# How much is enough to retire?



## Sippican (Jan 2, 2023)

With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
What are other folks doing, and is it working for you?


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## katlupe (Jan 2, 2023)

Welcome to our forum! I am sure others will come along with much more knowledge than I have on that topic. Glad you joined us here today.


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## Sippican (Jan 2, 2023)

Thanks! Not sure how I found this, but glad I did!


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## moviequeen1 (Jan 2, 2023)

Hi Sippican, welcome glad you found us
If you look at the' Retirement Thread' on the site ,you will notice a topic called' Financial', you might want to ck out what posters are saying. I've been in the stock market for yrs, my dad started me & my siblings yrs ago. I have a  financial /stockbroker been with since '93, very happy with results
 You'll meet wonderful group of members from around the world here at SF,cool place to hang out every day
 Sue in Buffalo,NY


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## Myquest55 (Jan 2, 2023)

Also, Welcome!  You're on the right track.  
My personal thoughts are that you need to focus on YOUR retirement needs - not always listen to "the experts."  My biggest "Ah Ha" moment came when I began to understand my monthly bills.  Those didn't change much from when DH was working and when he retired.  Once you understand what you are paying out each month - you need to invest with the understanding that you must create monthly income to cover those expenses - plus a little more (for a rainy day?).  
Thus, I waited until FRA (Full Retirement Age) to take my Soc. Sec. - it paid a larger monthly amount than taking it at 62 and we couldn't wait until age 70.  I set up several annunities (that lock in at a market high point) to pay monthly - I knew I would not have the discipline to withdraw the right amount by myself.  Plus we have an investment account that floats with the market.
  So far, we have managed comfortably on SSDI (disability) until age 65, Soc. Sec., a pension payment and an inherited IRA that will pay out for 10 years.  For us - it is enough and we should easily cover the expenses of a Continuing Care Retirement Community that we have picked out.   Good luck!


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## Sippican (Jan 2, 2023)

Myquest55 said:


> Also, Welcome!  You're on the right track.
> My personal thoughts are that you need to focus on YOUR retirement needs - not always listen to "the experts."  My biggest "Ah Ha" moment came when I began to understand my monthly bills.  Those didn't change much from when DH was working and when he retired.  Once you understand what you are paying out each month - you need to invest with the understanding that you must create monthly income to cover those expenses - plus a little more (for a rainy day?).
> Thus, I waited until FRA (Full Retirement Age) to take my Soc. Sec. - it paid a larger monthly amount than taking it at 62 and we couldn't wait until age 70.  I set up several annunities (that lock in at a market high point) to pay monthly - I knew I would not have the discipline to withdraw the right amount by myself.  Plus we have an investment account that floats with the market.
> So far, we have managed comfortably on SSDI (disability) until age 65, Soc. Sec., a pension payment and an inherited IRA that will pay out for 10 years.  For us - it is enough and we should easily cover the expenses of a Continuing Care Retirement Community that we have picked out.   Good luck!


Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
Thanks again for your thoughtful response.


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## jimintoronto (Jan 2, 2023)

Sippican said:


> Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
> I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
> Thanks again for your thoughtful response.


How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.


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## Myquest55 (Jan 2, 2023)

Ah, Sippican, I have 2 advisors and have split our accounts between the 2 companies plus our checking & savings with Navy Fed. Credit Union - just in case.  (too many stories, along the way, of Advisors taking off with client's money or going under)   Don't limit yourself too much - it is their job to know the market and economy.   Its good to stay informed.
You're welcome!


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## Nemo2 (Jan 2, 2023)

jimintoronto said:


> How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.


Not attempting to offer advice, but the R.E. market, Canada wide, appear to be poised, (if they haven't already started), to pop, and 17% returns make me uneasy.  Good luck.


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## Medusa (Jan 2, 2023)




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## NorthernLight (Jan 2, 2023)

Welcome, @Sippican  ! I never prepared for retirement, because I thought Prince Charming would take care of such things. I also never made much money. 

A few years before I retired, I found out how much the Canadian public pensions amounted to, and it sounded like an awful lot to me. But things changed, and I ended up moving to a "dying" town just to afford rent. I'm doing okay, but things are tight.

Occasionally a young person asks me if I have any advice for them. I tell them to try to put a little money aside, even if it's only 5% of their income.

People say money isn't important, they're happy with this and that. Well, I can't afford this or that!


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## jimintoronto (Jan 2, 2023)

Nemo2 said:


> Not attempting to offer advice, but the R.E. market, Canada wide, appear to be poised, (if they haven't already started), to pop, and 17% returns make me uneasy.  Good luck.


This REIT owns commercial buildings across Canada. It trades on the TSX and has done so for 11 years, with consistent annual returns ranging from 12 to 17 percent . JimB.


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## Nemo2 (Jan 2, 2023)

jimintoronto said:


> This REIT owns commercial buildings across Canada. It trades on the TSX and has done so for 11 years, with consistent annual returns ranging from 12 to 17 percent . JimB.


Go for it then, if you think it's a buy.....me, among other things, I'd consider the increases in working-from-home, and shopping online, and how those will impact the commercial R.E. market......I won't even mention 'recession'...(oops, too late).


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## Disgustedman (Jan 2, 2023)

Personally I applaud each person who retires with wealth in a paid off house or more. I wish I'd had you for a guide, mentor or friend.

I might not be in the position I am had we been. Still, congrats of smart investments, good planning and light indulgences.


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## Sawfish (Jan 2, 2023)

Sippican said:


> With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
> I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
> I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
> What are other folks doing, and is it working for you?


It's an interesting phenomenon that early in life you have a small pile of principal and so to get an *absolute* return that is satisfactory you are looking for a higher rate of return.

But if you have, e.g., 5M out there, a 4.50% rate is just fine to live on and even to marginally expand.

I don't personally mess with stocks/bonds/ETFs/REITs/etc. I do not know enough about it and also would have to keep up with it. The management company does that within a fairly narrow set of goals, which is largely preservation of capital. Schwab private client for most retirement; Ameriprize and Ameritrade for some other account, retirement and post-tax.

We have rental properties, several small apts. These I do keep up with. They give 5-12% cash-on-cash, each starts at the lower figure and often over time increase towards the higher end. Due to changes in landlord/tenant laws it is getting more risky than before, however.

The next round of financing of them will also be a challenge. On average, you are refi'ing or selling every 7-10 years. The longest we've ever held anything is 14 years.

So far it is working...


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## Sawfish (Jan 2, 2023)

Sippican said:


> Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
> I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
> Thanks again for your thoughtful response.


YES! about watching expenditures!

I'm a life-long tightwad, known by all relatives as being tight with a buck, so I actually *like* that part, but...


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## Timewise 60+ (Jan 2, 2023)

I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63, my retirement age was 66.  After a good review with my financial advisor, we decided to not start SSI until 66.  Because I was over 50 the company that shut down gave me a good severance bonus and I had saved money for an emergency over the years.  We lived on that money until I turned 66, allowing us to leave our nest egg intact until 66 as planned.  

After we retired, we found our expenses really were less than we thought.  We found that our SSI and our savings would be enough for us to live on, we did already have our home paid for, so it was just bills, food, and medical and fun money that we needed.   It is now 7 years later, and we still feel we are in good shape going forward.   We have traveled some and pretty much feel free to do things we enjoy.  

