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Old 03-07-2015, 03:59 PM
 
Location: Florida
19,828 posts, read 19,927,191 times
Reputation: 23241

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Quote:
Originally Posted by mathjak107 View Post
Longevity insurance is a form of a very very deferred annuity. It usually kicks in around average life expectancy and because of it pays a very high amount and in comparison charges very little for that coverage.
It is a good way for those with not enough money to plan out to their 90's when they do not have enough money to cover that far out.

They can plan a lot better out to only 85 Rather than 95.

I suggest before commenting about my dinner budget you learn about what it is you are commenting on. I am trying to offer solutions for those on a small retirement budget and your comments are not appreciated.
IOW, you have to have a lump sum of money to give up. That's not too likely to be an attractive option, and maybe not even a possibility, for someone that, as the thread title says, can't afford to retire.
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Old 03-07-2015, 04:02 PM
 
71,737 posts, read 71,853,273 times
Reputation: 49289
If they can't afford to retire then why are we having this discussion ? There is nothing to discuss and retirement is not an option.

If they have a shortfall in savings and can't develop enough income to last them a lifetime and pay there bills that is a different issue.

There are ways to take what you do have and have it cover a much shorter period of time.

For a lot less then the money you would have to tie up to eat in 30 years they can use a cheaper insurance plan. They were planning on eating in 25-30 years right ?

That means they need to set some aside for use each year and their money has to last them until the end.
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Old 03-07-2015, 04:06 PM
 
Location: Coastal New Jersey
56,165 posts, read 54,646,759 times
Reputation: 66610
Quote:
Originally Posted by mathjak107 View Post
Longevity insurance is a form of a very very deferred annuity. It usually kicks in around average life expectancy and because of it pays a very high amount and in comparison charges very little for that coverage.
It is a good way for those with not enough money to plan out to their 90's when they do not have enough money to cover that far out.

Those with a shortfall in savings can plan a lot better out to only 85 Rather than 95.

I suggest before commenting about my dinner budget you learn about what it is you are commenting on. I am trying to offer solutions for those on a small retirement budget and your comments are not appreciated.
I think his question is: is this particular solution affordable for the person who is in tight financial constraints? Are we talking about a financial product that costs hundreds of dollars a month even if one "shops around"? If so, it is not dirt cheap.

Some sort of estimate would be helpful.
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Old 03-07-2015, 04:08 PM
 
Location: Florida
19,828 posts, read 19,927,191 times
Reputation: 23241
Quote:
Originally Posted by mathjak107 View Post
Longevity insurance is a form of a very very deferred annuity. It usually kicks in around average life expectancy and because of it pays a very high amount and in comparison charges very little for that coverage.
It is a good way for those with not enough money to plan out to their 90's when they do not have enough money to cover that far out.

Those with a shortfall in savings can plan a lot better out to only 85 Rather than 95.

I suggest before commenting about my dinner budget you learn about what it is you are commenting on. I am trying to offer solutions for those on a small retirement budget and your comments are not appreciated.
Let me amend that to "the dinner budget someone in your financial situation could afford"
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Old 03-07-2015, 04:10 PM
 
71,737 posts, read 71,853,273 times
Reputation: 49289
Quote:
Originally Posted by Mightyqueen801 View Post
I think his question is: is this particular solution affordable for the person who is in tight financial constraints? Are we talking about a financial product that costs hundreds of dollars a month even if one "shops around"? If so, it is not dirt cheap.

Some sort of estimate would be helpful.
it likely will be a better option than trying to stretch their own funds out to 95. i can't say what it costs as each situation is priced on its own merit in its own state.

you have a few issues here . first off if someone can't afford to retire , then this whole discussion is silly because then retirement is not even an option.

but if what you mean is they have a budget short fall then we are talking a different game.

my opinion is that someone who has nooooo descretionary spending in their budget or very little has a bunch of very unique problems.

they can have a tough go of it getting a decent withdrawal rate because in my opinion they should not be in equities.

with no where in the budget to cut from when everything is a need i think they will do more harm in a down market to their savings spending down then upside will help.

growing money in equities really is not something they should chance. market investing is for those with room to cut back if we have a bear market if they have to.

when everything is a need there is nothing to cut back.

short term bonds , tips and longevity insurance can help stretch that money they have out over more years while providing much more than cash instruments will since their investment choices are limited .

it is alot easier planning an income to 80 or 85 on what you have then 95.

so taking a bit of that 80 to 95 powder you had to keep dry won't cost you anywhere near that amount to get that policy that kicks in should you live that long.

if not then you had way more money to live on while you were alive and hopefully lived a less stressfull life money wise . if you live then your budget could be handled by the policy that kicks in.


in either case you made what you had work more efficiently for you.

