http://www.early-retirement.org/forums/ en Fri, 20 Nov 2009 22:22:18 GMT vBulletin 60 http://www.early-retirement.org/forums/images/early_r/misc/rss.jpg http://www.early-retirement.org/forums/ http://www.early-retirement.org/forums/f28/social-security-retirement-calculator-47392-new-post.html Fri, 20 Nov 2009 19:28:34 GMT Benefits Calculators: About the Social Security Retirement Estimator I recently received...]]> Benefits Calculators: About the Social Security Retirement Estimator
I recently received my Social Security Statement in the mail and it got me thinking about SS estimates. I remembered something about additional credits being added for certain years of military service, so I tried to find out if these were factored into the estimates I received. NO real joy there. It says it is OR will be done automatically when you apply for benefits. Sooo, anyways I run the calculator estimator and it comes back with different results from what my statement shows. Hmm.... +$33 at 62; +43 at 65; +$57 at 70... Could this be the elusive additional military credit OR just some kind of a COLA difference between my statement dated on 6 Nov and now. I know it isn't additional income, since I haven't earned any in the last 7 yrs. Anyone else use the estimator and get different results from their statements?

BTW: For those still working the estimator lets you run some additional scenarios of stopping work prior(after) to 62 and seeing the effects on benefits. Nice what ifs... ]]> FIRE and Money JustNtime http://www.early-retirement.org/forums/f28/social-security-retirement-calculator-47392.html http://www.early-retirement.org/forums/f28/the-stars-are-aligning-47391-new-post.html Fri, 20 Nov 2009 18:33:44 GMT I don't have a count down meter like W2R did, but looks like things are falling in place for me to retire. The official date on paper will probably be 1/02/2010 but I have not signed on the dotted line yet. I am taking one week vacation this next week and two weeks vacation at the end of December. So I've basically got 3 weeks of actual time on the job to do. I have already started bringing home personal items and mentally retiring.

Megacorp as of yesterday informed me I could choose a private individual health plan (which I'll have to apply for) with their blessings. They will funnel some dollars to me to help with cost. Something that put the icing on the cake for me. Not full funding and no promise on number of years but the amount will not change unless they change the amount going to all retirees and current employees. So good news on that.

Once again I'm looking for help, advise and input on how to apply for (how much info to give etc.) and choose my family health plan.
Thanks,
Steve ]]> FIRE and Money Stevewc http://www.early-retirement.org/forums/f28/the-stars-are-aligning-47391.html http://www.early-retirement.org/forums/f28/for-those-already-in-er-47383-new-post.html Thu, 19 Nov 2009 16:33:31 GMT ... what % of your net worth is invested in real estate? *And not*, real estate for investment. Real estate for personal use only (which would... ... what % of your net worth is invested in real estate? And not, real estate for investment. Real estate for personal use only (which would include "vacation/2nd homes" assuming not rented out for income). ]]> FIRE and Money LARS http://www.early-retirement.org/forums/f28/for-those-already-in-er-47383.html http://www.early-retirement.org/forums/f28/formula-to-convert-partially-colad-pension-to-equivalent-colad-amount-47377-new-post.html Thu, 19 Nov 2009 05:18:35 GMT OK all you math gurus out there, I need your help. I am still trying to figure out my "Magic Number"—how much I need to have in my retirement account to leave my job with reasonable security. My pension has a quirk that makes it difficult for me to say how much of a shortfall my savings need to be able to make up. It's a defined benefit pension, with a fixed increase of 1.5% a year plus a guarantee that it will never go below 65% of the original purchasing power. Since inflation is almost always more than 1.5% a year, this isn't a fully COLA'd pension. If I live long enough (and I definitely intend to) it will almost certainly hit the 65% floor. OTOH, it isn't a fixed amount. Eventually the shrinkage of purchasing power will stop. By playing around with spreadsheets, I've found that, assuming constant 4% inflation, it takes about 23 years to hit the floor. I hope to retire before age 60 and am assuming I live to be 100, so 23 years is only about half of the time span the model needs to consider. This feature of the pension makes it tricky to figure out how much income my portfolio needs to produce. Even the financial planner I went to last year didn't have software that could model the pension accurately. The Monte Carlo simulations she did for me assumed the purchasing power of the pension would never stop shrinking, and IMO the "magic number" she calculated was grossly overestimated as a result.

