stelea99

Comments

• I am a big believer in the Virtuous Circle; a chain of events in which the positive things you do in life build on each other and increase one's overall quality of life. This chain can begin with anything you do....you know what you need to do to keep yourself sharp, healthy, still learning, socializing, being helpful to others, supporting your family, having a healthful diet, keeping up with events, walking every day, taking care of your car and residence, and being smart about your money. Entropy is everywhere and in everything. You must keep adding energy to your life or your circle will become Non-Virtuous. As we age, our health becomes more fragile. At 80 an illness or injury is harder to come back from than it was at age 50. So, you can't let things go, You know when you are living the Virtuous Circle; you feel good (as possible) and you know that whatever you are doing is the right thing for you.

  Post: Beyond the Balance Sheet: Investing in Yourself

  Link to comment from June 22, 2025

• I think the question is, if you put the equivalent of 12% of your salary into a 401K for most of your career, what investment option did you choose for these 401k monies? Did you take risk and put money into the S & P 500 for example? Or perhaps a Total Stock Market Fund? Had you done so over an almost 50 year career, you would have had a huge amount in your 401k. According to my HP12C had you invested just $6000 a year for 50 years at the average 7% return for equities you would have around $2.4Million in your 401k at retirement. I suspect that for the final 20 years of your career your 401k deductions would have been much larger. Given your conservative point of view, I suspect that you chose more conservative investment options….. The other thing I would point out is that between 2008 and 2022 while the Fed was keeping interest rates very low, annuities didn’t seem as desirable because what the amounts annuity companies were asking to buy one was much higher than today. For many, perhaps, still a good option.

  Post: A theoretical, simplified road to retirement income without a pension. I’ve learned it doesn’t exist. 

  Link to comment from June 21, 2025

• Since the vast majority of people who could buy an annuity when they retire do not, I think it is possible that you are the one not aligned with the majority. I think it is true that many would be better off with an annuity than trying to do what we have done. Can you produce any data source or survey result that supports what you think is the majority view?

  Post: How are you dealing with or plan to deal with inflation in retirement? By R Quinn

  Link to comment from June 21, 2025

• Gee, my 2009 Forester has around 54000 miles. At 79, and buying maybe 10G of gas a month, it seems likely to be my last car. The mileage for the 10G isn't material.

  Post: Another HD Post About Cars

  Link to comment from June 21, 2025

• Richard, Some how you have to get over the idea that everyone has to run their financial affairs just like you do. A person does not have to have an annuity or regular monthly income to live comfortably and be retired. We have been doing just that for 24 years. We have spent millions since we retired. There is a concept called Total Return. Under this concept, you are successful when the total return on your financial assets, including growth in value, over time exceeds your expenses. You do not SPEND DOWN your assets. They do not diminish, they get larger! Yes, you are exposed to market risks. When the market goes down your assets do as well. You need to be tough minded to deal with these down times. If you have the courage, over time you can do well. Your assets go up and so can the amount you spend. It is not hard to manage your affairs such that there is always enough $$ in a checking account to pay one's bills. I think that knowing you were going to retire with a pension that totally replaced your work income would reduce your incentive to save. You worked until age 67, I stopped at 55. You had a much larger family to send to college. Your expenses were higher than ours. When you and your spouse ultimately pass on, your pension will as well. Our financial assets will pass on to our children and grandchildren. There is no right or wrong way to live, there are only choices.

  Post: How are you dealing with or plan to deal with inflation in retirement? By R Quinn

  Link to comment from June 21, 2025

• Given all that they have going for them, I am amazed that the Finish are not happier. After all, there less than 6M Finns. 95% speak the same language. They have a common culture and lengthy history. They are a Christian country with only two main divisions. Because of their social safety net and common views they should be extremely happy!!! Okay, I am not knocking the Finns. But I am suspicious of these kinds of surveys. Given our own diversity of population I cannot believe that enough Americans statistically, accurately chosen were participants. Maybe I am just mad at the messenger, but I do know that while we have problems in this country, I don’t see any lines of people trying to leave. In fact, the opposite is true.

  Post: Does a Happy Country Lead to Happy Individuals?

  Link to comment from June 20, 2025

• Without financial assets acquired before retirement, a person will not be able to buy an annuity. Dividends come from equity investments. 4% is meaningless unless there are financial assets from which one can withdraw funds. Whatever strategy might be employed is moot without financial assets. Without pensions, people need to begin early in working careers to save and invest. SS can only provide a portion of needed income in retirement. I have been retired since 2001. I have no pension, but I have financial assets which have grown substantially since I retired easily keeping me ahead of inflation.

  Post: How are you dealing with or plan to deal with inflation in retirement? By R Quinn

  Link to comment from June 19, 2025

• Since most folks today will not have any pension, they must focus on the growth of their pool of financial assets. Only with an increasing base of financial assets with half or more invested in the stock market can a person expect to keep up with inflation in retirement. This is the hard cold truth. You can try to dodge, or tap dance around these facts as much as you want but they will not change. That the average person might not understand equities, or other investments is a problem. The fact that there are problems doesn't change the truth.

  Post: How are you dealing with or plan to deal with inflation in retirement? By R Quinn

  Link to comment from June 19, 2025

• In these kinds of discussions, I think it is important to make sure we are all on the same page in terms of what words mean. Anytime you are discussing any annuity payments, a portion of what you receive is not income, it is return of your principal. Income represents funds you receive that are not a part of your existing assets. What you are trying to plan in your early retirement years, is Cash Flow; where will the cash come from to pay expenses? Cash can come from annuity payments, it can come from a savings account, or from dividends, or retirement accounts. When you deal with annuities, the higher % they pay compared to a money market fund or CD includes giving you part of your own money back. You could do the same thing with a laddered set of CDs, spending the amount which was on deposit in addition to the interest. Annuities just make the process simpler. The annuity doesn't pay you more income.

  Post: The unexpected detour to deccumulation, finding peace in fixed income

  Link to comment from June 19, 2025

• There is a circular quality that needs to be present when thinking about how much you could potentially spend when retired. There have been many references to using 4% of investment assets as a rough estimate of what could be safely withdrawn over a 30 year retirement period without running out of funds. If you want to do this, then you must allocate around 60% (pick a number between 50-60) of your assets to equities with the balance to bonds and cash. The 60% allocation represents the reasonable investment risk position. So the easy formula for estimating annual retirement spending is then SS plus pension and annuity income, plus 4% of investment assets. The caveat must be the “reasonable allocation to equities” within your investment portfolio. Without a pension or annuity, you must have more investment assets to feel safe. Those who arrive at retirement without a pension and say $2M in financial assets might feel safer through using a portion of their assets to buy an annuity. Those with more than $4M (and potentially $160,000 in withdrawal income at 4%) might skip the annuity. However, all of this depends on the “reasonable allocation to equities”.

  Post: Let’s Stir Up the Bee’s Nest Again- Another Way of Calculating Net Worth

  Link to comment from June 16, 2025