# Living on a " fixed " income while not going " broke " .



## mmcmdl (Dec 4, 2022)

So I ask those who have recently left the work force . Do you have regrets ? Are you managing to eek out a living ? Hardships to be considered ? Pros and Cons ? I'm at the point where I'm pulling the trigger on SS . I know Jeff and Mike retired recently and I realize today is different than 5-10 years ago . Chime in please .


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## markba633csi (Dec 4, 2022)

Apparently it's best to not take an early retirement, then you can receive full benefits and even do some work on the side if you want
and they won't deduct from your SS
If you take an early retirement and still want to work they take a percentage of your SS
-Mark


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## ddickey (Dec 4, 2022)

My bro-in-law just started withdrawing SS @70 and works the same full-time job he has for years.


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## GeneT45 (Dec 4, 2022)

I left the workforce involuntarily about 18 months ago.  I'm not at SS age yet, but I've had my ducks in a row so my expenses (ignoring hobbies...) are low and things have not been bad.  I am still looking to generate some supplemental income, but unlikely to return to my profession (electronics engineer) due to my location.  

Probably the biggest hardship is figuring out what you can live on and then living within those means.  We lived lean in our early working years and have had no debt other than our home, which is now paid.  That meant that for several years I had a good income and few expenses leaving me with a lot of discretionary income even after banking a fair amount.  Now I feel I must be much more conservative in my spending and that has been an adjustment.


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## great white (Dec 4, 2022)

Retired a little less than 3 years ago.

don’t regret a thing.

But thats a very personal thing. It depends on your income post retirement, the debts you owe and where your family situation is. 

It also depends on where your head is, job wise. I was helicopter sar and when the doc said he was grounding me, I was mad. A couple weeks later I was thinking maybe it wasn’t the worst thing (I’ve seen and done things that would make a lot of folks curl up in to a ball and hide) and now, best thing that ever happened to me and probably why I’ve haven’t killed myself like so many people I knew in the job. I was ready to put down those bags, you have to decide if you are ready to put down your bags or not.

I was forced to retire by my employer for medical reasons. I was rcaf, so the gov’t of Canada is responsible for my injuries incurred as a result of my “employ”.

Consequently, my pension and benefits are quite…generous. I don’t have to work at all and my pension is roughly 90% of my pre-release wages. My wife works (because she wants to) and she also is retired military (ie: has a pension).

We kind of saw the writing on the wall for me before it happened though. 4 years before I was released, we started looking for a piece of land. 2 years before release we built our retirement home (built with my disabilities in mind). Roughly ten years prior, we starting knocking off our debts so that all we have now is the mortgage. No car payments, no credit cards, no loans, nothing but the mortgage and monthly expenses.

we do quite well, all said and done.

the only one who can answer the question as to whether you’re ready to retire is you…


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## mmcmdl (Dec 4, 2022)

No debt . Houses have been paid off 15 years ago . Land has been paid off for years . I've lived cheaply , a 20 % into the 401 K since I was 24 YO ? I add things up and it makes sense . I can earn $18,000 a year without penalties from SS which I plan on doing . I'll start up my LLC when I reach the limit . Medical benefits are pretty good thru the states program . I'm getting ready to tie up a few grand on a 4.5 % 1 year CD that has earned nothing over the past 5 years . A pension has been locked up for 23 years without a dime interest . So I have to go to the expert on this to figure out what to do .


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## hman (Dec 4, 2022)

mmcmdl said:


> So I ask those who have recently left the work force . Do you have regrets ? Are you managing to eek out a living ? Hardships to be considered ? Pros and Cons ? I'm at the point where I'm pulling the trigger on SS . I know Jeff and Mike retired recently and I realize today is different than 5-10 years ago . Chime in please .


I was very fortunate to have a great 401K/retirement savings plan from HP while I worked there.  The $$ I'm drawing out monthly, plus Social Sec, keeps me very happy.  Retired with a "golden handshake" about 12 years ago, started drawing SS at age 62, and doing well.  By then, my house in Oregon had been fully paid off.  So when my wife and I sold our respective houses, we were able to buy our present abode from the proceeds without going through the mortgage grinder.  So no monthly payments!  I've actally made some money with my shop (and paid some exorbitant income tax) last year.  Not been able to do too much machining since my stroke, but I have hopes for later this year.

PS - we both go to a pretty good financial advisor that Judy's mother has been using for some time now.


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## Bone Head (Dec 4, 2022)

Retired 11 years back, so this isn't lately.  Things can get tight depending on what breaks and if the wife works if she wants to.  No trips to exotic places, but they'd probably throw me out anyway.
The big difference is I've changed.  Not wound like an 8 day clock anymore, I'm a granpa now, and get to ride my motorcycles anytime I want.


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## BGHansen (Dec 4, 2022)

I retired at 62 & 5 months on 2/28/2022.  We are doing great, not from luck (well, maybe some) but through saving for many years before retiring.  More bragging than anything, but advisors will give a rough estimate of 10X of your salary in your 401K to be comfortable in retirement.  We dipped to about 30x when the market took a dump down to 29K, and are back up to around 35X now.  I'm not taking SS at this time.  Starting next year I'll be rolling over 401K money into a Roth IRA so I'm paying taxes on just the 401K, not 401K plus SS.  I'll wait until 67-70 to start drawing.  

We paid off our house and other debt over 10 years ago.  I'm also not taking a pension from GM (my former employer) as I had the option of a lump sum or a monthly pension.  In my case, the lump sum was 21 years of my annual pension; easy decision.  I should have probably retired from GM 3 or 4 years earlier, but didn't hate what I did.  My Fidelity modeler 3 or 4 years ago showed that I could sustain what was my current salary at the time until 93.  Now the modeler shows me bringing in 15% more than I made when I retired until I hit 93.  With no debt, daughter through law school 5 years ago, son with a BS in Computer Engineering 3 years ago, we're are in a good place.

