Retirement Portfolio Growth or Reduction Care To Share To Help Reassurance

[FULLTIMEWANABE]

Well we are in the process now of getting our last final ducks in a row.   Naturally as is the case with the highest percentile of folks, we worry about running out of money before air.   Albeit could easily be the other way around.    We think we are strong in our portfolio but was wondering how many of you that have been retired 5 years, 10 years, 15 years, 20+ years etc might be willing to comment on the following.  Just trying to reassure each other here that we will be good at 93% Firecalc success for next 35 years based on our planned withdrawals topping up our pensions etc.   Appreciate that history isn't necessarily indicative of future performance but what else can we use as a measurement?

Over time of your having been retired assuming you have withdrawn from your retirement portfolio have you found that you have seen the initial value go down or increase?   If so roughly how much percentage wise over what periods of time?

What type of ETFs, Indexes or otherwise are you invested in?  S&P500 Index/ETF?   Dividend Aristocrats?   Dogs of the Dow?  Others and if so what percentage of your total portfolio in each medium if you'd be kind enough to share?  

We are planning on the 3 buckets approach and after years of self directed hands on trading want to simplify to hopefully set it and forget it other than a quick scan once every quarter.   We absolutely don't feel comfortable with Financial advisors after a bad experience in the 80's and early 90's!  

Our first 2 year bucket in HISA Cash transferring into our chequing account monthly/quarterly as we see fit.   Second 5 year Bucket in GICs as a ladder and as required transferring into the first bucket in due course on our annual checks/tweaks.    Third Bucket we are thinking of the Vanguard S&P500 index fund (low MERs), to hopefully give us some of the historical average growth (remember well the 1987 crash, 90's tech bubble, 2008 crash and others).   We just don't want to get caught in a multi year downdraft, being older, but understand there will be a handful of years here and there that might crash, like just recently post COVID.

Anyway's looking forward to your comments and sharing your experience hands on over the past several years with your portfolios percentage wise of course.

Cheers,   FTW. 

[Kirk W]

1 hour ago, FULLTIMEWANABE said:

was wondering how many of you that have been retired 5 years, 10 years, 15 years, 20+ years etc might be willing to comment on the following.  

I took an early retirement at the age of 57 back in 2000. 

1 hour ago, FULLTIMEWANABE said:

Over time of your having been retired assuming you have withdrawn from your retirement portfolio have you found that you have seen the initial value go down or increase?   If so roughly how much percentage wise over what periods of time?

We did a lot of things in our early years that minimized our cost of living and a few times even had a very small income. By doing so we were able to not withdraw anything from my invested funds until I reached the age of required annual distributions (RMD). That age was 71. We did however use up most of the very small IRA that my wife retired with to pay for insurance in full each year and a small monthly income. We both began drawing Social Security at the age of 62. I am now 80 and Pam is 81. I did withdraw about $60k in 2010 to complete the purchase of our home when we stopped fulltime travel. That withdrawal did make our total investment fund fall back to about what we had 5 years before but it quickly recovered. I began to take the RMD each year in 2013 at age 71 but that now begins at age 72. That amount is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor that the IRS publishes in Tables in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).  In our case the the fund growth has exceeded the amount of our RMD every year except the current one. The RMD this year is going to lower the fund balance, most likely. The amount of that RMD has grown each year, between the growth of our funds and the shortened life expectancy of the IRS tables. If you look up the tables you can get a feel for what you can expect with the funds that you have.

1 hour ago, FULLTIMEWANABE said:

 Others and if so what percentage of your total portfolio in each medium if you'd be kind enough to share?  

Approximately 70% of our current investments are in my IRA which I rolled my former 401k into.  I have those funds in a managed fund that is currently with Ameriprise, but until a few months ago was with another firm. I moved my funds to follow my investment banker/broker when he and his team changed companies because he has done so well for us. I also have about 25% of our assets that are outside of the IRA invested but self managed with the advice of my banker/broker. I also keep about 5% of our funds invested in relatively liquid assets such as CD's, T-bills, and other marketable securities. I generally keep about 2 months of expenses in an interest bearing cash account or checking.

1 hour ago, FULLTIMEWANABE said:

We are planning on the 3 buckets approach and after years of self directed hands on trading want to simplify to hopefully set it and forget it other than a quick scan once every quarter.   We absolutely don't feel comfortable with Financial advisors after a bad experience in the 80's and early 90's!  

