Author Topic: Retiring But where?  (Read 25625 times)

eastbound

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Re: Retiring But where?
« Reply #45 on: February 18, 2019, 04:29:56 AM »
true that, pb---and over the years i always thought that if one leaves NY or somesuch high-pay, high-cost rat-race, one will never be able to come back---like, get off that train carefully, cuz you aint getting back on--now lotta questions beg from that--like, what would make a person think they would WANT to get back to a rat race they pulled out of? etc etc

and i just signed a new deal for my business (in NY!--worst tax state in the country).......hope it proves a good one--i am committing precious time and $$$--less worried about the money, that's capped---more worried about precious time and keeping physical and intellectual fitness to enjoy life.....

now this is why a showrunner needs to get on creek--none of this shit matters to him, and nothing tragic is happening to him, and he's happy and relaxed all the time---not sure i can say that about my self....he lives the "fuck it" life we all fear--but he's fine..... love to live vicariously through him--he represents hope for us frightened oldsters---"fuck it" can work

pay no tax? surf? go to PR---a guy in my business moved there---laughable how little tax he pays--laughable the palace he got for a song for him and his 7 kids--

now i will begin a 12 hour day getting my new biz going-----hope i dont die before i check all the other boxes i want

and RTG, yeah, one's bracket and income types will confuse, as might levels of "progressiveness" in state and local income and other taxes--tho i may have that wrong--could be most states hew to the fed brackets

brackets---come on polticians??---250k and up is the highest bracket?? dates back to the 1970's---i have no problem with high marginal rates an income 5mm, 10mm, and 20mm and higher--somebody makes 50mm a year??--i have no problem taxing the amount above 10mm at a 60 or 70% rate

why do we have billionaires? to me it all boils down to simple math--taxes on the wealthy and corps have been cut hugely since reagan--surprise:: our wealthy are much wealthier, and our middle class is much poorer--and when we talk about taxing the wealthy, that's the scary commie "redistribution" boogieman--but for the last 40 years that's exactly what weve been doing:: we've been redistributing UP for the last 40 years!!!

and the "float everyone"s boat by handing out money to rich people" is fallacy--working class people spend all they earn--they earn more (or get taxed less) they spend more--goes right into the economy--hand money to rich people?? they add it to savings--they have plenty of sneakers food and medical care

woops--sorry for another hissy fit!  clearly i need to start work


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RideTheGlide

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Re: Retiring But where?
« Reply #46 on: February 18, 2019, 06:10:26 AM »
Pono,

I could be wrong, but I suspect there are highways narrower than the financial tightrope you are walking in retirement.  ;)

I think the tightrope has to be pretty small or the COL unavoidably high before you give up on a location where you really want to retire. For most of us in the US wanting to retire in the US, HI is off the table; that's what I mean by unavoidably high COL. You can make most other *general* locations work with some trade offs. By general locations I mean further from the coast than you might like in SoCal, but still close enough to go to the beach for day trips, maybe having a smaller place than you had dreamed of if that's something you didn't feel as strongly about. I look at the tax hit further down the list than other aspects of the COL.

Also keep in mind that the crazy high income tax rates are progressive; if you are just drawing enough to make ends meet, there won't be that much tax.

You're right BUT, I've been poorer than most at one time, and frugal habits are good ones to keep, even if you don't think you need them.

As you infer, the problem with charts relating a percentage of tax is that they don't show the whole picture. Property taxes might look super high, but if your home in eastern Washington cost one third what your California home sold for, the resultant tax is probably about 33 percent of what you previously paid--or less. I know people who moved to a low-income tax state and then realized that their low retirement income put them in a very low bracket but the sales tax (regressive) and property taxes (semi-regressive) were eating them up. Or you could move to Alaska for the tax benefits and then spend a lot of money staying warm and getting the heck out of there when it's horrid.

Take your time and figure it out.

