-OZ-
Footballguy
I'd imagine you'd still get better treatment if you can pay for it. Maybe just the difference between basic care and swedish massages, but still a difference.
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PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)
- Thread starter Smack Tripper
- Start date
Judge Smails
Footballguy
Neighbor’s husband had early onset Alzheimer’s. Barely 60 and in diapers within 2 years. Wife finally had to put him in an assisted living facility. $7K a month.
themeanmachine
Footballguy
My father has early onset dementia that rapidly got worse, and 3 years ago at age 68 he needed to move into full time assisted living, nearly $10k/mo. Fortunately he was very frugal, and the interest from his investments just covers that monthly cost, leaving my mom to live off of their social security in a house that is fully paid off. They are very fortunate, I shudder to imagine where he would be if they didn’t have the means to pay for the place he is living now.
NutterButter
Footballguy
100k per year is what I have in mind.
SFBayDuck
Footballguy
These stories are why part of my retirement plan contains instructions that if this ever happens to me to take me out to the mountains, point up the trail toward the top, send me in that direction and say goodbye.
Seriously, both of my grandmothers spent years in assissted living - one about 10 before she finally passed, and the other has been in various homes and facilities, with dementia for 12-13 years now. I just don't want any part of that, and don't want that for my daughter. Seems like there has to be a better way.
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NutterButter
Footballguy
It's not me I am worried about, money-wise. I'm practically a monk living the ascetic life. But the wife can spend and that's not going to change, not to mention my daughter. Plus, I guess it would be nice to get out of the house for a vacation from the retirement every now and then. Glad I have twenty more years to accumulate before honing my decumulation skills.
Like everyone else, I'm torn between knowing that on average, I'll have 10-15 years of life should I retire at age 63. It would suck to save money my entire life and have little chance to actually spend it. But at the same time, I don't want to be a huge burden on my three kids because I lived to 100 or had some massive health problems destroying my savings.
It's because of this that I'm sticking with my employer, United States government, as the pension plan is a huge security blanket even though I've had offers of 15% more salary from several companies.
It's because of this that I'm sticking with my employer, United States government, as the pension plan is a huge security blanket even though I've had offers of 15% more salary from several companies.
Doctor Detroit
Please remove your headgear
A preview of the US without pensions
It's long but much like the program that inspired this thread, it's worth the read.
Unlike the Social Security, this is a much bigger issue in the coming years due to many companies pulling pension plans from their employees mid career. Social Security is not going away, not in my lifetime or any of yours. If it does it will be during a total economic collapse and your investments, real estate, and personal possessions won't be worth anything either. We can't have the elderly in dire straights, social security will at least provide enough to sustain people. It has to, and Social Security can be fixed with just a few adjustments.
Medicare is a different story, and because there are just so many baby boomers entering retirement now, it's impossible to project long-term do to actual medical and prescription costs. We'll see how that plays out, but I do think actual reform is needed with Medicare. With Social Security just gradually move back retirement ages, raise the ridiculously low annual earnings ceiling (currently $128k), and pay back the amount politicians (Reagan especially) have misappropriated over the years ($2 Trillion plus).
The pension systems are a different story. Imagine working on a pension plan for 20 or 30 years and then the company shutting down, selling their assets, or being bought out by a foreign entity who wants nothing more than to eliminate pensions? Now there are laws meant to protect these pensions but if a company goes belly up you aren't likely getting anything close to what you might have, in some cases just a few ten thousand bucks. These are some of the people to worry about now. They didn't have individual retirement plans, tax sheltered savings, or company matches. They had a guarantee, a flimsy guarantee at that, they would be provided a lifetime annuity once they reached retirement age. The article discusses individual cases, but be sure there are tens of thousands of people in the very same boat.
In the future the worry will shift away from the long forgotten pension and then shift to the fact that maybe a third (now it's half) the population is not saving for retirement in individual retirement plans. Sometimes it is due to the fact they simply don't have the money to put there, don't understand the systems because the company offers very little guidance, or they just have to have the latest new smartphone or a new car every two years.
