Posted on 06/26/2017 7:45:52 AM PDT by SeekAndFind
Edited on 06/26/2017 8:44:25 AM PDT by Admin Moderator. [history]
THIS
If you have the $1 million invested in diversified mutual funds with good ratings you could expect to average 6-8% annual increase (60-80K). Using the 4% rule, you could take 4% out throughout the year ($40K) and leave the other earnings in the account to keep up with inflation.
Oops, forgot: annuity, 100k: $525
Total income about 70k annual.
Amount invested: 610,000.
IRAS: $360,000 (not withdrawing yet)
66% of adults in this country have less than $1000 saved for retirement. About 50% haven’t saved a dime.
quote “invest in low-cost index funds and take periodic withdrawals”
sure, that is one of many things someone could safely invest in... I agree 100%.
I am only saying they should only take “periodic withdrawals” of their PROFITS, and never touch their principle.
Thank you very much. I wonder if that will remain true. I feel like I still need to earn, but I am unable to with all these people to take care of. I wasn’t expecting to end up alone doing this, but right now I wouldn’t want to get married again anyway because joining everything together is a mess, especially if you have kids... I’m not doing THAT again... To think that maybe I can do it for a while somehow on my own is a huge relief.
then they wont be retiring.
Yeah the whole exit California thing... I hear you there.
Yes, I wouldn't want to be hoping I die before I go broke.
I don’t have a younger wife, and I’m not turning gay any time soon. But I do have 4 kids, so it’s ok if I didn’t spend all I had.
My folks were stationed in Japan in the 50s and early 60s. We returned via ship, entering under the Golden Gate Bridge into Oakland.
California looked damned good to me...
Some of those are young people who haven’t had time to save.
My first retirement savings was made at 30, $2,000.
I retired at 60, no pension, just my non-IRA investments paying income. Took SS at 66.
Will be forced to take IRA withdrawals in 2.5 years at 70.5 years of age. I’ll take the minimum.
And if for some unknown reason a person ends up in a $5,000 a month nursing home, after five years that’ll cost you $300,000 without amenities like adult diapers if you happen to need them (and those can be pretty spendy), let alone all the incidental costs of everyday life. Ten years will set you back $600,000. Nursing homes that handle the ambulatory person cost much more than that.
If you’re not familiar with Dave Ramsey, get to know him!
You can get his books from the library and watch all of his videos on YouTube for free; he also has a radio show. His advice allowed me to be DEBT FREE and ‘retired’ at 55. (And I got divorced at 50, though I had no kids to care for as they are adults.)
If I can knock over an occasional gas station and keep my meth lab hidden I’ll be fine. /s
Here’s the key point to remember about retirement:
You build up principle throughout an entire working lifetime ...
to live off the “income” generated by that principle, not to live off the principle.
Any plan that involves living off the principle puts you in the unenviable position of needing to die before you run out of money.
Be careful choosing your municipal bonds! !
Nope. If you have a big enough pile there is no problem with spending down SOME of the principal, if for no other reason to minimize estate taxes.
Your question requires a little context before answering outright.
First of all, you must answer the question: "how much money DO I need to live in retirement?"
To answer that question, you can start by answering the question, "What was my pre-retirement income, and will I need the same in retirement?"
If you were only making $40 or $50 thousand per year, it would require you to earn 4-5 percent on a million dollars, to earn your pre-retirement salary. Honestly, there are numerous ways to make this much in terms of a percentage. Dividend ETFs, municipal bonds, etc. There are many investments that will pay that kind of a percentage, usually in the form of monthly or quarterly dividend checks.
The cash is paid to you based on the number of shares you initially purchase (assuming something like a dividend fund), not the principal amount, which may fluctuate, depending on market conditions.
If you currently make MORE that $40-50 thousand dollars per year and are looking to replace all of your income, it gets a little more risky. You still need to determine how much of your pre-retirement income you're trying to replace, and you may have to consider Social Security, or any other retirement income streams you might have, such as pension income from a former job.
There are also annuities that lock in a certain amount of return, but I don't know if there are any good ones out there or not. I'm sure other Freepers could chime in on those.
Best of luck to you.
Most Americans aren’t prepared for retirement; many retire to foreign locations (Ecuador for example) to stretch their limited funds.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.