10-17-2013, 08:28 PM
(This post was last modified: 10-17-2013, 08:30 PM by hendi_alex.)
Our situation is very different from many, so here are a few comments about the context of our portfolio. First of all it is pretty modest at under $300K.
We each are retired from the state and get decent pensions that take care of all monthly expenses and installment payments. We both are now getting social security, started at age 62 for me and just under 63 for the wife whose SS starts hitting the account next month. The SS checks are gravy, as is the income from the portfolio. We own about 2x-3x the portfolio amount in real property.
In this context our portfolio earnings are totally discretionary and risk tolerance is high. Planned use for portfolio earnings is purely for recreational uses.
Since we are both retired, the income stream is somewhat more important to us than growth of NAV.
Our plan is to place nearly 100% of SS checks into a cash investment account, to only spend the cash flow that the account generates. At this time, both that cash flow plus the IRA generated cash flow will be for big ticket discretionary spending. When one of us dies, the SS accumulations will provide an income stream that will help offset the lost state retirement and SS from the spouse.
Another note that may be of interest. Here in South Carolina, we over 62 crowd get many perks. You should look at your state as the tax perks may significantly improve your income situation.
State Income Tax:
Retirement Income Taxes: Retirement income is taxed. Social Security is exempt. Under age 65, $3,000 in pension income is exempt. If you are 65 or older you may exempt $15,000 of retirement income. You can take this deduction for income received from any qualified retirement plan. If both spouses receive retirement income, each spouse is entitled to an individual deduction. The $15,000 deduction must be offset by any other retirement deduction that is claimed. A surviving spouse may continue to tacke a retirement deduction on behalf of the deceased spouse.
Property tax:
For homeowners 65 and older, the state’s homestead exemption allows the first $50,000 of their property’s fair market value to be exempt from local property taxes.
We each are retired from the state and get decent pensions that take care of all monthly expenses and installment payments. We both are now getting social security, started at age 62 for me and just under 63 for the wife whose SS starts hitting the account next month. The SS checks are gravy, as is the income from the portfolio. We own about 2x-3x the portfolio amount in real property.
In this context our portfolio earnings are totally discretionary and risk tolerance is high. Planned use for portfolio earnings is purely for recreational uses.
Since we are both retired, the income stream is somewhat more important to us than growth of NAV.
Our plan is to place nearly 100% of SS checks into a cash investment account, to only spend the cash flow that the account generates. At this time, both that cash flow plus the IRA generated cash flow will be for big ticket discretionary spending. When one of us dies, the SS accumulations will provide an income stream that will help offset the lost state retirement and SS from the spouse.
Another note that may be of interest. Here in South Carolina, we over 62 crowd get many perks. You should look at your state as the tax perks may significantly improve your income situation.
State Income Tax:
Retirement Income Taxes: Retirement income is taxed. Social Security is exempt. Under age 65, $3,000 in pension income is exempt. If you are 65 or older you may exempt $15,000 of retirement income. You can take this deduction for income received from any qualified retirement plan. If both spouses receive retirement income, each spouse is entitled to an individual deduction. The $15,000 deduction must be offset by any other retirement deduction that is claimed. A surviving spouse may continue to tacke a retirement deduction on behalf of the deceased spouse.
Property tax:
For homeowners 65 and older, the state’s homestead exemption allows the first $50,000 of their property’s fair market value to be exempt from local property taxes.
Alex