Do you seriously think you can afford to retire? (apartments, department, guarantee)

[hartford_renter]

Originally Posted by shaker281

Do you think that is the norm for the majority of Americans? I live on approximately 30% of my gross too. I bring my lunch to work and wear everyday clothes. When I retire, I will save money on gas for my commute and stop funding my 401K. That is the most i can reasonably expect to save. But our situation does not apply to the majority of Americans. I would suspect most people spend everything they earn (maybe save 5-10% annually). After retirement they will save on commuting costs and no longer fund their 401K. What else might they cut out of their budget?.

Well if they are paying property tax in your example they could save on a mortgage.

Usually a mortgage is about 30% of someone's spending. So drop your 80% down to 50%!

[mathjak107]

some places even after the mortgage is paid the real estate taxes can be a fortune . right here long island is like that. even folks with paid off homes cant retire here.

[hartford_renter]

Originally Posted by mathjak107

some places even after the mortgage is paid the real estate taxes can be a fortune . right here long island is like that. even folks with paid off homes cant retire here.

Wrong you are paying taxes and the mortgage before retirement. Then after retirement you only pay the taxes.

You keep trying to argue minutia it isn't rational and none of your arguments seem to be.

This is more evidence that the 80% number is pure hogwash.

[Red On The Noodle]

Originally Posted by mathjak107

some places even after the mortgage is paid the real estate taxes can be a fortune . right here long island is like that. even folks with paid off homes cant retire here.

In some states there is a Homestead Act which means seniors get back a percentage of their property taxes on their income tax. So yes, real estate taxes are high and likely to go higher, but by retirement age you can get a big deduction for them.

[Ultrarunner]

Originally Posted by mathjak107

many annuity companies are calling in the chips. hartford is offering some weak cash buy outs of some of their annuity products that have certain gurantees .

prudential locked down 14 or so guaranteed annuity plans and wont let anyone add new money even if they didnt fully fund their plan as they thought they would.

they arent accepting new subscribers either.

most were of the gwib type, guarantted withdrawal income benefit.

milevsky called it when he said there is no way the annuity compnies could offer the gurantees they did in the gwib type planes.

guess he was right.


http://www.nytimes.com/2012/09/15/yo...pagewanted=all

Hartford Offers Buyouts to Annuity Clients to Trim Risk - Bloomberg

I shouldn't be surprised... I've heard so many 401k spiels that they all run together... heard another one today and I was thinking to myself that these guys never learn.

Anyone notice how, in a declining market... all the financial institutions shuffle personnel around... I guess it's to keep the public at bay... kind of hard to blame the new guy when he wasn't the one that sold you the product.

Every year at one company the 401k people would come in and give the standard pep talk... funny thing is they were all missing in action for 3 years.

One of the topics in today's talk was the benefits of the Roth being tax free and I raised my hand and asked for how long?

Sales people really have one goal and that is to make the sale...

I would be happy to participate at whatever amount to take advantage of the company match... thing is the company match was temporarily suspended in 2006 and has not come back...

I'm sure these financial offerings must work for some... just don't have any faith they will be there for me.. based on promises that have been made and not kept...

For the record... I think the notion of retirement free from financial worry will become even more elusive in the future and the turning point, in my opinion, is when retirement benefits shifted from defined benefit to defined contribution.

I took a pay cut when I switched companies for benefits... the new company had a generous stock plan, bonus plan, 401k match, etc... things were going great til part of the company ownership changed and our funds were in limbo for over a years till the IRS ruled on the same desk rule...

What that meant for me is the benefits I had negotiated for and taken a pay cut to get suddenly all but evaporated because I was only 20% vested... so 80% of the money in my account from the employer program was gone.

[mathjak107]

Originally Posted by hartford_renter

Wrong you are paying taxes and the mortgage before retirement. Then after retirement you only pay the taxes.

You keep trying to argue minutia it isn't rational and none of your arguments seem to be.

