How much do you need for a decent retirement? (1 Viewer)

[dgreen]

I thought of it as 4% of current balance, I guess that is where I was off. Minus healthcare, you would expect to be doing less as the years go on so the draw amount would go down. Learn something new, feel even better about my place now.

Ha, yeah, doing that would actually have you never running out money but you'd quickly get down to withdrawing very little each year.

And, yeah, when I started thinking about the 4% rule and the fact that that money can also earn more money along the way, it made me really relax about my retirement situation. It even has me thinking I'll be in position to leave my kids significant inheritance which I like.

Have to keep inflation in mind, though. If you do $40,000 a year on $1,000,000, can you keep doing $40,000 in year n+10 as inflation rises? Yes, your basic daily living expenses should decline over time as you age, but prices also go up.

 

[Random]

I've always planned that expenses would remain relatively flat (adjusted for inflation).  2 Kids + college savings should = a very nice annual vacation fund when we're retired.

 

[dgreen]

Thanks. Reason I asked was my dad worried about pretty decent savings (but not $2.5M) until his dying day and ended up living well in retirement & dying with more money than he retired with. I get the math of these formulas, and I get that his 2008-2017 window was unusual. However, if earning a meager 3% return stretches retirement funds out 44 years, it's not a logical target - JMHO.

Well, one thing that could throw that off is inflation and the potential need to be withdrawing more money each year to keep up with the same level of living.

 

[dgreen]

Social Security is really complex.  Here are a few items that apply to my situation.  Please note:  I am not a financial planner.  Please chime in if you think my information is incorrect.

1.  If a couple has a large difference in social security benefits, the lower earning person can get half of the higher earner's benefits instead of their own benefits, up to the amount when the higher earner hits full retirement age (67 for us).  But the lower earner cannot collect this before the higher earner starts collecting.  

2.  But the lower earner can start collecting at age 62 and then convert to half the higher earner's benefit when he starts collecting.

3.  Survivor benefits are on your social security statement.  The amount is at full retirement age.  I think the surviving spouse can collect earlier at a discount.

Interesting I didn't know that. My wife has barely worked so I don't think her SS is very high right now (I haven't checked in a while) so it's nice to know that she might be able to be bumped up to half of mine. 

 

[Marvelous]

If you withdraw at 4% with 0% returns, your money will obviously last 25 years.

If you withdraw at 4% while earning 2%, the money will last about 34 years.

Earning 3% is about 44 years.

If you look at where the 4% figure came from, the study used withdrawing 4% the first year, and then increasing the amount to adjust for inflation each subsequent year.  It was also based on historical figures, stating it worked if you did this in the past.  There is no guarantee that it will work in the future.

Some people are thinking that a lower figure may be needed in the future if stock market returns are not as good or if inflation remains high for a while.  So a 3.0% or 3.5% figure might be better in year 1.

So 4% is a good starting point.  But lower is safer.

But on the flip side, your expenses are more likely to be higher (excluding healthcare and long term care) early in retirement because you will want to do more things.  My parents have ample savings, but nothing to spend it on since they no longer travel, don't need any more cars, etc.

 

[yak651]

Maybe should be a new thread but will ask here.  For those retiring early (before 59.5) how are you getting at your money?  I just turned 50 and want to retire at 55.  I saved a lot but unfortunately it's mostly in 401k (~$900k) and  IRA (~400k).  Wife also has a 401k (~300k). I realized the errors in my ways and started pumping money in after tax and have about $150k in that.  I believe this will be at around $250k at 55.  I know there is a rule you can take the money out of 401k if you retire from the company it is in at 55.  Problem is my 401k doesn't allow partial distributions so all of it would have to be liquidated.  Assuming then it has to go to an IRA to prevent major taxes...and now I can't get it until 59.5....so how do I get this money at 55?  At present time believe $75k/year would be plenty (are debt free, just need to worry about buying health insurance).  

 

[steelerfan1]

Everyone in Belize speaks English. 

Don’t want to hijack the thread but everything I’ve read is that Belize healthcare is well below CR and Panama which is a big concern and is why that was ruled out as an option.

