Spending with Confidence in Retirement
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- Опубліковано 11 жов 2024
- I suspect that almost all new retirees are hesitant to spend money. In fact, research suggests that many retirees spend far less than they could while still protecting their future finances. But that means you're not living your life to the fullest!
In this video I share two approaches that I use to give me the confidence to spend without worry.
NOTE: I am not a financial planner or an "expert" on this topic. I'm just guy that educated himself on the basics and wants to share what I've learned, and my experiences, with you.
My wife and I retired at 56 and we are 10 months into retirement. We have saved all our lives and earned every single cent ourselves. We have used multiple financial advisors, planners, and CPA for a budget. Now we find it is so hard to spend. There is a lot of guilt and fear in spending. Thanks for the talk...
Good talk
I started keeping track of our spending until we were both retired. Then I was keeping track of our net worth and it has continued to go up after we were both retired. Now my RMD is going to be triggered and that will create a tax burden. Lost my pension in 2018 so there have been pot holes along the way. I believe that when the RMD's start I will have to look more closely at our budget. I too believe we are both under spending based on our age and life style. We are both conservative . Need to learn how to spend more.
I know what we have,know how to invest,we have no problem spending $$,cant take it with you.Start spending,YOU KNOW WHO YOU ARE.
I pay alot of attention to taxes. I keep a balanced portfolio of 50% stock funds and 35% bond funds and 15% money market funds. Plenty of cash and I sleep like a baby. The portfolio has grown by 300k since I retired 10 years ago. 60% in Roth and 40% in Traditional IRA. SS at 70. I made a forecasted budget 5yrs before I retired and was very conservative. I haven't looked at a budget since.
what software did you use to pull all your account info into one page?
It sounds like your plan is sound. One thing employers fail to educate employees about in regards to 401ks are those pesky Required Minimum Distributions when you turn 73. Having a large account balance in these types of investments is a blessing and a curse as your Medicare premiums will be based on income from all sources including 401k or Ira accounts. Looking at withdrawals from a tax standpoint may make sense. If you look at the tax brackets they go from 10%, to 12%, to 22% to 24%. One might want to make sure to at least fill the 12% bracket up with your deferred income every year to lessen the future RMD . Once all your deferred 401k or IRA money has been taxed you’ll have that RMD monkey off your back. Beware of the fact that these tax brackets expire after 2025 ,all the more reason to possibly fill the22% bracket up some. Keep in mind that entering a higher bracket only increases the amount of tax on income within the bracket not all your withdrawals
Thanks. I agree that folks are generally undereducated on the ins and outs of tax deferred accounts. I'm sure if it's incumbent on employers to provide that education, though. There are so many sources out there that push tax deferred accounts as a means of minimizing current taxes that people tend not to hear the "rest of the story". That is why I believe developing your financial literacy is so important.
Although we have multiple investment accounts (Roth, IRA, brokerage accounts, etc) I plan to pull any cash from my tax deferred accounts specifically to diminish that balance which will decreased RMDs.
Just curious are you drawing social Security now?
Yes, I am. I explain my rationale for doing so at 65 in the "Why I Bucked ..." video.