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Old 03-29-2016, 11:52 AM
 
6,218 posts, read 4,718,283 times
Reputation: 12730

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Quote:
Originally Posted by Serious Conversation View Post
At that point, you file BK and move on. You spend what you have and live off that and either have others help or live on assistance for the rest.
She looked into filing bankruptcy. The outcome would have been very bleak. She still owes the $40k or so but does have at least a $100k in home equity. Once her health permits, she will need to sell the house and find another place to live.
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Old 03-29-2016, 12:30 PM
 
Location: Loudon, TN
5,767 posts, read 4,825,615 times
Reputation: 19395
Quote:
Originally Posted by GeoffD View Post
I have been divorced twice at ages 39 and 49. My net worth today, inflation-adjusted, is a bit less than it was at age 38 when I was in extremely good financial shape. I then got caught up in the Great Recession and spent my 50th year unemployed. Since then, I've had no alternative but to be 100% focused on rebuilding my finances for a third time so I can retire at my "magical age". Very high savings rate. Very dialed back consumption though hardly a frugal lifestyle. My "Plan A" assumes I'll chug along until age 65 1/2 with no break in income and then stop working maintaining my current lifestyle. My worst case "Plan B" where I'm forced to stop working now as I'm about to turn 58 is pretty ugly. I'd have a roof over my head and food on the table but it would be a very modest life.

If I'd had that life event at age 51, I would have been screwed. At 58, it would kind of suck but I'd get by. Every year as I continue to execute my "Plan A", my worst case "Plan B" looks less awful. I wish I'd made better life choices where I didn't get divorced twice but I can't change that. I'm just glad I started this at age 51 instead of kicking it under the carpet.
I hear ya' on the divorce thing. My bro#2 is one of the two with serious health issues forcing retirement and if his first wife had not been a lazy, crazy spendaholic who hid her credit card addiction, forcing them to mortgage the house, not once but twice, my bro would be sitting pretty. They got divorced, sold the house to pay the debts and he is remarried to a nice lady with benefits now. Unfortunately his health went haywire as they were in the middle of building (actually doing the work themselves) their retirement home in the hills. Work on the house has slowed to a crawl, he has to pay his son and daughter to do all the physical labor. He will be retired in June, and will take his SS immediately since he's 62.

As for me, my divorce in 1993 was the best thing that ever happened to me. Jackhole left me for another woman and I started all over at 35. Now married, retired with both of us on pension, and living happily ever after. With my ex I would still be working for another 10 years since he was becoming a financial anchor chained to my leg.
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Old 03-29-2016, 01:18 PM
 
Location: Alaska
5,356 posts, read 16,340,513 times
Reputation: 4023
Quote:
Originally Posted by nicet4 View Post
I'm nearing 68, still working and not a day goes by that I don't run the numbers.

I am scared to death of retirement. Well, not scared of retirement but I am scared of not having enough money.

For comfortable enough I figure we need right at $4,137/month and we live in a relatively cheap cost of living state with extremely low property taxes.

Here is our budget as of today. Am I missing anything?

Prescriptions $120.00
Part B Medicare $243.60
Plan G $270.00
Plan D $56.00
Dental $60.00

(Surprising how medical alone adds up)

Property Taxes $100.00
Homeowners Insurance $50.00 (I guessed at this)
Home Maintenance $200.00
Auto Insurance $75.00
Gasoline $150.00
Auto Maintenance $50.00
Utilities $300.00 (Includes elect, water, sewer & garbage pickup)
Cell Phones $134.70
Internet Cable $123.27
Food $649.50
Clothing $100.00
Entertainment/Spending Money $649.50
Emergencies $300.00
Life Insurance $280.00
Home Health Care Insurance $116
Church $110.00
Total $4,137.57

It's surprising how much it really does take when you add everything you need and want.

Yeah, there is a lot of want in our budget but before I allow us to live in poverty I'd just keep working first.

If I quit working when I turn 68 our retirement income would be $4,857 (social security/pensions) without withdrawing anything from our pitiful savings. Yeah, we got some but nowhere near what people say we should have and we are going to leave what we do have to the survivor since we shouldn't need it.

