How much $ to retire and how to fund your lifestyle in retirement

[adiggs]

Sushi is great and quite healthy if you don't get it loaded with mayo and crap. But all things in moderation. There's a not insignificant amount of mercury in most fish and that can build up if eaten too frequently.

Sushi twice a day for years and/or the herbs he was taking took down Jeremy Piven for a while.

Exclusive: Jeremy Piven Defends Play Departure Due to Mercury Poisoning

Jeremy Piven talks to Good Morning America in an exclusive interview about why he pulled out of his starring role in David Mamet's Broadway play 'Speed-the-Plow.' Piven and his doctor said the actor had mercury poisoning possibly from eating too much sushi. He said at the Golden Globes it has...

abcnews.go.com

Good info. Thankfully I'm a long ways from that (no other meat but sushi for 20 years vs. 10 or 20 dinners worth in 1/2 a year ). That led me to some interesting info about mercury in fish:

Mercury Levels in Commercial Fish and Shellfish (1990-2012)

Mercury Levels in Commercial Fish and Shellfish from 1990-2012 by Species

www.fda.gov

To the degree it matters, get the salmon instead of the tuna on your ngiri. Looks like salmon is 1/7th to 1/35th the mercury levels compared to tuna (mean).


SO VERY VERY OT

 

[Oil4AsphaultOnly]

Good info. Thankfully I'm a long ways from that (no other meat but sushi for 20 years vs. 10 or 20 dinners worth in 1/2 a year ). That led me to some interesting info about mercury in fish:

Mercury Levels in Commercial Fish and Shellfish (1990-2012)

Mercury Levels in Commercial Fish and Shellfish from 1990-2012 by Species

www.fda.gov

To the degree it matters, get the salmon instead of the tuna on your ngiri. Looks like salmon is 1/7th to 1/35th the mercury levels compared to tuna (mean).


SO VERY VERY OT

From my wife's pregnancy days: large fishes have higher concentrations of mercury versus small fishes. So eat more mackeral/smelt versus tuna (yellow-tail is a type of tuna). ;-)

Or a better guideline - everything in moderation!

This discussion about enjoying sushi in retirement takes me back to the thread about de-urbanization (people won't leave the city for rural living due to access to food variety), but that's a dead horse now.

 

[dmvevguy]

Hello all, I did a lot of research over the last 2 months for my small biz tax planning for this year. I'm a PPL working on instrument rating, btw. The best thing that a small biz can do for a large tax deduction (assuming you're a pilot and love to fly) is to buy a small airplane from your small biz. The 179 bonus depreciation applies to aircraft, and is a super sweet deal.

That's the good news. The bad news is that there's hardly any supply of used aircraft for sale, and the ones currently on sale are super inflated along with everything else. I started looking into a new aircraft build (Cessna / Diamond / Cirrus), but manufacturers aren't able to produce and deliver until late 2022. Insane.

For my small biz tax problem (grateful for this first world problem), I'm eagerly/actively searching for a used aircraft to buy before Dec. Also will be taken the advice earlier and def buying a used truck/suv by Dec and plan to sell it once I take delivery of CT next year (or at this point maybe even 2023).

 

[brianhn1]

It is possible to find used aircraft at the moment but you might have to consider finding a well informed broker, that is willing to do the leg work to broker a deal from start to finish, schedule and coordinate a pre-purchase inspection for you, and even advise you to discuss with insurance what airplane you're even allowed to fly yourself or carry passengers. Aviation is fortunately filled with honest people but there are some that can give bad advise even if they don't mean to do so. Single engine piston has been on high demand for at least 4 or 5 years now and prices reflect that. There are some good examples and many bad examples out there (aging, old, lapse in maintenance).

You obviously will need to do your research so I may mistakenly say something erroneous below:

Buying an aircraft for business is highly beneficial but you many want to discuss with an aviation attorney how you can structure your usage to your business. You must document very accurately what each purpose of each flight is for (business, personal for non-entertainment, personal for entertainment), document who is on the flight (eg. employees flying to conduct business can only be completely deducted), and usage after the 1st 12 months must be at least 50% business to be able to depreciate the aircraft completely.