It occurred to me a while ago that it might be possible to treat this pension in a way that made it equivalent to a fully COLA'd pension with a smaller benefit. Obviously, it could be considered a fully COLA'd pension for 65% of the starting benefit. But if I only spend 65% of the starting benefit, I could invest the remainder and at a SWR of say 3%*, generate a COLA'd stream of income from it also. The first year's income stream {1} would be 3% x 35%=1.225% of the original pension. If I did this for n years, until the pension had shrunk to 65% of its original buying power, I'd have what amounts to a COLA'd pension at 65% of the original benefit amount, plus a series of COLA'd income streams {1} through {n}. Put together, it would all add up to a fully COLA'd stream of income for (65+1.225+{2}+...+{n})% of the starting benefit amount. What I'd like to know is the formula, if there is one, to calculate what percentage of the original benefit all those income streams add up to. By playing with the spreadsheets some more, I found that with constant 4% inflation my partly COLA'd pension would be equivalent to a fully COLA'd pension up to age 100, for between 71 and 72 percent of the original amount. I haven't quite figured out how to make the spreadsheet tell me what happens when the inflation rate varies. I suspect that the equivalent amount will be strongly affected by the sequence of rates. My guess is that a few years of high inflation at the beginning of a scenario would have a drastic negative influence, just like a bear market during the first few years of withdrawals makes it more likely that the portfolio will be exhausted.

*I used a SWR of 3% rather than 4% because the amounts have to last longer than 30 years, and because it might not be possible to defer tax on all of the "remainders". ]]> FIRE and Money kyounge1956 http://www.early-retirement.org/forums/f28/formula-to-convert-partially-colad-pension-to-equivalent-colad-amount-47377.html http://www.early-retirement.org/forums/f28/fireing-points-47372-new-post.html Wed, 18 Nov 2009 22:57:43 GMT There has been quite a lot of discussion about what an income replacement ratio really means and how it is relevant to retiree income. Lets turn... There has been quite a lot of discussion about what an income replacement ratio really means and how it is relevant to retiree income.

Lets turn this discussion around a bit.

Suppose now that your nestegg/pension/SS/other income puts you above the suggested 60/70/80 or even 100 percent income replacement threshold. Should you then retire (or FIRE as we say).

What's the income replacement level that would make you retire ? ]]> FIRE and Money MasterBlaster http://www.early-retirement.org/forums/f28/fireing-points-47372.html http://www.early-retirement.org/forums/f28/mutual-of-america-to-scottrade-or-vanguard-47370-new-post.html Wed, 18 Nov 2009 20:56:10 GMT Hi- Does anyone have direct experience with Mutual of America and an IRA account? I have been reading ER for several months and this is my first... Hi-
Does anyone have direct experience with Mutual of America and an IRA account? I have been reading ER for several months and this is my first post, so if I have not followed some rules of etiquitte, please let me know.

I had 403 & tda accounts with Mutual of America through a former employer and rolled it over to an IRA at MoA at 59 1/2 as a temporary move. I am no longer with the employer and am free to roll it into a different brokerage company. Am considering IRA rollover to Scottrade or Vanguard, where there are many more investment choices and easy to understand fee structures.

I am 60, ER, usually go with index funds, and do do not need to make withdrawls from this account for several years. MoA is easy to work with, but my experience has been:
a) choices are limited
b) it is difficult to see how much a particular investment has gained or lost as the reports are composite
c) It is difficult to tease out actual fees for services

I saw a reference or two to dissatisfaction with M oA because of a stated .09 annual fee and another unspecified issue.