Regardless of situation or timeline, I think in the golden ages of easy retirements lasted about 40 years, from 1970 to 2010. I think with the elimination of private pension plans, with companies cutting the fat at the expense of the employees first (benefits packages), and with people being people it's going to just get tougher and tougher.
It's long but much like the program that inspired this thread, it's worth the read.
Unlike the Social Security, this is a much bigger issue in the coming years due to many companies pulling pension plans from their employees mid career. Social Security is not going away, not in my lifetime or any of yours. If it does it will be during a total economic collapse and your investments, real estate, and personal possessions won't be worth anything either. We can't have the elderly in dire straights, social security will at least provide enough to sustain people. It has to, and Social Security can be fixed with just a few adjustments.
Medicare is a different story, and because there are just so many baby boomers entering retirement now, it's impossible to project long-term do to actual medical and prescription costs. We'll see how that plays out, but I do think actual reform is needed with Medicare. With Social Security just gradually move back retirement ages, raise the ridiculously low annual earnings ceiling (currently $128k), and pay back the amount politicians (Reagan especially) have misappropriated over the years ($2 Trillion plus).
The pension systems are a different story. Imagine working on a pension plan for 20 or 30 years and then the company shutting down, selling their assets, or being bought out by a foreign entity who wants nothing more than to eliminate pensions? Now there are laws meant to protect these pensions but if a company goes belly up you aren't likely getting anything close to what you might have, in some cases just a few ten thousand bucks. These are some of the people to worry about now. They didn't have individual retirement plans, tax sheltered savings, or company matches. They had a guarantee, a flimsy guarantee at that, they would be provided a lifetime annuity once they reached retirement age. The article discusses individual cases, but be sure there are tens of thousands of people in the very same boat.
In the future the worry will shift away from the long forgotten pension and then shift to the fact that maybe a third (now it's half) the population is not saving for retirement in individual retirement plans. Sometimes it is due to the fact they simply don't have the money to put there, don't understand the systems because the company offers very little guidance, or they just have to have the latest new smartphone or a new car every two years.
Regardless of situation or timeline, I think in the golden ages of easy retirements lasted about 40 years, from 1970 to 2010. I think with the elimination of private pension plans, with companies cutting the fat at the expense of the employees first (benefits packages), and with people being people it's going to just get tougher and tougher.
fantasycurse42
Footballguy Jr.
This guy Doctor Detroit clearly hasn’t heard about all the winning in DC lately 
With these huge tax cuts, every business in America is going to be giving it right back to the employees!!
If anything, pensions will be going up, huge tax cut money from businesses going right into pensions!! #MAGA
just in case it wasn’t obvious:
With these huge tax cuts, every business in America is going to be giving it right back to the employees!!
If anything, pensions will be going up, huge tax cut money from businesses going right into pensions!! #MAGA
just in case it wasn’t obvious:
The Stock thread might be the better place for this question but here goes: For those of us with significant investments across several funds in a 401k or 403b, do investors typically set standing stop-loss orders for those funds in case of a correction? I've never done that, and I typically see a correction as an opportunity to buy instead of sell as my time horizon is 20 years. I wonder if the answer is different for money in a brokerage account, say, that is meant to be more liquid and at higher risk for big swings (if we're talking about individual stocks instead of funds or an index.) Thanks for your feedback.
Don't Noonan
Footballguy
With a time horizon of 20 years I personally would not be trying to time the market or be setting stop loss orders in my 401k. You may tinker a bit with your allocation or rebalance occasionally but if you are not touching this money for at least 20 years I would just recommend to continue to dollar cost average as you have been doing.
-OZ-
Footballguy
I haven't, but almost all of my retirement accounts are in ETFs or mutual funds. I've only used stop loss orders for individual stocks.
Maybe I'm being naive but with 20 years to go I'm not worried about a short term correction across the market. I probably would use a stop loss if I had a significant amount in a specific geographic international fund.
