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Old 01-14-2016, 04:37 PM
 
Location: Sierra Nevada Land, CA
8,402 posts, read 9,154,456 times
Reputation: 13042

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Quote:
Originally Posted by freemkt View Post
How is that going to help when the waiting list is 10 years long?
I think you are thinking Section 8, which is for welfare types. Around here the line is two to three years long. The wait for a senior apt varies from a month to six. People do die or go unto placement.

No wait for food stamps or food pantries.
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Old 01-14-2016, 04:46 PM
 
Location: Close to an earthquake
890 posts, read 678,405 times
Reputation: 2390
Default Incorporating housing wealth into your retirement income stream

I stumbled across this continuing education seminar in my search for courses to take and thought it was interesting but I'll not be taking it. The instructor is is a certified Home Equity Conversion Mortgage (HECM) Specialist and Branch Manager with (name of company) which sounds like she peddles reverse mortgages. Here's the course description - what do you think?

Incorporating Housing Wealth Into Your Retirement Income Stream
The program demonstrates mathematically how an unconventional (even "disruptive") use of home equity, coordinated with a securities portfolio (typically held in a 401(k) account or a rollover IRA), substantially reduces the risk of cash flow exhaustion during retirement. Home equity, accessed by means of a reverse mortgage credit line, drawn upon instead of the portfolio after negative investment performance periods, allows the portfolio to better recover, and thus substantially extends the portfolio's duration, and hence extends cash flow duration.

Mathematical analysis, done by this speaker and by other highly respected academic and scholarly analysts, demonstrates compellingly that the strategic use of a reverse mortgage credit line early in retirement, in coordination with a securities portfolio, substantially reduces the risk of cash flow exhaustion later in retirement. This holds true despite the negative impressions about reverse mortgages conveyed by ill-founded and sensationalist news reporting and by some trashy TV promotions targeting financially desperate seniors

(Name of instructor) will provide real life scenarios of how (so and so's) research has been implemented to improve retiree's cash flow survival.

Objectives:
1. The effect of "sequence of returns" risk on securities portfolios that are drawn upon for retirement income.

2. Quantitatively, the correspondence between withdrawal rates from a securities portfolio and risk of cash flow exhaustion (the well-known "4% rule" and variations on that rule).

3. How a "coordinated" strategy, using home equity early in retirement, is so much more effective than the "conventional wisdom" of using home equity as a last resort (only if and when the securities portfolio is exhausted).

4. How the unconventional strategy not only improves cash flow sustainability, but also increases the total wealth at the end of retirement.

5. How an action taken or not taken early in retirement, with no noticeable impact immediately or shortly following the action or inaction, can have an enormous impact 10 or 20 years later.

Major Subjects:
Prevalent Misconceptions about reverse mortgages

Understanding the powerful impact of adverse sequence of returns on retirement account being drawn upon

Uses of Reverse mortgage credit lines to enhance retirement income and cash flow survival

Illustrations of results of offsetting adverse sequence of returns

Tables of median retirement account values at various times during retirement

Amount of interest accrual

Passing the deduction to heirs

Use of the deduction by 401(k)/IRA beneficiary

Misc. Information:
The program demonstrates mathematically how an unconventional (even "disruptive") use of home equity, coordinated with a securities portfolio (typically held in a 401(k) account or a rollover IRA), substantially reduces the risk of cash flow exhaustion during retirement. Home equity, accessed by means of a reverse mortgage credit line, drawn upon instead of the portfolio after negative investment performance periods, allows the portfolio to better recover, and thus substantially extends the portfolio's duration, and hence extends cash flow duration.

Mathematical analysis, done by this speaker and by other highly respected academic and scholarly analysts, demonstrates compellingly that the strategic use of a reverse mortgage credit line early in retirement, in coordination with a securities portfolio, substantially reduces the risk of cash flow exhaustion later in retirement. This holds true despite the negative impressions about reverse mortgages conveyed by ill-founded and sensationalist news reporting and by some trashy TV promotions targeting financially desperate seniors.

(Name of instructor) will provide real life scenarios of how (so and so's) research has been implemented to improve retiree's cash flow survival.
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Old 01-14-2016, 05:08 PM
 
Location: Central IL
15,253 posts, read 8,552,827 times
Reputation: 35688
Quote:
Originally Posted by bpollen View Post
I don't think so. But if I'm still in my right mind, I intend to take care of that in my own way. I've planned for death at 90. If I live to 95, I'm in trouble.

Of course, there are things I COULD do, like a reverse mortgage, I guess. Sell everything I own and live on that, and when it's gone, go into a nursing home. But I have other more permanent plans. Who wants to live to be 95?????!!!!
It's true that my retirement calculations assume I won't have a mortgage to pay (just taxes and insurance, etc.) but the value of the house isn't included. So actually, I"m glad you pointed out that it's always possible to sell the house and rent or do a reverse mortgage - that may make sense if you truly don't have many years left but maybe riskier with 10-15?
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Old 01-14-2016, 05:41 PM
 
Location: San Antonio
7,629 posts, read 14,386,728 times
Reputation: 18712
Quote:
Originally Posted by borninsac View Post
VP Joe Biden is in mission control to cure cancer and this raises a potential retirement planning crisis for many who may now live longer.

