Living on a $2-Million Nest Egg
Sparkling Future
By Mary Beth Franklin, Senior Editor
From Kiplinger's Personal Finance magazine, February 2009
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Annual income: $130,000
$30,000 from Social Security
$20,000 from a pension
$80,000 from personal savings
Expenses: As your income rises, so does your tax bill. Most of your Social Security benefits—which are tax-free for lower-income retirees—and all of your income from retirement accounts (other than Roth IRAs) will be taxed at your regular rate. But you will still have plenty of cash to buy a new car, give to charity or help your grandchildren pay for college.
Lifestyle: You might want to trade in your big house for two condos—one in a warm-weather destination. You shouldn’t have to worry about running out of money, even with a 50% chance that one of you will live to 92 or beyond. Take advantage of the market downturn to gift more stock to family members while reducing the size of your taxable estate. Pay attention to estate-tax changes and adjust your plans.
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