Retirement

[Radar Contact]

I will not be spending my kid's inheritance.

My kids are fortunate to be able to grow up with the opportunities I choose to provide for them. They are being instilled with a good work ethic as well. That is their inheritance. My goal is to die with .01 cents in the bank.

With that said, I totally respect your desire to leave them a large chunk. I hope they are old men by the time I die and have amassed enough for themselves.

 

[Ravioli]

My Father told us (6 sons) that he intended to spend everything he earned. (He was a PhD Chemist and worked for only 2 companies in his career)

At that time he was with his second wife who had two kids from her former marriage.

His logic was that we (my brothers and I) didn't need his money, and her kids wouldn't know what to do with it if they got it.

That conversation was about 15 years ago. Guess what... he was RIGHT!

 

[ntinkle]

The big unknown here is inflation, which, frankly, is scary.

This is the underlying topic that triggered the question, How do you judge these changing times?

If that is your biggest fear, protections can be in the stock market - inflates with inflation, but the downside is it may not be up when you need it - and real estate. Many have rent homes - managed or not - that provide both income and inflation protection in the form of increased rents and increased values.

 

[mscard88]

So the 2nd wife will get his money. She'll know what to do with it.

 

[Everskyward]

I think I'm there. It's just a matter of pulling the trigger. Pros are; residences paid off and no reason to conserve capital (no kids). Cons are no pension, needing to cover my own health insurance for 5 years, and having a taste for expensive travel.

 

[Matthew]

We talked with a pro last week. It was nice to get a second opinion on where we are and where we want to be. Looks like we can do it sooner than we thought. And if I semi-retire, could do it this afternoon. I can't remember how the guy guesstimated health insurance premiums, but I do know he used a pretty high number for annual cost increases for coverage, something like >50% above inflation.

 

[Ravioli]

Not at all her style. (and he did pass away in 2015)

Seems that maintaining the family cabin near Bass Lake costs close to the same as maintaining their (her?) house in SoCal.

 

[ntinkle]

I can't remember how the guy guesstimated health insurance premiums, but I do know he used a pretty high number for annual cost increases for coverage, something like >50% above inflation.

Lately, that wouldn't be enough. That HAS to change soon, right? Please.

 

[Matthew]

I think I'm there. It's just a matter of pulling the trigger. Pros are; residences paid off and no reason to conserve capital (no kids). Cons are no pension, needing to cover my own health insurance for 5 years, and having a taste for expensive travel.

The thing about expensive travel: do you think you'll slow down in the next 10 years? 20 years? Maybe not do as much traveling later?

 

[Everskyward]

The thing about expensive travel: do you think you'll slow down in the next 10 years? 20 years? Maybe not do as much traveling later?

My mom and other relatives kept it up until about 80. Luckily they were heathy and so am I, so far, but I know that can change in a hurry. That would be 20 years.

 

[mscard88]

Not at all her style. (and he did pass away in 2015)

Seems that maintaining the family cabin near Bass Lake costs close to the same as maintaining their (her?) house in SoCal.

Meant as a joke. Sorry for your loss.

 

[Ravioli]

Meant as a joke. Sorry for your loss.

No worries... and thanks.

We do enjoy the cabin (often).

 

[wilkersk]

The way I understand it, your planner needs to have a fiduciary agreement with you. In that case, they are required to work to your benefit.

Ron Wanttaja

The guys that work on commission can sign all the "fiduciary agreements" you want. They have professional "code of conduct" that say's they have a fiduciary responsibility. But, they still make money by selling you stuff, PERIOD!

If you want a financial advisor with real "fiduciary" responsibilities, go with the "fee-only" types. And, unless you're so rich, you need a full-time advisor on retainer, go with one that charges by the hour, and just visit him once a year for a check up.

I just can't see paying some of the outrageous fees that the guys like Fisher Investments want. They charge an annual retainer fee that is equal to a percentage of total assets under management, and a performance fee that is a percentage of the portfolio's ARR.

Unless someone can prove to me that they can (in the future) beat what I've already done in the past (on my own) with low-cost mutual funds and real-estate, I'm not buying it.

 

[SkyDog58]

Part of my retirement plan is having a wife who is 18 years younger than me.

Still, I will work as long as I can to make sure she is taken care of as well.

 

[Checkout_my_Six]

You can keep it up only as long as you can keep it up.

btw....they make a pill for that...don'tcha know?

 

[mscard88]

Part of my retirement plan is having a wife who is 18 years younger than me.

Still, I will work as long as I can to make sure she is taken care of as well.

OMG! You too?!



I kid I kid!

 

[NoHeat]

25 times your desired income.

That's the 4% rule. You can live almost indefinitely on a fund if you withdraw only 4% each year. So, 25X your desired income.

Example, for a $100k annual income, you need $2.5 million.

 

[JoseCuervo]

My kids are fortunate to be able to grow up with the opportunities I choose to provide for them. They are being instilled with a good work ethic as well. That is their inheritance. My goal is to die with .01 cents in the bank.

With that said, I totally respect your desire to leave them a large chunk. I hope they are old men by the time I die and have amassed enough for themselves.

