Couple in 60's still working with $1.5 million saved (benefits, family, security)

[mathjak107]

Originally Posted by Robyn55

I'm pretty familiar with Monte Carlo simulations - risk of ruin analyses - etc. from a period in my life when I was working on trading systems. I guess you should thank your lucky stars you didn't leverage up - and go belly up like LTCM and Lehman Brothers when your model trains ran off the tracks.

If you are only looking at the last 30 years of data - going back to 1982 or so - then you're not looking at enough data. You have to keep in mind that just about the greatest bull ever in US equities started about 1982 - and lasted for almost 20 years. So your data and experiences lead you to believe that the first 20 years were "normal" - and the last 10 "abnormal". If you had simply included a decade like the 70's to balance out the 80's and 90's - I think you would have a different POV. Although it might not help in terms of your investing (would depend on how you used that POV).

BTW - I have mentioned that my charts don't seem to copy here. But to give you an idea of what I'm talking about - Yahoo Finance has SP500 data going back to about 1950 (mine goes back to 1928). Here's what the 70's look like:

http://finance.yahoo.com/echarts?s=^gspc+interactive#symbol=^gspc;range=197 00105,19791231;compare=;indicator=volume;charttype =area;crosshair=on;ohlcvalues=0;logscale=off;sourc e=undefined;

Note that there are earlier decades that look worse than this. Of course - all of this is before inflation and taxes (both of which were pretty high in the 70's).

Another concern I would have about your investing style is you're using some newer investment products that haven't IMO stood the test of time - like TLT and GLD. I use some similar products in my investing - like JNK - but with relatively small amounts of money. All of these products have tracking errors to some degree - both short term and long term. And varying degrees of liquidity. When markets are under pressure - the tracking errors and liquidity can go haywire.

I understand the "permanent portfolio" part of your portfolio. Since I have been familiar with the work of Harry Browne for a long time. I'm not sure the concept works today - since one is guaranteed pretty much very low returns in the cash and bond parts of the portfolio. But I won't criticize it. It's meant to be a very long term approach. OTOH - I would question your use of the TLT and GLD for the bond and gold portions of the portfolio. Since this is supposed to be a very long term portfolio - why not simply buy physical gold and stick it in your safe deposit box? I still have mine from the early 80's (I used to be a Howard Ruff fan ). And with the treasuries - instead of the TLT - why not a laddered portfolio of treasuries? Or - better yet - a ladder of zero coupon treasuries (especially if this money is in tax-deferred accounts - zeros are a real PITA in taxable accounts). That way - when interest rates go up (might happen after we're both dead - but they *will* eventually go up) - you can roll over the bonds when they mature at a higher rate.

By the way - don't think I am criticizing you - except perhaps for a small degree of naivete that you show from time to time. Am just trying to share some of my thoughts/experiences with you for whatever you think they're worth. Hope if nothing else that they give you some food for thought. Robyn

the permanant portfolio still works even today. 2008 saw it still up 5% even with cash near zero and stocks down 45%.

its really not a portfolio for gains and growth. times were exceptional for it but going forward i cant imagine it generating almost 10% a year for 40 years from these levels.

it would take a real disaster in one of the catagories to propel the opposite catagories enough.

but the protection is still there and although the 30 year bond is about 3.5% it becomes more a capital gains thing than an interest rate thing if we have a flight to safety again.

interest rates can go negative too, investors will buy them in hopes of them turning more negative and earning a capital gain off the next person .

gold can still go higher and stocks can still go higher so the only real red headed step child is cash. i havent put to much thought into it but i would juggle the numbers to see how an immeadiate annuity would fit in providing an income stream into the mix to help the step child out.

[texdav]

I think we have no idea of the new reality is now. That really will hit when we actually see the consequences in paying off the deficit. I think its this looming monster in the future that we haven't seen anything of yet. Its the reason from wall street to main street people are holding cash close and paying down debt and saving. The figure just leased on delequency rates on all credit being the lowest since 1997 say alot. Its at 2% level.

[Snowbird100]

Originally Posted by suzsaz

As the original OP, I wasn't referring to that particular article, but week after week each one is similar...people in their late 60s wondering when they can retire.

As someone mentioned a few posts up...is it worth it to work and work and even die before you get to enjoy what you're saving up for? In other words, where do you draw the line? Between working to save for the future, and then working straight into the future and dying before you can reap the benefits of what you've sowed.

You are right and it is not worth it !

Balance is the key word, I think 50-55 is a good age to retire if one can live comfortably and some extra cash to spend.

If you look at Steve Jobs (Apple's founder who died in his 50's), was he a smart guy ? Yes ! Is it worth it ? No !

My rule of thumb is: Enough is enough, life is short, enjoy while you can but don't burn your hard earned cash nor work till you die !

[Escort Rider]

I find it a bizarre conception that we only begin to live, to really enjoy life, when we no longer work. I have no doubt that some individuals feel that way, but I can't believe that's a general pattern. I am going on the assumption that only a minority of those who work put in 80-hour weeks. Sure, if you work all the time, there is no time left over for anything else.

