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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 12:13:35 GMT -5
Excuse me.
There is no excuse for you. Not everyone in a nursing home is on life support. Many have lost their minds and need constant supervisor, like my grand mother.
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dancinmama
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Post by dancinmama on Mar 14, 2011 12:15:35 GMT -5
How to motivate someone or make them see the reason why they need to save NOW not later or the percentage required? As for some other friends their argument was: - too much bills for now (yeah like we all don't have them, I am paying slightly over 1k in student loans a month) - they have time (they are all around our age 25 with the oldest there being 29 I think) - Why bother since they might not see it (and with that comes stories of uncles/aunts and others they know that passed away before they got to enjoy their retirement) - And for my wife: we are young and we should enjoy life now, not when we are retired, old, arthritis, blood pressure, diabetes, etc. They all have some pretty valid points in their mind (don't worry I am not running to lower or stop my 401K contribution anytime soon) so how do you convince people like that they need to start saving for retirement? I did not try to convince any of them, just smiled and nod. I even joke on how I am going to empty my accounts so I can enjoy life before 2012 comes... cawaiu: People have different philosophies about money and life. DH and I started saving for retirement at age 24 - before we had a home, before we had a decent car, etc. Once the initial hit was made to our income and we adjusted to it, the contributions were pretty much on auto pilot after that and we didn't even think about the money being contributed or what we could be doing with it. Fast forward 30 years later. DH will be 55 in the first quarter of 2012 and will be retiring. Half of our retirement income will come from his pension and the other half from his 401k. Since most young people today probably will not have a pension, saving EARLY so that their retirement savings can grow is more important than ever IMHO.
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Post by Deleted on Mar 14, 2011 12:26:26 GMT -5
And, when one of my relatives went to the home, it was far better for her to have met her natural demise than it was to live a lingering death in the home. There is a difference between being alive and dying slowly in inches. Yes, at some point death is a blessing- but while I'm alive, I want to be able to use the bathroom, with help if necessary, rather than adult diapers, for example. I want to be able to take care of my teeth so I don't have to live in oatmeal and mashed potatoes. I want the mental stimulation of whatever the latest technology offers. Low-budget nursing homes are warehouses.
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Gardening Grandma
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Post by Gardening Grandma on Mar 14, 2011 12:26:48 GMT -5
I am saying I don't want or need the best care money can buy at the end of my life. And, I don't want my kids to bankrupt themselves trying to provide something like that. That's what you say NOW. Sounds like the young folks who say, "Why save for retirement? I want to enjoy life NOW. I won't care when I'm old". If you are paying for it, "basic, clean, and adequate" right now costs in the neighborhood of $6K/mo (depending on where you are). In order to qualify for Medicaid, you have to have spent nearly all your assets. and what you get MAY be "basic, clean, and adequate". Or it may smell like urine, be depressing and understaffed. Your kids may not find it acceptable.
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Wisconsin Beth
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Post by Wisconsin Beth on Mar 14, 2011 12:41:07 GMT -5
Once the initial hit was made to our income and we adjusted to it, the contributions were pretty much on auto pilot after that and we didn't even think about the money being contributed or what we could be doing with it. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=4720&page=2#ixzz1Gb2rZ1Q6This. I do 20% and we don't even notice it. I was hoping to hit the 6 figures milestone by end of the year but after the last week I'm not so sure that's going to happen this year. Poor Japan.
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Gardening Grandma
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Post by Gardening Grandma on Mar 14, 2011 12:46:40 GMT -5
I have life insurance, an excellent disability policy and retirement and savings accounts. I have no debt, own my home and cars and money in the bank.
All well and good. But life insurance and disability don't pay for long term care. Savings accounts do. Personally, an extended stay at around $70K/yr would seriously hurt the spouse at home, so we carry LTC ins. That's just us. I don't need cadilac care, but I would like a private room, exercise classes to help prevent falls, assistance as needed, and adequate staff. I'd like my quality of life in my later years to be as comfortable as possible. Those things cost money.
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raeoflyte
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Post by raeoflyte on Mar 14, 2011 13:01:48 GMT -5
I have life insurance, an excellent disability policy and retirement and savings accounts. I have no debt, own my home and cars and money in the bank.All well and good. But life insurance and disability don't pay for long term care. Savings accounts do. Personally, an extended stay at around $70K/yr would seriously hurt the spouse at home, so we carry LTC ins. That's just us. I don't need cadilac care, but I would like a private room, exercise classes to help prevent falls, assistance as needed, and adequate staff. I'd like my quality of life in my later years to be as comfortable as possible. Those things cost money. They cost an insane amount of money. My grandparents live relatively cheaply at a nice assisted living for 8k per month (it's 6k if just one of them is there). This place isn't top of the line, but they are well cared for, have activities, and a great staff. Before dgf had his meds regulated he had to be at an alzheimers assisted living. That place still cost a fortune, and was so rundown. The staff acted like it was a bother to do their jobs. The entire experience is what helped dh understand why we have to save for retirement.