Saving for retirement really is important...


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## Sippican (Jan 2, 2023)

jimintoronto said:


> How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.


17% is a high number. REITS have a place in some portfolios. I had a medical properties REIT. It was ok, but fluctuated way too much on share price for me. I'm going into retirement this year and am looking very conservative going into 2023 with the state of the US economy. A 'required' investment would make me hesitant for a couple of reasons; 1) Why? 2) what is the duration you must hold before you can liquidate?


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## Sippican (Jan 2, 2023)

Nemo2 said:


> Go for it then, if you think it's a buy.....me, among other things, I'd consider the increases in working-from-home, and shopping online, and how those will impact the commercial R.E. market......I won't even mention 'recession'...(oops, too late).


Good points...


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## Sippican (Jan 2, 2023)

Disgustedman said:


> Personally I applaud each person who retires with wealth in a paid off house or more. I wish I'd had you for a guide, mentor or friend.
> 
> I might not be in the position I am had we been. Still, congrats of smart investments, good planning and light indulgences.


Ahhhh, nope, not a paid off house. all 3 financial advisors advised against it. With a 2.75% interest rate and monthly P&E of $866.00, I could get far more on my investments than 2.75%. At anytime I could pay it off, but won't. Let it ride and use the money to make more than the 2.75%.


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## Sippican (Jan 2, 2023)

Sawfish said:


> It's an interesting phenomenon that early in life you have a small pile of principal and so to get an *absolute* return that is satisfactory you are looking for a higher rate of return.
> 
> But if you have, e.g., 5M out there, a 4.50% rate is just fine to live on and even to marginally expand.
> 
> ...


Sounds like a good plan!
Landlord/tenant laws are the worst. Very difficult to navigate. 
I had a tenant once that went as far as they could in the court system. 6 months (this was back decades ago) in the court system and it came down to Sheriffs at the door to move them.
I chuckled from across the street watching the deadbeats loading a sofa on the top of their car, in the pouring rain.


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## Nemo2 (Jan 2, 2023)

Timewise 60+ said:


> I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63


I was forced to continue working until I was 46.......... that was 34 years ago....I'd've preferred never to have started, but I bit the proverbial bullet and stuck it out, (not continuously of course).

We have nowhere near the $5 million that Sawfish mentioned, (I'm not sure I could see it from here even if I stood on the roof)......but we handle our own finances/investments and have never spent more than we bring in, (the Micawber Principle), and generally the outgo is considerably less.  We're not spenders, there's basically nothing we want, and we have what we need, but we do like to travel......on our terms...which is close to ground level because that's what we enjoy.......chacun à son goût  I guess.


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## Sippican (Jan 2, 2023)

Timewise 60+ said:


> I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63, my retirement age was 66.  After a good review with my financial advisor, we decided to not start SSI until 66.  Because I was over 50 the company that shut down gave me a good severance bonus and I had saved money for an emergency over the years.  We lived on that money until I turned 66, allowing us to leave our nest egg intact until 66 as planned.
> 
> After we retired, we found our expenses really were less than we thought.  We found that our SSI and our savings would be enough for us to live on, we did already have our home paid for, so it was just bills, food, and medical and fun money that we needed.   It is now 7 years later, and we still feel we are in good shape going forward.   We have traveled some and pretty much feel free to do things we enjoy.
> 
> Saving for retirement really is important...


Sounds like you are living the life most folks dream of!


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## Muskrat (Jan 2, 2023)

I really am just lucky I was raised by my mother. One thing she knew was how to make do. We had little. Good practice for a divorce at 40. I was pretty focused to not be poor. I got my nursing license and the race was on. I do not know much about stocks. Rather terrible at it in fact. No financial advisor. But….I have been lucky in real estate.


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## C50 (Jan 2, 2023)

Sippican said:


> With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
> I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
> I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
> What are other folks doing, and is it working for you?



Welcome!

In the last couple of years I too have decided fixed earnings are a better fit for me.  I still have a little over 20% of my portfolio in the market but the rest is all fixed interest investments.  I may pull that last bit out of the market soon and move it to a fixed earning account, then I will never have to check the ticker tape again!

My thinking at this point in my life is a steady return is so much easier to plan around, and just makes me more comfortable. Honestly if I can keep my money in 3% to 5% 
earnings I should be able to live comfortably for the rest of my life.


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## Tish (Jan 2, 2023)

@Sippican it's a pleasure to meet you.


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## HoneyNut (Jan 2, 2023)

Sippican said:


> one number you can't fit into any equation to figure out if you have enough...when you will die.


Yes this number sure makes a difference and not knowing it is frustrating.  Though knowing it would probably indicate some really bad news.

Before I retired the company I worked at had retirement topic webinars, and one of them taught that people need to have 5 years more money than they think they will need, in order to have the confidence to spend what they can afford in retirement.

I just can't figure out what the base number is.  According to the Social Security website, a woman my age can expect to live to age 88, so if I add 5 years to that it would be 93.  But, otoh I've read that genetics is the biggest factor in life expectancy and when I add up my parents and grandparents ages at death (and add in some years to compensate for a couple of them smoking), it seems like genetically I only have until 79 yr as my life expectancy.  Maybe I can add a couple years for being female and for improvements in health care, but that just ups it to 83.

So I think realistically 88 yrs would include the 5 extra years recommended by the webinar.  

Gee, maybe I should go to Amazon and order that fan I wanted.


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## Sawfish (Jan 2, 2023)

Nemo2 said:


> I was forced to continue working until I was 46.......... that was 34 years ago....I'd've preferred never to have started, but I bit the proverbial bullet and stuck it out, (not continuously of course).
> 
> We have nowhere near the $5 million that Sawfish mentioned, (I'm not sure I could see it from here even if I stood on the roof)......but we handle our own finances/investments and have never spent more than we bring in, (the Micawber Principle), and generally the outgo is considerably less.  We're not spenders, there's basically nothing we want, and we have what we need, but we do like to travel......on our terms...which is close to ground level because that's what we enjoy.......chacun à son goût I guess.


First, I was using 5M as a easy to manipulate example. I don't have 5M, either!

I think lots of people are led to believe that at retirement, all of a sudden you enter a golden era where you no longer deny yourself the things you excluded when younger. This is how my brother  thinks, it looks like.

But for me I've never been comfortable spending money and for many years made a sort of a game in how not to spend money. After a while the game becomes more satisfying than acquiring stuff, so it becomes a positive feedback loop.

But you sorta have to be into self-denial to start with, or it would be too hard.

Yes! I like to run a monthly surplus!!! It doesn't always happen, but I *like* it.

I'm happy, my wife says and acts like she is too, and you folks sound happy.

More power to you!!!


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## Sawfish (Jan 2, 2023)

Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement  lifestyle?

We have one daughter. I was almost 50 when she was born and by then I had lived the life of a childless old male, and had been fairly self-indulgent, within reason.

So after she got going I wanted to get the best life-toolkit for her (carefully selected private college prep K-12--I tool 4 years selecting and treated it as if I were taking an investment position in her name), then get her thru college with no debt.