I can understand that as we had a bad experience early in our retirement with an over aggressive broker, but when things we sour he left the business and returned to selling life insurance and as he left he pointed us to the person that we have used ever since. Finding someone really good isn't an easy thing to do but a good one can exceed what most of us are able to do on our own. If you have friends or relatives who can advise you that might be a way, or you could probably go with something like Vanguard, Franklin, or Schaab mutual funds. I like the managed fund because it can react to changes in economic situations so quickly. Prior to our retirement I was far more hands on in my investments, but since we have retired I like not having to spend the time that I used to and having now reached the age of 80, I am well aware that at some point age does hinder judgment and mental acuity so this is one less responsibility to deal with. 

I do hope that at least some of this is of value to you, even though I am in the USA and you Canada. If you wish to have more specific information or to ask more direct questions such as the numbers involved, feel free to send me a private message with your email and I'll be happy to respond.

 

[FULLTIMEWANABE]

Thanks as always Kirk for your thoughtful reply.  Bless you.    I'm pretty confident we'll be fine but we want to be a little less frugal than we have been the past multi decades, and not hold back on experiencing some things we might not have the opportunity to again, hence the question.   Generally we are not flippant with our spending always questioning is it a Need or a Want.    In the highlight of our twilight we know there'll be a lot more wants than needs though LOL.   For sure we'd like to leave some form of a legacy behind but definitely not at the expense of our not being able to enjoy the golden years as they call them.

I'm looking forward to hearing what others think about the 3 bucket approach.   We like the idea by having buckets one (cash) and two (laddered maturities), so that if the market does hit a downside as well it does from time to time, we just don't know when that might be after a 1 or 10 year bull run???, we won't be forced to sell out of bucket three the S&P500 index funds on a low until it recovers.    We're also conscious that being all in cash which emotionally more comfortable, generally iinflation could erode that exponentially.     It's all a doozie and as my wise ancestors would say "you pay your money you make your choices".

Thanks again for sharing everyone what you can on your personal experience after being a few years in retirement already 👍

[Kirk W]

15 hours ago, FULLTIMEWANABE said:

 I'm pretty confident we'll be fine but we want to be a little less frugal than we have been the past multi decades, and not hold back on experiencing some things we might not have the opportunity to again, hence the question.

That brings to mind something that was said in the preretirement planning class that my former employer sent us to. "If you wait to retire until you know that you will have enough money you will never retire." The point that they made was that you should have a reasonable plan and then adjust your retirement to the economic situation as you move ahead in life, exactly as you did before you retired.

At some point, it becomes time to begin to "spend down" from the accumulated funds, unless your goal was to leave a large inheritance to your descendants. It has been my observation that in most families, inheritance causes more family discord than just about anything. The fact is that most inheritance is not received until after those who receive it have already achieved financial security and so it really changes very little in their lives. The ones who most need money from an inheritance usually squander what the get and in the long term neither beneficiary makes a significant life change from what they receive. 

For us, the time has come that barring a total economic collapse, we are highly unlikely to live long enough to run out of funds so we have begun to think of spending down and so are doing some of the things that we felt we could not afford to do in the past. The difficulty in determining how much money is enough is a problem that only goes away if you are one who has saved up for your declining years.  

Here is hoping that some of the others will join into this thread as I happen to know that most of us are past the typical age of careers.  

[RV_]

FTW, we both took SS at 62, and I have a military pension with disability from 27 years active duty. So with that income, no co-pays on prescriptions(At base Pharmacies) or medical needs with Tricare For Life, we are in a different position than many as are all military retirees over 20 years or 100% medically retired. So our checks come as long as we are breathing. 

We never bought a new car until 2019 and bought classics or less than trade in cars under or a 2 years old. Out of 300 cars bikes vans and trucks (really - four or more a year) I'd  we only lost money on one Mazda 808 wagon. Back in the 80s. As well since I owned them outright I carried Liability, some medical, uninsured motorist and non-collision comprehensive fire/theft/glass/hail etc). As long as I was not at fault my vehicles were covered. I never had a wreck driving, but had three collisions when our cars were parked and no one in them from age 15 to now about to turn 71, so we saved not only finance charges but scads on collision insurance we could put to use making money not depreciating. Turning a wrench was relaxing on weekends so a pleasure not a job, and I usually had them done within a week or two of purchase with a few rare exceptions.

