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 01-02-2010, 12:35 PM
 
1,077 posts, read 2,688,446 times
Reputation: 910

Advertisements

Quote:
Originally Posted by highcotton View Post
You are no where even close in my opinion....unless you plan on living under a bridge and going dumpster-diving in 5-10 years.

Seriously Dave, even if you live out your days (25+ years is a long time) very frugally in a low-cost area, your chances are close to 100% that you will run out of [enough] money a long, long time before you die.
I know a lot of people, that could and are living on just what his pension is, come on man, living in a dumpster? It's not like he has to keep the Bentley gassed up, seems like he's just a regular guy.
Reply With Quote Quick reply to this message

 
Old 01-02-2010, 12:37 PM
 
1,077 posts, read 2,688,446 times
Reputation: 910
Quote:
Originally Posted by MagnoliaThunder View Post
I agree! So many people do not even HAVE pensions these days ... $2800 a month, plus the security of knowing the $300K is there, PLUS Social Security in a few years ... for a frugal person, all things being equal, that would be enough to live on comfortably -- unless you live in California or somewhere very expensive and want to keep doing everything you did when you worked.

My mother lived on QUITE a bit less than that and was able to stay in her home, take care of herself and had a good medical plan in addition to Medicare -- I think a lot of people are spoiled and assume that they have to have millions to be able to have a good retirement...while that's great if you have it, you don't have to have it.

Just my opinion, OP -- but you're set a lot better than many people I know, and I hope that encourages you a bit.
You could make it in California too, maybe not Pebble Beach, but you could make it in a lot of places in California. We're just another state in a lot of places, our roads aren't made of gold.
Reply With Quote Quick reply to this message
 
Old 01-02-2010, 02:20 PM
 
Location: At the Lake (in Texas)
2,070 posts, read 2,035,245 times
Reputation: 5032
Quote:
Originally Posted by MadManofBethesda View Post
Yes, but again, I go back to the other question that I posed to the OP:

Is his pension indexed for inflation? If not, that $2800/month will be down to $1400/month in only 18 years even if inflation only averages 4%/year. And if we have the hyper-inflation that some economists predict will happen once the economy recovers, then that $2800 may be able to buy a doughnut and a cup of coffee. (Yes, that is an exaggeration for effect.)
Yes, that is an issue that he needs to investigate -- If it does not keep up with inflation, that will make a big difference. Still, wish I had a pension to count on and that much in my 401(k).
Reply With Quote Quick reply to this message
 
Old 01-02-2010, 02:22 PM
 
Location: At the Lake (in Texas)
2,070 posts, read 2,035,245 times
Reputation: 5032
Quote:
Originally Posted by Everest209 View Post
You could make it in California too, maybe not Pebble Beach, but you could make it in a lot of places in California. We're just another state in a lot of places, our roads aren't made of gold.
That's great to know and I'm still looking there...it's my "Texas dream" to be able to live there one day...love love love California. Thanks!
Reply With Quote Quick reply to this message
 
Old 01-02-2010, 02:28 PM
 
Location: High Cotton
6,131 posts, read 6,442,376 times
Reputation: 3657
Well, I see that Dave is married - so I assume two people will be living off of the $2,800 per month pension. Does the pension keep up with inflation? Maybe, but doubtful. I also have to assume that neither Dave nor his wife will be earning any income from employment in the future.

Nothing was mentioned about major medical insurance coverage. I am assuming neither has full coverage from an employer...and probably no coverage at all. Depending on the coverage they choose the premiums could be anywhere from $500 to well over $1,000 per month. As it stands now Dave and his wife are 5-6 years from quailifying for Medicare, and Medicare alone is not enough coverage for most people. Without medical insurance one medical problem could easily wipe out his meager $300k in savings. The older you are, the more likely you are to need surgery or medical attention, including medication.

Nothing has been mentioned about housing costs, property taxes, repairs, etc. Does Dave and his wife own any real property? If so, does they have much equity? I see that Dave currently lives in Michigan - not the best place for maintaining real estate values. If Dave plans on renting to avoid spending any part of his $300k, that will almost certainly be a never-ending problem with increasing rent due to inflation, or needing to move to a cheaper rental when land is sold for development, etc.

I assume Dave has no personal savings because he didn't mention any. No contibutions to an IRA? No investment in stocks, bonds, CDs? Is there any net worth all all outside of the 401k? It appears not... That does not bode well for how frugal Dave will manage his finances in the future. In fact, it says a lot - which if true is not good.

There are so many things that eat away at money for most everyone - medical insurance, medicines, eye wear, cable television services, telephone, cell phone, entertainment, traveling, clothing, food, gasoline, electricity, natural gas or propane, water/sewage, replacement tires, auto repairs and inspection, automobile insurance, home repairs, home insurance, future replacement of appliances, HVAC equipment, computer, TV, automobile, etc., etc., etc., etc., etc.