You'll have to make sure to pay the sales tax on it right after purchase as every state IRS knows that is low hanging fruit by just simply seeing where your plane has been in the 1st 12 months after purchase. Some states will send you a tax bill if you parked it in their state for a certain period of time during the 1st 12 months even if you just registered it in another state.

Also liability is grey area if you get in a accident and the passengers sue. A good insurance policy (eg. $2M smooth) is required if you're carrying anyone remotely worth anything but insurance won't offer you that until you have at least a decent number of hours. Not many insurance companies are willing to insure new pilots over $1M/($250k per passenger) so you'll hear about some crazy stories of owner pilots going "naked" (self-insured) on like $2-3M turboprops or VLJs. You could do an LLC to limit liability but there are FAA implications (eg. charter, part 135 requirements, dry leasing, etc.) that are a bit annoying.

Either way, buying aircraft is a challenge but can be the most useful time machine, ever.

 

[dmvevguy]

It is possible to find used aircraft at the moment but you might have to consider finding a well informed broker, that is willing to do the leg work to broker a deal from start to finish, schedule and coordinate a pre-purchase inspection for you, and even advise you to discuss with insurance what airplane you're even allowed to fly yourself or carry passengers. Aviation is fortunately filled with honest people but there are some that can give bad advise even if they don't mean to do so. Single engine piston has been on high demand for at least 4 or 5 years now and prices reflect that. There are some good examples and many bad examples out there (aging, old, lapse in maintenance).

You obviously will need to do your research so I may mistakenly say something erroneous below:

Buying an aircraft for business is highly beneficial but you many want to discuss with an aviation attorney how you can structure your usage to your business. You must document very accurately what each purpose of each flight is for (business, personal for non-entertainment, personal for entertainment), document who is on the flight (eg. employees flying to conduct business can only be completely deducted), and usage after the 1st 12 months must be at least 50% business to be able to depreciate the aircraft completely.

You'll have to make sure to pay the sales tax on it right after purchase as every state IRS knows that is low hanging fruit by just simply seeing where your plane has been in the 1st 12 months after purchase. Some states will send you a tax bill if you parked it in their state for a certain period of time during the 1st 12 months even if you just registered it in another state.

Also liability is grey area if you get in a accident and the passengers sue. A good insurance policy (eg. $2M smooth) is required if you're carrying anyone remotely worth anything but insurance won't offer you that until you have at least a decent number of hours. Not many insurance companies are willing to insure new pilots over $1M/($250k per passenger) so you'll hear about some crazy stories of owner pilots going "naked" (self-insured) on like $2-3M turboprops or VLJs. You could do an LLC to limit liability but there are FAA implications (eg. charter, part 135 requirements, dry leasing, etc.) that are a bit annoying.

Either way, buying aircraft is a challenge but can be the most useful time machine, ever.

Great advice! Yes, I intend to actually simply use it for the first year solely for business trips without carrying passengers under Part 91. I was going to keep it simple and buy it from my existing LLC so I can take the 100% bonus depreciation. Talked to a few aviation attorneys, and they mentioned I could do a creative thing and setup a single member LLC owned by the parent LLC and still take advantage of the 179, but it seems too much trouble and complex. Also, don't feel like bothering with dry leasing and paying another CPA to manage bookkeeping etc. for another LLC.

I've talked to a few brokers, but just haven't come across anything decent so far. I'm hoping to get my instrument rating before purchasing an aircraft, which will hopefully lower the insurance and allow me to get more premium.

Fun times!

 

[Skotty]

Honestly, I could probably just work forever, but the huge burnout is the terrible time off policies in America. There is not nearly enough vacation time available through employers. It used to be you could get more by being a long term employee somewhere, but long term jobs (15+ years) don't really exist anymore. I just had to switch last year against my wishes due to COVID-19 furlough purgatory, and the get more vacation time clock started over again.

Best guess is I will probably retire at 75. I will continue to put money into 401K until that time at a typical rate (30 more years). I have a partial pension through one employer. And once I hit 75, whatever I have at that point is what I have. I'm also toying with the idea of developing some rental properties.

