As you all know, I'm out of the rental business now. But over the past 3 years or so it's become very clear to me that planning for income in retirement is even more complicated than planning for saving/investing while working. Minimizing taxes and avoiding late payment penalties on estimated taxes, etc...lots of watch outs. Below is a list of a few of the watch-out areas I've found.

1) Roth conversion strategy (for those who have lots of money in a 401k or TIRA)

2) Avoiding IRMAA when on Medicare

3) Deciding which "bucket" to take money out of to live off (TIRA, Roth, Investment account, etc.)

4) Deciding when to take SS...for us we are delaying until 70 so we can do large Roth conversions

5) Understanding the way SS is taxed using "provisional income"

6) Being aware of the "tax torpedo"

7) Being aware of the "widow tax"

8) Marginal tax bracket "filling" as a strategy

9) Understanding when/how to pay estimated taxes on Roth conversions to avoid penalties

I've done all our investing/planning over the years, but I've had to switch gears lately to learn about all the above. Quite a lot to learn.

And no good way to learn it.

No one can teach you how to plan for retirement, not really, beyond telling you to save. Financial planners are younger and less informed than we are, we found after talking to too many.

No one knows how to avoid paying TOO MUCH tax. A CPA can help, but without an in-depth focus on YOU they just can't do THAT much.

No one knows enough ab out running a business from the financial side of things: it takes years to build a biz from the ground up. By the time you think you know what you are doing, it's time to retire...so back to point one above. :P

Way to go WMH. You nailed it dead on with that answer.

I will add that if you knew how long you will live, then planning for retirement would be easy.

We finally got into a money guy.

Too soon to tell what good it will do, but at least we are focusing on it.

The last few months have been trying for me. I am not retirement ready or age but I have made some decisions that I had not considered before.

Taking notes:

What is IRMAA?

The Medicare income-related monthly adjustment amount (IRMAA) is a surcharge on Medicare Part B (medical insurance) and Medicare Part D prescription drug plan premiums.

What if your bucket is empty? LOL

What Is Provisional Income?

Provisional income is an IRS threshold above which social security income is taxable. The base, from §86 of the Internal Revenue Code (IRC), triggers the taxability of social security benefits, requiring its inclusion in gross income tax payment on excess amounts. Provisional income is calculated using the recipient’s gross income, tax-free interest, and 50% of their social security benefits.

The tax torpedo refers to the phenomenon where your provisional income pushes you into a higher tax bracket, resulting in a higher amount of your Social Security benefit being taxable. It occurs due to the taxation of Social Security benefits, and can impact middle-income households

A widow's exception, also known as a widow's exemption or qualified widow or widower status, is a tax statute that reduces the tax burden for a widow or widower after their spouse passes away. In many states, the widow's exception comes in the form of reduced property taxes for a period of time.

Marginal tax bracket "filling" as a strategy

Marginal tax bracket "filling" is a tax-planning strategy where you intentionally manage your taxable income to optimize your tax liability. The idea is to take advantage of the progressive tax system by "filling up" a lower tax bracket without spilling into a higher one. Here's how it works:

Understanding Tax Brackets: In a progressive tax system, income is taxed at increasing rates as it moves into higher brackets. For example, if you're in the 22% bracket, only the portion of your income within that bracket is taxed at 22%, while the rest is taxed at lower rates.

Strategic Income Management: By estimating your income for the year, you can decide whether to defer or accelerate income, or even make additional contributions to tax-advantaged accounts like IRAs or 401(k)s, to stay within a desired tax bracket.

Examples of Application:

If you're close to the top of a bracket, you might defer a bonus or other income to the next year to avoid spilling into a higher bracket.

Alternatively, if you're in a low bracket, you might choose to realize additional income (like selling investments) to "fill" the bracket without incurring a higher tax rate.

This strategy can be particularly useful for retirees managing withdrawals from retirement accounts or for anyone with variable income. It's always a good idea to consult a tax professional to tailor this approach to your specific financial situation. You can explore more about this concept here.

Certainly is a lot to learn.

"And no good way to learn it."

"I will add that if you knew how long you will live, then planning for retirement would be easy."

It's why Net Worth has never mattered to us, or 'you make money when you buy' or appreciation or depreciation or any other "on paper" benefit. Cash flow is all we care about. The ability to pay our own expenses.

If we die with some assets, good for the kids. But my promise to them has always been that they won't have to pay for our nursing home (not that we are going to a nursing home if we can help it!!)