If you lived 5 years longer than what your crystal ball forecast uses for retirement planning purposes, would you be able to eat and have shelter?
ABSOLUTELY! But then we have planned, saved, and will have 4 retirement checks (pensions) and 2-401K's between us. Our GOAL is to not touch the 401K's at all (or only take the minimum withdrawal while "gifting" each of our kids whatever the current maximum amt is annually once we hit "forced" age if that is still required by then) and to enjoy life. IF things get to the point we can not live on retirement pensions alone, we would rely on 401K's to subsidize where needed, but our PLAN is not to have to touch them. (and we all know how plans can go).....
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Old 01-14-2016, 05:49 PM
 
13,958 posts, read 7,429,050 times
Reputation: 25457
Quote:
Originally Posted by borninsac View Post
VP Joe Biden is in mission control to cure cancer and this raises a potential retirement planning crisis for many who may now live longer.

If you lived 5 years longer than what your crystal ball forecast uses for retirement planning purposes, would you be able to eat and have shelter?

Curing cancer just means something else will get you. Longevity is about 30% genetic and 70% behavioral. Exercise. Diet. Smoking. Alcohol. Obesity. Stress in your life. Those all impact your expiration date.

My plan of record is to defer collecting Social Security until age 70. I'll have 35 years of maximum contribution so I'll be getting $41,664 as my Social Security pension in 2016 dollars. I'll be able to keep my roof over my head and eat even if I burn through everything else. I've structured things so that Social Security check should cover all my expenses and mandatory IRA/401(k) distributions end up being pure disposable income. Assisted Living is what is going to chew up my assets, not my burn rate as a retiree.
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Old 01-14-2016, 06:06 PM
 
Location: Sierra Nevada Land, CA
8,402 posts, read 9,154,456 times
Reputation: 13042
Quote:
Originally Posted by GeoffD View Post
Curing cancer just means something else will get you. Longevity is about 30% genetic and 70% behavioral. Exercise. Diet. Smoking. Alcohol. Obesity. Stress in your life. Those all impact your expiration date.

My plan of record is to defer collecting Social Security until age 70. I'll have 35 years of maximum contribution so I'll be getting $41,664 as my Social Security pension in 2016 dollars. I'll be able to keep my roof over my head and eat even if I burn through everything else. I've structured things so that Social Security check should cover all my expenses and mandatory IRA/401(k) distributions end up being pure disposable income. Assisted Living is what is going to chew up my assets, not my burn rate as a retiree.
50% of people over 90 die in their own home. What if that is your fate???
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Old 01-14-2016, 06:24 PM
 
Location: Los Angeles area
14,018 posts, read 17,754,097 times
Reputation: 32309
This thread illustrates the greatest advantge of a defined benefit pension, in my opinion, and that is the peace of mind involved in not having to worry if we may live to an unusually old age. It is not that the defined benefit pension will necessarily give the average person more money - it may well be less money depending on a number of factors. But the money will just keep on rolling in at 85, 90, 95, 100 or more. Not that I want to live that long, or that I expect to live that long; rather it's that I have no (financial) worry about possibly living that long.
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Old 01-14-2016, 06:47 PM
 
Location: SoCal
13,265 posts, read 6,351,451 times
Reputation: 9885
I've got one kid that has said she will provide the money so that her sister, the caring one will have a grandpa/grandpa room in the backyard. I keep my fingers crossed.

Last edited by NewbieHere; 01-14-2016 at 07:45 PM..
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Old 01-14-2016, 07:16 PM
 
Location: VT; previously MD & NJ
2,207 posts, read 1,351,512 times
Reputation: 6344
Quote:
Originally Posted by borninsac View Post
I stumbled across this continuing education seminar in my search for courses to take and thought it was interesting but I'll not be taking it. The instructor is is a certified Home Equity Conversion Mortgage (HECM) Specialist and Branch Manager with (name of company) which sounds like she peddles reverse mortgages. Here's the course description - what do you think?

Incorporating Housing Wealth Into Your Retirement Income Stream
The program demonstrates mathematically how an unconventional (even "disruptive") use of home equity, coordinated with a securities portfolio (typically held in a 401(k) account or a rollover IRA), substantially reduces the risk of cash flow exhaustion during retirement. Home equity, accessed by means of a reverse mortgage credit line, drawn upon instead of the portfolio after negative investment performance periods, allows the portfolio to better recover, and thus substantially extends the portfolio's duration, and hence extends cash flow duration.

I think this scheme was hatched by someone too young to understand retirement. My house is the only tangible asset in my portfolio, and it's where I live. If I end up moving in the future, I will need the equity in my house to buy a new one or to pay for a CCRC, assisted living or whatever. If I use up the equity in my house first and then try to move, I would have to take a substantial amount out of my IRAs to pay for the new place -- with all the income tax that entails. Also, if I start getting payments from my house equity now and then when the RMDs kick in, that will probably be more money than I need to withdraw each month or year.

No. I still think a reverse mortgage is the last asset to use in retirement.
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Old 01-14-2016, 07:32 PM
 
Location: Wasilla, AK
7,275 posts, read 4,158,066 times
Reputation: 15718
Quote:
Originally Posted by borninsac View Post
VP Joe Biden is in mission control to cure cancer and this raises a potential retirement planning crisis for many who may now live longer.

If you lived 5 years longer than what your crystal ball forecast uses for retirement planning purposes, would you be able to eat and have shelter?

Lots of people live in cardboard boxes and eat at soup kitchens, so there are options.
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