But I am extremely fortunate I have the ability to earn $1,300/month working maybe 10 minutes from home each day so as long as I can work, which should be a good number of years yet but I do not count on that in the budget.

So many, especially husbands, don't think about what might happen to their wives if they pass away first which most of us guys will.
Just a small point. Life insurance main point is to replace income for several years should one pass away. If you're close to retiring, do you really need this expense? I cancelled my life insurance this year and I would have done it earlier but DW didn't feel comfortable about it when I retired. We have several income sources locked in, so we don't need the replacement income. She still has her policy as she's still working, even though I've told her we don't need it. Since your income at 68 is greater than your expenses, you likely can cut this expense now.
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Old 03-29-2016, 03:29 PM
 
12,825 posts, read 20,129,272 times
Reputation: 10910
Quote:
Originally Posted by ReachTheBeach View Post
Retirement planning wishes vs. reality - CBS News

That is plain nuts! I think a lot of people won't do a budget because they fear it will just confirm their suspicions. Living within your means doesn't mean it can't be enjoyable even if it is less than you were originally planning.

I need a second and maybe third plan - what if I can't work past 62 for some reason (economic or medical)?

This doesn't surprise me but I make enough where half isn't a crazy low number. When it is 2/3 of the population then it does include a lot of people with low numbers.
Most Americans live in complete denial of fiscal reality. Heck, it's The American Way!

In debt to the hilt!

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Old 03-29-2016, 03:32 PM
 
12,825 posts, read 20,129,272 times
Reputation: 10910
Quote:
Originally Posted by jrkliny View Post
Of course, the majority of people don't have any sort of systematic financial plan for retirement. The majority of US adults lack even very basic mathematical skills; i.e., numeracy. They cannot develop or understand a financial plan without basic math skills. In numeracy testing, US adults rank lower than adults from almost every other 1st or 2nd world country. I should not exaggerate, US adults do tie in skills with Spanish adults. Sixty percent of Americans are at the level where they either do not understand or struggle with math as simple as fractions, ratios, and reading simple graphs and charts.
But they sure know how to pick A WINNER!

Make America _____ again!
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Old 03-29-2016, 03:37 PM
 
12,825 posts, read 20,129,272 times
Reputation: 10910
Quote:
Originally Posted by Yakscsd View Post
Not so much nuts as not fixated. What is nuts is spending your entire adult life planning and saving for a retirement you may never live to see. What is nuts is passing on travel at an age where you can fully enjoy and experience it, because you had to save for retirement. What is nuts is not living fully for the day, because of a fictional image of retirement traveling and golfing. See a theme? Neither is wrong.
So I saw this guy. He was in a king cab with all the bells and whistles. His vanity plate said "LIV4NOW."

Hey, was that you?

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Old 03-29-2016, 04:24 PM
 
Location: Central IL
15,201 posts, read 8,509,345 times
Reputation: 35598
I'm not surprised at all. We've all been given the 80% rule of thumb and I think that suffices until you're maybe within 10 years of when you're thinking to retire. That's when you have to take a closer look to see if you're on track. Much before then and your estimates will be too far off. It's just as good to save as much as you can with 80% as a placeholder - too daunting to try to get down to the penny - JUST SAVE!

Also, remember - people don't even know what they want to do when they retire. Play 36 holes of golf every week? Go on 2 month long vacations abroad each year? Backpacking or luxury hotels? Six week long trips in the U.S.? Buy clunkers and work on them (estimate cost of clunker and all parts?!). Season passes to MLB or to the ballet? Even after you figure out all you want to do then you have to estimate the costs for each. So let's not get too snotty about people who fall back on 80%...at least until they're close enough to retirement to "get real" about it.
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Old 03-29-2016, 04:28 PM
 
Location: Central IL
15,201 posts, read 8,509,345 times
Reputation: 35598
Quote:
Originally Posted by nicet4 View Post
I'm nearing 68, still working and not a day goes by that I don't run the numbers.

