Armed Polite Society
Main Forums => Politics => Topic started by: Ben on April 04, 2019, 09:46:41 AM
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Expecting people to save for their own retirements just does not work.
Yes, this is where we're going. More socialism, less personal responsibility. Some people can't stop from buying the newest iPhone, or a Corvette or whatever instead of putting money in a retirement fund. Thus no one should be allowed (or to their way of thinking, forced) to, and the government will and should take care of you. ;/
I apologize for the link to stupid Vox.
https://www.vox.com/2019/3/27/18174385/retirement-savings-401-k
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So what they are saying is that delayed gratification and personal responsibility are attributes of the wealthy....
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Hindsight 2070: We asked 15 experts, “What do we do now that will be considered unthinkable in 50 years?” Here’s what they told us.
Youth tackle football
Bosses
Eating meat
Conspicuous consumption
The drug war
The way we die
Banning sex work
Ending the draft
Facebook and Google
Abortion
Self-driving cars
Our obsession with rationality
Abandoning public education
The idea of a “wrong side of history”
:rofl:
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It used to be to provide for their retirement people had kids, not saved money!
And now Americans have given up reproducing even at replacement rate.
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It used to be to provide for their retirement people had kids, not saved money!
And now Americans have given up reproducing even at replacement rate.
I have two qualified heirs to the throne who can support me in my old age. Yet, I will not burden them with my health and well-being. I have many peasants for that.
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I have two qualified heirs to the throne who can support me in my old age. Yet, I will not burden them with my health and well-being. I have many peasants for that.
I have 4.
I do not plan to burden them with my retirement if I can help it but I also have a non-zero expectation that sometime in the next 30 years the government may be seizing 401ks.
So it's nice to have a back-up plan. (Yes, the government can seize my children as well, but I put that at a lower chance than seizing my money.)
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Well, the 403(b) route has worked for me so far, with $ 820,000 K in the kitty at age 59. I started contributing at my first professional job at age 26, did matching, and never had to take a loan from the plan. Having said that, I realize full well that a substantial market downturn in the next several years could gut my retirement plan like a trout. I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.
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. I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.
That's some hard core white privilege you have going on there comrade. Your capital belongs to proletariat, state will take take care of you. Da?
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I am just relying on all of you
suckers working stiffs fine upstanding tax payers to support me on my two .gov pensions and Social Security for the next 20 years or so. ;)
bob
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I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity,
If I didn't have the fed.gov pension (essentially an annuity) to back up my TSP, I would be doing something similar. Just for the safety net.
But yeah, the rates aren't great. If we ever go into one of those nutty early 80s things again, I would consider adding an annuity at 10%. =D
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I have:
military retirement
TSP
Roth IRA.
I think that the current system where social security will pay enough that people don't end up on the street starving when they can no longer work if they don't have relatives willing to take them, with incentives for people to save otherwise, is about the best we can expect.
The problem with social security is that the excess isn't allowed to be invested effectively.
Some sort of mandatory IRA/401k system might be better, but would take a couple generations to switch to.
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I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare
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The problem with social security is that the excess isn't allowed to be invested effectively.
I've always wondered what the social security kitty would look like if they invested as efficiently as say, Vanguard, with the same overhead. Well, and also didn't raid the thing. Well, and also vetted for fraud.
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I've always wondered what the social security kitty would look like if they invested as efficiently as say, Vanguard, with the same overhead. Well, and also didn't raid the thing. Well, and also vetted for fraud.
So what you're saying is: I've always wondered what the social security kitty would look like if the government didn't run it.
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So what you're saying is: I've always wondered what the social security kitty would look like if the government didn't run it.
=D
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I would just like to know what the Social Security kitty looks like at all. How much is money is actually mailed to retired people each year? How high is their overhead? How much of their budget goes to disability payments and how much is actually mailed out? Lots of things I don't think I would be happy to learn.
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I would just like to know what the Social Security kitty looks like at all. How much is money is actually mailed to retired people each year? How high is their overhead? How much of their budget goes to disability payments and how much is actually mailed out? Lots of things I don't think I would be happy to learn.
As a likely future recipient of SSDI I honestly wish it would go away. I'd much prefer a totally privatized disability insurance environment. Rates would go up but not as much as taxes would go down if it we're eliminated without the money simply being redirected (please suppress your guffawing).