So all I planned for way back when, was how to set up to  live on my retirement and SS by having no debt. Even when we were starting out no loans and no balances past 30 days on credit cards and the few store accounts. The only way was to not have house notes or rent and no car payments or other debt. So we worked towards that and for several decades, including our 7 years full timing with a Ram Diesel long bed Dually and a 36 foot HitchHiker both bought used like new and cash.  We traveled save for winter quarters three month on an RV pad we built on semi-rural family property we later inherited.

So in addition to doing very well with our investments, we have a sizable amount in Lynn's 401, cash in the bank, our home which nearly doubled in value since we bought it cash over the last three years, and even our cars have appreciated?? Weird that!

But I can find nothing wrong with your planning either for anyone.

We have been essentially retired from age 45 when we retired to full time in 1997, with a four year break to build up a steel building company with a friend 2005 - 2009, that was for fun, but was very lucrative.

So our three buckets are: 1. Our homes/properties which we always buy with that in mind. 2. Lynn's 401/Tesla stock/Mineral royalties as we kept the mineral rights to the properties we have owned as most are in oil rich and gas rich areas. 3. Our military pension/two SS checks/TFL.

We have some hard currency and are thinking about increasing that.

I am making little from savings for investment funds staging so a, looking at short term (6 month) CDs that pay a bit over 5% right now and I am looking into T bills. I like short tewrm liquidity and CD pay regardless of the market like funds can do and suffer a loss. Our stocks are all "House Money" as I bought only held individual stock in 2010 at $20($17-22 on IPO pops drops) and sold it for $350, 1500% up if I did the math right, eight years later and bought it again on dips post 5-1 and 3-1 splits since 2020. We built it back up using only some of our profits from the first sale.

I also like Index funds and expect a recession before I die and have liquid assets ready for whenever the index funds go on a fire sale. The 2008 recession saw us using our surplus cash from my hobby job building and buying more of Lynn's funds and then Tesla.

So barring a nuclear war or large asteroid strike or the Yellowstone Caldera blowing we are pretty much set.

We too have been frugal all our lives but now when we were ready to do Australia and New Zealand inn 2020, then the Philippines, Guam, India and China, COVID and pulmonary Embolisms hit and we are hoping to resume our travel plans later this year after we decide to move again, take our house profits and use half to get an even nicer house without wildfire smoke to the extent it is here on the Colorado front range. We planned an active retirement and can resume soon.

I think you've nailed it too.

 

 

[FULLTIMEWANABE]

Well, based on Vegas Teacher's recent thread about activity/responses, I'm hedging my chances that maybe if I "resurrect" this post I started a while ago which only RV and Kirk very kindly shared some input, others might be willing to consider doing the same?    

As like someone else said when you get little to no feedback/replies, you do start to think why bother contributing yourself any more, and therein lies the demise as others continue the downward trend sadly.  

I'm sure there's more than me that planned on Freedom 55, and then for whatever reason had to revise it to Freedom 85 (not there yet for a couple decades plus if I'm spared, but you get the idea)  LOL.

It's also on a different subject than most of the longest time, repetitive mechanically/health/tesla etc etc more based ones so a different interest category for many maybe???

Just a thought, and I truly do enjoy reading your experiences since retiring. 

Here's hoping 🤞

[Kirk W]

37 minutes ago, FULLTIMEWANABE said:

As like someone else said when you get little to no feedback/replies, you do start to think why bother contributing yourself any more, and therein lies the demise as others continue the downward trend sadly.  

I know exactly what you mean and understand.       🥴

[Randyretired]

We use mostly a 2 bucket approach. I handle the investing and most of our funds are in index funds. ] The S&P 500 is by far the our largest investment. Of course up until the last year all of  the market returns were pretty good. Our situation is a little different than most as only a small amount of our funds are in tax deferred retirement accounts.  This severely restricts our ability to change investments without tax implications.  Right now we are shuffling funds to build a new place and the current market is not what I had hoped.  The figures say it should be fine but I guess there is always a what if.  My children tell me I, we are way to conservative but when you have saved most of your life...  I have read that many retires are more conservative than needed so I guess we are not alone.  My DW's health requires we stay close to home now so our expenses have gone way down. 