 

[SageBrush]

I will continue to put money into 401K until that time at a typical rate (30 more years).

You will also continue to fund social security, but will only benefit from your top 35 years of income.
I'm not writing this to dissuade you from working -- far from it. It is just an FYI that was on my mind because I was fiddling with a SS spreadsheet the other day.

 

[dmunjal]

You will also continue to fund social security, but will only benefit from your top 35 years of income.
I'm not writing this to dissuade you from working -- far from it. It is just an FYI that was on my mind because I was fiddling with a SS spreadsheet the other day.

If you retire before SS age (62), does is still calculate top 35 years and does zero income from early retirement (say 52) to 62 affect the amount you receive from SS at 62?

 

[CHGolferJim]

If you retire before SS age (62), does is still calculate top 35 years and does zero income from early retirement (say 52) to 62 affect the amount you receive from SS at 62?

Pre-covid, I found the staff at the local SS office surprisingly knowledgeable and helpful. Or a CPA.

 

[juanmedina]

You can download this SS calculator to see how zero income years will affect your retirement:

Social Security Retirement Benefit Calculation

 

[SageBrush]

If you retire before SS age (62), does is still calculate top 35 years

Yes; the age you stop working does not matter. If you work less than 35 years then all your work years are included. A work year is defined as a year in which you had wages.

does zero income from early retirement (say 52) to 62 affect the amount you receive from SS at 62?

Only in the sense that you could have worked, and those work years may have changed the top 35 year total.

Examples

1. You worked 20 years. All those years are included in the benefit calc
2. You worked 35 years. All those years are included in the benefit calc
3. You worked 40 years. Your top 35 income producing years are included in the benefit calc.

Note that SS is based on REAL dollars, meaning corrected for inflation according to the US urban and clerical cost of living index.
So e.g., if your income was 50k in 1990 and a dollar then is $1.5 now, the 1990 income will be treated as $75k 2021 dollars.

 

[SageBrush]

For anybody interested in 'gaming' the SS system, the best time to retire (all else being equal, which is never ...), a lifetime (max top 35 years) averaged 2021 Real monthly income of 6,000 has a pretty optimal return. In SS lingo, the averaged lifetime monthly income is called the AIME. NOTE that the AIME is calculated based on 420 months of income. If a worker had 210 months of income their AIME is 0.5 of their REAL accumulated wages.

That is to say, once you+employer have put 6,000*420 months*0.124 = $312,480 REAL dollars into SS, any more is going to be a money loser. Since SS contributions currently peak at an income of ~ $12k a month, it follows that someone who maxed out their SS contributions every year can smartly stop paying (from a SS benefit angle, anyway) after 17.5 years of work.

 

[Featsbeyond50]

Yes; the age you stop working does not matter. If you work less than 35 years then all your work years are included. A work year is defined as a year in which you had wages.


Only in the sense that you could have worked, and those work years may have changed the top 35 year total.

Examples

1. You worked 20 years. All those years are included in the benefit calc
2. You worked 35 years. All those years are included in the benefit calc
3. You worked 40 years. Your top 35 income producing years are included in the benefit calc.

Note that SS is based on REAL dollars, meaning corrected for inflation according to the US urban and clerical cost of living index.
So e.g., if your income was 50k in 1990 and a dollar then is $1.5 now, the 1990 income will be treated as $75k 2021 dollars.

My understanding is, if you only work 20 years, you have 15 years that are counted as zero. You don't get the average of just the 20 years. Is that not correct?

 

[tivoboy]

My understanding is, if you only work 20 years, you have 15 years that are counted as zero. You don't get the average of just the 20 years. Is that not correct?

Yes, in relative terms, but no in real terms. I found it’s better to think of it as just the overall $$ SS earnings accumulated numerator is going to be smaller with 20x$$ vs. up to max 35x$$.. but as a rough example if one earns 2x the normal yearly rate of income cap for all those 20 years, you’ll come out the same in the end. You don’t get docked for 0 earning years as long as earning years make up for it up to the SS income calculating cap.

