Retirement savings - good news, bad news

[zendog3]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.

[Stu from NYC]

If you are happy all is well but would bet the guy who sold u the annuity wishes you had thrown more money at him.

[Stu from NYC]

You purchased an annuity 55 years ago. Wow that salesman did you a disservice

[Robbb]

You purchased an annuity 55 years ago. Wow that salesman did you a disservice

Every $100 you invested in the S and P 500 would be $24,500 today. Every $100 you invested in an annuity would be worth app $2,400 today

[manaboutown]

All that has been going on in the market has caused me to review my stock market investing history. Now I am a real estate guy and the stock market has never been my "thing". I never put much into it, comparatively speaking. Nonetheless on or about January 1, 2022 the stock I held had appreciated to 22 times what it was worth in 2002. This appreciation does not include any BRK which I treat separately. This is after I had occasionally sold a little stock over the years to pull money out for various reasons. I don't recall selling any during the bear markets over the last twenty years and indeed rarely sold or traded stock. I just bought shares of good solid companies that I believed were good longterm investments in ownership, including (luckily) a few shares of Berkshire Hathaway at about $3K each back when it had only one class of shares in the 1980s.

I never bought whole life insurance or an annuity. Just out of college I went to work at the USPTO and learned lore that patent examiners (which I was at the time) bought term insurance and invested the difference in premiums in the stocks of insurance companies selling them term insurance, such as Travelers. Lol.

Anyway, a large commercial property in which I had an interest sold earlier this year and this bear market offers opportunities. I have put a toe into the water and bought a few shares of this and that. Most of it has dropped a little since I bought it but no big whoop. I am taking my time, not jumping in with both feet. The Fed is apt to raise interest rates again in July and August and possibly September and later in the year. Who knows? Blood is in the streets.

[Stu from NYC]

Every $100 you invested in the S and P 500 would be $24,500 today. Every $100 you invested in an annuity would be worth app $2,400 today

I am sure the salesman who sold this did very well. Hate to see people get taken advantaged of this way

[jedalton]

most kids know everything, I know I did. Whish I had listened

[irishwonone]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.
Cheer up. The market, over time, will rebound. You never lose money unless you sell in a down market. Likely everyone reading your post is also in a similar position regarding their investments at the current time. Try to ignore the noise and enjoy those things that give you joy in life.

[crash]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.

Better yet invest in dividend paying stocks that increase their dividend every year. This way your income goes up even if the market goes down.

[rsmurano]

The only people making money from annuities are the salesman. You missed out from some of the biggest gains in the stock market from 2017-2020 in history. You lost $90k I’m assuming ytd, I made $140k in the last 2 months from 1 etf, so you can still make money, just not in annuities.
I get it, keep investing in the market, even more so when it’s down since you will buy more shares and eventually it will come back. This is true, especially when your 40, 65 or older, not so sure.
In years past, I never sold a share in 2007 or in 2020, but I sold everything early this year (did buy into an etf a few months ago). Market is down 20-30% and I think it will still get worse. So instead of waiting a year or more after the market starts to recover to regain all the losses, I will jump back in and make 20-30% while the market recovers. Cash is king in a down market. You can’t time the market, so I might miss a few % gain from the start of the economy rebound, but it will be a good gain.

[retiredguy123]

One thing that annuity salespeople often neglect to tell you is that any money you make will be taxed at your ordinary income tax rate. You cannot take advantage of the lower capital gains tax rate when you withdraw the money.

[Biker Guy CJI]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.

Not sure why you would even write this. I read this forum for entertainment value only. If you’re looking for advice, you’ll get both sides of the topic ten times over and maybe even from the same person in different posts. Then you have the comedians that think they’re more clever than everyone else, followed by the curmudgeons that want to try and embarrass you with how smart they are followed by what an idiot you are. The judgmental will evaluate your worth based on your perceived political views and decide to support you or harass you.

