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This is Social Security's Magic Number

winger

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... I died last August and was revived with an AED. :D.
Wow - glad you are still with us!!!

One of my co-workers retired around 55 yo, and unfortunately suffered a heart attack within 6 months which he did not survive. He had 30 years with the company (which offers a pension) and saved all his life and was looking forward to a fruitful retirement. Life throws curveballs all the time - it's best to make the most of the time you have (including time with kids, travel, hobbies, etc.).
 

Talent312

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Life throws curveballs all the time - it's best to make the most of the time you have (including time with kids, travel, hobbies, etc.).

... and time with Social Security, which is one reason I plan to take it ASAP -- It 'll be less than I could get by waiting, but that's rolling the dice on how long I'll be around to collect.
.
 

bogey21

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I've recently gone to a condensed, primer/introductory session on different aspects of retirement. First, it was a very mind boggling experience given the amount of things to consider. Distribution (example SS) was one of the major items/sections covered . One big takeaway I got about this section was order in which you take distributions (e.g. pension, SS, IRA, 401k) in combination with other income sources (e.g. savings, rental income, etc.) could impact the amount of taxes you pay. I will need more education in taxation strategies.

I did absolutely no calculations. When I retired at age 66 I immediately signed up for Social Security and started my monthly Pension payments. Did I leave money on the table? Didn't care then and don't care now roughly 15 years later. Life is good!

George
 

WinniWoman

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I did absolutely no calculations. When I retired at age 66 I immediately signed up for Social Security and started my monthly Pension payments. Did I leave money on the table? Didn't care then and don't care now roughly 15 years later. Life is good!

George

Very good for you!

Sometimes I think- that is the way to do it. I spend so much time analyzing everything and making myself nuts! I have a master plan, but who the heck knows what's to be.

I love your method!:)
 

Sugarcubesea

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Wow - glad you are still with us!!!

One of my co-workers retired around 55 yo, and unfortunately suffered a heart attack within 6 months which he did not survive. He had 30 years with the company (which offers a pension) and saved all his life and was looking forward to a fruitful retirement. Life throws curveballs all the time - it's best to make the most of the time you have (including time with kids, travel, hobbies, etc.).

Almost the same thing happened to my Grandfather, retired on a Friday, died the following Monday, never even got to collect one pension check…so very sad
 

WinniWoman

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I've never done a real in depth analysis but it seems to me, just about all the states have the same basic services that have to be paid with taxes from some place. If it's no income tax, there's got to be taxes on something else to pay for the services. Same thing if property taxes are low, there's something else to generate revenue to provide the services. Nirvana is retirement (pension, SS, ETC) is exempt from a high income tax, property taxes are low as are other taxes including personal property taxes. If such a place exists, it would probably be flooded with retirees and rapidly go broke.

On the subject of Social Security, I retired from one job at 55, started my own business and then waited till my FRA to start taking SS. Made the most sense to me and probably was a pretty good bet since I died last August and was revived with an AED. :D. The SS Checks were and are used for travel and other luxuries. If I had waited until 70 and not been revived when my heart stopped, I would have missed a lot of fun. :)

Cheers

I don't know. I have posted before, but I have a relative in Delaware who lives very well on just his SS check. He has a split level home in a development in Wilmington. Property/school taxes are under $1000. No sales tax. No income tax I believe. He has a brand new car. Buys what he wants. Could never live like that in NYS. He, in fact, loves where we live- Hudson Valley, NY- the mountains and so on-but always says he would be crazy financially speaking to leave Delaware.
 

VacationForever

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200K isn't pretty high, it's a very high retirement income. But taking it at face value, using your own numbers...

For 130K gross income (net of SS) for a married couple, after standard deduction and exemption credits, I get a total tax of $6147, using the latest rates published by the CA FTB (2014). Not a trivial amount, but not $13K either.

Bob

I think definition of "pretty high" vs. "very high" is all personal. Ask Bill Gates what he thought of living on 200K in retirement and he will tell you that it is at poverty level.