I think everyone fears outliving their money, but I kind of look at it in a practical, albeit morbid sense. As my grandmother recently passed away at 98 years old, she was actually in pretty decent health up until the last two or three months. However, she made the conscious decision about 15 years ago that she'd rather her children received her money rather than caregivers. For the last ~14 years of her life she lived on her own on about $1400/month between social security and a partial pension. She still managed to save almost $300-$400 month. She never owned a house or a vehicle in her life. But she obviously lived quite frugally. She really didn't want to extend her life unnecessarily past 90 or so, and she didn't want the state draining away her life savings either so each year she gifted her children any excess money she had leftover. Without her knowledge, they pooled this money and set it aside in an account just in case she needed some assisted care, but she never wanted or required that. As I fear death probably much, much more than a reasonable person should, I think this is how I want to do it too. I want to give to the living so that they can enjoy it. Once I hit 85 or so (IF I am fortunate enough), I really don't see much international travel or extravagant purchases in my future. If I run out of money, so be it. Can't take it with me and hopefully my children/grandchildren/beneficiaries are able to do something with it.
As was mentioned earlier, I also believe the amount of federal assistance you receive is based on how much you have, so exhausting your savings or at least shielding them in a trusted relative(s) earlier in life is a good strategy - until of course they take it all without your knowledge, muahahahaha.
Anyway, I've kind of rambled on here, but I am not setting up a trust for my beneficiaries (probably) because I'm relatively cheap and don't want to pay someone to set this up, and I don't have life changing kind of money available (I'd consider this at $5mil+). I am intending on gifting my children a set amount each year as soon as I retire. It is part of my calculated retirement expenses and I will obviously adjust periodically as need be, but I'd like to give my money away before I die rather than pass along an inheritance. If it means I live in section 8 assisted living near end life, I have a feeling I'll at least have plenty of company there so will be able to find a pinochle or euchre game without much issue and hopefully my children will remember to stop by from time to time to steal money out of my wallet.
Almost all of my significant retirement monies are in index funds also, and I do not have stop loss orders set at all. I have periodic investments setup automatically so if there is a dip, I'm still buying in, just at a lower amount. I do have stop loss orders for some stocks, but only those a bit more volatile that I don't want to hold for a long time. I used to set more of these, but I got stopped out at MSFT for instance at 65 or so a year or two back and lost out on some nice run ups (granted it was just half of my position, but still). I am worried about a market correction, sure. If you are overly worried, I think there are better ways to protect yourself however such as options in positions you are heavy in.
Sand
Footballguy
So this year I didn't buy any Bitcoin, own tons of FANG stocks, or win the lottery. So, another year of work ahead. I did manage to add 14.5% on my net worth - not bad with my allocation (but should have probably been a bit more aggressive). Economic conditions still look good, so staying the course. Staying pretty conservative as I'm hoping to get "inflection point-ish" this year. Hope everyone else was treated well this year.
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ShaqAttaq
Morally Ambiguous
Wife and i are 46; we don’t live particularly frugally, are invested kinda conservatively and are at approximately 40% of our retirement goal. If we stay the course and the world doesn’t go haywire it seems we’ll be OK. Planning on continuing to max the tax-deferred vehicles and hoping for the best. Like most everyone this was a good year on paper.
James Daulton
Footballguy
Lots of people liking what they see on paper. However, as we've all ;lived through, on paper ain't worth the paper it's written on until you cash it in. Not saying you in particular but it seems like the country has forgotten that the market goes up and goes down. Not just goes up. I just hope that folks near retirement don't take this bull market for granted with their asset allocation.
-OZ-
Footballguy
What all are you including? Vehicles and other property or just home equity, savings and investments?
I'm struggling with the reallocation process. I've been doing it, I've gone from around 5% bonds to 15% in the last month (kids college accounts are around 35%). But when my retirement accounts have grown more in the last 6 months than my annual salary and our net worth (equity, savings and investments) has grown 10% since July 1, it's mentally hard to sell off much. I'm 20 years from "real" retirement, so there's time to recover if this all comes crashing down tomorrow, but reallocating is still the right process. "Trust the process" as we often say...
and yes, I realize 15% bonds is still a lot lower than most experts advise. But I think it's right for us.
