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the trick is to have that income and pay your smallest fair share of taxes on that income.
Bada Bing! Easiest way to not pay taxes is to be broke. Not a goal here. Hey if I reach a level where future means testing has kicked in having to figure out how to minimize that will be welcomed.
My point is that some use 'car(s) is paid for' as a planning thing as if it is a settled expense, not one that very well may be a $25/$30 and who knows what price 10/15 years from now, that needs to be factored in.
Buy a new car for cash when you retire and chances are you will never need another one. My mother bought a new car for cash in 2000, and is still driving it. It only has 100,000 miles on it, and would easily last her another decade if she were to live that long. With no need to commute, vehicles will easily last 20 years with minimal maintenance.
the problem is cars today cost so damn much to repair as they age. they require special testing equipment and knowledge few have outside of dealers when there are issues . i can tell you for what it cost me eventually to keep my old volvo running i could have bought a new car eventually.
the problem is you fix something major thinking thats the end and bingo something else happens and since you fixed the major thing you have to do the minor thing .eventually it is something else and the cycle keeps repeating. i think the only thing i didn't change on that volvo was the glove compartment door.
sometimes you are just better off not throwing good money after bad especially since cars today are made to fail after x amount of time. jd powers called that happening back in the 1990's when a maxima went on forever without even an oil change.
they said you will see cars stay trouble free for 3-4 years and little by little componants will be designed once again to fail or else they will be out of business. it has been my experience they nailed it dead on.
yeah everyone has a story about their 200,000 mile car that just keeps going but like most stories those are the only ones you hear about. the rest are in the junk heap at the scrap yard.
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the other factor is even if they were successful investors many tend to cut back their appetite for risk and or volatility (they are not the same ) by retirement.
while i was an aggressive investor for 26 years my allocations today are far different then they were and today i am no longer interested in running high volatility portfolios although i always maintain a healthy dose of equities in my portfolio.
This is sensible. If you need the money to meet expenses, or if you are forced to take distributions by the IRS, you can take a real bath by withdrawing capital during a downturn. If your portfolio is in the tank when you pull money out, you will never recover. Most older investors reduce volatility to reduce their risk of being in that situation. The exception might be if they really don't need the money.
The advantage of no mortgage is that your chances of not needing the money are greatly improved. Of course, if your investments are not sufficient to cover your mortgage, you are probably better off to stay liquid in case of unexpected expenses. The ideal situation is no mortgage, sufficient pension and SS income to cover all your expenses, and investments that are earning money faster than you can spend it, the classic "three legged stool" of retirement.
the problem is cars today cost so damn much to repair as they age. they require special testing equipment and knowledge few have outside of dealers when there are issues . i can tell you for what it cost me eventually to keep my old volvo running i could have bought a new car eventually.
the problem is you fix something major thinking thats the end and bingo something else happens and since you fixed the major thing you have to do the minor thing .eventually it is something else and the cycle keeps repeating. i think the only thing i didn't change on that volvo was the glove compartment door.
sometimes you are just better off not throwing good money after bad especially since cars today are made to fail after x amount of time. jd powers called that happening back in the 1990's when a maxima went on forever without even an oil change.
they said you will see cars stay trouble free for 3-4 years and little by little componants will be designed once again to fail or else they will be out of business. it has been my experience they nailed it dead on.
yeah everyone has a story about their 200,000 mile car that just keeps going but like most stories those are the only ones you hear about. the rest are in the junk heap at the scrap yard.
Your problem is that you bought a European car. They are nice cars, but cost a fortune to maintain. Buy US, Japanese or Korean and you will not have that problem.
Just about any car manufactured in the last couple decades will run 200,000 miles with only regular maintenance.
Buy a new car for cash when you retire and chances are you will never need another one. My mother bought a new car for cash in 2000, and is still driving it. It only has 100,000 miles on it, and would easily last her another decade if she were to live that long. With no need to commute, vehicles will easily last 20 years with minimal maintenance.
We bought a new car in 2007, a Honda Accord, and the mileage now is about 75K. Our aim was to buy our last car for retirement that is dependable with decent mileage (28 around and about, 34-35 on the open road). All we've had to do is replace the brakes, the battery, tires last year (it's very hilly with lots of curves where we live) and keep up with normal maintenance (oil and filter changes, air filters, system fluid flushes, tire rotations, etc.) and it's comfortable and runs like a dream. For a Honda it's not even broken in yet. My guess is that it will outlive both of us - now 66 and 68. First tune-up coming at 100K. No one has ever turned a wrench on it but a Honda dealer to include regular oil and filter changes for $18.95. Hurt us some more!
What is this thing you call "commute?" During our last 11 working years we walked to work or took the light rail if the weather was bad. Now, "work?" Wazzat?
Last edited by Curmudgeon; 10-04-2014 at 05:26 PM..
Your problem is that you bought a European car. They are nice cars, but cost a fortune to maintain. Buy US, Japanese or Korean and you will not have that problem.
Just about any car manufactured in the last couple decades will run 200,000 miles with only regular maintenance.
one day i will tell you about the new 40k jeep sahara i bought in 2012. chrysler really needs to get their quality control in order. they can not hold a candle to any of the japanese or german cars i owned and it was just as costly.
they shipped it from the factory with different fenders on each side. they put painted fenders on the drivers side as it should have , they put sport fenders on the other.
there is pictures of my jeep all over the internet,
by 16,000 miles a poor head design had the cylinder heads needing replacement . since then a starter had to be replaced , the battery failed and the hard top roof leaks.
the leather on the drivers seat split and had to be replaced and there was a brakeline issue rubbing on the chassis.
the jeep is now all of 3 years old.
this was the first american manufacturer i went back to in 25 years and my last.
Wife and I are concerned about updated safety technology and features. We probably do more driving now than in our working years after the kids were grown.
i will get rid of this chrysler junk next year. it will be 4 years old . getting a subaru forester instead.
same here ,we anticipate more driving trips than ever before coming up. the gas savings alone will pay for the trade in.
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