The toughest thing we're running into is switching from "save mode" to "we can spend some money" mode.  We've needed new stools at our kitchen island for years.  Do we REALLY need them, no, so we sat on the uncomfortable, unpadded, $10 each ones from Oak Express for 20 years.  We just splurged on some $175 a pop ones with nice padded seats, lumbar support, swivel seat, etc.  Oh no, $750 out of the bank account?!?  Yep, and very glad we did.

Bruce


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## Reddinr (Dec 4, 2022)

No regrets here.  I retired at about 58 a couple of years ago.  I say "about" because it has been a gradual thing and I got to retire at the speed I wanted from my own LLC.  I have lots of hobbies, interests and family around and I was tiring of the work so it was an easy decision.  I had a plan and have not been bored.  I regret only that I didn't do it sooner.

I am not a financial expert but have learned a few things over the years that have worked out to be true.  I hope the following helps you.  You mentioned "going to a professional".   I am kind of "a dog with a bone" on this topic so forgive me for maybe ranting a little.

I recommend that you use caution when/if picking an expert.  Remember, they are in it to make money and that money comes from you.  Understand what the costs are to you and be very careful about the costs they like to hide in various tricky (but legal) ways **.  One trick is to lock you in to some of their "great and special" funds that are expensive for you to buy into and to leave.  They _imply_ that you will do better with those funds.  They like to make it look complex too.  I would go so far as to say "never pay front loading or back loading on any fund".  It is generally just handing over a big chunk of your money for no likely benefit to you.   I think there is a special place in he!! for some of those jokers.  It is also less tricky to do it yourself than you might think.  

Even if you do go with professional help, maybe read some of this linked wiki so at least you have good questions for them and can protect yourself:   https://www.bogleheads.org/wiki/Main_Page   There is also a great forum there which I think is second only to this one for atmosphere and helpfulness.  BTW, if you do ask investment/retirement questions there, use the question format they suggest in the wiki and you will get much better answers.  Also, most questions have been answered there many times so the search feature is pretty useful.

SS is usually a good investment to put off taking as long as you are fairly healthy and don't need it yet.  It grows much faster than inflation every year you don't take it.  It grows much faster than the CD you mentioned.  The trick is to not die too soon, but that is always the trick, right?
Once you start drawing from pension and tax-deferred (IRA / 401K), that also counts as income when figuring out tax for SS income.  It really isn't a penalty, just another possible tax for a portion of your SS income.  Feels like a penalty though.

For your CD, maybe consider a few smaller CDs bought over time.  That way, they mature at different times, like once a quarter or half-year, etc.  You may have to give up a small fraction of the interest for smaller CDs, but something to consider.

_** My sister is retired and has been with an expensive, but popular store-front broker for decades.  She wouldn't consider herself well-to-do.   She asked and I worked with her and attempted to show her what a bad deal it was and recommended that she get out as soon as possible.  It has literally cost her hundreds of thousands in fees (including missed growth on those earlier fees), needlessly.  About 1/4 of her investment-generated annual income goes to fees, basically 1.2%, mainly AUM.  She works part time at a job she does not really like to earn back about the same amount as those fees.  This is not that uncommon. However, she "likes her guy" and mistakenly thinks he is making her more money and has stayed put.  Part of it is a pride thing I suppose.  A good part of it is that "her guy" is a better salesman than I am._


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## Boswell (Dec 4, 2022)

I retired in April 2021, 20 months ago just a little before turning 64. No regrets. At least so far. That may change if we run out of Money before we die, but I think I will be OK. We have Sufficient $ in 401K, SS and my wife's Pension. No dept whatsoever. I still know that there are catastrophic things that could happen that would erase all that. I am taking SS early and not earning any  additional income. If things get tight, I might do something to earn money but I really don't see that happening unless I have no choice. For us the key is that we are very good at living within our means. So as we get older we plan to reduce our expenses slowly over time. Right now they are the same as when I was Full Time Employed. 

Only time will tell if we got the finances right but I LOVE that I have time to spend with my wife and son and I am not working the high pressure job that I had and I am still young enough to take advantage of it all. 

If I have any useful advise it is that if you are on the fence, lean toward retirement, not away.


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## JPMacG (Dec 4, 2022)

Retired 2 years ago at 64.  No regrets.  Just started to collect SS in October of this year.

Everyone is different.  If you love your job then maybe put off retiring for a bit longer.   I worked in aerospace as an electrical engineer and had had enough.  I was ready.  I have more than enough things to keep me busy.  Granschildren, traveling, lots of hobbies....  I have friends who are in their 70s and still working.  Working is their life - they have no other interests.

I think putting off SS depends on your individual situation.  From a total lifetime standpoint there is no clear advantage to putting it off.  Based on statistical life expectancy, your total lifetime SS will be about the same whether you collect less for longer or more for shorter.


