Retirement planning

[Tomtint]

I have a very negative outlook on mutual funds 401 and pensions. Someone in their 20-40s is going to see several more recessions much worse than the past, they are going to see social security disappear,they will see govt impose taxes on investments in order to fund other govt welfare programs. And at some point in the next 20 years of less I believe our dollar will totally colapse due. To our debt. All the fancy future projections and last performance documents will only be good to wipe your behind with.

 

[Citydude]

I have a very negative outlook on mutual funds 401 and pensions. Someone in their 20-40s is going to see several more recessions much worse than the past, they are going to see social security disappear,they will see govt impose taxes on investments in order to fund other govt welfare programs. And at some point in the next 20 years of less I believe our dollar will totally colapse due. To our debt. All the fancy future projections and last performance documents will only be good to wipe your behind with.

As stated, a very negative outlook. Investments are taxed now when withdrawn unless taxed before investing. Got that bunker built yet? You guys crack me up.

 

[dave1949]

JamesHW:

The NY property taxes people speak of here seem very high. Assuming they are based on market value, then keeping your house on the small side (sq ft, #bedrooms, #bathrooms) should help. Since you are effectively anchored in NY by the family property, then I would look to hold property taxes as low as I could.

The Germans have an expression: klein aber fein. It means "small but nice." I firmly believe that can be achieved in housing that you will enjoy living in, will be energy efficient, and taxed on its size, not its fineness. A small house can be very charming, warm and inviting if the design work is done to create that. Since you are planning a retirement home single floor living with easy access, wide doors, a bathroom laid out for possible disabled access, etc. would be high on my list too.

You could spruce up a couple of rooms in the old house to live in while you build that would later become a guest quarters/bunkhouse for visiting family and friends. Or, a barn house design lends itself well to an upper half-story that is used for guest bedrooms.

We downsized from 3000 sq ft to 1600 sq ft living space; two bedrooms, two baths, a study, open living/dining/kitchen area, separate laundry room, huge hallway pantry, walk-in closet and an attached garage. It's all we need and not a lot to take care of, heat or cool. I basically looked at what part of the 3000 sq ft we actually used and let that be my guide as to what is really needed. I didn't get it perfect, but no one does it seems.

The other space requirement--rural living toys, tractor and implements is also important to consider. Between the attached and detached garages I have as much vehicle and equipment space as living space, and could use a bit more.

 

[riptides]

As stated, a very negative outlook. Investments are taxed now when withdrawn unless taxed before investing. Got that bunker built yet? You guys crack me up.

Well quite a lot of companies have frozen or done away with pensions. More are under quasi-government control. Heck, many a company do not even offer pensions anymore.

I have looked at pension histories in the past, and when my turn came, I ended up cashing out my companies pension plan and investing the money in the current market. YMMV

 

[Citydude]

Well quite a lot of companies have frozen or done away with pensions. More are under quasi-government control. Heck, many a company do not even offer pensions anymore.

I have looked at pension histories in the past, and when my turn came, I ended up cashing out my companies pension plan and investing the money in the current market. YMMV

I did the same. Cashed out my pension and invested it. The company I retired from no longer offers a pension and requires employees to contribute to a 401k. They will make more on their investments than a pension. i see it as investing in America rather than a pension trustee that make kabillions off of the interest while you retire with a set monthly distribution.

 

[ultrarunner]

I guess I share the negative too... experience has taught me that promises are not kept and when it is all said and done you can only count on yourself...

I took a pay cut in exchange for benefits about 15 years ago... through mergers and acquisitions... the benefits I bargained for no longer exist.

As I came on board there were others retiring and all had built a nice nest egg and some were almost oblivious how it happened... they signed up for company stock and 401k up to the match when they came on board... the company stock did phenomenal... it wasn't a year when the company went private and shares were called in... I guess some saw how well the retiring employees had done.

People will tell me we still have Jobs... and my reply is Jobs died and someone else is at Apple now...

 

[KiotiKowboy]

I have looked at pension histories in the past, and when my turn came, I ended up cashing out my companies pension plan and investing the money in the current market. YMMV

Fortunately, my pension is at the state level. Sure, there is still some risk. I have, however, seen so many stories of lost pensions as companies ran into hard times - and considered myself blessed to not be in such trouble. My heart goes out to those who built those pensions, only to find themselves forced back into the workforce after retirement.

I encourage people to put their eggs in more than one basket. I have my state pension, an IRA and SS in 2 years. My wife also has a state pension and will follow with SS about 6 years behind me. For the most part, except for an upcoming construction loan for a new home, we are debt free. The plan is to clear the loan in under 3 years. With a little luck, it looks as though we will have a fairly comfortable retirement.

 

[dave1949]

It's a good idea to track the solvency of a pension plan if you are in one. I think it's actually easier for public/state pension plans to be modified to your disadvantage than private plans. There is really only one financial standard for a public employee pension plan that exists in lieu of Social Security: in the view of the IRS it must be reasonably equivalent to Social Security.

You might find that the state legislature can change it very quickly like they did in Maine. In order to fund cutting the income tax rate from 8.5% to 8%, they decided to fund the pension plan at a lower rate and cut benefits.

 

[JamesHW]

JamesHW:

The NY property taxes people speak of here seem very high. Assuming they are based on market value, then keeping your house on the small side (sq ft, #bedrooms, #bathrooms) should help. Since you are effectively anchored in NY by the family property, then I would look to hold property taxes as low as I could.

The Germans have an expression: klein aber fein. It means "small but nice." I firmly believe that can be achieved in housing that you will enjoy living in, will be energy efficient, and taxed on its size, not its fineness. A small house can be very charming, warm and inviting if the design work is done to create that. Since you are planning a retirement home single floor living with easy access, wide doors, a bathroom laid out for possible disabled access, etc. would be high on my list too.

You could spruce up a couple of rooms in the old house to live in while you build that would later become a guest quarters/bunkhouse for visiting family and friends. Or, a barn house design lends itself well to an upper half-story that is used for guest bedrooms.

We downsized from 3000 sq ft to 1600 sq ft living space; two bedrooms, two baths, a study, open living/dining/kitchen area, separate laundry room, huge hallway pantry, walk-in closet and an attached garage. It's all we need and not a lot to take care of, heat or cool. I basically looked at what part of the 3000 sq ft we actually used and let that be my guide as to what is really needed. I didn't get it perfect, but no one does it seems.

The other space requirement--rural living toys, tractor and implements is also important to consider. Between the attached and detached garages I have as much vehicle and equipment space as living space, and could use a bit more.

We definitely appreciate small homes, our house in the city is a 1920's 2 bedroom bungalow. My Mom's uncle added a big addition to the house, an 800 square foot room and a screened in porch onto that the next year, so the entire house is around 2,500 square foot and has 5 bedrooms (2 are tiny child rooms off other room) and 3 bathrooms, so space for quests should not be an issue.

But our plans for the barn home (30 x 40 English 3-bay is basically one bedroom in the loft above a kitchen, 2 bathrooms (1 up and 1 down) and the rest of the barn a big open space, so it should total out at 1,600 square foot. Have not decided on a basement or not.

 

[JamesHW]

Oh, and in regards to taxes, NY State has the STAR program that one is eligible for at age 65 and under $60,000 annual income.