Edited April 19, 2023 by Randyretired

[FULLTIMEWANABE]

Bless you Randy thanks for sharing.   Your thoughts echo mine so much, I'm very much a "what if" person myself, and I've become more and more risk adverse the older I've become.   It's just learning to strike that balance between fear and living.   Like you say, it's hard to start spending down when you've been in that save mode for almost all your adult life!!!  

 I've always been a no debt other than mortgages either on our own homes or revenues or new builds that we paid off many years ago.   We are a banks worst nightmare I think, as our credit cards have been paid off every month for decades now.   We were taught from children to switch off lights when not in rooms, keep heating set lower and put on another sweater, don't waste food and and and......  My grandmother's words still echo in my head today "never a lender or borrower be".    It's hard to break such careful spending type habits and learn as we are now older to reap the benefits of prior years.  I enjoyed reading Kirks thread about splurging a bit more nowadays and finding it hard to start on that journey   Albeit we have always splurged a little to create tremendous memories with our children at times, recognising time is so precious, so we can honestly say we've had a fabulous life thus far on so many fronts. 

We are anticipating that our spending for the first few years will be higher and taper off as we become less and less mobile over time (Already had the C' word and other mobility issues raise their heads), so are allowing for that, but equally there's that lovely 'I' word = Inflation, that will likely ensure it doesn't taper as much as we might think so ......   Anyway's thanks again for your sharing.   Wishing your wife respite with her health issues soon, and happiness with your new build.

[Kirk W]

6 hours ago, FULLTIMEWANABE said:

We are anticipating that our spending for the first few years will be higher and taper off as we become less and less mobile over time

I don't know your ages, but I suspect that you are younger than Pam & I so will offer some thoughts on that plan. When we were fulltime we began to do RV volunteer positions to save money and while that did save money it also was something that we quickly discovered fit our way of life far better than other choices and so continued to do that for half or more of each year of our 12 years and even did 3 more locations after we had returned to part-time RV travels. In those years we spent time with our grandchildren much more than money on them and even now that they are adults they talk of the adventures we had together. But now that we are no longer fulltime we indulge ourselves with cruises and such to supplement our RV travels and that is where most of our increased spending goes. But one thing to think about in your long term planning is that the day may well come when you no longer are able to care for a house or RV and you may even need personal care. We have now sold our last stick house and we live in a senior community which is "age in place" meaning that if needed they have assisted living, memory care, meal plans, and even full care. That means that our monthly expenses are now somewhat higher than with a house and they have the potential to increase dramatically, if either of us should need memory care and when we may need assisted living.  In planning for that we bought an insurance plan called "asset protector" that will pay for 1 of us to be in some form of care when needed, to protect the remaining assets for the one not needing that care. Unfortunately, I don't see any company offering such plans today. Should one or both of you need care beyond what your budget can pay for, Medicaid is available to pay the difference but only after most of your assets are spent. The potential problem is for the situation when 1 of a couple need expensive care while the other is still able to travel and live alone. I'm not sure exactly what I'd do differently today but it is something that one needs to consider. 

[Randyretired]

Kirk, that is certainly one of my what if  thoughts.  One of us needing full care for an extended period could be a budget headache to say the least.  And with inflation the way it is that cost is certainly the elephant in the room.

[Tulecreeper]

The OP didn't say how old they are, or what type of pension(s) are involved.

We pulled the plug 10 years ago in our 50's.  Both of us worked for the state, so we both have pension income from that.  We also had a 457 account that we used for the first 5 years to supplement those pensions.  Then, when I turned 60, I started collecting my Navy Reserve pension which replaced the 457 money.  So, since we didn't need it anymore we just cashed out the remaining 457 and stuck it in the bank.

Then, when we turned 62, we took early social security.  So now we have 2 state pensions, a Navy pension, and 2 social security pensions.  Our mortgage is $950/mo on a 2000 sq-ft house on 10 wooded acres, and our utilities (elec., phone, internet, etc.) run about $500/mo.  Our Medicare Advantage Part C premiums are picked up by the state as part of our pension benefits, and they reimburse us for our Medicare Part B premiums.  We have minimal medical issues, but since we are covered by Medicare, Medicare Advantage, and Tricare for Life (TFL) we pay pretty close to zero for everything anyway, including prescriptions.

It seems as though (to me) the OP is relying mostly on their investment portfolio for income after retirement.  That would make me a bit shy as we only used ours as a supplement.