6x6, no way to learn it from birth if your parents didn't know how either. My parents' generation didn't even invest in the stock market until they were old, it was for wealthy people not the middle class. 401ks were new in my lifetime. ROTHS were new when we were already old.

WMH, maybe you just solved the riddle.

The chicken came before the egg. The egg can't learn if the chicken came first and didn't know what to teach the egg.

It's certainly more complex than I would have ever expected.

When I retired I had around 70% in real estate investments.

Then the pandemic hit and Los Angeles would not allow eviction for non-payment of rent. Loosing me $630,000 in rent, $200,000 in paid relocation money to get some out. And $100,000 in legal fee's.

The California made some tax mistakes, costing me another $200K.

I just got a letter today about some make up code that I violated, and need to pay $4000 in fines.

Thanks, 6x6--I didn't know what a lot of those things meant!

Hoosier, do you have any resources you'd recommend to learn about these things?

I like WMH's strategy of owning everything in Roth IRAs. Then it's all invisible to the tax man!

Bonanza, to answer your questions:

The way to figure out how much you need is to first understand your annual spending budget. Let's say you need $80,000/year after taxes. There is a rule of thumb that's called the 4% rule that says you can withdraw 4% of the amount you have saved in the first year of retirement, adjust that for inflation annually, and you will not run out of money over a typical 30 year retirement. Therefore, if you multiply your annual need ($80k) by 25 (100 divided by the 4% noted), you would get $2M. That means you'd need $2M to keep your lifestyle. This sounds like a lot, but remember that if you have SS income, you can deduct that off your $80k. So for example if you're going to get $50k in SS from yourself and wife combined, then you only need $30k/year (since SS is COLA-adjusted). Multiply that $30k by 25 and you get $750k....a much more manageable number.

Keep in mind the 4% rule is a RULE OF THUMB. More detailed planning is needed, but that's a good start.

IMO the tricky thing about determining your budget is "lumpy" expenses...such as a car or a lake house, etc. What I do is use some estimates that transform those "lumpy" expenses into annual numbers, and add them to our "normal" annual budget. For example, if you buy a $50,000 car once every 10 years, then that's $5,000/year...so just add $5k/year to your typical annual budget.

Our spending has actually come in about 5% higher in retirement than we expected, but that's because we realized we have enough saved, so we actually began spending more on purpose for things like travel, I bought a 2024 Corvette Z06 (paid cash), more expensive meals out, etc.

Retiring was definitely the right move. I "phased" my retirement...I left the 55 hour/week job at age 52, took a 70% pay cut to become a home inspector ( initially 35 hour/week, then I cut down to 20 hours week) for 7 years,and now I do some small handyman jobs that make me about $5,000/year just because I enjoy it.

Keep in mind taxes are a huge factor. Who can live better between the two below?

1) A person with $1.5M in a traditional IRA and a pension paying $40k/year?

2) A person with $1.2M in a Roth and a pension paying $30k/year?

The answer is #2 because he/she won't have to pay taxes on any of the $1.2M...whereas person #1 will be in a much higher tax bracket, have to pay IRMAA fees, have very high RMDs, and so on.

And to address the comment of many here...

"how can you learn all this?"

You can't...that's why there are people called financial advisors! Hire one and let them analyze your situation and guide you. I am fortunate enough that I have an MBA in finance and have been doing investing for myself, a few friends, and my family for decades...so I'm comfortable learning the above things and applying them to my own situation.

And to answer 6x6's question of what to do if your bucket is empty..the answer is to fill the bucket! Get to work, start saving, cut expenses, and get as much as you can in that bucket!

I have one friend who approached me when he was 52 (10 years ago) and had ZERO saved for retirement. He was worried. I advised him on some things, and he (and his wife, combined) now have over $600k saved! Coupled with a high SS payment, he will be fine...but he had to buckle down for years and save hard, forego some things, and be diligent. Anyone can do it.

One other thing. There is some research about a spending pattern in retirement called "smile spending". Imagine a smile, where the left side of the line is high, the middle of the "mouth" is lower, then the right side goes up again. There is a lot of research showing this is how people actually spend in retirement. At first you spend a lot because you're fixing up your house, taking those trips you've always wanted, buying that boat/sports car/lake home, etc. In the middle of retirement you are done traveling, you don't need the boat anymore, but you're still somewhat healthy. At the end of life, your health costs become significant and your spending increases again. I think there is some truth to this, but you have to know your own health status and desires when you retire.