If you are happy with your decision 55 years ago I’m very happy for you. If you’re debating with yourself I’d discuss it with a small circle of friends that will be honest with you. Not the mob waiting to pounce.

[Rich42]

Glad your kids don’t listen to you….obviously they are much smarter.

[OhioBuckeye]

You’re right you better weigh things out because nobody is going to feel sorry for us!

[Albany]

There really is no reason to post such a snarky reply to the person who honestly discussed his retirement nest egg during this time of upheaval in the markets. And it sounds like he is doing fine, as am I.

[Pgcacace]

Most of our retirement money is in annuities. We have not lost any money. It was a good move.

[Stu from NYC]

There really is no reason to post such a snarky reply to the person who honestly discussed his retirement nest egg during this time of upheaval in the markets. And it sounds like he is doing fine, as am I.

Since you didnt quote anyone no way to tell who you are writing about.

IMHO many of us use this type of post as a learning experience to help others.

[retiredguy123]

Since you didnt quote anyone no way to tell who you are writing about.

IMHO many of us use this type of post as a learning experience to help others.
I agree. Providing facts and opinions about good and bad investments should be part of an "investment talk" forum.

[Boomer]

If you are happy all is well but would bet the guy who sold u the annuity wishes you had thrown more money at him.

You purchased an annuity 55 years ago. Wow that salesman did you a disservice

I am sure the salesman who sold this did very well. Hate to see people get taken advantaged of this way



There really is no reason to post such a snarky reply to the person who honestly discussed his retirement nest egg during this time of upheaval in the markets. And it sounds like he is doing fine, as am I.



Since you didnt quote anyone no way to tell who you are writing about.

IMHO many of us use this type of post as a learning experience to help others.



Seriously, Stu? Seriously?

Please connect the dots.

Boomer

PS: In fairness though, these quoted posts are not the only ones delivered in that recurring tone of belittling. Smarm and snark are thick around this joint……..

…….Oh my, I think I just wrote a snarky post…….EEK! Sometimes it is just plain contagious and I can’t help it…..

[Boomer]

Not sure why you would even write this. I read this forum for entertainment value only. If you’re looking for advice, you’ll get both sides of the topic ten times over and maybe even from the same person in different posts. Then you have the comedians that think they’re more clever than everyone else, followed by the curmudgeons that want to try and embarrass you with how smart they are followed by what an idiot you are. The judgmental will evaluate your worth based on your perceived political views and decide to support you or harass you.

If you are happy with your decision 55 years ago I’m very happy for you. If you’re debating with yourself I’d discuss it with a small circle of friends that will be honest with you. Not the mob waiting to pounce.



Yep. Thanks for saving me the time to write pretty much the same thing. And, btw, ‘pounce’ is the operative word there.

Boomer

[OrangeBlossomBaby]

There really is no reason to post such a snarky reply to the person who honestly discussed his retirement nest egg during this time of upheaval in the markets. And it sounds like he is doing fine, as am I.

Sadly, there's a shot of reality here: some folks aren't capable of feeling good about themselves and their own life choices and circumstances, unless they can demonstrate that others are beneath them.

[manaboutown]

In my experience a rising tide lifts all boats and vice versa. My stocks are down from their January 1, 2022 valuations as well and most of them are dividend paying large solid companies. What happened is that unpredictable Mr. Market altered his valuations of them for many reasons.

[Stu from NYC]

Sadly, there's a shot of reality here: some folks aren't capable of feeling good about themselves and their own life choices and circumstances, unless they can demonstrate that others are beneath them.

Do not know what you might have majored in but if psychology you should turn in your degree.

[retiredguy123]

Seriously, Stu? Seriously?

Please connect the dots.

Boomer

PS: In fairness though, these quoted posts are not the only ones delivered in that recurring tone of belittling. Smarm and snark are thick around this joint……..