 

[NutterButter]

Maybe should be a new thread but will ask here.  For those retiring early (before 59.5) how are you getting at your money?  I just turned 50 and want to retire at 55.  I saved a lot but unfortunately it's mostly in 401k (~$900k) and  IRA (~400k).  Wife also has a 401k (~300k). I realized the errors in my ways and started pumping money in after tax and have about $150k in that.  I believe this will be at around $250k at 55.  I know there is a rule you can take the money out of 401k if you retire from the company it is in at 55.  Problem is my 401k doesn't allow partial distributions so all of it would have to be liquidated.  Assuming then it has to go to an IRA to prevent major taxes...and now I can't get it until 59.5....so how do I get this money at 55?  At present time believe $75k/year would be plenty (are debt free, just need to worry about buying health insurance).  

Rule 72t is an option.  Its certainly a lot more complicated than the rule of 55.  Basically there's a withdrawal schedule you need to follow based on one of 3 formulas.   You set up a separate ira and depending on how much you desire each year until you turn 60, you transfer enough money into that ira so that the schedule pays out that amount yearly.   

 

[Random]

Maybe should be a new thread but will ask here.  For those retiring early (before 59.5) how are you getting at your money?  I just turned 50 and want to retire at 55.  I saved a lot but unfortunately it's mostly in 401k (~$900k) and  IRA (~400k).  Wife also has a 401k (~300k). I realized the errors in my ways and started pumping money in after tax and have about $150k in that.  I believe this will be at around $250k at 55.  I know there is a rule you can take the money out of 401k if you retire from the company it is in at 55.  Problem is my 401k doesn't allow partial distributions so all of it would have to be liquidated.  Assuming then it has to go to an IRA to prevent major taxes...and now I can't get it until 59.5....so how do I get this money at 55?  At present time believe $75k/year would be plenty (are debt free, just need to worry about buying health insurance).  

Rental Properties.

I realized early on that 401k/IRA savings would never get me to early retirement, my income was too low to even dream about 72t.  Luckily, this was in 2007/2008 so I began plowing money into rentals as the housing market crashed.  Its paying dividends now.  

 

[ConstruxBoy]

Maybe should be a new thread but will ask here.  For those retiring early (before 59.5) how are you getting at your money?  I just turned 50 and want to retire at 55.  I saved a lot but unfortunately it's mostly in 401k (~$900k) and  IRA (~400k).  Wife also has a 401k (~300k). I realized the errors in my ways and started pumping money in after tax and have about $150k in that.  I believe this will be at around $250k at 55.  I know there is a rule you can take the money out of 401k if you retire from the company it is in at 55.  Problem is my 401k doesn't allow partial distributions so all of it would have to be liquidated.  Assuming then it has to go to an IRA to prevent major taxes...and now I can't get it until 59.5....so how do I get this money at 55?  At present time believe $75k/year would be plenty (are debt free, just need to worry about buying health insurance).  

Look up Rule 72t. 

 

[ConstruxBoy]

I've long thought I'd feel alot more comfortable about retirement if we would shift money out of social security and into Medicare. Give me 100% covered healthcare with no out of pocket costs. I'll take care of my other income needs via retirement funds.Its the healthcare expenses which are the great unknown bogeyman to me. A lower baseline SS benefit that pays for a few groceries to make sure I don't starve and complete health coverage seems more desirable. Of course the math probably doesn't work.

I really like the idea of a deferred annuity for late life needs. Pay a chuck of your retirement savings now for an annuity that guarantees payments at an advanced age like 80. That plus SS can get you through some LTC expenses. Then you have the rest of your retirement savings to get you to 80. It helps you plan better and allows you to maybe do more fun bucket list things when you are young, feeling more confident about the advanced age finances. 

 

[steelerfan1]

I've long thought I'd feel alot more comfortable about retirement if we would shift money out of social security and into Medicare. Give me 100% covered healthcare with no out of pocket costs. I'll take care of my other income needs via retirement funds.Its the healthcare expenses which are the great unknown bogeyman to me. A lower baseline SS benefit that pays for a few groceries to make sure I don't starve and complete health coverage seems more desirable. Of course the math probably doesn't work.

I’d sign up for this tomorrow.

 

[BeTheMatch]

I’d sign up for this tomorrow.

Absolutely

 

[Atomic Punk]

Don’t want to hijack the thread but everything I’ve read is that Belize healthcare is well below CR and Panama which is a big concern and is why that was ruled out as an option.

You can get by in both Panama and CR with English and a little gringo Spanish. Both have pretty solid health care and quite a few expat locations with lots of Americans and Canadians. I’m considering both as options.

 

[Sand]

Retiring outside the continental US has been my plan for years. It's the only move. 

Been eyeing the Porto area for a while now.

