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Old 03-17-2008, 02:57 PM   #41
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Some of the advice does make sense, and I do think that they probably can ease the pursestrings somewhat. But it would be better to ease into things gradually, rather than beginning retirement by purchasing a fancy car and increasing their annual charitable donations by a factor of 8.5.

And haha makes a valid point: if the couple was genuinely interested in volunteerism or socially conscious mutual funds, chances are they would not need the advisor to push them in those directions. Taking a holistic approach to money management shouldn't mean pushing your personal values on your clients.

P.S. IMHO, any couple who at ages 55 and 56 has liquid assets of only $1.3 million (not counting the anticipated lump-sum value of the pension), an outstanding $320,000 mortgage, and average annual living expenses of $63,000 is neither "ridiculously secure" nor "extreme savers".
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Old 03-17-2008, 03:30 PM   #42
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I have to agree with prior criticisms:

1. Expecting a return of 8.8% over the 40 years this couple has to plan for is just far too high a risk, especially given the market and global changes in the last 6 months.

2. Their outstanding mortgage negates the lump-sum. They need to get rid of that mortgage before even considering themselves retired, IMHO.

3. Average living expenses of $63K would be less if they got rid of that mortgage. I agree that is not particularly extreme savings for living in so Cal.
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Old 03-17-2008, 03:46 PM   #43
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I agree with consensus. The couple had done a good but not exceptional (by the standards of the board) job saving and is well positioned to retire early with no major change in their lifestyle.

It seems foolish to the point being irresponsible to say that the should buy Lexus give away their money etc. I am in a better financial position than they are, and after a weekend where a $20 stock in a blue chip company Bear Sterns is suddenly worth $2... My confidence in making 8-9% over the next 30 years isn't very high.
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Old 03-17-2008, 04:04 PM   #44
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Quote:
Originally Posted by clifp View Post
after a weekend where a $20 stock in a blue chip company Bear Sterns is suddenly worth $2
Actually I believe it is rather worse than that: Friday's closing price was approx. $30. Thursday's was approximately $60! And less than a year ago, Bear Stearns was trading for upwards of $150.

Ugly!
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Old 03-17-2008, 05:40 PM   #45
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3. Average living expenses of $63K would be less if they got rid of that mortgage. I agree that is not particularly extreme savings for living in so Cal.
The expenses will go down to about $40K if the mortgage is paid off.
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