This is more evidence that the 80% number is pure hogwash.

the taxes and expenses have increased so much for many after they retired here in long island that the percentage is back up again.

real estate taxes and home insurance has been sky rocketing catching retired homeowners without enough income to even continue living in their paid off homes. many paid 35-50k for their homes decades ago so mortgages were quite small .

your thinking like expenses and retirement income move in tandem, they do not.


by the way not one of your claims,statements or arguments has been true so far . everything you said in every thread above was wrong and had no fact at all. .

you werent even able to dispute you were wrong so you just go off on another thing you try to debate.

there i nothing that is not hard core fact that i have stated above so let not claim others dont know what they are talking about when so far its you who shoots from the hip.

[mathjak107]

Originally Posted by Ultrarunner

I shouldn't be surprised... I've heard so many 401k spiels that they all run together... heard another one today and I was thinking to myself that these guys never learn.

Anyone notice how, in a declining market... all the financial institutions shuffle personnel around... I guess it's to keep the public at bay... kind of hard to blame the new guy when he wasn't the one that sold you the product.

Every year at one company the 401k people would come in and give the standard pep talk... funny thing is they were all missing in action for 3 years.

One of the topics in today's talk was the benefits of the Roth being tax free and I raised my hand and asked for how long?

Sales people really have one goal and that is to make the sale...

I would be happy to participate at whatever amount to take advantage of the company match... thing is the company match was temporarily suspended in 2006 and has not come back...

I'm sure these financial offerings must work for some... just don't have any faith they will be there for me.. based on promises that have been made and not kept...

For the record... I think the notion of retirement free from financial worry will become even more elusive in the future and the turning point, in my opinion, is when retirement benefits shifted from defined benefit to defined contribution.

I took a pay cut when I switched companies for benefits... the new company had a generous stock plan, bonus plan, 401k match, etc... things were going great til part of the company ownership changed and our funds were in limbo for over a years till the IRS ruled on the same desk rule...

What that meant for me is the benefits I had negotiated for and taken a pay cut to get suddenly all but evaporated because I was only 20% vested... so 80% of the money in my account from the employer program was gone.

You can say the same thing about leaving any job that has retirment benefits even pensions. if you leave before your pension is vested you lose it.

at least with the 401k you leave with the part you saved.

while there may be a few 401k's that companies sponser that have higher fees for the most part they are not much higher if your company uses fidelity or vanguard or any of a number of other fund families.

we cant blame the savings vehicle as much as we can blame the lack of interest and knowledge most folks have .

the typical american knows more about sports, their car and refrigerator then anything pertaining to investing or mapping out a financial plan.

im on the board of 401k management at my own company and the people blindley follow each other into hodge podges of things that make no sense.

they then all bail at the wrong times and get back into things at the wrong time and their performance is poor.

on the other hand im drinking from the same well and have done very well .

so its not the vehicles as much as the lack of knowledge.

we use fidelity for our 401k and many of the same funds in the 401k i own outside the 401k as well and the expenses are maybe .25% diifference if that much.


its not just in 401k's that people perform poorly in . look at morningstars invester tracker. they show you what each fund did if you bought in and stayed the course. there are 2 returns given on most morningstar performance data.

the more volatile the markets get the wider the spread gets.

they then show you by tracking the money in and out by small investors what their returns were. for the most part they run 1/3 what the fund actually gets as they try to time things in and out or try to jump iin everything hot that already happened.

the data collcted by ibbotsen and fidelity shows pretty much the same thing.


fidelity said that even the lost decade saw the average 401k balance for those 55 or older who contributed from 1/2 to max jumped from 96k to 216k over a time frame when markets were pretty sluggish .

1/3 was market gains and the rest the employees own contibutions and matching.

thats a huge savings even without much market help .

[hartford_renter]

Originally Posted by mathjak107

the taxes have increased so much for many after they retired here in long island that the percentage is back up again.


by the way not one of your claims,statements or arguments has been true so far . everything you said in every thread above was wrong .

you werent even able to dispute you were wrong so you just go off on another thing you try to debate.

there i nothing that is not hard core fact that i have stated above so let not claim others dont know what they are talking about when so far its you who shoots from the hip.

I work as an actuary and I actually priced gmwb's and gmib riders for our insurance company.

