What Retirement Calculators Get Wrong (date, single, older, Florida)

[Robyn55]

Originally Posted by TuborgP

Maybe you should just not read my post or better yet read them and don't react to them. Also I am being civil and respectful in our conversation but I don't need to know your political affiliation in the retirement forum. Yes I am having a gosh darn swell year and have been since January 20, 2009. Perhaps you haven't but I have and like we both know everything is individual! I did just recently do my part and help workers out by buying a new car and the sales people were very appreciative. So we each shout our joy and love of life. You for your reasons and me for mine and I think we can both agree that the beauty of America is our individual realities.

Perhaps I overreacted to your post (I do that sometimes) - but it just kind of turned me off to see you rejoicing in making some money when there are a lot of people out there these days with big financial problems. I feel sorry for some - especially the working poor/lower middle class people who kept their noses clean and are trying very hard to make ends meet. Don't feel sorry about others - those who treated their houses like piggy banks and lived well above their means while the party was going on - and are now walking away from their obligations. I am doing ok financially as well - but I think it unseemly to do cartwheels about it (it would be like bragging to my housekeeper that I just spent $400 on a pair of shoes). About the political stuff - just said it because I didn't want people to think that I am in general a "bleeding heart" kind of person. I'm not.

Anyway - I apologize if you took my remark as a personal attack (although I personally will save the cartwheels until our local unemployment/foreclosure rates get back to relatively normal levels - things here in NE Florida aren't as bad as they are in south Florida - but they are pretty bad). Apology accepted (if so - we'll get on to other things)? Robyn

[Jaggy001]

Originally Posted by Robyn55

Why do you think you'll need less money? Let's think something simple - teeth (not covered by Medicare). My father had great teeth all his life - but has spent $10k+ in the last 2 years dealing with failing caps - cracked teeth - new bridgework - etc. Teeth only last so long - even if they're great teeth when you're young. So you want a nice smile? Or are you going to go with the quick fit budget denture?

Or another simple thing - eyes. Medicare will pay for your basic cataract surgery - but not the new zippy lens implants. Those were about $4k. Anything medical will almost certainly cost you more than most activities you can think of doing when you're younger. The medical stuff is a real "budget buster". I will probably need cataract surgery soon (seems that a lot of us who have lived in the south for decades are getting cataracts earlier than people who have lived up north). And I'm going to spring for the zippy lens implants. Robyn

I thought this article was interesting.

'I can't afford surgery in the U.S.,' says bargain shopper - CNN.com

Might be worth shopping around.

[Robyn55]

Originally Posted by Jaggy001

I thought this article was interesting.

'I can't afford surgery in the U.S.,' says bargain shopper - CNN.com

Might be worth shopping around.

It isn't only a matter of personal medical tourism. Some employers are offering lower insurance rates to employees willing to accept major medical care outside the US. But one thing you have to ask yourself (or read in your insurance policy). If you need post-op care as a result of a screwup or an unfortunate result/complication - where will you get it - and who will pay for it? If you were a doctor here in the US - and someone came to you after a botched/post-op complications cardiac operation in India - would you care for that patient - clean up someone else's mess?

I do think shopping around is a good thing. Whether it's a question of finding a decent price - and/or the best doctor. But I personally wouldn't get medical care super far from home unless I thought the care in the specialty I needed was substandard or average here in general - and I wanted the best for something complicated. Which would probably mean going to a place like MD Anderson in Texas or Mayo Rochester as opposed to a hospital in India. Robyn

[Jaggy001]

Originally Posted by Robyn55

It isn't only a matter of personal medical tourism. Some employers are offering lower insurance rates to employees willing to accept major medical care outside the US. But one thing you have to ask yourself (or read in your insurance policy). If you need post-op care as a result of a screwup or an unfortunate result/complication - where will you get it - and who will pay for it? If you were a doctor here in the US - and someone came to you after a botched/post-op complications cardiac operation in India - would you care for that patient - clean up someone else's mess?

I do think shopping around is a good thing. Whether it's a question of finding a decent price - and/or the best doctor. But I personally wouldn't get medical care super far from home unless I thought the care in the specialty I needed was substandard or average here in general - and I wanted the best for something complicated. Which would probably mean going to a place like MD Anderson in Texas or Mayo Rochester as opposed to a hospital in India. Robyn

I agree with you. I know we are getting a little of topic here but I think you have to be smart in what you have done overseas and where you go. For example, I would feel a lot more confident in the UK or France than I would in India. But, even then, I'm not sure I would want anything non-routine done overseas.

But in terms of post retirement financial decision making they are important questions.

