Ensuring enough money if live to be super old

[IBC_FriendOfNelsons]

@Aerides I agree everyone is and always should be entitled to their “opinions”, though they should not convey them as something factual unless they can back them up. I am happy to engagement in respectful discourse if folks want to learn from one another. In fact, I am looking to be factual debunked on my understandings, if someone would intelligently articulate where my blind spot is. I’m open minded...I was looking for that kind of discussion here...not to be called out for “BS” or as a “salescritter” or that my work of choice is some sort of “scam”, etc. None of that helps us all learn and evolve.

 

[MichaelB]

In fact, I am looking to be factual debunked on my understandings, if someone would intelligently articulate where my blind spot is. I’m open minded...

Well, you might start by providing a credible source your your assertion that new avg life expectancy is 140 years.

I was looking for that kind of discussion here...not to be called out for “BS” or as a “salescritter” or that my work of choice is some sort of “scam”, etc. None of that helps us all learn and evolve.

I would suggest you stop taking selective offense at other’s posts and stick to making simple points with substantive support.

 

[IBC_FriendOfNelsons]

@RunningBum Wow, deceitful seems too harsh. Truthfully, no one truly knows what potential advancements in human longevity could be coming down the pike. I was wrong not to put a link behind the words “I heard”.

 

[REWahoo]

Here is a look at "infinite banking", what it is and for whom the author says it might be a good fit (hint: you need a nest egg of $10M or be on the receiving end of the sales commission for it to be worthwhile).


UNDERSTANDING INFINITE BANKING: DOES IT MAKE SENSE FOR YOU?

At first blush, infinite banking sounds like a somewhat inefficient way to save money first and then spend it. In fact, until you have very strong cash flow, that’s exactly what it is.

If you want to “bank on yourself” and escape the tyranny of modern banking, an easy way to do it is to save money by earning more and spending less than you earn. That way, when you need to make a big purchase, you’ll have the cash you need to do it.

That said, for the mega-high income and mega-wealthy person, infinite banking could make some sense. Whole life insurance policies have certain advantages (cannot be garnished in a lawsuit for example), and could make sense for estate planning purposes (if you're looking at estate tax liability). The ability to draw down the cash value for investment or consumption is basically an added benefit.

Are you mega-wealthy ($10m plus in liquid assets)? If so, ask your financial advisor about infinite banking. If you’re not, skip the infinite banking for now, and work on saving cash for you next purchase and making long term investments.

 

[OldShooter]

@pb4uski I thought this was suppose to be a friendly group (per the terms I agreed to)

The group is friendly, but very intolerant of preposterous statements like your assertion about markets.

I think it's beyond the group's scope to try to educate you at such a basic level. I suggest that you spend some quality time with "The Instant Economist" by Tim Taylor. (https://www.amazon.com/Instant-Economist-Everything-About-Economy/dp/0452297524)

 

[Gumby]

If I had $10 milion in liquid assets, why would I ever need to borrow money at all? And, if I really needed to, I'm pretty sure I could borrow at a good rate with a HELOC from one of my banks. Also, if I had $10 million in liquid assets, why would I need life insurance? Surely my widow could survive on that. You know, having been frugal enough that we could accumulate that much in the first place.

 

[marko]

So, does this mean that if you had a $100K policy, you could borrow, say $50K even if you had only paid into it for a few months?

Or would you need to have paid $50K into it first and have some sort of balance to that amount?

If the latter, I'm stumped as to how this could possibly be a good idea.

 

[OldShooter]

... Whole life policies are not just a financial windfall for dead people’s heirs. They provide financial certainty and freedom within the owner of the policy’s lifetime. ...

Actually you're right. The certainty and freedom, however, are provided to the insurance salesman and the insurance company, not to the mark.

 

[Gumby]

So, does this mean that if you had a $100K policy, you could borrow, say $50K even if you had only paid into it for a few months?