 

[RavenFan]

You can get by in both Panama and CR with English and a little gringo Spanish. Both have pretty solid health care and quite a few expat locations with lots of Americans and Canadians. I’m considering both as options.

I can't imagine being 60+ and risking my or my wife's healthcare on some 3rd world country like Panama or Costa Rica. Trust me friends, healthcare seems like an unneeded expense until you need it.  I've had access to Johns Hopkins and still almost kicked it twice, and I'm only put back together as well as I am thanks to the skill of modern medicine.

Thanks but I'll stay in the good ol' USof A when I get to the age that healthcare literally means life or death. 

 

[Sand]

Social Security is really complex.  Here are a few items that apply to my situation.  Please note:  I am not a financial planner.  Please chime in if you think my information is incorrect.

1.  If a couple has a large difference in social security benefits, the lower earning person can get half of the higher earner's benefits instead of their own benefits, up to the amount when the higher earner hits full retirement age (67 for us).  But the lower earner cannot collect this before the higher earner starts collecting.  

2.  But the lower earner can start collecting at age 62 and then convert to half the higher earner's benefit when he starts collecting.

3.  Survivor benefits are on your social security statement.  The amount is at full retirement age.  I think the surviving spouse can collect earlier at a discount.

Great SS calculator.  It doesn't try to optimize (but there are software packages out there that will do that), but this gives you a great idea where you stand.

As long as I'm doing calculators, have a gander at Rich, Broke, Dead.  Gives a great, simple look at retirement and where you sit.

 

[skol asylum]

I really like the idea of a deferred annuity for late life needs. Pay a chuck of your retirement savings now for an annuity that guarantees payments at an advanced age like 80. That plus SS can get you through some LTC expenses. Then you have the rest of your retirement savings to get you to 80. It helps you plan better and allows you to maybe do more fun bucket list things when you are young, feeling more confident about the advanced age finances. 

I know my wife's parents had and advisor help convert some of their funds to annuities. Don't know any details though.

 

[stbugs]

I thought I read awhile ago that if you start taking S.S at 62 instead of waiting till 70, the break even point for total money received is 79.  

Just based on current max benefits values for 2022, I get 10.3 years if you make 0% return on the money you take out early. That’s not a real good comparison because if the payout for 62 gets you $454k by the time you turn 70, you should make a return on that chunk and it’s not just investing for 8 years, it’s 10.3 (the last month before you turn 70) to 18.3 years (the first month you turn 62) as you continue to earn on that best egg while getting to break even.

Let’s simplify and say the average number of years you can invest is 14.3. Using the rule of 72, a 5% return gets you a double so if you can get a 5% return on your Age 62-70 money, then it will take another 10.3 years to break even, but again in that second 10.3 years you again are making interest on that $908k and so on.

If you can earn something like 6-7%, your income from that original $454k will basically make up the difference between the retire are 62 payments and the retire at 70 payments but again at 70 you have that about $600k nest egg in your pocket so you are ahead of the game by that amount.

 

[KGB]

Maybe should be a new thread but will ask here.  For those retiring early (before 59.5) how are you getting at your money?  I just turned 50 and want to retire at 55.  I saved a lot but unfortunately it's mostly in 401k (~$900k) and  IRA (~400k).  Wife also has a 401k (~300k). I realized the errors in my ways and started pumping money in after tax and have about $150k in that.  I believe this will be at around $250k at 55.  I know there is a rule you can take the money out of 401k if you retire from the company it is in at 55.  Problem is my 401k doesn't allow partial distributions so all of it would have to be liquidated.  Assuming then it has to go to an IRA to prevent major taxes...and now I can't get it until 59.5....so how do I get this money at 55?  At present time believe $75k/year would be plenty (are debt free, just need to worry about buying health insurance).  

Thank you for asking this, also looking to retire between 50 and 55 and thank you for the answers 

 

[Marvelous]

Great SS calculator.  It doesn't try to optimize (but there are software packages out there that will do that), but this gives you a great idea where you stand.

As long as I'm doing calculators, have a gander at Rich, Broke, Dead.  Gives a great, simple look at retirement and where you sit.

The SS calculator is really interesting.  It does show that the spouse benefit is reduced if my wife starts her own benefit early.

 

[wilked]

it’s not just investing for 8 years, it’s 10.3 (the last month before you turn 70) to 18.3 years (the first month you turn 62) as you continue to earn on that best egg while getting to break even.

I can’t quite follow this….  We are comparing taking SS at 62 vs taking it 8 years later, no? 
 

