Watty wrote: ↑Sun Jan 16, 2022 11:30 pm
Be sure to crunch their numbers three ways, as a couple and as if either of them survives the other. If one of them dies then they will only get one Social Security check and the survivor will be in the higher single tax brackets.
Yes, great point (and thanks for your whole post), will do. Figuring out the mortgage piece is also key now. As you mention, the goal is to keep from having to bump them up into a high tax bracket for one year. Also I agree with you about the nice alignment between a fixed rate mortgage payment and a fixed annuity. One of the reasons I think they should buy vs. rent, assuming, of course, that they're certain about the move.
phxjcc wrote: ↑Mon Jan 17, 2022 1:23 am
They are getting 13,000/ month income and probably writing off at least 50,000/ year due to property tax and mortgage interest….AND SS income is not taxed in CA…and the pensions may not be either. Plus insurance premiums and healthcare costs…their tax burden will be very low (try it out in TurboTax, et al)
Good thoughts, so I ended up running the AARP 1040 calculator (and CA's online calculator/tax tables) and indeed the tax burden is quite low. Probably like 12-13% state+federal. Unfortunately pensions/annuities are taxed in CA, but CA has more progressive tax brackets than NY, so the state taxes don't really change.
celia wrote: ↑Mon Jan 17, 2022 1:17 am
Is the $42k annuity being taken from the $1.15mm IRA? If so, many people here are counting it as both income and still available to withdraw from, as needed. How much of this IRA is NOT part of the annuity?
When one of them dies, how will that impact their income? Of course, one of the SS will disappear. Will part of the $42k annual annuity also disappear?
I also noted that you said you looked into a “retirement community”, but most people here are only talking about the condo expenses. If they stay in the community as their health declines, I would think the fees would increase accordingly.
The annuity is separate and I'm looking into the survivor benefit. Should be at least 50%. And yes, conceivably their expenses could go up in the future, but from everything I've read expenses on average go down as people age.
moneyflowin wrote: ↑Sun Jan 16, 2022 11:31 pm
Have you considered senior (55+) mobile home parks?
I love this idea and I will actually look into it, but I think it's unlikely unless you're willing to try to convince my mother-in-law to live in a mobile home park, no matter how practical it might be.
psychoslowmatic wrote: ↑Sun Jan 16, 2022 10:46 pm
As someone in New England who’s getting snowed on tomorrow you could also point out that outside is always useable unlike in NY. Maybe they can get by with less space if they’re not trapped in it for 3 months.
I’d maybe have them rent for a bit to make sure they like the Bay Area and will handle the transition ok.
This is a real selling point. They check our weather every day. Plus the community has so many activities available that there's always an opportunity to do something outside the house. Also we have a backyard studio/ADU, so they typically spend ~6+ weeks in the area per year with us and have for several years now.
rgs92 wrote: ↑Sun Jan 16, 2022 9:38 pm
Maybe a mortgage broker could help. I'm not sure.
I just bring this up because this possible obstacle should be considered in planning for such a major endeavor.
(I'm actually curious about this myself.)
I'm looking into it and will post what I find. They can't discriminate based on age/source of income so the question is whether they'll consider IRA distributions "income."
gavinsiu wrote: ↑Sun Jan 16, 2022 10:03 pm
However, when I call she's usually not home which means she has things to do.
Awesome
lasp506 wrote: ↑Mon Jan 17, 2022 7:22 am
…and quite frankly…and not to be morbid…but their life expectancy (mean) is 14 more years.
What are you waiting for/what are they saving for?
Yes exactly. I am quite comfortable, especially because I know we can help out if ever need be, but they don't want to feel like their moving here requires financial assistance from us.