Same with regular retirement benefits. That 12.4% would turbo-charge my retirement savings and I'd blow away the "return on investment" from SSI. I'd even be willing to give up my "earned" benefits to date to make that happen.
If other schmucks out there aren't willing to take responsibility for their retirement savings, or to insure against disability, they can just work until they can't. I'm ok with having it be an opt-out rather than opt-in scenario on some level for private retirement savings and disability insurance. Not sure how that can work, but I'm open to the possibility if a workable solution is possible.
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I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare
I’d be very close to retirement right now in that scenario.
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I’d be contributing a lot more to my 401k if the .gov wasn’t getting to my paycheck first for social security and Medicare
I'd be able to retire right now based on my pay-in.
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I am now pondering the concept of at the time of retirement, taking $ 100 or 200 K and buying a single payment fixed annuity, and am thinking about immediate payout vs. deferred payout vs. survivor benefits vs. return of principal. Since I have never had a pension, this would give me some of the security of a fixed payout not dependent upon market return. The current interest rates and rates of return on a fixed annuity are still not what I would want them to be, but I would be hedging against that downturn.
I know when Dad sold the tavern, he put big chunk of the money into a annuity. I remember him telling me tat they calculated a monthly payment based on him living until age 75. He lived until he was 91. He used to joke that Home Office of the Insurance Company would call the agent that sold him him the policy each month to ask "Is that SoB dead yet ?" :laugh: :laugh: :laugh:
I'm meeting with an agent next Friday to learn more about them and maybe open one and start stashing money into one/them.
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I’d be very close to retirement right now in that scenario.
I've been saving a min of 15% (now 20% for the last 3.5 years) of my income for 18 years, I'm have no where near enough to retire yet.
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I am in the 15% ball park. It should be more with all the matching % and retirement plan % my company does. I hope to be further along than Millcreek by the time I reach 60.
What I need to do is save more after tax money.
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^^^Of note, I have lost hundreds of thousands of dollars in various 'market corrections' over the years; a downside of any retirement plan that relies upon the stock market.
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^^^Of note, I have lost hundreds of thousands of dollars in various 'market corrections' over the years; a downside of any retirement plan that relies upon the stock market.
Unless you sold at the low point and never reinvested you haven't lost anything. And values have been regained, and then some even since the last correction, never mind all the previous ones.
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Unless you sold at the low point and never reinvested you haven't lost anything. And values have been regained, and then some even since the last correction, never mind all the previous ones.
Yup. Anyone who has been able to follow the Vanguard philosophy of, "Don't just do something, stand there." Has done A-OK.
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Yup. Anyone who has been able to follow the Vanguard philosophy of, "Don't just do something, stand there." Has done A-OK.
That works for mutual funds. It often doesn't work for individual stocks. I've gone down with the ship a bunch of times: Washington Mutual, Federal Mogul, Peabody Coal, etc, etc. And some others where I should have taken half my money off the table when they were doing unusually well.
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That works for mutual funds. It often doesn't work for individual stocks. I've gone down with the ship a bunch of times: Washington Mutual, Federal Mogul, Peabody Coal, etc, etc. And some others where I should have taken half my money off the table when they were doing unusually well.
Agreed. It's why my Ameritrade account is my "gambling account" and the money I want to count on is in Vanguard indexes and the TSP. And yes, I've "gone down with the ship" a few times with individual stocks at Ameritrade. Oh well, income tax deduction. :laugh:
Even then, at some point you do have to switch from "just stand there", like when you start getting old and need to move more of your money to boring stuff that pays less, since you'll be be getting too old to stand there and wait for a recovery that may be 10 years out.
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Unless you sold at the low point and never reinvested you haven't lost anything. And values have been regained, and then some even since the last correction, never mind all the previous ones.
A common attitude that it is all 'a paper loss'. Yet for those who were retired and drawing from their accounts, it was a very real financial loss unless you had years or decades to recover from it.
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A common attitude that it is all 'a paper loss'. Yet for those who were retired and drawing from their accounts, it was a very real financial loss unless you had years or decades to recover from it.