I'm 64 now and although I'm still working...I consider myself retired as of when I was 52 (that's when I left my 55 hour/week high-stress job as a finance executive) due to the much easier schedule and taking on a new job (as a home inspector) I enjoyed. Since 2019 I've just been doing small handyman jobs. So far this year I've made $1,600 doing handyman work...I've only worked 11 days this year and that's fine with me! My goal is no more than 200 hours/year.

We've already been on one vacation to Tennessee this year, we are going to Las Vegas in April (I'm taking a high-performance driving school there and then spending 4 days in Vegas and Lake Havasu), then we go to South Carolina in May for 12 days, then I have a woodworking class for 5 days in June, then I'm going to Virginia Beach on vacation in July for 10 days...and we're starting to plan a trip to North Carolina for this fall. So yes, we are spending a lot right now...and we're enjoying it.

Hoosier, thanks for bringing this up. A lot of people will say, "Sell and enjoy your money", but that leaves out the fact that there are a lot of complexities in managing that money. Yours is the most realistic and detailed list that I have seen.

quick jump-in to correct Robin's statement: we do NOT own everything in ROTHs! Brad does, I think, or many, but we do not.

"I am not a smart man" - Forest Gump

but my own analysis is kind of similar but simpler. I just don't know if it will work in practice. I have 401Ks, IRAs, Roths, etc but my focus has been having the rentals support my current life style. rental expenses like roofs, HVAC, and cast iron pipes could derail things. I'd dip into the savings side if I had to but I can't until 59 1/2 which would be next year.

I start with expenses. using Hoosier's 80K a year for personal living costs, I'll round that off to $7K a month in after tax income. My thinking is I'll need $21K a month from rentals - $7K for me, $7K for the tax man, $7K for expenses for the rentals.

I just don't know if that is realistic or not. To hedge my bets I am hoping to sell my Day job and live on that lump sum of money until 62 and then worry about SS and then 65 for Medicare. But it does seem a convoluted mess with lots of pitfalls.

I don't think I could retire if I didn't have rentals.

Any more thoughts from those who have gone before me would be appreciated.

More notes:

Thank you for the examples.

"... adjust that for inflation annually,..."

How do you do that?

"More detailed planning is needed..."

What might be some examples?

Thank you again for the examples on "lumpy" expenses.

If I learned to use public transportation, then I could do away with the car and all related expenses.

Nice car. Loved learning about the DCT transmission. Messes with my plan above though as I do love vehicles.

"Keep in mind taxes are a huge factor. Who can live better between the two below?"

Thank you for giving and explaining the answer to that. I bet Ray knew the answer as well?

If I may add a third question to that: 3) A person who grew up with no financial education, a welfare kid, but who had enough will to be different, learned through the school of hard knocks to try different approaches, screwed up a lot, learned to shy away from the human race and be self-reliant, and is so used to that way of life that they can live on a lot less?

Obviously, that is debatable as most people would not feel that way. Humans typically want more than that and view the world differently. Just analyzing.

What Is a Required Minimum Distribution (RMD)?

A required minimum distribution (RMD) is the amount of money that must be withdrawn annually from certain employer-sponsored retirement plans like 401(k)s and certain individual retirement accounts (IRAs), such as the traditional IRA. RMDs must be taken by April 1 after you turn 73 years old. You must calculate and withdraw the correct RMD every year after that, or face a penalty from the Internal Revenue Service (IRS).

1

RMDs do not apply to Roth accounts until after the account owner dies.

I wish I could have learned more years ago, but I am learning now.

Thank you for answering my bucket question more for fun. I learned to be a savor a long time ago but never knew of investing. And now, inflation has me questioning my saving strategy. Did I waste my efforts? I can't help but wonder. I try and become more efficient every year that goes by but sometimes those plans fail and where I thought I could save here by doing that it doesn't always go to plan, and I see how silly of an idea it was as I would have been better off doing the other. Such is life of a silly rabbit. Grins...

Thank you for the friend example. You are right, anyone can do it.

"smile spending"

www.forbes.com/sites/wadepfau/2018/09/20/what-is-the-retirement-spending-smile-2/

" At the end of life, your health costs become significant...."

Stay healthy by being active till you bite the big one. Maybe die on a set of monkey bars? Don't stop being ADHD 6x6

"I'm taking a high-performance driving school there.."

6x6 is jealous. Enjoy.

No kids works well, although I do enjoy playing with other peoples kids as I am a kid myself and can give theirs back.

Great learning from you, my friend. I will print this off.

Living off the cash flow.. which goes up every year, along with Social security, and wife's pension.