 

[stbugs]

I can’t quite follow this….  We are comparing taking SS at 62 vs taking it 8 years later, no? 
 

Yes. I took the max payments at 62 to come up with how much we’d (double everything for my wife and me) have by age 70 and got a 10.3 year break even if you made 0% return. I was just saying assuming no return is a bad assumption. If you add a return, then you also have to include that you are making a return on extra money not just from 62 to 70 but 62 to break even. Money I get paid at 62 earns a return for 18.3 years and money I get paid at 69.9 earns a return for 10.3.

It doesn’t take a huge return (6-7%) tomake it so you can never break taking money starting at 70. Also, you don’t have the advantage of already shaving hundreds of thousands of dollars in hand like you do starting at 62. Again, this only matters if you’ve saved enough that you can invest this money. Most people can’t which is why most people take money early. 

 

[James Daulton]

So I just turned 54.  I spent a lot of time at a previous job that stopped their defined benefit plan around 2010 but those of us vested still would get a payout.  Well, the time when you're eligible for the payout is between 55 and 65.  You have multiple different options for how you want the payout, annuity, lump sum, etc and the longer you wait the more the payout is.  Using rough numbers, let's say the monthly annuity at 55 is $1,800 and $3,000 if you wait until 65.  And the lump sum is $220k if you take at 55 and $400k if you wait until 65.

I always assumed that unless something happened and I needed the money (I don't need it now but obviously it'd be nice) that I'd wait until 65 to take the lump sum.  But the discussion on taking SS early rather than waiting has me thinking if this is the correct choice.

I'd like to retire at age 63 at the latest and while I don't have FBG millions in a 401k, account I should hit at least $1.25M, by 63 (assuming tepid returns of 3% the next 9 years).  I make decent money so SS will be close to the max and I live in Maryland so my taxes are pretty high.  I assume pulling the money next year would be dumb.  I was kind of thinking to use the money as a down payment on a place in Florida when I retire but I'm open to other ideas if there's a way to maximize it differently. 

 

[wilked]

So I just turned 54.  I spent a lot of time at a previous job that stopped their defined benefit plan around 2010 but those of us vested still would get a payout.  Well, the time when you're eligible for the payout is between 55 and 65.  You have multiple different options for how you want the payout, annuity, lump sum, etc and the longer you wait the more the payout is.  Using rough numbers, let's say the monthly annuity at 55 is $1,800 and $3,000 if you wait until 65.  And the lump sum is $220k if you take at 55 and $400k if you wait until 65.

I always assumed that unless something happened and I needed the money (I don't need it now but obviously it'd be nice) that I'd wait until 65 to take the lump sum.  But the discussion on taking SS early rather than waiting has me thinking if this is the correct choice.

I'd like to retire at age 63 at the latest and while I don't have FBG millions in a 401k, account I should hit at least $1.25M, by 63 (assuming tepid returns of 3% the next 9 years).  I make decent money so SS will be close to the max and I live in Maryland so my taxes are pretty high.  I assume pulling the money next year would be dumb.  I was kind of thinking to use the money as a down payment on a place in Florida when I retire but I'm open to other ideas if there's a way to maximize it differently. 

This spreadsheet by Kitces is a great analysis tool. 
 

https://www.kitces.com/blog/rigorous-analysis-of-pension-options-done-right/

take the time to review and analyze the options. 
 

if in the end they are all “neutral” at something like 4% return then it’s a lifestyle decision.  
 

Is there a spousal benefit? Do you have a spouse? I know that is a big decision point. I helped my father in law w similar analysis (he was a union guy), he did the higher (delayed) number primarily to make things easier on his wife as he assumes he will die first 

 

[ConstruxBoy]

Kitces is great. 

 

[stbugs]

So I just turned 54.  I spent a lot of time at a previous job that stopped their defined benefit plan around 2010 but those of us vested still would get a payout.  Well, the time when you're eligible for the payout is between 55 and 65.  You have multiple different options for how you want the payout, annuity, lump sum, etc and the longer you wait the more the payout is.  Using rough numbers, let's say the monthly annuity at 55 is $1,800 and $3,000 if you wait until 65.  And the lump sum is $220k if you take at 55 and $400k if you wait until 65.

I always assumed that unless something happened and I needed the money (I don't need it now but obviously it'd be nice) that I'd wait until 65 to take the lump sum.  But the discussion on taking SS early rather than waiting has me thinking if this is the correct choice.