…….Oh my, I think I just wrote a snarky post…….EEK! Sometimes it is just plain contagious and I can’t help it…..
The tone may be questionable, but I agree with the message. People who sell annuities are not doing their clients any favors. Rather, their purpose is to enrich themselves at the expense of their clients. They do this by presenting inaccurate, distorted, and dishonest information about the product they sell. They have no right to call themselves financial advisors or to seek the trust of clients.

[Stu from NYC]

Seriously, Stu? Seriously?

Please connect the dots.

Boomer

PS: In fairness though, these quoted posts are not the only ones delivered in that recurring tone of belittling. Smarm and snark are thick around this joint……..

…….Oh my, I think I just wrote a snarky post…….EEK! Sometimes it is just plain contagious and I can’t help it…..

I did not mean to belittle anyone just gave my opinion of an "investment advisor" who gave terrible advise to a client. Thought I was helping others.

I apologize to anyone who thought I was belittling others.

[Topspinmo]

I am not in stock market any more an glad cause IMO it going to take big dump and that’s not going to be good for anybody.

[bern916]

The tone may be questionable, but I agree with the message. People who sell annuities are not doing their clients any favors. Rather, their purpose is to enrich themselves at the expense of their clients. They do this by presenting inaccurate, distorted, and dishonest information about the product they sell. They have no right to call themselves financial advisors or to seek the trust of clients.

You are wrong. Not ALL annuities are bad. We have a 4% 5-year FIXED annuity. We paid ZERO fees. No market exposure. Avoids probate. Grows tax deferred unless I choose to take the interest annually (or monthly).

Should all of someone's money be in fixed annuities, of course not. But it's a conservative option that can serve a purpose in anyone's retirement portfolio.

[MidWestIA]

If you can afford to shift a little into a index voo or vti when you hear it's gone down big and wait a year you can make good money. Just look at yahoo finance chart to see where they are in the cycle

[Bay Kid]

Most of the stock I bought over the years was my power company in VA. Good dividends that more than pays my electric bill every month and it has gone up every year.

[Travelhunter123]

You are wrong. Not ALL annuities are bad. We have a 4% 5-year FIXED annuity. We paid ZERO fees. No market exposure. Avoids probate. Grows tax deferred unless I choose to take the interest annually (or monthly).

Should all of someone's money be in fixed annuities, of course not. But it's a conservative option that can serve a purpose in anyone's retirement portfolio.

Excellent point

[retiredguy123]

You are wrong. Not ALL annuities are bad. We have a 4% 5-year FIXED annuity. We paid ZERO fees. No market exposure. Avoids probate. Grows tax deferred unless I choose to take the interest annually (or monthly).

Should all of someone's money be in fixed annuities, of course not. But it's a conservative option that can serve a purpose in anyone's retirement portfolio.
Not if you don't know what you are buying. Many people who buy an annuity have no idea what they are buying, and the insurance company will not even allow them to read the contract until they give them their money. There are television commercials that sell annuities, but they never even mention the word annuity. I have reviewed investment portfolios for people, and when I tell them that they have an annuity, it is the first time they are aware of it. They think they own stocks and bonds in their own name, not a life insurance contract. Some say that they bought it because they trusted a friend or relative to invest their money wisely. In some cases that could be true, but mostly the salespeople are selling annuities because it is their product that pays the highest commission, and often it is not appropriate for the client.

Is that any way to sell a financial product?

[MandoMan]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.

My retirement is all in TIAA mutual funds. It grew so much that to my surprise I was able to afford to live here. However, now it is down 30% from its peak. It will go back up, but no more gravy until then. If the Chinese didn’t eat weird animals that carry new diseases and the Russians stayed out of Ukraine, I’d be doing very well indeed.

[Blueblaze]

All of our retirement money is in cash and real estate. At 3% inflation, it was enough to support 30 years of retirement. At 20% inflation, we'll burn through it in 10. But if this inflation lasts that long, none of us will want to be alive 10 years from now.