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## savarin (Dec 4, 2022)

Retired at 62, 73/74 now, never regretted a single moment of retirement.
In my humble opinion one of the most important parts of retirement is a number of different hobbies.
I cant relate to the U.S. system but we want for nothing, no debts etc.
Could I purchase a new Maserati? nope but we buy most things we want when we want them.
I feel most financial advisers over estimate how much you need and if we're really honest how many of us are going to live into our nineties needing what we need today?
_(I don't count the ludicrous cost of the US. medical system in this)_


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## hman (Dec 4, 2022)

BGHansen said:


> I retired at 62 & 5 months on 2/28/2022.  We are doing great, not from luck (well, maybe some) but through saving for many years before retiring.  More bragging than anything, but advisors will give a rough estimate of 10X of your salary in your 401K to be comfortable in retirement.  We dipped to about 30x when the market took a dump down to 29K, and are back up to around 35X now.  I'm not taking SS at this time.  Starting next year I'll be rolling over 401K money into a Roth IRA so I'm paying taxes on just the 401K, not 401K plus SS.  I'll wait until 67-70 to start drawing.
> 
> We paid off our house and other debt over 10 years ago.  I'm also not taking a pension from GM (my former employer) as I had the option of a lump sum or a monthly pension.  In my case, the lump sum was 21 years of my annual pension; easy decision.  I should have probably retired from GM 3 or 4 years earlier, but didn't hate what I did.  My Fidelity modeler 3 or 4 years ago showed that I could sustain what was my current salary at the time until 93.  Now the modeler shows me bringing in 15% more than I made when I retired until I hit 93.  With no debt, daughter through law school 5 years ago, son with a BS in Computer Engineering 3 years ago, we're are in a good place.
> 
> ...


Good on ya!


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## great white (Dec 4, 2022)

savarin said:


> Retired at 62, 73/74 now, never regretted a single moment of retirement.
> In my humble opinion one of the most important parts of retirement is a number of different hobbies.
> I cant relate to the U.S. system but we want for nothing, no debts etc.
> Could I purchase a new Maserati? nope but we buy most things we want when we want them.
> ...


Big thing i found is my expenses went waaaay down when I no longer had to commute and fill the truck every week, no more pension contributions, no more unemployment insurance premiums, etc, etc.

Heck, a tank of gas in my F150 lasts 2-3 months now! I can even stretch it to 4 sometimes! Used to be I burned_ *at least*_ a tank in each 3/4-1 month period (my truck has oversized the towing tanks- DTE goes to "999" on a fill) just commuting. That's a hefty savings when today's fuel costs means roughly $150 each fill.

That was the biggest surprise for me in how much difference it made in the cash flow department.

Of course, there's also a "mental benefit" of not having to get up at o-dark-30 every morning and deal with all the other "traffic idiots" on the roads trying to shave another 1-2 minutes on their commute by swerving around cars or going waaay too fast

USA Medical system I can't comment on:


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## RJSakowski (Dec 4, 2022)

It is my understanding the social security benefits are based on a break even point at 85 years of age.  If you expect to live past that, your lifetime payout will be greater.  If you expect to pass on before then, take the benefits earlier.   . My wife is 14 years my junior and she hasn't worked in the US long enough for a larger benefit so I expect that she will draw on my survivor benefit when I pass on and I delayed taking benefits.  A year ago, our financial advisor worked up total expected lifetime benefits based on our expected life spans and for different scenarios from my wife drawing on her benefits at 62 to waiting until 70 and the totals differed by only a few thousand dollars.  We elected to delay her drawing as there are tax implications involved if we added more income now.    She also has a pension from the UK that we are presently deferring because of the tax implications.  I should say that we are financially relatively well off so we don't need to draw on her social security.  Were we in a different financial situation, we would be drawing on both.

The big issue currently is medical insurance.  She still has 17 months to go before she is eligible for Medicare.  Her high deductible insirance runs $7K a year and we get no benefits until her annual out of pocket hits $7K.


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## Frankhi (Dec 4, 2022)

hman said:


> I was very fortunate to have a great 401K/retirement savings plan from HP while I worked there.  The $$ I'm drawing out monthly, plus Social Sec, keeps me very happy.  Retired with a "golden handshake" about 12 years ago, started drawing SS at age 62, and doing well.  By then, my house in Oregon had been fully paid off.  So when my wife and I sold our respective houses, we were able to buy our present abode from the proceeds without going through the mortgage grinder.  So no monthly payments!  I've actally made some money with my shop (and paid some exorbitant income tax) last year.  Not been able to do too much machining since my stroke, but I have hopes for later this year.
> 
> PS - we both go to a pretty good financial advisor that Judy's mother has been using for some time now.


Hah I retired from HP (in Corvallis) too. I took an early retirement package in 2012 and went to work for Intel for 19 moths. At that point I was done and officially retired at age 52. I've taken a few contract gigs back at HP, not that I needed too but they were fun assignments.

I have been working this year and have just retired for the 5th time... I'm 61 now so maybe it will stick?

I have just finished installing my new PM 1440GT lathe (single phase) and PM 935 Mill (3ph running a 1ph to 3ph VFD). So lots f things to do that do not involve work..


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## homebrewed (Dec 4, 2022)

I retired in October 2016, 65.5 YO at that time.  A lifetime of frugal living plus basically winning the lottery with stock options from my former employer have us set up pretty good.  I held off tapping into my SS until 70, wife is taking the same approach.  We own three vehicles, the newest of which is a 2000 Toyota Tacoma 4WD.  We hate car payments, all of them were paid for in cash.  That said, the only one we bought new was the Tacoma.  We also hate the instant depreciation once you drive a new car off the lot.  

We live in a relatively new house we had built, and we sourced a lot of material for that.  The floors -- honed slate and Ipe -- were bought on closeout from a couple of local vendors.  We collected about 12 tons of stone for the exterior of the house, using the aforementioned Toyota in trip after trip to the quarry -- but doing it that way we paid $35/ton for the stone vs. $350 if we had bought it palletized.  Plus we had less waste -- we asked the masons what they wanted and that's what we gave them.  The downside there:  we got to handle each piece at least four times along the way (but we got a nice pressure washer as part of the deal ).  The 1.4 acres we have were bought back in 1984 for a pittance by today's standards, at least in our metro area.  We grow a big vegetable garden.  We like beans and left-overs.  We hardly eat out because we can cook better than 90% of the restaurants around here, especially with stuff from the garden (talk about locally sourced!).  We'd rather go hiking than watch movies.  No cable or satellite TV.  It all adds up.