This is all done.

Then I wanted to increase/enhance our own financial position without increasing personal expenditures other than for inflation. Happily, my wife seems to be on board  with this.

Finally, we set up an estate strategy that made sense, spent perhaps a year at it. I'm fairly pleased with it--any substantial improvements would require us to move from a tenancy-in-common state to a community property state.

These kinds of considerations have really dictated how I'm living right now, which is to try to continue to expand our financial positions.


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## Nemo2 (Jan 2, 2023)

Sawfish said:


> Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement  lifestyle?


I've been divorced once, widowed once.......never had kids, never wanted kids......now, thanks to my supervisor, (the love of my life), I have 5 granddaughters whom I adore.  If the proverbial nest egg continues to appreciate, once we're gone they, and everyone else in our will, are welcome to it.   (We're unlikely to come knocking on their doors asking for it back.)

We don't spend, not because we're misers and deny ourselves, and not because we're saving it for others, but because there's generally nothing we _want......_and if we ever do want something, we get it.......rare occasions.


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## Sippican (Jan 2, 2023)

NorthernLight said:


> Welcome, @Sippican  ! I never prepared for retirement, because I thought Prince Charming would take care of such things. I also never made much money.
> 
> A few years before I retired, I found out how much the Canadian public pensions amounted to, and it sounded like an awful lot to me. But things changed, and I ended up moving to a "dying" town just to afford rent. I'm doing okay, but things are tight.
> 
> ...


Money is the lubricant of life


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## Sippican (Jan 2, 2023)

Tish said:


> @Sippican it's a pleasure to meet you.
> 
> View attachment 260274


Thanks! Love the Gold Coast and The Rocks!


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## Timewise 60+ (Jan 2, 2023)

Sippican said:


> Sounds like you are living the life most folks dream of!


I mistakenly made it sound different than it is.  We watched our spending all of our lives, if we wanted a vacation or to buy something we planned and saved for it.  After over 50 years of living like that, it has become our preferred way of living.  Therefore, when we retired nothing changed, we know how much we spend and have emergency money set aside for unexpected problems including health issues.  We are comfortable and have only the limitations we have always had...it works very well for us.


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## Sippican (Jan 2, 2023)

Sawfish said:


> Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement  lifestyle?
> 
> We have one daughter. I was almost 50 when she was born and by then I had lived the life of a childless old male, and had been fairly self-indulgent, within reason.
> 
> ...


I have 3 boys. All in their 30's and successful. 
They always tell me to spend my money and don't worry about them.
So, when it comes to leaving a financial legacy, it will be towards my grandchildren. Making sure that my Trust spells out exactly when and how they can withdraw funds.


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## Sawfish (Jan 2, 2023)

Sippican said:


> Money is the lubricant of life


Exactly. It's fat put away for lean times.

It is the grease that allows you to squeeze thru places you'd not otherwise be able to pass.


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## Sawfish (Jan 2, 2023)

Timewise 60+ said:


> I mistakenly made it sound different than it is.  We watched our spending all of our lives, if we wanted a vacation or to buy something we planned and saved for it.  After over 50 years of living like that, it has become our preferred way of living.  Therefore, when we retired nothing changed, we know how much we spend and have emergency money set aside for unexpected problems including health issues.  We are comfortable and have only the limitations we have always had...it works very well for us.


Yes.

We never were spontaneous or impulsive, and it's still the same.


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## Sawfish (Jan 2, 2023)

Sippican said:


> I have 3 boys. All in their 30's and successful.
> They always tell me to spend my money and don't worry about them.
> So, when it comes to leaving a financial legacy, it will be towards my grandchildren. Making sure that my Trust spells out exactly when and how they can withdraw funds.


If I may ask: where is the Gold Coast you referred to?

I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.


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## NorthernLight (Jan 2, 2023)

Sawfish said:


> Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement  lifestyle?


I bought a life insurance policy so my daughter would have "something." Some time later, I couldn't afford the payments any more. But she was already doing waaaay better than me.

I wrote a will once, when I was living with someone, so that he would get all the household goods. The executor would get everything else, which would barely cover the inconvenience and labor.

I haven't written another will, as anything left would just be paperwork, an old car, and other hassles. I can't think of anyone I'd want to burden with that.


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## Sippican (Jan 2, 2023)

Sawfish said:


> If I may ask: where is the Gold Coast you referred to?
> 
> I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.


The Gold Coast is a metropolitan region south of Brisbane on Australia’s east coast. It's famed for its long sandy beaches, surfing spots and elaborate system of inland canals and waterways. Many wineries in the area.


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## Sippican (Jan 2, 2023)

Sawfish said:


> Exactly. It's fat put away for lean times.
> 
> It is the grease that allows you to squeeze thru places you'd not otherwise be able to pass.


Thats one way to put it!


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## Sippican (Jan 2, 2023)

Sawfish said:


> If I may ask: where is the Gold Coast you referred to?
> 
> I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.


Oh, and the Rocks....is a section of Sydney that is a favorite area for bars and clubs. Back in the day, its where the first inhabitants landed there and were also called aboriginals. I mentioned in my response because the writer was from Australia.


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## Sawfish (Jan 2, 2023)

Sippican said:


> The Gold Coast is a metropolitan region south of Brisbane on Australia’s east coast. It's famed for its long sandy beaches, surfing spots and elaborate system of inland canals and waterways. Many wineries in the area.


Newcastle?


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## Sawfish (Jan 2, 2023)

Sippican said:


> Oh, and the Rocks....is a section of Sydney that is a favorite area for bars and clubs. Back in the day, its where the first inhabitants landed there and were also called aboriginals. I mentioned in my response because the writer was from Australia.


I think I would really have liked Australia.


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## Sippican (Jan 2, 2023)

HoneyNut said:


> Yes this number sure makes a difference and not knowing it is frustrating.  Though knowing it would probably indicate some really bad news.
> 
> Before I retired the company I worked at had retirement topic webinars, and one of them taught that people need to have 5 years more money than they think they will need, in order to have the confidence to spend what they can afford in retirement.
> 
> ...


Live your best life, everyday, because you never know if there will be a tomorrow. 
Every morning when I wake, I put my two feet on the floor and think. God has a plan for me because he let me wake up today and move under my own power. How lucky we all are to say that and yet we take it for granted sometimes. Some people would give anything to be able to do that every day.....Live your best life.


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## bowmore (Jan 2, 2023)

I suggest you go to early-retirement.org. They have a program called Firecalc that is very good.


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## mathjak107 (Jan 3, 2023)

Firecalc and the fiedelity planner are two very good tools


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## mathjak107 (Jan 3, 2023)

The question of how much is enough is like asking how long is a rope …

for one thing how much your draw rate will be is a major factor .

we have had 122 rolling 30 year retirement periods to date .

over 60% have failed trying to use just fixed income at a 4% inflation adjusted draw .

that is an awful success rate .

so if someone is using no equities or little equities they need to reduce that draw .

it can mean as much as a 25% pay cut if one has to go to 3% draws instead because they want to use only fixed income .

you need at least 35% equities to get at least a 90% success rate of lasting 30 years to draw 4% inflation adjusted .

unless one is going to stick to a lower draw rate making inefficient use of the money one worked so hard to accumulate by using only fixed income , it is recommended that one at least goes to at least 35% equities so they can safely draw 4% inflation adjusted as a minimum


here is a chart of draw vs allocation


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## mathjak107 (Jan 3, 2023)

here are the firecalc results for a 500k savings with just fixed income , spending 20k a year inflation adjusted from the portfolio.

you want at least a 90% success rate .

this is only the portion the portfolio can contribute, all other income gets added to it .

you can see it has failed miserably already over and over

FIRECalc Results​Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.



