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Old 08-05-2017, 08:54 AM
 
71,779 posts, read 71,875,234 times
Reputation: 49345

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Quote:
Originally Posted by elnrgby View Post
My annuities are all fixed, not inflation-adjusted. Additional annuities get added every 5 to 10 years, which accounts for keeping up with reasonably expected inflation. If annuities are high enough (as mine are), they will keep with the the increase in the cost of things that I might want to buy. By my present age of 57, I have pretty much figured out what the things are that I might want to have; after a lifetime of being perfectly satisfied with public transportation and occasional rental of a Nissan Versa, I am not worried that at 77 I might suddenly develop a need to start collecting Porsches and Bentleys, so no worries about disproportionate increase in price of high-end items :-).
that is why i said "general advice "
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Old 08-05-2017, 03:19 PM
 
Location: Living on the Coast in Oxnard CA
15,754 posts, read 26,800,795 times
Reputation: 20403
Quote:
Originally Posted by reneeh63 View Post
FIVE million? Do I hear TEN, just in case? Seriously, I guess no one is really ever set to retire...how do people do it?
You mentioned here about how anyone can save money for retirement.

Quote:
Originally Posted by SOON2BNSURPRISE View Post
Starting early is key to doing it. We have told our kids that if they will put in just $2,000 a year starting at age 20 or earlier then by the time they hit 65 they will have the money to retire. Realize that if you just invest a couple thousand a year for 7 years and then stop, the average IRA should grow to over $1million by the time you hit 65. If you were to do that for the entire 45 year time frame you would have over $2 million. A couple that does this would easily have close to the $5 million mark.
I mentioned here that it is important to start early. I don't see how I was talking down to you or anyone else. You can get irritated all you want but this has been common knowledge for decades. When I was 14 I learned how compound interest works.
Quote:
Originally Posted by reneeh63 View Post
Thanks for the newflash but you caught me 35 years too late to work your program. I didn't have parents like you savvy with investments... my dad died while I was in school and my mom was very naive and needed help herself. But believe me, I'm not shaking in my boots planning to work until I drop - I'm retiring at 62 and have fully budgeted all my travel.

Sorry but it is just the most irritating thing to be talked down to about what I should have done 35 years ago....especially when few people have need for millions. I do detest the Calvinistic work ethic and the fear-mongering and lifestyle it dictates. Kids who manage to save a few thousand each year from 20 onward (while in college?!) more than likely have mom and pops helping out with that.
I have six kids and while not all of them save money, I have a 19 year old that while attending college here locally, also works and has managed to save over $16,000 last year alone. No we do not charge him rent. As long as he is a full time student working towards his degree we will not charge him rent.

We have a 13 year old that saves most of his money. We give him $20 every two weeks. He has saved over $500 so far. He has also managed to buy his own video games with his money over the years.

Many people though, I see it all the time, they want to go to Starbucks, have the latest cell phone, spend a couple hundred on Cable, Phone, internet, buy a new car every five years, go out to eat often, but fail to save just $2,000 a year.

Sorry that you are at the end of your work life. If you can pull off retirement at age 62 and live the kind of life that you want then you have made it. I don't see it for me until I have hit my financial goals. What I am saying is if you don't need $5million then better for you.
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Old 08-05-2017, 06:16 PM
 
1,738 posts, read 621,943 times
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Quote:
Originally Posted by SOON2BNSURPRISE View Post
Starting early is key to doing it. We have told our kids that if they will put in just $2,000 a year starting at age 20 or earlier then by the time they hit 65 they will have the money to retire. Realize that if you just invest a couple thousand a year for 7 years and then stop, the average IRA should grow to over $1million by the time you hit 65. If you were to do that for the entire 45 year time frame you would have over $2 million. A couple that does this would easily have close to the $5 million mark.
Extrapolating from my own SEP-IRA (self-employed): if a 20 year old puts $2k into an IRA for 7 years, then stops, he'll have about $150k in that IRA at the age of 65. If he puts 2k into this account every year from the age of 20 to 65, he'll have about $280k at 65. If you want to have a couple of million by 65, I think you generally still have to earn them the old-fashioned way, ie, by working :-).
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Old 08-05-2017, 06:25 PM
 
71,779 posts, read 71,875,234 times
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just saving 50k in the same fidelity insight growth model i have followed for 30 years has grown to 1-1/2 million today even without another penny added . the s&p 500 would be about a million too .
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Old 08-05-2017, 09:10 PM
 
