Mike Pgh. Your welcome. And thanks for the comment.
You're welcome Mike Pgh. Great question!
Dougie, when you're ready, here is one from Bill
Bill, You can collect 50% of your wife's as a spousal benefit while you wait for yours to grow to full retirement age
Bill, You have 3 ways to collect benefits, but you can only collect 1 at any time: spousal, Workers or Survivor's benefit
Bill, Since statistically you will out live your spouse, assuming good health, you will want the largest benefit in your later years. With an 8% annual growth, along with CPI growth, if you delay your workers benefit until 70, you can grow it to a very nivce benefit. In the meantime, you can draw your spousal benefit. In fact, at your full retirement age, you can file your claim but elect to not draw bemnefits, allowing you benefit to grow, and you wife could switch from her worker benefit to her 50% spousal in your benefit.
Dougie, you can take this next question from Robert M when you're ready
Robert, The key to successful retirement planning is diversification. Investing in real estate is not an all or nothing thing. A portion of your assets should be held in real estate, but a portion should also be held in stocks and bonds. You do not mention the amountsd of the accounts, but putting a part of your portfolio into investing in real estate if fine. If your acounts are still in the beginning stages, and the real estate would take all your account - do not do it. Find a partner or buy a percentage, but you must keep you portfolio diversified.
Lea Ann, here's one from Paul
HI Paul. Assuming a well-diversified portfolio with 60% stocks and 40% bonds returns an average of 7% per year over the next 30 years, you could take up to 7% and still not run out of money. As a financial planner I don't necessarily advise that - the markets are unpredictable, inflation could be much higher than it is today and taking 7% a few years in a row in bad market conditions will seriously deplete what's left to grow. Better to figure out how much you need to live comfortably and design a portfolio that can be spent down, but will outlive you in a variety of market conditions. A fee only planner can run a retirement calculation with these specific concerns in mind and determine a more accurate estimate of the amount you can withdraw each year without running out of money.
Thanks, Dougie. When you're ready, here is another question from TWK
TWK, I believe you can convert from a TRAD IRA to a ROTH IRA any amount at any time. You will have to pay income tax on any amounts converted. To avoid a large 1099, this could be a 10 year program, converting 1/10 per year. You still have to take an RMD based on the value at the end of the previous year, but the conversion will reduce this amount as the years go on.
TWK, Also, In essence, your first RMD should be taken by Dec. 31 of the year you turn 701/2. However, the date you must begin RMDs is generally April 1 of the year following the year you turn 701/2 , If you turn 701/2 at any time in 2013, then your RBD is April 1, 2014. If you wait until 2014 to take that first RMD, you have to also take a second RMD by Dec. 31, 2014.
Dougie, when you're ready, a followup from TWK
TWK, The IRS simpified things a few years back - you can now rollover directly to the ROTH from the 403(b). You might also want to consider rolling your 403(b) into a TRAD IRA. This will allow for better legacy planning, and may open the investment platform for you to invest in Vanguard, Schwab and the like.
Here's our next question from Joanie
Joanie, my wife & I have the same age difference. Initially, you must plan sufficient funds for both of you while both here. Your husband will likely pass on first, and this reduces living expenses, but you will lose your social security when you elect survivor's benefits.
Dougie, before you have to go, we have a followup from Joanie
That is correct. You have a right to collect spousal, worker or survivor benefits, but you can collect only one benefit at any given time. While your husband is alive, he will collect his worker benefit, and when you retire you will collect your spousal or worker benefit, whichever is higher. So while he is alive, you and he will collect 2 benefits. When he dies, your survivor benefit will equal his benefit. But when you take it, you must stop the spousal or worker benefit you have been drawing. So total SS income will decline. As there will be only one left to support, living expenses will also go down.
Dougie, when you're ready, here's another question from mur44
mur44, it is risky to keep once interest rates go up - you want out of long term bond funds BEFORE interest rates go up. There are great short term and intermediate term bond funds anf ETFs that you can move these funds to. I am also using public listed RIETS for up to 10% of my income funds, and have also used utility etfs for a portion. These do not strictly fall into the bond definition, but small percentages can keep up the income as the short term & intermediate term bond funds are yielding very poor yields.
Hi Joanie -- have you tried the T Rowe Price Online calculator?
Joanie, the calculators that are out there do have their limitations, and we can't all be masters of the spreadsheet either. But to ensure you and your husband will have adequate retirement income, the safest approach would be to plan for the duration of your own lifetime. Doing so you may overshoot the mark but that is far better than not having enough.
Readers, bear with us a few minutes here while we transition advisors
Good Day all - signing out
Thank you for your help, Dougie!
Hi, this is Therese Govern from Therese Govern Financial Advisors in Seattle, joining the chat.
Hi, this is James Ruff of Homrich Berg in Atlanta, joining in.
Alright, let's get going again with this question from Jimaldan
Well, Jimaldan, none of us has a crystal ball. Your bond funds will lose value as interest rates rise, for sure, but how severely, and how long, depends on how those rising rates unfold. You can shorten the duration of your bond portfolio, and/or add higher yielding bonds, as potentially protective measures.
Jimaldan, just wanted to follow up on my earlier answer. Take a look at how bond funds have reacted to periods of rising rates in the past; Vanguard has a useful white paper on the subject if you're interested. It's true that the funds will be buying into higher yielding bonds as rates rise, and that can mitigate the impact of rising rates over a multi year period.
James and Therese, here is another question from BG