And that makes things interesting as you live into your 80's, your "kids" are in their 60's when they finally get their hands on the estate. I don't think an inheritance at age 60 is going to dissuade someone from education and working in life...

It just kind of brings up the purpose of work, retiring, and if you are to have a "purposeful" life.

If someone quits working early, and then just spends all their money, living well, buying toys, travelling, should we admire them, or, should we shake our collective heads at the lost opportunities they squander to do good?

Not sure what the answer is.

I know "respected" families where they spend every dime that comes in every month, travelling, RVs, toys, vacations, golf, etc...

And, I know "respected" families that don't give a dime to charity, are building trusts with all sorts of complicated tax structures to try and control the wealth for generations.

And, I know "respected" families that spend all their time at the local cat shelter, and will leave all their money to the cat shelter in town.

 

[Sac Arrow]

Yeah, would likely require you to understand data and economics. If you really worry about $60/hour minimum wages, you also don't understand much else about economics.

You also, likely don't understand Deflation.

if you really worry about falling off 60 story buildings, you also don't understand much about physics.

F*****g troll.

 

[JoseCuervo]

if you really worry about falling off 60 story buildings, you also don't understand much about physics.

F*****g troll.

I don't worry about falling off 60 story buildings, and, I understand way more physics than you do, because the possibility is 0%.

Nor do I waste energy worrying about inflation driving minimum wage to $60/hour, or vice versa.

You kind of use bad language. You should work on expanding your language so you could sound semi-educated.


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[Checkout_my_Six]

Oh no.....make it stop...lol

 

[denverpilot]

Sorry not 75 mil its 750K. Should read what I right.

Heh. I was thinking you might consider a bigger airplane.

 

[painless]

One of the big things keeping me from hanging up the handpiece (dentist) is health care insurance premiums that are curently at $1800.00/month for crap coverage. I've got 5 years to go until I get on Medicare, so forking over $100,000+ over that period does not sit well with me.

 

[Sac Arrow]

I don't worry about falling off 60 story buildings, and, I understand way more physics than you do, because the possibility is 0%.

Nor do I waste energy worrying about inflation driving minimum wage to $60/hour, or vice versa.

You kind of use bad language. You should work on expanding your language so you could sound semi-educated.


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You, I think, espouse socioeconomic theories that have been tried in the past but never been successfully implemented in their pure form. You are an idealist. You have a vision that many of your kind share. It is a kind world, where nobody suffers and nobody prospers, where mediocrity is rewarded, and ingenuity and entrepreneurship are punished. In a perfect world, you envision everyone wearing a grey workers smock producing goods for the State, where no greedy capitalistic leeches can possibly bleed sustenance off the people. It is a world where, you need no money, because the State will always be there for you, to feed you and house you. It is a world where status is irrelevant. Income is irrelevant. Money is irrelevant. Money in it's pure form doesn't even exist. Certainly it shouldn't.

My friend, in theory your economics work, just not in a free market economy. You can't have it both ways. You want to fix wages, up or down? Sure. Do so. But be prepared to fix prices too. Up or down. If the free market economy has dictated a $60 per hour de-facto minimum wage, then all other facets of economics have already adjusted. If you want to artificially legislate it as such just so all people can lead a middle class existence regardless of value and productivity, then be sure you are able to control costs. Money can be produced in a vacuum for the short term, but not the long term.

 

[mscard88]

 

[paflyer]

how much equity or money would it require you to say "I quit- I'm outa here. cya"

Depends on what it costs you now to live, and how/if you expect that to change much if you're not punching the clock anymore.

 

[paflyer]

What would cause one to not be able to live off of $3.2 million in retirement funds?

That is a large chunk of change, and could generate significant income.

5% pretax produce a really nice income.

 

[X3 Skier]

One thing that has truly surprised me is my 401k. Retired 20 years come this January. I had to start taking the RMD a few years ago. I have more money in the 401k every year than I start with while cashing the RMD checks every month.

Since RMD's are supposed to empty the account at my life expectancy, does this mean I'm immortal?

Cheers

 

[rpadula]

You can keep it up only as long as you can keep it up.

You know you're getting older when it takes you all night to do what you used to do all night.

 

[rpadula]

My company is offering me $1.2M to retire. That's in lieu of my pension, of course.

Ron Wanttaja

Please think carefully, or get some help, in deciding to take the lump sum or not. My uncle, a very smart guy with two engineering degrees, has burned through the $ more quickly than expected and really wishes he had kept on the pension installments. Are you smarter than the pension committee?

http://alephblog.com/2015/11/04/on-lump-sum-distributions/

(This article also has modifications to the 4% "rule")

 

[JoseCuervo]

You, I think, espouse socioeconomic theories that have been tried in the past but never been successfully implemented in their pure form. You are an idealist. You have a vision that many of your kind share. It is a kind world, where nobody suffers and nobody prospers, where mediocrity is rewarded, and ingenuity and entrepreneurship are punished. In a perfect world, you envision everyone wearing a grey workers smock producing goods for the State, where no greedy capitalistic leeches can possibly bleed sustenance off the people. It is a world where, you need no money, because the State will always be there for you, to feed you and house you. It is a world where status is irrelevant. Income is irrelevant. Money is irrelevant. Money in it's pure form doesn't even exist. Certainly it shouldn't.