FIRECalc looked at the 122 possible 30 year periods in the available data, starting with a portfolio of $500,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 122 cycles. The lowest and highest portfolio balance at the end of your retirement was $-258,780 to $1,174,787, with an average at the end of $95,698. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 64 cycles failed, for a success rate of 47.5%.


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## Jean-Paul (Jan 3, 2023)

With the Federal Reserve System's unconstutional so-called "dollar"  fiât currency, (debased 98% since Fed création, 1913), I expect huge continuing future dollars debasement.

The interest on the 30...100 T$ (largely unreported) US government debts will consume all taxes paid in by 2035. Essentially,  the USA is already insolvent.

I Suggest Real estate, physical assets, certain collectables may be better to hold than dollars denominated assets like cash, stocks, REIT, etc. for  preservation of future retirement savings.

THIS IS NOT FINANCIAL ADVISE!!! PLEASE Consult your financial advisor....
Bon  courage 

Jon
an optimist in the nuclear age 




j


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## mathjak107 (Jan 3, 2023)

Actually if you take the value of everything in this country and look at it as what we owe is a mortgage on it , you would find we actually come in with less debt as a percentage then most Americans do  with their mortgage


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## Jean-Paul (Jan 3, 2023)

Mathjak You mix up the US government liabilities ( on books plus off the books) with the assets " value of everything in the country " owned by the PEOPLE, and not government property.

audit  the Fed, audit the Pentagon, 

Jon


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## mathjak107 (Jan 3, 2023)

Jean-Paul said:


> Mathjak You mix up the US government liabilities ( on books plus off the books) with the assets " value of everything in the country " owned by the PEOPLE, and not government property.
> 
> audit  the Fed, audit the Pentagon,
> 
> Jon


I am not mixing it up at all ….that debt is like a mortgage on the value of this country and all our assets as well as the govt assets all owe it ….we are the govt


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## palides2021 (Jan 3, 2023)

Sippican said:


> Ahhhh, nope, not a paid off house. all 3 financial advisors advised against it. With a 2.75% interest rate and monthly P&E of $866.00, I could get far more on my investments than 2.75%. At anytime I could pay it off, but won't. Let it ride and use the money to make more than the 2.75%.


I could never understand why these financial advisors advise against paying off your house. It's not really yours until you pay it off. Is it?


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## palides2021 (Jan 3, 2023)

Sippican said:


> Live your best life, everyday, because you never know if there will be a tomorrow.
> Every morning when I wake, I put my two feet on the floor and think. God has a plan for me because he let me wake up today and move under my own power. How lucky we all are to say that and yet we take it for granted sometimes. Some people would give anything to be able to do that every day.....Live your best life.


Yes! I agree with you absolutely!


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## Sippican (Jan 3, 2023)

palides2021 said:


> I could never understand why these financial advisors advise against paying off your house. It's not really yours until you pay it off. Is it?


Well, actually it is yours, for as long as you want it to be. When you look at a home from a financial standpoint, it makes sense. 
The money I would have spent paying off the house to do away with 2.75%, I can make 5,6,7%, pay the 2.75% and still make money. 
If paying off a house brings someone comfort, then thats fine. But from a 'utility' standpoint (having a roof over your head) it makes sense from a financial standpoint.
I can do the same things to the house/home either way. 
Putting your money in revenue generating assets, while paying down a very low interest rate, is a prudent approach. 
Its all about the interest rate and your funds available that determines if it makes sense. If someone has a high interest rate (6-7%) then it makes sense to pay it down sooner or refinance at a lower rate if possible.


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## palides2021 (Jan 3, 2023)

Sippican said:


> Well, actually it is yours, for as long as you want it to be. When you look at a home from a financial standpoint, it makes sense.
> The money I would have spent paying off the house to do away with 2.75%, I can make 5,6,7%, pay the 2.75% and still make money.
> If paying off a house brings someone comfort, then thats fine. But from a 'utility' standpoint (having a roof over your head) it makes sense from a financial standpoint.
> I can do the same things to the house/home either way.
> ...


Yes, paying off the house did bring me comfort, and the worst-case scenario is the bottom-line for me. For example, if there was a Stockmarket crash, or run on the bank, or a catastrophe, or an illness that ran through all my money (I've seen this with people who had cancer and spent all their money on treatments) and I was left with little or no money. Then I would lose the house that I thought was mine (or borrow more money to keep it) if I could not continue paying my mortgage payments, and insurance, and property taxes, etc. Also, by the time you're done paying, let's say a 500,000 dollar home, with 30-year mortgage, for example, you will have paid a lot more for it than the initial cost. I know 2.75% is low, but it is not 0%. I will continually be on this treadmill of owing money on my house - somehow like a rental. These are my thoughts.


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## Sippican (Jan 3, 2023)

palides2021 said:


> Yes, paying off the house did bring me comfort, and the worst-case scenario is the bottom-line for me. For example, if there was a Stockmarket crash, or run on the bank, or a catastrophe, or an illness that ran through all my money (I've seen this with people who had cancer and spent all their money on treatments) and I was left with little or no money. Then I would lose the house that I thought was mine (or borrow more money to keep it) if I could not continue paying my mortgage payments, and insurance, and property taxes, etc. Also, by the time you're done paying, let's say a 500,000 dollar home, with 30-year mortgage, for example, you will have paid a lot more for it than the initial cost. I know 2.75% is low, but it is not 0%. I will continually be on this treadmill of owing money on my house - somehow like a rental. These are my thoughts.


Fair points. But, your worst case scenario is not worst case, albeit cancer is devastating.
Bottom line is, if there was a stock market crash, run on the bank, or catastrophe, the value of your 'investment' would dwindle down greatly from 500,000. Real estate is not immune from external economic downturns.
Your reference to property tax and insurance will need to be paid either way, ownership or mortgage.
Mortgage interest deductions also play into the equation as a plus.
Oh, and if you did (God forbid) get a terminal disease, you may have to sell your house to pay for treatments.
Everyones situation is different, I get it.
It works for me because my principal and interest (I'm leaving out insurance and taxes because they are paid either way) is $860 a month. So, paying it off doesn't really matter. Like I said, everyones situation is different,


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## palides2021 (Jan 3, 2023)

Sippican said:


> Fair points. But, your worst case scenario is not worst case, albeit cancer is devastating.
> Bottom line is, if there was a stock market crash, run on the bank, or catastrophe, the value of your 'investment' would dwindle down greatly from 500,000. Real estate is not immune from external economic downturns.
> Your reference to property tax and insurance will need to be paid either way, ownership or mortgage.
> Mortgage interest deductions also play into the equation as a plus.
> ...