Having a lot of interesting stuff to do helps fill the days.  It's a cliche' about having LESS time after retirement but it's true!  My to-do list is huge....and keeps growing.....


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## Bone Head (Dec 4, 2022)

If you're looking for professionals to invest with, try Fidelity.  Look them up on the web...and they have "no fee" funds.  Are there better outfits/investors?  Probably.  But they've never screwed me over and have supplied prospectus and reports for everything I've wanted.  Down side is none of their funds are guaranteed that I know of.
I'm happy with them.


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## SLK001 (Dec 4, 2022)

great white said:


> Of course, there's also a "mental benefit" of not having to get up at o-dark-30 every morning and deal with all the other "traffic idiots" on the roads trying to shave another 1-2 minutes on their commute by swerving around cars or going waaay too fast


I was forced into retirement at age 55 in 2009.  My alarm hasn't been set since!  I just wish that I could sleep until the time I _*used *_to get up with the alarm!  If I'm not up by 5:30 AM, then I've essentially "slept in"!  The bright side, is if I get tired during the day, I can take a nap!  My house has been paid off since 2003 and I paid cash for my vehicles.  I'm closing in a couple of days on some land in Alabama, where I intend on building my dream shop and house.  If I got offered my old job back, I'd politely say "no".  I get a pension from my former employer plus I am drawing SS, so I have plenty of money, although I do start worrying when my bank balance drops below $400,000.

In short, I'm having the time of my life and I don't intend on stopping the enjoyment anytime soon!


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## Forty Niner (Dec 4, 2022)

mmcmdl said:


> So I ask those who have recently left the work force . Do you have regrets ? Are you managing to eek out a living ? Hardships to be considered ? Pros and Cons ? I'm at the point where I'm pulling the trigger on SS . I know Jeff and Mike retired recently and I realize today is different than 5-10 years ago . Chime in please .




My advise is to NOT trust financial managers.   I retired in 2008, so that is not recent, but before I retired I tested the waters.  I tried three different financial management organizations.  I put $100,000 in each of their hands and measured the results after 1 year.  They all made money off of me, but the results for me were unacceptable.   Fees canceled out any gains at one place.  One firm put my money into money market funds that had no gain in value over the year, but reported supposed dividends paid by the investments.  Bottom line was I had to pay taxes on dividends that I never got.  One firm actually lost money over the year.  
Friends of mine have had their life savings totally drained by financial managers.  Now that was sad.

So I decided I would not let anyone manage my money.   My advice is to ignore those financial advisors that invite you to the rubber chicken dinners and wow you with their supposed successes.  They lie lie lie.   They will tell you that you will be able to live on less money because you don't have to drive to work and buy work clothes and on and on.   
We drive more that we did when working.   All of our expenses have gone up since retiring.  But because of years of saving, we have managed to not spend any of our savings.  We live strictly off annuity, social security, interest, and dividends.   But our income is more that when we were working because of good investments in dividend paying stocks.


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## Aaron_W (Dec 4, 2022)

markba633csi said:


> Apparently it's best to not take an early retirement, then you can receive full benefits and even do some work on the side if you want
> and they won't deduct from your SS
> If you take an early retirement and still want to work they take a percentage of your SS
> -Mark



This only applies until you reach your full retirement age (65-67 depending on when you were born) then you can earn as much as you want.

As of 2022 the earnings cap is $19,500 and will likely increase in 2023.

The other part is any earnings can increase your benefit if it is enough to offset a lower year likely something early in your career or perhaps during a layoff where your income decreased.


SSA benefits


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## snoopdog (Dec 4, 2022)

If anyone would like to invest in cattle, I'll gladly share with you a portion of the profit, based on your percentage of investment.


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## Winegrower (Dec 4, 2022)

snoopdog said:


> If anyone would like to invest in cattle, I'll gladly share with you a portion of the profit, based on your percentage of investment.


Back many years ago when that was a big thing, a friend invested in a cattle deal, and was awarded so many units of the partnership.   Later, the value declined.   He asked why, and was told “it seems a lot of your units died.”


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## Asm109 (Dec 4, 2022)

I am 64 wife 62..  She retired a year ago, I retired in July.  She has a military pension. 24 years, retired as a captain in the public health service.
We are drawing heavily on my 401k/ IRA to make things balance.  In 3 years, I reach SS full retirement age and our mortgage is paid off.
At that point we should only need 1 or 2 % out of my IRA.  Life is good now, itll be even better then.


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## Alcap (Dec 5, 2022)

Everyone‘s story will be different along with their idea of retirement. I’ve worked with guys working crazy OT that spend so much that they couldn’t live on what I made while working !  I retired Oct. 2020 so 21 months 61 1/2  . Before I retired I figured I wanted to keep my meager standard of living , wife was pretty much a stay at home mom and enjoying life so no retirement income from her and she’s 4 years younger too . I wanted 100% of my take home pay in retirement or close knowing  Some things like health care was going to be more coming off that amount .  Looked at  income being pension + taking money from my 401k and not taking SS so that would increase so my wife would get more if I die I took the 75% survivors spouse option on my pension which gave a lower amount to begin with then 75% of that . I let her decide so I started SS at 62 , When pension + SS got me close to my income goal with the 401k making up the rest . In the 2 years now the first year the money taken out of the 401k was used for house upgrades this year we didn’t need it so did a Roth IRA conversion. It gives us a nice option . As for your questions, I didn’t think working longer for the increase in both pension and SS was worth it being that the 401k making up for that and so far  even with stock market ups and downs . For me , I’m enjoying retirement !


