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Bad financial surprises of retirement?
Old 04-07-2013, 08:10 AM   #1
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Bad financial surprises of retirement?

What would you folks say is the most underrated or least discussed financial concern of retired folks? As I draw nearer to retirement, I want to make sure I have all financial bases covered and I have considered just about all the expenses that may arise. I have at least four years to go, but it is never to early to start planning. I guess it is all a matter of income vs. expenses. Thank you for your time and expertise.
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Old 04-07-2013, 08:19 AM   #2
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One thing little discussed but very real is cognitive loss or impairment in old age leading to financial calamity.
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Old 04-07-2013, 08:51 AM   #3
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One area I have not seen discussed much is estimating the larger maintenance / lifestyle costs that will come with the future. I am referring to new roofs, cars, appliances, electronics beyond appliances (TVs, Computers, and such), etc. My budget has a set aside element for these areas. I am trying to cover the unexpected / unwanted costs that can produce an impact just when you do not want an impact...
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Old 04-07-2013, 09:18 AM   #4
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These things come to all homeowners and car-owners, not just retired ones.

I agree with Michael that cognitive decline is the big pole in the tent, though. Suspect the reason it isn't much discussed is that no one has a clue what to do about it.

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One area I have not seen discussed much is estimating the larger maintenance / lifestyle costs that will come with the future. I am referring to new roofs, cars, appliances, electronics beyond appliances (TVs, Computers, and such), etc. My budget has a set aside element for these areas. I am trying to cover the unexpected / unwanted costs that can produce an impact just when you do not want an impact...
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Old 04-07-2013, 09:49 AM   #5
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The one thing that surprised me upon ER back in 2002 is that I could not buy health insurance at any price for my wife/self. I thought we were in reasonably good health for our ages (52/54 at the time) but mild high blood pressure under control with medication and carpal tunnel were sufficient to deny coverage. Hopefully under O'care that will not be a concern starting next year.
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Old 04-07-2013, 10:05 AM   #6
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I agree with Michael that cognitive decline is the big pole in the tent, though. Suspect the reason it isn't much discussed is that no one has a clue what to do about it.
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I suppose the only 'surefire' way to guarantee against that is to put a big chunk of your portfolio into a SPIA so you're 'guaranteed' against investing it in something stupid or falling prey to a con artist, and putting the rest in a diversified mutual fund like (psssst) Wellesley, so all you have to do is spend the income that comes in, and tell your spouse/child to make sure you don't liquidate that position and do something stupid with it.
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Old 04-07-2013, 10:42 AM   #7
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putting the rest in a diversified mutual fund like (psssst) Wellesley, so all you have to do is spend the income that comes in, and tell your spouse/child to make sure you don't liquidate that position and do something stupid with it.
Years ago I read a book on personal investing by a woman who had been a stock broker and mutual fund salesperson for many years ( I forgot her name but she had an example mutual fund she called the Seminar Fund.)

She referred to your strategy as 'buying some brains'. Having spent a lifetime building up the Seminar Fund one simply told them to send a certain amount of $$'s every month at a rate that was expected to NOT deplete the fund until after death. Shades of Firecalc!!
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Old 04-07-2013, 10:52 AM   #8
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What would you folks say is the most underrated or least discussed financial concern of retired folks? ...
Investing with the correct AA for your risk profile and at the same time using low ER bond/stock investments.

This has been discussed a lot here and on Bogleheads, but retired folks in America generally are probably badly informed on this stuff.
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Old 04-07-2013, 05:23 PM   #9
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My biggest concern is health. DH was recently diagnosed with cancer and I'm worried about my own cognitive future (strong family history of Alzheimer's)
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Old 04-07-2013, 05:30 PM   #10
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Mine is health too. My husband's family has early onset alz gene - he has 50% chance. He is right at the age when it all came down for his father. If that happens, our life will suck as it's difficult to travel and such. fingers crossed it passed him by (and thus his daughters)
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Old 04-07-2013, 05:33 PM   #11
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My biggest concern is health. DH was recently diagnosed with cancer and I'm worried about my own cognitive future (strong family history of Alzheimer's)
+1. DH had cancer, and has tumors reappearing in recent scans. Not to mention he has cognitive issues as a result of the initial chemo. He's not 60 yet, and I can't even imagine how much more of a challenge I am going to face.

Of course, my mother and her sister both had Alzheimer's, so I may have no clue that DH is declining.

I watched an elderly couple stand outside church last night, screaming at one another about how she didn't warn him she was going to take a right turn. She was absolutely baffled at his anger. I thought: "oh boy, there we are in 20 years..."

I just take it one day at a time.
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Old 04-08-2013, 06:56 AM   #12
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One thing little discussed but very real is cognitive loss or impairment in old age leading to financial calamity.
Dealing with FIL's issue has been an awareness-raising event with us too. We have enough resources to handle reasonably foreseeable events and some unreasonable, but loss of mind is more difficult to plan for.

FIL did get scammed out of $1,100 that he could ill afford to lose a couple of years ago and it was like pulling teeth to get him to admit it.

Fortunately I'm married to a smart lady so hopefully I'll have sense enough to just do what she tells me to.
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