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Old 12-02-2011, 06:27 PM   #21
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The "5-year planning" teaser in the thread made me think about my own situation for a moment. When I retired at 58, I had a "30-year plan." Oddly, I still have a "30-year plan" as I approach 65. I agree that 5 year planning is inadequate, but some of us "geezers" (like myself) may have the opposite problem: Thinking we always have 30 years left to cover. At some point, I really need to start thinking about a 25-year plan or maybe a 20-year plan. I much prefer my "problem" to those who plan only 5 years ahead in retirement. YMMV
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Old 12-03-2011, 02:25 AM   #22
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The only annuity that makes sense to me is the one that kicks in around 80 years of age. To protect against running out of money at an old age.
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Old 12-03-2011, 07:58 AM   #23
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It's articles like this that convinced me that SS is actually a pretty good idea.

It forces me into a less than optimal spending of my money, but for most people it covers for a complete failure to plan for retirement.
+1

It's forced savings that, for many, will be their only retirement income. I think there are many reasons for this (resources, fear, knowledge, willpower, etc.). But, it's almost not relevant "why" because it is and will likely always be so for a great many folks.

So, mandating SS is necessary for it to work, and good for society IMO, even though it redistributes wealth. So, it's a mandate that I'm OK with as it's currently structured.
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Old 12-03-2011, 10:39 AM   #24
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I separated my retirement plan into two parts. The first is from when I ERed (in 2008 at age 45) through age 65. The second is from age 65 through at least age 92 using Fidelity's Retirement Planning software (I am a FIDO client).

In the first part, especially before age 60, I have to live solely off my taxable accounts without tapping into my IRA (yes, I can tap into the IRA using the 72t rule, but I really want to have unfettered access to it starting at age 59.5). As long as I can make it to age 60 (or 65, preferably) intact, things will only improve for me after age 65 because I will have all me "reinforcements" in full force - my frozen company pension, SS, and the IRA. I will also have Medicare available which will reduce my health insurance costs.

According to the FIDO planner, my outlook worsens slightly before I turn 65 but then improves a lot after that.

So my planning horizon from when I first ERed was 15-20 years.
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Old 12-03-2011, 03:19 PM   #25
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It appears to me that most posters to this group have done just about everything correctly when it comes to retirement preparation and have used errors and mistakes along the way as a one-time learning event. I really had no idea that my pensions and SS income stream would be so calming and not have to force me to have to dip into my portfolio stash too early, but that is what has happened. These kind of guaranteed income streams tend to have a very positive effect on the entire long-term portfolio.
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Old 12-03-2011, 10:02 PM   #26
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Obviously in the realm of what we have all experienced as normal, planning only for 5 years is, well. . .stupid. However, I think that the current zeitgeist is one of fatalism. I don't mean that I think everyone thinks we're all going to be nuked, so "what the hell." But lately I've gotten feelings from peope that there's really no hope for the future so maybe there is no future, so live for today. I'm still planning for 30-40 years but at times I find myself hoping that I'm not wrong, a thought entirely foreign for this life-time penny pincher.
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Old 12-04-2011, 06:56 AM   #27
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The only annuity that makes sense to me is the one that kicks in around 80 years of age. To protect against running out of money at an old age.
Instead of the annuity, how about just delaying taking SS until 70, you'll have a nice annuity with a COLA, guaranteed by the US govt.
TJ
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Old 12-04-2011, 09:54 AM   #28
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Instead of the annuity, how about just delaying taking SS until 70, you'll have a nice annuity with a COLA, guaranteed by the US govt.
TJ
Yup, sounds like Bud Hebeler.
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Old 12-04-2011, 11:01 AM   #29
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Instead of the annuity, how about just delaying taking SS until 70, you'll have a nice annuity with a COLA, guaranteed by the US govt.
TJ
That thought has crossed my mind. But, it would really drain my personal funds. I guess I will have to compare the what I give up to what I will gain. I would give up about $100,000 in SS benefits ( not figuring in COLA and the earnings on the money). My main concern is that the insurance company won't be around to make the payments. Also, I can't imagine that such an annuity with a full COLA would be cheap.
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Old 12-04-2011, 11:13 AM   #30
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Originally Posted by teejayevans View Post
Instead of the annuity, how about just delaying taking SS until 70, you'll have a nice annuity with a COLA, guaranteed by the US govt.
TJ
Plus, if you are married (as I am), you can claim against your spouses SS and get 50% between the ages of 66-69 (assuming a FRA age of 66) while earning delayed retirement credits at 8% per year (plus any COLA increase).

Assuming you are male and DW will pass after you, this also gives your DW an increased benefit after your passing.

BTW, DW/me have a joint SPIA (annuity) that is giving us income "up front" and allowing us to delay SS, per our personal plan.

That SPIA will just be "icing" on our SS "cake" when we start collecting. If we pass earlier than expected? Our joint SPIA pays to our estate at the time we both pass.
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Old 12-04-2011, 01:13 PM   #31
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I separated my retirement plan into two parts. The first is from when I ERed (in 2008 at age 45) through age 65. The second is from age 65 through at least age 92 using Fidelity's Retirement Planning software (I am a FIDO client).
We have the same strategy. We're maxing out our 401(k) and IRA contributions for our post-60 retirement fund, and we're setting aside what we can beyond that for our pre-60 FIRE fund. When the FIRE fund reaches the point where it can support us until we can tap "retirement accounts," we will have arrived!

We are still debating whether to deplete the FIRE fund or not. We can retire several years sooner if we plan to deplete it instead of waiting until the FIRE fund is so big that we can live off the interest only and never touch principal. I am in favor of assuming that we will deplete the FIRE fund to a certain point (leaving some in place for emergencies) but my husband wants it all to still be there once we hit 60... not sure which way we will end up going there.
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Old 12-04-2011, 01:41 PM   #32
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the best way to prepare for retirement is to start early, save cash out of every paycheck. Invest only in secure bonds, like municipal or government bonds. Never trust the stock market. Pay the max on your federal retirement fund or fica account.
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Old 12-04-2011, 02:38 PM   #33
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We have the same strategy. We're maxing out our 401(k) and IRA contributions for our post-60 retirement fund, and we're setting aside what we can beyond that for our pre-60 FIRE fund. When the FIRE fund reaches the point where it can support us until we can tap "retirement accounts," we will have arrived!

We are still debating whether to deplete the FIRE fund or not. We can retire several years sooner if we plan to deplete it instead of waiting until the FIRE fund is so big that we can live off the interest only and never touch principal. I am in favor of assuming that we will deplete the FIRE fund to a certain point (leaving some in place for emergencies) but my husband wants it all to still be there once we hit 60... not sure which way we will end up going there.
In my pre-60/65 ER budget, I have done something in between the views of you and your husband. I have set up a budget which, at least initially, has surpluses (dividends over expenses, but not counting anything withdrawn from my IRA) in the earlier years (until around age 58), then runs deficits until age 65.

I originally drew up this budget in 2008, before any federal health insurance changes were done ("Obamacare"). I also changed my individual health insurance plan earlier this year which costs me less (my original HI plan had risen 50% in 2 years and I had to get out from under it) but is far less broad than its predecessor. So I am running considerable surpluses right now.
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