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## CJ5Dave (Dec 5, 2022)

I retired 18 months ago. My wife retired the same day.  Not touched 401k or SS yet. When we retired 401 k was earning $20 k a year. Then it lost $150,000 in a few months. We were breaking even on our retirement annuities and expenses. Now we are  $1000 down each month. Meds, gasoline, food is up . Dramatic change since January. It’s better if you are debt free.  Then I have necessities like tools and ammunition. Don’t mind fixed income., as long as it is fixed high enough. I was on a fixed income (salary) before I retired. I just got people allergies and needed to get out of public life. Was mad every day about something. Retirement really helped my people allergies.


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## rabler (Dec 5, 2022)

Reddinr said:


> I recommend that you use caution when/if picking an expert. Remember, they are in it to make money and that money comes from you. ...


This is the philosophy I took to heart when I retired in 2019.   If someone was really that good with managing money, they'd be doing something more like running a mutual fund, not advising people.  Or, more bluntly, they'd be managing their own money rather than getting paid to manage someone elses.  And even those that run mutual funds, etc, don't do so hot.  The advice of investing in some basic index funds has a lot of merit.   I look at it as getting paid for my effort, even if that effort is managing my own money rather than paying someone else to do so.  

A simple spreadsheet, starting with a retirement balance, is a great tool.   Punch in some numbers for % interest earned, % inflation.   Add in when you start drawing social security.  You can pretty quickly make up a plan that shows how much you can spend a month and how old you'll be when you hit $0 (or straight social security only).    The rest is just guessing what inflation and investment return (interest) you will earn.  No one has a crystal ball for that, most advisors are just looking at history and taking some worse-case scenarios.

As someone else mentioned, I do find costs go down, especially after a couple of years of "settling in" to retirement.  You don't put as many miles on a car unless you travel.  You don't have work related expenses associated with eating out,  clothes for work, etc. 

What works against you is inflation and medical expenses. 

Plan to stay active physically and mentally.


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## Aaron_W (Dec 5, 2022)

Something else I think worth considering is will your income increase at some point or remain flat.

In my case I was able to retire at 50 because I worked as a firefighter and they like to get us out relatively young so we don't croak on the job. Heart attacks and strokes have a big uptick in line of duty deaths after 50.

Because we can go so much earlier than SS kicks in, my pension includes a supplement until I turn 62. The supplement is 50% of what SS pays at 62. At 62 the supplement goes away regardless of whether or not I start taking SS. My wife is almost 10 years younger than me.

At 62, if I start taking SS it will be double what we currently receive from the supplement so a nice boost. If I hold out until 66, an even bigger increase of we have any concerns over living on our fixed income. I have part time work I can increase if I find I need to bridge the gap for 62 to 66.

At 72 my wife will be 62 and becomes eligible for SS, so we add whatever she gets to our fixed income.


For us my pension works out to about 90% of the take home of what I received in a base check (gross is much less, but I get to keep most of my pay now, lower income bracket, no SS, no retirement taken out etc). We have a young child still with us so my wife was able to go back to full time when I retired and I'm still able to work part time / intermittent which between the two of us adding income actually has us living more comfortably than before I retired. We spent many years living on just my paycheck.

House is paid off, and our only debt is a car payment with about a year left on it. Property tax is one area that California is pretty good, so it can only rise a small amount each year. Oldest will hopefully be fully self sufficient before I'm 62 (hopefully very successful and he decides Dad needs a bigger shop with all the best tools  ). Youngest will be 18 when I'm 64, so our expenses should also be declining as we go forward.


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## jbobb1 (Dec 5, 2022)

I've been 100% self-employed for 9 years and work is on track to fizzle out, so the wife and I will start receiving SS benefits starting Jan 2023. I'm 65 and the wife will be next May.  We have a great financial advisor that has helped us make some very smart moves. Our future looks to be comfortable. I think my biggest problem is having something to keep me mentally healthy. I'm used to being on my feet, busy and many times under a lot of pressure, so time will tell. I just hope my wife won't kick me out!


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## rabler (Dec 5, 2022)

jbobb1 said:


> I've been 100% self-employed for 9 years and work is on track to fizzle out, so the wife and I will start receiving SS benefits starting Jan 2023


I guess that means your signature line will need to change!


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## jbobb1 (Dec 5, 2022)

rabler said:


> I guess that means your signature line will need to change!


I forgot about that.


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## Janderso (Dec 5, 2022)

mmcmdl said:


> No debt . Houses have been paid off 15 years ago . Land has been paid off for years . I've lived cheaply , a 20 % into the 401 K since I was 24 YO ? I add things up and it makes sense . I can earn $18,000 a year without penalties from SS which I plan on doing . I'll start up my LLC when I reach the limit . Medical benefits are pretty good thru the states program . I'm getting ready to tie up a few grand on a 4.5 % 1 year CD that has earned nothing over the past 5 years . A pension has been locked up for 23 years without a dime interest . So I have to go to the expert on this to figure out what to do .


4.5% earnings on cash!
It’s been a long time since we could earn a small gain on those CD’s. Good for you Dave. My wife and I did the same thing.
The number one thing is low-no debt. That was our goal and we achieved it.
I need to keep my wife reigned in on spending. She wants to travel to Europe. 
We are going to England again in May, and then she is going to Italy with her girlfriends a few weeks after we get back.
Now she is talking about a river cruise down the Rhine River!!
Oh and she wants to remodel the master bathroom.
Living within a budget is very important!!
Our Edward Jones guy told her she could do all this. I wish he wouldn’t have said that!!

Dave, you’ve worked hard, all your life. You may have a rough patch the first few months then things settle down. At least that was my experience.
Taking SS is a big decision. Good for you.
Stay healthy my friend. That makes all the difference.
Medicare is great compared to what I had at work. That saves a lot of money.


