SVT
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Joined: Dec 20, 2010 15:39:33 GMT -5
Posts: 1,491
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Post by SVT on Feb 21, 2011 19:29:07 GMT -5
Have you guys never used that site before? It's been linked on these forums many times. That's the site I used for my calculations earlier in the thread.
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Post by robbase on Feb 21, 2011 23:34:01 GMT -5
I expect no more than 3% per year
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formerexpat
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Post by formerexpat on Feb 22, 2011 0:24:36 GMT -5
I was saying it for simplicity sake but yes, you are right and it is good to know and plan accordingly. Here is a helpful tool for people to use for such analysis and planning: personal.vanguard.com/us/insights/retirement/plan-for-a-long-retirement-toolHere is to hoping your mother does have many years left with you. My great-great grandmother was sharp as a tack at 102, when I was about 10 or 11. Her insistence on independence was her downfall. A weed that she could see out her window bothered her so badly she had to go pull it. She tripped, fell, broke her hip and passed less than a year later. Those feisty, old ladies - gotta love them! [/size]
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cronewitch
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Post by cronewitch on Feb 22, 2011 0:45:42 GMT -5
My grandmother probably passed too young from being too independant too. She was almost 97 when she fell in the kitchen while living alone. She broke her leg so was taken to the hospital then never got back home and died 2 years later. When she broke her leg she weighted 82lbs because she lost track of time and whenever she took a nap and woke she assumed it was morning so had a bowl of cereal. So she wasn't eating regular meals and losing weight. In the nursing home they would put food in front of her and leave it past when she said she was done. Then she would eat more in a few minutes, she gained weight and got a little stronger. Then in assisted living they put food where she could find it when she and another women would look for food in the night. She got up to 96lbs from eating meals and sneaking snacks. If she had gone to assisted living before she lost so much weight she may have not fallen and have stayed stronger.
Mom went to dinner with us tonight, she didn't take her cane and only needs to hold on to someone when she is taking a step up or down. She is walking a mile or more a day and dieting. She lives with my brother and his wife so is served regular healthy meals. She does the yard work mostly, at least she likes to pull weeds and pick up the pine cones, someone else mows but she is careful. She won't take dogs on her walks because she might fall trying to hold leashes of bad dogs will picking up dog droppings. She loves to go to the off leash dog park with my brother, he picks up after the dogs so she can just enjoy all the dogs.
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formerexpat
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Post by formerexpat on Feb 22, 2011 1:12:40 GMT -5
I think it's wonderful that your mother is staying active and in an environment that helps her flourish at her age, Crone! That's definitely a recipe for a longer and more enjoyable life.
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runewell
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Post by runewell on Feb 22, 2011 9:21:33 GMT -5
If you retire at 65 or so that 20 years is only to about 85. The odds are you will live much longer than that, at least one of the couple if you have two people. The life expectancy of a 65 year old is 17 years for a man and almost 20 years for a woman. The probability of living to 85 is then 39% for the man and 52% for the woman, and the probability of both surviving is 20% or 1 in 5. I don't think the "odds" are that you will live much longer than that. Once you make it to 65, half the males have died by 82.5 and half the femals have died by 86.5. www.ssa.gov/oact/STATS/table4c6.html
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sunuva
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Post by sunuva on Feb 22, 2011 9:30:03 GMT -5
The S&P is chosen by committee, not by any particular hard-and-fast rules. And the selection is an attempt to represent all of the industries of the united States. So companies do drop off the list and get replaced. I believe there are 10 or 12 companies that are not headquartered in the United States on the list, but the rest are from the United States and i believe replacement selections are also from the United States. However, I do not know what the criteria or selection means actually are.
Now this is just an index - a floating weighted number - comprised of large-cap companies (doesn't necessarily mean growth only, just actively traded and large cap). So any fund that attempts to track the S&P 500 can be close to the index provided the management fees are kept low.
I bring these two points up regarding market returns for the S&P for the future horizon. Now this is my own personal opinion and I don't have any hard links to prove my point. But when a company is dropped and a new company is added, all of these index funds that attempt to track the S&P will the one company (hammering its share price) and buy the new company (driving its share price up). This process alone, I believe, will contribute to a better S&P percentage return as I feel these large institutions get more for their buck in this process. I state this because I feel going forward there are going to be a lot of companies being replaced in the S&P over the next 30 years to adjust for the new globalization that we are in the midst of.
The United States isn't going to go down without a fight - they are still a significant economic powerhouse and we are talking the S&P as a representation of industrial might of the United States. I believe many of the smaller cap companies right now are going to migrate to large cap companies and find themselves in the S&P and I believe that is also going to spark a return of greater than 11% in the coming years. But all of this is a bet on the United States economy.
If you aren't betting on the United States economy for the future then get out of the S&P.
I think you will do better than 11% return in an S&P index fund for the long haul investing today (since it has already been hammered twice in the past 10 years - as opposed to say, investing just prior to getting hammered back in 2000). Yes, this is akin to saying "timing the market." But the question posed is also a "timing" reference question.
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spartan7886
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Post by spartan7886 on Feb 22, 2011 9:37:15 GMT -5
Runewell, given the numbers you posted, the probability that at least one of a (straight) couple will live to 85 is 71%.
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Post by ca on Feb 22, 2011 16:16:21 GMT -5
I have an older copy of The Wealthy Barber from the mid 90s and in the very early stages the "barber" talks about 15% returns.
I decided to stop reading right then.
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Angel!
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Post by Angel! on Feb 22, 2011 16:25:28 GMT -5
I have an older copy of The Wealthy Barber from the mid 90s and in the very early stages the "barber" talks about 15% returns. I decided to stop reading right then. He may have over-estimated the stock market returns. But one thing he got right was he felt real-estate was over-priced & there would probably be a downturn in the future.
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Post by ca on Feb 22, 2011 16:53:07 GMT -5
He was actually decent with real estate, saying that for a lot of people renting is fine. And he did say he saw bubbles happening even in the 90s (although it took another decade to pop). But he kinda over sells the idea that the downpayment is the only thing you look at when looking at your return when you sell your house though to give you your return on investment. His idea was that mortgage payments would equal rent which you'd have ot pay to shelter anyway, so that's a wash. But renting you don't have to pay for maintenance or property taxes or condo fees/etc. which is significant in a lot of places, even if your mortgage payment is roughly what rent would be.
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