No. of Recommendations: 2
I'm nearing retirement (original date was 12/31/21) but what really changes in retirement?
I know when I was working I'd just throw money into stocks/ETFs/etc. and didn't worry too much about it and never got into bonds. At times some CDs or would hold cash and wait for dips in the market.
To simplify stuff I'm moving more to indexes and maybe a 50/50 split between stocks and fixed income. In my case the fixed income is mostly treasuries. I might move into bond funds down the road.
The hardest things for me to figure out are taxes. Also I expect to draw down money most between 60 and 65 and least after 70. We get one COLA pension as soon as I retire but that will only cover about 1/3 of expenses. Initially the rest will be from my savings, then two smaller pensions at 65, my wife's social security at 67 and mine at 70. At that point our withdrawals from savings may be zero.
The money I'm moving to treasuries will cover us from at least retirement until 67 and might be about 30% of my savings.
I don't count on this in my planning for retirement but it is likely that an older relative (non-parent/sibling in his 80s) will leave us a decent sized tax deferred sum of money. If that happens while a very nice thing, it will certainly add to my tax issues. Anything that I can do to help minimize tax issues if this happens? I'm guessing it would be at least $500K. Again I don't plan on it for my retirement but since I was told it was in his will, I at least want to be aware of the tax issues since if it happens when we are collecting social security, the pensions and have to make RMDs from his account and mine, it could get expensive.
In our case leaving an inheritance isn't a big deal since we have no children, only some nieces/nephews.
Thanks
Rich