Last edited by mathjak107; 03-07-2015 at 04:23 PM..
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Old 03-07-2015, 04:19 PM
 
Location: Coastal New Jersey
56,165 posts, read 54,646,759 times
Reputation: 66610
Quote:
Originally Posted by mathjak107 View Post
it likely will be a better option than trying to stretch their own funds out to 95.
Of course. But you're missing the point that regardless of how much better it might be, it's NO OPTION AT ALL for someone who doesn't have the money to buy it in the first place. Those are the people this thread is about.

As previously stated, I'm a 56-year-old with little savings. I am in a defined pension plan so I won't be under a bridge. But my monthly income is accounted for by debt plus my living expenses. I don't have hundreds of extra dollars left over each month to put towards the future. And I'm better off than a lot of others.
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Old 03-07-2015, 04:27 PM
 
71,737 posts, read 71,853,273 times
Reputation: 49289
that is where you are missing the point. are you talking about only having ss or a pension and no savings providing an income stream at all ? then that isn't a savings short fall.

if we are talking living off ss and savings when you are retired then you draw off what you do have . that draw has to last you a lifetime .

you have money to eat and pay bills today as well as 30 years from now.

that money you were allocating for use age 80-95 is already there . if it isn't how the heck were you eating in 25 years or paying bills ?


if you are talking about somene living off just ss only or pension , then they have zero options for stretching or adding to a budget , it is what it is if you were not supplementing from savings for the rest of your life.

the longevity insuranace is for those who will be drawing some of their income off of what they did save for use over a lifetime.

this is why i keep saying not everything can or will apply to every situation.

i know folks who had savings but not enough to provide the cash flow they needed if they planned out to 95. those are the folks i am talking about.

planning out to 85 and getting the policy let them retire and make what they had work.

Last edited by mathjak107; 03-07-2015 at 04:43 PM..
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Old 03-07-2015, 04:37 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
Reputation: 15649
Quote:
Originally Posted by Mightyqueen801 View Post
Of course. But you're missing the point that regardless of how much better it might be, it's NO OPTION AT ALL for someone who doesn't have the money to buy it in the first place. Those are the people this thread is about.

As previously stated, I'm a 56-year-old with little savings. I am in a defined pension plan so I won't be under a bridge. But my monthly income is accounted for by debt plus my living expenses. I don't have hundreds of extra dollars left over each month to put towards the future. And I'm better off than a lot of others.
Two different issues are being mixed up here. One is not having enough to retire. Most folks, when thinking they have "enough," are probably figuring they have enough to get them through comfortably to 85. After all, how many people reach 86? I scan the obits daily in several local newspapers, and I can say not many.

It's the improbable stretch between 85 and 95 that the annuities are aimed at for many people who confidently initially retired. OMG, the thinking goes, what if I live another 10 years, what then? What if my spouse does too? IMO, that extra decade is the wild card, and it's the expensive decade b/c of healthcare and facilities. Those who planned super well self-insured to 100. Those who planned only adequately are going to either ignore the possibility of 10 more years, or search for a financial product to help them through.

In the back of my mind though is having known both an elderly doctor and dentist who had amassed a fortune and ran through the money in the nursing home. The despised gov't program ("redistribution") Medicaid to their rescue. They got to stay in their nice facility in their single rooms till they died around 90. So maybe being covered to only 85 will suffice for most.
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Old 03-07-2015, 04:40 PM
 
71,737 posts, read 71,853,273 times
Reputation: 49289
for a 65 year old average life expectancy today is 83 for a man and 85 for a woman and 87 for a couple . but that is only the 50% point where 1/2 died and 1/2 go on to live longer so alot more are alive than you think.

what is interesting is the group gets cut in 1/2 yearly every year from that point
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Old 03-07-2015, 04:40 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
Reputation: 15649
Quote:
Originally Posted by mathjak107 View Post
you have money to eat and pay bills today as well as 30 years from now.

that money you were allocating for use age 80-95 is already there . if it isn't how the heck were you eating in 25 years or paying bills ?

if you are talking about somene living off just ss only or pension , then they have zero options for stretching or adding to a budget , it is what it is if you were not supplementing from savings for the rest of your life.

the longevity insuranace is for those who will be drawing some of their income off of what they did save over a lifetime. this is why i keep saying not everything can or will apply to every situation.

i know folks who had savings but not enough to provide the cash flow they needed if they planned out to 95. those are the folks i am talking to.

planning out to 85 and getting the policy let them retire and make what they had work.
We posted at the same time and I read your mind re: the decade between 85 and 95. That is the wild card.
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