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## Janderso (Dec 5, 2022)

BGHansen said:


> I retired at 62 & 5 months on 2/28/2022.  We are doing great, not from luck (well, maybe some) but through saving for many years before retiring.  More bragging than anything, but advisors will give a rough estimate of 10X of your salary in your 401K to be comfortable in retirement.  We dipped to about 30x when the market took a dump down to 29K, and are back up to around 35X now.  I'm not taking SS at this time.  Starting next year I'll be rolling over 401K money into a Roth IRA so I'm paying taxes on just the 401K, not 401K plus SS.  I'll wait until 67-70 to start drawing.
> 
> We paid off our house and other debt over 10 years ago.  I'm also not taking a pension from GM (my former employer) as I had the option of a lump sum or a monthly pension.  In my case, the lump sum was 21 years of my annual pension; easy decision.  I should have probably retired from GM 3 or 4 years earlier, but didn't hate what I did.  My Fidelity modeler 3 or 4 years ago showed that I could sustain what was my current salary at the time until 93.  Now the modeler shows me bringing in 15% more than I made when I retired until I hit 93.  With no debt, daughter through law school 5 years ago, son with a BS in Computer Engineering 3 years ago, we're are in a good place.
> 
> ...


Bruce,
You mentioned switching from saving to spending. Man, that is so true.
My mind set is I don’t want to spend a dime. We worked to hard to save I am having a hard time spending.
We are living on my SS and my wife’s teacher’s retirement. We are taking home almost $8,000 a month.
Our Edward Jones guy said at some point we will need to begin a monthly withdrawal due to inflation.
As far as I’m concerned, we can live on what we get monthly fir several years to come.
My wife is the major bread winner. This changed when I retired. I have to listen to her with renewed interest


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## twhite (Dec 5, 2022)

Welp. I will be working until I die. I have always worked in sweat shop environments where the pay was just enough to get by on and no retirement packages. My choice, and I made sure my wife was a homemaker to raise our 2 children. My priority and overriding obligation was to raise my children to be good productive people in this world. Mission accomplished on that front. 
I will have my home paid off when I turn 70. So that will be a bonus. Am 60 now. I will hopefully relocate to another state. God willing. Live in Commifornia right now. I will evaluate if I can retire at that time. 

Life is good. 


Cutting oil is my blood.


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## mmcmdl (Dec 5, 2022)

Janderso said:


> Dave, you’ve worked hard, all your life. You may have a rough patch the first few months then things settle down. At least that was my experience.
> Taking SS is a big decision. Good for you.
> Stay healthy my friend. That makes all the difference.
> Medicare is great compared to what I had at work. That saves a lot of money.


I'm no mathematician by any means . I figure this . I added everything up that is liquid . I then divide the amount by 360 which represents 30 years in months . This is what I plan to receive each month . This amount along with SS is greater than my bring home pay at this point . Neither of the houses or land are in the equation .

So , I figure if I take the 1/360th a month , the money will last for 30 years without including dividends / interest . If the stocks go down , I'll be taking less each month and visa versa . I'm very diversified as investments go , and I tend not to blow money . Only on rare occasions !  Also owning a rental house takes care of tax write offs and additional monthly income . I need to clarify this .....................at the end of EACH month I would remove 1/360th of the balance so it would vary on the amount . Sorry .

Does this make sense to all here ?  Like I said , I'm not a mathematician , and didn't sleep at the Holiday Inn last night either .


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## Janderso (Dec 5, 2022)

The big unknowns are long term care in an old folks home.
Scares the #$4@sf out of me.


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## mmcmdl (Dec 5, 2022)

Janderso said:


> The big unknowns are long term care in an old folks home.


We just tend to drop dead . It runs in the family blood .


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## westerner (Dec 5, 2022)

CJ5Dave said:


> Retirement really helped my people allergies.


I retired as soon as we felt we could afford it. The relief from the above mentioned malady more than makes up for loss of income.


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## graham-xrf (Dec 6, 2022)

I was one who deferred retirement for 6 years, all the time piling on pension contributions into a private pension. This would be in addition to the state one, which is, I suppose, equivalent to what you are calling SS here. Of course, being fully being paid up on what is known in UK as National Insurance, deferring means one gets a bigger pension payout for one's remaining (hopefully) years.

@savarin in post #13 referenced the burden that is health funding provision in USA. Adding up what is taken from USA individuals for health-related needs must come to a total that could rival some nation's economies, and there is a significant fraction going into pure corporate profit that makes one suspect the health provisions are either fantastic, or not great value for money. In UK, as in most European countries, this is taken care of in other ways, and for that, I am pleased we have the system we do.

I know I have said it somewhere before in this forum, but I say here again. "_However little you think you might have, if you keep going, you can end up with more money than time!_ "

While I now have enough to get by, and no debts, I regret staying in the race for as long as I did!


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## Aaron_W (Dec 6, 2022)

graham-xrf said:


> I was one who deferred retirement for 6 years, all the time piling on pension contributions into a private pension. This would be in addition to the state one, which is, I suppose, equivalent to what you are calling SS here. Of course, being fully being paid up on what is known in UK as National Insurance, deferring means one gets a bigger pension payout for one's remaining (hopefully) years.
> 
> @savarin in post #13 referenced the burden that is health funding provision in USA. Adding up what is taken from USA individuals for health-related needs must come to a total that could rival some nation's economies, and there is a significant fraction going into pure corporate profit that makes one suspect the health provisions are either fantastic, or not great value for money. In UK, as in most European countries, this is taken care of in other ways, and for that, I am pleased we have the system we do.
> 
> ...



I've compared what I pay for health insurance, and what my friend in Denmark pays in income taxes total. I pay a larger share of my income, and then still have to pay income taxes in addition. Health care in the USA is an amazing scam on the tax payers.