I'd like to retire at age 63 at the latest and while I don't have FBG millions in a 401k, account I should hit at least $1.25M, by 63 (assuming tepid returns of 3% the next 9 years).  I make decent money so SS will be close to the max and I live in Maryland so my taxes are pretty high.  I assume pulling the money next year would be dumb.  I was kind of thinking to use the money as a down payment on a place in Florida when I retire but I'm open to other ideas if there's a way to maximize it differently. 

The spreadsheets are good to run. I will say that the lump sums make this discussion a bit different than the SS one.

 

[James Daulton]

The spreadsheets are good to run. I will say that the lump sums make this discussion a bit different than the SS one.

Running the numbers on the monthly annuity by year.  It looks like a 7% increase every year you wait until 62, where it goes to 4% and stops growing at 65.  The same for the change in lump sum.

One issue I have to consider is that I've had some pretty serious health problems in the far past and the very recent past.  While everything is cool now, I'm more at risk for certain cancers than your typical Joe.  So me expecting to live a long life may not be reasonable.  So when I think of these things I don't plan on living to my 80's, more like early 70's.  I just think that's the mindset I have to have.  

 

[skol asylum]

I know I've asked this before but will do again as I've never really pursued it. I'm 48 and she's going to be 45 soon. We have a little under $700k total in our 401Ks. Wish it were more but that's where we are. Have finally increased contributions to a decent level the last few years, now up to 14% each plus 4% match each. That's the extent of our savings. My plan has been to just keep plowing money into 401K. I know there are lots of reasons to have Roth money but at our age does it still make any sense? I don't necessarily have a lot more to invest right now so it would be robbing 401K Peter to pay Roth Paul. I remember reading here and there that the Roth is more of a tool for younger people and at some point it doesn't make as much sense as you age. Thoughts? 

 

[stbugs]

I know I've asked this before but will do again as I've never really pursued it. I'm 48 and she's going to be 45 soon. We have a little under $700k total in our 401Ks. Wish it were more but that's where we are. Have finally increased contributions to a decent level the last few years, now up to 14% each plus 4% match each. That's the extent of our savings. My plan has been to just keep plowing money into 401K. I know there are lots of reasons to have Roth money but at our age does it still make any sense? I don't necessarily have a lot more to invest right now so it would be robbing 401K Peter to pay Roth Paul. I remember reading here and there that the Roth is more of a tool for younger people and at some point it doesn't make as much sense as you age. Thoughts? 

Honestly, it’s mainly about your income taxes. Look at the highest bracket you pay because that’s where contributions to 401k would be taxed if you took that money and put it in a Roth. If you aren’t making a lot that could be a low rate and might be worth doing a Roth so you don’t pay taxes later. If you could afford to save more and put it in a Roth IRA that wouldn’t be bad and honestly neither would maxing out your 401k. If it’s tough to save now the traditional 401k could be good because you can afford to save more of your paycheck as it would get taxed, especially coming up on 50 and having the chance to add the catch up amount each year.

If you get yourself in a better situation and are allowed (income limits) to put money in a Roth IRA, do both.

Also, don’t feel bad, you are way ahead of most people with that amount and you’ve got a lot of time left. It doesn’t sound like you’ve got a lot of liquid savings so I will recommend building up an emergency fund, which if large enough could also be used to invest. Having all savings in retirement vehicles could cause penalties if you needed a large amount for emergencies.

 

[matuski]

I can't imagine being 60+ and risking my or my wife's healthcare on some 3rd world country like Panama or Costa Rica. Trust me friends, healthcare seems like an unneeded expense until you need it.  I've had access to Johns Hopkins and still almost kicked it twice, and I'm only put back together as well as I am thanks to the skill of modern medicine.

Thanks but I'll stay in the good ol' USof A when I get to the age that healthcare literally means life or death. 

Costa Rica is generally viewed as one of the best in the world... think I saw a top 15 in recent years.  Always #1 in Latin America.

Know a couple docs that moved there to semi retire.

 

[Sand]

I know I've asked this before but will do again as I've never really pursued it. I'm 48 and she's going to be 45 soon. We have a little under $700k total in our 401Ks. Wish it were more but that's where we are. Have finally increased contributions to a decent level the last few years, now up to 14% each plus 4% match each. That's the extent of our savings. My plan has been to just keep plowing money into 401K. I know there are lots of reasons to have Roth money but at our age does it still make any sense? I don't necessarily have a lot more to invest right now so it would be robbing 401K Peter to pay Roth Paul. I remember reading here and there that the Roth is more of a tool for younger people and at some point it doesn't make as much sense as you age. Thoughts? 