My friend, in theory your economics work, just not in a free market economy. You can't have it both ways. You want to fix wages, up or down? Sure. Do so. But be prepared to fix prices too. Up or down. If the free market economy has dictated a $60 per hour de-facto minimum wage, then all other facets of economics have already adjusted. If you want to artificially legislate it as such just so all people can lead a middle class existence regardless of value and productivity, then be sure you are able to control costs. Money can be produced in a vacuum for the short term, but not the long term.

What the hell are you talking about?

I replied to a comment you made where you said data should be ignored and that you knew $60/hour minimum wages were a couple years away.

Is using data and relying on analysis of data some sort of failed "socioeconomic" theory?

And how could it be a bad thing to rely on data?

It is great to create imaginary positions to rail against, but why not rail against my real commentary? You know, the part about data being good, inflation not a major risk, and deflation being much worse.



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[wanttaja]

My company is offering me $1.2M to retire. That's in lieu of my pension, of course.

Please think carefully, or get some help, in deciding to take the lump sum or not. My uncle, a very smart guy with two engineering degrees, has burned through the $ more quickly than expected and really wishes he had kept on the pension installments. Are you smarter than the pension committee?

I'm innately conservative, and come from long-lived stock. I like the idea of regular pension payments even if everything else goes to heck. The pension isn't my only retirement savings, so we can be a bit more risky with the investments.

Ron Wanttaja

 

[Sac Arrow]

What the hell are you talking about?

I replied to a comment you made where you said data should be ignored and that you knew $60/hour minimum wages were a couple years away.

Is using data and relying on analysis of data some sort of failed "socioeconomic" theory?

And how could it be a bad thing to rely on data?

It is great to create imaginary positions to rail against, but why not rail against my real commentary? You know, the part about data being good, inflation not a major risk, and deflation being much worse.



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I honesty have no idea where you are coming from ideologically. I happen to disagree with some of the current economic data and statistics that is presented to suggest that inflation is not a problem, but, you seem to suggest that inflation in itself is not a problem to begin with, which is a position with which I disagree. In my opinion we can tolerate small, predictable amounts, but not large amounts. I don't care what kind of CPI stats you throw at me, they simply aren't reflective of real world economics that people have to live with. You probably aren't shocked that you are paying seven dollars for a mocha at Starbucks because you can afford it. But you should be, these days a car costs as much as a house, and a house costs as much as a mansion. Yet, in the last twenty years bank interest had been a fraction of a percent.

You can't retire that way, at least for very long. The only alternative is to take very risky high yield investments to stay ahead of it that you probably shouldn't be taking at the retirement stage.

I don't care about Econ 101 and all the rhetoric and models about healthy economic growth through controlled currency devaluation (which I frankly find abhorrent but that's just me), rather I'm talking about real world living.

 

[ntinkle]

One of the big things keeping me from hanging up the handpiece (dentist) is....

A dentist with the handle of "painless". I like it!

 

[denverpilot]

One thing that has truly surprised me is my 401k. Retired 20 years come this January. I had to start taking the RMD a few years ago. I have more money in the 401k every year than I start with while cashing the RMD checks every month.

Since RMD's are supposed to empty the account at my life expectancy, does this mean I'm immortal?

Cheers

LOL! That works in up times and doesn't work when the investments inside the 401k crash. Have seen both.

Technically the RMD calculation is supposed to be re-done at the value of the account each year also, but from talking to some folks who have to do them, various firms do better or worse jobs at calculating them correctly.

Last time I read the law about them, it looked damned near impossible to calculate it in any accurate way, anyway. Most accountants just shake their heads and pick a "reasonable" way they can replicate consistently to do the number and know nobody's going to come asking about it as long as they saw a distribution of a general size taken.

But I like your theory better.

 

[Mason]

How big a pile do you need?

 

[SoCal RV Flyer]

LOL! That works in up times and doesn't work when the investments inside the 401k crash. Have seen both.

Yeah, nothing is a sure thing. I've got one of those "target date" 410(k)s that relies less on stocks and more on bonds as you approach withdrawal time. Rounding out the mix are some real estate, a long-term stock portfolio with a 15-year horizon, some stock "mad money" for short-term gains and a good ol' fashioned lump of cash in a bank savings account that's earning next to no interest, but it makes me feel good it's there.

Diversify, diversify! And hope for the best.

How big a pile do you need?

Shoulda paid attention in chemistry class.

 

[Tom-D]

I guess you could say, I started with nothing, and I still have most of it.

 

[Checkout_my_Six]

rich people.....

 

[Art VanDelay]

For me to honestly say "I'm outta here" would likely be somewhere north of 5 million. I am a ways from that neighborhood but the good news is I love my job and will honestly miss it when they finally make me go.

So I'm happy to continue to plod along. After all , this is the best part time job I've ever had.