Money Mag: Can this Retirement Be Saved?

[NinjaPigeon]

Quote:

Originally Posted by bssc No, the liberal way would be to raise your taxes and start a government agency to help these poor people and others in the same situation.

Hey, no liberal attacks :P I'm liberal and have no desire to help stupid people. And the government is even more inept than these people at handling money. This liberal is all too excited to watch the subprime meltdown receive zero government help

And I'd tell the wife if she wanted to keep the vacation home, SHE could go back to work Pretty sure we had a thread similar to this several months ago where the guy's wife didn't understand why he'd want to retire after 30 years of working and supporting her instead of continuing to work so she could keep the McMansion...

[mathjak107]

Quote:

Originally Posted by dex I agree with you.

at first we were apprehensive but then thinking about it we said why not? its bizarre but people will talk to strangers and co-workers about their sex lives, cheating and marital problems but for some reason we have this thing about our finances being taboo.

the problem i think is most people are either embarresed by what they have or lie thru their lifestyle and dont really have the assets to back up the life they try to show to others.

we also did an article in the last fidelity magazine. no reservations what so ever. in fact they were lots of fun. we had a blast doing the photo shoot

[teejayevans]

Quote:

Originally Posted by mathjak107 at first we were apprehensive but then thinking about it we said why not?

Any friends and family start asking you for loans?
You get any contact from FAs wanted to help you manage your portfolio?
You get any contact from various charities, some of which you never heard
of?
BTW, did I mention I'm the head of the "save the mosquito" foundation...

I assume the benefit is some free financial advise? ie they didn't pay you?
TJ

[mathjak107]

we thought we would get a flood of calls and junk mail. got not one, nothing. not even a call from a long lost relative. ha ha

no they dont pay you, i was just curious to see how my plans stacked up against their proffessionals view

[chinaco]

Quote:

Originally Posted by FinanceDude What a witch............ : :

Switch the w with a b and put selfish in front. The only other explanation is STUPID!

The ridiculous part is that it is the house is an inanimate object. It can only fall into about 2 categories investment or toy...possibly a combination of both. Memories are in her mind... they do not have an opportunity cost. She should just take some pictures. If you think about it... this is emotion run a muck.

I really don't buy the memories part... I would buy the status symbol part or defining oneself with an object. Heck, they could probably sell it and rent the same place when they take a vacation and come out better off financially.

They will sell that place. No choice! Look at the realestate holdings all very illiquid. The taxes and insurance alone will probably suck up Carol's pension.

Their standard of living is going to plummet.

[FinanceDude]

Quote:

Originally Posted by chinaco Switch the w with a b and put selfish in front. The only other explanation is STUPID! The ridiculous part is that it is the house is an inanimate object. It can only fall into about 2 categories investment or toy...possibly a combination of both. Memories are in her mind... they do not have an opportunity cost. She should just take some pictures. If you think about it... this is emotion run a muck. I really don't buy the memories part... I would buy the status symbol part or defining oneself with an object. Heck, they could probably sell it and rent the same place when they take a vacation and come out better off financially. They will sell that place. No choice! Look at the realestate holdings all very illiquid. The taxes and insurance alone will probably suck up Carol's pension. Their standard of living is going to plummet.

They're toast, he needs to get a job.............. :P :P

HALF their retirement gone in a couple years??

[Texas Proud]

Quote:

Originally Posted by deserat Was scanning the latest Money Magazine and saw the article "Can this retirement be saved?" I went to the bottom line and it showed: Income: [b]Withdrawal from savings $123, 489[/b] Rental Income $36,000 Total - $159,489 Assets NC vacation home $900K FL residence $770K FL investment prop $454K 401K/IRAs $120K Cars (two-Ford and Mercedes) $36K Life Insurance (cash value) $36K Brokerage account $34.3K Carol's Gov't pension $25K Bank, checking/savings $9K Total - $2.3843 M

Show me where they have savings to withdrawl $123K per year!!! Where is the $3 mill??

[Moemg]

I just read the whole article .These people are clueless about how to live on a smaller income .Have they never heard the word downsizing ?

[2B]

Quote:

Originally Posted by gandalf42 Yes, I noticed that. I wrote them off at that point. She said the vacation home had "memories". Apparently she preferred the past memories of a vacation home that they spent little time at to making new memories with a retired husband. Ouch!

I've had a prior post where I noted that "retired" wives seem oblivious to keeping "dear hubby" working until he dropped. My DW started make similiar comments and I basically pointed out the inconsistincies in what she seemed to think I should do, what I'd like like to do, what she's currently doing and what she's willing to do if I don't keep working. She had an "enlightening moment" but I don't know if it took.