[TuborgP]

Originally Posted by Robyn55

Perhaps I overreacted to your post (I do that sometimes) - but it just kind of turned me off to see you rejoicing in making some money when there are a lot of people out there these days with big financial problems. I feel sorry for some - especially the working poor/lower middle class people who kept their noses clean and are trying very hard to make ends meet. Don't feel sorry about others - those who treated their houses like piggy banks and lived well above their means while the party was going on - and are now walking away from their obligations. I am doing ok financially as well - but I think it unseemly to do cartwheels about it (it would be like bragging to my housekeeper that I just spent $400 on a pair of shoes). About the political stuff - just said it because I didn't want people to think that I am in general a "bleeding heart" kind of person. I'm not.

Anyway - I apologize if you took my remark as a personal attack (although I personally will save the cartwheels until our local unemployment/foreclosure rates get back to relatively normal levels - things here in NE Florida aren't as bad as they are in south Florida - but they are pretty bad). Apology accepted (if so - we'll get on to other things)? Robyn

No need to apologize. Most people who follow my postings would say I don't react and get engaged. You might notice there is a thread on retirement on a shoestring budget. That is a thread designed to talk about how to enjoy retirement on the minimum and conversation about having it good would not be appropriate there. Most other threads have people on both sides of the aisle but basically they are respectful of each other and folks who are in good shape are appreciative/blessed for their position. The OP makes the statement that online calculators can get it wrong and that is very true as evidenced by the discussion in the thread. No free online calculator factors in everyone's individual circumstances.

[TuborgP]

Originally Posted by Robyn55

Well if I had a pension large enough to meet my current spending needs/wants - I'd probably invest the non-pension money - money that I didn't need today - conservatively to meet needs my husband and I will probably have when we get older (like more help around the house - higher medical expenses - possible need for a SNF - etc.). And it really wouldn't matter what return figure I put into a financial calculator. Because if you're not dipping into a fund - you don't have to worry about "tapping out" (unless you invest poorly). Which is pretty much what we do today - live off our taxable portfolio - as if it were a pension - and save in our retirement accounts.

Also - depending on the company - I'd probably try to avoid getting into a situation where my pension depended on the company - and where I had a ton of company stock as well (too many eggs in one basket) I'd also keep a pretty close eye on my company (I know a few airline pilots who wound up in pretty bad shape when their airlines went bust because their pensions were over PBGC limits - and because they were looking to retire early - but PBGC has rules that limit that option). Guess I also wouldn't assume that any medical benefits I thought I might receive from my employer when I retired would be there (unlike pensions - those benefits usually aren't guaranteed). I'd also keep an "ear to the ground" regarding proposed pension changes if I hadn't yet retired (I think that big IBM case - where IBM changed its pension rules in the middle of the game) is still pending. I've never worked for a big company - so those are thoughts off the top of my head. Robyn

All of your points are very valid. We are already retired drawing our state pension from a state that is reasonably ok. They will have to make changes for new employees eventually(sooner the better). We are saving/investing the the wife's SS and I will take mine at 70 unless I get concerned about the system. I will take spousal benefits at 66. We have by all current recommendations for medical covered but still overkill would be advised and we are doing that. The new prostate cancer breakthrough costs about 90K and it will be interesting how medical insurance handles that. Since they will initially be unable to handle everyone who needs it (late term prostate cancer) it would be advisable to be able to pay cash as that might get you to the front of the list if you didn't need approval. This will be a real challenge for Medicare and the new health care reform.

[Robyn55]

I was going to bring up the prostate cancer drug thing in another message - but thought it OT. Over $90k for maybe 4 extra months of life (in end stage prostate cancer patients)? My husband and I have the money - but wouldn't pay for it (and might not even go for it if Medicare paid for it). If we're ever in that situation - we'd probably go to great eating cities - stay in great hotels - play around - and eat our brains out (I get really sick of trying to eat "healthy" - and the one thing I know about terminal cancer - my mom died from colon cancer - is you can eat as much as you want without getting fat - and who cares if you gain 10 pounds if you're going to die in a few months). Robyn

P.S. Only friends I had who went through nasty end of life cancer stuff to gain a few months were younger friends with small kids - they thought it made a big difference if they'd be around for their 6 and 8 year olds for 6 more months. And - for the most part - they were right IMO. Once you're a lot older - it is quality of end of life that counts IMO - not quantity.

[Synergy1]

The corporate calulations for retirement are not as correct as we would like, so in 1995 I generated an Excel spreadsheet. It has helped me because I added or subtracted percentages on a monthly then on a yearly basis. It depended when I would get a performance increase, a COLA or an across the board general wage increase. The increases usually totalled 6.5%-7.25% for performance and COLA plus 2.5%-3.5% across the board.

Retirement brings up to 80% of pay then SS, but I didn't qualify because I was government and although I put into the SS fund for 11 years some 40 years ago I do not qualify to receive SS using todays standards.

