I am 62, single, retired. NOT getting Social Security yet. I’ve about 800K. 300K Roth, 220K Inherited IRA, 73K in SEP, and 200K Cash. No other income. My question is, What fund should I use to live with ? I have no bills, mtg, anything. Homes pd off, cabin, 120 acres in WI. I’ve assets too. Should I draw on my SEP being I’ve no income? I don’t want to burn thru my cash either. I spend about 2K month. What do you think or do you need more info? Thx
No question, answer, or discussion of any kind facilitated on this site is confidential or constitutes financial or legal advice. Questions answered are selected based on general consumer interest, and not all are addressed. Questions and answers may be displayed online and archived by Wealthtender. To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn more.
To fully diagnose, I’d need some additional information but I can give you some things to consider.
While it may go hand in hand with other pieces of the decision, I’d want to understand your Social Security benefit and when you are considering claiming it and if that will cover your expected expenses in the future.
As far as spending until you claim Social Security, I’d want to know more about the inherited IRA. Is it subject to annual distributions and the requirement to have it closed? If so, this will be money you can use for your monthly expenses. If you’re not having to take distributions annually, but are still required close it in 10 years, it can make sense from a tax perspective to spread withdrawals out over multiple years versus waiting until year 10 and taking it all at once. Also withdrawing it prior to Social Security could make sense from a tax perspective.
If the inherited IRA is from a spouse you could consider moving it to an IRA in your name. You could then use the funds or consider doing Roth conversions while your income is low.
You’ve got a prime opportunity to do tax planning that could help extend how long your money will last. You don’t want to waste these years of no taxable income. I’d recommend finding a fiduciary planner that will work with you on either a 1-time or ongoing basis. The value they could provide given your situation could easily be worth the cost.