Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 08-08-2016, 07:20 PM   #21
Gone but not forgotten
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
I love to gift .I gift my So,my daughter,my SIL,my grandsons ,my sister and my SO,s grandchildren and DIL,s.Some reciprocate some do not but it does not matter .It is what I enjoy doing especially for my daughter and grandsons .Isn't that what money is to enjoy and spend how you want to ?
Moemg is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-08-2016, 07:38 PM   #22
Recycles dryer sheets
 
Join Date: Nov 2010
Location: Henderson
Posts: 87
Structured Gifts to Demonstrate Retirement.

To demonstrate management of retirement assets, I have set up an account I'll call Demo. I retain ownership of Demo and give my intended beneficiary the right to look at it. I seeded Demo initially with a low-cost index fund (95%) and cash (5%). My gifts from this account to my intended beneficiary include part of that cash. More importantly, the cash gifts provide a continuing lesson in management of retirement assets.

Each month, I mark to market -- computing the total value of Demo. I then compute a monthly withdrawal: one four-hundredth of that total value. Doing this monthly, or twelve times a year, comes to a 3% annual withdrawal rate (12/400 = 3%). Withdrawing from the cash part of the account will not incur any income tax. I seeded it with after-tax money. The withdrawal goes to my intended beneficiary as a gift.

Once a year, the fund pays a dividend around 2%; that replenishes the cash in Demo to some extent. That dividend is taxable as income to Demo's owner. To approximate the loss due to income tax, I put only 80% of the dividend into Demo. The remaining 20% goes into an account from which I pay my income taxes.

Finally, once a year, after the 2% dividend comes in, I liquidate about 1% of Demo's fund holding, Actually, I compute the number of fund shares to sell to raise enough cash to return Demo to 5% cash. Again, to make realistic allowance for income taxes, I put only 80% of the realized capital gain into the cash component of Demo. All of the return of capital part of that sale also goes into Demo.

That's easy. There are just 14 transactions in this account annually -- monthly withdrawals and annual receipt of dividends and annual reblancing. The safe withdrawal studies that fix purchasing power of monthly withdrawal, commonly used a 4% annual rate, adjusted for inflation maybe. This disregards the effect of stock market performance. That is, a retired person may find it hard to stick to the original spending plan when the market is way down. Also, those studies assume that there is fixed interest short-term component of the retirement assets, paying decent interest, unlike today.

FIREcalc is not strictly comparable to this plan. It adjusts withdrawals to maintain purchasing power. Demo adjusts distributions according to market performance, predicting that corporate dividends grow at about the same rate (or better) as inflation over a period of years. FIREcalc concluded that the 3% withdrawal plan had no failures in a fifty-year plan.

Questions and comments are welcome.
Ted_Shepherd is offline   Reply With Quote
Old 08-08-2016, 09:13 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by Moemg View Post
I love to gift .I gift my So,my daughter,my SIL,my grandsons ,my sister and my SO,s grandchildren and DIL,s.Some reciprocate some do not but it does not matter .It is what I enjoy doing especially for my daughter and grandsons .Isn't that what money is to enjoy and spend how you want to ?
In 2011, I helped my daughter buy her first home, and gave her the money to put 20% down. The townhome was on short sale, and she bought it at less than 40% of what the previous owner paid in 2008.

Today, the price has recovered to 80% of the previous high. This means it has doubled from what she paid.

Without my gift (my wife and I made separate gifts to double the amount allowed by the law), she would have missed out on that deal. I hope it taught her the lesson of buying when people are selling, and that one must have the cash reserve to take advantage of such occasions.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 08-12-2016, 11:32 AM   #24
Dryer sheet wannabe
 
Join Date: Apr 2016
Posts: 18
Yes, we 'gift':

What? Cash
When? Birthdays and Christmas for our children. Weddings and High School/College graduations for nieces and nephews as well as our own children.
Why? Because we want to

Are your gifts reciprocated? Sometimes reciprocated, always acknowledged.

In my family, I am the youngest of 5 children. Four of us are doing well and buy what ever we want/need and we agreed long ago to not exchange gifts. The other one has a more challenging life, and we send her a gift for her birthday and Christmas as well as helping her as we can throughout the year.
cat wrangler is offline   Reply With Quote
Old 08-12-2016, 11:50 AM   #25
Thinks s/he gets paid by the post
2017ish's Avatar
 
Join Date: Apr 2012
Location: Nashville
Posts: 2,504
We do the occasional gift of wine from our cellar to friends who would appreciate--this is spur of the moment stuff and the initial purchase amounts per bottle would be less than $100 (although often some years ago). Other than that (and charity):

What? Cash/fund transfers
When? End of year some years; Also, another category is always in connection with coming together for extended family annual get-together
Why? They are 20 somethings, we are retiring soon; their marginal utility for money is quite high right now, and both we and they like having them in attendance for the annual gathering.
To Whom? our three kids (and, derivatively, to their long-time S.O.s)
Are your gifts reciprocated? Nope, at least not in kind. See "Why."

Even with no student loans and their relatively high incomes, generational arbitrage helps them a lot more than it disadvantages us, and we aren't talking huge sums of money. Same with the cost for them to attend the annual get-together. As long as they enjoy seeing grandparents/cousins and the like, it would be a shame to have monetary issues prevent it.

I suppose we should include cheap (but AFR compliant) loans for graduate school and weddings/houses in this category too? Getting 2% guaranteed or so is not bad for me, and paying it is a steal for them. Nonetheless, it is in some respects a gift, as we wouldn't do it for strangers.
__________________
OMY * 3 2ish Done 7.28.17
2017ish is offline   Reply With Quote
Old 08-12-2016, 01:18 PM   #26
Thinks s/he gets paid by the post
Keim's Avatar
 
Join Date: Feb 2007
Location: Moscow
Posts: 1,569
I GIVE, I do not GIFT.

Mostly just immediate family. Family gift to brother and another to parents. Not much individual giving at this point.
__________________
You can't enlighten the unconscious.
But you can hit'em upside the head a few times to make sure they are really out...
Keim is offline   Reply With Quote
Old 08-12-2016, 01:22 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
I recently started to use the word gift as a verb, but after first verified that it was correct.

From the Web: The use of gift as a verb is not new, at least according to the Oxford English Dictionary, which lists examples of gift used to mean to make a present of from as early as the 17th century.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Did you gift money to your kids? How? wanaberetiree Other topics 18 03-11-2014 07:57 AM
How did you gift $$ to your kid? wanaberetiree Other topics 9 03-10-2013 09:32 PM
Do you have experience with "charity gift funds"? FIREd Other topics 10 09-30-2009 09:10 PM
Best Gift you Ever Received or Got Someone Else....... FinanceDude Other topics 13 06-25-2009 06:42 PM
Veteran's Day Gift to all you vets~Thanks for your service mickeyd Other topics 1 11-03-2006 11:42 AM

» Quick Links

 
All times are GMT -6. The time now is 05:12 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.