U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-31-2016, 03:18 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,935,948 times
Reputation: 6716

Advertisements

Quote:
Originally Posted by mathjak107 View Post
owning is a personal preference , not always a financial one when the opportunity costs are considered because the money eventually is tied up in the home .

as an example we can buy a co-op like our apartment for about 300k . it would cost us 6k a year less then our rent if we buy and pay cash t .

sounds good right ?

except we will give up 12k in income on the 300k we will tie up in the apartment .

so lots of folks rent but they invest elsewhere and at better returns so once again owning vs renting may mean little at the end of the day .
When I look at buying versus renting - I look at *guaranteed* rates of return in terms of the income I'm giving up by having equity in a place. Where can you get 4% guaranteed these days?

Also - one has to consider locking in housing costs. Whether it makes sense. Especially when you look down the road. Might make sense to lock in housing costs in area X - but not in area Y. We own a house without a mortgage. So our housing costs are - except for repairs and improvements - and possibly increases in utility and insurance costs - basically fixed forever (Florida - like California - has a constitutional amendment that places pretty strict limits on our property tax increases).

If I lived in an area like NYC - well what happens if Queens - where you live - becomes trendy for young people? That has happened in Brooklyn (who would have "thunk it"?) - and it might happen in Queens. If you really want to age in place where you live - I think you should lock in your housing/cost of housing/place you want to live best you can. Robyn
Reply With Quote Quick reply to this message

 
Old 01-31-2016, 03:22 PM
 
71,651 posts, read 71,777,271 times
Reputation: 49241
we are thinking about buying that co-op but for now have it on the back burner until next year . that is my thinking too . down the road it may turn out to be the better deal .
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:27 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,935,948 times
Reputation: 6716
Quote:
Originally Posted by reneeh63 View Post
To the OP...until recently women didn't have great odds of even approaching the savings power of their husbands. And frankly, I'd say few husbands counted on their wives to add much of anything! Whatever it was was a bonus so now that women are making substantial contributions everyone is amazed! But now the stakes seem to be raised? One million isn't enough - it's TWO?! Please....
The fact that many/most households now have 2 wage earners has only raised the bar in terms of what things - especially housing - costs and what you need to retire. Also - as Senator Elizabeth Warren pointed out in some scholarly studies she did when she was a professor - now that almost every family is living on 2 salaries - there is less of a safety net when one spouse can't work any more. The wife can't go to work if/when the husband falters to supplement the family income - because she is already working. I am not much of an Elizabeth Warren fan - but I think this is a good insight on her part. Robyn
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:28 PM
 
Location: Florida -
8,767 posts, read 10,848,423 times
Reputation: 16640
Quote:
Originally Posted by Caltovegas View Post
Save what you can and when retirement happens deal with it. A good idea would be to be debt free. From what I have seen first hand is save especially if you don't have a pension, pay off the house, and be debt free. Just relying on soc. sec. isn't going to cut it. People have to start saving early and consistantly. Do the best you can and let the chips fall where they may.

That being said enjoy life because we can have the best laid plans and life can blow them up. If married have your estate plan in order and adequate life insurance in place.

This --- Actually, saving a million for retirement is not the retirement 'wealth' it was once considered. It all depends on the "What else" factor. Even at 5-percent, $1M is only $50K per year -- Add SS, and one still can't pay many bills or a mortgage. Also, 5-percent withdrawal (ie; 401K), will only produce about $38K after 25-percent taxes. Finally, given market conditions over the past 6-8-years, 5-percent would have left many in the hole. -- There really is no 'magic' retirement number. It's all pretty much the simple math of income vs spending.
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:30 PM
 
7,936 posts, read 5,045,305 times
Reputation: 13596
Quote:
Originally Posted by Robyn55 View Post
We owe almost all of our success to a couple of lawsuits where my husband won big (he's a retired trial lawyer) - and the 20 years of great bull markets (in equities and especially bonds) we had in the 80's and 90's.

Note that the annualized rate of return on the SP500 from 1/1/2000 to the close Friday has been 1.86%/year. Toss in 2% dividends - and you're talking about returns that are less than our parents got on their 5% passbook savings accounts. With a lot less stomach-churning volatility. ...
Exactly! The 1987 crash notwithstanding, the 1980 and 1990s were a super super splendid time to be middle-aged and aggressively investing.

For a contrary example, consider what would have happened to a hypothetical investor born in 1880. He/she would have been too young in 1929 to substantially be cycling out of equities, since retirement would still have been decades away. But he/she was sufficiently old, to have already spent decades saving and investing money. So this investor would have gotten walloped by the crash of 1929-1932. But somebody born only 20 years later would have done splendidly, having too little invested to substantially suffer in 1929-1932, and plenty of years to benefit from the low equity valuations of the 1930s and 1940s, retiring in the mid-1960s.

