start the discussion here.
Mr. brown turns 73 this year. He’s going to have to start taking Required Minimum Distributions from his IRA account. I’ve found an easy-to-understand page on Bankrate.com and have run a rough calculation to the best of my ability, and I’m pretty sure he’s already taking more than is required. But I thought I’d start a discussion.
For some reason, I thought I read somewhere a few years ago that when you calculate what your RMD is to be, you had to also take into account your Social Security payments. But now that I’m looking into it again, it looks like I was mistaken and that all the IRS cares about is money coming out of your IRA. Do I have that right?
And does anyone have tips or advice or horror stories about their RMDs?
I’m not a CFP nor a professional accountant, but I believe this to be true. The amount to be withdrawn is based on the amount of money in your IRA(s) at the end of the previous year.
BTW, I’ve found Bankrate to be a wonderful online financial reference site.
I also thought it was a certain percentage of your IRA must be withdrawn. Nothing else is relevant.
Correct. It’s based on the balance in your account as of 12/31 the previous year, and divided by a factor based on your age and your life expectancy at that point.
It takes some scrolling down to find the table. I think that you divide the appropriate figure into your total balance. So if you have 1M in the account on 12/31, and you are 73, you need to take 1,000,000 / 16.4, or 60,975.61.
Someone who is 74 would divide by 15.6 and so on.
A Roth IRA is NOT subject to RMDs (until you die, then the beneficiaries have to withdraw it on some schedule; I don’t know offhand what those rules are).
If the money is more than the person needs, you can take the withdrawal and invest it in a regular investment vehicle.
The only interaction your IRA and Social Security have, income-wise, is that if you’re taking enough out, it means your income is higher, and your Social Security may be subject to income tax.
This.
For someone who was getting by on their SS plus small IRA withdrawals and now reaches the age of RMDs, there can be a rude surprise that a hefty bite of the extra money you withdraw from your IRA savings goes straight out in taxes. Because the RMD amount is taxed as ordinary income, and depending on the rest of the family tax situation, suddenly that can trigger taxation of some or most of your (and/or your spouse’s) SS benefits too.
This is more likely to affect the old person who saved diligently and has a whopping IRA that they’re afraid to spend a penny from, so they live in relative penury far below their actual means.
Someone with an IRA more proportional to their pre- and post-retirement spending habits probably won’t have a big issue.
This is a great point. It’s a wise move to have tax withheld on the IRA withdrawal, which will certainly lessen the shock come tax-time next year.
If Mr. brown has multiple accounts, say more than one IRA, or an IRA and a 401k that he never converted to an IRA, then there might be some issues with coordinating the RMD across all of the accounts subject to RMDs. However, do not take my word for it, as the SECURE Act or SECURE Act 2.0 may have changed the requirements, and that particular requirement was not on my radar so I did not pay much attention to it. IIRC, if you had 20% of your money in an IRA and 80% in a 401k, the RMD had to be withdrawn proportionally from those accounts. Again, I may be wrong, but for some reason that little detail has stuck with me for some reason.
From the IRS website:
An IRA owner must calculate the RMD separately for each IRA they own but can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) contract owner must calculate the RMD separately for each 403(b) contract they own but can take the total amount from one or more of the 403(b) contracts.
However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans, must be taken separately from each of those plan accounts.
My take on this is that one should convert a 401k or other retirement funds to IRAs. If all of the funds are in IRA accounts, then the RMD can be taken from one or multiple accounts. That’s not the case if the funds are still in a 401k or other retirement plan.
I personally am in the process of converting my 401k to a Fidelity IRA, and moving my other (smallish) Vanguard IRA into the same Fidelity account.
It’s certainly wise to understand the tax implications of every financial move you make. And to understand the second and third order effects since taxation of SS benefits, IRA/401K withdrawals (not just RMDs), and capital gains taxation are each different and each play off on the other two.
Here is a cite I like to refer to that explains some of this in greater detail, but is specifically about the tradeoff between ordinary income and capital gains. And for this discussion, IRA/401k withdrawals, required or not, are ordinary income.:
As to withholding …
Folks’ attitudes vary on whether they prefer withholding or paying quarterly estimated taxes in retirement. I personally do zero withholding. To me, any withholding just complicates the computation of the quarterly estimated payment I have to make anyhow for my other income streams.