I don't disagree. Your investments at the point of retirement should be different than when retirement is 15 years away. I am at the point, I need to start putting money in more stable investments I think. One of my to-do items this year.
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A common attitude that it is all 'a paper loss'. Yet for those who were retired and drawing from their accounts, it was a very real financial loss unless you had years or decades to recover from it.
Any money you need short term, so within a couple years, should probably be in a cash fund like a money market. Medium term, 3-10 years out, should be in a higher yielding investment that's lower volitility (e.g. bonds or dividend stocks). Long term money, <10 years before you need it, should remain fairly aggressively invested since if necessary you can let it ride for a decade to recover if a downturn hits. In down markets use the low risk money and let high risk things ride. In an up market shift things to make sure you keep the short and medium term accounts full.
Prior to the Obama administration there had never been a 10 year period in which the overall stock market was negative. Since then there's been a few rolling 10 periods that were negative, but if we can keep such types away from the oval office those windows should work reasonably well. Otherwise maybe extend them by 25-50%.
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I've been saving a min of 15% (now 20% for the last 3.5 years) of my income for 18 years, I'm have no where near enough to retire yet.
I was a bit curious, so I made a spreadsheet that does simple compounding interest with a steady investment. Rather than dollars, I just stuck "0.15" in there to represent 15% invested.
At 15% invested, I consider 0.85 as the "magic number" for the annual return where you can retire, as it replaces the income you are used to living on. Of course, most people don't earn a steady amount through their lives, so later income increases can lower the effectiveness of compounding interest as it moves the goal posts of what you consider replacement income more than simple inflation. Speaking of which, I'm disregarding that as well. But then, most retirement calculators tend put you on living at 60% of your income at the end, so oh well. It's more examining the differences various assumptions make.
Investing 15% at a 5% return, you hit 0.86 at 40 years. 15 years in, compounding interest starts to be a larger factor than your continuing deposit of 15%.
Change that to a 10% return, .86 is hit after 22 years. Retire early, perhaps? But then, that would have implications for health care, so it might be better to wait to retire early 2 more years, at which point your investment would return 1.07 times your income. Or, even safer, 29 years, when you could switch from probably highly risky(on an annual basis) 10% return investments to much safer 5%.
If you do 20%? At 10% that's hitting 0.8 at only 18 years. 1.6 times your income at 24.
I've averaged 9% with my investments, which would be 23 years for 0.85, 31-32 for full replacement income.
It's really quite astonishing how much faster you hit various "retirement points" if you are able to save a good chunk of your income - and that depends more on your spending, I think, than your income.
Of course, keep in mind that the cheaper you live now, the less you can potentially save during retirement. Sure, you can save money not driving to work every day, but what if your idea of "retirement" is packing into a RV and driving around the country?
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I've been saving a min of 15% (now 20% for the last 3.5 years) of my income for 18 years, I'm have no where near enough to retire yet.
Then you either have an investment strategy that is absurdly conservative, or your lifestyle expectations for retirement are overly ambitious. Or some combination thereof. Unless you have some medical issue that makes health insurance impossibly expensive or simply unobtainable.
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Then you either have an investment strategy that is absurdly conservative, or your lifestyle expectations for retirement are overly ambitious. Or some combination thereof. Unless you have some medical issue that makes health insurance impossibly expensive or simply unobtainable.
At my 9%, without going to 20, it should be about 23 years to hit replacement income. Which might be "overly ambitious", but if you're retiring early you probably want to be a bit over ambitious to not get caught short. Also, the more years you expect to be retired, the less you can depend on simply draining some of your capital each year.
At my age, I'd probably be best off having an investment portfolio where I have a long term investment into riskier, higher gain assets and a short term investment into safer funds for annual living expenses. Where transfers from the higher-return fund are designed to attempt to do the transfers when such funds are at their strongest vs the safer investments. Something like an annual equalizing system, where if the high risk assets are at a current low, not much money is transferred, but if the difference is high, a lot of money is transferred.
The low-risk fund would be enough for, say, 5 years of living expenses, and would involve drawing down the balance without regular transfers from the higher risk fund.
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Then you either have an investment strategy that is absurdly conservative, or your lifestyle expectations for retirement are overly ambitious. Or some combination thereof. Unless you have some medical issue that makes health insurance impossibly expensive or simply unobtainable.
