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June 1, 2012 at 5:58 PM in reply to: How are people dumber than us going to make out with their 401(k)s? #744808June 1, 2012 at 3:08 PM in reply to: How are people dumber than us going to make out with their 401(k)s? #744793
no_such_reality
ParticipantBG, be vary cautious of homes that have sat with the utilities turned off for extended periods.
flu, what your uncle did is doable, provided you hit the timing right, have the right marital situation, and are willing to move every two years and live in the areas the rentals are at.
It’s good rule of thumb, never by a rental you would be unwilling to live in or in an area you wouldn’t want to live in.
June 1, 2012 at 1:58 PM in reply to: How are people dumber than us going to make out with their 401(k)s? #744784ParticipantBecause you can’t draw how little you want. The IRA and 401K rules stipulate that you have to meet minimum dispursements based on your age in retirement.
http://www.bankrate.com/finance/money-guides/ira-minimum-distributions-table.aspx
Starting at 70.5 years of age, you must take a minimum distibution based on the balance. If your balance is $1 million, you’ll need to take out $35K whether you need it or not and have it be income. As you get older it goes up faster.
If you are 65, your life expectancy is 85 as a woman. At 80 you have to take out at least $53K if you have a million balance. 85 you need to take out $67K. and on.
The income will be counted as income. If you have Social Security, it will be additive on top of social security.
June 1, 2012 at 12:34 PM in reply to: How are people dumber than us going to make out with their 401(k)s? #744773ParticipantAnd let’s not forget, 3 houses is a half a million dollars, give or take. If you’re buying $150-$175K houses. Probably $500-$600K if you’re targeting just sub-$200K houses.
At the moment, looking at most of urban San Deigo south of Oceanside, I see 32 houses listed at below $175K. (that’s not much).
So what is realistic rent and what’s realistic expenses? And if you finance, don’t forget those expenses of closing the purchase and fixing up, and rental refurb. Or will you allow the property to slowly spiral in the rental slum so many landlords allow happen?
Participant[quote=outtamojo][quote=squat250]I have never had visible abdominal muscles but I will by the end of this year. I blame junk food.[/quote]
Yeah, I’ve been exercising about an hour a day for the last 8 months and now I’ve got these hard boney things on my side- what are they called again?[/quote]
That’s your trainer’s you know what…
June 1, 2012 at 11:27 AM in reply to: How are people dumber than us going to make out with their 401(k)s? #744760Participant[quote=bearishgurl]
kev, those SOLID jobs were not the “glamour” jobs of today, nor did they have anywhere NEAR the working conditions of today OR employee-friendly laws in place (FMLA for example). Sorrento Valley either did not exist or was ONE dead-end street with four bldgs on it (circa very early-eighties). Most retired “boomers” in SD that DID NOT retire from the government retired from “head-down” positions such as assembler/mechanic from Convair, General Dynamics, NASSCO or Rohr. SD was a manufacturing town and the majority of contracts were with the military.The Gen X and Gen Y family-consumers of today CAN live frugally and save but most choose NOT TO! Boomers had no other choice, due to lack of as many options, products, new housing tracts to choose from as young families of today do.
It’s all relative.[/quote]
+1 BG, you are spot on.
One minor nit, the current Gen-X/Gen-Y cubical jobs (marketing, IT, software development), they’re head down, non-glamours, assembly line work. More leeway due to things like FMLA and employment law but a whole lot more uncertainty in the job or any equivalent job being here tomorrow. (particularly, here as in California).
Rental management, a small business (and government headaches that go with it), are the way to go.
June 1, 2012 at 11:00 AM in reply to: How are people dumber than us going to make out with their 401(k)s? #744750Participanthttp://taxdollars.ocregister.com/files/2012/03/annual-benefits-service-retirees1.jpg
Yep, only exalted executive types…
June 1, 2012 at 10:49 AM in reply to: How are people dumber than us going to make out with their 401(k)s? #744747ParticipantLOL, I can look at the Controller site and see W2 incomes. W2 incomes will translate directly to retirement income. It even tells you their retirement plan.
Or just look at CalPERs numbers and compare total retiree growth to growth of retirees with $100K payouts and see what percentage of ‘new’ growth it is.
June 1, 2012 at 10:44 AM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744746ParticipantYou can download the market returns by month from Yahoo.