I don't do my own income tax (CPA does) but we don't get a lot of deductions and we don't have a mortgage so there is no mortgage interest to deduct. But my CPA had always advised us to assume 10% income tax for CA. There was a year that I sold a property overseas and we were subject to the millionaire penalty which was in excess of 13%.
 
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VacationForever

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Have you looked at average electricity bills in Hnderson? I venture to guess due to heavy AC usage during 1/2 the year, you could be paying upwards of $300-400/mo certain months. Would that put a dent in your budget when compared to say somewhere with more moderate temperature here in Calif?

I cannot compare apples and oranges but I can tell you that so far I pay less in Nevada than CA
- CA home is about 5000 sq ft. Before we put in an indoor pool, electricity bill was $400-$500 during summer months, winter months gas heating + electricity was about $350. Spring / Fall would also run at about $300. After we put in the indoor pool in winter, the total bill was $600 and we panicked and put in solar panels. Solar panels have brought our electricity bill down to about $200 per month throughout the year. Gas heating bills are still running about $200-$300 in the winter.
- NV home is a condo and about 2800 sq ft. We haven't spent summers in NV but run our home at 80 degrees while we are away. Electricity bills in summer months have been $400 to $500. However, in winter, electricity drops to $150 (no gas in the condo) and it pays mainly for the water heater as the indoor temperature is in the low 70s and heating does not kick in at all. Sometimes we have to run the air-con for a short while.
 
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vacationhopeful

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I don't know. I have posted before, but I have a relative in Delaware who lives very well on just his SS check. He has a split level home in a development in Wilmington. Property/school taxes are under $1000. No sales tax. No income tax I believe. He has a brand new car. Buys what he wants. Could never live like that in NYS. He, in fact, loves where we live- Hudson Valley, NY- the mountains and so on-but always says he would be crazy financially speaking to leave Delaware.

Delaware has an income tax.
 

John Cummings

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According to some studies, one key component of relocating at retirement would be who is at the 'destination'. Unfortunately, being first generation, we do not have family outside of California (all our relatives are either in San Fran or Los Angeles (LA) areas) so this could limit our out-of-state options. I don't really like LA, aside from visits to Newport Coast and/or Disneyland - that leaves our current San Fran area.

So, your statement of not paying very much taxes in California is interesting.
Is there something(s) you are doing specifically (out of the norm) to help curb taxes?

My taxes are done by my financial manager so I don't know all the details. My retirement income is a mix of SS, dividend, annuities, capital distributions etc. Some of the income is from my IRA. I do itemize deductions.

I didn't mean to imply that California is a low tax state but it certainly is not nearly the highest for retirees.

Personally, I think that taxes are not a very good reason for picking a place to live. There are many places that are cheaper to live than California but I wouldn't want to live there. We have lived in Vancouver Canada, Portland OR, SE Florida, Arizona, San Diego CA, SF Bay area CA, Mexico, and Venezuela. We have also spent a lot of time in several other areas. For us it was a no brainer to retire where we now live in Southern California.

I believe that you should live where you like it the most as long as you are able to. If we couldn't live here then Arizona would be our second choice.
 

VacationForever

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Personally, I think that taxes are not a very good reason for picking a place to live.

I agree that taxes alone should not drive the decision as to where to live. The factors that are most important to us are safety, arts/social activities for retirees, future of the state which is often driven by the political climate which in turn is tied back to one's political association, then affordability. I believe spending expands to fill income so affordability is actually the last of the factors. We like Henderson NV because it feels a lot safer than many parts of California. People are very nice and genuine. It almost has a small town feel. Plus it helps that the area where our home resides is also the prettiest place on earth that both my husband and I have been to. :)
 