Edited April 20, 2023 by Tulecreeper

[Kirk W]

5 hours ago, Randyretired said:

One of us needing full care for an extended period could be a budget headache to say the least. 

Making that even more difficult is the fact that many of the companies that used to write long term care policies have left the business and I was told that the prices have increased dramatically. We bought our policy from Alliance when I was 52. The type that covers which ever person needs it first only isn't sold by anyone now as far as I am able to learn and while Alliance continues all of the previously sold policies, they do not write any type of long term care now, I was told. The policy we bought cost us $177/month for 10 years and is since paid up. We get an policy statement each anniversary of the policy that states what they will pay per day for long term care. The daily rate they pay has an automatic increase each year and as of 2023 it will pay up to $237/day to start after the policy holder has been in care for 30 days. Each time we get a statement I am grateful to the financial advisor who recommended that we look into the coverage when he did. He even gave us a list of companies he considered to be leaders of the industry and we talked to 3 different ones.  With a total premiums paid in of $21,240 it would only take 3 months for the entire price paid to be returned ignoring inflation. The policy will pay for a total of 3 years or more than $1/4 million. 

Best Long Term Care Insurance of 2023

Edited April 19, 2023 by Kirk W
added a link

[Randyretired]

We purchased a long term policy each in the 80's.  It only pays $65 a day for one year.  We looked into adding to it but it isn't widely available and is very expensive.  For now it is what it is. I guess time will tell. 

Edited April 19, 2023 by Randyretired

[2gypsies]

If one needs long-term nursing home care here are some rates by state.  If you don't need serious care as you age it's a lot cheaper and more pleasant to stay in your home and have  caregiver agency come in to care for you for a few to 8 hr./day.  They can help with bathing, hygiene, cook your meals, do light cleaning, shopping, etc.  More and more are choosing this route.

https://www.seniorliving.org/nursing-homes/costs/

[Kirk W]

49 minutes ago, Randyretired said:

We purchased a long term policy each in the 80's.  It only pays $65 a day for one year. 

Wow! We got ours in the mid 90's. All of the policies that we looked at also had a riser clause that the amount per day would increase over time. Is yours one that is paid up or do you still pay a monthly premium?

18 minutes ago, 2gypsies said:

If you don't need serious care as you age it's a lot cheaper and more pleasant to stay in your home and have  caregiver agency come in to care for you for a few to 8 hr./day.

True and some policies will pay for that as well. But the complete care or memory care are much more costly and for a couple to get help they must spend down most of their assets before Medicaid will help.

[Randyretired]

3 hours ago, Kirk W said:

Wow! We got ours in the mid 90's. All of the policies that we looked at also had a riser clause that the amount per day would increase over time. Is yours one that is paid up or do you still pay a monthly premium?

I still pay a small premium of $15 a month.  They offered us some additional coverage a few years ago but the price was steep.  I decided it was to high and as I recall there was some restrictions. 

⁷

[FULLTIMEWANABE]

Oh wow, this thread is gaining some momentum     Awesome to see.     For those that might be curious/interested ..........

Being Canadian our health care system is so very different to yours in the USA so that isn't my concern for the future as we have our plans sorted for that should the need arise.  Pensions and income wise,  we get CPP (based on how much you contributed during your working years.    We get OAS when we hit 65 (based on a % of 40 years you have been in Canada) and "if" low income we also can get GIS.   That's as far as government pensions support or in our case again if low income you can get a province small payment seniors benefit plus glasses, dental, mobility support etc.   In addition being of UK descent prior to emigrating 30 years ago, we also get a portion of UK pension based on number of years we contributed.   Hubby is now in receipt  after they increased the age to start at 66 for him.   I am younger and won't get mine until I am 67 as the UK increased the ages based on DOB a few years ago, and likely will again in the not too distant future based on life expectancy.   Canada has been and still is aged 60 for CPP or higher if you delay to 65 but OAS begins at 65 or higher if you delay until 70.  Due to our family history both of us have made the decision to take early OAS at a lower rate.  GIS is only payable if you are in receipt of OAS and in the government's eyes classified as low income = a lot of folks do qualify for this, and I've calculated out that with no other income a couple could end up around close to C$4000/mth +/- on pensions and benefits in 2023.    Very few folks receive full CPP, but if they did and were eligible for full OAS they would't qualify for GIS.   Likewise if as is our case you earned income from other sources such as investments/working/ side hustles you'd likely not qualify for it also.

