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Old 24-04-2011, 18:33   #31
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pirate Re: Retirement Salvage

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Originally Posted by Skylark View Post
I would take option 1 and retire now. Learn to live well on less, its the new way of doing things.
Yup.... you don't need 3000+ calories of junk food/day....
1500 calories of quality produce is cheaper and healthier...
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Old 25-04-2011, 07:19   #32
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Re: Retirement Salvage

The Florida Retirement System has different retirement requirements for different classes of people. Teachers are able to retire at any age with 30 years of service at any age or at 62 with 10 years of service. The person retiring with 30 years of service receives a higher retirement pension than the person with 10 years service. If the person retires before 30 years of service is completed the pension is reduced 5% per year. Police and Fire personnel receive a higher pension than teachers. The politicians receive retirement benefits after their term limit is reached.


I think the originator of this post needs to work 2 more years. If the FRS goes bust, I will sell the house and live on the boat. That should give me enough money for 20 years. No, I will not be living high on the hog. I am not living that way now. If you worry about what will happen a heart attack could be the result.

A government employee that has been told you do not need to make much money because of your future pension.

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Old 25-04-2011, 07:29   #33
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Re: Retirement Salvage

This thread has gone totally political and is now CLOSED.




Oh wait I can't do that.
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Old 25-04-2011, 07:35   #34
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Re: Retirement Salvage

Politics removed... Can we go back to financial advise PLEASE?

I don't want to close my own thread!
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Old 25-04-2011, 08:13   #35
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Re: Retirement Salvage

1) Stay for the 2 years.
2) If you are able--do 5 years in DROP.
3) Make your decision for a cash out at that time.
4) Nobody knows what this market will do--How about all those that lost their retirement in 401K's. Remember how there were THE BEST

John
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Old 25-04-2011, 09:26   #36
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Re: Retirement Salvage

I worked for a state agency in Florida for 15 years. I retired at age 58 because the job was literally killing me. I found that the retirement plan was a pretty good deal only if one stayed for the full 30 years. I chose the self managed investment program. After 15 years it came to be around $100K. Upon retirement, I rolled it over into my Vanguard IRA. The Vanguard IRA which is very much diversified has provided for a pretty comfortable retirement. Despite the fact that it is my only income, there is actually more in the account than when I retired almost 3 years ago. In fact, this morning I will pull out enough to cover my expenses for the next several months plus enough to pay for having our pool resurfaced and the pool deck resurfaced with pavers and there will still be about $20K more than when I retired. While the economy still suks the stock market has rebounded nicely. It would have been nice if the market hadn't crashed, I lost about $250K but I've made most of it back. The ones that really got screwed were the ones that pulled everything out in fear. Next year I qualify for SS and that will cover about half of my expenses.

Forgive the rambling, but the choice I made was to take the lump sum from the state and rolled it over into my IRA avoiding the immediate income tax and yet protecting it from a state run plan that could very likely go broke. My Vanguard IRA has consistently provided much better than average returns. So far for this year the return on the funds is averaging to about 8.4 %.

Good luck,
Rich
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Old 25-04-2011, 10:57   #37
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Re: Retirement Salvage

In his original post, capngeo said...
Quote:
At the present I have 3 choices:
  1. "Traditional" pension with a monthly stipend
  2. Transfer to an "investment program" like a 401(k)
  3. Take a lump-sum payout (and get hit with a bunch of income tax)
Then cabo sailor said
Quote:
...the choice I made was to take the lump sum from the state and rolled it over into my IRA avoiding the immediate income tax and yet protecting it from a state run plan that could very likely go broke. My Vanguard IRA has consistently provided much better than average returns. So far for this year the return on the funds is averaging to about 8.4 %.
(emphasis added).

I asked this question before, but didn't see a response, if there was one.

Capngeo, why can't you take retirement as a lump sum and roll it over into a IRA? I did this when I retired from a private company 10 years ago, and apparently cabo sailor has done the same thing with his Florida state retirement fund. As long as you roll it directly into an IRA within the time limit, you'll have no current tax liability.

