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Gold Conversationalist

Re: I"m concerned about outliving my nest egg in retirement. You're not??

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Message 1 of 17

Well Paul Ryan is Speaker of the House of Representatives so do not count it out...he has plenty of backers . The question is what will the Senate do. The GOP Platform says no change for those 55 or older and an option for everyone else. We will see.

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Info Seeker

Re: I"m concerned about outliving my nest egg in retirement. You're not??

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Message 2 of 17

Fortunately, I think that Congress won't be interested in that proposal.

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Gold Conversationalist

Re: I"m concerned about outliving my nest egg in retirement. You're not??

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Message 3 of 17

I was not really concerned as I have my nest egg  withdrawels planned out to supplement my SSA and small pension. Then I read that Rep. Paul Ryan intends to turn Medicare into a voucher to buy private insurance system as part of the repeal of the ACA. Given the cost of private insurance I will really scale back on everything if he does it.

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Super Social Butterfly

Re: I"m concerned about outliving my nest egg in retirement. You're not??

2,881 Views
Message 4 of 17

With Trump at the reins now, you have no worries!  Haha LOL

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Info Seeker

Re: I"m concerned about outliving my nest egg in retirement. You're not??

3,033 Views
Message 5 of 17

Unless you're a total spendthrift, I don't think you have anything to worry about.  I wish that were my nest egg.

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Bronze Conversationalist

Re: I"m concerned about outliving my nest egg in retirement. You're not??

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Message 6 of 17

Retiredtraveler is right.  Map out your current expenses but also map out your expected retired expenses.  You have a net income that you live on now and when you retire, you don't need as much gross income to have the same current net income in retirement.  For example, you won't be putting money into savings or retirement plans anymore and you won't be paying SS/Medicare taxes.  That lowers the gross you need to keep your current net.  You may not be making house payments if you can get it paid off before retirement but rent and property taxes are forever.  And hopefully your state and federal income taxes will be lower.  Mine drops one tier but when I hit 70 1/2 years and have to take the required minimum distributions from my 401k/IRA plans, my tax bracket will go back up.

 

Most of the retirement calculators are poor.  The AARP is also a poor one unless you fit the general mold they have.  The best one I've ever used was by Fidelity but now they have it restricted to account holders only.  Check on Morningstar.com to find some good recommendations for others.  The best ones will let you put in mutual funds, SS, pensions, and if register they will update the value of your mutual funds automatically so all you have to update is cash savings.  Some will let you put in detailed expenses.  The one on Personal Capital will let you enter data manually.  They push to have you link your banking and investment accounts so they can do a read-only of your accounts.  I'm too old and suspicious to let an online company monitor my finances when I don't have a business relationship with them, so I only use them in manual entry mode.  They do provide you with a nice net worth view and a reasonable prediction of retirement.

 

The market fluctuates but has always recovered.  I've been through every market downturn since 1985.  But no matter how scary they are, you lose more if you panic, leave the market, and miss the recovery.  Not even the market gurus are adept at timing a recovery so you are even less likely to do it.  My mutual funds suffered losses of -8% in 1994, -17% in 2001, -23% in 2002, -43% in 2008, and -8% in 2015 and I never moved a penny.  The straight year-to-year average APR has been a +8% gain even with all the drops.  The funds that weathered all of those loses are worth 7+ times more than what they were in 1990.  And I am by no means an expert investor.

 

Check into what is called a "bucket strategy" to retirement.  Most people do something similar even though they don't know it's called a bucket stratgy.  Your money is divided into risk buckets.  Bucket 1 is low risk cash type investments that you will live off of for 2-5 years, such as CDs, savings, money market.  Bucket 2 has the years 3-8 investments in slightly more risky things, like bond mutual funds.  Bucket 3 is your 10-15+ years out funds that are in equity type investments.  Bucket 1 and 2 support you through any of those years when the market turns sour and so Bucket 3 can recover and continue growing if it's going to take several years to recover.  Every 2-3 years you evaluate your needs and adjust bucket 2 and 3 to refill your bucket 1, which is your living income.

 

You might look at using part of your savings to buy an immediate annuity at retirement for a guaranteed income stream for life.  These are complicated insurance instruments with 1000's of options.  Buyer beware but with the right guidance it will supplement your SS until you die.  Always use a financially solid insurance company if you look into them.

 

One thing I did over the years was build a ladder of CDs with my credit union.  I spread the purchase of 60 5-year CDs over 5 years such that one CD matures every month.  Some had APRs as high as 7% at one time and most have declined to 2% but some are still above 3%.  If the market fell apart, they would provide me with a tax-free monthly income for up to 5 years to supplement my SS.  If inflation hits, each renewing CD would be at increasing interest rates as money tightened.  The lower rate CDs would buffer my income as the higher CDs grow.

 

Hope this helped.

 

 In comparison, my mother lives on a 401k of about $150K that pays her $9K-$10K a year invested in a 75/25 mix of a bond fund and a S&P 500 index fund plus her social security of about $1100/mo and a $200/mo pension.  Her 401K has actually grown since she retired in 2002 at 70 and paid her each  year.

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Info Seeker

Re: I"m concerned about outliving my nest egg in retirement. You're not??

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Message 7 of 17
Fortunately, my wife will get 50 percent of my pensions. That should be enough. I like the suggestion to start saving now and every year for inflation. Good advice. Of course if everything hits the fan I will move to a country like Costa Rica. My money will go further there.
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Conversationalist

Re: I"m concerned about outliving my nest egg in retirement. You're not??

3,223 Views
Message 8 of 17

If your pensions are truly well funded, your only concerns will be inflation, and the pending reduction in social security. Plan for the latter and start saving a little to anticipate the former.  Save 5% a month,  increase a little each year.  And stay healthy.

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Treasured Social Butterfly

Re: I"m concerned about outliving my nest egg in retirement. You're not??

3,231 Views
Message 9 of 17

@cr76165900 wrote:

I have a different situation than most.  I have lived foolishly meaning paycheck to paycheck.  I never saved or invested.  I rent where I live and do not have any investments.  That may sound bad.  I plan on retiring in 2 years.  On the up I have 2 pensions.  One goverment and one from a public utility which is overfunded.  I estimate the my income will not change when I retire.  Although I do not have hardly any savings my wife an my income from the 2 pensions and 2 social securities will be around $75,000.  We live rather modestly.  My question for someone out there is should I be concerned?


You might still want to be concerned .. how are your pensions set up; what will your wife get, if you die unexpectedly early? Will she get some portion of your pensions, or does that money just stop? How much will your wife's income be, if she only had SS coming in? What if your rent & other expenses go up?


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Info Seeker

Re: I"m concerned about outliving my nest egg in retirement. You're not??

3,249 Views
Message 10 of 17

I have a different situation than most.  I have lived foolishly meaning paycheck to paycheck.  I never saved or invested.  I rent where I live and do not have any investments.  That may sound bad.  I plan on retiring in 2 years.  On the up I have 2 pensions.  One goverment and one from a public utility which is overfunded.  I estimate the my income will not change when I retire.  Although I do not have hardly any savings my wife an my income from the 2 pensions and 2 social securities will be around $75,000.  We live rather modestly.  My question for someone out there is should I be concerned?

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