I'm saving to retire at 62 (I'm 45), saving like there is not going to be any social security and saving to take a couple big foreign country trips every year as long as I can in retirement and hopefully snowbird on a sailboat in the Caribbean.
I have a fairly aggressive investment strategy and I do have a defined pension plan (that I am not including). I can't retire today with my savings but I should be bringing home more in retirement (I'm shooting for 50% more) than what I will be making my last years of working.
I've scrimped on a few things (drive older vehicles), but I still go on a out of state hunting trip each year and at least one bigger vacation.
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I'm saving to retire at 62 (I'm 45), saving like there is not going to be any social security and saving to take a couple big foreign country trips every year as long as I can in retirement and hopefully snowbird on a sailboat in the Caribbean.
I have a fairly aggressive investment strategy and I do have a defined pension plan (that I am not including). I can't retire today with my savings but I should be bringing home more in retirement (I'm shooting for 50% more) than what I will be making my last years of working.
I've scrimped on a few things (drive older vehicles), but I still go on a out of state hunting trip each year and at least one bigger vacation.
So, very, very ambitious life style goals.
Normal person retirement requires 60-80% of pre-retirement income. Not 150%. Normal is a nice vacation somewhere modest each year, not 2 overseas vacations. Normal is snowbirding to a golf course in Arizona or Florida, not a sailboat in the Caribbean.
If you can pull that off my hat is off to you.
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So, very, very ambitious life style goals.
Normal person retirement requires 60-80% of pre-retirement income. Not 150%. Normal is a nice vacation somewhere modest each year, not 2 overseas vacations. Normal is snowbirding to a golf course in Arizona or Florida, not a sailboat in the Caribbean.
If you can pull that off my hat is off to you.
Pending a 1930s depression I'm 90% certain I'll achieve my goals. My parents did it and a few of my relatives did too.
Sadly my parents didn't decide to snowbird or travel, so they are sitting in a pile of a lifetime of retirement savings. They are both 69 and everytime I talk to them, they complain about being forced to withdraw from their IRAs in the next year or 2. I do remind them that they have showed me how not to live in retirement. Dad watches/reads too much conservative news and things he'll be assualted by muslims or leftists if he travels, mom won't go against what dad says.
My aunts and uncles that saved well are having a blast with multiple foreign trips each year.
A sailboat is cheaper than a house on the water Florida
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Pending a 1930s depression I'm 90% certain I'll achieve my goals. My parents did it and a few of my relatives did too.
Sadly my parents didn't decide to snowbird or travel, so they are sitting in a pile of a lifetime of retirement savings. They are both 69 and everytime I talk to them, they complain about being forced to withdraw from their IRAs in the next year or 2. I do remind them that they have showed me how not to live in retirement. Dad watches/reads too much conservative news and things he'll be assualted by muslims or leftists if he travels, mom won't go against what dad says.
My aunts and uncles that saved well are having a blast with multiple foreign trips each year.
A sailboat is cheaper than a house on the water Florida
Um, what? They didn't spend a lot of money doing things like traveling meaning they now have a lot of money saved, and that is a "sadly"?
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I think Charby means they're not spending/enjoying the money they saved now that they're retired. So, sad meaning they're not using it for the purpose originally intended.
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Um, what? They didn't spend a lot of money doing things like traveling meaning they now have a lot of money saved, and that is a "sadly"?
No, sadly they saved all this money to do things in retirement (like traveling and buying a winter home in the south) and my dad is too scared to travel more than 30 minutes from home because he worried he will be attacked by terrorists, Muslims, Mexicans and wacko leftists.
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No, sadly they saved all this money to do things in retirement (like traveling and buying a winter home in the south) and my dad is too scared to travel more than 30 minutes from home because he worried he will be attacked by terrorists, Muslims, Mexicans and wacko leftists.
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So they're happier doing what they're doing now than doing what they previously thought they'd want to do - or you'd want to do? To the extent that your dad is unreasonably afraid of things, I guess that is mildly unfortunate, but to the extent that they're financially secure and have the ability to do everything they actually want to and more I'd say they are incredibly fortunate.