So I'm currently losing 20% a year to the government theft known as inflation. That still seems preferable to losing 20% to the Wallstreet Casino on top of 20% to inflation.

The thing that makes me mad is that I'm still barely making 0.1% interest in my money market account, while mortgages are at 6% and credit cards are at 18%. Government/Banking corruption like that is why America no longer works. For the 100 years prior to the Wall Street bailout, any fool could get 4.25% on a passbook savings account at any bank, even through the Great Depression and the Carter Inflation. On the day I retired and moved my life savings from a 401K to an IRA, I did the math, and realized that after bumbling my way through three stock market crashes, my life savings would be twice as much if I could have just kept my money in a 4.25% savings account the whole time. But, of course, that option hasn't existed since the government abolished it in 2008.

Annuities? If you hold an annuity 55 years, you've beaten the actuary's statistics, along with my cash scenario. Congrats on your longevity! Not many people manage that.

In fact, an annuity ought to be the perfect investment for the average joe. Basically, you're accepting a lower rate of interest to let the professional investors at an insurance firm invest your money -- and the firm has the longevity to survive market booms and busts. On top of that, it's literally a survivor's game. Unless you choose a return-limiting rider on the policy, the fund even gets to keep your investment when you die. With a deal like that, you'd think any insurance company would be tickled to guarantee more than half the Market's average rate of return for the use of your money. But they don't have to. Unfortunately, there seems to be an endless supply of math-challenged folks who will fork over their life savings for a guaranteed monthly check, thinking the percentage represented by the ratio of their monthly check to the total investment is the investment's "return" -- which ignores the time value of money. In reality, an insurance company rarely needs to grant a real return that even matches the inflation rate.

But with inflation running at 20%, maybe it's possible to lock in that rate now with an annuity, and keep it after government comes to its senses. Maybe. And pigs might fly. I think you'll find that the math wizards at the insurance companies have already factored that possibility into their contract, but you might be able to squeeze 3-4% out of them.

Which would still be a heck of a lot better than I'm doing in cash.

[Robbb]

Most of our retirement money is in annuities. We have not lost any money. It was a good move.

You have also lost out in the tripling appreciation of the market over the past 10 years. The market has gone up 547% since 2009.

[Stu from NYC]

You have also lost out in the tripling appreciation of the market over the past 10 years. The market has gone up 547% since 2009.

I agree but you need to accept some risk to invest.

[Robbb]

Excellent point

Totally disagree, first any investment can be set up to avoid probate, that has nothing to do with the investment. Second 4 to 5% historical return is not even a fraction of what you could have been earning. The market is up 547% since 2009. Even 30 year government bonds were paying 6% or greater during that time. Any investment that pays a sales guy 8% commission and has a 15 page contract is not in your best interest. Look up the returns for a vanilla Vanguard 60/40 fund over the past 10 years. Oh also, annuity payments are taxed as normal income, investments are taxed at the much lower (usually) capital gains. The first 77K of income of capital gains is taxed at 0%. Annuities are a screw job for the vast majority of investors.

[craigrmorrison]

I’m planning for retirement. How can you be assured that you have enough money to get you to the grave? Thanks in advance.

[Stu from NYC]

I’m planning for retirement. How can you be assured that you have enough money to get you to the grave? Thanks in advance.

Get a subscription to Kiplingers and read cover to cover.

Go to local library and take out some books on financial planning.

You need to know more about planning for retirement before even thinking of meeting up with a professional financial planner.

[zendog3]

When stocks are booming, as mine were the last couple of years, annuity looks like a bad investment. When stocks are crashing as they have been lately, annuity seems like a brilliant position. Sadly, the person with a balanced portfolio is always making less that the person with an unbalanced portfolio.

