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thats why there are so many failed retirements. they are planned like the story of the little engine that could. i think i can ... i think i can i think i can...
telling folks they can go an unknown retirement time frame with no inflation protection either is a poor recommendation as well .
a life expectancy chart does not mean you will be dead at a certain age. its only the mid point as to who died and who goes on . a coin toss isnt good odds that both me and my spouse will be gone early on.
there is to much shooting from the hip and not enough working with facts ,real numbers, research and cushions for that what if im wrong.
they dont really understand the numbers behind the basis thats used for planning so they dream up their own and continue to attack that which they dont even understand..
like i said what your income was has no bearing on what you need once your not working. only your expenses will determine that.
i intend to go part time before i actually pull the plug , which salary shall i use?
many folks wind things down over years, which salary do they use?
if your leaving the area and state what good are your old expenses as far as calculating to see it you have enough as a percentage of income.
if its a low cost area maybe you need to achieve way less than 85%.
arguing what percentage of some income someone needs to retire is just plain dumb unless they are making no changes in their lives and will do only free things with all their extra time .. then you can compare .
Something in Hartford Renters story doesn't add up. He claims to live on 30% of his gross and that may be so, but actuaries are not well paid. Plus, I suspect he is very young based on his responses. He may be living in a small rented room and driving a 15 year old beater with no insurance, yet he believes his situation can be generalized to a mature couple with a lifetime of obligations.
Some folks will retire to a nice well funded lifestyle and others will be rolling around a trash cart looking for aluminum cans.
so far nothing he has said or disputed had any fact to it. not even he has been able to prove what he writes. its only the world in heartfords head that things exist as he thinks.
this planing stuff can be so complex that unless you have a load of money and a low level lifestyle you really need to learn the basics of retirement planning .
then when you have a foundation and understanding of just what your plan may be able to endure then you can fine tune it dynamically to your lifestyle.
Just look at the numbers - median net worth of renters is what, $4000? Obviously SOME renters get ahead financially, but those are the outliers who have substantial income. (Median income of renters is less than half that of homeowners - more numbers for you.) And those renters who get ahead financially usually become homeowners, leaving behind a still-poor pool of renters...
There are a whole lot of reasons this statistic is highly suspect. Many renters are just starting out in life and have had no time to build wealth. They may be disproportionately young and still low on the wage scale. They may be renting because they lost their job and sold their home.
In the end, renting is generally cheaper than buying in many ways (insurance, property taxes, maintenance, utilities...). So, all things being equal you could build more wealth while renting versus owning without risking loss of equity!
There are a whole lot of reasons this statistic is highly suspect. Many renters are just starting out in life and have had no time to build wealth. They may be disproportionately young and still low on the wage scale. They may be renting because they lost their job and sold their home.
In the end, renting is generally cheaper than buying in many ways (insurance, property taxes, maintenance, utilities...). So, all things being equal you could build more wealth while renting versus owning without risking loss of equity!
i think there are quite a few who will debate the without loss of equity part on both sides .
it really shakes out that those who spend less on housing in the early years can invest elsewhere at far higher returns. markets have surpassed residential real estate by as much as 4x and having the money working early on for the renter is a big plus.
the homeowner has his money going into the home and once the mortgage is paid his housing costs drop and he has money to invest but he has lost decades of compounding on it.
by retirement the investing renter has higher housing costs but higher potential income from assets saved. the homeowner may have lower housing costs but a higher percentage of net worth tied up in the house generating less retirement income.
they can both work out just fine but the bottom line is you first need some money to have those choices.
i think there are quite a few who will debate the without loss of equity part on both sides .
it really shakes out that those who spend less on housing in the early years can invest elsewhere at far higher returns. markets have surpassed residential real estate by as much as 4x and having the money working early on for the renter is a big plus.
the homeowner has his money going into the home and once the mortgage is paid his housing costs drop and he has money to invest but he has lost decades of compounding on it.
by retirement the investing renter has higher housing costs but higher potential income from assets saved. the homeowner may have lower housing costs but a higher percentage of net worth tied up in the house generating less retirement income.
they can both work out just fine but the bottom line is you first need some money to have those choices.
A lot of good points, but the last 15 years have been tough. My home is worth about 10% more than what I paid 15 years ago. In the interim I have paid appx $100K in property tax. $100K in mortgage interest, $10K in homeowners insurance and probably $60K in maintenance, upkeep and improvements. Hard to see the upside of that without good solid price appreciation! At a 4% growth rate my home should be worth almost twice what I paid after 15 years!
so far nothing he has said or disputed had any fact to it. not even he has been able to prove what he writes. its only the world in heartfords head that things exist as he thinks.
this planing stuff can be so complex that unless you have a load of money and a low level lifestyle you really need to learn the basics of retirement planning .
then when you have a foundation and understanding of just what your plan may be able to endure then you can fine tune it dynamically to your lifestyle.
If you have no money and a low level lifestyle, why would you really need to learn the basics of retirement planning?
you dont need to know a thing , its hopless for you. but for others there are ways to stretch what limited amounts you do have maximiizing what you can get.
whether you need to draw some income through retirement off of 50k or 50 million it will still only be based on what you yourself has.
no money is no money and there is no magic for that.
Do you seriously think you can afford to retire?
We were just the lucky few and the exception to the rule when computing what is needed to retire, which we were nowhere near it, but we did it anyway and have been retired for the past 15 years now, but overseas in the Philippines (not for just anybody), our roots where we only spend 40% of my retirement pension, the other 60% goes into our nest egg! We own a modest home, we have no debts and we have life and medical insurance and in case of my demise, my wife has survivor's benefits she can live on for the rest of her life! She could also sell our home and buy something smaller with low or no maintenance, it's up to her when I'm gone!
When I retired at age 49, we couldn't afford to live in California any longer with my initial small U.S. Government pension, plus I couldn't anymore due to my chronic lower back ache (I'm not on disability, the quack Dr. who evaluated me at the VA hospital screwed me, but I shall refile my claim eventually, in the process)!
So, we paid off all of our debts and sold everything we owned before moving overseas! We just started life all over again with a new slate and enough money from my 1st initial pension to live on comfortably until my other pensions kicked in 11 yrs later at age 60 and 62!
I'm now 64 and my wife 50. We didn't have any children, but we tried!
As I always say, "different strokes for different folks"! "Life is what we make it to be"! We made ours and still enjoying our retirement!
Last edited by Art2ro; 12-11-2012 at 04:08 AM..
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