I am in the middle; I have saved about 4 times the median amount and I have 30 cap years for SS. I don't expect nor deserve any sympathy from those struggling to figure out how to make it work, but from the experience of others I think the trap I have to watch out for is retiring with a lifestyle I can't afford long term. I have seen others burn through a few hundred thousand pretty quickly in the early years of retirement, cutting future interest income in half when they are barely out of the gate. I should be able to retire comfortably, but still have to watch expenses closely.

The other thing that's hard to figure in this situation is when to start taking SS. If you have a big retirement account, it's a no brainer to wait until 70. If you don't have much you have no choice but to start taking it when you retire. In the middle it's a dicier question. 4-5 years of expenses out of the retirement account is too big of a hit. I will wait until FRA at the least, which is 66+8 for me. I am hoping not to work past 65 full time. OTOH, I have no guarantee I will have full time work until 65. I hope I can hang on where I am for the next 5 years and not have to find anything else; would likely take a cut and find out about ageism first hand looking for something else.
« Last Edit: February 18, 2019, 06:14:07 AM by RideTheGlide »
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RideTheGlide

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Re: Retiring But where?
« Reply #47 on: February 18, 2019, 06:26:45 AM »
why do we have billionaires? to me it all boils down to simple math--taxes on the wealthy and corps have been cut hugely since reagan--surprise:: our wealthy are much wealthier, and our middle class is much poorer--and when we talk about taxing the wealthy, that's the scary commie "redistribution" boogieman--but for the last 40 years that's exactly what weve been doing:: we've been redistributing UP for the last 40 years!!!

and the "float everyone"s boat by handing out money to rich people" is fallacy--working class people spend all they earn--they earn more (or get taxed less) they spend more--goes right into the economy--hand money to rich people?? they add it to savings--they have plenty of sneakers food and medical care

I always hated that analogy - "a rising tide floats all boats". Actually it sinks the ones that are heavily anchored. We are in an oligarchy disguised as a democracy right now. Between gerrymandering, vote suppression, misleading or outright dishonest propaganda and the slant of voter participation by age and income strata, a minority is in charge. Yeah, I have some strong opinions about that also.
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Bean

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Re: Retiring But where?
« Reply #48 on: February 18, 2019, 09:02:50 AM »
The other thing that's hard to figure in this situation is when to start taking SS.

Yes, thats become complicated but out of the multiple scenarios that exist, there is an opportunity for optimization based upon specific individual circumstances.  Best to get a SS expert to assist on that part of the puzzle for sure.

RideTheGlide

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Re: Retiring But where?
« Reply #49 on: February 18, 2019, 10:12:09 AM »
The other thing that's hard to figure in this situation is when to start taking SS.

Yes, thats become complicated but out of the multiple scenarios that exist, there is an opportunity for optimization based upon specific individual circumstances.  Best to get a SS expert to assist on that part of the puzzle for sure.

They often give my least favorite answer - "Just work longer." Uhm, I am asking for retirement advice because I want to retire, have the means but want to optimize what I have.  ::)
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Bean

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Re: Retiring But where?
« Reply #50 on: February 18, 2019, 10:33:52 AM »
The old "just work longer" spiel is a cop out for sure.  It's hard to plan your future with somone (a professional) who has their own plan for you.   ;D

RideTheGlide

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Re: Retiring But where?
« Reply #51 on: February 18, 2019, 11:39:21 AM »
The old "just work longer" spiel is a cop out for sure.  It's hard to plan your future with somone (a professional) who has their own plan for you.   ;D
It's also quite often the case that continuing to work really isn't a viable option. I wouldn't take a low paying job that just made the gap smaller and could have trouble finding one that pays close to what I make now. Timing for it to last until I am 65 could even be tricky because of a product phase out. I am trying to make myself relevant to another project, but so are some younger less expensive guys.
« Last Edit: February 18, 2019, 11:51:42 AM by RideTheGlide »
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LeeBee