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The J
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Post by The J on Mar 14, 2011 14:15:35 GMT -5
Have you accounted for inflation in those numbers?
A nursing home isn't always just about the end of your life either. My grandmother broke a hip at 80 and had to go to a nursing home during her recovery. Thanks to good insurance and healthy savings, she was able to go to a very good nursing home, and was recovered 6 weeks ahead of schedule and was able to go home. That was several years ago.
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dancinmama
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Post by dancinmama on Mar 14, 2011 14:27:06 GMT -5
Once the initial hit was made to our income and we adjusted to it, the contributions were pretty much on auto pilot after that and we didn't even think about the money being contributed or what we could be doing with it. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=4720&page=2#ixzz1Gb2rZ1Q6This. I do 20% and we don't even notice it. I was hoping to hit the 6 figures milestone by end of the year but after the last week I'm not so sure that's going to happen this year. Poor Japan. beth: Good job. You'll get there!!
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TrixAre4Kids
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Post by TrixAre4Kids on Mar 14, 2011 14:45:54 GMT -5
personally I am not convinced your balance is healthy. I think you could live a little bit more and still be good, 25% and 20% into the 401ks and then trying to save and do a Roth on top of that is a lot of savings. To give you an idea I make about the same household income you do (a little less I think but it is just me) and my housing is similar in cost, I save 5% plus3% match plus the Roth IRA and pay close to what you do in SL. I am not rolling in money like some people seem to think I should be and occ I cringe at going out if it has been several times in a row but mostly I think I have a balance. I have also run the numbers and assuming 8% gains and 2% increase yearly salary it puts me at about 2.5 mil in 30 yrs which I think should be reasonable. Look at where your numbers put you, if it is way over the top of what you think you will need maybe your wife is right and you should have more balance??? ps forgive YM for I sinned, but saving/retirment isn't everything I used to stress over buying 'indulgences' for myself until I read the '60% solution' on MSN. articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/ASimplerWayToSaveThe60Solution.aspxI crunched my numbers and found out (to my surprise) I live on about 52-55% of my income (including the roommate $). I save about 25% into my 401k, and about 7% goes for 'fun money'. The rest is my short term savings. In my fun money I include my housecleaner, cable/internet, tivo, netflix, lottery and pocket money for movies, lattes, concerts - stuff I can do without if I have to but that I really enjoy. The point of all this ramble? I stopped stressing. I am entitled to some fun money. In moderation. So are you!
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Post by Deleted on Mar 14, 2011 15:04:08 GMT -5
You might want to show your friends this example about why it's better to start early:
Person A starts saving at the age of 25. They start out with a zero balance and contribute $200 monthly until retirement (65). Assuming an average annual rate of return of 12%, Person A can retire with $2,061,941.74. Wow! Millionaire status achieved, two-fold.
Person B starts saving at the age of 40. Because person B is further in life, we�ll assume this person started with an initial investment of $10,000 and contributes twice as much, $400 per month, with the same 12% average annual rate of return. Person B will retire at the same age (65) with $886,803.53. Hey, that�s not fair! No, that�s compound interest at it�s finest. J
Read more: What Age Should I Start Saving For Retirement? Get more information on Entrepreneurship
Also - if your friends think the financial pressure is big now wait until they have kids, a mortgage, and retirement looming.
The happiest 50 and 60 year olds I know have lots of money in savings - they have all the flexibility they need. When you have kids and grandkids you'll appreciate having the money to fly to see them as often as you want, going on joint vacations, and buying toys like a maniac.
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Post by Deleted on Mar 14, 2011 15:27:39 GMT -5
anne81- where can I get that 12%? ;D
Seriously- I know the Math works regardless of interest rate. In fact, I could make a case for a higher % return on the money you put in during your 20s and 30s because you can afford to take on more risk. If you start investing in your 40s you should probably go for a more conservative mix.
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azphx1972
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Post by azphx1972 on Mar 14, 2011 16:35:05 GMT -5
I am somewhat surprised by some of the responses in this thread. I would never presume to tell someone that I think they're saving too much. Everyone's goals and circumstances are different, and what works for one person may not work for someone else. I know I am socking away as much as I can because financial security is extremely important to me, and I have no desire to continue working during my golden years (which may not even be an option once my skills start to become stale, or I become too old/unhealthy).