Thanks for all your insights!


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## Brookswood (Jan 3, 2023)

Check out some of the retirement calculators on sites like Vanguard and Schwab. 

Also check out FireCalc which will give you an idea of the how you assets would have survived in over 100 market periods from the past.   Nobody can predict the future. The past is the best we can do.


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## OneEyedDiva (Jan 3, 2023)

At least financial "experts" are starting to admit that everyone doesn't need that cliche one million $$ to retire. How much depends on each person's particular set of circumstances. I remember reading a refreshing article in Money magazine about people who retired on much less than the 80% of final salary usually recommended. My colleagues didn't believe I could make it in retirement when I left at age 50. I wasn't making as much as them because they had been on state payroll much longer than I was. I also lost 4% of my pension due to early retirement and couldn't collect SS for another 11 years (retired a month before turning 51). But I knew I'd be alright because...
~My housing expenses were/are about 27% of the average rents because I own a co-op apartment which seeks to keep costs down.
~I retired debt free
~I had excellent health insurance benefits which I didn't pay any premiums for until I got on Medicare

If any one of those factors had not been in place, I might have had a hard time. Once I started receiving SS, I was able to save/ invest almost the entire amount and have done that for over a decade.


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## mathjak107 (Jan 4, 2023)

Anyone who states that a million dollars is needed as some magic number is no financial adviser…those are click bait writers .

any planner knows better and there is no such number


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## Jean-Paul (Jan 4, 2023)

The perpetual debasement of the "dollar" mandated by the private unconstutional so called "Federal Reserve System" means your retirement savings purchase much less each year.

The old theoretical 2% inflation target meant 50% of your savings purchasing power is lost every 10 years.

Today the official (manipulated) rate is 4..6%, but the real rate is 8..13% per year.
Fed vs real CPI index comparisons
http://www.shadowstats.com/alternate_data/inflation-charts

If your portfolio makes less that that rate, your future retirement savings value is ever decreasing.

Thus there's no fixed number for the retirement amount as it will be dynamically ever increasing.

Only one unfortunatet concequence of a fiât unit of account.

Bon courage 

Jon


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## ronaldj (Jan 4, 2023)

how much is enough, someone once said, "just a little bit more." I have been a blue collar worker getting along and now a retired blue collar worker, getting along. do I want to leave something for my children, I taught them to work, give and save and they all today make twice or more than I ever did.  We are close and leave good memories.


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## mathjak107 (Jan 4, 2023)

Jean-Paul said:


> The perpetual debasement of the "dollar" mandated by the private unconstutional so called "Federal Reserve System" means your retirement savings purchase much less each year.
> 
> The old theoretical 2% inflation target meant 50% of your savings purchasing power is lost every 10 years.
> 
> ...


Diversified portfolios have beaten inflation over and over ..not every year , but they don’t have to beat it yearly ..it is our longer term averages that matter


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## leastlongprime (Jan 4, 2023)

Sippican said:


> With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
> I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
> I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
> What are other folks doing, and is it working for you?


Hello, Sippican.
I subscribe to a Liability=Income philosophy. Planned. Current Liability<Income.
Income streams and a reserve for severe inflation or major irregular expenses . Discretionary trading account is not counted towards retirement, yet. 
Approximate Income: 28% SS; 6% Pension, no cola; 25% GWLB Longevity annuities; 41% Rental Income.  
Will probably take the 2023, full allowable withdrawal from the annuities rather than just RMDs and going forward continue to do so. Any excess Income will go into cash account or CDs. 
No big debt or mortgage. Remaining student loan (parent's) ~$300/mn for another 8 yrs.
Current age 73/76. 

I have no idea "How much is enough to retire."
We live on what we get, whatever that may be.


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## Lethe200 (Jan 4, 2023)

C50 said:


> Welcome!
> 
> In the last couple of years I too have decided fixed earnings are a better fit for me.  I still have a little over 20% of my portfolio in the market but the rest is all fixed interest investments.  I may pull that last bit out of the market soon and move it to a fixed earning account, then I will never have to check the ticker tape again!
> 
> ...


Depends on how long you live. Inflation - even average inflation, far lower than what we have currently - will cut your ability to maintain your current lifestyle noticeably after 10 yrs, and drastically after 25.


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## mathjak107 (Jan 4, 2023)

Lethe200 said:


> Depends on how long you live. Inflation - even average inflation, far lower than what we have currently - will cut your ability to maintain your current lifestyle noticeably after 10 yrs, and drastically after 25.


Even a 4% draw will fail if one cannot achieve at least a 2% real return average the first 15 years of a 30 year retirement.

fixed income alone has failed to do that about 65% of the 122 rolling 30 year retirement periods we have had REGARDLESS OF RATES.

real returns are after inflation adjusting them


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## Brookswood (Jan 4, 2023)

Jean-Paul said:


> The old theoretical 2% inflation target meant 50% of your savings purchasing power is lost every 10 years.


I must disagree.   2% inflation will take 36 years for your money to lose 50% of it's value. 

   Ten years would require an inflation rate of about 7.2%, which we did have for a while this year. Actually we had a higher rate for part of this year.  That is a scary thought.


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## Brookswood (Jan 4, 2023)

Lethe200 said:


> Depends on how long you live. Inflation - even average inflation, far lower than what we have currently - will cut your ability to maintain your current lifestyle noticeably after 10 yrs, and drastically after 25.


Yup. We all took a nice haircut in 2022.   Today's lower inflation rate (if it sticks) only means that we are losing value more slowly. Do not believe those in the news media who imply that somehow we are clawing back some of the inflationary losses of 2022. Or that some government subsidy or rule is reversing the loss.  That is nonsense. It is gone.


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## OneEyedDiva (Jan 4, 2023)

mathjak107 said:


> Anyone who states that a million dollars is needed as some magic number is no financial adviser…those are click bait writers .
> 
> any planner knows better and there is no such number


MJ when I used to subscribe to Money and Kiplinger's, decades ago, I read so many articles that threw out that million dollar number. Same thing when I started reading articles online from ostensibly respected publications.


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## OneEyedDiva (Jan 4, 2023)

palides2021 said:


> I could never understand why these financial advisors advise against paying off your house. It's not really yours until you pay it off. Is it?


Exactly. And once it's paid off, you better not skp on paying taxes either. Could cost you your house. I think they advise against it because they want people to have adequate emergency funds, not wind up paying higher interest if they use other credit sources (with much higher interest rates) to fund their needs because they've spent all their money paying off their mortgages. But for people who can *well* afford it, I don't see why they shouldn't be mortgage free.


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## Blessed (Jan 4, 2023)

OneEyedDiva said:


> Exactly. And once it's paid off, you better not skp on paying taxes either. Could cost you your house. I think they advise against it because they want people to have adequate emergency funds, not wind up paying higher interest if they use other credit sources (with much higher interest rates) to fund their needs because they've spent all their money paying off their mortgages. But for people who can *well* afford it, I don't see why they shouldn't be mortgage free.