Or would you need to have paid $50K into it first and have some sort of balance to that amount?

If the latter, I'm stumped as to how this could possibly be a good idea.

I'm surely no expert, but my experience with whole life policies is that you can borrow only a portion of the cash value, which cash value only accumulates as you pay premiums. You can't put a bunch of money all in at the beginning because that would violate the modified endowment contract rules and you would lose the beneficial tax treatment of the cash value investment growth. https://www.investopedia.com/articles/insurance/10/avoid-modified-endowment-contract-traps.asp

So it is a very long term strategy at best.

 

[bmcgonig]

@Aerides I agree everyone is and always should be entitled to their “opinions”, though they should not convey them as something factual unless they can back them up. I am happy to engagement in respectful discourse if folks want to learn from one another. In fact, I am looking to be factual debunked on my understandings, if someone would intelligently articulate where my blind spot is. I’m open minded...I was looking for that kind of discussion here...not to be called out for “BS” or as a “salescritter” or that my work of choice is some sort of “scam”, etc. None of that helps us all learn and evolve.

Really what you should say is that you are here to sell whole life etc. You're here to share only one thing i.e., infinite banking. You're not here to learn about anything else, no matter what you might say.

 

[Gumby]

@RunningBum Wow, deceitful seems too harsh. Truthfully, no one truly knows what potential advancements in human longevity could be coming down the pike. I was wrong not to put a link behind the words “I heard”.

This is recent data I find regarding life expectancy at birth:

Social Security Administration (2016) -- 76.04 male/80.99 female

https://www.ssa.gov/oact/STATS/table4c6.html

Centers for Disease Control (2017) -- 76.1 male/81.1 female

https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_07-508.pdf


I suppose they know this stuff as well as any of us.

 

[daylatedollarshort]

Wow!

If I will not be too broke, I prefer the 2,000-sf home for $20,000 instead of the 350-sf for $4,000.

If energy will be so cheap or even free, I should be able to cool and heat the larger home.

We really do have the technology for people to live pretty inexpensively. It just hasn't been mass produced yet but it is coming. 3D printer homes, solar powered homes and cars, large indoor farms with solar powered LED lights and low water usage (also no bugs or weather to worry about) -

https://www.nationalgeographic.com/news/2014/7/140717-japan-largest-indoor-plant-factory-food/

In our area companies are now offering free rooftop, on grid solar panels with 40% off the utility rates. They keep ownership of the panels so it seems like a bit of a hassle to me but many of our neighbors are going for it. We're probably going to wait until the prices drop further and then install panels we own ourselves. Elon Musk says a 100 square mile area of solar panels could power the entire U.S. - https://www.entrepreneur.com/article/297414

So that is my old age plan. Just wait for technology to provide everything I need at a very low cost. That and continued LBYMs in retirement.

 

[Fermion]

If we hit 140 we have probably solved the issue of cell death (there was some research into telomeres and preventing their shortening but nothing came of it)


If we have solved the issue of cell death, then there is no reason except suicide, accidental death, or war/murder to prevent someone living forever.

 

[Teacher Terry]

This thread was my laugh for the day)

 

[LRDave]

^^^ I listened to a podcast recently about arthritis. Even the most current research is not too hopeful (prevention or treatment). The rheumatologist featured hypothesized that arthritis - as opposed to cancer, vascular/heart disease, or infectious disease - could be our ultimate limiting factor.

