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Old 04-24-2014, 03:25 PM
 
18,370 posts, read 23,556,449 times
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[quote=nurider2002;34501953]I understand how someone could be tired of the endless articles about the coming catastrope! Yesterday I read about how 1 million in savings won't be nearly enough, that you would need a minimun of 2.1 million now if you retire at 65. How many folks can reasonably achieve that? If you know despite your best efforts that you will never reach these theoretical magic numbers, it does get frustrating. I do think most folks will be woefully unprepared for retirement. Most of my co-workers who are well paid do not even max out their 401 savings. I do the best that I can, without drastically altering my current lifestyle because let's face it, at a certain point in retirement, declining health is going to seriously impact money spent on leisure. So you better have some fun now! I also plan to relocate to an area with a lower cost of living, whether it is in the U.S. or perhaps central america. But no, I don't worry. I save what I can and figure worst case scenario, I end up in some third rate nursing home in the last years, hopefully by then I won't know where I am or care[/QUOTE]

ive seen this too many times,,,save and save and save and sacrifice ,,,,do all the right things..
finally retirement comes
within too short of time,,,the person(s) have alzheimers / or worse..

so, for all the sacrifice and scrimping,,, avoiding vacations,,,

when there time finally comes to enjoy themselves,,, its cut short..

im all for preparations,,,but you also have to try to enjoy yourself..along the way
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Old 04-25-2014, 10:29 PM
 
Location: State of Being
35,885 posts, read 67,205,825 times
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Quote:
Originally Posted by golfingduo View Post
ani I am fine with critism. I have broad shoulders and take responsibility for my words and actions. If I didn't bring these in there would be fewer reasons to be here. Why visit the forum if nothing new has been posted. Your words are part of the discussion.

We can feel that it is over done and that may be but remember that this is what this forum is for. There are rules to follow but the forum is here to open dialog and discussion. If I am not allowed to do that then why have the forum at all.
Absolutely - nothing wrong with opening discussion. I hope it didn't appear I was suggesting you should not post about how much concern there is with financial matters and retirement. My thought is - sad that there is so much worry about it. What are the positive steps we can take so that we are not consumed with worry? What things can we do before we retire . . . and what things can we be doing during retirement -- towards being financially stable? We can't control national/international events (such as a market crash) . . . we can't control natural disasters . . . we can't control most of the health issues we may end up dealing with (or our loved ones, either) . . . but what we can we control?

Budgeting? Lifestyle decisions? Different living arrangments? Alter our expectations of what life will be like in retirement? Make a move to a new area (or not?)
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Old 04-25-2014, 11:06 PM
 
48,516 posts, read 83,999,418 times
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It hard when you lose a major portion when retired already and things are tight. Much easier when you still have new income to invest and not withdrawing. I was very lucky as I loss nothing I relied on. But I can see losing and seeing people loss you know ;who have to start back with portion left and taking higher risk where many are. Perhaps this will be like 70's recession when a whole generation of retail investors never returned to market. If people think alot are on sidelines now; just wait until they have more of a choice to not as much risk.
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Old 04-26-2014, 03:20 AM
 
71,779 posts, read 71,875,234 times
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the conditions we are in now as far as as the outlook for not running out of money are in uncharted waters.

never before have we been in a scenerio where we have low rates and high stock valuations at the same time.

so we have great cause for worry going forward.

according to a new study at texas university who are at the fore front in retirement and real estate research says their data and calculations show that while a 4% inflation adjusted withdrawal rate in a 50/50 mix has had a 96% chance of surving a 30 year period without taking a pay cut, going forward has far less chance of succeeding than a coin toss.

it took 30 years for rates to to get where they are today so even getting back to historical averages would take an increase of 2 to 3x what they are. that can take a long long time.

with a retirees early years determining the entire 30 year outcome the scenerio of getting rates to double or triple so quickly is slim. while this may eventually have a regression back to the mean it can take far longer than new retirees have .

with high stock valuations they too generally are sluggish for many years . they may go up and down in a wide range but it has been 14 years now and we barely budged for anyones money invested prior to 2000.

this is not our fathers times and the new normal may make what you did and how you planned old ,obsoleted and no longer going to work.