I am lucky to be mortgage free.  I was just reviewing my property taxes last night getting ready to send the payment.  In the scheme of things it might seem like a big hit but in reality it is not,  still cheaper to live in my own home than in an apartment.  The taxes will go down, at least 40% when I hit 65.  Then they will be locked in somewhat.  We are blessed in that regard. I have just been trying to make a new budget for the next 2 or 3 years based on all the information I can gather. Increased SS, insurance cost once I start Medicare, will it be better to get an advantage plan or keep my federal coverage.  Looks like federal will win that one so far. 

I always thought I would get to the point I would not have to worry, not to be constantly comparing options.  That is not the case for most of us, retired or not, fixed income or not, we all have to be proactive in watching the financial and insurance options we have available.


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## leastlongprime (Jan 4, 2023)

palides2021 said:


> I could never understand why these financial advisors advise against paying off your house. It's not really yours until you pay it off. Is it?


Re: Holding a mortgage while in retirement. Why?
Practically everyone lives on the concept of  Liability vs Income or liability < income, through your retirement.  If somewhere in your retirement, your Income falls below your liability requirements, for a length of time that also depleted your emergency funds, you will be in trouble. 

extreme case A: Asset rich (no mortgage, paid off home, not renting) and suddenly insufficient Income. What are your options?

extreme case B: Same Asset but with mortgage (you chose the equity) and same Income problem in case A. What are your options? and What are the options of the mortgage holder?

Example IRL: We have a PLUS student loan, @ X int rate; 8 yrs remaining; ~$300/mn payment. If we stopped paying on the PLUS, What will happen? Age 73/76. Did We just increase our cash flow ?


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## mathjak107 (Jan 5, 2023)

OneEyedDiva said:


> MJ when I used to subscribe to Money and Kiplinger's, decades ago, I read so many articles that threw out that million dollar number. Same thing when I started reading articles online from ostensibly respected publications.


Like I said , financial writers who have no clue …a million here in nyc can be like 500k in cheapsville .

plus we all back in to what we have and make it work ….

no respectable planner will ever throw out a magical number as a blanket statement


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## mathjak107 (Jan 5, 2023)

Brookswood said:


> I must disagree.   2% inflation will take 36 years for your money to lose 50% of it's value.
> 
> Ten years would require an inflation rate of about 7.2%, which we did have for a while this year. Actually we had a higher rate for part of this year.  That is a scary thought.


Actually when spending down to live the math is different .

when spending down you have sequence risk  so  what happens is excessive  negative real returns deplete money faster by causing more spending to buy the same thing leaving a lower balance each year .

any interest is on less money each year so under  the worst case outcomes vs the best case you can have a very big difference because of sequence risk.

don’t forget having 10 years up front of excessive inflation then 20 years of low inflation will have a very different balance left then the reverse will  when you are spending down . Yet the average inflation will appear the same amount.

so figuring averages when spending down is way way off because of the fact sequence risk plays a bigger roll and that means the order that inflation , our investments and our spending hits us has a big effect on how long the money will last when spending down


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## mathjak107 (Jan 5, 2023)

Blessed said:


> I am lucky to be mortgage free.  I was just reviewing my property taxes last night getting ready to send the payment.  In the scheme of things it might seem like a big hit but in reality it is not,  still cheaper to live in my own home than in an apartment.  The taxes will go down, at least 40% when I hit 65.  Then they will be locked in somewhat.  We are blessed in that regard. I have just been trying to make a new budget for the next 2 or 3 years based on all the information I can gather. Increased SS, insurance cost once I start Medicare, will it be better to get an advantage plan or keep my federal coverage.  Looks like federal will win that one so far.
> 
> I always thought I would get to the point I would not have to worry, not to be constantly comparing options.  That is not the case for most of us, retired or not, fixed income or not, we all have to be proactive in watching the financial and insurance options we have available.


Except there is a flaw in that thinking .

an important part of the equation is if you sold the house , got an apartment because you no longer need a whole house  and that money tied up in the house was invested in a balanced portfolio it would be generating an average of 6% a year over the long haul  Providing a nice cash flow and the comfort of liquid assets that can be had with the push of a button.

we rent now and if we bought a similar apartment to ours as a condo  it would cost us less  on the surface .

but once you figure that the over 400k spent on that apartment would no longer be generating a minimum of 24k in income that equation changes ..

it actually would cost us 18k a year in cash flow more then renting   If we bought .

the fact we would have a paid off condo in retirement means nothing ..we can’t spend the hall closet at the supermarket.  More important to us is the cash flow  we can enjoy and spend ..

plus we have the security of having access to our money instantly if needed and not count on costly loans if we ever wanted our money unlike when it’s trapped in a house .

actually we took it a step further ..we sold our house in 2003 and bought a extremely lucrative commercial real estate business in Manhattan .

we sold that off over the years and now the money we made using that money no longer in a house  can buy multiple homes like we had  If we wanted ..so today that money generates enough in our conservative balanced portfolio to not only pay the rent but our entire living expenses .

so I love these comparisons people do but they forgot those hundreds of thousands of dollars trapped in the house and the income not being generated by that money when they compare to renting .

I am not advocating renting in many parts of the country because I wouldn’t want to deal with some amateur landlord wanna bee but when it comes to the usual comparison people do they leave out an important financial consideration which is what that money tied up in the house would be bringing in .

here in nyc renting favors buying because we have mostly high rise living which has very different metrics in cost  to a house .

you can rent a two bedroom , 2 bath apartment with pool , tennis courts and gated entry here in queens for about 2600 a month ..single family homes start at 7 figures .

So most people  rarely rent what they would buy …so apple to Apple comparisons can be rare in the real world since most don’t rent as much house as they would buy ..especially if rentals offer apartment houses and high rises .

plus nyc has very strong tenant laws so most hi rise buildings have guaranteed renewal and rent increases  are determined by a voting board yearly .

so not all places have an advantage to owning  when one has choices of selling what they have and pocketing a lump sum to invest elsewhere.

but certainly in all cases the cash flow not being generated on that money tied up in the house has to be accounted for in any comparison


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## Blessed (Jan 5, 2023)

@mathjak107, I am not a financial wizard, I can only look at my day to day life here.  I could not even imagine living in NYC and the cost of living.  Right now for me, I would rather have the home equity.  I have other funds that I have even moved into low risk areas since the pandemic hit.

I was widowed in 2010, in addition I was sidelined by health problems to the point I can't work.  I don't qualify for disability but was able to draw my husband SS at age 60.  

We already went through that big hit in 2008, so I have been trying to build back up the balance since my husband passed and I was still working.  It is difficult sometimes but as I have aged I have realized that a want is not a need in my case. I have been able to give up those extras without suffering. 

Would appreciate any input but feel I am doing the right thing for right now.


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## mathjak107 (Jan 5, 2023)

NO one can say what is right for someone personally..

but there are certain parameters in calculations that one needs to consider to compare things .

