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He is probably paying for any addtional coverage now. Once he retires he will probably still be paying for any additional coverage. One of the questions is will his insurance still cover him when Medicare kicks in. Will it become his supplemental.
No, once I hit the age of Medicare, all insurance coverage provided by my employer will cease. I will need to purchase supplemental insurance to Medicare completely on my own.
It is my opinion that the best financial planner you will find will be in the mirror as that is the only vested in the plan. Others won't take as much care about losing than you will. Investments vary greatly.
Self directed IRA's will allow you to invest in many things including real estate.
The typical Real estate investment can yield from 7-15%. One I deal with yields 15-45%.
To me precious metals only get press after they jumped then those that bought low want to get some sucker to pay them for it so they can make the 30% and it sits static for 10 years
Stocks go with the wind. While I have made 100% before in the market you need to have a system that works. be it dogs of the dow, puppies of the dow . Or day trading volatile stocks ( which is what I did)
Forex.is outright risky, all I ever run into are losers there . the winners are lucky. Your odds are far better on a roulette table.
Obviously CD's blow as stated by your return. Why you would have accepted 1.5% return while you were working is beyond me. When you have the income is when you take the riskier investments not at time of retirement.
I'd say your best return with low risk will be found in real estate. More millionaires make it there than anywhere.
It is my opinion that the best financial planner you will find will be in the mirror as that is the only vested in the plan. Others won't take as much care about losing than you will. Investments vary greatly.
Self directed IRA's will allow you to invest in many things including real estate.
The typical Real estate investment can yield from 7-15%. One I deal with yields 15-45%.
To me precious metals only get press after they jumped then those that bought low want to get some sucker to pay them for it so they can make the 30% and it sits static for 10 years
Stocks go with the wind. While I have made 100% before in the market you need to have a system that works. be it dogs of the dow, puppies of the dow . Or day trading volatile stocks ( which is what I did)
Forex.is outright risky, all I ever run into are losers there . the winners are lucky. Your odds are far better on a roulette table.
Obviously CD's blow as stated by your return. Why you would have accepted 1.5% return while you were working is beyond me. When you have the income is when you take the riskier investments not at time of retirement.
I'd say your best return with low risk will be found in real estIate. More millionaires make it there than anywhere.
One of the best moves that I ever made was to purchase residential rental homes years ago. These 3 rental homes (side by side duplexes) have provided me with the funds to send my kids to college, the future weddings, and extra income for my family through retirement. The upside to this is obviously the income being generated, but the downside is the time needed to be a responsible landlord. For now, I plan on holding onto these properties through possibly the first ten years of retirement.
I would be interested to read as to where you think that I/we should explore, and why you feel so strongly about investing in real estate with the current market in such dire straits.
With a minimal amount to invest, you are unlikely to find and receive serious professional attention from an investment advisor. With a small amount to invest, most advisors would recommend buying diversified funds. .....and then leave your investments alone except for annual rebalancing.
If you had done that you would not feel burnt with the recent economic downturn. Many of us have done really well over the past year or so. In my case I am much better off than before the downturn. Ideally we should buy low and sell high. Human nature means that we are likely to buy stocks when returns are great and the economy is doing well. So we buy high. Then when the economy and stocks decline, we panic and sell low. Trying to predict the market is all but impossible, but rebalancing helps. If you made lots last year in stocks, then rebalancing means you sell back the stocks and buy bonds or other lower risk investments. So you are selling off your profits. Then when the market declines, in order to rebalance, you buy back in at a relatively low price. Rebalancing does not mean you buy at the bottom and sell at the top, but it does help. It also keeps your investments balanced so you have a mix of stocks which are likely to do well over the long haul and bonds which are safer short term. As you get older, it is wiser to move towards safer investments and decrease the percentage of stocks and risker investments. There is a simple way to do all of this. Buy a age-specific investment fund. Some people hate to pay the fund fees but I view that as money well spent. The funds will automatically rebalance and over the years will shift towards more fixed investments.
One of the best moves that I ever made was to purchase residential rental homes years ago. These 3 rental homes (side by side duplexes) have provided me with the funds to send my kids to college, the future weddings, and extra income for my family through retirement. The upside to this is obviously the income being generated, but the downside is the time needed to be a responsible landlord. For now, I plan on holding onto these properties through possibly the first ten years of retirement.
I would be interested to read as to where you think that I/we should explore, and why you feel so strongly about investing in real estate with the current market in such dire straits.
Yes that sounds like it was a great move. The rule of thumb (mine) is don't buy unless you have a positive cash flow as a rental. for multiple s like duplexes and quads I like to see 1 unit to a max of 2 for a quad cover the mortgage.
Here in Orlando we have a pretty active market. We are fortunate to have a strong growth in our population so that demand keeps us moving and I expect will for many years. When other areas were hurting we were selling more houses than ever. In December we closed more than 3200 homes which was up from November.
I have a company I work with that does a turnkey operation for investors, They buy a property, they renovate it ( and do a good job) and they rent it out and have a management company in place to handle tenants and issues. they tend to return 10-15% with homes mostly priced under $50,000 They can close the homes quickly some of my clients are hands on and want to go tour them others just buy and let them do the work. either works.
Another company I work with does oil investments with property with producing wells, not wildcatting. Their format returns 15-45% but their minimum is $100,000. Some of their returns have exceeded 100% they do very well.
Here in town I have a variety of investors that do many of the different options. One deals with short term rentals which he has turned in to an $*M / yr business and growing. He will buy another 10 homes this year.
Others have looked at condos and townhomes that are under $50k but HOA's are the concern there. Homes can run from $70k up and rents will normally start around $900 for a 3/2 and go up depending on size and location. HOA's on homes are lower and their appreciation tends to be much higher.