It's about both cash flow and appreciation

Rental business has made us more than working at jobs.

Paying more in taxes than I ever did... but have more income than I ever did. I'm not so worried about paying taxes, cause it's part of the game.

Should never run out of money, and will pass on the equity at a stepped up basis.

With the last few months that I have had I am ready to turn it all over to someone else, take the hit on management fees and just enjoy my days.

I'm still a pup. Just turned 57.

Unfortunately I did not play well with my old 401k and I just got a new Roth IRA last month.

According to the money guy we are set pretty well. But that is if I keep running the properties myself.

More notes:

Thank you for the examples.

"... adjust that for inflation annually,..."

How do you do that?

** Add 3% per year

"More detailed planning is needed..."

What might be some examples?

** If most of your money is in TIRAs, then you'll want some detailed analysis on what your RMDs might look like, and possibly do Roth conversions in the gap years so that you minimize RMDs...this will lower your tax bracket for the rest of your life. But you need to know the actual numbers to do this...a person with low AGI may not need this, but a person with high AGI would really benefit from this strategy. If your RMDs for a married couple are let's say $70,000, then probably 85% of your SS income would be taxable.

Thank you again for the examples on "lumpy" expenses.

** you're welcome

If I learned to use public transportation, then I could do away with the car and all related expenses.

** Difficult for most people, but only having one car can save money for anyone who has multiple cars

Nice car. Loved learning about the DCT transmission. Messes with my plan above though as I do love vehicles.

** I am a car guy as you know!

"Keep in mind taxes are a huge factor. Who can live better between the two below?"

Thank you for giving and explaining the answer to that. I bet Ray knew the answer as well?

If I may add a third question to that: 3) A person who grew up with no financial education, a welfare kid, but who had enough will to be different, learned through the school of hard knocks to try different approaches, screwed up a lot, learned to shy away from the human race and be self-reliant, and is so used to that way of life that they can live on a lot less?

** Yes, my experience has been that for people in the upper income ranges, it's easier for them to cut spending than to increase income. But for people at the lower end of income, it's easier to increase income by simply taking on a "gig" job like Uber, delivering pizzas, walking around to neighbors houses and offering to rake leaves or trim trees, etc. Look into being an Amazon delivery driver part time using your vehicle...it's called Amazon Flex.

Obviously, that is debatable as most people would not feel that way. Humans typically want more than that and view the world differently. Just analyzing.

What Is a Required Minimum Distribution (RMD)?

A required minimum distribution (RMD) is the amount of money that must be withdrawn annually from certain employer-sponsored retirement plans like 401(k)s and certain individual retirement accounts (IRAs), such as the traditional IRA. RMDs must be taken by April 1 after you turn 73 years old. You must calculate and withdraw the correct RMD every year after that, or face a penalty from the Internal Revenue Service (IRS).

1

RMDs do not apply to Roth accounts until after the account owner dies.

I wish I could have learned more years ago, but I am learning now.

** The RMD age you quoted above depends on the year of birth...for some people it's 73 and for others it's 75. There is a table you can look at, but a rough figure for the first year is to divide your TIRA balance (or 410k) by 26...that will be approximately what you need to withdraw...then that number will change slightly each year.

Thank you for answering my bucket question more for fun. I learned to be a savor a long time ago but never knew of investing. And now, inflation has me questioning my saving strategy. Did I waste my efforts? I can't help but wonder. I try and become more efficient every year that goes by but sometimes those plans fail and where I thought I could save here by doing that it doesn't always go to plan, and I see how silly of an idea it was as I would have been better off doing the other. Such is life of a silly rabbit. Grins...

Thank you for the friend example. You are right, anyone can do it.

"smile spending"

www.forbes.com/sites/wadepfau/2018/09/20/what-is-the-retirement-spending-smile-2/

" At the end of life, your health costs become significant...."

Stay healthy by being active till you bite the big one. Maybe die on a set of monkey bars? Don't stop being ADHD 6x6

** LOL

"I'm taking a high-performance driving school there.."

6x6 is jealous. Enjoy.

No kids works well, although I do enjoy playing with other peoples kids as I am a kid myself and can give theirs back.

Great learning from you, my friend. I will print this off.

Phil, that's great! You must have low or zero mortgages on your properties. In my experience, the only way to get great cash flow is either OPM or having no mortgages...otherwise mortgage payments eat up all the cash flow.