 

[gwraigty]

@pb4uski job well done on the work and the discipline to put yourself in a position to retire at 56 in 2012. I want you and others in similar positions to continue to thrive in retirement, though I want to make note of a couple things that you could consider. “Average rate of return” is not real rate of return, and within various windows of time the “average” is typically lower. Another consideration is, how does one adjust their “prudent 4%” annual withdrawal when their portfolio drops by the “26.6%” noted in this article? https://www.financialsamurai.com/historical-returns-of-different-stock-bond-portfolio-weightings/.
Lastly, so far I have been reading commentary from folks on here that believe I am a scum salesperson of life insurance policies. My goal is for everyone that wants financial independence to have it. Whole life policies are not just a financial windfall for dead people’s heirs. They provide financial certainty and freedom within the owner of the policy’s lifetime. A question (of many) for everyone to ponder that desires FI is, “is each dollar you utilize doing more than one job when put into whatever portfolio split you choose?”
The answer is “no”. Becoming Your Own Banker utilizing a whole life policy is the only vehicle that provides your hard earned dollars to perform multiple jobs...and tax-free, at that.

What's interesting is that by clicking on the report button, this text (bolding mine) comes up:

Note: This is ONLY to be used to report spam, advertising messages, and problematic (harassment, fighting, or rude) posts.

The above post certainly qualifies, IMO, so consider yourself reported. Experienced forum members, especially those who have already retired early and/or are financially independent (whether retired or not), are those who I respect here and listen to.

 

[NW-Bound]

We really do have the technology for people to live pretty inexpensively. It just hasn't been mass produced yet...

My sarcasm may be too subtle, starting with people living to 140.

 

[TheHobbit]

This is pretty simple to figure out... take probability of failure for your chosen portfolio say 8% or something (depends on your firecalc numbers), then multiply (uncorrelated outcomes) by your probability of living to a given age say 100, let’s call this 5% (5.9% for women, 3% for men per SS agency). 0.05 * 0.08 = 0.004 or 0.4% or 1 chance in 250.

The thing most folks miss out here is the chance of both outcomes (dying of very old age AND getting unlikely with equity markets) coming true at the same time is very unlikely.

 

[OldShooter]

@pb4uski job well done on the work and the discipline to put yourself in a position to retire at 56 in 2012. I want you and others in similar positions to continue to thrive in retirement, though I want to make note of a couple things that you could consider. “Average rate of return” is not real rate of return, and within various windows of time the “average” is typically lower. ...

@IBC_FriendOfNelsons, you really need to understand that this is a financially sophisticated group with a lot of expertise and understanding. @pb4, for example is a financial executive retired from the insurance industry. He probably knows more about your industry than you ever will. I'm sure he found your condescension to be very amusing.

 

[Gumby]

OP - your concept has been pitched here several times in the past. Most have not been persuaded.


http://www.early-retirement.org/forums/f28/your-own-private-family-bank-92906.html

http://www.early-retirement.org/forums/f28/bank-on-yourself-770-accounts-70876.html

http://www.early-retirement.org/for...rd-of-the-infinite-banking-concept-27184.html

 

[Bigdawg]

“Average lifespan of 140” means some will live to 180.
So, buy AAPL and hold.
Or, put part of your portfolio into ammo and MREs.

If I live to 180 (130 years from now) AAPL will probably be out of business. Also I will be to arthritic to load the ammo and I won't even be able to spell MRE.

 

[Fermion]

IBM has been around 108 years, no reason to think Apple will go anywhere in 100 years.

 

[Walt34]

Here's a nice article about the "Be Your Own Banker" concept that explains things in a bit more detail. And includes some little bits that proponents seem to leave out, such as this paragraph:

The BYOB salespeople are incredible marketers. This must be where political campaign managers ply their trade in between elections. They blast our financial system, banks and bankers, mutual fund managers, and financial advisors. They profess to care about the customers they call “clients.”

https://kahlerfinancial.com/financial-awakenings/insurance/byob-dont-join-this-party

 

[JDARNELL]

Here's a nice article about the "Be Your Own Banker" concept that explains things in a bit more detail.

I like the concept of being my own banker but most definitely through an insurance product. I think it’s legalized fleecing of the masses. I don’t want to ever have to fill out another loan application or any financial information for anyone again.

 

[RobbieB]

I sure hope I'm dead long before 140.

140. Geeze. Probably look like emperor Palpatine