Welcome to Our Forums. Once you've registered and logged in, you're primed to talk football, among other topics, with the sharpest and most experienced fantasy players on the internet.
One of the main advantages of investing directly in real estate is the multitude of tax benefits. You’d lose those if your properties are held in a tax preferred account.
Excel, or Google Docs if you don't have it
If you are forecasting using the total market method, you are going to have some wild results looking at individual possibilities. The point is to get to a percentage of historic results that you are comfortable with.
I think it's as optimistic or pessimistic as the inputs and assumptions you use. 100% on firecalc could still be a terrible representation if your assumptions are that your portfolio grows at 20% per year and inflation is 0% per year.
Lol. I just tried it. There were some nice endings. The one thing that rang true was the don’t be a chicken #### investment wise when you enter retirement. They take all the 35 year periods so you can see what happens. I can only hope I leave my kids that much even while spending like a normal person.
Agreed on the bold.
If I'm reading right, I don't have to buy this in my 40s and wait until my 80s? I can buy one at, say, 75 with a lump sum and it'll start paying out right away for as long as I live, right?
A podcast (I'm not sure which one, I listen to many) made a pretty convincing argument about a year ago that annuities can make good sense when you're older. When you're young they'll be expensive and lack upside. When you're older they're cheaper because on average they don't pay out as long but make sense if you do live long. Pretty much the opposite of Life insurance.
Yeah it looks like this SPIA thing doesn't have that accumulation phase. Which is what my concern was... if I'm 45 and can contribute for 40 years and then start getting paid at 85, that's one plan I need to pull the trigger on fairly soon. However, if I can punt until I'm 84 and buy one then... that option could be better for me.
Right. I’ve also read that the best rate of returns are achieved purchased in your 70s-80s. It’s longevity insurance essentially, no payout if you die early. And sounds like that’s exactly what you’re after.
I find it to be optimistic on an absolute scale. I've delved into this area about as deeply as anyone.
I mean, you could certainly fall in love later in life? Or feel very compelled to leave it to a certain charity? I wouldn't just completely blow off any money left when you die.
I would be interested in a further explanation of what you mean as well. It is basically an excel sheet with a front end userface so I'm not sure what parts you're referring to. I do agree that you need to consider taxes separately, and make sure you understand the present/future value of money correctly and how it's being handled in the interface.
Oh sure, totally agree. I was just wondering if @Sand had some specific tips for the tool itself.
The problem isn't the program, it's darn good as a planning / forecasting tool.
Just don't take it blindly. You'll still need to adjust as you go. The good thing is we're all capable of changing course when needed. (The changes themselves will vary, some are harder than others to make)
This applies, in general, to variable annuities and the other exotic products that have a 100+ page contract. Single Premium Immediate Annuities and Deferred Annuities are simple products, so you can easily get a good idea of what you get.
Yeah - but only in comparison with other tools. I need to think about how to formulate the answer to this.
I went through it a bit. When I go through the investigate option and select for the highest spending that can support a 95% success rate it comes up with about double what I think it should be. If I run the Firecalc number through my own historical calculator I get a 77% failure rate. My number matches up with other calculators like Pralana Gold. That's a major disconnect and if that's the same calc used for the rest of it it's a bit optimistic.
Correct. I have written my own algorithm for this and it doesn't match up - I'm very comfortable that my math is right. I spent a months writing mine and it's more extensive than Firecalc.
Including contributions, we gained 6% more in 2020 than we had gained in 2019. In 19 we bought a RAV4, in 2020 we only bought a new HVAC system so that's part of the difference.
My net worth increased by my annual salary. Last month. So far, this month too. Hoping that streak continues, for sure.
Maxed my 401K for the 6th(?) year in a row.
Great stuff!
Thanks! And no, she's still finishing up her applications. She's applying to three UC schools, U of O, and six private schools in California. #1 on her list is currently UC Davis, so fingers crossed she gets accepted - both for her, and our finances!
Well you also have a minivan full of them, I just have the one. But yes Davis is $14,495 in state, with total cost of attendance estimated at $38K per year..Presumably you're in state. I won't be paying $44k for tuition for our kids
Same thing I went through in 2019 - I was scared of having to cut the check for a big expense. But especially with the company contribution it really becomes a no brainer. Worst case is you have to pull from it to cover some costs with tax-free money, and last year I did have to do that with some of the funds. Best case you let it ride and compound for years with double tax benefit. It did take me until later in 2019 before I felt comfortable investing the money, but since then I have just kept the minimum amount required in cash and automatically invest the contributions.
Lol. I get it.
I was just glad that happened for us over the whole year. Each month means you won't be working much longer.
I think it means she/he doesn’t need to work 1 more day.... I’m trying to think of the combo of investments, balance, and salary that can yield this scenario. Best I am coming up with is $1MM invested entirely in Bitcoin and taking a job as a wal mart greeter