But when I was working full time, I did all of the following: traveled, saw movies, read books not connected to work, socialized with friends, and had hobbies. Of course I didn't have time to do as much of all those things as I wanted, but I definitely did not have the feeling that my life was on hold until that magic retirement time. My life was vibrant and active and that included my work. I feel very sorry for those who have that feeling of being on hold, of waiting, waiting all those long years for the pay-off. Just to clarify: I did look forward to retirement and I am enjoying it, but my enjoyment of life did not begin there.

[Snowbird100]

I think 80 hours/week is too much but I do think some people work 44-50 hours/week to get some overtime pay. I think younger people could work more hours as they are younger and more energetic.

I think having 1.5 millions (plus a house without mortgage) and still working in their mid 60's is too much !

[mathjak107]

Originally Posted by texdav

I think we have no idea of the new reality is now. That really will hit when we actually see the consequences in paying off the deficit. I think its this looming monster in the future that we haven't seen anything of yet. Its the reason from wall street to main street people are holding cash close and paying down debt and saving. The figure just leased on delequency rates on all credit being the lowest since 1997 say alot. Its at 2% level.

we dont have to pay the deficit off ever, all we need to do is increase gdp so its smaller.

[Snowbird100]

Originally Posted by HappyTexan

I agree. If you can financially do it then retiring as early as you can gives you that much more free time. And being younger allows you a bit more flexibility in what you want to do.

True !

It's the case of making a decision when one thinks "I am worth it". I think it is difficult for a lot of people who just can't give up what they are bringing in working until they suddenly feel "something is wrong with one's health". As I said, "enough is enough" because making money is an endless game. In my case I could continue to work till the day I died (just like Steve Jobs). But is it worth it ? I don't think so !

Now I have my own free time and I taylor what I have to do what I like within my means. I don't have to answer to my boss anymore (everyone has a boss in this world: We know if one works; If one owns his/her business his/her customers are his/her bosses ...)

If we exclude the healthcare costs in the discussion (Canada & the US have different health care costs), there are a numbers of scenario to look at:

Scenario 1: If one lives in Toronto with a paid off house, he could sell the property and move to the subburb, with the savings he could early retire and do things he likes within his means.

Scenario 2: Same as 1 but with some savings in the bank, well he could do some traveling ...

Scenario 3: ...

Scenario 4: Same as 1 but with 1.6 million, well he could do more traveling ...

So I think it's a matter of choice & life style rather than asking the question "Can I retire with 1.6 million $ ?". It's like asking "Can I retire with 1.6 million $ but I would like to travel using my private jet ? ", the answer would be NO !

[Giesela]

I'm 55 and pretty depressed by all of this. I too wonder when I'll ever be able to retire. I just can't figure it out. Its gotten so much more complicated and unpredictable. Trying to figure it out is like a whole second job especially if you factor in trying to manage a 401k.
Global economy and population growth makes things change faster and its all a brand new ball game. I don't think any of the old models work for a global economy. And now things change faster and the speed of change will be ever faster. Every 'event' is bigger with more global consequences (tsunami, war, oil drilling **** ups, pollution). That's just going to continue to balloon into more unpredictablity and volatility. Inflation will hit at some point.
I don't think you can afford to include social security or medicaid as part of your plan. As a govt worker I expect my retirement benefits like health care, and the very small annuity to be reduced along the way. Its mostly all based on 401k/TSP which I am terrible at and so now have most in G (basically cash).

The only thing I feel I know is that I have no where near enough (and no where near 1.5 mil) and won't ever have enough to live a real if modest retirement...i.e. moving to somewhere 'nice', vacations etc.
I have to factor in I'm alone in the world which makes my situation far different from people with family to fall back on. So feel I should buy long term care insurance but that industry has seen some struggles and so you have no guarantees for some pretty pricey premiums.

I would love to retire now but of course can't. Am hoping I can "retire" at 60 from my main job and still be able to work doing something, probably at much reduced pay, somewhere of my choosing (govt work tends to pin you to a location and I hate mine). However the market for jobs at 60 is pretty small and I can't plan on that either.
I don't mind working per se and I actually enjoy my main job, but the people/politics that you will find in every work place you have people is stressful. Part of life. But these days I just don't handle that stress as well as I used to. Its like I was born with a jar filled with '"handle work stress juice" and my jar is empty. So I end up hating to go to work because its always so much more than just the work you do.

I don't have a real plan, the future amount of money I have is uncertain. Add in an uncertain world and I feel all I can do is go by feel.

[StealthRabbit]

Originally Posted by Giesela

I'm 55 and pretty depressed by all of this. I too wonder when I'll ever be able to retire. I just can't figure it out. Its gotten so much more complicated and unpredictable. ... As a govt worker I expect my retirement benefits like health care, and the very small annuity to be reduced along the way. ..


The only thing I feel I know is that I have no where near enough (and no where near 1.5 mil) and won't ever have enough to live a real if modest retirement...i.e. moving to somewhere 'nice', vacations etc.


I have to factor in I'm alone in the world which makes my situation far different from people with family to fall back on. So feel I should buy long term care insurance but that industry has seen some struggles and so you have no guarantees for some pretty pricey premiums.