Only two - how are the fees in the 401k?  If they're awesomely low then this looks pretty good.  If not and you can do a traditional IRA that's worth considering.  Also, does your health plan contain an HSA?  If you do and aren't contributing I'd max this out and invest it (don't spend it).  Best retirement vehicle out there.  

Generally the order should be - 401k with match, HSA, 401k or trad. IRA unless income is pretty low, then a Roth.

 

[KGB]

SO, are we still at 2.5MM to have 100K / year? 

 

[Riffraff]

Where Expats Love (& Hate) Living in 2023

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[Judge Smails]

It's definitely not for everyone. It can certainly be cost-prohibitive for some, and at the other end of the spectrum it can make more sense to self-insure. But there's definitely a sweet spot where it makes a ton of sense. And there are hybrid products now where there's also a life insurance component and your beneficiaries can effectively get your money back if you end up not needing care.

At 55 or so it'll cost ~$5000/year. Maybe more. Often these will get you 5 years of LTC coverage. And the premium is not fixed, in fact most premiums have increased significantly in the last 5 years or so (say from $4000 to $5000).

So you pay for 25 years, now you're 80. My guess is premiums will continue to go up in that time. Let's say you put out $150K in premiums. A year of LTCI might cost $150k at that point. If you had invested it at just a 6% return you'd have doubled your money ($300K). Average length of stay in nursing homes is ~ 2 years. 1/3 of nursing home stays are under 100 days and covered by Medicare. Only 10% of nursing home patients are still there 5 years after arriving.

to me the only real benefit of that insurance is the long tail (that 10% of patients). Note, that is not 10% of population, that is a subset of:

-Those that live long enough to be alive at typical nursing home age

-Those that have health issues requiring nursing homes / no secondary support with children/siblings/spouse

For me, I'd choose to self insure.

Also, those hybrid products I am very skeptical on. One is a life insurance product I am fairly certain... why add life insurance if you don't need it? At 55 you don't need life insurance, your children are grown and the house is well on its way to being paid off. And the other product is an annuity product I believe, which tend to have lots of hidden fees. Be very wary.

LTCI used to be a good deal, but prices have increased 30-50% in the last 10 years, maybe more. A better way to account for long term care insurance if you ask me is to delay SS filing til 70. For those thinking of taking it at 62, you nearly double your income by waiting til 70, it is inflation adjusted, and pays until you die. That's your 'long life' / 'long term care' insurance - steady income in your final 10-30 years of your life that increases each year. That income stream alone will pay for half of a nursing home stay, with your other income / savings picking up the second half, all in the unlikely event you have a multiyear stay in a nursing home

My financial planner says exactly this. Average length of time in care is 2 years. Suggesting we just self insure.

 

[culdeus]

You can get by in both Panama and CR with English and a little gringo Spanish. Both have pretty solid health care and quite a few expat locations with lots of Americans and Canadians. I’m considering both as options.

I can't imagine being 60+ and risking my or my wife's healthcare on some 3rd world country like Panama or Costa Rica. Trust me friends, healthcare seems like an unneeded expense until you need it. I've had access to Johns Hopkins and still almost kicked it twice, and I'm only put back together as well as I am thanks to the skill of modern medicine.

Thanks but I'll stay in the good ol' USof A when I get to the age that healthcare literally means life or death.

Curious about this. I mean if you get to the brink and are brought back how often is it that you aren't really just a short time away? It becomes a quality/quantity thing. Heart care and some cancer stuff is better in the US but I mean you gotta die somehow.

 

[Terminalxylem]

You can get by in both Panama and CR with English and a little gringo Spanish. Both have pretty solid health care and quite a few expat locations with lots of Americans and Canadians. I’m considering both as options.

I can't imagine being 60+ and risking my or my wife's healthcare on some 3rd world country like Panama or Costa Rica. Trust me friends, healthcare seems like an unneeded expense until you need it. I've had access to Johns Hopkins and still almost kicked it twice, and I'm only put back together as well as I am thanks to the skill of modern medicine.

Thanks but I'll stay in the good ol' USof A when I get to the age that healthcare literally means life or death.

Curious about this. I mean if you get to the brink and are brought back how often is it that you aren't really just a short time away? It becomes a quality/quantity thing. Heart care and some cancer stuff is better in the US but I mean you gotta die somehow.

