[flyer]

FIH, I think things work out well for lots of people–more than you might think. As we see on this forum, there are many in the “Pigg World,” and I run into many more–friends, aquaintances, peers, etc. out in the “Big World”–who feel their lives have worked out well.

Since you asked, personally, we attribute the genesis of whatever successes we have achieved to our parents and grandparents. They were/are very smart, savvy people, and they planted the seeds from which most things in our lives have grown.

They gave us a strong foundation, but it was all up to us to make it or break it from there. As was mentioned, some squander these type of opportunities, but we have tried not to make those type of mistakes, and our kids have followed suit.

That doesn’t mean we don’t have our challenges–we’ve had plenty over the years–many, many of various types–some life threatening–but we feel we’re stronger for them. Everyone has issues in life–it’s surviving them and moving on that counts.

[flyer]

OK, folks, when I said “Ivy material”–I meant from a purely academic perspective–no slur intended–some kids are ready and some are not–especially when it comes to Ivy med schools–as our kids found out when they were competing to get in. Money aside, they definitely earned it.

[flyer]

[quote=bearishgurl][quote=flyer]That’s good to know that some believe Boomers as a whole are better prepared than they have been in the past, but, imo, those numbers are still dismal for a comfortable retirement long term (depending on how you want to live) and, based on the small percentage of those with a high net worth, (stats reveal only about 8% of US households–of all ages, not just Boomers–have over a million in net worth, excluding primary residence) they are hardly predictive of a huge transfer of wealth among generations across the board.

Granted, as I mentioned before, 10% of us will do extremely well in retirement across all generations, but there is still concern, as a society, about the 90% who won’t.[/quote]

flyer, do you think an individual or couple needs $1M in investable assets (not incl equity in principal residence) in order to retire? And would they need less than $1M if one or both of them had DB pensions?

With a paid-off residence with a $3-$5K annual tax bill and no HOA dues, what do you think is an adequate monthly income for a retired couple in SD county? How about a single retiree? Assume that the oldest member of the household or the single retiree is wishing to retire at 62 years old.[/quote]

BG, my general comments were made based upon the analysis of experts and the stats they provided, and they, of course, are analyzing the status of all Boomers across the board, and that information does not paint a rosy picture.

To get specific–I will start by saying the comments I am about to make are strictly my opinion.

Although my comfort zone requires a much higher figure (lifestyle also has a lot to do with the funds you will need in retirement) I do believe that (based upon many factors) most Boomers will need at least $1M in investable assets (not including equity in the primary residence) or the equivalent in pensions, etc., as you mentioned, to retire comfortably, from approximately age 65 forward. This assumes they are no longer generating income from any other sources, passive or otherwise, and is another reason we plan to keep our investment properties for most of our lives.

With the state of Social Security and Medicare, I believe younger generations may need to double that figure.

Many people make a lot of money between 25-45, or even into their 50’s, but, in many cases that gravy train dries up for one reason or another–job loss, illness, divorce, etc.–that’s why I also think it’s very important to carefully plan at a young age exactly how you and your family plan to survive financially for the duration. Believe it or not, many just let the mega-bucks slip through their fingers during the “flush” years, which never ceases to amaze me. Making the money is one thing, keeping it for the duration is what will make or break you.

Again, these last comments are just my opinions based upon lots of research, as well as our personal goals, and I respect that everyone is free to plan as they choose.

FIH, I agree there may also be a healthcare crisis, but I’ll let you fill us in on that one.

[flyer]

BG, I completely understand what you and TS are saying, and I’m just quoting the stats and what the experts are saying, so, I’ll just leave it
at–whatever works for each person is all that really matters!

[flyer]

That’s good to know that some believe Boomers as a whole are better prepared than they have been in the past, but, imo, those numbers are still dismal for a comfortable retirement long term (depending on how you want to live) and, based on the small percentage of those with a high net worth, (stats reveal only about 8% of US households–of all ages, not just Boomers–have over a million in net worth, excluding primary residence) they are hardly predictive of a huge transfer of wealth among generations across the board.

Granted, as I mentioned before, 10% of us will do extremely well in retirement across all generations, but there is still concern, as a society, about the 90% who won’t.