I weathered a lot of market downturns when I was young. That was not a problem because I had a lifetime to recover. A crash in retirement can be a serious problem for a retiree whose savings are not diversified. I, for one, do not believe the current downturn is over. I continue to be happy that I have some annuity to protect me if this current downturn continues.
In watching the stock market casually over most of a lifetime, I observe that when any stock or group of stocks are overvalued compared to their earnings, there will be a crash. I think it is important to know the difference between investing and speculating. If you buy a security because you think the company is strong and growing, and will return profit from new sales, that is investing. If you buy a company that is overpriced because you think other people will drive up the price of your stock, that is speculation. Speculating is fine, if you are smart enough to sell before the crash. Only a fool expects the price of an overvalued stock to continue to go up forever. But, as recent history shows, a lot of fools spend their money on overpriced stocks.

[Old Bob]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.
The stock market is just like a roller coaster. The only ones that get hurt are the ones that fall off----just hold on tight!!!

[rsibole]

most kids know everything, I know I did. Whish I had listened

A little too late . . .

[Altavia]

The only people making money from annuities are the salesman. You missed out from some of the biggest gains in the stock market from 2017-2020 in history. You lost $90k I’m assuming ytd, I made $140k in the last 2 months from 1 etf, so you can still make money, just not in annuities.
I get it, keep investing in the market, even more so when it’s down since you will buy more shares and eventually it will come back. This is true, especially when your 40, 65 or older, not so sure.
In years past, I never sold a share in 2007 or in 2020, but I sold everything early this year (did buy into an etf a few months ago). Market is down 20-30% and I think it will still get worse. So instead of waiting a year or more after the market starts to recover to regain all the losses, I will jump back in and make 20-30% while the market recovers. Cash is king in a down market. You can’t time the market, so I might miss a few % gain from the start of the economy rebound, but it will be a good gain.

The reality of trying to time the market.

Does Market Timing Work? | Charles Schwab (https://www.schwab.com/learn/story/does-market-timing-work)

[Plinker]

Marcus money market at Goldman Sachs currently pays 1% with no minimum. People don’t need to settle for the bupkis offered by banks. If people would take a little time educating themselves on the most basic tenets of financial planning, they wouldn’t choose such a paltry rate.
I use laddered MYGA’s (multi year guaranteed annuity) vs bank CD’s as the rates are FAR higher and backed by the issuing insurance company and the State of FL.
I agree that ALL annuities are not bad. A pension and SS are types of annuities and are quite popular with retirees. IMO, the “financial advisors” peddling variable and index annuities in TV are a pox on society and prey on vulnerable seniors.
Also, gotta love that VOO!

[retiredguy123]

Marcus money market at Goldman Sachs currently pays 1% with no minimum. People don’t need to settle for the bupkis offered by banks. If people would take a little time educating themselves on the most basic tenets of financial planning, they wouldn’t choose such a paltry rate.
I use laddered MYGA’s (multi year guaranteed annuity) vs bank CD’s as the rates are FAR higher and backed by the issuing insurance company and the State of FL.
I agree that ALL annuities are not bad. A pension and SS are types of annuities and are quite popular with retirees. IMO, the “financial advisors” peddling variable and index annuities in TV are a pox on society and prey on vulnerable seniors.
Also, gotta love that VOO!
The Vanguard Federal Money Market fund is now paying 1.35 percent.

[Plinker]

The Vanguard Federal Money Market fund is now paying 1.35 percent.

Thanks for the update. Marcus is actually paying 1.1%. I did have cash in the Vanguard MM fund you describe for many years but switched when Marcus started offering much higher rates. Both choices are vastly superior than banks.

[Hifred]

I took a look at my retirement savings today. My retirement is in TIAA/Cref.
The good news is that there is still enough there to get me to the grave.
The better news is that my annuity gained about $1,300 in the last 6 months.
The bad news is that my equities lost about $ 90,000.
The great news is that I din't have a dime invested in crypto currency.

Seriously, when I started saving for retirement 55 years ago, I read up and learned that I should diversify into low risk annuity and risker equities. I chose a 25/75 % split which worked well. I was often tempted to dump the annuity and put all my money in stocks. I am now glad I didn't. I only wish I had changed may diversity distribution to more annuity at time of retirement.