Does anyone have direct experience, negative or positive, with Mutual of America and an IRA account? Thank you! ]]> FIRE and Money Ricardof http://www.early-retirement.org/forums/f28/mutual-of-america-to-scottrade-or-vanguard-47370.html http://www.early-retirement.org/forums/f28/i-and-e-bond-beneficiary-designation-for-existing-bonds-47369-new-post.html Wed, 18 Nov 2009 19:12:38 GMT I have some I and E bonds for which I didn't designate a beneficiary. I would like to do that now, but I cant find any information about how to proceed or even whether it can be done. These are paper bonds, but I could convert them to book entry if that would help.

I spent a fair amount of time this morning looking at the treasury direct site, but I admit that I am not the world's best web searcher.

I have fresh in my mind an example of what not to leave for your cleanup crew, so I am trying to clean up in advance.

Any ideas for me?

Ha ]]> FIRE and Money haha http://www.early-retirement.org/forums/f28/i-and-e-bond-beneficiary-designation-for-existing-bonds-47369.html http://www.early-retirement.org/forums/f28/you-know-youre-an-er-nerd-when-47366-new-post.html Wed, 18 Nov 2009 14:47:15 GMT .....$100k doesn't mean a new car and expensive vacations, it means $5k in annual income.;) ]]> FIRE and Money nun http://www.early-retirement.org/forums/f28/you-know-youre-an-er-nerd-when-47366.html http://www.early-retirement.org/forums/f28/rollover-rmd-47363-new-post.html Wed, 18 Nov 2009 11:32:25 GMT Mom is 72 and required to take RMD from her IRA. She received below email the other day from Vanguard.

What does it mean ?

I'm assuming she still must take RMD - but if she already withdrew enough earlier in the year, you can rollover an automatic RMD distribution back into an IRA account ?

"By now, you may have heard about legislation passed in 2008 that lets you choose to take your 2009 required minimum distribution (RMD), take a partial distribution, or suspend your 2009 RMD entirely. These options apply to traditional, SEP-, SIMPLE, and rollover IRAs, as well as 401(k)s, 403(b)s, defined contribution plans, and inherited IRAs and inherited retirement plan accounts that are subject to RMDs." ]]> FIRE and Money Delawaredave5 http://www.early-retirement.org/forums/f28/rollover-rmd-47363.html http://www.early-retirement.org/forums/f28/tax-question-about-ltcl-carryovers-47362-new-post.html Wed, 18 Nov 2009 05:29:19 GMT Hi,

My three kids have LTCL's from CY2008. I know that they can carry these forward to use against future gains and income.

My question is this: If my kids don't otherwise have to file, do they need to file what would essentially be an informational return each year in order to maintain a paper trail with the govt for those carryover losses, or can they skip filing until they actually need to file and just enter the carryover losses on their returns then?

2Cor521 ]]> FIRE and Money SecondCor521 http://www.early-retirement.org/forums/f28/tax-question-about-ltcl-carryovers-47362.html http://www.early-retirement.org/forums/f28/401k-catch-up-question-47361-new-post.html Wed, 18 Nov 2009 04:14:31 GMT I have a 53 year old friend and former coworker (I'm retired) who wants to take advantage of the catch up option to add to his 401k balance. However, when he called the benefits office they told him they don't allow that. Has anyone ever heard of this before? Can they stop him from doing the catch up? And why would they? I can't think of how it would hurt them in any way, since he has already maxed out the match. Do you think he might have just gotten a loser help desk person and should try again? Any thoughts would be appreciated. ]]> FIRE and Money harley http://www.early-retirement.org/forums/f28/401k-catch-up-question-47361.html http://www.early-retirement.org/forums/f28/innovative-strategy-to-increase-cash-flow-47359-new-post.html Wed, 18 Nov 2009 03:00:56 GMT A British PhD scientist has revealed that she is the writer of the blog "Belle de Jour" about the adventures of a prostitute, and that she dabbled in the profession herself while completing her PhD.