I do think this will be a “silent crisis” for many reasons, so we may never really know the true outcome, but the stats speak for themselves.

[flyer]

In response to those who don’t have to be concerned about covering the costs of going to an Ivy, I would say, you should be more concerned about your kids actually getting in, and graduating.

Two of our kids graduated from “Ivies,” and getting them in and seeing them through to graduation was more challenging than paying for it (thanks to the gradparents)–especially to med schools. In retrospect, it was well worth it, but, as many on this forum have mentioned–if you’re going out on a financial limb to do it–you might want to give it some serious thought.

We’ve known many people who wanted their kids to attend “Ivies,” but, in the final analysis, they just didn’t turn out to be Ivy material. In other words, there are many other variables that may effect the outcome of this quest other than cost.

[flyer]

Wealth Transfer? Boomers Banking on a Mirage
By Dan Kadl
TIMEBusiness

“Under-saved boomers have long believed that a tremendous generational transfer of wealth will save their retirement. Estimates have put the expected bequest from boomer parents at $10 trillion to $30 trillion. Well, don’t count on it.

Boomer parents continue to break the mold in terms of how long they live. Meanwhile, health care costs for those in old age are soaring, the recession zapped elders’ nest eggs, and with interest rates so low boomer parents don’t have the income they once projected—and are systematically spending down savings to maintain their lifestyle.

It all points to a disappointing final tally. The Wall Street Journal reports that among boomers, 56% now say they expect to receive less than $50,000. Just 5% expect more than $250,000. Allianz Life found that only one in five people past the age of 72 believe they have a duty to leave their kids money. So there won’t be a lot of game-changer inheritances in coming years.

This will come as a shock to some boomers, who at one point may have expected a retirement bailout from Mom and Dad. What they’re getting instead is a double-whammy: Not only is there little or no money in the parental till, but they are being asked to help the same parents that once looked like a golden goose. In some cases these parents not only need money, but boomer kids’ time as well as they require increasing levels of personal care giving.

“Thanks to medical gains, a 65-year-old man has a 60% chance of living to age 80 and a 40% chance of reaching 85. For women, the odds are 71% and 53%, respectively. All of this has made the 85-and-over age bracket the fastest-growing segment of the population.”

The Boston College Center for Retirement Research found that projected inheritances for baby boomers had fallen by 13%. The Center for the Study of Aging at Rand Corp., a nonprofit, found that individuals have reduced their wealth transfer expectations by 19%. Even the affluent are pulling back. Merrill Lynch found that among those with at least $250,000 in investible assets only 41% said preserving inheritances was a top concern.

Retirees without guaranteed lifetime income, and with interest rates so low that they have no safe means of investing for meaningful income, wind up exhausting their savings to make ends meet. One in three adults age 60-plus say they don’t feel prepared financially to live to 85; almost one in two say the same about living to 95, according to Northwestern Mutual Life.

This is the new normal–and it’s the face of a quiet crisis that will have a trickle-down effect on the inheritances of future generations as well.”

[flyer]

From what I’ve read, the “greatest transfer of wealth” is concentrated at the top–it’s not across the board–so it may occur for maybe 10% of the population at the max, but, that will not be the “norm,” for the other 90%.

In the very top tiers millions+ may transfer, but as you work your way down, averaged out, it amounts to a few hundred thousand at best.

I realize most of us “Piggs” are in those top tiers, but, for most, it just isn’t going to happen, and that’s why there’s concern about a “retirement crisis.”

edit: And this. . .

“It was revealed by one of the most authoritative sources comparing wealth-concentration in the various countries, (the Credit Suisse Global Wealth Databook, 2014) that in the U.S., 75.4% of all wealth is owned by the richest 10% of the people.”

[flyer]

Should be interesting to see how long we can float the game this time. Of course, some people will use this opportunity wisely, but, for the most part, it will probably simply add to the already exponential ranks of the “low or no equity” population, which will not bode well for their retirement years.

[flyer]

Agree that it’s best to do the things you want to do in life while you’re young, if at all possible. We have over the years, and are glad we did. Life is short, and you never know what might happen in later years.

Now that we’re in our 50’s, even though we’re still actively involved in our professions, for us, the main value of financial security as we get older, is the ability to do what we want to do, or nothing at all, and knowing we should be good for the balance of our lives without running out of funds. That, along with being able to pass it onto the kids.