I would give this wisdom to my kids, but they don't listen to me anyway.


We have about the same split as you do and it is working well for us too. The issue we faced as educators is we had a 403B and a 457 which work on pretax dollars. So the interest and monies earned get taxed upon withdrawal. We have been slowly moving some of those monies into a Roth so that future earnings will grow tax free. We had an accountant do a comparison and the taxes really do take a chunk out of your earnings. We are at a 22% bracket and when we have to do RMD's we will be in the 24% bracket so we are just going to roll money over so that we don't end up in the 32% tax bracket. Also as we age it is almost certain that one of us will die before the other. To maintain our standard of living I being the wife will probably need to pay for house maintenance and all the things I don't know how to do that my husband does like clean the sprinkler heads etc. He will have to do stuff that I do that he doesn't know how. However, I would have half as much to live off of because as a widow I only will receive half of his pension. If I don't change over to a Roth then I will be taxed at the single rate not the married filing joint rate on the extra 50% that I need to make up withdrawing from his 403B. There is so much stuff to think about. I wish I knew of an honest financial planner but most I have spoken to give me advice that I don't believe is in my best interest. So far we have been doing things with the help of an accountant who I ask questions and he runs the numbers. I don't let anyone invest for me. I do it myself.

[retiredguy123]

We have about the same split as you do and it is working well for us too. The issue we faced as educators is we had a 403B and a 457 which work on pretax dollars. So the interest and monies earned get taxed upon withdrawal. We have been slowly moving some of those monies into a Roth so that future earnings will grow tax free. We had an accountant do a comparison and the taxes really do take a chunk out of your earnings. We are at a 22% bracket and when we have to do RMD's we will be in the 24% bracket so we are just going to roll money over so that we don't end up in the 32% tax bracket. Also as we age it is almost certain that one of us will die before the other. To maintain our standard of living I being the wife will probably need to pay for house maintenance and all the things I don't know how to do that my husband does like clean the sprinkler heads etc. He will have to do stuff that I do that he doesn't know how. However, I would have half as much to live off of because as a widow I only will receive half of his pension. If I don't change over to a Roth then I will be taxed at the single rate not the married filing joint rate on the extra 50% that I need to make up withdrawing from his 403B. There is so much stuff to think about. I wish I knew of an honest financial planner but most I have spoken to give me advice that I don't believe is in my best interest. So far we have been doing things with the help of an accountant who I ask questions and he runs the numbers. I don't let anyone invest for me. I do it myself.
If you are retired, I would suggest that you transfer all of the money in your 403B account into a Vanguard or Fidelity traditional IRA. The fees will be lower, you will have more choices for investments, and they will assist you with many aspects of the investments. I prefer Vanguard, but Fidelity has a office at Lake Sumter where you can see a live person. 403B accounts are notorious for having excessive management fees, and some of them have even been sued because of the high fees. Vanguard or Fidelity will handle all of the paperwork to do a direct transfer.

[Stu from NYC]

We have about the same split as you do and it is working well for us too. The issue we faced as educators is we had a 403B and a 457 which work on pretax dollars. So the interest and monies earned get taxed upon withdrawal. We have been slowly moving some of those monies into a Roth so that future earnings will grow tax free. We had an accountant do a comparison and the taxes really do take a chunk out of your earnings. We are at a 22% bracket and when we have to do RMD's we will be in the 24% bracket so we are just going to roll money over so that we don't end up in the 32% tax bracket. Also as we age it is almost certain that one of us will die before the other. To maintain our standard of living I being the wife will probably need to pay for house maintenance and all the things I don't know how to do that my husband does like clean the sprinkler heads etc. He will have to do stuff that I do that he doesn't know how. However, I would have half as much to live off of because as a widow I only will receive half of his pension. If I don't change over to a Roth then I will be taxed at the single rate not the married filing joint rate on the extra 50% that I need to make up withdrawing from his 403B. There is so much stuff to think about. I wish I knew of an honest financial planner but most I have spoken to give me advice that I don't believe is in my best interest. So far we have been doing things with the help of an accountant who I ask questions and he runs the numbers. I don't let anyone invest for me. I do it myself.

