Your imaginary retirement.

[Phoebe Loosinhouse]

My accountant ( and other sources, because I checked) say that for every $100,000 you have squirreled away, you can expect to take out 4% a year in order to have income yet conserve principle.

So, for every 100K you have, you get to spend the princely sum of $4,000 a year in addition to your:

pension, SS, etc.


$500 K nets your $20K, etc. etc. etc

How many people do you think have 500K tucked away?

How many people have THEIR ENTIRE NET WORTH in their house?

What do your property taxes alone cost you?

What is your plan?


I will say that I think one thing people could do right this second is look around and decide which of their friends and/or family they will be comfortable co-habitating with in the future in order to conserve expenses.

[Bluzmann57]

1. My plan is to leave

I think I'm heading to the Phillipines. Good people, low cost of living and modern conviences.

[Wizard777]

20. Don't forget about the terrorists. But they are getting them under control.

Their President Gloria Arroyo went to school with Bill Clinton. All in all it's not a bad place. But they have their fair share of problems. I have a friend on another board that keep us up to date on all the happenings in the Philipines.

[FreakinDJ]

2. Headed to the Philippines too

My wife already has a nice home there

on edit:

Health Coverage is about $75 per person/month

[Redstone]

3. Regarding your "Right-this-second look around:"

You're on to something there. You really are. I do believe that's going to be the survival model for many Americans, and not too far in the future...meaning right now.

Redstone

[FreakinDJ]

4. All the way from the Mexican border down to Panama

along the West Coast in retirement villages for Americans already

Thing is the Government of many of these countries sees serviceing the retirees and a viable industry for their people and a positive influx of dollars

[Habibi]

5. I'm already semi-retired

due to downsizing. I expect to be dead when I hit actual "retirement" age. Or happily cackling on the street, scaring the rich people.

[bbgrunt]

6. the sad thing is that the $100,000 you may have

tucked away in a mutual fund will not be worth $100,000 for very long.

[GoesTo11]

7. My retirement plan is to just keep working

Hope it pans out.
Or maybe my 401k will really be worth millions when I retire like the retirement calculators say it will with a 12% return or whatever. I'm skeptical about that, since the market has basically done 0% above inflation for people investing over the last 13 years.

[question everything]

8. This is why most people will continue to work until they die (nt)

[Ewellian]

9. I will be selling the house

and going to live..in a van down by the river.

[cliffordu]

10. I'm working on becoming a functioning "Ötzi the iceman".

Hunter-gatherer, completely able to live on what I can hunt with a bow and deadfall traps.

Livin' large on bunnies and quail.

[rug]

11. I'm on the RJReynolds Retirement Plan.

I'll just keep smoking so I don't have worry about retirement.

[tpsbmam]

12. I'm doing okay but I have friends who are really struggling....

I'm going okay because I've cut way back on everything and I'm very careful with my money right now. Ask me next year -- it may be a whole other story! But my house is paid for, which offers a tremendous sense of security these days. My neighbors, I'm afraid, are really at risk of going into foreclosure and I won't be able to help -- there are 5 of them, including 3 children under age 5. There just isn't enough room here or I'd make an offer if that day comes. But I have reached out to friends who are struggling and told them they have a place to live should the need arise. I could take in 2 people and would gladly do that if it would rescue a friend. I guess if it comes to that, it'll sort of be first come, first serve. I've made the offer to about 5 friends.

[pitohui]

13. didn't we learn anything from college? or why "roommates" don't work

i think we already learned the hard way that taking in roommates/extended family members doesn't save money -- it COSTS big time

one of my good friends has been financially wiped out by a family member he took in after katrina, she basically opened accounts using his name and his mom's and completely wiped him out -- you don't have the same protection against identity theft and financial fraud when the con artist is someone living with you, in fact, if you report it, you may be accused by the credit card co. of colluding in the fraud if you don't pay, after all, it's obviously YOUR family member or friend, they're living with you!

we all know people who get screwed by roommates, whether it's a little bit (roommate never pays more than that first month or two of rent and meanwhile eats you out of house and home and runs up a fortune in phone/cable/etc expenses) or a LOT -- using your address, getting into your mail box, etc to truly rip you off

the model you suggest isn't the answer in a survival situation because people in a survival situation, unfortunately, don't suddenly become noble, instead they eat each other

if somebody isn't on your team and financially invested in your success (in other words, your spouse/significant other) then it just don't work in my experience of the world, sorry

if you think it is bad that you only have $100K saved, for an extra $4K a year after your social security payment -- think how bad it will be for my friend who is actually in debt now and will have absolutely nothing

i've just known too many older people get ripped off to kid myself that "roommates" is the answer to anything, just shoot me now because that is worse than no hope at all

i myself really got screwed in the s&l crisis years and got ripped off by friends i tried to help, once burned, twice shy, i'm afraid

as far as property tax, i don't know why everyone doesn't move to louisiana, the property tax is trivial for modest homes so that older folks can stay in their homes, pick a zone c location so you don't get hit too bad by the cost of flood insurance and you could do okay if only we had some freaking jobs

[Phoebe Loosinhouse]

16. Goodness! I suggested looking around now for compatible housemates

I'm sure people do get screwed by needy relatives, etc. - but that was not my point. My point was - develop an economic survival plan now with people you consider symbiotic - you both contribute to mutual survival. And, hopefully know and like each other, to boot.