Imo, this is another discussion for which their is no right or wrong answer. Lifestyle decisions before or after retirement are all based on individual choices, but the one decision we all have in common is figuring out how to financially care for ourselves and our families from the beginning to the end of our lives.

[flyer]

You’re actually right AN, in that, although $1M is 7 figures, by today’s standards and stats, the new definition of “wealthy” starts at around $10M.

[flyer]

Don’t want go OT, or into any other detail, but for me, it’s really hard to separate financial milestones from personal milestones because, for us, the spiritual, family, friends, financial and other factors in our lives all hold equal importance–especially since everything in this world is so fleeting.

That said, on a purely financial basis, having a high net worth is nice. Having our dream home in our dream location, along with other properties is nice. Having toys like cars, boats, planes, helicopters, etc., is fun. That’s about all I can think of right now.

Yeah, AN, we’ve always had a combo of TF money, W-2, and are also business owners.

[flyer]

Happened to be up posting this morning and read your great post.

All of these decisions are very individual, and it sounds like you came up with a win/win for your family.

We, (as I’m sure others do) feel the same about the decisions we have made concerning education, careers, housing, finances, etc., etc. in our family, which, as has been mentioned, illustrates there really are no “right or wrong,” answers to these questions–it’s simply–to each his/her own.

[flyer]

[quote=flu][quote=flyer]Agree with flu and FIH that rental properties (residential and commercial) are also a great way to go. Regardless of education and career choices, getting into that game years ago in San Diego and elsewhere has also really paid off for us, and just about everyone we know. As BG said, there are definitely challenges, but that is to be expected, and, in most cases the issues can be managed.[/quote]

Ok flyer, totally off topic now. but since you brought it up, I’ll ask. How does one even get started with commercial real estate on a small scale? Beyond fishing through loopnet (which some have said it’s the worst way to buy commercial RE)… If you don’t feel comfortable sharing publicly, it would be great if you could PM me. Would be interested in picking your brain about this, without being fed to the sharks. The last arrangement any family member had with commercial RE had to do with a property that was in Manhattan Beach found by a family friend that had a good rental stream, since it was that was a large land occupied by corporately owned fast food restaurant for which the corporate entity paid for the building and lot maintenance and the property taxes, so the only thing the partners did was collect the rent check and renegotiate the lease every 10 or so years. Unfortunately, the guy that found us this thing tried to squeeze all the other partners out after the thing really appreciated, so everyone ended up selling their respective stake and forcing everyone to get out of that clusterf of an arrangement, and killing the goose that laid the golden egg, so to speak..

So what’s the secret sauce into the world of commercial RE? And do you have anything in San Diego? Would prefer *not* to be involved in any sort of partnership with people that I don’t know well. I’m not interested in any sort of bullshit from PETDNT (piggington experts that don’t know shit), but would be in debt to folks that really know what they are doing to provide some “education”. Rest assured any sort of involvement I would possibly be in would not disturb the 1% club that you belong to, as my financial impact on that club would be like 0.0000000001% if any…. :)[/quote]

flu, don’t mind your questions at all, and if we had anything going on that would work for you, we’d be glad to chat, but, commercial is now a thing of the past for us. I brought it up because we were once very involved, but, as the city developed, and our holdings became more and more valuable due to the locations we held, it seemed wise to cash out.

Commercial is much more complicated these days, probably because people seem to be a lot more complicated these days, (reference the scenario you mentioned) but many of our deals were made with family, friends and a handshake–if you can believe that–and that’s probably the only way we would have been comfortable being involved in that type of business at that time. It was all very “old school,” so I’m probably not the best person to talk to concerning today’s marketplace.

If I remember correctly, I think you’ve mentioned working with some of the realtors on this forum concerning your investment properties, which, from their posts, sound like great people. Any chance of talking to them or people they might know about current commercial opportunities?

[flyer]

Agree with flu and FIH that rental properties (residential and commercial) are also a great way to go. Regardless of education and career choices, getting into that game years ago in San Diego and elsewhere has also really paid off for us, and just about everyone we know. As BG said, there are definitely challenges, but that is to be expected, and, in most cases the issues can be managed.

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