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Old 11-07-2016, 04:23 PM
 
13,879 posts, read 7,391,112 times
Reputation: 25356

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Quote:
Originally Posted by artillery77 View Post
Because old age healthcare is the great equalizer. If price for a treatment is $1M each when in reality it costs much less, it is because there's only a few that can afford it to cover the remainder that don't have any savings to go after.
I don't think you understand how Medicare and supplemental Medicare insurance work.

The thing that crushes the wealth of retirees is long term care. A memory care ward is at least $60K per year. A nursing home is easily $100K per year. Medicaid doesn't kick in until you've spent yourself to zero.

I'm busy spending my mother to zero in assisted living. She has a bit more than $40K in income between a pension, some annuities, and some trace Social Security income. Her burn rate is about $100K. I can pull up her brokerage account and estimate within a month or so when she'll be out of money. At that point, my sister and I will need to assess whether we start picking up that $60K per year or if we let Medicaid deal with it.
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Old 11-07-2016, 04:29 PM
 
Location: Coastal Georgia
37,096 posts, read 45,604,555 times
Reputation: 61704
Quote:
Originally Posted by Ultrarunner View Post
I'm around a lot of older people and Certificate of Deposits is as risky as they get.

The neighbor that passed at 101 was super diligent to not have too much money in one bank... she was concerned about FDIC deposit insurance limits.

My Grandparents survived the Depression and they would rather dig a hole in the ground vs. Wall Street and nothing you could say would change that... and the same for most of their friends.
OMG, I worked in banking at the beginning and the end of my working life. People are losing money if they keep it in a bank, and there has never been much danger of keeping money in a failing bank. Many people seek failing banks because they pay more interest in hopes of gaining customers.
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Old 11-07-2016, 04:31 PM
 
7,899 posts, read 5,031,079 times
Reputation: 13549
Quote:
Originally Posted by eaton53 View Post
I personally would like to spend my last dollar on the day I die.
If I knew when that day was, you bet I'd try to do it!
We all have our own peculiarities. Mine is to die with higher net worth (adjusted for inflation) than on the day that I retire. This means that during retirement, I may actually be using pension income to add to my savings, having effectively a negative rate of withdrawal. It also means that it's never possible to relax, dropping one's guard - even for a buy-and-hold investor.
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Old 11-07-2016, 04:58 PM
 
Location: Podunk, IA
3,995 posts, read 1,808,451 times
Reputation: 4277
Quote:
Originally Posted by mathjak107 View Post
why not ? if he is getting a better return elsewhere then he is better off . we can pay cash for a place we are thinking of buying but i rather take a mortgage .
Obviously he wasn't better off because he blew all the money.
If his house were paid off he could've at least downsized. Underwater he was doomed.


Quote:
Originally Posted by ohio_peasant View Post
We all have our own peculiarities. Mine is to die with higher net worth (adjusted for inflation) than on the day that I retire.

I don't want make money so someone else can spend it.
Also... I don't have heirs, just me and my wife. My kin can get their own!

Last edited by eaton53; 11-07-2016 at 05:07 PM..
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Old 11-07-2016, 05:59 PM
 
29,772 posts, read 34,856,103 times
Reputation: 11681
Quote:
Originally Posted by ohio_peasant View Post
We all have our own peculiarities. Mine is to die with higher net worth (adjusted for inflation) than on the day that I retire. This means that during retirement, I may actually be using pension income to add to my savings, having effectively a negative rate of withdrawal. It also means that it's never possible to relax, dropping one's guard - even for a buy-and-hold investor.
Bada Bing!
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Old 11-07-2016, 07:15 PM
 
25,973 posts, read 32,978,177 times
Reputation: 32158
Quote:
Originally Posted by Eevee17 View Post
Many of the people I know in their 60-70s are not in good health and/or wish they were dead. This is across different races and incomes.
Good LORD. That is certainly not the case around here. Do you live near a nuclear waste dump?
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Old 11-07-2016, 09:40 PM
 
Location: RVA
2,164 posts, read 1,265,106 times
Reputation: 4451
Seriously agree, what a ridiculous statement. People can be ill and die at all ages. Let's all plan to checkout at 70 so we can retire at 55 and know exactly how much we will need and live a giant party until the end. We are not at Logan's Run just yet....
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Old 11-07-2016, 09:55 PM
 
Location: Exeter, NH
5,300 posts, read 4,400,288 times
Reputation: 5684
I think we are going to find out, the hard way, that the Baby Boom DOESN'T have nearly enough saved to retire--and most people's health doesn't allow them to work until 65 (or 67) no matter how much they need to. We are going to see TONS of bankruptcies as more Boomers hit those incredibly inflated health care costs, considering that even with insurance, you've still got plenty to pay.

And BTW, do you know that "Balance Billing" is perfectly legal? It means that if you go to the hospital, thinking you are covered by insurance, you may find some of your health care providers aren't satisfied with the insurance company's "accepted and reasonable cost" for your area--and YOU are legally responsible for the difference between the reasonable cost and whatever incredibly inflated amount the provider decided to bill you?

I'm currently trying to fight a $1,500+ bill that went to a bill collector, threatening to ruin our credit rating, after the ER Doctor at Exeter Hospital (NH) decided his minimal input was worth 5X what the insurance company paid him. Funny, considering the pain resolved itself in hours and he never figured out what was wrong, and didn't run much for tests either. If we had known we would be burning $1500, we certainly would have requested another doctor, or just gone to Portsmouth Hospital--but they have no legal obligation to tell you that you're racking up huge bills that insurance won't cover.
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Old 11-07-2016, 09:58 PM
 
Location: WA
878 posts, read 469,605 times
Reputation: 2681
Default I'm planning on not outliving my money

In fact I'd like to be a little in the red when it's time to kick the bucket. But for now, I just try to be as frugal as possible and put cash in the bank.

I used to be really into financial planning, but at a certain point I realized it's all funny money and the planet is doomed.
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Old 11-07-2016, 10:02 PM
 
Location: RVA
2,164 posts, read 1,265,106 times
Reputation: 4451
Quote:
Originally Posted by eaton53 View Post
If you spend $5MM over 40 years, that's $125K a year.
That guy wins!

I personally would like to spend my last dollar on the day I die.
If I knew when that day was, you bet I'd try to do it!
Actually way more, like $300k a year if you figure the earnings at 4%. Yup, it would be a cold day in Hades when I would live off just the earnings of 5MM and leave that much principle to heirs!! Of course I mean in todays dollars. 1MM today is nothing like it was in 1980.

So yeah, taking inflation in to account, if comfortable is $60k/yr today for retirement and that requires a $25k SSI, and that requires $850k saved to generate the balance, then todays 20 year old would need roughly 3 times that or 2.5MM IF SSI keeps up with that inflation rate. More if it doesn't. It always seems shocking, but then todays EEs from top schools are starting at $60-70k/yr, and back in 1980 we were starting at about $23k and thought we were quite well off. I CLEARLY remember thinking that if I earned $50k/yr, I could retire easily at around 45, because since I lived easily on less than $25k, banking the extra $20k after taxes for 25 years plus interest would be plenty. That plan sure didn't work out...
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