Bonanza and others who are not confident in their retirement plans. Go meet with a financial planner!!! They will put the details of your plans if you have them into their analysis software, if not they will help you develop them. Here's how that worked for me.

I had some ideas about retirement. I had acquired enough rentals to live off of and retired early, had stashed a good chunk in a 401k, had a small pension coming, and knew what my SS benefit would be. I, like Hoosier, had made an agreement with my wife to have the rental properties sold before 70. My son had expressed an interest so we worked out the details on me carrying the notes and slowly selling them to him over 8-10 years once I was to that point.

I set down and spent the better part of an afternoon with my financial advisor (he also manages my stock funds). He loaded everything in, my pension, my SS, a % of the sale of the business (rentals) each year, the net rental income each year declining as they are sold, my 401K, how much I wanted draw with the associated tax rate, and how long I thought I would live (I went conservative with 95 for my wife and I). He ran it with various factor such as different rates of return on the stock market, both low and high interest rates on the notes, and at various inflation rates. At each step he ran it through a monte carlo model that produced a "percentage of success", a draw I could take to make it $0 at 95, and an amount for inheritance if I took the smaller draw I had asked for. Comparing the different runs I could see how things like the market significantly underperforming, high inflation, and different tax rates could affect the numbers. It gave me every confidence that I knew the plan I settled on would work thus easing almost every fear that I had going into retirement.

One of the reason we don't have mortgages is *because* we never cared about net worth, appreciation, "making money when we bought" or in huge depreciation deductions (although nice if you can get them.)

I am 74 retired for 10 years - wife 69 works part time. I was fortunate enough to work 32 years for a company that had very good pay and retirement benefits. Hoosier and Mike have covered most of the basis but I can add.

keep a detailed spreadsheet of living cost several years before you retire, and I mean every thing to determine what you will need to maintain a good standard of living in retirement.

Factor in Health care - Prior to 65 and Medicare cost as well as a supplemental policy.

When I retired we had Zero debt - Rental houses, land, personnel residence, cars, nothing No debt. All part of my plan.

My cushion is the company savings plan - I saved at least 10% of my salary for 32 years - I participated in it from day one. Start saving as early as possible.

Why do people go into the executive(?) position just to end up getting out of it and doing something else?

Is it a high stress job?

6, I can only speak for myself. It was very stressful for a number of reasons, you are managing employees and their union, keeping the customer happy, keeping the boss and board happy, living within a set budget even when unexpected things happen, all while every decision you make is under a microscope. It gets especially tough when each of those has competing and sometimes contradictory needs and expectations. Add to that in my case it was Security at a high consequence facility which is 24/7 and a requirement to brief incident reports within a few hours of when they happened all the way up the government chain of command even if it's Christmas Day. The average tenure in that position was 3.5 years during the 30+ years I worked at that facility so you know going in that it is unlikely you can sustain your mental health and stamina for long. It's lots of hours, constant interruptions on nights and weekends, with lots of armchair quarterbacks causing you stress. Most guys take the position as the last thing before they retire or they have their lower paying dream job that they can fall into to finish out, it's really no different than professional athletes that have a short shelf life and then enter the business world once they are done with their sport.

6x6, in my executive role I was responsible for $4.5 billion of accounts receivable scattered across 194 countries around the world. I had people reporting to me in Singapore, Brazil, England, China, Germany, Australia, India, the U.S., and a few other countries. Due to time differences, I had to hold meetings with some people at 6 AM, some during the normal workday, some at 7 PM, and some at 10 PM. Trying to manage a good home life while doing this was difficult. Each country has its own laws and payment methods. There are language barriers and cultural barriers (people from India for example, are taught not to disagree with anyone more senior than them…so during a meeting they would nod their heads like everything was fine, then later show me a problem in some accounting system that I wish they would have mentioned during the meeting.)

As for stress, the more zeros there are behind the numbers you’re responsible for, the more magnified a mistake becomes. I reported to the corporate Treasurer, and saying “no”, “that’s not possible”, “I can’t get it done that fast”, or “I need more staff to do the work you’re asking me to do” will get you demoted or worse…they had very high expectations and if you didn’t deliver with a smile on your face…you were gone.

There are also a lot of office politics…if your boss makes a mistake, you need to cover for him/her or make the problem go away…even if it wasn’t your fault. You also, as a good leader, were responsible for any mistakes your team made…good leaders don’t blame failures on their subordinates.

We had to report financial results to the SEC each quarter, and our VPs were liable for any misstatements or fraud…they could face jail time via SOX (Sarbanes Oxley) rules…so it was critical that the results reported were accurate and followed all GAAP accounting rules.

