Are you "lucky"if you have a secure retirement?

[Travelover]

I have a low opinion of "financial advisers." I see no reason to pay them 1% of AUM (for fee-based) or commissions (the rest of 'em) for information that is pretty easy to find on the internet.

Several of them here in town have TV or radio shows (paid programming) and refer to themselves as "the retirement coach" and such. They are essentially salesmen.

I totally agree. And remember it is not just 1% of your total investment that they harvest, it can be 1/4 of your spending in retirement if you use the conventional wisdom of 4% safe withdrawal rate*. So on a million dollars, they are skimming $10,000 a year regardless of the market performance.



* Based on age 65+ and 50/50 stocks/bonds asset allocation

 

[ultrarunner]

Well Luck does play into it... at least for some.

One of my co-workers was left an Estate just under 2 million from great Aunt.

It was a total surprise because nothing was ever said... bulk of the estate was a home in Cupertino they sold for 1.3m plus a few stocks and money market accounts...

My co-worker is a very sweet 50 something and could never have children... they lived in a mobile home park in the Bay Area... her husband was injured years ago...

Anyway, my co-worker is the kind of person that never forgets someone's birthday and always has something positive to say... apparently, she was the only one that kept in contact with her aunt... never missed a birthday and always remembered her anniversary/holidays

Aunt died of a Heart Attack and she got a call from a lawyer saying all was left to her... it really didn't sink in at first...

Some would say it wasn't luck at all... just kindness expressed over years.

 

[jix]

No such thing as "lucky" when it comes to money and retirement.

It is all about choices and knowledge. In our current society, knowledge rules. And you have a choice to get more.

My friends on TBN do speak a lot of wisdom in this thread. I feel compelled to add one factor that has been only softly mentioned. DIVORCE AND THE LAW... When we get married, we are in a situation where trust rules. Marriage is all about trust, we all know that. But it is nearly impossible, going in, to determine if a marriage partner will always be trustworthy in twenty or thirty years from the day of marriage. Ask me how I know this.

When I was 55 I was set for life. When I was 57, I was stone cold broke, without a job, and no prospects for a job, with an adolescent son to finish raising and to educate, and with no house, no land, no car ..and no bank account. Time to Buckle Down!

I did recover financially, my son did have his university opportunity, I again own a house (in the country) which I built myself, alone. I now have a comfortable pension. Fortunate? No,. Hard working unstintingly..Yes. Shrewd beyond words, Yes., Well-respected, Yes, Honest, Yes. Courageous, Yes. Good friendships, YES

My motto: Love many, trust few, and always paddle your own canoe. And always have a pre-nuptial contract !

I am now re-married; I had a prenup for the first twelve years of my second marriage, but one day we decided that it was no longer necessary, so we tore it up. And we live now in trust..Proven trustworthiness is not wishful thinking. it must be earned, valued, cherished and respected...and recognized.

Betrayal in marriage is a very great danger, impossible to predict accurately. Divorce law is brutal, as are its consequences. The only sensible advice is GET A PRENUPTIAL CONTRACT before you get a Diamond ring!!!..:fox:

 

[3930dave]

Well Luck does play into it... at least for some.

One of my co-workers was left an Estate just under 2 million from great Aunt.

It was a total surprise because nothing was ever said... bulk of the estate was a home in Cupertino they sold for 1.3m plus a few stocks and money market accounts...

My co-worker is a very sweet 50 something and could never have children... they lived in a mobile home park in the Bay Area... her husband was injured years ago...

Anyway, my co-worker is the kind of person that never forgets someone's birthday and always has something positive to say... apparently, she was the only one that kept in contact with her aunt... never missed a birthday and always remembered her anniversary/holidays

Aunt died of a Heart Attack and she got a call from a lawyer saying all was left to her... it really didn't sink in at first...

Some would say it wasn't luck at all... just kindness expressed over years.

Good karma in circulation is a welcome sight !

Rgds, D.

 

[ovrszd]

Luck? Intelligence? Risk tolerance? I don't think it's just one thing.
I like the analogy of a card game: It's 1) intelligence (how smart you are, how to best strategize, see the big picture, etc..); 2) your risk tolerance (how much are you willing to invest/gamble/lose); and 3)Luck (the cards that are dealt).
Sometimes having one can overcome not having the other two, and other times not having one can cancel out having other two.
:2cents:

I watch the Poker Tournament every year on TV. Your 3 analogies are spot on. I've watched some very, very talented players get beat out by some no where near as good of players by number 3.