I do believe it's important to try to achieve happiness in life, and that comes when you feel like you have "enough", an idea that's very well explained in the excellent book "Your Money Or Your Life". I highly recommend reading it.
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8 Bit WWBG
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Post by 8 Bit WWBG on Mar 15, 2011 16:13:29 GMT -5
...:::"I used to stress over buying 'indulgences' for myself until I read the '60% solution' on MSN.":::...
I thought that had finally died! Every time someone mentions that old article it makes me think of the "cut back on lattes, trim your own hair, shop at goodwill" type of articles.
...:::"In moderation.":::...
Everything in moderation, including moderation.
...:::"Person A starts saving at the age of 25.":::...
Wasn't there another one that said if someone put in $4k/year from ages 14-18 and then never added a penny, that they would end up with more money by age 55 than someone who put in $4k/year from ages 18-55? Or something like that? Makes me feel stupid for not having a 401K as a fetus.
In fact, if I start WWBG Jr's 401K now, despite him/her not being conceived for several years, does that set him/her up for retirement at 22?
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azphx1972
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Post by azphx1972 on Mar 15, 2011 16:29:01 GMT -5
In fact, if I start WWBG Jr's 401K now, despite him/her not being conceived for several years, does that set him/her up for retirement at 22? I think 22 would be pushing it. After all, that's only 22 + (whatever several years is) for the money to grow to the point where it could sustain someone for 60 or more years? Maybe by the time your child is 30 or 40, but not 22 unless he/she was very lucky with regard to market returns and/or lived a very modest lifestyle.
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8 Bit WWBG
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Post by 8 Bit WWBG on Mar 15, 2011 16:56:02 GMT -5
...:::"Maybe by the time your child is 30 or 40, but not 22 unless he/she was very lucky with regard to market returns and/or lived a very modest lifestyle.":::...
Or wasn't conceived for at least 5-10 years from this point.
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Wisconsin Beth
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Post by Wisconsin Beth on Mar 16, 2011 9:01:22 GMT -5
Once the initial hit was made to our income and we adjusted to it, the contributions were pretty much on auto pilot after that and we didn't even think about the money being contributed or what we could be doing with it. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=4720&page=2#ixzz1Gb2rZ1Q6This. I do 20% and we don't even notice it. I was hoping to hit the 6 figures milestone by end of the year but after the last week I'm not so sure that's going to happen this year. Poor Japan. beth: Good job. You'll get there!! Thanks dancing. I know I'll get there eventually. For us, we've realized that the bulk of our savings is in retirement funds and very little is in a savings/efund/investment accounts. We don't want to stop contributing to retirement so we have to cut back/find money in other areas and to be honest, we'd rather the money fairy just gift us with some! lol.
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phil5185
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Post by phil5185 on Mar 16, 2011 9:49:38 GMT -5
Person A starts saving at the age of 25. They start out with a zero balance and contribute $200 monthly until retirement (65). Assuming an average annual rate of return of 12%, Person A can retire with $2,061,941.74. Wow! Millionaire status achieved, two-fold. LOL, yes, that's how it works, I'm age 72, BTDT. But I am constantly amazed that the younger folks don't believe it - my employer gets only about 35% participation in 401k plan. Didn't Einstein comment that the greatest mathematical principle was compound int erst?
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Post by cytoglycerine on Mar 16, 2011 10:04:06 GMT -5
...:::"Person A starts saving at the age of 25.":::... Wasn't there another one that said if someone put in $4k/year from ages 14-18 and then never added a penny, that they would end up with more money by age 55 than someone who put in $4k/year from ages 18-55? Or something like that? Makes me feel stupid for not having a 401K as a fetus. Bwahahahahaha!! That's one of the funniest things I've read in a while...Thanks for the laugh! Karma for you ;D
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Post by Deleted on Mar 16, 2011 12:08:15 GMT -5
...:::"Person A starts saving at the age of 25.":::... Wasn't there another one that said if someone put in $4k/year from ages 14-18 and then never added a penny, that they would end up with more money by age 55 than someone who put in $4k/year from ages 18-55? Or something like that? Makes me feel stupid for not having a 401K as a fetus. Bwahahahahaha!! That's one of the funniest things I've read in a while...Thanks for the laugh! Karma for you ;D Makes me think I better start saving for my child now
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Post by Savoir Faire-Demogague in NJ on Mar 16, 2011 12:10:42 GMT -5
Makes me think I better start saving for my child now
There is the RIC-E trust. You'll have to google it for specifics.
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cronewitch
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Post by cronewitch on Mar 16, 2011 12:17:52 GMT -5
You can save for your child and gift them a retirement fund but if they don't want it they will spend it on something else.
