Each week I run into a few articles that I feel are especially valuable. Every Monday I would like to share some of the best with you, my readers. I hope you find them helpful.
This week’s favorites include why you should take social security at age 62, understanding why you can buy a house for 2% interest but student loans are 6.8%, tax traps to avoid with inherited IRAs, twelve things to love about online school, and you can still retire early even if you do things wrong.
Most talk about when to take social security assumes you need the income throughout your retirement years. But what happens for those of us who retire early and don’t need their social security check to live on? When we take the money, it will either be invested, or spent so less money will be taken out of our retirement plan, which leaves the equivalent amount invested. I covered this in chapter 7 of my retirement book. If you are going to invest the money, then age 62 is the clear winner for beginning your social security benefits. ESI Money just published an article that comes to the same conclusion called A Case For Claiming Social Security Early. I also covered it in this blog article. If you can get a long term average return of 8%, there is no way for the person who waits until they are age 70 to ever catch up with those who start collecting at age 62.
It is an interesting phenomenon that a medical student can buy a home with a 30 years mortgage and no money down at 2.5%, but has to pay 6.8% interest on their student loans. Why the disparity? Physician on FIRE gives us the answer in his article called Diagnosing Debt: Demystifying Interest Rates & Loan Terminology. Do you think the explanation is good enough to justify the higher interest charged on student loans?
Last December we lost my father-in-law just after Christmas. His wife inherited his IRA along with a lot of rules for how to use an inherited IRA. After a quick learning process, it still baffles me why the government makes things so complicated. Her Money gives us some help with 7 Tax Traps to Avoid if You Inherit an IRA from your Spouse. Don’t mess up any of these rules or you will be paying a large amount of your inheritance in tax penalties.
The pandemic has created mass online schooling at home, which may end up being a game changer for how we teach our kids. For some parents, it has been very hard to deal with. Others are finding a silver lining. Minimal MD has found that virtual school has its benefits. She lists them in Online School: Twelve Things to Love. I especially like #3 which I have been using since I retired from medicine, and now run a virtual business from home. There are perks of being at home.
Many doctors are talking these days about retiring early. The FIRE movement might get a boost in the physician realm as those who have been laid off, or had their income cut, decide it is time to go ahead and retire. You don’t need to get everything perfect to reach early retirement. Leisure Freak gives us hope for our mistakes in Things I did Wrong and Still Retired Early. If you are one who is ready to leave the medical field, don’t do so without first reading my book, The Doctors Guide to Smart Career Alternatives and Retirement. I am enjoying my time since I retired and here is a summary of the first three years.
I hope you enjoy these articles as much as I did. I look forward to updating you again next week with a few more articles I find especially interesting. If you read an especially good article, send me the link so I can share it with others.