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## mickri (Dec 6, 2022)

I found it easy to live on what I had when I had to retire early for health reasons.  I looked at how much money I had coming in and got rid of every unnecessary expense and parred the necessary expenses down to what I could afford.  Income went from around 9k per month to 2k.   A lot of my expenses were all related to work.  When work stopped those expenses stopped.  The workers comp settlement paid off all of my debts except for the house with a little left over.  My son and his roommates moved out of their apartment and into the house.  The house payment was less than their rent.  I moved onto my sailboat.  That saved over 2k per month.  Not paying state and fed income taxes and not paying into the 401k saved over 3k.   Car expenses  went down too because I wasn't driving that much anymore.  I was still able to do everything I wanted to. 

When I left on my sailboat to cruise down to Mexico monthly expenses dropped even more.  Even got rid of my car after a couple of years.  Down in Mexico my monthly living expenses dropped to a little over $300 per month.  Still had state side expenses of around $1000 per month.  When Obama crap came along that took care of my medical insurance until I got medicare.  Another savings.  Not eating out all of the tine was another savings.  Healthier too. 

And the best thing about retiring early was all of my health issues which were stress related went away in 6 to 9 months.  Lost close to 40lbs in weight and blood pressure went back to normal along with all of the other things they test you for.  I am healthier now then when I was working.

All in all early retirement was a good thing and not a strain on me financially.


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## graham-xrf (Dec 6, 2022)

mickri said:


> When I left on my sailboat to cruise down to Mexico monthly expenses dropped even more.


Lots of folk from San Diego have discovered that working in USA, but living in Tijuana gives them a better deal, especially if they can time the commute into USA, or if they do a lot of remote access work, learned from COVID days.


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## RJSakowski (Dec 6, 2022)

Long term health care can turn a millionaire into a pauper in a very short time. There is insurance to protect against those expenses but it isn't cheap.  Electing to purchase laonterm care insurance would have required almost doubling the  amount that we are drawing from our savings and investments.  We decided not to go that route, taking our chances that we will be able to avoid the need for assisted living.


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## westerner (Dec 6, 2022)

mickri said:


> I am healthier now then when I was working.


Stress has killed more of us than nearly anything else. Retire. You will be fine.


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## Janderso (Dec 7, 2022)

RJSakowski said:


> Long term health care can turn a millionaire into a pauper in a very short time. There is insurance to protect against those expenses but it isn't cheap.  Electing to purchase laonterm care insurance would have required almost doubling the  amount that we are drawing from our savings and investments.  We decided not to go that route, taking our chances that we will be able to avoid the need for assisted living.


Both my parents ended up in assisted living. My dad was in there less than four months and my mom less than two months.
Hopefully if I end up in one it won’t be a lasting endeavor.


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## great white (Dec 7, 2022)

westerner said:


> Stress has killed more of us than nearly anything else. Retire. You will be fine.


Yes, and no.

If you retire too soon with too much debt you'll just be trading one type of stress for another......


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## RJSakowski (Dec 7, 2022)

Janderso said:


> Both my parents ended up in assisted living. My dad was in there less than four months and my mom less than two months.
> Hopefully if I end up in one it won’t be a lasting endeavor.


My Mom was in assisted living for five hears.  My Dad for only two months.  Fingers crossed!  

We have no children and anything left when we pass goes to various charities and educational institutions.  Looking at long term health care, most have a three month exclusionary period before claims can be made.  Purchasing long term care at that point would probably cost around $20K annually which is manageable for us.


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## EricB (Dec 7, 2022)

I retired 15 years ago with a pension after 27+ years in the military. My wife was medically retired in 1998. She gets SS disability insurance. We have no kids. My second career has been looking after my wife's needs, school, and hobbies. You could say our income is fixed.

Except for our house and a car loan we are debt free with growing investments and emergency cash. We got there by living within our means and saving for the future. We still live within our means. We try not to spend money we don't need to spend. We discuss purchases over a certain amount. We never buy new when used is just as good (there are some exceptions). We like thrift shops, craig's list, ebay, and yard sales. A good amount of the furnishings in our home were bought used. They just don't build stuff to last anymore. The last new car I bought was in 2000 and I kept it for 18 years. It was replaced by a used car.

Our largest recurring expense aside from food is for medical not covered by insurance. We can't do anything about that, but we have it covered. My wife was ill before long term care insurance was a thing, so she can't get it. That's a big if that I hope we don't get to. I have to have it and lots of life insurance too.

It took a bit of time to adjust to not being needed outside the home anymore, but I've managed.

I don't think I gave up any secrets here.


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## Janderso (Dec 7, 2022)

RJSakowski said:


> My Mom was in assisted living for five hears.  My Dad for only two months.  Fingers crossed!
> 
> We have no children and anything left when we pass goes to various charities and educational institutions.  Looking at long term health care, most have a three month exclusionary period before claims can be made.  Purchasing long term care at that point would probably cost around $20K annually which is manageable for us.


RJ,
You have always been my favorite machinist 
I've often thought of you as my favorite uncle.


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## mmcmdl (Dec 7, 2022)

The company finally provided some stress relieving today . NPI . 2 less ( so called ) mechanics to deal with . They kept us on nightshift busy with all their F ups . Hate to see anyone fired this type of year , but THEY put themselves on the list . Come in late everyday , don't show up , don't work etc .


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## RJSakowski (Dec 7, 2022)

Janderso said:


> RJ,
> You have always been my favorite machinist
> I've often thought of you as my favorite uncle.


Flattery will get you nowhere!


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## Janderso (Dec 7, 2022)

mmcmdl said:


> The company finally provided some stress relieving today . NPI . 2 less ( so called ) mechanics to deal with . They kept us on nightshift busy with all their F ups . Hate to see anyone fired this type of year , but THEY put themselves on the list . Come in late everyday , don't show up , don't work etc .


“Come in late, don’t show up, don’t work”.
This seems to be a universal problem.