The article you posted about taking away the annuity guarantee is not correct. Like most of the crap you are posting...

When you purchase an annuity the guarantee is set based on your lump sum contribution

In most annuity products paying more premium is akin to issuing a new policy. The policyholders still retain the original annuity guarantee. The reason they can't purchase another annuity with the same benefit is that the insurance companies are reducing the richness of the guarantees.

This is largely driven by low interest rates.

What you don't seem to grasp is that there is a market for guaranteed protection that is a function of the financial system competition etc...

We live in a free market where people are allowed to set a price freely in an open system. I'm not sure what you are getting at. Are you in favor of price controls?

Anyway I have actual credentials that back up my comments

Your other comments about insurers failing to pay out the full life insurance claim are also incorrect.

I think your problem is that you have acquired this chicken little mentality which stems largely from your desire to have people listen to what you say. Hey look the sky is falling if you don't do as I say you are doomed!

Whatever the old people are the ones with all the money we should be taxing them and not feeling like they are doomed if they don't have 10 million dollars with 3% being withdrawn each year.

[mathjak107]

so mr i have the creditionals , i challenge you so show us data to back up your claims. no one cares what you do for a living. you have not shown us anything to back up everything you dispute as hogwash.

link us to the inflation adjusted rate your own company pays on an immeadiate annuity . any bet you can not show 6% for age 62-66 that anyone of us can get right now ?

show me where at any point i said annuities dont perform a function if used correctly.. i bet you can not. if you actually read my posts you will see im the biggest advocate for using a mix of annuities and your own investing.

show me where i said they have not paid out the full amounts to date? no where did i say that. if you are able to read you will see i spoke of what the state guaranty funds will cover in each state if push came to shove.

where do i state the sky is falling if you dont sock away tons of money? no where. all i said is your historical chances of success will fall the smaller your cusion for the unknown.

thats not my opinion but thats decades of data crunched by some of the smartest people on the planet.


the data from these studies show us what you could or couldnt do to survive the worst of the past.

i live in nyc and i can build a house today that would have covered 100% of everything thrown at us to date including sandy plus add a big new worse case scenerio into the construction and build to way higher standards..

that will take lots of dollars.


i can build and limit to a sandy level with no extra beefier construction for anything worse then sandy for less money.

i can assume sandy was a once in 100 year thing and for less money i can build for the storms we had not including sandy.

or i can risk that the storms will be no worse then just the typical storm we average. thats the cheapest cost.

the choice is mine and how much money i want to spend .

thats the basis for what retirement planning is all about. you have little knowledge in that area based on the rediculous points you keep making.

if you understood what planning is about instead of trying to dispute things with your hog wash as you call it you would better understand there is no one way right for everybody, there is only different levels of comfort and spending ability built in..

that true even for the exact same income level you hope to achieve.. in each case above, the home can look identical on the outside but internally there is a world of difference in the contruction and the level of storms it can reliabily endure ..

so i challenge you, go find these things you claim i said. like everything else you claim they exist only in your own head because no one here saw me ever state anything else but what i said.

[mathjak107]

as many said said the link between salary and retirement needs is a poor one.

there is no reason your salary plays apart unless you live in the same house and do the exact same things without figuring in all the free time you have to spend if seeing and doing is in your plans.

your retirement needs will be based on expenses and wants, not what you earned prior.

i never quite understood the link thats made as many dont live in even the same state they did.

some with pensions and saving can afford more in retirement then they could working and saving. we fit in that camp and so do many others who now own 2 homes in retirement and are snow birds..

i know tuborg recently added a 2nd home to his life and he is just an example of many who plan their retirement around what they can afford now ..

some it can have the opposite effect. they dont have 80 or eeven 50% of their salary but they are moving to cheaper lower cost areas and following that rule my have stopped them from pulling the plug.

that why i like planning that works off expenses not some salary you once had.


once i know my expenses i would back into the mount using financial calulators like fire calc, the excellent jim otar one brooklyn mentioned or the ones major brokerages have.

feed in your intended allocations and the amount of cushion and see what the dollars you need look like going. in.

thats the proper way in my opinion to do your figuring.