If you retired in in May (I picked May because the month just closed), in any year from 1999 to last year with $1,000,000, and matched the S&P 500 return while needing to take out $40,000 a year in equal monthly installments, in only 3 of 13 years do you have a remaining balance above $1,000,000.
In only one of those, retiring May 2009, is your balance notably larger, $1,363,209. The other two are $1.016M and 1.026M The lowest, noteworthily low, is the May 2000 retiree, their balance is $356K, their $40K annual stiped has also lost 20% of it’s purchasing power.
It’s overly simplified but highlights volatility risk. In 9 of 13 years, note that their low points hit the 500s or lower. That’ll really stress you out.
Balances and interim low by year or retirement
Year Balance Low
1999 $396K $306K
2000 $356K $282K
2001 $541K $386K
2002 $755K $506K
2003 $1025K $658K
2004 $829K $548K
2005 $824K $545K
2006 $733K $495K
2007 $656K $451K
2008 $754K $506K
2009 $1363K $1046K
2010 $1016K $862K
2011 $917K $814KNow hopefully they weren’t 100% in the market, then again, hopefully they weren’t new real estate mid-2000s either, or bonds
June 1, 2012 at 8:10 AM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744730ParticipantIf you look at CalPERs numbers for last year, and compare total number of retiree growth to total number of retirees with $100K or more annual payouts, you’ll see that 50% of the growth is in the $100K club.
You can talk about averages but those averages are driven down by retirees that are currently 70, 75, 80 and retired 10,15, 20 years ago.
May 31, 2012 at 9:16 PM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744694ParticipantI said it is worth $3,000,000.
I suggest you use the internet and get some online free quotes for annuity that will pay $100K a year starting at age 55. That’s straight annuity with joint survivor benefit. Typical cost today is $2.2 Million. That doesn’t include the COLA benefit the retirees get. That adds another $700-900K. You can estimate it yourself by looking at what it would cost to add the $16,000 COLA growth after the first 5 years, that would be a $16000 a year annuity starting at age 60, hint (about $250K). Then another $20K one at 65 (hint $300K+). Then another at 70.
OR run a retirement simulator that shows to have a 90% survivability you need less than a 4% withdrawal rate.
The reason is simple, volatility. If you thought you weathered the storm at Y2K and retired on less, 2002 would basically leave you destitute today.
Weathered 9/11 and the 2007 meltdown would have you worried if you started with less.
But quibble if you want, maybe it’s $2.5 MILLION.
Long term averages don’t matter that much either, it’s the big drops you worry about. You have to have a big enough pile to survive and continue to withdraw and be able to rebuild while withdrawing after a big drop, like in 1987, 2001, 2007.
May 31, 2012 at 10:41 AM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744623Participant[quote=AN][quote=no_such_reality]The facts will set us free.
Government retirees are the 1%.
People need the numbers shoved in their face. Those retirement benefits are like a private person having $3,000,000 in their 401K.[/quote]
You mean most of us don’t have $3M in our 401k by the time we’re 50-60?[/quote]I don’t know why, it’s easy. You just have to put away $25,000 a year indexed to inflation, get a 7.5% compounded return for 30 years.
May 31, 2012 at 9:35 AM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744617ParticipantThe facts will set us free.
Government retirees are the 1%.
People need the numbers shoved in their face. Those retirement benefits are like a private person having $3,000,000 in their 401K.
ParticipantEnding the corn and grain subsidies is a no brainer. Corn is in everything.
Here’s another no brainer.
The ingredient list has to be on the front display of the package, in a font no smaller than 1/3rd the size of the largest font on the package and no smaller than 12 point in Arial MT normal font.
May 31, 2012 at 8:27 AM in reply to: My next door neighbor was a cop, still under 60, been retired for more than 5 yrs #744608Participant[quote=CA renter]We taxpayers have an awful lot to complain about, and the compensation of hard-working cops, firefighters, teachers, etc. should be at the bottom of the list. Those are some of the very few people who actually *work for and earn* what they get from the government.[/quote]
CAR, in Santa Ana, many firefighters are retiring with $100K/yr pensions at 50 and 55.
A $100K/yr pension is worth $3,000,000. That’s three million dollars.
How well are they paid when they get pension that is the equivalent of having amassed three million dollars by age 50 or 55?
That’s water under bridge. I’m fine with them amassing that if they contribute a large and appropriate portion of income to it. Today, they don’t.
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