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Re: Retiring But where?
« Reply #52 on: February 18, 2019, 03:10:43 PM »
OK some thoughts from an old retired guy, who made enough money to retired to where I wanted (SW Colorado) at 65 over 10 years ago.
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LeeBee

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Re: Retiring But where?
« Reply #53 on: February 18, 2019, 03:35:10 PM »
OK, some thoughts from an old guy, who made enough money to retire to where I wanted (SW Colorado) at 65 over 10 years ago. I paddle on a beautiful 15 mile long reservoir 20 minutes away and sell Mistral paddleboards on the side. Just bought an OC-1 canoe and looking forward to the spring thaw in April o get back on the water. I do go over to Arizona in the late fall and early spring to extend my season. Some points:
1. Stop complaining about all your wrong choices in the past, learn from them, and be honest in where you are in life today.
2. Look at where you would like to be at retirement, both in location and how much you will need to make to live at the economic level you would like to be at.
3. Have someone you trust listen to points 1 & 2 and tell you if you are full of crap or being reasonable in both assessments. Adjust as needed.
4. Put a plan in place to get there. A good starting place is to read (and reread) some books like "Minimalism vs. Consumerism" and cut back your spending. You will save more and retire able to spend less and still be happy.
5. If you find that place you want to be retiring to, and especially if undeveloped property, buy it. The odds are it will appreciate faster than most investments and will further motivate you towards figuring a way to get there.
6. Develop some skill that will allow you to make some money after you move there, and per point 4 enjoy life (and paddling) not "things'.
7. Per point 6 read books like "Deep Work" for hints on how to succeed in the future in an "on-line" business, by developing a skill needed in the future.

Enough lecturing, time to get my snowshoes on and go for a walk with the dogs...good luck
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PonoBill

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Re: Retiring But where?
« Reply #54 on: February 18, 2019, 05:37:51 PM »
I wrote about that a little bit in my retirement book. I'd quote it, but I don't recall where it is, so these numbers are off the top of my head. One way to think about SS is to contrast the money you collect from SS to the same amount of money invested in an annuity. Say you collected 25K in social security and invested the money in a simple annuity. The return you could expect would be about 4 percent. Your SS increases about ten percent for each year you defer. Viewed this way, deferring as long as you can makes the most sense. There are other complexities involving employed spouses, differential ages, and how long you expect to live, but generally,  deferring SS puts you in a better situation later, though the value of that might be a bit slim.
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epoxybrain

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Re: Retiring But where?
« Reply #55 on: February 18, 2019, 08:25:25 PM »
And this is why I tune in to the zone! Such a wealth of good perspectives, all united by a shared love of water.

I've read Pono's book on retirement a few times over the last few years, and I had it back onscreen just last week. Well done, Pono, and thank you. I've been a fan of your no-BS approach across many posts, and it was a nice discovery to find you tackling retirement in the same way you've handled a hundred other problems. In fact, this whole thread is full of good insight that is lacking from sources that aren't putting access to water at the top of the hierarchy. 

Once all the spreadsheet dust settles, I'm hoping that when I roll into whatever near-water town I end up in, I discover a 'zoner a couple doors down with a garage stacked with watercraft and littered with odd projects in various stages of completion.

To me, that sounds like a good place to be.

Beasho

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Re: Retiring But where?
« Reply #56 on: February 18, 2019, 08:49:17 PM »
Your SS increases about ten percent for each year you defer. Viewed this way, deferring as long as you can makes the most sense.


I am nowhere near retirement age but have been planning for it for 25+ years.  A surfer friend of mine said "Beasho you are good with numbers what should I do with regards to taking my Social Security for retirement?"  His name was Rocky he was 62.

I asked him a few questions and we concluded what you wrote 'The returns are better the longer you wait.' 

I then said "Do you need the money?"  He answered "No!"

So I replied "Then wait".

6 months later Rocky had a heart attack face down in the surf at the Half Moon Bay jetty. 

As sad as it was he didn't need the money. 