I would love to retire now but of course can't. Am hoping I can "retire" at 60 from my main job and still be able to work doing something, probably at much reduced pay, somewhere of my choosing (govt work tends to pin you to a location and I hate mine). However the market for jobs at 60 is pretty small and I can't plan on that either.
...

Trust me, as a Gov Worker, and single, you will do fine (if resourceful, and willing to make changes / take a few risks).

I pulled the plug at 49 without healthcare / pension, and the BIG issue is (and will continue) to be healthcare. If that was off my plate, life would be good... but life is still good and I have found some temp / PT / contract gigs when necessary cover 'extraordinary' needs. (I still like to set a goal (travel, investment, toy, expense) and figure out some way to fund it apart from cashing in my dough,).

I plan to take on some PT gigs to get more international travel. I find it nice to be paid to travel on occasion and in some destinations. Work has always been a learning and fairly rich experience. You can afford to be more picky on chosen employ / tasks when 'retired'. I HOPE there will remain a few PT positions that cover HC, but who knows. It is probable the US GOV with totally screw up HC. They have torpedoed 4 of my HC options in 6 yrs.

I carry LTC, due to family history of needing it about age 40 > end of life. I'm living on borrowed time. I plan to stick a 'Send me to Oklahoma (or the Philippines' tag on my hospital gown BEFORE I go senile. LTC is MUCH less expensive there. I will take a trip (non-tornado / typhoon season) and pick out an actual 'forwarding address'.

[Snowbird100]

Originally Posted by Giesela

I'm 55 and pretty depressed by all of this. I too wonder when I'll ever be able to retire. I just can't figure it out. Its gotten so much more complicated and unpredictable. Trying to figure it out is like a whole second job especially if you factor in trying to manage a 401k.
Global economy and population growth makes things change faster and its all a brand new ball game. I don't think any of the old models work for a global economy. And now things change faster and the speed of change will be ever faster. Every 'event' is bigger with more global consequences (tsunami, war, oil drilling **** ups, pollution). That's just going to continue to balloon into more unpredictablity and volatility. Inflation will hit at some point.
I don't think you can afford to include social security or medicaid as part of your plan. As a govt worker I expect my retirement benefits like health care, and the very small annuity to be reduced along the way. Its mostly all based on 401k/TSP which I am terrible at and so now have most in G (basically cash).

The only thing I feel I know is that I have no where near enough (and no where near 1.5 mil) and won't ever have enough to live a real if modest retirement...i.e. moving to somewhere 'nice', vacations etc.
I have to factor in I'm alone in the world which makes my situation far different from people with family to fall back on. So feel I should buy long term care insurance but that industry has seen some struggles and so you have no guarantees for some pretty pricey premiums.

I would love to retire now but of course can't. Am hoping I can "retire" at 60 from my main job and still be able to work doing something, probably at much reduced pay, somewhere of my choosing (govt work tends to pin you to a location and I hate mine). However the market for jobs at 60 is pretty small and I can't plan on that either.
I don't mind working per se and I actually enjoy my main job, but the people/politics that you will find in every work place you have people is stressful. Part of life. But these days I just don't handle that stress as well as I used to. Its like I was born with a jar filled with '"handle work stress juice" and my jar is empty. So I end up hating to go to work because its always so much more than just the work you do.

I don't have a real plan, the future amount of money I have is uncertain. Add in an uncertain world and I feel all I can do is go by feel.

I am sorry to learn of your situation but I think yours is not that bad. Remember the saying "where there's a will there's a way" ?

I can't help you figuring out the costs of health care in the US as it's so complicated and expensive compared to universal health care in Canada (funded by tax payers, so Canadians can retire early without worrying too much about going bankrupt b/c of the medical bills, having said that Canadians do pay their own prescription before 65 unless they have some medical/dental plans that cover them after retirement).

Here's my suggestions (not necessary my approach but I am gathering what I knew from learning/hearing from different people):
- Stretch your dollar: You will be amazed how much you save.
- Learn to enjoy within your means: Do not "expect" a lavish lifestyle, do not "expect" to live like a king ... But a reasonable house.
- Plan your trip ahead of time.
- Ask around for tips as to how to travel without breaking the bank.
- House sitting: I learned of people who traveled to Australia for 2 months with free accomodation and car for just doing some light house work and watch the house for the wealthy.
- Take your trips while students are in schools.
- Look for discount on accomodation: Coupons, Roomsaver.com ...
- Book your cruise at rock bottom prices: I did it !
- Register with airlines for discounted air fares.
- Don't push yourself to live like a king in Europe but plan ahead.
- Rotate your grocery shopping based on sales/flyers to some degree.
- Use credit card that offers gas discount (avoid Air Miles as value of points are so minute compared to gas discount I have been getting).
- Develop new "hobbies" that cost you almost nothing such as some "research" on the internet.
- Afterall, no one could afford to travel 365/year unless they are Bill Gates or Buffet ...
- More and more

So, do you really need 1.5 million plus a big house ? No !

Good luck !