Skip to comments.The big mistake investors make once they hit that first $1 million
Posted on 02/01/2018 7:31:07 AM PST by SeekAndFind
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Who wrote this crap?
OTOH, I don't plan on telling my soon to be 15 YO son that we're getting a dependent benefit from SS until he graduates from HS. LOL...had I known about it, I would've retired when I hit 62 over 18 months ago.
Aw heck, it's going to his college fund anyway.
We tend not to 'splurge" a lot but have no problems spending some of our grand-kids' inheritance (our kids are grown and self sufficient so we opted to will most of whatever is left to the grand-kids).
If we were to save like we were still working for retirement and leave our IRAs alone (except for minimum mandatory withdrawals once we reach that age) we would be leaving a lot more than what we have now - I have no intention of doing that....;-}
“Can you live on $40K per year? If so, youre fine, so long as you arent spending more than that.”
It is expected that you will slowly draw down that 1 million over time. In fact if it is in a 401K you need to withdraw 10%/year after you reach age 71 IIRC. You can spend or save what you withdraw. If you are getting a 4% return ($40 K) and spend 40 K of your 401 K withdrawl you have the $80K you need. Yes your return will be somewhat lower each year but if you are spending $40K of your savings per year it will last for 25 years even if you are getting 0% return (1,000,000/40,000 = 25).
A nursing home will run you $7k+ per month in typical cases.
Medicare DOES NOT pay for nursing home care or having a private caregiver come to your house. Medicare pays for hospital bills, doctor bills and prescriptions—but no long term care (custodial care, feeding, bathing etc.)
If you sign up in your 40’s and don’t already have chronic medical conditions, your premiums will be low and will stay relatively low. The longer you wait to apply, the more likely it is that you will start experiencing chronic diseases (assc. with aging) which will drive your premiums sky high. The insurance companies look for things like debilitating rheumatoid arthritis, fibromyalgia, diabetes, heart disease, dementia, Parkinson’s etc.
Mr. Roo Roo and I pay about $100 apiece in premiums, benefit is about $7500 per month, up to a $500k max. Prudential is the insurer. We’ve been paying premiums for over 20 years.
“I know someone, a friend of a friend, who was diagnosed with cancer. Her children are trying to take over ownership of her house. Theyre afraid shell end up in a nursing home and they wont get *their* money.”
Sounds similar to a poor woman in my wife’s 3 decade plus bridge group. This woman is older and needs to live in a place with care or redo her home and have live in care. Her health and mobility cratered last year.
Her family hustled her off to a cheap board and care place to die.
They had hustled her into a dying place, where her daily entertainment was being pushed in her wheelchair to the hallway to a dirty window to see what was happening outside.
Two women in the bridge group went to get some local elder help for their friend after seeing what had happened to their friend.
They helped her to get a reverse mortgage and revamp her home so she can live in one level without stairs via the line of credit. She has a generous line of credit from the reverse mortgage and no monthly mortgage payments. She has to live in the home and pay the property taxes and insurance. Those costs are taken care of basically from the rent from her new renter.
She is happy in her new revised home with her new downstairs bedroom. She has a daytime help person, who helps her and does the final touches re the home delivered meals for two.
She rents out her former upstairs master bedroom to a single working woman.
The single woman serves the evening meal for two, cleans ups and they both go to their own bedrooms.
The renter cleans the home as part of her rental agreement. The single woman fixes breakfast for the older woman and leaves for work when the day care person comes in.
Her children are outraged at what happened. If they keep it up, their names will be removed from the settlement of the home and the ladies investments before she dies.
She is happier, enjoys her new old home and hosts her bridge group every two months.
You and Mr. RooRoo sound like financially sensible people.
All the best to you for a long, happy, financially secure retirement! Enjoy your travels!
CD interest rates.
Today you might make $10,000 if you put one million into CD’s at the current rate of around 1% (in a year).
If we had the rate of return we had in the mid 80’s you could make $100,000 off that same million.
Now that I’m older and have the mortgage paid off, and don’t borrow money, I’d like to see the rates go back up some.
I am not that far from that $1 million and figure with social security and if I get some 5% or more from my million dollars without touching the principle then I can retire and not worry about money unless I marry and divorce a few times or take up gambling and hookers.
Or, you could help your kids learn to invest by helping them fund a 401K or fund IRAs...thats what we are doing.If youre that well off, you can afford to give your Social Security checks to the kids. And set the example that they should do the same for your grandchildren, if possible.
The two things, of course, are not mutually exclusive at all. You are saying that the kids need help funding a retirement apart from Social Security; I was merely pointing out the scale of the intergenerational Ponzi Scheme which an affluent, caring parent should consider trying to compensate for.The article talks about spending the kids inheritance; anyone who can help their kids overcome the Social Security headwind they face should consider that part of responsible stewardship.
I wasn’t disagreeing with you...
Poor people plan for Saturday night, wealthy people plan for generations.
As a parent, I find it satisfying to provide a bit for my offspring when I’m gone.
To others, you can’t take it with you so spend it now.
To each his own.
One million is NOTHING!!!!
I’m looking to buy a new home. One million buys you a “starter house” in Los Angeles.
Save 2 to 3 million now depending on where you live and how old you are.
One of the other problems I see with owning extra houses is the people who talk about how they paid only $150K and sold for $400K always say they made $300K. If they paid cash for the house and forget the property taxes then they can legitimately claim that. If they took out a mortgage they never seem to realize how much interest they paid over 15 or 30 years.
My parents always said they were spending their kids inheritance. Of their four children my sister and I were the two that always told them that if there was more than a dollar left when they passed then they didn't have enough fun or good times. It was their money and we had no right to lay claim on their retirement funds. My biggest concern was I wanted them to fully enjoy their retirement. My oldest brother didn't see it that way and was a total jerk when our last parent passed away.
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