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Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 04:49 PM   #1
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Money Mag: Can this Retirement Be Saved?

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:

Withdrawal from savings $123, 489
Rental Income $36,000
Total - $159,489

Outgo
Mortgages $67, 164
HOA fees, Prop Ins $23, 682
Prop Taxes $22,300
Groceries, dining out $9600
Cars $7200
Util $7200
Credit card payments $6000
Insurance (car, life health) $4775
Marketing of investment prop $4000
Pool, yard maintenance $3252
Gifts, charity $1460
Clothing $1200
Golf fees $252

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

Liabilities
Mortgages $620K
Home equity loan $98K
Credit card debt $31K
Total $749K

He is 61, she is 60 - both eligible for SS of about $32K per year in 1-2 years respectively. They believe in real-estate investment and based on my brief (*VERY* brief) scan, he is going to go back to work because of the real-estate market meltdown.

I did a quick back of the envelope assessment and I say they could do quite well if they did the following:

Sell NC and FL investment properties and pay off all debt - that leaves $605K - take 4% of that yearly ( $24.2K/yr) their eventual $32K per year SS - that's $56.2K. They have no debts, a nice roof and money to 'play' with. During that first year they could look at reducing their food bill ($800/mo), their util bill ($600/mo!) and perhaps their clothing bill. They don't have to worry about property marketing credit card bills or mortgages. They could also look at down-sizing their residence to something which has lower property tax and upkeep costs.

Money mag did tell them to offload the investment properties - however, something like what I did above should be what they show - I'm awfully surprised at the low IRA balance and very small lump-sum pension. I'm also surprised at the credit card balance and how little they actually pay towards that balance - the statement was made that they would like to travel Europe, etc -they'll need a bit more than that above.....Deserat
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 05:12 PM   #2
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Re: Money Mag: Can this Retirement Be Saved?

Im just amazed they have 31k in cc debt but think its a good idea to give to charity and play golf. Its like crapping money down the toilet

Credit card debt is EVIL.



And im not saying charity isn't a good thing before I get lynched..
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 07:59 PM   #3
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Re: Money Mag: Can this Retirement Be Saved?

I read that article and couldn't believe that they could be that financially naive. Getting rid of the NC vacation home seemed like the obvious solution to their problem.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 08:11 PM   #4
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Re: Money Mag: Can this Retirement Be Saved?

Do their own lawn maintenance
Eat out less
Shop secondhand for clothing.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 08:46 PM   #5
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Re: Money Mag: Can this Retirement Be Saved?

Call me conservative, but I sure wouldn't feel comfortable retiring with a 620K mortgage.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-15-2007, 09:32 PM   #6
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Re: Money Mag: Can this Retirement Be Saved?

Looks like a plan to me, probably won't work but it would be fun just to sit back and watch. It might just serve as a good example of how not to do it.

Haven't seen a good train wreck in a long time.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 12:13 AM   #7
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by UncleHoney
Looks like a plan to me, probably won't work but it would be fun just to sit back and watch. It might just serve as a good example of how not to do it.
$4000 on marketing?!?

I'll get the popcorn.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 12:16 AM   #8
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Re: Money Mag: Can this Retirement Be Saved?

Marketing on why they wont pay off that 31k cc debt
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 01:23 AM   #9
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Re: Money Mag: Can this Retirement Be Saved?

Maybe we should take up a collection to help them out.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 01:36 AM   #10
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by bssc
Maybe we should take up a collection to help them out.
That would be the liberal way wouldn't it.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 02:41 AM   #11
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Re: Money Mag: Can this Retirement Be Saved?

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.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 04:24 AM   #12
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Re: Money Mag: Can this Retirement Be Saved?

i love their planning articles . sometimes they are soooooo off base though you have to wonder what they were thinking. my wife and i were reviewed in an article by them last year. although the long term care debate i had with them made sence the rest of their advice was just so so .

if anyone hasnt seen the article ill see if cnn still has it on there web site

http://money.cnn.com/magazines/money...0203/index.htm
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 05:36 AM   #13
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by mathjak107
i love their planning articles . sometimes they are soooooo off base though you have to wonder what they were thinking. my wife and i were reviewed in an article by them last year. although the long term care debate i had with them made sence the rest of their advice was just so so .

if anyone hasnt seen the article ill see if cnn still has it on there web site

http://money.cnn.com/magazines/money...0203/index.htm
Maybe it's just me, but why would you publish your most intimate financial
statistics? I've seen people post details on this site as well, maybe I value
privacy more than others?
TJ
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 06:25 AM   #14
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by teejayevans
Maybe it's just me, but why would you publish your most intimate financial
statistics? I've seen people post details on this site as well, maybe I value
privacy more than others?
TJ
I agree with you.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 07:05 AM   #15
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Re: Money Mag: Can this Retirement Be Saved?

Anybody notice the wife would rather send her husband back to work than part with the NC vacation home. Now that's love...Tracy
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 07:39 AM   #16
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by Tracy42
Anybody notice the wife would rather send her husband back to work than part with the NC vacation home. Now that's love...Tracy
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!
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 09:39 AM   #17
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Re: Money Mag: Can this Retirement Be Saved?

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!


What a witch............ : :
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 10:57 AM   #18
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Re: Money Mag: Can this Retirement Be Saved?

yeah, if you want burn thru a 160k/year with a 1.6m portfolio ... you better keep working. In his shoes, I'ld send the wife back to work.
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 11:15 AM   #19
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by gandalf42
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!
There seems to be an implicit assumption that her cherished memories were made with her husband...
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Re: Money Mag: Can this Retirement Be Saved?
Old 05-16-2007, 11:59 AM   #20
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Re: Money Mag: Can this Retirement Be Saved?

Quote:
Originally Posted by Nords
There seems to be an implicit assumption that her cherished memories were made with her husband...
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