James Daulton
Footballguy
Being 50 I'm about 10 to 12 years away from retirement and I'm finishing up paying the kids college (what the 529 plans didn't cover). I think I can handle another downturn as well but the longer we go before it comes, the more nervous I'm getting.What all are you including? Vehicles and other property or just home equity, savings and investments?
I'm struggling with the reallocation process. I've been doing it, I've gone from around 5% bonds to 15% in the last month (kids college accounts are around 35%). But when my retirement accounts have grown more in the last 6 months than my annual salary and our net worth (equity, savings and investments) has grown 10% since July 1, it's mentally hard to sell off much. I'm 20 years from "real" retirement, so there's time to recover if this all comes crashing down tomorrow, but reallocating is still the right process. "Trust the process" as we often say...
and yes, I realize 15% bonds is still a lot lower than most experts advise. But I think it's right for us.
Sand
Footballguy
Exactly that - house and investments. I don't count vehicles - they're a cost necessary to have a life.
My asset allocation is sitting at about 55/35/10 (stocks/bonds/real estate). There was a good study a bit back that showed the safest allocation over the years was to be the most conservative at retirement and increase stock allocation from there. Since my nut is getting in range I'm doing my best to stay disciplined. I'm watching economic items very closely and will get even more conservative if things deteriorate.
When I hit my magic number i'll probably reshuffle all this to hit an allocation that is still conservative, but hits ~3.5% yield that will allow for pretty small reductions in principal as I spend down.
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-OZ-
Footballguy
I realize this is personal but what formula are you using for the magic number?
Just still trying to figure this out for us. With pensions our magic number isn't as high as it would be for others but I'm feeling averse to going too conservative.
Sand
Footballguy
Like things with lots of unknowns it's best to, and I've tracked, a number of indicators to see where I stand. For sure hitting 0 cycles failed on firecalc is one - IMO firecalc is a bit non-conservative so that one should be a slam dunk before looking onward. Others that I have seen and keep track of are expenses=3.5% of net worth and having 30x expenses in investments only (not there yet).
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-OZ-
Footballguy
https://www.cnbc.com/amp/2017/12/29/in-retirement-a-1-million-nest-egg-isnt-enough.html
While the article itself isn't anything new, one paragraph stuck out to me:
It's even worse for a 42-year-old Gen Xer, whose $1 million at retirement will only generate an inflation-adjusted $19,000 in year one after all is said and done. And a 32-year-old millennial planning to retire at 67 with $1 million would be below the poverty line.
a million dollars still sounds like a lot of money but put in those terms really brings the point home. This seems to exclude SS, but poverty plus SS still isn't good living.
While the article itself isn't anything new, one paragraph stuck out to me:
It's even worse for a 42-year-old Gen Xer, whose $1 million at retirement will only generate an inflation-adjusted $19,000 in year one after all is said and done. And a 32-year-old millennial planning to retire at 67 with $1 million would be below the poverty line.
a million dollars still sounds like a lot of money but put in those terms really brings the point home. This seems to exclude SS, but poverty plus SS still isn't good living.
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James Daulton
Footballguy
Ignoring social security is disingenuous. Most of the money we've put in will be available to us in some fashion or another.
-OZ-
Footballguy
You're probably right, but do you know how much a 40yo will end up getting? (Sort of a rhetorical question but if you do, I'd love to hear the answer)
I think this is the prudent course. The SS we get we'll probably mostly donate to charity or use to help others.
NutterButter
Footballguy
If you want to be conservative, estimate 75% of what you'd be getting now which is where it will be if no changes are made.
The Ref
Footballguy
I work for one of the largest custody accounting companies in the world who specializes is pension servicing.
They took away our cash account pensions 10 years ago. If I was on the same plan I'd have another 160K or so today.
The Ref
Footballguy
I'm behind. Early 40's and I really dicked around in my 30's having borrowed some money from retirement and made a few bad investments.