If you really get to the brink, meaning cardiopulmonary arrest, the odds aren’t good - only 20-30% survive a witnessed in-hospital code. At a year, about half of survivors have serious deficits compared to pre-code, including some in the dreaded vegetative state.

And yeah, you don’t generally get to that point without a lot of underlying disease, which isn’t cured by chest compressions and a breathing machine.

Also, just like the US, if you have money, healthcare in Costa Rica is top notch

 

[tri-man 47]

You can get by in both Panama and CR with English and a little gringo Spanish. Both have pretty solid health care and quite a few expat locations with lots of Americans and Canadians. I’m considering both as options.

I can't imagine being 60+ and risking my or my wife's healthcare on some 3rd world country like Panama or Costa Rica. Trust me friends, healthcare seems like an unneeded expense until you need it. I've had access to Johns Hopkins and still almost kicked it twice, and I'm only put back together as well as I am thanks to the skill of modern medicine.

Thanks but I'll stay in the good ol' USof A when I get to the age that healthcare literally means life or death.

Curious about this. I mean if you get to the brink and are brought back how often is it that you aren't really just a short time away? It becomes a quality/quantity thing. Heart care and some cancer stuff is better in the US but I mean you gotta die somehow.

If you really get to the brink, meaning cardiopulmonary arrest, the odds aren’t good - only 20-30% survive a witnessed in-hospital code. At a year, about half of survivors have serious deficits compared to pre-code, including some in the dreaded vegetative state.

And yeah, you don’t generally get to that point without a lot of underlying disease, which isn’t cured by chest compressions and a breathing machine.

Also, just like the US, if you have money, healthcare in Costa Rica is top notch

The bolded ("some in the dreaded vegetative state") raises another consideration: The ten US states, as I understand it, that have "death with dignity" laws: Maine, Vermont, New Jersey, New Mexico, Montana, Colorado, Oregon, Washington, California, and Hawaii ..plus Washington DC.

 

[matttyl]

It's definitely not for everyone. It can certainly be cost-prohibitive for some, and at the other end of the spectrum it can make more sense to self-insure. But there's definitely a sweet spot where it makes a ton of sense. And there are hybrid products now where there's also a life insurance component and your beneficiaries can effectively get your money back if you end up not needing care.

At 55 or so it'll cost ~$5000/year. Maybe more. Often these will get you 5 years of LTC coverage. And the premium is not fixed, in fact most premiums have increased significantly in the last 5 years or so (say from $4000 to $5000).

So you pay for 25 years, now you're 80. My guess is premiums will continue to go up in that time. Let's say you put out $150K in premiums. A year of LTCI might cost $150k at that point. If you had invested it at just a 6% return you'd have doubled your money ($300K). Average length of stay in nursing homes is ~ 2 years. 1/3 of nursing home stays are under 100 days and covered by Medicare. Only 10% of nursing home patients are still there 5 years after arriving.

to me the only real benefit of that insurance is the long tail (that 10% of patients). Note, that is not 10% of population, that is a subset of:

-Those that live long enough to be alive at typical nursing home age

-Those that have health issues requiring nursing homes / no secondary support with children/siblings/spouse

For me, I'd choose to self insure.

Also, those hybrid products I am very skeptical on. One is a life insurance product I am fairly certain... why add life insurance if you don't need it? At 55 you don't need life insurance, your children are grown and the house is well on its way to being paid off. And the other product is an annuity product I believe, which tend to have lots of hidden fees. Be very wary.

LTCI used to be a good deal, but prices have increased 30-50% in the last 10 years, maybe more. A better way to account for long term care insurance if you ask me is to delay SS filing til 70. For those thinking of taking it at 62, you nearly double your income by waiting til 70, it is inflation adjusted, and pays until you die. That's your 'long life' / 'long term care' insurance - steady income in your final 10-30 years of your life that increases each year. That income stream alone will pay for half of a nursing home stay, with your other income / savings picking up the second half, all in the unlikely event you have a multiyear stay in a nursing home

My financial planner says exactly this. Average length of time in care is 2 years. Suggesting we just self insure.

Only if you actually need care. Roughly half don’t.

I sell LTCi (or what’s left of it in the current market). Rule of thumb stats are if you’re 65 in US today, you have a 50/50 shot of ever needing care. In those that do, half need it for less than 90 days. Of that 25% remaining, half need it over two years (that’s where LTCi is needed).