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## BGHansen (Dec 10, 2022)

Forty Niner said:


> My advise is to NOT trust financial managers.   I retired in 2008, so that is not recent, but before I retired I tested the waters.  I tried three different financial management organizations.  I put $100,000 in each of their hands and measured the results after 1 year.  They all made money off of me, but the results for me were unacceptable.   Fees canceled out any gains at one place.  One firm put my money into money market funds that had no gain in value over the year, but reported supposed dividends paid by the investments.  Bottom line was I had to pay taxes on dividends that I never got.  One firm actually lost money over the year.
> Friends of mine have had their life savings totally drained by financial managers.  Now that was sad.
> 
> So I decided I would not let anyone manage my money.   My advice is to ignore those financial advisors that invite you to the rubber chicken dinners and wow you with their supposed successes.  They lie lie lie.   They will tell you that you will be able to live on less money because you don't have to drive to work and buy work clothes and on and on.
> We drive more that we did when working.   All of our expenses have gone up since retiring.  But because of years of saving, we have managed to not spend any of our savings.  We live strictly off annuity, social security, interest, and dividends.   But our income is more that when we were working because of good investments in dividend paying stocks.


+1 though results can vary depending on the manager.  I don't use anyone either.  My simple philosophy is "buy low, sell when the greed sets in".  I get nervous when the Dow gets near a record high, then consider switching to bonds/income fund.  My father-in-law's philosophy was/is that the stock market, in the long run, is your best investment.  He'd keep 2 years of "needs" in an income fund and let the rest ride in the market.  His thought was when the Dow does drop, it always recovers within 2 years.  That way they could live off from income fund money and not have to sell low; just wait for the recovery and transfer funds back into their income fund.  Then around 2000 hit and the market dropped from around 11,000 in early 2000 and was still low (around 8000) in early 2003.  They'd used up their income fund stash and needed to sell depressed stocks to make payments.

I thinks it's a good strategy, but I use 6 years of income fund with the rest being available for "playing".  I was getting nervous in 2008 when the Dow hit around 13,000 and started to fluctuate.  I moved 90% of my Dow investments into bonds.  I got back in around mid-2009 at around 8500 and rode the wave going up.  I did not violate my "6 year rule" of income fund reserves. 

I got out of the market again in late 2019 as I was getting closer to retirement and the Dow was fluctuating around 28,000.  Also, was going by my "buy low, sell when the greed sets in" philosophy; I'd gotten in at 8500 and tripled my money in 10 years.  Then Covid hit and the market tanked to under 20,000.  I got back in around April 2020, again not violating my "6 year rule" of income fund reserves.  The Dow got up to around 36,000, I got nervous again and got out.  It dropped again to under 30,000 when I got back in.  Things went back up to >33,000, I got a 10% gain and got out again (and am still out).

Long story longer, looking at my mom and dad's performance from their advisor at Ameriprise, I WAY out performed them over the last 15 years.  Not that I don't trust them, but I'm hesitant to invest my money with someone else who has no "skin in the game".

The one advantage I see having an advisor is that they "should" be fluent in the rules/laws.  This isn't financial advisor related, but is similar.  My mom passed away in May 2022 (dad passed away in 2019).  Their two houses were deeded to their living trust.  As executor of the trust, I was going to quit claim deed one property to my sister and brother in law, and the other to my wife and me.  We went to an attorney to process the paperwork and were informed that my plan wasn't our best option tax-wise.

Michigan passed something called the Headlee amendment in around 1980 which caps property taxes at an annual increase of 3% or the rate of inflation, whichever is lower.  Our property tax statements carry two numbers:  Taxable value and Market value.  In the case of the home I was taking, the taxable value is $57,600 (actually the half-value) and the market value is $77,400.  Our property taxes are the millage rate times the assessed value which is the taxable value.  However, if the property is sold, the taxable value becomes the market value; the Headlee amendment rule does not apply when the property is sold.

The properties were both in the trust with my sister and me as the beneficiaries.  Beneficiaries are grandfathered in at the lower taxable value.  However, my brother in law and wife were not named beneficiaries in the trust.  So, if I would have written quit claim deeds to transfer the properties with my sister/me and our spouses, that could be interpreted as a sale of the property adjusting the assessed values to the higher market value.  In our case, the property taxes would have gone up from $4000 a year to $5400.  I had no clue about that rule, but the attorney did.

You would hope that a financial advisor would be privy of ways to minimize your tax burden.  My wife usually does our taxes with TurboTax, but we're going to an accountant this year.  With my mom passing, we inherited a house and some other cash.  The limit is something like $12.06 million (total for all beneficiaries) before you need to pay inheritance taxes.  We're WAY away from that, but it's still a good chunk of cash.  I "think" all I have to do is file a 1041 detailing the >$10,000 chunks we've received from cashed-out annuities, life insurance, liquidation of some bank accounts, etc.  We're also selling off a lot of my parent's household items (cameras, nick nacks, general clutter, etc.) on eBay.  eBay will be sending us a 1099 as we're way over $600 so far.  Items from the trust are not subject to income tax.

The other thing I'm taking advantage of, which I'd hope a financial advisor would recommend too, is the transfer of some of my assets to my mom before she passed.  I make/made a fair supply of old Erector set manuals and parts that I sell on eBay.  I'm also selling off my collection.  While my mom was living, I gifted my Erector set collection, spare parts, my reproduction manuals, and all of my reproduction parts to her.  When she died, her pour-over will transferred everything to my parent's living trust.  I'm still selling stuff on eBay, but now it's stuff owned by the trust which is not subject to Federal Income Taxes as long is it's under the $12.06 million total (and it's WAY under that).  I didn't make the tax rules, but I'm taking advantage of them to avoid paying income tax on my (I'm sorry, my parent's trust) eBay sales.  

Again, a good financial advisor would be wary of ways to maximize your income and minimize your tax burden (within the current rules/laws).

Bruce


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