Say your child gets a job at 16 and earns $5K a year to spend on cars, college and fun. A parent or grandparent could gift the child 5K in a ROTH. If they did that for 10 years they would have 50K in the ROTH for the 26 year old child plus it might have grown.
The 26 year old child might not see the value of 50-100K in a ROTH at 26 and be thinking of a million ways to spend it.
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Deleted
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Post by Deleted on Mar 16, 2011 12:28:58 GMT -5
You can save for your child and gift them a retirement fund but if they don't want it they will spend it on something else. Say your child gets a job at 16 and earns $5K a year to spend on cars, college and fun. A parent or grandparent could gift the child 5K in a ROTH. If they did that for 10 years they would have 50K in the ROTH for the 26 year old child plus it might have grown. The 26 year old child might not see the value of 50-100K in a ROTH at 26 and be thinking of a million ways to spend it. Yep that might be the downside to it. The moment they take ownership of that account, they can do with it as they please and nothing you can do can change that. A friend comes to mind. Her grandmother left her about 300K when she passed away and it was her grandmother wish that she finally start her own business like she always been talking about. Instead she listen to the guy she was dating (sweet talker I may add) and instead but a house in my moms neighborghood for 740K using the whole 300K as a downpayment. Yes they are still married but I wonder if she ever regrets not starting her own business like her grandmother wanted her to. On the good side she is paying the same mortgage amount for a house worth over a million now as someone with a 400K mortgage.
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cronewitch
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Post by cronewitch on Mar 16, 2011 12:41:58 GMT -5
The Ric-E trust is a high fee trust. Three hundred to start but a 2% annual fee and high expense funds.
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Post by Deleted on Mar 16, 2011 12:45:12 GMT -5
My old bosses did this for their two teenage boys. They had them work in the office and then contributed the max to each of their IRA's.
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phil5185
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Post by phil5185 on Mar 16, 2011 12:46:59 GMT -5
On the good side she is paying the same mortgage amount for a house worth over a million now as someone with a 400K mortgage. Hmmm - you have an interesting view of "good side". But it is a common phenomena - winners of lottery, of judgments, and heirs - any lump sum - seem to squander it in less than 7 yrs. Handled differently, $300k is a life-changing opportunity - if placed at 11%/yr, it would grow to a million in only 12 yrs. No need to start a business or any other extraordinary effort, just keep your hands off of it for 12 yrs.
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Post by Deleted on Mar 16, 2011 12:55:32 GMT -5
On the good side she is paying the same mortgage amount for a house worth over a million now as someone with a 400K mortgage. Hmmm - you have an interesting view of "good side". But it is a common phenomena - winners of lottery, of judgments, and heirs - any lump sum - seem to squander it in less than 7 yrs. Handled differently, $300k is a life-changing opportunity - if placed at 11%/yr, it would grow to a million in only 12 yrs. No need to start a business or any other extraordinary effort, just keep your hands off of it for 12 yrs. I understand that Phil but from their point of view they got to buy their dream home at 23 for her and 28 for him instead of waiting till they were 44 and 53 like my parents. Come on, for them that is HUGE! They are the youngest home owners in their block/neighborhood and they are not Medical Professionals, Ph'd's holders or Executives.
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DVM gone riding
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Post by DVM gone riding on Mar 16, 2011 12:56:03 GMT -5
The J: I adjusted for inflation in how much money I thought I would need, I can't really adjust the gains for inflation, I figure inflation will increase the gains but decrease the amount the money is worth. I tried to use conseravative but realistic numbers, I hope the market will do better then 8% over the next few years, it could do worse of course. But if there isn't inflation then I need less right??
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phil5185
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Post by phil5185 on Mar 16, 2011 13:14:39 GMT -5
they got to buy their dream home at 23 for her and 28 for him instead of waiting till they were 44 and 53 like my parents.
Come on, for them that is HUGE! They are the youngest home owners in their block/neighborhood I don't see that as a 'good' at all. The excesses (mcmansions & leased beemers) of the last 20 yrs have caused the financial failure of jillions of families. Do you really not see the economic futility of kids blowing a $300k windfall on a DP of a $750k house?
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The J
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Post by The J on Mar 16, 2011 13:25:20 GMT -5
The J: I adjusted for inflation in how much money I thought I would need, I can't really adjust the gains for inflation, I figure inflation will increase the gains but decrease the amount the money is worth. I tried to use conseravative but realistic numbers, I hope the market will do better then 8% over the next few years, it could do worse of course. But if there isn't inflation then I need less right?? Ok. My point is that, if you need $50k/year right now, and you believe that in 30 years your lifestyle will not increase at all, then at 3% inflation you would need $121k/year. Assuming a 4% withdrawal rate, you'd need $3m to have that.
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