 

[Snotbubbles]

First define "decent" in terms of disposable income. Then take your projected monthly income and subtract your projected monthly expenses. If your number is higher, then you should be good.

 

[Grahamburn]

Retiring outside the continental US has been my plan for years. It's the only move.

This is the way.

~$500k will buy you a pretty stellar 3/2 overlooking the pacific in Costa Rica or Nicaragua. Many places will need some cash dumped in to update decor to North American standards, but that's not bad if the location and bones of the building are good.

Healthcare is quite good and a fraction of the costs here. Everything else is generally at a significant discount over anything but maybe the bottom half of flyover country.

It's not without its own set of warts and inconveniences... but if you like sun, sand, and seafood... You'd have to have at least double the nest egg to retire comparably along the coast in the states.

https://www.coldwellbankercostarica.com/property/14226

https://www.coldwellbankercostarica.com/property/14485

No kids, fellas?

Can't imagine not living close to my kids/grandkids.

 

[Snotbubbles]

Retiring outside the continental US has been my plan for years. It's the only move.

Got friends that bought land in Belize. They are currently building their house near water and retiring down there in about 3 years.

 

[massraider]

No kids, fellas?

Nope.

But people from the north do this every day, I am just flying a little further.

 

[supermike80]

For those with a financial planner...Is it worth it? I do my own planning. Yeah Ok maybe I'm not diversified enough, but I also don't see the value in giving up to 1% of my retirement to a planner. I see a lot of articles suggesting it, and they are probably all written by financial planners, so I don't always trust the advice.
Can you all add some insight into it?

 

[Senor Schmutzig]

For those with a financial planner...Is it worth it? I do my own planning. Yeah Ok maybe I'm not diversified enough, but I also don't see the value in giving up to 1% of my retirement to a planner. I see a lot of articles suggesting it, and they are probably all written by financial planners, so I don't always trust the advice.
Can you all add some insight into it?

I don't mind giving up 1% to a planner if they can get better than a +1% return on my investments.

That's the way I look at it, at least.

It's paid for by itself if that's the case. I'm sure there is a better way for me to justify it or even prove to myself that my planner is giving me at least 1% more than I could do on my own, but I'm trusting their ability to understand the options, my risk factor, my future plans, the market, etc. much better than I can at this point.

 

[gianmarco]

For those with a financial planner...Is it worth it? I do my own planning. Yeah Ok maybe I'm not diversified enough, but I also don't see the value in giving up to 1% of my retirement to a planner. I see a lot of articles suggesting it, and they are probably all written by financial planners, so I don't always trust the advice.
Can you all add some insight into it?

I don't mind giving up 1% to a planner if they can get better than a +1% return on my investments.

That's the way I look at it, at least.

It's paid for by itself if that's the case. I'm sure there is a better way for me to justify it or even prove to myself that my planner is giving me at least 1% more than I could do on my own, but I'm trusting their ability to understand the options, my risk factor, my future plans, the market, etc. much better than I can at this point.

I don't even need it to be that much. Even at ~0.5% more return than what I can do, I'll pay the other amount for the "peace of mind" that I'm not missing something. That, along with the time I don't have to spend to make sure something hasn't slipped through the cracks and/or keeping tabs on everything and it's worth it for us.

 

[dino259]

Some what crossing threads.

Personal Finance

 

[KGB]

SO, are we still at 2.5MM to have 100K / year?

? m with or without golf?

 

[NewlyRetired]

For those with a financial planner...Is it worth it? I do my own planning. Yeah Ok maybe I'm not diversified enough, but I also don't see the value in giving up to 1% of my retirement to a planner. I see a lot of articles suggesting it, and they are probably all written by financial planners, so I don't always trust the advice.
Can you all add some insight into it?

I did all my own investing up until I retired but at that time I transitioned over to a Financial Planner and have been very satisfied the past 13ish years.

I was very comfortable investing in mutual funds but I had very little knowledge of bonds and I knew I needed a bond ladder to create the constant stream of money that I would live off of in retirement. The financial planner created a solid bond ladder for the wife and I. Due to being a financial planner, she was also able to get into slightly higher return bonds than I would have been able to get by myself.

 

[NewlyRetired]

Like in all jobs, you are going to find, good, average or bad planners.

To help mitigate this, stick to fee only financial planners and then do your due diligence.

Note that the more long term successful a planner has been, the more money they typically require of a client to have for them to take on.