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So they're happier doing what they're doing now than doing what they previously thought they'd want to do - or you'd want to do? To the extent that your dad is unreasonably afraid of things, I guess that is mildly unfortunate, but to the extent that they're financially secure and have the ability to do everything they actually want to and more I'd say they are incredibly fortunate.
I don't think you grasp what I am saying. Simple terms, my parents as long as I can remember, told me and everyone that they were saving extra money since day one to have enough money in retirement so they can take foreign vacations every year as long as they were able and that they were going to own a house somewhere in the SE US to spend the winters in. Even a year after they both retired at 60 they traveled a bit, planning their first foreign trip to Ireland, and were physically looking at places in Florida, Alabama, Mississippi and Georgia. Then something happened to my dad, he shut down, won't even travel 70 minutes to visit me. Mom is unhappy, she still wants to travel and snowbird, Dad throws a fit is she is gone more than a couple days visiting me or my brothers. My baby brother did get in my dad's face and said he is taking mom to Arizona for a week 2 years ago, which he did. Apparently he called about every hour to make sure everyone was still safe. Last time I was at my parents, my mom showed me her passport because she is going to Canada with my brother this summer, dad was pissed about all if, saying things like the boarder agents aren't going to let them back in the US. They live in a university town and a big John Deere factory town, they live in a really affluent neighborhood (paid cash for their house 9 years ago) and dad shits bricks when any of the JD professionals that move in the neighborhood aren't Caucasian or don't speak with a Midwestern accent. Most of these foreign workers are here temporarily working at John Deere and will return to their home countries to manage JD operations over there.
I don't know what happened to my dad, he used to regularly work Southside of Chicago and East St Louis as an electrician for the railroad, used to get pissed at me and my brothers if we pointed out hateful things about minorities or religions different than Christianity. When I visit he is usually in the bedroom and has Fox News or a Religious Channel on the TV, or the local conservative Christian radio station on. Icing on the cake is dad constantly bitches about the winter, then he gets really pissed at me when I say get in your car or truck and drive south until the weather suits you better.
I think for my mom's sanity, they probably should have been a little more extravagant with spending when they were still working. I'm going to be really pissed if they end up leaving me and my brothers with a large estate.
Are they happy, no. Dad is a angry mess and mom is pissed at him.
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they live in a really effluent neighborhood (paid cash for their house 9 years ago) and dad shits bricks
I'm seeing a pattern ...
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I'm seeing a pattern ...
fixed it, thanks for the laugh
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Charby, is there any way you can try to get your dad in for a complete physical and workup? Just from your description, I see things that make me wonder about depression, anxiety and paranoia and the sudden onset makes me wonder about a medical origin, such as TIAs, medication side effects, dementia or the like.
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Charby, is there any way you can try to get your dad in for a complete physical and workup? Just from your description, I see things that make me wonder about depression, anxiety and paranoia and the sudden onset makes me wonder about a medical origin, such as TIAs, medication side effects, dementia or the like.
Nope, he'll do physical health exams with a little proding or if he feels bad, but nothing mental. He even quit smoking a few years ago after a really bad pneumonia incident. Drs gave him several mental and physical exams after he got better. I don't disagree he is depressed but he won't seek help. He only take a baby asprin everyday and supposed to take zyrtex for allegeries but he refuses, doesn't like pills other than the asprin.
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I don't think you grasp what I am saying.
[snip]
Are they happy, no. Dad is a angry mess and mom is pissed at him.
I'm sorry to hear that. It's a bad situation, but even with your mom's unhappiness that she can't travel everywhere she wants to, and your dad's mental issues, they're still in better shape than a lot of folks out there. A lot of people face those same kinds of issues without any resources at all.
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Well, Charby, that is sad about your dad. I guess people get resistant to change as they age.
That being said, if he likes warm weather, Christianity and right wing politics he would love it down here is the South. Seriously.
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So I did put together some information for annuity quotes and sent it off to the company's retirement financial advisor. I ran some quotes on the annuity purchase websites and I will be interested to see how the advisor's quotes compare. I am looking at a deferred income annuity both single life and single life cash refund, to see how much of a monthly income a single qualified $ 200,000 premium payment will get me. Since my wife has her own pension, 403(b) and Social Security, extending the annuity to cover her was not a major consideration.