[Celany]

the thing I don't get about the whole memories schtick is that they moved to florida to be with the grandkids...presumably, to make more *memories* with the grandkids. as the article said, due to their current situation, they only see the grandkids once a month.

so she'd rather hold on to old memories than make *more* memories with the very people that they moved to florida to see?

very strange, indeed...sounds like she hasn't put much thought into it...

[Fireup2025]

From what I see, she seems to be incapable of such advanced thought! Me me me...now now now...

That is the extent of the "thought"

[deserat]

The responses to this have been interesting - frankly - I just skimmed part of the article and focused on the numbers....I saw that they could have a retirement if they changed their expectations....sort of like the members on this board. My other thought was that "where the he!! did all of their money go over the years?" They weren't as far as they could be.....

Thanks for the responses - Deserat

[chinaco]

Quote:

Originally Posted by deserat The responses to this have been interesting - frankly - I just skimmed part of the article and focused on the numbers....I saw that they could have a retirement if they changed their expectations....sort of like the members on this board. My other thought was that "where the he!! did all of their money go over the years?" They weren't as far as they could be..... Thanks for the responses - Deserat

Exactly. And it is too late! I know people that have speculated on land and property and gotten rich ($10s of MM). But they are few. Most have gotten a more normal return. Some were highly leveraged and wound up broke in a cash crunch.

These people have most of their money tied up in illiquid real estate and the largest one is a toy. Imagine... a $900k house in NC. I can imagine it is in a tourist trap. But still, it is likely to be a fairly large house. Think of the furniture that was purchased. Plus, If I am going to have a $900k house, it damn sure is going to have a nice pool and probably a pool table (which I have). My point just think of furnishing that house. It is likely to be a good 3000+ sq ft. They likely did not have a bunch of empty rooms.

When we moved to our present house, most of our furniture was, shall we say fully depreciated... We bought a lot of new fruniture (personal decision). Heck we are probably set for life in the furniture dept. Any way dropping that money all at once was very expensive. We bought direct in NC and saved quite a bit... but still it was expensive.

Now think about yearly taxes, insurance, up keep, etc... Yuk!

I hope his wife's memories are fantastic... they sure paid for them. probably to the tune of $10k per thought.

[mathjak107]

one of the reasons money mag had been interested in doing us was they said most of the people they do are either committing financial suicide , in debt up to their eyeballs or just failing miseably in putting together on their own a financial plan. so they figured they wanted to do a baby boomer couple who was debt free, kind of financialy savy and thought they were covering all the bases . whether we actually did or not was the crux of the article. . then they wanted to pit their financial team against our plans and see how we faired. we did better than i ever expected us to do and we came to disagreement really only on the issue of long term care.

[oliverdickens]

Might be in the string, but did anyone wonder how they purchased car, life and health insurance for only $4775 a year. That seems impossible given high cost for car insurance alone in Florida, and I did not notice their former jobs that might have offered some reduced health insurance.

Their home insurance must have been rolled into the $67000 of mortgage payments. Wow

Any way, if there is someway to spend less than $400 per month for all that, I would like to know. Thoughts?

[W2R]

Quote:

Originally Posted by oliverdickens Might be in the string, but did anyone wonder how they purchased car, life and health insurance for only $4775 a year. That seems impossible given high cost for car insurance alone in Florida, and I did not notice their former jobs that might have offered some reduced health insurance. Their home insurance must have been rolled into the $67000 of mortgage payments. Wow Any way, if there is someway to spend less than $400 per month for all that, I would like to know. Thoughts?

High deductible on the house. Minimum liability on the car. These may not be the most attractive choices (which is why they are cheaper), but you asked.

[Sheryl]

Train wreck is right!!!

As others said, where in the heck are they going to withdraw $123k from per year? The cars (which they claim as assets)? Besides the insurance number being way low (maybe their health is paid for by employer?) There are no line items in the budget for all of the "other" that people like this are sure to buy. With this budget they will never buy anything but food, clothing and yard maintenance? She never gets her hair done, he never buys new golf balls? Sheesh – we think we’re pretty frugal, and we still can’t go through a month without a couple hundred bucks in “other.” I bet they can’t even live on the budget as shown!

[gindie]

The other mis-prioritization is that she is choosing her vacation home over paying for her cholesteral medication!

[Nords]

Quote:

Originally Posted by gindie The other mis-prioritization is that she is choosing her vacation home over paying for her cholesteral medication!

Sounds like this problem will end with a Darwin-Award solution.

[mathjak107]

this is more for suzie orman and her flock of financial loosers.