 

[SageBrush]

My understanding is, if you only work 20 years, you have 15 years that are counted as zero. You don't get the average of just the 20 years. Is that not correct?

Exactly right

I tried to clarify that point in a later post but it probably bears emphasis:

AIME = accumlated_real_wages / 420
Along with the proviso that if more than 420 months of wages have accumulated, only the top 420 are counted

Editorial
The inflection point of 35 years work at $6,000 AIME (2021) reflects a built-in deeply progressive tax scheme. As something of a wild guess, I'll say that a good 10% of workers have salaries of $10k or more a month, and it is not hard to imagine a 40-45 year work history. That worker's benefit (as a fraction of contributions) peaked after 21 years of work; during the other 20+ years the worker gets back about 1/2 of what they put in. The prior generation construct of one person of a household works and the other stays home has a better SS benefit outcome because the homemaker gains 50% of the worker's benefit so that type of couple gets back ~ 75% of what the worker put in for those same 20+ years after the peak.

And I suppose another POV should be mentioned: If the worker is not self-employed then half of SS is paid for by the employer. If you care to view that as free money then the benefit calculation shifts a lot. The peak stays the same, but one could argue that contributions past the peak are returned to the worker.

 

[juanmedina]

Update:

Yesterday I was talking to a family member that I don't see often, he is a teacher, married and with two kids. He has been always very outdoorsy and sports oriented, he was telling me about his summer break and that he has been going fly fishing everyday and playing tennis tournaments. That sounded awesome to me and make me think "why I am still working?". They don't have much money but they live an awesome life, they don't make a lot of money, they still have a mortgage, debt and both of their kids are at college on scholarships. There house is modest and nice, they garden, they live a really simple life and it seemed great.

Anyway, we are currently sitting at 2.3M in investments and I wanted to wait until 3M but I really don't see the point and it feels like I am wasting time. We took our first step towards retirement and slowing down; my wife last day from work is this Wednesday. I see a lot of people have way bigger goals than I do, do many of you are planning to carry a mortgage? We currently don't have one and I wonder if that makes my goal seem more reasonable.

I think is time for an update with SP mooning retirement is calling me bad. I am really considering quitting my job because I am not really enjoying it right now and I even got promoted the other day lol. My investments are now 3.5M and I have been selling my stock slowly. I have around 900k in cash and most of my shares are underwater with covered calls at $1100 in my after-tax account. I feel like I can easily make my current net income by selling premium in my after-tax account with puts and BPS. I actually enjoy trading options from time to time even after losing 6 figures the other day when the stock gapped up 20%. I think I should be able to trade options maybe one week or two weeks out of the month to match my current paycheck. What I am finding really hard to do is quitting my job; it is really scary to take the plunge. I actually think it would be better for me to get laid-off because I think I would receive about $150k on a severance package and stock which would be really nice. I think my main worry is that my current job is really high paying for my qualifications, location and is easy and I am afraid I would not be able to find another like it if I ever need to work again. Any thoughts? suggestions?

 

[mongo]

I think is time for an update with SP mooning retirement is calling me bad. I am really considering quitting my job because I am not really enjoying it right now and I even got promoted the other day lol. My investments are now 3.5M and I have been selling my stock slowly. I have around 900k in cash and most of my shares are underwater with covered calls at $1100 in my after-tax account. I feel like I can easily make my current net income by selling premium in my after-tax account with puts and BPS. I actually enjoy trading options from time to time even after losing 6 figures the other day when the stock gapped up 20%. I think I should be able to trade options maybe one week or two weeks out of the month to match my current paycheck. What I am finding really hard to do is quitting my job; it is really scary to take the plunge. I actually think it would be better for me to get laid-off because I think I would receive about $150k on a severance package and stock which would be really nice. I think my main worry is that my current job is really high paying for my qualifications, location and is easy and I am afraid I would not be able to find another like it if I ever need to work again. Any thoughts? suggestions?