[DailyGrind51]

14. I'll probably work until I die, which, with my health history,

will come before I need to worry about retiring!

[LWolf]

15. I don't expect to retire.

I don't have a retirement fund.

Well, I do, but it has about $3,600 in it.

I cashed in my state retirement when I was 33 to do my student teaching. I had to quit my paying job to finish the teaching credential, and I needed to support my family for that period, and until I got a teaching contract.

So I have about 10 years in one state, and 3 years in another. I'll have a total of 30 years by the time I'm 65, but it won't be in one block.

I had a 401k, but cashed it in and paid penalties to put a well in when the shared well agreement I bought my new/old house with expired (the well caved in.) There's no water here without a well. There's about $600 left in that fund.

I started a new one when I moved, but the paycut I took reduced my contribution from $300 a month to $100 a month, so it's not accumulating quickly. By the time I'm 65, I'll have put in another 20,000.

I don't think that will be enough to live on for the rest of my life. I'll just keep working.

[osaMABUSh]

17. Here's what I am doing with my 401 K

First off my current 401K is not my only retirement source (I have a couple of other IRAs from previous jobs, a modest pension and expect some inheritance money plus I own a house with decent equity built up) so I can be a little risky with my 401 K. I have about 2,000 shares of company stock (about $70/share now) and my goal is to accumulate as many shares as possible over the next 15 years. I max my company 100% match of 6% contribution each pay period to add more shares for 12% total every two weeks. The company is fairly solid and the stock does go and up and down fairly regularly (but not huge swings) so to maximize my 401K I simply follow the old adage: buy low, sell high. I pay no fees when I buy or sell. So I couple of times a month I sell and/or buy usually when the stock swings a couple of bucks or more. So I can inflate my 401K by several thousand bucks each month (at least) simply by trading on the margins. For example I just sold all my shares on Friday at about $3 over the price I bought two weeks ago for a $6,000 increase. When I sell I buy into an all cash position (Money Market); I'm not about to try to figure out what the rest of the market is doing. Then with stock sinks a couple of bucks or more I buy my company stock with 100% of the cash. The cycle continues for years. Yes, it is a little risky: any company could completely tank at some point. However, it is actually less risky than keeping 100% of my compnay stock 100% of the time. Plus I know the company very well and study it's stock and trends every day. It is kind of a modified 'day trading' but with only one stock and I only trade once or twice a month. Here's the kicker: I use the 'pass through dividend' feature where I can receieve the dividend each quarter (75 cents/share) as regular income so it's like an extra paycheck evey 3 months. The trick here, of course, is too make sure I am 100% in stock on 'of Record' date.

[DavidDvorkin]

18. Since I hope to retire in 5 years, my plan is to save $100,000 each year

That's considerably more than I earn each year, so there are details yet to be worked out.

[Liberal_in_LA]

24. lol!

[paparush]

19. I own two, small houses that we rent out. These are paid for free and clear.

I'll probably still end up working until I drop dead.

[RUMMYisFROSTED]

21. ...and $9600 a year in SS.

:rofl:

[roody]

22. I would like to live in Cuba, where the elderly are

cared for.

[dysfunctional press]

23. communal living is how i see the not-to-distant future for a lot of people.

we're planning on it.

[Angleae]

25. Well, if I'm imagining it.

I'll imagine winning the lottery.

[Raven]

26. I'm 62 and at the cusp of Baby Boomers who will be retiring in

the next 5 to 10 years. There are millions and millions of us and we vote religiously. Most of us have worked hard all our lives, I know I have, and we expect a reasonably comfortable retirement. To me, our sheer numbers mean that the next administration cannot ignore the problems you outline. I plan to keep working until I'm 66, to continue to try to save and watch what I spend and to vote early and often.

[melm00se]

27. there is a more significant issue

than this (and it was alluded to earlier in the thread) and that is what happens as boomers retire and they begin to liquidate the assets in their retirement accounts? ditto for the pension funds that cover those same retirees?

there will be a large inventory of available equity and other investment vehicles for sale which will have a couple of effects, the most notably is a drop in price: a surplus of inventory coupled with working population that will be stretched by an increasing federal and state tax burden there won't be much available funds to buy these investments. Plus, with the drop in the available pension funds buying (as fewer folks are covered by defined benefit plans), so issue becomes more compounded.

While the investment market is certainly a global one and while the above will apply to the US and hopefully there will be a booming economy composed of younger folks with a monetary surplus, that is by no means certain.

[Maine-ah]

28. retirement?

pft. It's a joke. We never had a chance in hell to get anything started, let alone trying to start something now. We're going to work till we die.

[lumberjack_jeff]

29. Why would one preserve principal in retirement?

My goal is to spend the last $10 on flowers.

[Phoebe Loosinhouse]

30. So that you don't outlive your money.

Back to the 500K that no one has. If you take out 4% - 20K, you'll pretty much still have your 500K

If you took out 50K a year your 500K would only last 10 years or so.

[lumberjack_jeff]

31. If you spend only 4%, your capital will live forever.

Unfortunately, you won't.

At age 65, I can expect to live 15 years. I should withdraw about $50,000 each year to deplete it before I die. Dying broke? The "broke" part is not my bigger worry.