Hoosier,

Great information and advice!

Thanks for all the time to teach us!

Most LLs don't really know personal finance. They just plan on collecting rent until they die.

Let's meet up - I want a ride in your new Vette and you can drive my new dream car.

I learned to use Roth IRA (govt started it in 1997) and 401K Roth for real estate at SEMINARS!! It pays to go to get educated.

MY advice based on Dave Ramsay and many other experts -

We don't know what the future holds so take SS$ at 62. The math is favorable compared to waiting and start USING your SS dollars. Invest it, pay off debt, (buy your dream car!)

BECAUSE...

You might die.

Get the money YOU put in before you are gone.

The govt KNOWS actuary tables -

They KNOW a high percentage of people will die before collecting.

THAT is why it's set at 70.

I was advised to wait and now I realize the THOUSAND$$$ I could have brought in and USED.

110 of my graduating class died.

I squeezed past deadly cancer. Wifey just had cancer surgery.

Numerous relatives and friends from church - gone too early.

It seems age 55 is a danger zone - lots of my acquaintances, LLs died in that age range. (you probably have access to those stats)

Dave Ramsay also recommends 62 based on stats.

BRAD

Thank you, Hoosier. That explains a lot.

you guys are way over my head in thinking. I just don't have the ability to focus like you all seem to have.... I truly have self diagnosed the past few years and determined that I have ADD. I digress.

One thing that I don't really see mentioned is that if your retirement accounts are invested properly (at least the way the stock market has been for quite a few years), your account balances continue to grow, even while taking out your minimum distributions. If you have other income and don't need those distributions to live, you reinvest them and that also is additional assets and possibly income should you purchase dividend paying stocks.

Yes Brad, health issues are real. I’ve had my share. Glad you and Cathy are doing ok now, doctors can do amazing things if issues are uncovered early.

In our case, can’t take SS early due to doing Roth conversions…but each person’s plan is unique based on specifics. For many people, the smart plan is for higher earner to defer so that lower earner gets larger benefit after death of higher earner…but again it depends on specifics.

Also keep in mind SS is set up so that you don’t get back the money you put in. The money you put in goes to people receiving benefits at that time. Your benefits will be paid by others who are working while you are retired. Yes, there is a “trust fund”, but that is a relatively small portion of where benefit money comes from. In essence, your kids are paying your benefits.

Nicole, your balance continues to grow only if the growth is higher than your RMD. This may happen in the first few years, but not in the long term. And, the formula for RMDs changes as you age, with the goal of forcing you to withdraw all your money by the time you die. If you look at the link below, you’ll see that at 73 you must take out 3.8% (1/26.5). However, if you live to 99, you must take out 14.7% (1/6.8). There is no way a portfolio is going to keep increasing when you are taking out nearly 15% annually. The govt wants their tax money, and they will get it!

www.bankrate.com/retirement/ira-rmd-table/

Don't forget unplanned changes to all those numbers made by other people AFTER you retire when it is too late to change lanes or shift game plans...if you make too much money IRMA kicks in and not just for one year, 3.8% for Obamacare penalties, changes in how depreciation is applied, changes in LTCGs taxes, blah blah blah.

Note that Ramsey only says to take it at 62 if you immediately invest it into a good mutual fund -- so that you beat what you'd have if you waited until 65/66.

If you take it at 62 and buy your dream car with it -- Ramsey would disagree with that in most cases.

That being said, I'm not a big fan of financial advice from Ramsey. He's aimed at people with poor financial planning. Most of us here likely don't fit that mold. We aren't Dave's target audience. So take his advice with a grain of salt...

God laughs at "plans". Can't "plan" around a health scare, divorce or uninsured loss (floods in the mountains).

My plan is to take the SS money at the earliest that I can. I will dump it back into something that will make me money.

I shouldn't need the money to live on unless something drastic happens. Thus the reason for pulling it as soon as possible.

Exactly -- that's my plan to (to not need SS at all -- but to take it at 62 and invest). That being said, I work for a place where the main financial advisor is also one of the partners with me. So I will rely on him some to help determine what makes the most sense from a tax standpoint -- such as taking from Roth or 401k and so on. So that could change depending on some things.

And, tryan, yes -- we don't know what is coming. But we can still PLAN for things including some contingencies. "Failure to plan is planning to fail."

Way too many people in worse financial situations than most of us are doing the "I'll just let it all work itself out" thing -- and it is NOT going to go well for them...