I do want to say this though ,  anyone who lost money in 2008 lost money because of their own poor investor behavior , not markets .. diversified portfolios went on to go higher and higher so it is one’s poor actions that caused losses .

but in any case , how much you are drawing from savings to live determines how you need to invest …someone with 20% or less  in equities and drawing 4% inflation adjusted is taking very large risks of running out of money before they run out of time .

to support a draw rate of 4% inflation adjusted  has taken at least 35- 40% equities to have a 90% chance of not running out of money over 30 years .

on the other hand if one takes a 25% pay cut to a 3% draw they should be fine with just fixed income .

personally though I didn’t scrimp and save a lifetime to make inefficient use of my money at just a 3% draw , but others may feel differently

so to have a safe secure retirement is dependent on not what we want to do , but what the needs are we want to meet with a high degree of success


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## Blessed (Jan 5, 2023)

@mathjak107, in 2008 we were going through a tough period, husband had cancer, we had to meet a lot of out of pocket expenses for about five years that ate into our normal savings.

Investment/retirement funds were never touched in that time frame but we took a big hit in liquid assets at that time.  Then we had to look at market loss.  Not an easy time but it was what it was.  

I have not had to tap into retirement funds/investment funds and do not anticipate that anytime in the near future.  Like I said, the house is paid off and continues to appreciate, I see that as a good investment.  The kid was put through college without any student loans, good investment.  I will admit I live a simple life, I drive a 14 year old car that only has 40M miles.  I no longer work so I don't have to buy work clothes. I don't have to spend money at the beauty shop, hair and nails.  To be honest, my biggest expense are the care of my dogs and medical bills after insurance. for me.

The home, my son and his family lived here for 3 1/2 years saving for their own.  I also moved my Mom in when she could not live alone for a couple of years.  So, the home has served me well. If things keep going I could see the kids giving up their home and coming back here.  I have the room and the out of pocket expense for them would be much lower.  In any case, I can't see myself doing anything unless I become unable to care for myself. At that point, the house would be sold.


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## mathjak107 (Jan 5, 2023)

Blessed said:


> @mathjak107, in 2008 we were going through a tough period, husband had cancer, we had to meet a lot of out of pocket expenses for about five years that ate into our normal savings.
> 
> Investment/retirement funds were never touched in that time frame but we took a big hit in liquid assets at that time.  Then we had to look at market loss.  Not an easy time but it was what it was.
> 
> ...


In retirement we don’t really care about a home appreciating anymore , those days are over ..

what we care about is cash flow ….that determines what we can spend on ourselves or kids and grand kids while we’re alive .

so the fact if we bought the condo may see appreciation on the money tied up in it , it can’t be enjoyed while we are alive .

so we feel much more secure with lots of liquid assets generating lots of cash flow for us while renting . We could buy something at any time but we see no reason to.

especially with all the protections renters have here …

don’t forget renters are a mixed bag  ranging from very poor with no assets or credit to buy and they likely will always be low end .

on the other hand there are well off renters who  can do better using the landlords money to provide a place to live , while deploying their own resources in to more lucrative things ..

our building has loads of professionals who are just starting out and instead of buying a house they are buying practices or businesses .

so this myth that renters are paying for nothing isn’t always true …many renters are just using the landlords money to provide that place to live so they can do better elsewhere


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## Blessed (Jan 5, 2023)

This is going to sound bad, I don't worry about what I want to do now because I don't have anyone to do it with.  I just want to get through the rest of my life without worry and be able to leave something behind, like a college account for the grand kids.  Already set up.


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## mathjak107 (Jan 5, 2023)

Sippican said:


> Well, actually it is yours, for as long as you want it to be. When you look at a home from a financial standpoint, it makes sense.
> The money I would have spent paying off the house to do away with 2.75%, I can make 5,6,7%, pay the 2.75% and still make money.
> If paying off a house brings someone comfort, then thats fine. But from a 'utility' standpoint (having a roof over your head) it makes sense from a financial standpoint.
> I can do the same things to the house/home either way.
> ...


The answer really is it depends .

when we keep a mortgage so we can invest or leave our mown money invested in effect we are borrowing to invest .

if most of us were going to borrow money to invest we want a risk premium for taking the risk over and above what we would want if we weren’t borrowing money to invest .

many make a mistake here ..

so as an example , if a risk free govt bond is paying 4 to 5% , if I am going to take  a mortgage and invest in my portfolio I want at least 2% to 3%  more as a risk premium over a risk free bond  to use borrowed money , plus I have to cover the interest .

at one time my 100% equity portfolio could do that .. but today it isn’t so easy to  get enough in a 40% equity portfolio to warrant using borrowed money and the associated risks of using borrowed money .

dont forget in down years like now you are shelling out tens of thousands in interest on top of regular spending .

so it isn’t a case in retirement of borrowing money to invest and simply getting a point or two better  like when you don’t borrow money ..you really want a risk premium on top of that one or 2% in retirement.

that puts a risk premium return at beating a bond rate of 4% or so , plus the mortgage interest , plus a risk premium of 2-3% for using borrowed money ..that is tough for a balanced portfolio to do


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## mathjak107 (Jan 5, 2023)

Blessed said:


> This is going to sound bad, I don't worry about what I want to do now because I don't have anyone to do it with.  I just want to get through the rest of my life without worry and be able to leave something behind, like a college account for the grand kids.  Already set up.


Well it All depends what percentage you are drawing out vs how you allocate ..


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## Blessed (Jan 5, 2023)

mathjak107 said:


> Well it All depends what percentage you are drawing out vs how you allocate ..



At this point I am not drawing anything out of my retirement account so I hope to be able to leave something, only time will tell.  I guess that applies to a lot of us.


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## mathjak107 (Jan 5, 2023)

Blessed said:


> At this point I am not drawing anything out of my retirement account so I hope to be able to leave something, only time will tell.  I guess that applies to a lot of us.



If you are not spending assets down then no problem in what you do . Your savings isn’t supporting you ..you really are blessed ha ha.

plus even if hypothetically if you sold the house and rented and took that lump sum and invested it , you don’t seem the type that would exhibit good investor behavior when things went down so there is no better option in my opinion then what you are doing


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## mathjak107 (Jan 5, 2023)

C50 said:


> Welcome!
> 
> In the last couple of years I too have decided fixed earnings are a better fit for me.  I still have a little over 20% of my portfolio in the market but the rest is all fixed interest investments.  I may pull that last bit out of the market soon and move it to a fixed earning account, then I will never have to check the ticker tape again!
> 
> ...


That is only true if inflation cooperates in the right sequence

those in 1965 and 1966 who retired never predicted expenses jumping double digits in just a few short years and staying up 

negative real returns had them going broke many more years a head of where they should have


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## mathjak107 (Jan 5, 2023)

In the years after 1965, the perfect storm of retirement killing conditions took place.

Inflation grew rapidly over the following decade, exceeding 10% in several years in the 1970’s and averaging 6% a year from 1965 to 1985.

Interest rates rose rapidly, from ~4% in 1965 to ~8% in 1970, up to 15% in 1982, causing bonds prices to plummet.

The combo of fast rising high inflation and rising interest rates destroyed bonds.


Stocks also performed horribly. Adjusted for inflation, the stock market didn’t rise above its 1965 value until  20 years later.

Dividends moved sideways over 2 decades

The most insidious portfolio killer was inflation.

Retirees were pulling out way more dollars to live then they ever imagined .