I am scared to death of retirement. Well, not scared of retirement but I am scared of not having enough money.

For comfortable enough I figure we need right at $4,137/month and we live in a relatively cheap cost of living state with extremely low property taxes.

Here is our budget as of today. Am I missing anything?

Prescriptions $120.00
Part B Medicare $243.60
Plan G $270.00
Plan D $56.00
Dental $60.00

(Surprising how medical alone adds up)

Property Taxes $100.00
Homeowners Insurance $50.00 (I guessed at this)
Home Maintenance $200.00
Auto Insurance $75.00
Gasoline $150.00
Auto Maintenance $50.00
Utilities $300.00 (Includes elect, water, sewer & garbage pickup)
Cell Phones $134.70
Internet Cable $123.27
Food $649.50
Clothing $100.00
Entertainment/Spending Money $649.50
Emergencies $300.00
Life Insurance $280.00
Home Health Care Insurance $116
Church $110.00
Total $4,137.57

It's surprising how much it really does take when you add everything you need and want.

Yeah, there is a lot of want in our budget but before I allow us to live in poverty I'd just keep working first.

If I quit working when I turn 68 our retirement income would be $4,857 (social security/pensions) without withdrawing anything from our pitiful savings. Yeah, we got some but nowhere near what people say we should have and we are going to leave what we do have to the survivor since we shouldn't need it.

But I am extremely fortunate I have the ability to earn $1,300/month working maybe 10 minutes from home each day so as long as I can work, which should be a good number of years yet but I do not count on that in the budget.

So many, especially husbands, don't think about what might happen to their wives if they pass away first which most of us guys will.
Biggest question that $649.50...how many meals out, movies, trips (and what kind) is that meant to fund? How did you arrive at that figure. We can put down numbers and it looks very neat and tidy. BUT - is it realistic? What is it based on? How flexible is it? Not picking on you, just saying that looks can be deceiving and the more decimal places you carry it out to the more certain it APPEARS...but that's not real.
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Old 03-29-2016, 05:20 PM
 
Location: Grove City, Ohio
10,129 posts, read 12,376,133 times
Reputation: 13942
Quote:
Originally Posted by reneeh63 View Post
Biggest question that $649.50...how many meals out, movies, trips (and what kind) is that meant to fund? How did you arrive at that figure. We can put down numbers and it looks very neat and tidy. BUT - is it realistic? What is it based on? How flexible is it? Not picking on you, just saying that looks can be deceiving and the more decimal places you carry it out to the more certain it APPEARS...but that's not real.
It's actually a guess of $150/week with 4.33 weeks in a month.

It's just a round number.

Food wise we eat very healthy, not extravagantly and it takes money to eat healthy.
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Old 03-29-2016, 05:29 PM
 
Location: Central IL
15,201 posts, read 8,509,345 times
Reputation: 35598
Quote:
Originally Posted by reneeh63 View Post
Biggest question that $649.50...how many meals out, movies, trips (and what kind) is that meant to fund? How did you arrive at that figure. We can put down numbers and it looks very neat and tidy. BUT - is it realistic? What is it based on? How flexible is it? Not picking on you, just saying that looks can be deceiving and the more decimal places you carry it out to the more certain it APPEARS...but that's not real.
Quote:
Originally Posted by nicet4 View Post
It's actually a guess of $150/week with 4.33 weeks in a month.

It's just a round number.

Food wise we eat very healthy, not extravagantly and it takes money to eat healthy.
And I can understand that...and I'll bet people are making a LOT of guesses and patting themselves on the back.

Once you're reasonably close to retirement you can at least use your CURRENT expenses on how much you go out to eat, travel etc. and decide how that might go up (or down) when you're retired. Other hobbies that you plan to take up but don't currently do can be VERY hard to estimate.

To estimate my travel expenses I looked at the last 5 years of vacations - the number of days, the kind of accommodations, general location, to get a daily average depending on whether the trip was local, in the U.S. or abroad. Then figured how many MORE days of travel I wanted to do....then added another THIRD on top of that.
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