# Retirement question. How does one retire? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 22, 2024, 5:51pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956 "2024-02-22T17:51:15Z")\ **Posts on this page:** 8\ **Page:** 11
**Author:** ![Railer13](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/railer13/32/9742_2.png) [@Railer13](https://boards.straightdope.com/u/Railer13)\ **Post date:** [March 27, 2024, 10:25am UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/201 "2024-03-27T10:25:02Z")
> [@Yllaria](#): > > Can someone who’s retired tell us when you pay the taxes? Can it come out with the payment from the account or do you need to save up and make the payment yearly, before April 15? As a volunteer tax preparer (who’s quite busy right now), I can tell you that it works both ways, and it’s up to the account holder to decide how it’s done. Many of my clients are low-income retirees, with only Social Security and their IRA withdrawals as their income streams. As such, the totality of their income is less than the standard deduction, so they pay no taxes. Having nothing deducted when they draw their IRA money makes sense for them. Others withdraw enough money to generate taxable income, and they have taxes withheld (generally 10-15%) at the time of withdrawal. It’s important to remember that, if you live in a state that levies an income tax, to have state tax withheld at the same time. 5% is probably a good figure to withhold for state tax. If you withhold too much, you’ll receive a refund at tax time. Withhold too little, and you’ll pay when you file your taxes. My advice is to withhold 10% initially, and then you can adjust the percentage of withholding in succeeding years. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [April 2, 2024, 7:04pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/202 "2024-04-02T19:04:39Z")
401k employer match I’ve met numerous people that don’t contribute to their 401k plans, because they say they can’t afford it. Many companies will match your contributions up to 6% of your pay. So if you make $50,000 per year and you contribute 6% of your pay to the 401k plan ($3,000) your employer will also contribute $3,000 into your 401k plan. Now if I ask those same people would they make an investment where they could earn 100% on their money guaranteed, most of them say yes, especially if it was guaranteed. Well that’s what they’re passing up by not contributing to their 401k plan when there is a company match. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [April 2, 2024, 7:50pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/203 "2024-04-02T19:50:56Z")
> [@Railer13](#): > > My advice is to withhold 10% initially, and then you can adjust the percentage of withholding in succeeding years. You can also do the quarterly estimated tax payments, if you don’t think you’re having enough withheld. We have federal and state income taxes withheld from the inherited IRA that I’m drawing down; it’s nice not to have to worry about it. Since we’re still working, it would likely be covered by the fact that we are usually overwithheld on our income taxes, but I’d rather do so, than have to write Uncle Sam a check. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [April 2, 2024, 9:24pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/204 "2024-04-02T21:24:10Z")
> [@Euphonious\_Polemic](#): > > If your portfolio only went up 15% in 5 years… that’s not good. I hadn’t looked at my five year return for a while, and the last time it included the 2008/2009 fiscal meltdown where I lost 26% one year and 16% another. My curent 5-year increase is 74.3%. I consider that pretty good considering about 25% of it is in cash at low interest. But obviously if I include the losing years it’s much less. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [April 2, 2024, 9:52pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/205 "2024-04-02T21:52:45Z")
> [@Sam\_Stone](#): > > I hadn’t looked at my five year return for a while, and the last time it included the 2008/2009 fiscal meltdown where I lost 26% one year and 16% another. So… You hadn’t looked at your 5 year return since… 2014? That’s what I call a passive investor! ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [April 2, 2024, 10:39pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/206 "2024-04-02T22:39:33Z")
Sorry, 2018, not 2008. Although 2008 was worse. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [April 2, 2024, 10:55pm UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/207 "2024-04-02T22:55:32Z")
> [@Sam\_Stone](#): > > Sorry, 2018, not 2008. Although 2008 was worse… TSX was down 8.9% in 2018, up 22.9% in 2019. If you lost “26% one year and 16% another” from the 2018- 2023 time period… Yikes. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [April 3, 2024, 1:52am UTC](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956/208 "2024-04-03T01:52:08Z")
TD Balanced fund was down 5% in 2018, up 17.5% in 2019. If you were in index funds and ETF’s you should have done better than this, as you were not paying management funds, yes? [Previous page](https://boards.straightdope.com/t/retirement-question-how-does-one-retire/997956.md?page=10)