Non advice thoughts:
If your job is more positive than negative, no reason not to stay employed for now. It gives you an income cushion, helps with insurance, and gets you closer to retirement age.
If you are much younger than 60 and have IRA's maybe look into a ladder Roth conversion to allow access to those monies (the roll over amounts) in 5 years. Just opening and contributing to a Roth (if you don't already have one) starts the earnings 5 year clock which matters if you are >55. There is also a rule on 401ks for early penalty free access if you leave/ lose your job and are at least 55.

Also, maybe consider trading the puts more often at further OTM strikes to reduce risk.

 

[ZeApelido]

I actually think it would be better for me to get laid-off because I think I would receive about $150k on a severance package and stock which would be really nice. I think my main worry is that my current job is really high paying for my qualifications, location and is easy and I am afraid I would not be able to find another like it if I ever need to work again. Any thoughts? suggestions?

 

[UltradoomY]

I think is time for an update with SP mooning retirement is calling me bad. I am really considering quitting my job because I am not really enjoying it right now and I even got promoted the other day lol. My investments are now 3.5M and I have been selling my stock slowly. I have around 900k in cash and most of my shares are underwater with covered calls at $1100 in my after-tax account. I feel like I can easily make my current net income by selling premium in my after-tax account with puts and BPS. I actually enjoy trading options from time to time even after losing 6 figures the other day when the stock gapped up 20%. I think I should be able to trade options maybe one week or two weeks out of the month to match my current paycheck. What I am finding really hard to do is quitting my job; it is really scary to take the plunge. I actually think it would be better for me to get laid-off because I think I would receive about $150k on a severance package and stock which would be really nice. I think my main worry is that my current job is really high paying for my qualifications, location and is easy and I am afraid I would not be able to find another like it if I ever need to work again. Any thoughts? suggestions?

Greetings fellow wage slave! lol
I was in a similar situation earlier this year where the numbers got big enough to give me less of a reason to care about work.
So - the wife retired in October (41 years old) and instead of myself also retiring, I opted to make the time worth more.
This was achieved by thinking through what made me want to work (43 years old) and for me there is a nice sense of purpose and I like my job.
Just because I don't "have" to do it anymore has made it more fulfilling. Not sure why but it helps smooth out any of the good/bad balance of going in everyday.
Also picking up a new Model S Plaid tomorrow since, why not? Giving myself some little treats and saving 100% of my salary is nice and helps me go through the motions of "being retired" but not the stress.
When the wife retired I was a little stressed since it was nice to have her income (nurse practitioner) and insurance but after the first couple of weeks it went away when I saw how happy she was, and that made me happier at work of all things.

Sorry for the long (not @adiggs long.... ) rant about my personal choices and situation so not sure if that helps....

What we are really doing at work is selling our time. Time that we can never get back.
If you have more valuable things that could be done with your time, then that would be the way I would look at it. Do those things.

Maybe (since you were just promoted) talk with your company - manager, boss whatever they are called now a days, and let them know your thoughts.
Might be able to trade some salary for extra vacation time and that would be a good balance.

 

[Christine69420]

I think is time for an update with SP mooning retirement is calling me bad. I am really considering quitting my job because I am not really enjoying it right now and I even got promoted the other day lol. My investments are now 3.5M and I have been selling my stock slowly. I have around 900k in cash and most of my shares are underwater with covered calls at $1100 in my after-tax account. I feel like I can easily make my current net income by selling premium in my after-tax account with puts and BPS. I actually enjoy trading options from time to time even after losing 6 figures the other day when the stock gapped up 20%. I think I should be able to trade options maybe one week or two weeks out of the month to match my current paycheck. What I am finding really hard to do is quitting my job; it is really scary to take the plunge. I actually think it would be better for me to get laid-off because I think I would receive about $150k on a severance package and stock which would be really nice. I think my main worry is that my current job is really high paying for my qualifications, location and is easy and I am afraid I would not be able to find another like it if I ever need to work again. Any thoughts? suggestions?

I'm opting out of stock options. Can't be bothered. But about the other options of life:

I too used a long time to become retired. Perhaps it would calm the butterflies in your belly to remember that you can get another job after ie. a year if you find you miss working too much. Depending on what your job situation is of course.

For me that option is so far forgotten as it can be!