a smart retiree dependant on his own portfolio for an income may be smart to look at the various products that offer guaranteed incomes to use as at least a base income to stabilize things and take some of the dependancy away from just interest rates and where markets go.

while those of us looking at data from the past may think we are okay using older guides and rules the fact that there is noooooooooo data from the past representing what we are in could be a real game changer.

you may need to keep a lot more powder dry, have lower withdrawals then you planned on ,at least early on as well as have to use unconventional investing techniques and products for unconventional times.

a retiree is really reverse dollar cost averaging , spending more shares of things such as cash ,bonds or stocks when returns are low and less when returns are high to arrive at the same consistant cash flow ..

spending more than you should have when returns are low eats up prinicipal that should have been there to grow when returns are better only now is gone forever.

Last edited by mathjak107; 04-26-2014 at 04:47 AM..
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Old 04-26-2014, 05:48 AM
 
29,809 posts, read 34,894,042 times
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In addition to all that MathJak says another very critical issue related to the current return on investment climate is how the heck are the products giving us a previously established rate of return/pay out benefit going to earn the money to do it. Consider pensions with a formula based on an annual 8% return on investments or even some annuity products etc etc.
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Old 04-26-2014, 06:10 AM
 
8,204 posts, read 11,927,697 times
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Quote:
Originally Posted by HappyTexan View Post
That's a key point. People think they can stop working but somehow maintain the lifestyle they had when they worked.

Unless you get a retirement income stream that equals your working career paycheck #3 above ain't gonna happen.
Not necessarily. For one thing, you'll no longer be paying payroll taxes (plus the state & federal income taxes on those payroll taxes) so that's about 10% right there (depending upon your tax bracket). Also, if you were putting away 15% of your gross toward retirement savings, that's no longer required either. With just those two items right there, you've already eliminated the necessity for "spending" 25% of your previous income so you'd only need a retirement income stream of 75% of your salary to maintain the exact same lifestyle.

Another relatively easy change is moving to a lower-cost area. I left Maryland the day I retired and also left its approximate 8% income tax behind. Now we're into the mid-60s as far as what percentage of previous income is required to maintain the equivalent lifestyle.
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Old 04-26-2014, 06:23 AM
 
71,779 posts, read 71,875,234 times
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which is why for most it is not wise to work off what income was. instead focus on the retirement budget based on expenses or what you hope to allow yourself and plan the lifestyle around that. that would be kind of the tail waging the dog.

but if we left nyc i would have little idea of what my expenses would be so i would set a budget i thought i could do and back into the lifestyle from the budget.

but in either case it is not based on working income..

Last edited by mathjak107; 04-26-2014 at 07:15 AM..
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Old 04-26-2014, 06:26 AM
 
71,779 posts, read 71,875,234 times
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Quote:
Originally Posted by TuborgP View Post
In addition to all that MathJak says another very critical issue related to the current return on investment climate is how the heck are the products giving us a previously established rate of return/pay out benefit going to earn the money to do it. Consider pensions with a formula based on an annual 8% return on investments or even some annuity products etc etc.
they have things to get them through tough times we don't, they have dead bodies.

they pay out nothing for the dead and at least in annuities those who die support those who live through mortality credits . they are less dependant on markets and interest rates then we are.

they know how many will die each year, they just don't know who.

Last edited by mathjak107; 04-26-2014 at 07:01 AM..
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Old 04-26-2014, 06:42 AM
 
188 posts, read 170,842 times
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"Worry is an unnecessary emotion. Worrying is unproductive."

I don't agree with this. If all you do is worry then I suppose it is unproductive, but if you worry and then take some action which you believe will relieve your concern, then worrying can be very productive.
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Old 04-26-2014, 06:57 AM
 
71,779 posts, read 71,875,234 times
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the problem is old conventional planning tried to rule out uncertainty and pretty much counted on low inflation and a good stock market to eventually save the day.

today good planning allows for uncertainty and does not try to rule it out.

some new thinking is assets should be deployed in a barbell approach.

one end gets about 25% in pensionized income from various laddered insurance products , the other side assets that respond well to inflation like gold,real estate,oil and commodities. the rest in the middle get invested as you normally would.
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