# Later stage planning



## karen (May 9, 2019)

A few years ago when my grandmother turned 90, I started to think more about retirement savings and longevity risks. Her savings ran out by 82. Fortunately, my parents were able to take her in and care for her.

I don't plan on having any kids and so I've been thinking about this even more. My friends and I have been working on a retirement savings project for this and I'm curious if anyone would be willing to speak with us or share retirement plans.


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## AZ Jim (May 9, 2019)




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## retiredtraveler (May 9, 2019)

DW and I started saving for retirement in my 20's and retired at 56/54 on our own investments. There isn't any more insight I could give you than any number of online articles would tell you. You have to start saving early to allow compounding of your savings. You have to create a budget, stick to it, to determine what you can save.  You have to live below your means (not simply within your means). You need to invest in the stock market with a diversified portfolio. If a 401k is available to you, put as much as you can into it. These are all 'standard' approaches you'll find in myriad articles. It requires you to actually understand budgeting and investing which will take you some time and homework. You also need to be an informed consumer allowing you to spend wisely.
     I don't know if you're looking for specifics. There are so many variables among individuals where specific approaches have to be formulated. What kind of education do you have, type of job, living expenses where you choose to reside. Can you advance, or change your career to make more money? Would it make sense to move elsewhere for job opportunities or less expensive standard of living? Could you work a second, part-time job to provide you extra monies to invest for retirement? Your largest expenses are typically a car and rent/mortgage --- are you minimizing those expenses?  There is an endless list.


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## karen (May 9, 2019)

Thanks for the thoughtful reply. Have you looked into annuities or products like that? What are your thoughts on that?


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## Aunt Bea (May 9, 2019)

Saving for retirement is important.

Reducing your expenses and expectations to fit your retirement income is equally important.

IMO the most important thing for an elderly person is to have a support network of close family and friends that can oversee their care and act as advocates in their final years.

Creating/establishing that network has been the biggest challenge for me and I'm not sure how to pull it together at this late date so I'll probably go it alone.

Good luck to you and your friends in the years ahead.


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## mathjak107 (May 9, 2019)

Z





karen said:


> Thanks for the thoughtful reply. Have you looked into annuities or products like that? What are your thoughts on that?


Most annuity products stink .. the only one I would consider in conjunction with my own investing is a immediate annuity


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## retiredtraveler (May 9, 2019)

karen said:


> Thanks for the thoughtful reply. Have you looked into annuities or products like that? What are your thoughts on that?



I'm with Mathjak. No annuities. To be specific, annuities are for those who do not want to be bothered with learning how to invest. They're 'lazy' investments. They can give you a predictable income and if you're risk adverse, peace of mind. You offload the investing to the company issuing the annuity. But you pay high fees. If you're_ truly _concerned with maximizing your retirement, you're back to my original posting. Do the work yourself, save the fees. There are several basic strategies that are simple if you're young and talking long term. For instance, index funds. If you're not aware, those funds mirror a specified index. For example, you can invest in an index fund that invests in all the companies in the S&P. If you believe that the S&P, over time, will produce good results, you have that as one of the components in your portfolio. You certainly do not need a broker, pay for advice, or pay fees simply to invest in index funds. 
   Average return of S&P is 10% since the 20's. Average return on annuities -- 3% - 4%. Guess what? Average inflation is in that range. If you're young, you have decades of returns that will compound. Look at the Rule of 72 to give you an idea.


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## Don M. (May 9, 2019)

Financial planning for retirement requires that a person recognize, at a fairly early age, that they, too, will one day got old and no longer be able to work.  Living paycheck to paycheck, and carrying large amounts of debt well into the final working years is a sure recipe for being financially strapped when retirement comes.  Fortunately, we had parents who practiced good financial behavior, and imbedded that attitude in us.  We didn't buy fancy cars, live in expensive houses, or take lavish vacations...we lived reasonably modest, and saved as much as we could.  When the kids got out on their own, we found thousands of dollars/year that we no longer had to spend on them, and started putting that in conservative investments.  We're not rich, but most standards...but if we get the urge to go to the casino, at least we're not fooling with grocery money.  Looking back, the only thing I wish is that the 401K plans had been available for all my working years.


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## mathjak107 (May 10, 2019)

retiredtraveler said:


> I'm with Mathjak. No annuities. To be specific, annuities are for those who do not want to be bothered with learning how to invest. They're 'lazy' investments. They can give you a predictable income and if you're risk adverse, peace of mind. You offload the investing to the company issuing the annuity. But you pay high fees. If you're_ truly _concerned with maximizing your retirement, you're back to my original posting. Do the work yourself, save the fees. There are several basic strategies that are simple if you're young and talking long term. For instance, index funds. If you're not aware, those funds mirror a specified index. For example, you can invest in an index fund that invests in all the companies in the S&P. If you believe that the S&P, over time, will produce good results, you have that as one of the components in your portfolio. You certainly do not need a broker, pay for advice, or pay fees simply to invest in index funds.
> Average return of S&P is 10% since the 20's. Average return on annuities -- 3% - 4%. Guess what? Average inflation is in that range. If you're young, you have decades of returns that will compound. Look at the Rule of 72 to give you an idea.




the problem when spending down is averages don't `work anymore ...the sequences of real returns are what counts ... no matter how good the 30 year average is for a retirement , it can fail 15 years sooner with the same average return and average inflation depending on the real life order of those gains and losses ..

so annuities alone are tough to count on ... but spia's  when combined with your own investing and some tax free permanent life insurance for a spouse are combined , that can become a very effective comprehensive package .


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## retiredtraveler (May 10, 2019)

mathjak107 said:
			
		

> the problem when spending down is averages don't `work anymore ...the sequences of real returns are what counts ... no matter how good the 30 year average is for a retirement.....so annuities alone are tough to count on ... but spia's  when combined with your own investing and some tax free permanent life insurance for a spouse are combined , that can become a very effective comprehensive package .



Agree. Most of this is moot, as you well know, if you're talking about someone who is in their 50's and suddenly 'discovers' they can't retire. Everything hinges on starting in your 20's or 30's, so most readers on this forum are past that.


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## retiredtraveler (May 10, 2019)

Don M. said:


> Financial planning for retirement requires that a person recognize, at a fairly early age, that they, too, will one day got old and no longer be able to work.  Living paycheck to paycheck, and carrying large amounts of debt well into the final working years is a sure recipe for being financially strapped when retirement comes.  Fortunately, we had parents who practiced good financial behavior, and imbedded that attitude in us.  We didn't buy fancy cars, live in expensive houses, or take lavish vacations...we lived reasonably modest, and saved as much as we could.



Well done (and I thank my parents too as you do)!


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## mathjak107 (May 10, 2019)

retiredtraveler said:


> Agree. Most of this is moot, as you well know, if you're talking about someone who is in their 50's and suddenly 'discovers' they can't retire. Everything hinges on starting in your 20's or 30's, so most readers on this forum are past that.


yes and no .... investing needs to start young .. but a lot of planning and mapping out does not happen until you are ready to retire ... immediate annuities are not bought until you are ready ... single premium life policies can be bought when you ready ... but you need to have the resources by that stage to work with


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