Retirement tip

[Tackleberry]

I'd also recommend looking into some Long Term Care insurance from a reputable company. Medicare doesn't cover nursing home care except for 21 days in the hospital and at a reduced amount up to 90 days a year, or something like that.

Be sure that you check out the policy carefully, they vary greatly in what is covered- at home care, lifetime caps, etc. We were able to purchase 250,000 policy for both of us for about a hundred a month. A nursing home can easily cost 80,000 or more a year.

 

[JohnnyPension]

You are right about the mandatory 20 percent. That was considered a "safe" amount by my tax consultant to avoid having tax time woes at tax time.

 

[moreluck]

"Unless they you assets over $500,000, you do not need to do a revocable living trust..."

I think it's still recommended in order to avoid probate. In some states (like ours) it can take a year to year-and-a-half. Survivors have to wait THAT long to sell the house or get their hands on other stuff.

If I am a surviving spouse I don't want some big old house with just me in it. I also don't want the big old payment that comes with it. I would want to unload the house asap and get a condo or something.

I think the living trust is a good idea for everyone.

 

[Brown Dog]

Does anyone know about a combined pension where you get credit for part-time work to go along with your fulltime years? I'm in 710 and think we don't have it. I heard 722 does. It would be nice if that 7 years I spent PT was worth 3 1/2 FT instead of that paltry 280$ receivable at age 65 from UPS. Thanks

 

[brownmonster]

My biggest fear is that when SS gets in far worse shape one of the fixes will be penalizing those folks who have been saving all these years for retirement. Kind of like when you save for your kids college and then get penalized for saving by not qualifying for any federal aid or cheap loans. The bigger the financial misfit you are in this country the more benefits you get.

 

[moreluck]

Eleven Dumb and Dumber Excuses Not to Save Money | Fox Business

 

[pretender]

Has anyone else looked into this whole age 59 1/2 thing. Normal thinking is if you withdraw before this you have to pay the 10 percent penalty. But...at IRS.GOV under "Distributions from 401k Plan" it says:

Tax on Early Distributions

Exceptions. The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances.



Made to an employee after separation from service if the separation occurred during or after the calendar year in which the employee reached age 55.

When I retired I called up the IRS (on hold for about an hour) and was told that yes, when you are 55 and retire from your company there is NO 10 PERCENT PENALTY. The only tax you pay upfront is the mandatory 20 percent.

I have not taken this money out. I have taken my union annuity and UPS stock (both considered retirement funds in my case) and have not had to pay the penalty.

I would be interested to know if anyone has taken their 401k money before age 59 1/2.

Don't hold me to this, because I am just in the process of researching this myself. It is my understanding that you can take a one time withdrawal from your
401k after you turn 55. The key would be to decide how much you need in advance, before converting the remainder to an IRA. It is also recommended that you take the withdrawal the year after you retire, when you would be in a lower tax bracket. You cannot take a one time withdrawal from an IRA before 59 1/2. However, you can take take equal monthly payments for a period of 5 years.