Scientist announces that she is call girl and blogger Belle de Jour | Technology | guardian.co.uk

Belle de Jour

I had difficulty deciding whther this belongs in the FIRE and Money or Other forums...... enjoy! :laugh: ]]> FIRE and Money Meadbh http://www.early-retirement.org/forums/f28/innovative-strategy-to-increase-cash-flow-47359.html http://www.early-retirement.org/forums/f28/what-if-china-forever-pegged-to-dollar-47346-new-post.html Tue, 17 Nov 2009 11:02:29 GMT What happens if China does not allow their currency to appreciate and move upwards relative to dollar ? Is their anything in their interest to let... What happens if China does not allow their currency to appreciate and move upwards relative to dollar ?

Is their anything in their interest to let their currency appreciate ?

I remember the "Japanese invasion" in the 80's - where their imports were taking over US. Then it was 200 yen/dollar. Now it is less than 100. Their currency appreciation against the dollar seem to have "balanced out" trade between both companies.

If China just held current exchange rate - would they just continue to "suck the wealth" out of the US ?

I do not understand any downsides to them on continuing their current practice. ]]> FIRE and Money Delawaredave5 http://www.early-retirement.org/forums/f28/what-if-china-forever-pegged-to-dollar-47346.html http://www.early-retirement.org/forums/f28/how-does-a-house-fit-into-this-plan-47344-new-post.html Tue, 17 Nov 2009 03:16:18 GMT Thanks again for all the great replies to my last question about the need to take risk with our investments.

My fiancee and I have talked this over and decided to (1) continue maxing out our Roth IRA's with $10k/year, (2) begin maxing out a Thrift Savings Plan with another $16.5k/year, and (3) use a balanced stock/bond mix for these investments. FireCalc says that following this plan for the next 20 years, coupled with receiving a military pension, would give us a very high probability of being able to retire successfully in our early 40's.

Anyway, my next question is about housing. I'm familiar with the conventional wisdom about buying vs. renting: that you should only buy if you plan to be somewhere for at least 3-5 years. Unfortunately, as an active duty military member I think 3 years is about the longest I could ever expect to be in one place and I'm afraid that we'd be at a disadvantage if we just rented for the next 20 years and then left the military with 0 home equity. Am I correct in this line of thought or not?

Some older military members I've spoken to have dealt with this by purchasing homes wherever they get stationed and turning them into rental properties when they PCS. This has worked out great for some, but I've heard from others that it can cause serious headaches. Any thoughts on this?

Another idea I've been cultivating is this: rent and aggressively save money for a few years until we can buy a modest home with cash. This would give us 100% equity from the start and (I think?) avoid most closing costs. When we PCS we'd sell and get our money back (ignoring capital gain/loss) minus the cost of insurance, property tax, and maintenance (which seems cheaper than renting). We could then use that money plus other savings accrued along the way to purchase another, less modest home at the next duty station and so on. Upon retirement we'd have a paid-for home. Is this as smart as I'm imagining, or am I missing something?

Tim ]]> FIRE and Money timwalsh300 http://www.early-retirement.org/forums/f28/how-does-a-house-fit-into-this-plan-47344.html http://www.early-retirement.org/forums/f28/article-on-how-much-is-needed-to-retire-47343-new-post.html Tue, 17 Nov 2009 01:28:09 GMT I thought this was a good article that addressed the "fallacy" of needing 80% of your pre-retirement income to have a comfortable retirement. Obviously everybody's circumstances are unique, but much of this seemed reasonable to me, and consistent with what I have seen posted here before.

The 80% myth: Rekenthaler Report: Aiming for 80% of pre-retirement income in retirement is not only hard for many to achieve, it's also not absolutely necessary ]]> FIRE and Money stephenandrew http://www.early-retirement.org/forums/f28/article-on-how-much-is-needed-to-retire-47343.html