So we know hypothetically once we are both aged 65+ we would based on todays rates get government payouts around C$4000+/- per month approximately between the two of us.   In addition our TFSA (Tax Free Savings Accounts) grow and we can withdraw funds from without it affecting our pensions/benefits whatsoever as and when we deem we need a top up.    Any other monies in RRSPs or investment funds that we have to or do draw down from would affect GIS and if our income exceeds $86,900 pa in 2023 each then they would clawback on our OAS.

With our personally saved up portfolio assuming it gains interest at above 5% p.a. we won't qualify for GIS either one or us and will have a partial clawback on our OAS.  but we want to be able to spend a little more than C4,000 per month especially when headed as winter snowbirds south to explore and experience whilst we are still able enough to.   

There's no simple formula, you need a maths degree to work out your entitlements and how to avoid losing them or paying the tax man  = I'm sure you feel the same in the USA!

 

 

[Kirk W]

It isn't simple here either, but with fewer plans to deal with it is probably less complex than yours. You can receive Social Security retirement benefits as early as age 62. However, we'll reduce your benefit if you start receiving benefits before your full retirement age. For example, if you turn age 62 in 2023, your benefit would be about 30% lower than it would be at your full retirement age of 67. The IRS allows penalty-free withdrawals from retirement accounts after age 59½ and requires withdrawals after age 72. These are called required minimum distributions (RMD). We also have healthcare called Medicare starting at age 65 but it only pays 80% so most of us also purchase an insurance supplement. For the indigent there is also Medicaid that will help if you run out of funds but those rules vary to some degree by state of residence because it is a mostly federally funded program that is administered by the states. 

[Tulecreeper]

45 minutes ago, Kirk W said:

It isn't simple here either, but with fewer plans to deal with it is probably less complex than yours. You can receive Social Security retirement benefits as early as age 62. However, we'll reduce your benefit if you start receiving benefits before your full retirement age. For example, if you turn age 62 in 2023, your benefit would be about 30% lower than it would be at your full retirement age of 67. The IRS allows penalty-free withdrawals from retirement accounts after age 59½...

That is for a 401k; a 457 allows withdrawals at anytime after age 55, retired, or not...earlier if you are fully retired.  And even a 401k will allow withdrawals prior to 591/2 if you are fully retired.

[Kirk W]

46 minutes ago, Tulecreeper said:

That is for a 401k; a 457 allows withdrawals at anytime after age 55, retired, or not...earlier if you are fully retired. 

A 457 plan is a tax-advantaged retirement savings plan offered to employees of many state and local governments and some nonprofit organizations. A 403(b) plan (tax-sheltered annuity plan or TSA) is a retirement plan offered by public schools and certain charities. A TSP closely resembles a 401(k) plan offered by private employers but is for employees of the federal government.

Edited April 20, 2023 by Kirk W
add plans

[Tulecreeper]

4 minutes ago, Kirk W said:

A 457 plan is a tax-advantaged retirement savings plan offered to employees of many state and local governments and some nonprofit organizations.

True...I had one when I retired.  Cashed it out when we no longer needed the supplemental income.

[RV_]

On edit: I got interrupted by a refrigerator warranty repair guy and although Kirk already defined one this has reference links too.

For Americans like me that don't know what those Canadian programs are, I had to look them up:

"Canada Pension Plan (CPP) and Old Age Security (OAS) are two of the three main pillars of Canada’s retirement income system. The third pillar includes workplace pension plans and RRSPs."

https://www.savvynewcanadians.com/cpp-and-oas-pension-comparison/#:~:text=Canada Pension Plan (CPP) and Old Age Security,they are calculated%2C supplementary benefits%2C and eligibility rules.

I also had to look up 457 Plans

"457(b) plans

A 457(b) plan is similar to a 401(k), but it’s available only for employees of state and local governments and some tax-exempt organizations. In this tax-advantaged plan, an employee can contribute to the plan with pre-tax wages, meaning the income is not taxed. The 457(b) allows contributions to grow tax-free until retirement, and when the employee withdraws money, it becomes taxable."

Source: https://www.bankrate.com/retirement/best-retirement-plans/

Edited April 20, 2023 by RV_