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John Cummings

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I agree that taxes alone should not drive the decision as to where to live. The factors that are most important to us are safety, arts/social activities for retirees, future of the state which is often driven by the political climate which in turn is tied back to one's political association, then affordability. I believe spending expands to fill income so affordability is actually the last of the factors. We like Henderson NV because it feels a lot safer than many parts of California. People are very nice and genuine. It almost has a small town feel. Plus it helps that the area where our home resides is also the prettiest place on earth that both my husband and I have been to. :)

Where we live is very safe. Murrieta is consistently one of the safest cities in the country. If you are happy in Henderson then that is where you should be. Though we have spent a lot of time in Las Vegas, we would never consider living there. We have so much to do in this area and being just an hour from San Diego is a big plus. We have a great climate and housing is great.
 

WinniWoman

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I don't know what you pay, but from what we have seen, Vermont property/school taxes are half what they are in NY for the type of house/property we have. .

Of course the rates differ widely in NY as well as in VT. Just for kicks I looked up houses in Pine Bush on realtor.com, and there were several houses close to what my house is currently valued at. The property taxes on them were about $500 per year higher than what I pay in VT, so nowhere near twice as much.

I'm just pointing out that averages can be misleading - no offense intended.[/QUOTE]

One other thing- you have to be careful when looking at the property tax listings in my area because the school and property taxes are billed separately. So- the school tax person sends a bill to homeowners in Sept- here the average is about $4000- and then in January the homeowners get another bill from the town they live in- in my case almost $5000. But many times real estate listings only show the property tax.
 

WinniWoman

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I agree that taxes alone should not drive the decision as to where to live. The factors that are most important to us are safety, arts/social activities for retirees, future of the state which is often driven by the political climate which in turn is tied back to one's political association, then affordability. I believe spending expands to fill income so affordability is actually the last of the factors. We like Henderson NV because it feels a lot safer than many parts of California. People are very nice and genuine. It almost has a small town feel. Plus it helps that the area where our home resides is also the prettiest place on earth that both my husband and I have been to. :)

Very true. But some people don't have a choice. They might need to reduce expenses in retirement. They might want to live in San Francisco, but their wallet can only pay for Destin, Fla. If money really isn't an issue and you don't mind paying higher taxes and expenses it's a no brainer to just live where you want.

I think having family nearby- a short drive- is also very important as you age. You get into your 80's and you will need help with certain things. No one will care about you the same way as (hopefully) a close family member, like an adult child. Convenient access to excellent medical care is another major consideration of mine. Safety, activities, the "feel" of a place-topography as well as the culture of the people-, politics- all very important. No place is perfect, of course.

I think most people fall somewhere in between which is why this can be such a hot topic and a difficult decision for most- me being one of them.
 
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Elan

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The lists, from the above links:

Tax-friendly
-------------
1. Alaska
2. Wyoming
3. Georgia
4. Arizona
5. Mississippi
6. Delaware
7. Nevada
8. Louisiana
9. South Carolina
10. Florida

Tax-unfriendly
----------------
1. Rhode Island
2. Vermont
3. Connecticut
4. Minnesota
5. Montana
6. Oregon
7. Nebraska
8. California
9. New Jersey
10. New York
 

VacationForever

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The lists, from the above links:

Tax-friendly
-------------
1. Alaska
2. Wyoming
3. Georgia
4. Arizona
5. Mississippi
6. Delaware
7. Nevada
8. Louisiana
9. South Carolina
10. Florida

Tax-unfriendly
----------------
1. Rhode Island
2. Vermont
3. Connecticut
4. Minnesota
5. Montana
6. Oregon
7. Nebraska
8. California
9. New Jersey
10. New York

This list is copied from the last page which is for 2013. When you scroll through the slides, the information is from 2014. Some difference in the states between 2013 and 2014.
 

Elan

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This list is copied from the last page which is for 2013. When you scroll through the slides, the information is from 2014. Some difference in the states between 2013 and 2014.
Ah, didn't notice that. Just trying to save everyone from having to click through the slide show. Thanks for the correction.

Sent from my Nexus 5 using Tapatalk
 
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