Maybe I'm missing something peculiar to your individual situation.



p.s. I'm 100% with Vanguard and love it.
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Old 27-04-2011, 07:13   #38
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Re: Retirement Salvage

I guess the answer is that I feel the market is going to tank very soon, and I don't want my money there when it does. The only "investing" I understand is real-estate, and have made good money there even through the "crash". If I could find a tax sheltered way of buying RE, I'd be on it.... But the only way I know of is to take the retirement as a lump and pay income tax on it.
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Old 27-04-2011, 07:35   #39
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Re: Retirement Salvage

You have got to break down and pay for some professional help, as in tax lawyers and retirement specialists. If you want to take a retirement fund and roll it over into a real estate portfolio and avoid paying taxes, create a retirement trust fund and you can manipulate what's in it any way you want. You will pay taxes on it only when you draw on it. It will also protect you against BS liabilities, like a tenant suing you, as retirement funds are difficult to attach. A lawyer has to do this for you. Every dollar you pay these guys will save you ten.
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Old 27-04-2011, 07:42   #40
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Re: Retirement Salvage

While you're biting your fingernails, the DOW just cracked 12.6
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Old 27-04-2011, 07:50   #41
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Re: Retirement Salvage

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Originally Posted by capngeo View Post
I guess the answer is that I feel the market is going to tank very soon, and I don't want my money there when it does. The only "investing" I understand is real-estate, and have made good money there even through the "crash". If I could find a tax sheltered way of buying RE, I'd be on it.... But the only way I know of is to take the retirement as a lump and pay income tax on it.
Totally agree. Over the years the best returns I have made were from real estate. Investing in the stock market to me is a black art, plus I think to some degree it is manipulated by the insiders. Real estate on the other hand with just a bit of study I think is a safe, solid investment, as long as you don't get caught up in a bubble and pay too much for property.

There are ways to invest your IRA or 410K in real estate. The easiest is a REIT which is essentially buying stock in a company that invests in real estate. To me this is not too much different than stock investing. A couple of stock brokers have told me that there is a way to set up an individual real estate investment so you can buy property with your retirement funds and keep a tax protected status until you cash them out. But it is not a simple deal and would have to follow some strict guidelines to qualify. I have asked my retirement fund manager to set one up for me and if you're interested will let you know how it works out.

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Old 27-04-2011, 08:33   #42
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Re: Retirement Salvage

I think a great many people ignore all the true costs of investing in RE and end up inflating the gains. When you factor the RE commissions, transfer taxes, real estate taxes, insurance costs, and of course maintenance costs, etc you sometimes get a different picture. It is good to remember that the tax code allows you to depreciate the cost of structures to nil over 25 years. That's because structures do in fact depreciate.

Owning a property is far more expensive then renting the same, and a renter with the discipline to invest that difference in other markets will almost always come out ahead.
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Old 27-04-2011, 08:38   #43
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Re: Retirement Salvage

I'd look closer at option #3. I can take my lump sump before I'm 59 1/2 with no income tax penalty but with a few stipulations. A good finacial advisor should be able to answer that question since your retirement lump sum may be set up different.

As for investing, go with what you know. Since you are into real estate, I'd look at REITs with good returns. Even with a cruisers life style, you should be able to check you 'folio weekly and move money if necessary.

I am personally in the utilities industry and I have a large portion (20%ish) of my money in regulated utilities that pay decent dividends, mostly coal fired. I mention coal fired because if the EPA keeps up with their nonsense, I will dump those stocks faster than you can say "see 'ya". Since I know the utilities industry, I stuck to something I "know" and it has worked well for me for the most part. I especially like the part were almost everyone needs electricty.... except cruisers.
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Old 27-04-2011, 09:30   #44
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Re: Retirement Salvage

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Originally Posted by lorenzo b View Post
I think a great many people ignore all the true costs of investing in RE and end up inflating the gains. When you factor the RE commissions, transfer taxes, real estate taxes, insurance costs, and of course maintenance costs, etc you sometimes get a different picture. It is good to remember that the tax code allows you to depreciate the cost of structures to nil over 25 years. That's because structures do in fact depreciate.

Owning a property is far more expensive then renting the same, and a renter with the discipline to invest that difference in other markets will almost always come out ahead.
Purchased 15 acres bare land just outside of town. No structure or maintenance costs to factor in, so counting 10 years of taxes, total purchase cost including commissions and interest, and assuming I sold today at a price at the very low end of what is selling in the same area I would double my original investment. I'll take that rate of return any day.
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Old 27-04-2011, 09:49   #45
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Re: Retirement Salvage

I've retired a year ago and went through the same set of decisions. We are on our second financial advisor after learning some interesting lessons. A well diversified 401k/IRA could be your best bet if the pension plan can't be trusted. Good Luck
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