I'm sorry, but the future I see for Dave and his wife is maybe buying an old double-wide in a run-down Florida trailer park and having a 10+ year old car for transportation, and pretty much wasting away from a boring life beginning at age 59. My guess is that Dave's $300k will be long gone well before he reaches 70.

PS - Why will the $300k in a 401k not earn any interest or income in the future? Is this another indication of Dave's lack of financial savy?

Last edited by highcotton; 01-02-2010 at 03:05 PM..
Reply With Quote Quick reply to this message
 
Old 01-02-2010, 04:22 PM
 
356 posts, read 508,468 times
Reputation: 407
the reason i have the 300k is because i was out of the stock market when it crashed earlier this year. I'm sitting in money markets waiting for interest rates to go back up to purchace CD's.I don't trust the market anymore and i don't trust the government.
but my 2800.00 pension is cut in half at age 62 and 1 month,then i have to apply for
SS to make up the difference or postpone SS and make up the diff.I was given a suppliment to get to that age.But im trapped like everybody else i have 2 houses that are worth less now ,saving that doesnt keep up with inflation.no debt though
Reply With Quote Quick reply to this message
 
Old 01-02-2010, 06:06 PM
 
356 posts, read 508,468 times
Reputation: 407
By the way thanks for the responses even though highcotton let his amagination run away with him .The reason i'm asking opinions is 7% R of R on the dream sheets is very hard to achieve unless you assume more RISK (stocks,bonds)which i'm not willing to do. at my age and risk level a laddered CD portfolio would be my main focus.
with minimal higher risk assets for POTENTIAL growth.But i think a 3% inflation rate topper is a long way away.Hopefully the gov will issue a special bond to pay off the trillions in debt.As far as my pension i believe there are periodic COLA's as well SS which was not paid this year.i have good paid health insurance and normally high taxes and insurances and bills like everyone else. My houses ,cars are paid for
Reply With Quote Quick reply to this message
 
Old 01-03-2010, 07:17 AM
 
Location: High Cotton
6,131 posts, read 6,442,376 times
Reputation: 3657
Quote:
Originally Posted by dave w View Post
By the way thanks for the responses even though highcotton let his amagination run away with him .The reason i'm asking opinions is 7% R of R on the dream sheets is very hard to achieve unless you assume more RISK (stocks,bonds)which i'm not willing to do. at my age and risk level a laddered CD portfolio would be my main focus.
with minimal higher risk assets for POTENTIAL growth.But i think a 3% inflation rate topper is a long way away.Hopefully the gov will issue a special bond to pay off the trillions in debt.As far as my pension i believe there are periodic COLA's as well SS which was not paid this year.i have good paid health insurance and normally high taxes and insurances and bills like everyone else. My houses ,cars are paid for
Dave - I can't imagine why would you ask your original question offering only tidbits of information that is required to actually answer the question.

I do agree that laddered CDs would probably be a good choice for you considering your age and risk tolerance. It sounds like you are a novice in the very early stages of learning about money and investing.

In my opinion, the answer to your original question remains a strong NO.
Reply With Quote Quick reply to this message
 
Old 01-03-2010, 07:21 AM
 
Location: Fairfield, CT
5,844 posts, read 8,605,080 times
Reputation: 6286
Quote:
Originally Posted by dave w View Post
59 yrs old ,2800.00 pension ,typical cheap coupon cutter, will drive extra mile for a deal .no debt.normal expenses,will it last till i die,with no intrest made on savings.
What are your income needs?

You're pretty young, so you need an amount that is going to last and give you protection against inflation.

It's impossible to answer this question without knowing more about your financial situation. What are your expenses now? Don't expect them to drop very much if you retire. In fact, sometimes they go up, because you have more leisure time to spend money and take trips.

My gut reaction is that it is not enough. It wouldn't be enough for me. Do you have any other savings/assets to generate income?
Reply With Quote Quick reply to this message
 
Old 01-03-2010, 07:23 AM
 
Location: Fairfield, CT
5,844 posts, read 8,605,080 times
Reputation: 6286
Quote:
Originally Posted by dave w View Post
the reason i have the 300k is because i was out of the stock market when it crashed earlier this year. I'm sitting in money markets waiting for interest rates to go back up to purchace CD's.I don't trust the market anymore and i don't trust the government.
but my 2800.00 pension is cut in half at age 62 and 1 month,then i have to apply for
SS to make up the difference or postpone SS and make up the diff.I was given a suppliment to get to that age.But im trapped like everybody else i have 2 houses that are worth less now ,saving that doesnt keep up with inflation.no debt though
You own two houses?

No way $300K is enough in that case. It's expensive to keep up 2 houses.
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
Similar Threads
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