[brostholder]

Originally Posted by getdul981

I am already on RR Ret and the only time I paid in SS was for a few months before working for the RR and the time in military. I don't see the benefit of taking the 4 years of SS if you're just going to pay it right back when you get to be 66. If you can survive without SS for the 4 years, why not just quit work at 62 and not apply until you are 66?

One reason is that the government is basically giving you a zero interest loan for 4 years. For example, if I get $32,400/year between my wife and I, then in 4 years I will have $129,600. However, if I take the $32,400 and can get 4% (no easy task these days), then in 4 years I should have $143,100, a gain of about $14,000. This is an option that is legally available to all. In fact it was told to me by social security.

[Russ_Boston]

Thanks for the info.

[l2ridehd]

One item you also need to factor into this plan is taxes. You will be taxed on SS benefits if your other income with SS puts you in a taxable position. And my guess would be that if you can afford to save and invest it, you will be taxed on it. And probably at a much higher rate then you 4% required return.

[Boomer]

Speaking of taxes -- am I correct that Florida does not have a state income tax? I always thought that was one of the draws for retirees, besides the weather and oceans. That could help out the budget of those who establish residency after living where state income taxes were a factor. But I don't know for sure what the status of Florida is now with that.

We do not own in TV, at this point, but for what it's worth, I think that unless someone is completely committed to the new home market because they are absolutely certain that only new will do, they should think about taking their time and giving the pre-owned market a chance.

I think finding the right pre-owned home can save you money. I am also a big believer in not buying as big as you can afford. In fact, I admit to getting a little tickled when I see people assume that the size of the house reflects net worth.

If you are not in a hurry to buy and/or you are not completely convinced that new is what you want, I suggest renting to get your bearings so you can really think about how much you want to spend and where you want to spend it.

Renting could be a really good investment, not that old "money out the window" thing at all. Well, sure, that's contradictory to all the stuff we have heard all our lives -- just like hearing that old "buy as big as you can afford" thing. I think the rules of real estate have changed forever.

I better get out of here this morning before I end up writing some kind of dissertation about why I think what I think about all this. You would all be lulled back to sleep if I did that.

Seeya.

Boomer

[mak44070]

Boomer,
You are correct - Florida has no state income tax at this time. That's one of the reasons that we are in Florida for over six months and in Ohio the rest of the time. It'll be nice not to write a check to the Ohio Treasury next April!

[jmitchell]

Originally Posted by brostholder

What a great thread for some of us "worriers". It certainly has helped put my mind at ease a little bit. In a few months I will be eligible (at age 62) to collect social security of $1800/month. The year after that my wife will collect $900/month for a total of $2700/month or $32400/year. We have group of investments that pay dividends that cover our CYV mortgage, amenity fee and bond. From what everyone is writing it appears that if we lived without eating out a lot, we could do it without ever touching our savings and other investments. Here is a typical day I spent in the villages when I was there last month. 6am-2mile walk (free). 7am-swim laps at seabrook (free); 930am-civil discussion group (free); 11am-line dance lessons for 2 hours (free); 2pm-two happy hour beers and free peanuts on the porch at Cody's watching the world go by ($6); 4pm-pennecamp pool talking with great neighbors (free); 530pm-happy hour double and dancing at LSL ($5); 8pm-a delicious linghuini and white clam sauce at pizza bravo in LSL ($14). There is no where else in the world that I could have that great of a day for $25!!!! Living in the villages...priceless!

[Boomer]

Originally Posted by mak44070

Boomer,
You are correct - Florida has no state income tax at this time. That's one of the reasons that we are in Florida for over six months and in Ohio the rest of the time. It'll be nice not to write a check to the Ohio Treasury next April!

Thanks, mak, I was not sure.

I think there are some states that do not tax unearned income, but Ohio sure wants a piece of everything. I know it's not as bad as some other states, but it's bad enough. I am glad to hear that Florida still has no state income tax at all. Congratulations on next April's raise.

- - - - - - - - - -

While I am on the subject of taxes, I might as well throw in another of my thoughts. I think that if a pension and/or SS or other sources of income are in place, staying out of tax-deferred accounts, for a while, if possible, can work really well in some circumstances. Spending the taxable income first, and trying to do that as long as it makes sense, can give the opportunity for transition into a retirement budget by lessening the tax hit for a while.

Remember that old "3-legged stool" that retirement planning used to talk about. (Pension/SS/Investments) Well, that stool now, to be ideal, might need at least 4 legs, maybe 5. The 4th leg is health care coverage. A 5th leg would be to enter retirement without debt or with only very carefully considered debt, as with a mortgage that can be covered with cash flow that is known and certain.

Uh oh. I think I am off and running here.....just some thoughts.

But before I go, I want to say that I follow Ohiogirl's posts. I have a feeling that girl knows her numbers. And there are lots of other posters here, too, who are sharing their good insight. Thank you.

Good luck to all of you as you try to figure out what is right for you as an individual making those retirement plans and choices.

Boomer

[barb1191]

Originally Posted by rjm1cc

You can increase your social security payments by delaying when they start. You might want to think about using some of your investments for living expenses for a year or two and then start SS.

If you wait until you're 70 y/o, you may then apply to SSA for the maximum accrued amount for your account.

What I did may not work for everyone, however, I collected on my deceased husband's SSA (which may also be your deceased and/or divorced spouse whom you were married to for at least eleven years) until turning 70 then transferred to my own SSA account to now receive the maximum amount.

All very legal and proper....b

[rjm1cc]

Originally Posted by l2ridehd

One item you also need to factor into this plan is taxes. You will be taxed on SS benefits if your other income with SS puts you in a taxable position. And my guess would be that if you can afford to save and invest it, you will be taxed on it. And probably at a much higher rate then you 4% required return.

From what I have read you get a refund or credit for the taxes paid. I have not tried to work it out so I do not know if you get dollar for dollar back or not. Understanding how taxes will work is an important part of this plan.
Also where the money is coming from for the repayment. Short term money earns very little. If you keep the funds in the stock market and it went up you could sell and be ahead of the game. If the market went down you could skip the repayment but then your benefits would also be lower. The point is everyone has a different situation and when to collect SS is a lot more complex than a lot of us know. Seek advice from the SS administration and anyone else you can talk to.