That said my wife and I crossed 1/3 of a Million today for the first time. (She also has a govt pension coming, so in reality it's more than that).
There are others my age that do and should have more than that put away, but we have put some work in to get back on track and it feels good to say.
That said my wife and I crossed 1/3 of a Million today for the first time. (She also has a govt pension coming, so in reality it's more than that).
There are others my age that do and should have more than that put away, but we have put some work in to get back on track and it feels good to say.
NutterButter
Footballguy
-OZ-
Footballguy
That's my thought. The only thing this does imo is reminds us that tax rates can and do change over time.
Make sure you're not in a retirement plan at work. I had never even thought about it but:
“A traditional IRA is fully tax deductible if you or your spouse are not participating in a retirement plan at work, regardless of income, or even if you or your spouse do participate but your income is less than $62,000 for an individual or $99,000 [if you are] filing jointly."
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-OZ-
Footballguy
Debt free with 1/3 million (and presumably building) and the pension is a very good position to be right now.
I’m within the 12% tax bracket myself, so I’m loading up the Roth. I’ll also roll money from my 401k into the Roth and pay the tax man this year. I have a hard time envisioning a scenario when I’m 65 where my top tax rate will be lower than 12%.
xulf
Footballguy
Yes...but I'm now 9% lower than I would have been. I'm essentially 95-98% traditional and I think it is my best chance to hedge.
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xulf
Footballguy
KCitons
Footballguy
Both the wife and I are at 50. We are approaching 3/4 million in retirement. We've been debt free for 5 years (except leased vehicle). Unlike others, I expect to pull SS and the wife's Federal Fers retirement annuity. Our health care is semi fixed through BCBS federal. We live very frugal and continue to save roughly 35% of our income. We reallocated to 70/30 bond to stocks about 6 months ago.
The only thing that may change, is if we decide to buy a motor home and travel full time for a few years while we are still young enough to enjoy it.
ShaqAttaq
Morally Ambiguous
ugh. my wife and i (46 yo) have a goal of $3 million. i knew it wasn't going to be old age life on easy street, but that is sobering.
-OZ-
Footballguy
Sand
Footballguy
No worries. The Fed says perpetual inflation is such a good thing they have targets for it and everything.
Sand
Footballguy
As long as it isn't an Illinois or Kentucky pension...
Debt free with 1/3 million (and presumably building) and the pension is a very good position to be right now.
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Tom Hagen
Footballguy
Good point but it also reminds us that nothing in tax law is guaranteed to stay the same. Between the talk of lowering 401(k) limits and threatening to take away deductions most considered untouchable (mortgage interest, medical) it makes me remember Congress could decide to tax Roth earnings someday. I still prefer to have a mix of traditional and Roth as a hedge.
sbonomo
Footballguy
Just out of curiosity how much did you have to put away a year to reach your goal of $5.0MM? Let's assume you have $1MM now and need to save the other $4.0MM between now and 67. That is roughly $40,000 per year (assumed an 8% return rate) over the next 27 years. That is $24,000 of post tax dollars that needs to be saved each year. Hmm, after doing the math that isn't actually that bad.
ETA: my goal has always been $1.5MM liquid and house paid off (i should have this done by mid to late 50's). I don't plan on having kids so whatever is left will either be donated to something or given to family.
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NutterButter
Footballguy
I'm guessing that's for 2 people. That still is a pretty big number if that's going to be mostly disposable income. I think you're in the disregard SS camp so that probably has a lot to do with it.
xulf
Footballguy
Not to mention no longer saving for retirement...a huge expense.$57,000 / year with the home paid off is still decent living.
Tom Hagen
Footballguy
This doesn't get talked about enough. I read articles suggesting you need to cover 80%+ of pre retirement income, but right now I live off less than 2/3 after taxes and retirement savings and have a mortgage payment I won't have in retirement.
xulf
Footballguy
Advisor advice is often off set multipliers. Anyone who has had large increases in income or good combo income with a spouse can NEVER catch up to the multipliers.
You are restricted to what you can contribute and what you are matched at.
