IRA withdrawals plan
I have a lot in an IRA. I am 68 retired.
Married. Our income is approx 40k, from our SSI + my PENS.
I want to work PT. My wife 65 still works PT. She will get a partial PERS and money in 2yrs.
How do we even begin to use it? When to start? It just sits there. We get taxed using it.
How to use it to our advantage?
Terry Says
OK, I usually eliminate a lot of personal details when I respond to questions like this — but you are a great example of a couple who has done everything right — and now you need a PLAN for making your money last during and through your retirement.
I’m going to direct you to Wealthramp.com where you can find a fee-only financial planner who is not trying to sell you stuff but instead is a FIDUCIARY who puts your interests first.
But you need to be prepared for this kind of meeting, so consider these things that you will discuss.
1. You need to create a clear picture of your monthly spending — and include annual events such as auto or homeowners insurance. Will you be doing all this spending in retirement?
2. Lay out a clear and specific picture of your income (without part time work,and outside of any IRA withdrawals). I hope you’ve waited to take Social Security — every year you wait til age 70 gives you an 8% boost in benefits. Same thing with your wife.
3. Be prepared to discuss your goals for the rest of your life. Do you want to travel? Do you have grandchildren you want to spoil? Do you plan to stay in your home?
4. I’m assuming you are both now on Medicare with a supplement. Still, you must consider future medical expenses. Fidelity says that a 65 year old couple retiring today can expect to spend $280,000 in medical expenses over their retirement — including payments for supplements for uncovered Medicare expenses, Part B premiums, Part D, dental, and other expenses. A planner will help you include that in your retirement budget.
5. Do you have life insurance? Or a combo life/long term care policy? Consider that.
6. Have you made an estate plan recently — preferably a revocable living trust.
ONLY AFTER this type of discussion, will you come to:
How do I invest my IRA for both growth and safety, and perhaps to leave some to my heirs.
When must I start withdrawing (age 72) and what will the impact be on my taxes — because yes, you must withdraw on the govt schedule and you must pay taxes!
OK — one more thing. Please spend about $15 and buy the new edition of The Savage Truth on Money (linked to Amazon on my website). I’m not trying to sell books, believe me. BUT it will give you the background on ALL of these topics so you are a bit more educated before you meet with a planner.