By the time. The smoke cleared the fact the greatest bull market in history was in their time frame did not help as they already spent down to far for markets to help.

those only in fixed income were destroyed even sooner 

Few even gave it a thought prior since inflation was low and not even on the radar


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## Packerjohn (Jan 5, 2023)

This question has been asked before.  There is no correct answer.  Usually some turkey financial adviser goes on the media about this time of the year and says you need $1.3 million dollars or so.  That is pure BULL!  It depends on your lifestyle and whether you have any debts and own your home or condo.

I have been retired now for 23 years and I will tell you a little secret for free.  No charge!  When you retire your health is a lot more important than the amount of money in the bank.  If you are sick, unhealthy and maybe dying, $10 million in the bank is not going to help you much.


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## mathjak107 (Jan 5, 2023)

Money doesn’t buy happiness but I learned early on it can buy important choices in life .

not everything can be fixed with money , we get that .

but choices in life are one of the most Important options you can have and many times it takes money.

even renovating your house so you can stay in it instead of having to go to a nursing facility is an important option paid for with money .

don’t underestimate the things money can do , as opposed to what it can’t do …

I grew up in an nyc housing project . I know what it can do


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## palides2021 (Jan 5, 2023)

mathjak107 said:


> Except there is a flaw in that thinking .
> 
> an important part of the equation is if you sold the house , got an apartment because you no longer need a whole house  and that money tied up in the house was invested in a balanced portfolio it would be generating an average of 6% a year over the long haul  Providing a nice cash flow and the comfort of liquid assets that can be had with the push of a button.
> 
> ...


Yes, there is money in real estate. When we owned a bigger home in a good area, and sold it, the money from the sale was able to buy 2 more homes in less expensive areas. I am now living in one of those homes, mortgage free.


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## mathjak107 (Jan 5, 2023)

palides2021 said:


> Yes, there is money in real estate. When we owned a bigger home in a good area, and sold it, the money from the sale was able to buy 2 more homes in less expensive areas. I am now living in one of those homes, mortgage free.


We sold the house , rented and bought a real estate package of 9 co-ops over looking Central Park in New York city’s second most desirable co- op in the city .

the hitch was they were original rent stabilized tenants who didn’t buy under the conversion. So they remained stabilized tenants .

they were paying half market rents 

we offered 100k to any tenant that would leave and 7 out of 9 took the offer and left .

we sold them for 1 to 2 million each .

plus we bought a 10% stake in some commercial lease rights in Manhattan  with real estate mogul Bernie spitzer  as a partner …elliot spitzer is his son .

so we scored big with a fabulous deal ….

all is sold now and we have no intention of buying anything .no reason to …we have better cash flow renting


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## Knight (Jan 5, 2023)

Given the age of many here a 30 year strategy should have been in place before reaching your 60's & 70's.  As is evident from the various posts no one set of circumstances is the same.  But the different approaches are interesting to read.


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## mathjak107 (Jan 5, 2023)

Knight said:


> Given the age of many here a 30 year strategy should have been in place before reaching your 60's & 70's.  As is evident from the various posts no one set of circumstances is the same.  But the different approaches are interesting to read.


i started investing in 1987


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## Knight (Jan 5, 2023)

mathjak107 said:


> i started investing in 1987


And from your posts you live a comfortable life.


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## mathjak107 (Jan 5, 2023)

Knight said:


> And from your posts you live a comfortable life.


it was a life long goal .

i grew up in the city projects and i promised myself i would never raise my own family in one as well as all the things we had to deny ourselves growing up would never happen again 

it kept me very focused for decades


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## palides2021 (Jan 5, 2023)

mathjak107 said:


> We sold the house , rented and bought a real estate package of 9 co-ops over looking Central Park in New York city’s second most desirable co- op in the city .
> 
> the hitch was they were original rent stabilized tenants who didn’t buy under the conversion. So they remained stabilized tenants .
> 
> ...


Very interesting, @mathjak107 ! I had some questions - 
When you bought the real estate package of 9 co-ops, was it at 20% down (or less) or did you pay in full? Also, to sell them at 1 - 2 million each, did you have to do much work on the units? I doubt if tenants took care of the property as they should (at least from my experience). So you probably need to put the cost and the time and effort it took you into the formula. How much time from purchasing to selling them did it take? Just curious.


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## squatting dog (Jan 5, 2023)

Way back when I was a whole lot younger, I kissed the wife and headed to work. Nothing unusual about the day. By nightfall that day, I was in intensive care with 2nd and 3rd degree burns over 60% of my body, and a less than 20% chance of survival. What that taught me was... save some for the future, but, don't spend so much time worrying about that future that you forget to enjoy life today.


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## mathjak107 (Jan 5, 2023)

palides2021 said:


> Very interesting, @mathjak107 ! I had some questions -
> When you bought the real estate package of 9 co-ops, was it at 20% down (or less) or did you pay in full? Also, to sell them at 1 - 2 million each, did you have to do much work on the units? I doubt if tenants took care of the property as they should (at least from my experience). So you probably need to put the cost and the time and effort it took you into the formula. How much time from purchasing to selling them did it take? Just curious.


No lenders will finance investors buying occupied stabilized apartments so these are all cash deals .

all apartments are sold as is both to us and by us .


the 9 apartment's were sold as the tenants took the offers ..the first couple went in the first year .

The rest  over about a 10 year period .

The last  two were sold to an investor group two years ago as the tenants wouldn’t take a buy out offer .

the apartments had a value of 1.1 million each .

we sold them for 360k for both at break even rents …so that gives you an idea how low these apartments that are occupied go for as tgere is no way to get the tenant out .

so it has a fair amount of risk but very very high reward


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## Gary O' (Jan 5, 2023)

Sippican said:


> Ahhhh, nope, not a paid off house. all 3 financial advisors advised against it. With a 2.75% interest rate and monthly P&E of $866.00, I could get far more on my investments than 2.75%. At anytime I could pay it off, but won't. Let it ride and use the money to make more than the 2.75%.


Yup

I'm no stock investor 
But keeping that money free to buy land, build a cabin, double (more like triple) my money......I'm there 
​


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## OneEyedDiva (Jan 5, 2023)

mathjak107 said:


> Like I said , financial writers who have no clue …a million here in nyc can be like 500k in cheapsville .
> 
> plus we all back in to what we have and make it work ….
> 
> no respectable planner will ever throw out a magical number as a blanket statement


Not disagreeing with you...just stating what I've come across over the years.


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## Brookswood (Jan 6, 2023)

mathjak107 said:


> so figuring averages when spending down is way way off because of the fact sequence risk plays a bigger roll and that means the order that inflation , our investments and our spending hits us has a big effect on how long the money will last when spending down


Excellent points!     Sequence of return risks can wipe out money very fast. Or, if one is lucky, extend the amount of time one's  pile of cash is around.     This is serious stuff.

Getting old and retiring is not for sissies!


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## mathjak107 (Jan 6, 2023)

Brookswood said:


> Excellent points!     Sequence of return risks can wipe out money very fast. Or, if one is lucky, extend the amount of time one's  pile of cash is around.     This is serious stuff.
> 
> Getting old and retiring is not for sissies!


Nice to see someone who understands how powerful sequence risk can be …


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## Brookswood (Jan 6, 2023)

mathjak107 said:


> Nice to see someone who understands how powerful sequence risk can be …


It's in the numbers. You know, math.   Thanks for the compliment.


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