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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (24465)	3/9/2016 12:04:57 AM
From: JimisJim	3 Recommendations Recommended By Mannie rnsmth Thehammer Read Replies (1) \| Respond to of 34328

My wife retires in June after teaching special ed for 40 years... I've been trying to bring her up to speed on what I've been doing with our investments... she has a substantial 403b acct. (same as 401k, but for public employees) and when we roll it over into a combo of ROTH and regular IRA -- currently/up to this point, she's had a crappy selection of 8 Oppenheimer mutual funds -- we/I picked 4 and she's contributed the max for all those years... the performance of those mutual funds hasn't been all that great, but at least she started contributing early and that in itself has made it a substantial sum, one that I can't wait to convert to a DGI (probably more conservative than mine as we won't need much income, if any, from it)... Here's the bad news: she can't seem to grasp that in retirement, no more contributions to retirement savings, no more union dues (sort of like SS taxes I've paid all my working life), etc., which in itself boosts the available income we'll have from her pension (even at just 2/3 of her last year's salary, it is quite nice), my SS (have had to recalculate when to file now that file/suspend is not longer an option for us), my IRAs, her 403b rolled over into the ROTH and an IRA (maybe two to spread it around some), plus agricultural land that I rent out for income (and which paid off the loans on it)... She hasn't really internalized that we won't be saving for retirement any longer... we may not spend as much as all of the above income -- perhaps taking some divvies selectively for income and letting the rest compound some more -- but it is also time to begin enjoying what we've built up... sort of like your story about the basketball game... I want to start spending money on things that create memories for us, our daughter and friends, but first I have to convince my wife that we can indeed afford to -- I calculate that our retirement income will equal our combined working incomes and if/when we start distributions from the IRAs, we'll actually have more income (gross), and a lower marginal tax rate due to the differences between payroll taxes and earned income vs. our "new" income sources. We won't go hog wild, necessarily at first, as I want to earmark a certain portion of our savings for non-covered health care (she will continue to be covered with same family policy as we have now -- it was cheaper for her to cover us than for me, a self-emplyed 1-man LLC)... her coverage lasts until she turns 65 and then we'll have to go the Medicare and ancillary supplements route... still trying to decide about long-term health care -- it seems like 6 of one, half dozen of the other in terms of cost, and I've watched as my parents burned through $18,000/mo. despite having long term insurance (it doesn't cover everything)for nursing care since last June, putting a big dent in their savings... now that my mother is a widow (since 2/12 when my dad died), she has moved into assisted living and only spending $7,000/mo. on that... the good part about their long term care is that even if mom runs out of money completely, all of her expenses will be paid -- the catch is she has to be broke first... So learning from the above, my brother (who turns 65 next week) and I've been talking pros and cons of the various long term care options available... it is not a simple task even when dividing the homework between the two of us... I know that the cost of LT care insurance keeps going up as we age, but I've kept track since age 50 of what we'd have paid up to this point vs. socking away money such that we might actually be better off "self insured" so to speak when it comes to LT care... Our other ace in the hole if needed is substantial real estate that can generate income and some that is undeveloped but has appreciated in value 500% in the last 10 years despite a weird market where the various pieces are located (SoCal, SW Ohio farmland -- very expensive, but also generates handsome income, more ag land in Mich. as well as a couple of places in very high demand for resort type living without having to be part of a resort... if necessary, we could liquidate some of the Real Estate that doesn't generate net income after taxes and expenses, further boosting the liquid/investable assets we have... I like having options... wasn't easy to get to this point, but all that work and religious saving coupled with fortunate investments at opportune times makes it all worthwhile in the end... I only hope I live long enough to enjoy it all -- as I type this, we are both in excellent health mentally and physically (despite what our 24 yr. old likes to tease us about). I would consider it a success if we ended up with a modest estate to pass on (mostly real estate, I figure) after spending the bulk of it on us... we already gave our daughter an advance on inheritance in the form of a free college education so she would not start out $100,000 - $200,000 in debt. At the very least she will inherit the old family vacation home (4th generation in the family counting her) and probably a home or condo here in SoCal, too... I just never wanted to promise her anything and get her to stand on her own from here on out... any other assets that remain we we're both gone will simply be icing on the cake for our daughter -- as well as two charities my wife and I have identified in our wills/trusts should we die "young" and/or don't manage to blow through as much as planned -- or the investments appreciate/compound more than I've been estimating... It's all good...