Oh man, I just hope I can change my sleep schedule when I retire. I work from home so I could literally sleep in 'til 8am, but I’ve been getting up around 3am.
I really don’t think boredom will be an issue for us. We play ~10 games of chess a week. And also play cribbage and darts. We are going to start a garden. Turns out my wife has a bit of a green thumb. After 33 years of nothing but snow, pine trees and rocks, it surprises us both.
My wife would like to learn to play piano, I have a nice Yamaha electric picked out that I will buy for her retirement. It will just be nice to have it, my cousin and really, best friend is a fantastic piano player. She can come and stay with us for a few days here and there and play (her apartment isn’t big enough for a piano).
I like to cook, and of course there is grass to mow and dogs to walk. We moved to a new place and there is a dog park about 100 yards from my back gate. Us geezers, and younger folk kind of congregate there with our dogs. The dogs have a blast chasing each other around, and I’m making friends.
My dog is sleeping on the couch right now. He’s dreaming and barking in his sleep. Chasing rabbits I’m sure, It’s cute. Life is good.
I was talking with a friend this week and he mentioned a pheasant hunt he went on a few years ago. He said the guide had some hunting dogs that worked hard all day long. I said dogs don’t work hard, they just do dog stuff all day long. Doesn’t matter to them. Nevertheless, I hope your dog enjoys retirement.
Thanks. Oh, the dogs will love it. They can pester me all day long. This is the primary reason that I’m up at 3am. Then they go take their morning naps the bums.
I don’t like to walk as far as my wife does (bad back) so we trade off which dog to walk and go in different directions. Or just take them to the dog park. That tuckers them out for sure if there is a gang of dogs to chase.
I think mowing grass will be good exercise for my back.
Well, it’s now been 17 years since retirement and I still don’t miss it at all. Still relatively healthy at age 78. Still miss my woodshop. I probably shouldn’t have given away all my oil paint supplies, as it would be good to have a hobby. I came across a couple of paintings from the 90s yesterday, which kinda made me want to start up again, but that would require a dedicated spot for an easel and the wife has laid claim to the second bedroom for piles of paper, an oversized computer desk, and bookshelves.
Since we decided not to get another dog after Max was gone, and I’ve taken up walking for exercise, I’ve been making friends witht the dogs that look like they want to meet me. Today I scritched Leo (he looks just like Satchel in the Get Fuzzy cartoon), Tasha - a chihuahua with a pekinese face, and Maisie - goldendoodle who just wants to jump up and hug you. Great way to meet people, too.
I’ve also gotten to know Smoky who’s half Great Pyrenees and half Armenian Gampr. His dad Jason is hoping the Pyrenees will keep him smaller!
I understand that - but I think the question was “What if you don’t earn much but are living off IRA/401K withdrawals which are taxable income and therefore show up on tax returns?” A person might be wthdrawing 6 figures from 401K/IRA accounts, but I doubt that’s low enough for free ACA premiums anywhere. Subsidized, maybe , but not free.
Most likely true. But if a person is drawing 6 figures from an IRA every year, they likely have a very large IRA balance and ACA premiums will at most an annoyance to their financial wellbeing
I turn 73 next year, first year of RMD. According to the handy-dandy AARP online calculator, I would need an IRA balance of $2,548,080.00 to mandate a distribution of $100,000.00.
I would love to have that amount of money in my IRA.
Sure, but it doesn’t have to be every year - I could withdraw 200k one year to buy a condo for winters and then withdraw much less to live on in subsequent years.
Retired California tech professional here, and I don’t take nearly that much out because I maxed out on Social Security and don’t even need to spend all my RMD, which is a lot less than half that. But my house is paid for, which helps.
First:
“Atypical for all retired Americans” and “Atypical for well-off Americans” are two very different things. Most conversations about taxes and investments are more about the well-off end than the not-well-off end.
Second thought:
RMDs start at a fairly low percentage. Current guidance is 2024 Publication 590-B, and specifically Appendix B Table III on pdf page 67, at least for unmarried folks = the simplest case.
The first year (age 73) your RMD is ~3.6% of the balance. But the required percentage ramps up as you age. If you’re lucky enough to live to 90, the percentage is 8.2. Then it really takes off.
Per SSA’s actuarial tables (see Actuarial Life Table), roughly 17% of males and 28% of females can expect to reach age 90. Of course life expectancy is strongly correlated with middle-class-or-better wealth, such that for folks with hefty balances, the survival rate to 90 ought to be well north of 17%M / 28%F. And those percentages are just of live births long ago. Living to age e.g. 65 to be able to retire, or 73 to be able to start RMDs indicates a much, much higher likelihood of making 90 from there. Not going to run out the math; I’m already on my 4th major edit on this post.
And depending on how your investment returns have been during that 17 year period, versus how much you’re taking out, your IRA balance may be larger when you’re 90 than it was when you are 73.
So your age 90 RMD, when you’re probably not doing too much partying and wild traveling, so not a lot of spending, may be 2x or 4x larger than it was when you were 73. Which may put that 90yo in the highest tax bracket of their entire life at a time when they have negligible deductions.
It’s definitely a comfortable problem to have, but most First World problems are pretty comfortable when seen from the POV of the rest of the world.