 

[Parkanzky]

I watch the Poker Tournament every year on TV. Your 3 analogies are spot on. I've watched some very, very talented players get beat out by some no where near as good of players by number 3.

Poker is a good analogy. I've played a lot of poker over the years.

When you play tournaments, there's always the risk that you'll do everything right but still get taken out by somebody doing something stupid and catching an unlikely card. The key is never to invest your entire bankroll in one tournament. Over time, the better players will make money and the poor players won't.

 

[RedNeckGeek]

When I saw the title of this thread the first question that popped into my head is "What is a secure retirement?"

I have friends that had 30 years under their belt when they retired and started collecting fat pension checks, only to have their company go bankrupt and leave them with $.50 on the dollar. Can you say "Please sir, do you have any work for me?"

I have other friends that were married 30 years, then divorced in retirement, leaving neither them nor their ex-wives with enough income to live on. Back to slaving for wages.

I have a nice retirement nest egg built up, but I've lost huge amounts to declining bond fund prices, defaulted corporate bonds, and capricious swings in the stock market. In spite of all that, I've still managed to grow those funds by just hanging in there and not panicking. But I still worry some new scam will take another bite out that I really can't afford to lose, especially since I'm no longer working. Even though we have a big roll back in gas prices right now, everything else seems to be going up. My pension was converted to an annuity when I retired, but there's no COLA to compensate for inflation.

I've run three or four different retirement income calculators, but all of them are based on historical data that doesn't seem to reflect current trends in the stock market or real estate or much of anything else. So how can you trust the answers they provide?

When I was working I did what I could to maximize my earnings, usually with more schooling/training, but sometimes (not often) changing jobs. I also saved as much as I could and lived modestly. I cashed in my big city home and bought a fixer upper in the country when I retired, and am enjoying a higher quality of life in a lower cost of living area as a result.

At the end of the day I think it comes down to staying aware of your needs vs your wants, and of changing conditions in your financial environment. Luck does play a part, but at least in my case it was in realizing early on that nobody was going to look out for me as well as I could if I learned how. That learning is an ongoing process, and even in retirement, is just plain old hard work.

 

[JDgreen227]

My friends on TBN do speak a lot of wisdom in this thread. I feel compelled to add one factor that has been only softly mentioned. DIVORCE AND THE LAW... When we get married, we are in a situation where trust rules. Marriage is all about trust, we all know that. But it is nearly impossible, going in, to determine if a marriage partner will always be trustworthy in twenty or thirty years from the day of marriage. Ask me how I know this.

When I was 55 I was set for life. When I was 57, I was stone cold broke, without a job, and no prospects for a job, with an adolescent son to finish raising and to educate, and with no house, no land, no car ..and no bank account. Time to Buckle Down!

I did recover financially, my son did have his university opportunity, I again own a house (in the country) which I built myself, alone. I now have a comfortable pension. Fortunate? No,. Hard working unstintingly..Yes. Shrewd beyond words, Yes., Well-respected, Yes, Honest, Yes. Courageous, Yes. Good friendships, YES

My motto: Love many, trust few, and always paddle your own canoe. And always have a pre-nuptial contract !

I am now re-married; I had a prenup for the first twelve years of my second marriage, but one day we decided that it was no longer necessary, so we tore it up. And we live now in trust..Proven trustworthiness is not wishful thinking. it must be earned, valued, cherished and respected...and recognized.

Betrayal in marriage is a very great danger, impossible to predict accurately. Divorce law is brutal, as are its consequences. The only sensible advice is GET A PRENUPTIAL CONTRACT before you get a Diamond ring!!!..:fox:

OP here....two years and four months ago, my spouse of 20+ years told me she wanted a divorce...there was nobody else involved on my side and as far as I know, nobody else on her side. Did not have a prenup and it ended up costing me about 200 grand, much of it in property equity.

The situation I experienced is moot now, but being engaged again, do you think I have a prenup in the works this time around? HECK YES.

 

[Travelover]

OP here....two years and four months ago, my spouse of 20+ years told me she wanted a divorce...there was nobody else involved on my side and as far as I know, nobody else on her side. Did not have a prenup and it ended up costing me about 200 grand, much of it in property equity.

The situation I experienced is moot now, but being engaged again, do you think I have a prenup in the works this time around? HECK YES.

Been there and done that, only it cost me 750K. And yes, I got a prenup the second time around.

 

[ovrszd]

I've been thru the divorce thing. I never considered half of whatever "value" we had and/or accumulated together as costing me anything. After all half of it was hers anyway. Same thing would happen with a prenup. Unless of course you marry a woman that is dense enough to sign a prenup giving away her half of anything you accumulate together.