By the way, the point isn't when somebody retires, but when that person reaches a milestone in life at which it's time to start rotating out of stocks. This might happen 20 years before actually retiring, or 20 years after retirement commences.

Quote:
Originally Posted by mathjak107 View Post
when we do have crappy time frames like 2000-2015 the time frames leading up to them or after them generally are pretty good so they just average out those excellent years back to the averages again .

odds are take any rolling typical accumulation time frame which can be 20-30 working years and returns are not to shabby .

we can all cherry pick shorter time frames within an accumulation time frame where things sucked wind but when the whole picture is looked at it usually looks a lot better .
Yes, of course we can cherry-pick to buttress our particular viewpoint. I remember a wildly popular investment book written by the "Motley Fool" brothers, in the late 1990s. It posited an 11% averaged annual return in the US stock market, before deriding this as being shabby and quotidian, and exhorting readers to do better - much better! - as individual stock-pickers. A year or so later, the market crashed.

But the greater point is that our success or failure has less to do with personal fortitude than with multi-decade trends. Our curmudgeon-friends on this Forum, who deride the stock market as "a gamble", or being rigged, or some heinous fraud, would have looked like abject idiots in 1999 - and may again carry that dishonor in 5 or 10 years. Or maybe not. Maybe their histrionics, stripped of sanctimony and bile, come to be wise admonishments.

Ultimately, we all want stability AND good returns, do we not? Those of us who started paying attention to the stock market in the 1980s, have it burned into our consciousness, that equities are a wonderful thing, that despite occasional hiccups, solid and enviable progress is almost inevitable. Maybe we need to reconsider?
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:38 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,935,948 times
Reputation: 6716
Quote:
Originally Posted by NewbieHere View Post
I think my sister always invested 100% in stocks. I laughed when people came on CD and touted the virtue of investing in CDs. I know sometimes my sister only could put in 4% of her income for employers matching. So it's not all about savings, it was investing, or for some people it was gambling. Whatever it worked for her.
My late FIL - who never earned more than $25k/year and invested only in CDs - died with about $1 million - when he was in his 80's. OTOH - he was really a skinflint (even when we urged him to spend money on himself and my late MIL). On the third hand - you have to remember that CDs have had some very generous risk-free returns in past decades. Robyn
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:38 PM
 
71,651 posts, read 71,777,271 times
Reputation: 49241
i can see reducing equity's but unless you need 2% draws inflation adjusted or less rotating out of them is never a good idea . 35-40% is just fine and should do just fine over a 30 year retirement time frame . 60-65% bonds and cash is plenty
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:48 PM
 
2,443 posts, read 2,073,079 times
Reputation: 5690
Quote:
Originally Posted by mathjak107 View Post
i can see reducing equity's but unless you need 2% draws inflation adjusted or less rotating out of them is never a good idea . 35-40% is just fine and should do just fine over a 30 year retirement time frame . 60-65% bonds and cash is plenty


Sounds like the right mix. Stocks for some growth and bonds and cash to protect from a big drop in the market.
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:50 PM
 
Location: NE Mississippi
13,683 posts, read 8,585,088 times
Reputation: 19892
Quote:
Originally Posted by luv4horses View Post
All the articles we read today say this is a myth. Well, okay then. But one question I've always had is whether this 'myth' was refering to each member of a couple, or a couple per se. A lot of retirement rules of thumb are geared to the couple. For example Fidelity says that a couple will on average spend $220,000 on health care after they reach 65. But back to this million dollar meme, would a couple need to have saved TWO million to retire carefree? Not looking to argue the arbitrariness of this number, just wanting to understand what the original intention was.
The original intention was to get everyone to invest as much money as possible with the author of such nonsense.
Reply With Quote Quick reply to this message
 
Old 01-31-2016, 03:57 PM
 
Location: NE Mississippi
13,683 posts, read 8,585,088 times
Reputation: 19892
Quote:
Originally Posted by Robyn55 View Post
My late FIL - who never earned more than $25k/year and invested only in CDs - died with about $1 million - when he was in his 80's. OTOH - he was really a skinflint (even when we urged him to spend money on himself and my late MIL). On the third hand - you have to remember that CDs have had some very generous risk-free returns in past decades. Robyn
It's one of the great ironies.
Savers become poorer as they grow older. That's because they simply cannot bring themselves to not save. Ever.

Investors actually can become wealthier. But sometimes they, too, become poor old people. Afraid to spend.

Spenders are doomed from the start. They will become poor old people.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top