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Right now I'm 29 years old. I am counting on Social Security to be a significant part of my retirement income when I retire in 2051. I believe that by then, we will have solved the problem. It's foolish to blanket today's political problems for something that is promised in 38 years from now. So by then it should be okay. What I would do now is reduce my contributions down from 15% to 8%, and rely on Social Security in addition to that.
I also plan to reduce my emergency fund down to 3 months, because I believe that's enough. Like I said, there are many other ways out beyond the 3 months, such as credit card borrowing, selling off investments, tapping into my Roth IRA, collecting unemployment insurance, collecting severance, asking for money from parents....whatever. There are many options. And I have a master's degree in accounting, so I'm invincible. It just seems excessive to hold $22,000 in a bank account emergency fund and not put it to work or use toward buying a home, etc.
I also plan to avoid getting a revocable trust, because it seems completely unnecessary, when I already have all of my assets designated to my parents as beneficiaries. And I want to actually own my assets as an individual, rather than the trust owning the assets.
I mean, doesn't my logic seem more personalized and reasonable?
1. Don't overestimate the trend of SS. At this rate, we'd be lucky if we get 50% of what ws promised.
2. I don't see your situation as being invincible. A little premature to call yourself invincible.
3. Revocable trust - probably not for you just yet. Not for me either just yet.
Another stupid Suze piece of advice is that she says to only finance a car for no more than 3 years, then keep the car for at least 10 years. REALLY?
When I bought a new car back in 2008, I opted for a 6-year loan @8.19% because the payments would be smaller than a shorter term. This allowed me to stash away money faster. Then, just 2 years after purchase, I paid off the car with ONE lump sum payment, and plan to own the car for 10 years anyway. Had I financed it for 3 years, the payments would have been like $550 a month, which is simply too much to fit in my budget.
For an accountant, you don't seem to be too consistent with your finances.
1. You having to fund a car over a 72 months just goes to show that you bought too much of a car, more than you can afford. Mistake number 1.
2. You seemingly were ok with an 8.19% APR - mistake #2.
3. As an accountant, you were ok stashing cash away "faster" but at the same time, bleeding 8.19% into the car..... how does that make sense? Buy a cheaper car!
4. Don't act like you were able to pay off the car in ONE LUMP SUM 2 years later because you planned for it... the truth of the matter was that you ended up with some sort of a bailout from a settlement.
5. And you're not invincible, as much as you'd like to think you are. A masters in accounting - and making rookie mistakes.
She would say then that you can't afford that car. Not saying she's right, but that is what she would say.
Her main thing with the trusts is for people with kids. She says minors cannot inherit money directly, and the money would go to an adult family member or the court itself, and they would administer it but also have power to decide how it's spent on the kids, change investments, etc. In a RLT she says you can determine how every cent of it is spent and make sure no one can misuse it. I think you also avoid long probates before your kids can get the money should something happen. I don't recall why she pushes it on singles, maybe due to the higher degree of control they seem to offer?
there are many different types of trusts that do different things. providing money to minors is one type. hey are also used to pass more to heirs passing things outside the estate limits.
they are good for avoiding probate on real estate, other types can protect assets from nursing homes.
a trust in the eyes of the law can be a seperate enity much as if it was a 3rd party .
a trust can have conditions and restrictions put on the money , a will cannot.
the one thing i am against is the do it yourself kits for wills and trusts she promotes.
having gotten burned not once but twice by oversites i found out the hard way how easy points in your state can be overlooked or not worded right.
there are many different types of trusts that do different things. providing money to minors is one type. hey are also used to pass more to heirs passing things outside the estate limits.
they are good for avoiding probate on real estate, other types can protect assets from nursing homes.
a trust in the eyes of the law can be a seperate enity much as if it was a 3rd party .
a trust can have conditions and restrictions put on the money , a will cannot.
the one thing i am against is the do it yourself kits for wills and trusts she promotes.
having gotten burned not once but twice by oversites i found out the hard way how easy points in your state can be overlooked or not worded right.
there are no do overs once there is an issue.
She only promotes these for those who cannot afford it any other way. There have been many callers who have kids yet don't even have wills let alone trusts. She is trying to eliminate all excuses.
She only promotes these for those who cannot afford it any other way. There have been many callers who have kids yet don't even have wills let alone trusts. She is trying to eliminate all excuses.
if you read my example above with our refinance being stopped because of what the title company said was a will omission , little things can turn into big expenses later on. it is those that can least afford to waste money that need to get it right the first time and that could mean seeing an attorney .
there are protocols in states that are not laws and not in the will kit instructions yet are very important.
the first thing the attorney did in front of PROPER witnesses is ask us if we know what the wills are, if we are on medications, if we were pressured into signing , etc etc.
none of which is required in our state but there is not an estate attorney around that will not ask those questions as a matter of record.
in fact i thought i would use a will kit and then pay an attorney just to review it. i could not get one that would even use a document that wasn't their own written the way they want it to be.
as the saying goes "the poor man usually pays twice" as they try to skimp or do things on the cheap and when that fails to work out they or their heirs first have to pay to get the right thing anyway.
i can tell you there is no truer saying as time and time again i see folks buy things because they think they can get away cheaper only to find down the road they rebuy what they should have bought in the first place. and now spent even more.
Last edited by mathjak107; 10-19-2013 at 07:28 AM..
Another stupid Suze piece of advice is that she says to only finance a car for no more than 3 years, then keep the car for at least 10 years. REALLY?
....
Yet when she researched someone who criticized her advice, one of the things she pounced on was that he was driving a "junker." This is what I mean about her inconsistent advice.
Suze's show has become gimmicky, but I still watch it. I do have to credit the show for prodding me to take a look at my own financial situation. When I had a good job, I never thought about it -- just socked away as much as I could, and stayed out of debt. Then I lost that job, and had no idea the minimum I needed to cover monthly expenses. Net worth? Again, no idea. I finally tallied everything up. I thanked my lucky stars that I had at least a year's emergency fund saved up. It allowed me time to consider various options and saved me from panicking.
Most people have a pipe dream of retiring early, to enjoy life while they still have their health. It does irk me that a millionaire who could have retired decades ago is advising people to work until they are at least 67, but I guess that she wants them to be safe, than sorry (or poor).
I did have to laugh -- the other week she advised a woman to cut her clothes-shopping budget from $750 to $350/month!! I'm sure I've never spent that much in a year! And she often cuts people's eating-out budget, but doesn't increase their weekly food budget for eating at home. You've still got to eat something!
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