Hi Everyone. I Owe you a World of Thanks!

[seabourne]

"will have a lifetime monthly retirement check of $3,100 with a 3% yearly cola, After taxes and health insurance, I think I should have about $2,100. My husband gets a SS check of only $1000. We get about $1,300 for two rentals. To cover maintenance, insurance and property taxes on the rentals and my home, I plan to put the $1000 SS away in a separate account to cover it.

I do have about $250K in 403 b Accounts, 250K In real estate, 50K in the bank which is earning me practically nothing."

Carla, congratulations and welcome! The million dollars in PV (stands for "Present Value", how much cash today all your pension and SS future money would be worth if someone were buying the rights to it)

The simple rule is 4% or rule of 25, which means for every $100 you have, you can get $4 (which is 4%) each year from it pretty safely, probably without running out in 30 years. the other way, is if you have $1000/month SS, ($12k/year), the value of that is as if it were 4% of money you had put away, of 25 times the value ($12,000x25=$300,000).

Where someone was saying that you have value of over one million gets there by adding up your pension ($3100/month) SS ($1000/month) and assets. You wouldn't count both the real estate and the rental income from the real estate, since one depends on the other.

So I'd get (roughly): 3100x12x25 + 1000x12x25 + 250000 (investments) +250000 (real estate) +50000 (bank cash) -19000 (mortgage) = $1,761,000!

So congratulations!! I think that you can safely consider yourself in the millionaire club! It looks like you have a very reasonable budget, and you are in good shape to relax and enjoy your well earned retirement!

[pb4uski]

Carla, congratulations on your success - you are definitely well prepared.

You asked what you might do with the 50k in cash. I have a savings account at Discover Bank that is paying 1.2% and is fully FDIC insured. I have been very happy with it but there are other similar internet banks (Ally, Orange, etc.) that might offer similar rates. Much better than what other brick and motar banks pay, but make sure to read the fine print before investing.

[Ally]

Seabourne, thank you do much for giving such a detailed explanation! What peace of mind you've given me, since we are in a similar situation with a nice pension and then both getting soc. sec. Our savings is in the range of Carla's and we plan to keep on saving, but by your calculations, we could have nearly 2 million in value when we retire from our SS, pension and savings. Amazing! Now I don't feel do bad when I read how much many of you have saved.

[April Fool]

Thanks again to everyone who has welcomed me so warmly.

Thanks pbluski for the the info on the discovery bank. I really have been looking but have found nothing. I'm going to check it out.

Seabourne, thanks for the explanation. You probably made a lot of us happy who does not know how this money thing works. I only wish I could feel like a member of millionaire's club. Back in the day that seemed like an astronomical figure that only the rich could achieve.

If someone had asked me just last week if I thought I could ever reach a million dollars, I would have said no and never will.

Thanks



Carla

[robbridg]

Quote:

Originally Posted by chris2008 What a great story! I wish you + DH all the best for your retirement!

I agree.

BIG CONGRATS!