54 yo trouble

[Spanky]

One problem is you are assuming she/they will get SS... she has a 403(b), and some will not get this benefit.

If you are a teacher in Texas, you will not... but you will get an annuity on your imcome... say she worked 30 years at 2.2 per year it is $26,400 per year from pension.. you only need to make up $10,000...

Is the pension inflation adjusted?

$10,000 is almost 24% withdrawal rate from the portfolio.

The bottmline is that she will need additional income from other sources or simply spend less.

 

[Martha]

There are lots of tragic cases out there like the friend of the OP. Actually there are many in much worse shape. For many of these people, they'll have to fall back on family members to make it through the duration or suffer the consequnces of their choices.

If you accumulate $150,000, the 4% SWR is $6000 a year or $500 a month. I know all sorts of people who make $20,000 to $30,000 a year. They live within their means but very, very little income is left to save for retirement. They may have children, be divorced, and child support doesn't seem to get paid. How are they going to accumulate enough to pay them even $500 a month? How much choice is really involved here? They seem to do best if they can buy a home early on, and lock in the costs, and have the home as an option for a reverse mortgage. But many couldn't afford a house and with increases in prices in the past few years, even if they once could afford a house they can't anymore.

 

[Marketneutral]

Is the pension inflation adjusted?

$10,000 is almost 24% withdrawal rate from the portfolio.

The bottmline is that she will need additional income from other sources or simply spend less.

Back to my initial point of downsizing right now looks attractive.

Trying to get additional income in this economy is like trying to surf in a bathtub.

 

[wildcat]

Housing prices will fall back to the norm. Raising slightly below wage increases.

Telling her to count on a reverse mortgage was jumping to a conclusion, don't you think?

I am not going to stoop to your level and take your bait. I feel sorry for you if your sole purpose here is to argue and I am sure your crystal ball is as accurate as you claim to be.

 

[Marketneutral]

I am not going to stoop to your level and take your bait.  I feel sorry for you if your sole purpose here is to argue and I am sure your crystal ball is as accurate as you claim to be. 

What bait?  How can housing appreciate exceed wage increase growth for any length of time?

The house I just sold doubled in less then 4 years.

That is not normal and this is the norm now. 

Everything goes back to the norm.

Home appreciate slightly slower then wage growth.  Or we would all be living in a cave and if you believe the CPI - we all ready do. 

 

[Marketneutral]

And by the way. There are times when housing prices fall.

Believe it or not.

 

[wildcat]

Well, thanks for the additional tip Oracle of the ER forum.

 

[Marketneutral]

That reverse mortgage deal is not such a sure bet.

Works great in a house bubble. I give you that.

Not sure this bubble can continue for 11 months let another 11 years.

Having reverse mortgages as mortgage product at all should probably been a sign that there is an imbalance.

 

[xprinter]

I like that Oracle line

 

[Marketneutral]

I like that Oracle line

You can get a nifty nickname to if you point out something that goes against what he says.

 

[oldcrowcall]

If the savings are in a protected form (e.g., IRA, etc) and the debt is unsecured, she she might want to consider filing bankruptcy to wipe out the debt. Rather extreme measure but might be worth considering if she can't pay it off. New rules are more restictive now tho. She could take in wash too.