1,738 posts, read 621,943 times
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Maybe so, but for each 50k I spent on an annuity deferred for 28 years I will get back 24k per year til the end of my life, no matter how long I might live (and I come from a very long-living family on my father's side), without ever following any growth model or s&p or whatever. I paid the premium to the insurance company, and can completely forget about that money - the expected amount of monthly payment will appear at the expected time, and it will keep appearing until I die. That for me is the whole point, because I have a life, and don't want to spend all (or much, or. actually any) of my time managing money.
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Old 08-06-2017, 01:53 AM
 
71,779 posts, read 71,875,234 times
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they pay that much for so little with longevity insurance because odds are people will collect very little . they can offer all kinds of juicy amounts because statistically few will get much back . so you can't compare your own investing to an insurance product anymore than you can compare a pension to your own investing because once you die game over unless you pay to pass to a spouse . .

that is not to say they are bad products , in fact they can be quite interesting .

they can have you plan with your own money up to age 80-85 or so which gives you a lot more to spend than planning to 90-95 , and if you happen to beat the odds and live longer the longevity annuity kicks in .

as a point of fact though , lazy portfolio's take no time at all . i bet in 30 years i put less time in to portfolio mgmt then it takes to read and understand most annuity product contracts .
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Old 08-06-2017, 09:10 AM
 
Location: SoCal
13,297 posts, read 6,362,704 times
Reputation: 9932
Quote:
Originally Posted by mathjak107 View Post
they pay that much for so little with longevity insurance because odds are people will collect very little . they can offer all kinds of juicy amounts because statistically few will get much back . so you can't compare your own investing to an insurance product anymore than you can compare a pension to your own investing because once you die game over unless you pay to pass to a spouse . .

that is not to say they are bad products , in fact they can be quite interesting .

they can have you plan with your own money up to age 80-85 or so which gives you a lot more to spend than planning to 90-95 , and if you happen to beat the odds and live longer the longevity annuity kicks in .

as a point of fact though , lazy portfolio's take no time at all . i bet in 30 years i put less time in to portfolio mgmt then it takes to read and understand most annuity product contracts .
I've been wondering whether it's worth it to buy longevity insurance vs ltci, what do you think? Have you done any analysis on this? I would like to learn from your experience.
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Old 08-06-2017, 09:22 AM
 
71,779 posts, read 71,875,234 times
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they are two very different things and serve two different purposes . your longevity insurance may fall way short inflation adjusted .

today a home here is 120k a year . can you imagine how much you need to tie up in longevity insurance to meet costs 20 or 25 years out ? ltci adjusts at 5% a year .

what if you need care before it kicks in ?
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Old 08-06-2017, 09:29 AM
 
Location: SoCal
13,297 posts, read 6,362,704 times
Reputation: 9932
I agree but ltci also goes up every year. I just cancelled mine, but if I hadn't cancelled mine, I think I would pay double in premium every 5 years to keep up with the 5% adjustment. And I may never need it. While I will get longevity insurance payment if I live long enough. While it may not come out the same. But at least I get something.
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Old 08-06-2017, 09:32 AM
 
Location: Central IL
15,253 posts, read 8,556,682 times
Reputation: 35693
Quote:
Originally Posted by SOON2BNSURPRISE View Post
You mentioned here about how anyone can save money for retirement.


I mentioned here that it is important to start early. I don't see how I was talking down to you or anyone else. You can get irritated all you want but this has been common knowledge for decades. When I was 14 I learned how compound interest works.


I have six kids and while not all of them save money, I have a 19 year old that while attending college here locally, also works and has managed to save over $16,000 last year alone. No we do not charge him rent. As long as he is a full time student working towards his degree we will not charge him rent.

We have a 13 year old that saves most of his money. We give him $20 every two weeks. He has saved over $500 so far. He has also managed to buy his own video games with his money over the years.

Many people though, I see it all the time, they want to go to Starbucks, have the latest cell phone, spend a couple hundred on Cable, Phone, internet, buy a new car every five years, go out to eat often, but fail to save just $2,000 a year.

Sorry that you are at the end of your work life. If you can pull off retirement at age 62 and live the kind of life that you want then you have made it. I don't see it for me until I have hit my financial goals. What I am saying is if you don't need $5million then better for you.
My point is that none of this is relevant to anyone older than 30 or 35...they are "doomed" from being able to save $5-10 million if only because they'll have started too late. So to state the obvious to someone who couldn't take advantage of that at their advanced age is....irritating...to the OP and to at least 75% of people in this forum who are too old for it to fit them...and then also irritating to the remaining 24% who happen to have the common knowledge of how compound interest works. Give some wise words on something few people know.
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