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deserat · 05-15-2007, 03:49 PM

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

Mwsinron · 05-15-2007, 04:12 PM

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..

DangerMouse · 05-15-2007, 06:59 PM

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.

bssc · 05-15-2007, 07:11 PM

Do their own lawn maintenance
Eat out less
Shop secondhand for clothing.

cj · 05-15-2007, 07:46 PM

Call me conservative, but I sure wouldn't feel comfortable retiring with a 620K mortgage.

UncleHoney · 05-15-2007, 08:32 PM

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.

Nords · 05-15-2007, 11:13 PM

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.

Mwsinron · 05-15-2007, 11:16 PM

Marketing on why they wont pay off that 31k cc debt

bssc · 05-16-2007, 12:23 AM

Maybe we should take up a collection to help them out.

Mwsinron · 05-16-2007, 12:36 AM

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.

bssc · 05-16-2007, 01:41 AM

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.

mathjak107 · 05-16-2007, 03:24 AM

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

teejayevans · 05-16-2007, 04:36 AM

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

dex · 05-16-2007, 05:25 AM

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.

Tracy42 · 05-16-2007, 06:05 AM

Anybody notice the wife would rather send her husband back to work than part with the NC vacation home. Now that's love...Tracy

gandalf42 · 05-16-2007, 06:39 AM

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!

FinanceDude · 05-16-2007, 08:39 AM

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............ :

:

tryan · 05-16-2007, 09:57 AM

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.

Nords · 05-16-2007, 10:15 AM

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...