Between this and Social Security, this may get me close to a relatively guaranteed pension as my wife has through her teaching job. This will still leave me a big chunk of retirement change in the 403(b) to play the market, but will insulate me at least somewhat from the inevitable downturns when I am retired.
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I have just bought a single premium deferred income annuity to buy myself a pension. I did this to hedge myself against the inevitable market downturns after I retire.
It is a single life with cash refund with no riders, pays $1000/month beginning in April 2021, is underwritten by New York Life (A++), the $ 202K premium will be funded by a rollover from my 403(b), and if I die before the full premium amount is paid out, my wife gets the remaining premium refunded as a lump sum. As of today, this still leaves me with over $ 600K in my 403(b) so I can take advantage of market gains.
If I file for Social Security at age 62, I will have just over $ 3000/month guaranteed income plus whatever the 403(b) is doing at that time.
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Assuming you retire in 2 years the 403b will hopefully be around $700k. At a 4% withdrawal rate that would give you $28k/year plus the annuity and SSI, so about $64k per year. Plus whatever your wife gets. Not luxurious but not pauper-ish either.
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I ended up buying the annuity directly from immediateannuities.com. I gave our company retirement advisor and the person I buy annuities from for my malpractice cases, the opportunity to place it in the market. Both of them called me and said they could meet but not beat the quotes from the website, and since I clearly knew what I was doing, I should just go ahead and buy it from the website, since it would be quicker than going through them.
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Assuming you retire in 2 years the 403b will hopefully be around $700k. At a 4% withdrawal rate that would give you $28k/year plus the annuity and SSI, so about $64k per year. Plus whatever your wife gets. Not luxurious but not pauper-ish either.
When the retirement planner from the teacher's union crunched the numbers, it looks as though from her pension, SSI and the projected value of her 403(b), that she will be getting in the upper $50sK per year, so we should be somewhat over $ 100K combined, before taxes. And since I paid off the house earlier this year, that saves us $1800/month that we won't be paying in retirement.
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It is a single life with cash refund with no riders, pays $1000/month beginning in April 2021, is underwritten by New York Life (A++), the $ 202K premium will be funded by a rollover from my 403(b), and if I die before the full premium amount is paid out, my wife gets the remaining premium refunded as a lump sum. As of today, this still leaves me with over $ 600K in my 403(b) so I can take advantage of market gains.
That's actually not bad for an annuity. I guess the interest rates on them are finally coming up a bit.
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As a risk manager, I work with insurance companies, so I wanted to place the coverage with a company with an A++ rating to minimize the chance that I would lose the money due to company failure. Of the quotes I received, Mass Mutual and New York Life were the only two such companies out of the eight quoting. Mass Mutual was several thousands more expensive, giving a cashflow rate of 5.42% and New York has a cashflow rate of 5.72%. The cashflow rate range of my quotes was from 5.42 to 5.88%. Lesser-rated companies have the higher cashflow rates and five of the quotes clustered between 5.68 and 5.75%.
Bearing in mind that my entire 403(b) portfolio (approximately 53% stocks/47% bonds and short term mutual funds) had a return last year of 1.4%, this guaranteed annuity rate does not look too bad. If I could buy a CD or other guaranteed return investment vehicle right now with a rate upwards of 5%, I would have done so instead of the annuity, but Bankrate said the best right now was 3.05%. So I have some guaranteed income stream with the annuity and SSI, and I will have some income stream subject to the market. Hopefully when I retire there will be no significant downturns, but I am not betting on that.
PS: I forgot to mention: my research showed that Blueprint Income and Immediate Annuities were the most popular places to buy annuities directly. I was interested to see that I received slightly better quotes from Immediate Annuities, and I wonder if the difference was due to different commission rates.
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As a risk manager, I work with insurance companies, so I wanted to place the coverage with a company with an A++ rating to minimize the chance that I would lose the money due to company failure. Of the quotes I received, Mass Mutual and New York Life were the only two such companies out of the eight quoting. Mass Mutual was several thousands more expensive, giving a cashflow rate of 5.42% and New York has a cashflow rate of 5.72%. The cashflow rate range of my quotes was from 5.42 to 5.88%. Lesser-rated companies have the higher cashflow rates and five of the quotes clustered between 5.68 and 5.75%.