Does the enrichment academy offer courses in Financial management? Get a financial publication or two you need to know as much about finance as you can so you can plan for the future.

[Hifred]

If you are retired, I would suggest that you transfer all of the money in your 403B account into a Vanguard or Fidelity traditional IRA. The fees will be lower, you will have more choices for investments, and they will assist you with many aspects of the investments. I prefer Vanguard, but Fidelity has a office at Lake Sumter where you can see a live person. 403B accounts are notorious for having excessive management fees, and some of them have even been sued because of the high fees. Vanguard or Fidelity will handle all of the paperwork to do a direct transfer.

My 403 B has no fees and pays a fixed rate of 3%. I am moving some at a time into a back door Roth by paying the taxes and rolling it into a roth. I am putting it into a fixed rate MYGA which is like a CD but from an insurance company that pays 4.05%. I do have stocks and the dividends were paying me $21,000 a year in addition to my pension but with the stock downturn they are paying me about $16,000. I would not take a 403 B and move it into a traditional IRA. Because the growth would still be taxed. With the Roth the interest is not taxed.

[Boomer]

We have about the same split as you do and it is working well for us too. The issue we faced as educators is we had a 403B and a 457 which work on pretax dollars. So the interest and monies earned get taxed upon withdrawal. We have been slowly moving some of those monies into a Roth so that future earnings will grow tax free. We had an accountant do a comparison and the taxes really do take a chunk out of your earnings. We are at a 22% bracket and when we have to do RMD's we will be in the 24% bracket so we are just going to roll money over so that we don't end up in the 32% tax bracket. Also as we age it is almost certain that one of us will die before the other. To maintain our standard of living I being the wife will probably need to pay for house maintenance and all the things I don't know how to do that my husband does like clean the sprinkler heads etc. He will have to do stuff that I do that he doesn't know how. However, I would have half as much to live off of because as a widow I only will receive half of his pension. If I don't change over to a Roth then I will be taxed at the single rate not the married filing joint rate on the extra 50% that I need to make up withdrawing from his 403B. There is so much stuff to think about. I wish I knew of an honest financial planner but most I have spoken to give me advice that I don't believe is in my best interest. So far we have been doing things with the help of an accountant who I ask questions and he runs the numbers. I don't let anyone invest for me. I do it myself.



There was a thread here a while back that discussed moving IRA money into a Roth, even though it meant an immediate tax hit in the process. Opinions varied because situations vary…….

I had done conversions to Roth from our IRAs when we had first retired and were quite a few years away from the RMD age.

My only regret is that I did not do it more often. I don’t know why I got distracted from my pay-now-so-we-don’t have-to-pay-later plan, but at least I did it a few times.

If you have several years before RMD age, if I were you, I would keep doing those conversions.

You bring up the concern of what can happen to the survivor’s income when only one is left. You are smart to be thinking ahead of that sad but inevitable event and to try to plan for it.

As we reach RMD age, we are then well into Medicare age. At that point, IRMAA can rear its ugly head and you can find yourself paying more for Medicare if AGI crosses certain thresholds. The bigger the RMD, the more likely IRMAA will get you. (If you don’t know about IRMAA yet, find out. It is another reason to do Roth conversions if you can, while you can.)

Boomer

[manaboutown]

Here is another reason to transfer as much as possible (and if possible) into a Roth to at least reduce if not eliminate RMDs. Thankfully I was able to do so one year almost 20 years ago. I still get hit with this additional 3.8% tax on some income but not as much as I would if I had to take RMDs.

Net Investment Income Tax | Internal Revenue Service (https://www.irs.gov/individuals/net-investment-income-tax)