Ann - If I am reading your question correctly, you will have annual income in retirement of $80,000 from sources other than investments. Is your question whether your portfolio will provide you with $15,000/year from now throughout retirement? The rule of thumb for "safe" withdrawals from investment portfolios in retirement is 4%; however, this is a topic that is being hotly debated in the industry. The debate is about fluctuations of investment value over time and whether the 4% is a fixed dollar amount based on initial portfolio value or whether it fluctuates each year. The assumptions your advisors made do seem a little rosey; we use a 5% inflation rate for our "worst case" analyses and a return of 7% (blended equity/fixed income). Also, you did not state what probability your advisor gave for your analyses.
Michael-Typically, file and suspend is used when one of the spouses has little or no benefits due them under their own work record. It is therefore advantageous for this spouse to take the spousal benefit based on the other spouses's record. I assume this is your situation. And yes I believe the SSA is correctly stating the fact that both spouses cannot each take a spousal benefit on the other's record simultaneously.
Hi Tom - You are right to consider non-muni investments for your IRA. The primary reason people choose municipal bonds (mutual funds, ETFs, or bonds) is the tax benefit, which isn't available in the IRA.
Here is one from jfitteron
Hi jfitteron - You should probably talk to your local Social Security office about your wife trying to take a spousal benefit BEFORE her FRA. I'm thinking that isn't permitted, but they are the authority. In general, you're right about trying to delay your SS benefit to provide a bigger total benefit over your lifetime.
jfitteron - Just a clarification to my earlier response: you should ask whether she can take the spousal benefit before FRA, then later switch to her benefit. I believe that's not possible, but they will give you the authoritative answer.
jfitteron-Yes, the scenario you mentioned is possible. Your wife would get a 50% benefit reduced depending on the number of months before her FRA that she begins taking the spousal benefit. If her FRA is 66 y/o, the reduction would be approximately 25% I believe so her benefit would be reduced to approximately 38%.
John, Could you please give us a little more detail, as I do not fully understand your question.
John-Any withdrawals from a Trad IRA will be taxed as ordinary income depending on your tax bracket and other income and deductions.
While we wait to hear back from John, how about you take this next question from Marie
Marie- You might qualify for SS benefits as a divorced spouse under you husband's record if you were married more than 10 years.
Bonita, your retirement savings is probably best done in an IRA then -- which may or may not be deductible, depending on what your tax return looks like. If it's not deductlble, and you qualify (there are income limits), a Roth IRA could be a good choice. You could fund up to $5,500-- that's the IRS limit for your age this year. Any of the discount brokerage firms make it very easy to open and fund an IRA, and they all have target-date funds. As far as how much to save toward college vs. retirement, that's a hard one. But if you haven't saved anything for retirement, you have to prioritze that first, in my opinion. You can do both, but I'd weight the retirement much more heavily.
James, if you're ready, you can take this question from Kate
Hi Kate. Great question. Delaying the start of social security benefits until age 70 will indeed maximize the amount he will receive each year while he is living, and it would likely maximize the survivor benefit you would receive at his death (provided your own social security benefit isn't higher). But for delaying the start of social security to be superior to starting at 67, your husband would have to live long enough to make up for the foregone benefits between age 67 and 70. Also, consider that at most 85% of social security benefits are taxable income, while withdrawals from most other forms of retirement savings are fully taxable.
Thanks, Therese! Here is a question from Reva Tomko
Reva, that's the $64,000 question! Turning a nest egg into a retirement paycheck is the primary financial challege we all face once we're retired. Start by making sure you understand safe withdrawal rates; that's critical. Make sure you educate yourself about asset allocation -- the right mix for you between low risk and high risk assets. And understand that if you're looking for guaranteed income, you have to look at single premium immediate annuities -- where you hand over a lump sum to an insurer, irrevocably, and in turn, they pay you a promised amount for life. A portfolio of stock and bond investments does not come with any guarantees.
Thanks, Phil. When you're ready, here is a question from Dario