Yeah, that's a good rate. For kicks, I punched your parameters into the TSP, which is known for great annuities, and it gave me $1012/mo, so only twelve bucks more.
Personally, I think after you reach a certain age, annuities make sense if you look at them as part of a diversified plan, and if they're 5% or greater. Given that you don't have some other pension (though in some of those cases they can make sense too). If I didn't have my gov pension, I would look at turning at least half of my TSP into an annuity at current interest rates. If annuity rates get any higher, I might still consider a partial annuity. It can be kind of a safety blanket for the post 50 crowd.
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Yeah, that's a good rate. For kicks, I punched your parameters into the TSP, which is known for great annuities, and it gave me $1012/mo, so only twelve bucks more.
Personally, I think after you reach a certain age, annuities make sense if you look at them as part of a diversified plan, and if they're 5% or greater. Given that you don't have some other pension (though in some of those cases they can make sense too). If I didn't have my gov pension, I would look at turning at least half of my TSP into an annuity at current interest rates. If annuity rates get any higher, I might still consider a partial annuity. It can be kind of a safety blanket for the post 50 crowd.
The only reason I'm not really looking is my military retirement pay fulfills the same function.
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I have about a pension worth about $60000 that I may take as an annuity instead of a lump sum when I retire just so I'll have a little bit of guaranteed lifetime income besides SS. My 401(k) is worth $720000, and I have another $450000 in cash (CDs) and other investments, some of which is a Roth IRA, so not taxed. My house is paid for, but needs some kinda expensive repairs.
I *think* I'm ready to retire at the end of the year (age 60) but not totally sure.
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You have about $1.2 million in assets. That seems low to retire at age 60, but I don't know the whole story or where you plan to live.
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You have about $1.2 million in assets. That seems low to retire at age 60, but I don't know the whole story or where you plan to live.
Almost $1.4 million if I include my home equity, and some other small accounts that I didn't mention (mainly because I forgot about them) I'm still not sure if it's enough. Longevity runs in my family.
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Almost $1.4 million if I include my home equity, and some other small accounts that I didn't mention (mainly because I forgot about them) I'm still not sure if it's enough. Longevity runs in my family.
If you can earn 5% or more in interest and live off that without touching the principle. then you might be OK depending on your life style. Add in Social Security and you'll be better off. That is all simple math and doesn't factor in inflation, stock market fluctuations, and medical expenses as you age.
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I am not so convinced that the decision to pull the pin on retirement is as much an issue of your net worth as much as what kind of monthly cash flow can you generate vs. your monthly expenses. My house, at $ 600K, is my second largest asset after the 403(b) value, but will generate no cash flow. Now that it is paid off, it will not generate a whole lot of monthly expenses, either.
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2 nice things about annuities.
1. If you die during the payoff perioid, the balance left in the annuity is paid out.
2. It pays out as long as you are alive. Dad got almost 20 years of "free money".
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More good news:
https://www.cbsnews.com/amp/news/when-will-social-security-and-medicare-run-out-of-money-to-pay-all-obligations/
The latest report from the government's overseers of Medicare and Social Security shows the financial condition of the retirement programs in shaky condition.
Social Security is on a path to become insolvent in 2035, with only enough money cover about 80 percent of its obligations.
Medicare would become insolvent even sooner, by 2026, if no changes are made to payroll taxes or how health providers are paid.
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More to my expectations that it's my generation that's going to be screwed, come retirement.
But at least every one before me will get "what they paid!" back. It's just me and my children that will be screwed over.
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More to my expectations that it's my generation that's going to be screwed, come retirement.
But at least every one before me will get "what they paid!" back. It's just me and my children that will be screwed over.
Well, those of us who are older and are trying to get some of our money back are not getting back what we paid, even if we get SS till the day we die. I have almost 40 years of lost opportunity cost because the gov decided they knew better than me and took my money instead of letting me stick it in Vanguard.
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More to my expectations that it's my generation that's going to be screwed, come retirement.
But at least every one before me will get "what they paid!" back. It's just me and my children that will be screwed over.
I will happily give you my SS benefits when I retire, so long as the IRS stops taking it from my paycheck today.
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I will happily give you my SS benefits when I retire, so long as the IRS stops taking it from my paycheck today.
+Eleventy-gajillion