« Last Edit: February 18, 2019, 08:52:52 PM by Beasho »

surfcowboy

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Re: Retiring But where?
« Reply #57 on: February 18, 2019, 09:19:39 PM »
I also want to point out that even in CA, if you aren’t near the coast you can still find an inexpensive lifestyle.

We own a place in the desert that we bought for less than any of you guys in Texas or Wisconsin can boast. It’s a 2.5 hour drive to the coast and the area has none of the “more, bigger, faster” culture that people associate with SoCal (it’s mostly a lie btw, the South has as much or more of that stuff really from what I’ve seen.)

You can go up the coast and live in a manufactured home 10 min from the beach for not much more than what folks pay on the Gulf coast and still be close to your family and the surf.

Look beyond the McMansions and the 90 miles of coast near the most expensive cities and you can score. The Central coast has tons of great little towns not more than 30 min from the beach. California isn’t just LA/OC and SF.

But if you like the desert at all, you can live in this great state for next to nothing and travel when and where you like.

I’m a few years behind you guys but my wife and I are building a low cost real estate portfolio where we can rent them short term for income and travel between them during the various off seasons of each to reduce the income loss. You’d be surprised what’s out there if you look.

Kudos to those of you who remind us to live and not regret the past. Life in the US can be pretty sweet at most any income level if you have your head right. Also, there are some beautiful places out of the country to go for cheap. Especially if you can fly and stay long term. I love Creek’s adventure and urge others to look at the option of a low cost permanent residence and a modest travel budget to get you to warm, great places where you can live for much less than the US.

Costa Rica is expensive in town (but you can still do way better out of the tourist areas.) But it opened my eyes to Central America as a whole.

So many good ideas and attitudes here.

RideTheGlide

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Re: Retiring But where?
« Reply #58 on: February 19, 2019, 05:32:59 AM »
I wrote about that a little bit in my retirement book. I'd quote it, but I don't recall where it is, so these numbers are off the top of my head. One way to think about SS is to contrast the money you collect from SS to the same amount of money invested in an annuity. Say you collected 25K in social security and invested the money in a simple annuity. The return you could expect would be about 4 percent. Your SS increases about ten percent for each year you defer. Viewed this way, deferring as long as you can makes the most sense. There are other complexities involving employed spouses, differential ages, and how long you expect to live, but generally,  deferring SS puts you in a better situation later, though the value of that might be a bit slim.

It is complicated. Yes, there is that increase, but it will take a while to catch back up to make up for the money you didn't receive while deferring - the break even point. You likely know this but it's not as much a purposeful incentive to delay as a flaw in the calculation. They calculate it so that at the end of an average life span you will receive roughly the same amount no matter when you start taking it. But they use a number that is too low, given that you have already reached an advanced age. If you are able to defer, you either are healthy enough to continue working or have above average wealth, both of which also increase average life span. The percentage of people who reach retirement age and then live past the break even point is more than 50%, but the percentage of people who live more than 5 years past the break even point is less than 50%. But with a couple the odds of one of you reaching your 90s are much higher. Anyway, the odds of coming out ahead by deferring are in your favor. The odds of coming out way ahead are not.

Whether the draw on my funds to meet expenses while deferring exceeds 4% is a big factor also. Market timing could even make 4% bad. Nearly all my funds are tax deferred, which complicates it further. If I have little to no other income besides the draw on those funds, I will pay the least possible amount of tax on it. When I put it in, I was protecting it from the highest rate I paid at the upper end of my income. My head hurts...

I am almost certainly not taking it until FRA (66+8).
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Tom

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Re: Retiring But where?
« Reply #59 on: February 19, 2019, 09:20:01 AM »
I agree with Surfcowboy and he looks like he has a good plan. California also has easy access to Baja, where can stay full or part time near quality surf for about as much as you want to pay. I know a few retired surfers that live in Scorpion Bay for less than they would pay almost anywhere else. 

 


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