Using a percentage calculation today would not be anywhere close to being accurate for income to receive. We do require more than 3.5% in 2010 but no bank will provide one with that rate of return...............

Dividing up CDs or ones favorite investments would be the best way of achieving a good rate to counteract inflation.

As a former Analyst I told my mother-in-law to invest where she felt most comfortable. She let her money stay in a very low checking account then when she had 6k in it she purchased a few CDs totalling 5k at the going rates.....

[mathjak107]

Originally Posted by Robyn55

Perhaps I overreacted to your post (I do that sometimes) - but it just kind of turned me off to see you rejoicing in making some money when there are a lot of people out there these days with big financial problems. I feel sorry for some - especially the working poor/lower middle class people who kept their noses clean and are trying very hard to make ends meet. Don't feel sorry about others - those who treated their houses like piggy banks and lived well above their means while the party was going on - and are now walking away from their obligations. I am doing ok financially as well - but I think it unseemly to do cartwheels about it (it would be like bragging to my housekeeper that I just spent $400 on a pair of shoes). About the political stuff - just said it because I didn't want people to think that I am in general a "bleeding heart" kind of person. I'm not.

Anyway - I apologize if you took my remark as a personal attack (although I personally will save the cartwheels until our local unemployment/foreclosure rates get back to relatively normal levels - things here in NE Florida aren't as bad as they are in south Florida - but they are pretty bad). Apology accepted (if so - we'll get on to other things)? Robyn

quite frankly i see nothing wrong with rejoicing about making money in this enviornment.. in fact if you had the fortitude to bear the downturn in your investments ,ride out the painful storm, invest more or simply got your self to rebalance and buy more of what was dropping daily and you made money then your a financial hero and deserve a parade.

while alot of folks are out of work and hurting thats a given but im not refering to them... ,quite alot of new wealth was spawned or will be spawned as people bought all kinds of things at fire sale prices.

anything you bought last year has pretty much almost doubled with certain sectors up 200-500% over the year .

folks use anchoring alot in their minds also.no one expects to buy at the exact low or sell at the exact high yet the market peaks are always our reference and anything less then and we say we are down.

the guy who bought google at 90 and sold it at 600 thinks he did great even though it went on to over 800. the guy who bought it at 90, held it and it hit over 800 but rode it down to 600 says hes down.

then you got folks who did the wrong thing, they either thought they would time things and beat the markets at their own game so they sold near the lows and they never believed the ralleye was real and missed the run up so shame on them or they panicked and were in investments that they shouldnt have been..


then you got folks who just dis-regarded those words "investments contain risk" and without any knowledge of what they are buying just bought what their buddies at work bought then realized to late they should have educated themselves more about what it is they called a portfolio.

then you got those who found out they have less tolerance of risk then they thought and they did the wrong thing and bailed out.

there are many reasons people say they lost money , most are not the markets fault at this point as if you did the right thing your probley ahead if you still rebalanced on the way down or bought when everyone else was selling.

then you got those looking at money they put in long term investments and are expecting instant results short term. their money hasnt paid its dues yet and spent enough time to mature in the markets but they are complaining they are down with money they put in over the last 5 years.


the real deal is most people do more reasearch on buying a car or a refrigerator then they do their own financial well being.

they have no idea what they own, they think throwing money into a hodge podge of funds in their 401k is all they need to do to to call it a plan and they have no understanding of anything financial nor do they care to learn.

this is the same type of person who thought just buy real estate and the money will role in, not even realizing real estate is a profession like any other job. you need talent and skill to make money. they confused genius with a bull market in real estate. now they are burned.

im not talking about the sole who lost his job, thats a real shame but most of these folks who lost money in the markets did so on their own, not the markets fault .

im no genius ,and i and lots of others did the right thing and merely stayed the course, had a plan and stuck to it.. now we were rewarded for simply doing what any investor should have done and we did it with nothing more then mediocre average funds. available to anyone... they to had a choice to ride things out , keep rebalancing or add to their investments and chose not to.

no one has to feel sorry for those that did the wrong thing.

by the way im one of those who lost his job last month... i was going to retire next year but have gotten involved with another exciting job in a start up business venture and so retirement is officially on hold for now.

[mathjak107]

the problem with trying to work inflation into these calculations is an inflation number isnt the same thing as a cost of living index.

our personal inflation rates or cost of living is unique to all of us.

what we buy , how much of that item we buy and whats the quality of that item is our personal index and varys greatly.

while k-mart jeans which are dirt cheap maybe fine for some and actually dropped in price the more expensive better quality gap jeans are actually way higher in price...

if i dont drive a car and live in a rent stabilized building i maybe unscathed by high oil or gas costs that effect everyone else much more.

its all to personal to take a general number for everyone.