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We are moving to a active adult community soon and our plan is to redo our will and living trust at that time going forward. Our heir situation is pretty straight forward with two 30+ adult children and no grandchildren. I do wonder how people handle a situation if all would become deceased at same time (due to accident, etc) and estate is split between wife's side of the family and my side. I'm just curious -- as if that happened why would we really care at that point??
We would have no direct heirs anyway, and neither my wife or I would be concerned with who gets what past that point. Without designation in a will other than next of kin, I assume 1/2 would go to my side of the family -- I have no siblings, and no living parents so mine would be split with my cousins? I have no living aunts/uncles either. Just 20 first cousins that are living, and 4 deceased. Would it be split 24 ways with the deceased cousins heirs getting their first cousin share to split? I hope they enjoy the $52 bucks! lol. if they end up in a fight over the estate it will be a good way for them all to bond again.
That is not true ... ss may be cola adjusted but colas have little in common with our personal costs of living ... so there is always sequence risk because your actual inflation is very different from just a price change index on baskets of goods and services where you have no use for most of them or that may be different in your geographic area..
It is a misconception that these price index cola adjustments are some how supposed to reflect your personal cost of living..
A personal cost of living index includes how many times you buy something x the price changes x a quality factor . Higher priced goods tend to see higher price increases but last a lot longer....how willing you are to sub is also key .... I won’t buy ice cream if I can’t get my no sugar added Klondike’s on sale. So I will buy no sugar added pudding instead .
So a personal cost of living index is very different from just the CPI which just takes the temperature in the 1500 min economies that make up this country and tracks just the price changes on loads of things we have no use for
My personal inflation has gone down, way down. Normally when we’re working my husband would just pay $9.99 for coffee bag anywhere, now he goes on his walk and when he sees coffee price at $4.99, he loads up. We’ve found many things to be true when we retire. Don’t drive much, cost of gas also down. The only thing is our travel is up, but even then Southwest has airfare to go to Hawaii for $49 one way. When we’re working, we paid $1000 per ticket to go to Hawaii in the summer sometimes. A few examples why I don’t even worry about sequence of risk when I get SS.
@ OP, You, may, PM me on what gives you $2000-$3000/mn in dividends TIA.
I can venture a guess:
$750,000 in tax free hi yld munis, .. oops OP has stocks, so maybe $300,000 in CIM or other hi-yield REIT,
.. then again he might be the conservative type and have $1.5+ MM in NOBL (dividend aristocrats)
...or then again any amount in between and a mixture of the above. ..or never mind.
I can venture a guess:
$750,000 in tax free hi yld munis, .. oops OP has stocks, so maybe $300,000 in CIM or other hi-yield REIT,
.. then again he might be the conservative type and have $1.5+ MM in NOBL (dividend aristocrats)
...or then again any amount in between and a mixture of the above. ..or never mind.
JK, disregard the above..I really haven't a clue.
Also, Vanguard High Dividend Yield Index. Currently yields 3.37%. So 750k in that fund would give you over 2k per month.
My personal inflation has gone down, way down. Normally when we’re working my husband would just pay $9.99 for coffee bag anywhere, now he goes on his walk and when he sees coffee price at $4.99, he loads up. We’ve found many things to be true when we retire. Don’t drive much, cost of gas also down. The only thing is our travel is up, but even then Southwest has airfare to go to Hawaii for $49 one way. When we’re working, we paid $1000 per ticket to go to Hawaii in the summer sometimes. A few examples why I don’t even worry about sequence of risk when I get SS.
the wild card is healthcare costs which always have exceeded inflation adjustments..energy costs can shift on a dime . taxes can suddenly sky rocket . we saw that in the poconos when we were there, so the point is thinking the cpi will match any ones personal inflation rate is going to be a mistake assuming that . sequence risk never goes away anytime there is a negative real return .
fidelity's retirement planner was calculating long term care increases at 7.50% and healthcare at 5.50% ...
the numbers have shifted and both are running 5.50% currently .. that is a far cry from cpi levels . in our top expenses in retirement our long term care policy i think is 4th just after rent , food and medical insurance costs as far as dollars consumed . so far this is year 4 and no increases in the policy costs
We have enough pretty safe dividend stocks right now (some are aristocrats, but not all) to generate about $3,200 a month in dividends that are currently being reinvested.
Hopefully we can continue to generate AT LEAST $2,000 a month in the future from that group of stocks even if their average dividend rate would drop to about 2.5% in the future. Most run from 3% to 6% right now, probably averaging around 4%, and about 30% are in a Roth accounts so no taxes to pay on those withdrawals once we start to use that money. I don't plan on using any of that money until age 70.5 when the stocks that are in traditional IRA's will require RMDs at that time. So the dividends will be reinvested another 7 years (around another $200,000+).
We have looked into LTC for both of us, unfortunately I do not think my wife will be eligible and I am a recent cancer patient myself so it may be iffy for me at least in the near term.
We are moving to a active adult community soon and our plan is to redo our will and living trust at that time going forward. Our heir situation is pretty straight forward with two 30+ adult children and no grandchildren. I do wonder how people handle a situation if all would become deceased at same time (due to accident, etc) and estate is split between wife's side of the family and my side. I'm just curious -- as if that happened why would we really care at that point??
We would have no direct heirs anyway, and neither my wife or I would be concerned with who gets what past that point. Without designation in a will other than next of kin, I assume 1/2 would go to my side of the family -- I have no siblings, and no living parents so mine would be split with my cousins? I have no living aunts/uncles either. Just 20 first cousins that are living, and 4 deceased. Would it be split 24 ways with the deceased cousins heirs getting their first cousin share to split? I hope they enjoy the $52 bucks! lol. if they end up in a fight over the estate it will be a good way for them all to bond again.
Without a will, your state law will designate how your estate will be divided. Your state law will also determine whether you and your spouse died simultaneously or if one survived long enough for distribution to be based on the surviving spouse's death (in some states, it's a matter of hours or few days). Also, the lack of a will creates a burden for all involved, heirs, possible heirs, courts, etc. If you have a trust, you should have a pourover will and identify all distributions in the trust. You can likely accomplish the same thing with only a will and Transfer on Death beneficiaries on financial accounts.
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(dividend aristocrats)