When you can buy homes at 20-50 cents on the dollar and make positive cash flow on rent... that is a great deal.
As to why I feel strongly about this market... This is the best opportunity to buy than we have ever seen. Some of our prices are what was seen in the 90's . Some have never been seen. Here is an example on a specific higher income home. The community has 5000' homes that were pricing from $1M -$12M this home was fully furnished, 10,000 sq ft, brand new and a designer show house. priced at $7m it sold for under $900k. Building costs were probably around $300+/ft... When deals like this can be had... there is no better time to buy.
The banks are over reacting making the prices lower than they should be in many cases which creates opportunity. Demand is high, prices low, need for rentals high.It all ads up
I so appreciate your experiences, recommendations and thoughts of getting myself on track to retirement. For me, the decision to retire now is a financial decision, as my employer will pay for my family's health insurance through me reaching Medicare (almost 7 years). There is a very good chance that this "perk" will disappear in 2012. I realize that I need to better educate myself. Any additional recommendations will certainly help.... any thoughts of what you might do with the $100000 in CD's now matured?
I'd look to investing in indexed mutual funds or ETFs. If you get the book I mentioned before, they give suggestions on asset allocations and the type of funds to invest. Your investment horizon is still 15-30 years, so you're looking for he long term. Many people think that when they get closer to retirement, their investment base should be closer to cash. That may have worked when interest rates were in the 5-10% range, but it doesn't work now.
One of the best moves that I ever made was to purchase residential rental homes years ago. These 3 rental homes (side by side duplexes) have provided me with the funds to send my kids to college, the future weddings, and extra income for my family through retirement. The upside to this is obviously the income being generated, but the downside is the time needed to be a responsible landlord. For now, I plan on holding onto these properties through possibly the first ten years of retirement.
I would be interested to read as to where you think that I/we should explore, and why you feel so strongly about investing in real estate with the current market in such dire straits.
While I'm not up on rental income taxes, chances are that your property is fully depreciated and you'll be looking at paying taxes on the full sales price. You used to be able to do a rental exchange that would at least delay paying taxes. If it still exists, you should look into it.
I am also a public servant union employee who will be eligible to retire in 173 more days. My pension amount looks like it will be roughly 10k above my post retirement expenses.....so it looks like I should be able to live comfortably on my pension.
Looks like you're in a good position. Does your pension have some inflation protection? If not, you'll want to look at investing some of that $10k to provide for future years.
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Originally Posted by faithfulFrank
The reason I am considering retiring within the next year or so is that our current contract allows me to continue our family medical and dental coverage for a cost of about $600/year......until I am eligible for medicare. I am 52 years old. I'm pretty sure we might lose this benefit in our next contract. From what I've been told, it is a valuable benefit. If true, I could not make up for that benefit even if I stayed another 15 years.....
Definitely a valuable benefit. It will give you the flexibility in any future job choice, be it self-employed or crappy benefits with another employer. Do plan for what is needed when you turn 65.
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Originally Posted by faithfulFrank
I plan on starting a private business once I retire to add to our income. I'm told that it would benefit me to do this and keep paying SS, so I do not have years of zeros. I have yet to learn much about this.
You can download an estimator from the SS site. In it, you can put your history and future salary to determine your benefit. You can do what-if scenarios on future earnings to see how your benefit changes.
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Originally Posted by faithfulFrank
I am actually attending a full day seminar for public employee retirement tomorrow. I have no debt and about 125-150k in my deferred comp that I do not plan on touching.
Good thing to have. This will give you some flexibility with your retirement plans. You can use it for inflation protection and/or to offset any medical costs when you reach Medicare age.
Coach,
I too have so much more to learn about all of this. I did not think I'd need to know this so soon, but for many reasons it seems to be the case. I hear terms like "Part B", "Donut hole", etc.....I am elegible for AARP, so maybe I need to join just to get the magazine to learn some of these things.
Our Deferred Comp has been easy because it comes out of our pay pre-tax......I can keep it there, but am pretty sure once I leave the job I'll roll it over to a different planner. I currently know one I trust and plan on having more talks with him.
I also want to learn more about the different retirement pension options we have. For instance I'm told that it may be better to take the zero option with the maximum pension amount and supplement with a life insurance policy, etc,etc.
Hopefully I'll know more tomorrow. Our retirement is based on our best three year average. A few years ago I made an excell spreadsheet, so I know already what my highest amount is. I worked a lot of overtime a few years back which helped. Now overtime is rare, so it is good that I did.
Stay well my friend,
Frank
From what I've heard, AARP does not give any more information than you can find on the web.
The main reasons for rolling a plan is because of the investment choices or plan fees. If it's an option, consider rolling it into a traditional IRA that you can manage yourself.
Be aware that the zero option may not be for all. It does require your spouse to sign off any claim to benefits and after all is done, your gain may not be worth all hassles. Heaven forbid if you miss an insurance payment.
For background, I should provide some of my information. I too will be receiving a public pension and will be retiring in about 3 years at age 60. I'm lucky in that one retirement benefit is medical coverage that becomes supplemental at 65. Dental/vision/auditory is extra, but we get the group rate that is reasonable.
I started actively planning for retirement in my mid 40's, having absolutely no idea of what I need or would get. The only thing I realized was how lucky I was to have stumbled into a defined benefit plan years before. As I got closer to retirement, the numbers became easier to define and my retirement age dropped from 66+ down to 60 over the years. By far, the hardest part was getting a handle on expenses, but current becomes a good predictor as you get closer. So I've been planning for retirement for 12+ years, but most of the time was just seeing how far off track. on track I was. Key for me was when my portfolio hit $250k for the second time three years ago and I realized that amount would be enough to supplement retirement income. I'm currently on my third time above $250k.
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