Lizard Queen
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Post by Lizard Queen on Oct 27, 2021 9:32:07 GMT -5
Things to consider: inflation is ramping up. If I were on the edge of having enough, I'd keep a close eye on it. It can change everything. (Eta: There's a good chance the extra in your portfolio lately is due to inflation.)I'm not sure I really understand this? If inflation is happening with all good and services, then the price of stocks should also inflate to a proportional percent too - because they aren't losing value necessarily just because inflation occurs - unless inflation is affecting their business in some way. That's pretty much what I mean. Your stocks aren't necessarily pulling ahead of goods and services more than normal. The extra is just keeping pace with inflation.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Oct 27, 2021 9:53:18 GMT -5
I'm not sure I really understand this? If inflation is happening with all good and services, then the price of stocks should also inflate to a proportional percent too - because they aren't losing value necessarily just because inflation occurs - unless inflation is affecting their business in some way. That's pretty much what I mean. Your stocks aren't necessarily pulling ahead of goods and services more than normal. The extra is just keeping pace with inflation. Ok so like it looks like a lot but inflation is eroding the value so not worth as much as that balance would have been last year? Yeah, that I get.
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Lizard Queen
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103/2024
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Post by Lizard Queen on Oct 27, 2021 10:11:24 GMT -5
That's pretty much what I mean. Your stocks aren't necessarily pulling ahead of goods and services more than normal. The extra is just keeping pace with inflation. Ok so like it looks like a lot but inflation is eroding the value so not worth as much as that balance would have been last year? Yeah, that I get. Yeah, and also the inflation you're seeing now could just be the tip of the iceberg. What we're seeing at the utility I work for is some very large price increases for supplies/inventory, and those won't be reflected in the prices we charge until next July. If this continues, it could be very bad as price increases go back and forth between suppliers.
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buystoys
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Post by buystoys on Oct 27, 2021 10:35:05 GMT -5
We did a major purge when I moved in with DH, another when we were packing to move, and another once we'd moved here. Each time, those things that we just couldn't do without became less important. Doing it over and over made us realize just how much stuff we actually had. Right now, there's a closet of crafting items I can't really use yet because I don't have the room to leave out what I'm working on. When we finish my hobby hole, I'm willing to bet we find more in that closet to get rid of. I'm very curious! what's hobby hole? is it a small bedroom - or an alcove somewhere? the cuboard under the stairs? It's one of the bedrooms in the house. It will be designated for all my hobby stuff (card making, scrap booking, knitting, needle work, etc.) so I can keep it all in one place and completely accessible. We've sanded the walls, so we need to sand the ceiling and the wardrobes, then wash it all down and paint.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Oct 27, 2021 12:03:16 GMT -5
Ok so like it looks like a lot but inflation is eroding the value so not worth as much as that balance would have been last year? Yeah, that I get. Yeah, and also the inflation you're seeing now could just be the tip of the iceberg. What we're seeing at the utility I work for is some very large price increases for supplies/inventory, and those won't be reflected in the prices we charge until next July. If this continues, it could be very bad as price increases go back and forth between suppliers. Yes, very worrying…..
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Rukh O'Rorke
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Post by Rukh O'Rorke on Dec 3, 2022 0:34:29 GMT -5
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laterbloomer
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Post by laterbloomer on Dec 3, 2022 1:11:08 GMT -5
Thanks for looking it up but these aren't what I was thinking of. My memory must be playing tricks on me but I remember you starting threads where we list financial and personal goals for the year and at the end of the year we see how it went. I must have been imagining it.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Dec 3, 2022 2:05:26 GMT -5
Thanks for looking it up but these aren't what I was thinking of. My memory must be playing tricks on me but I remember you starting threads where we list financial and personal goals for the year and at the end of the year we see how it went. I must have been imagining it. no I used to do that every year!!! I just couldn't find any for 2022, maybe can look more tomorrow...
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laterbloomer
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Post by laterbloomer on Dec 3, 2022 9:55:20 GMT -5
Thanks for looking it up but these aren't what I was thinking of. My memory must be playing tricks on me but I remember you starting threads where we list financial and personal goals for the year and at the end of the year we see how it went. I must have been imagining it. no I used to do that every year!!! I just couldn't find any for 2022, maybe can look more tomorrow... I'll look too. I'll try going through your "recent threads"
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susana1954
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Post by susana1954 on Dec 3, 2022 10:15:56 GMT -5
Inflation should be a real worrier. I only retired 3 years ago, and it has hit me really hard. And I take home slightly more than I did when I worked! While I blithely say I don't "need" to substitute, I should amend that to say I don't need it to eat, etc. I already have a home and a car, but that car is 16 years old! I dread having to replace it with a used one. I didn't buy luxury cars, but I always bought new. And that washing machine that I just paid almost $900 for! You get the idea.
And while your IRA, 401k, etc. may be going up, don't count on it. Mine is still $100k less than it has been in the past . . . before inflation hit so hard! I am glad that I am not withdrawing from it yet (I will be 69 in January and have a decent SS and pension, but the pension never goes up).
None of this informs your punch list, but just be wary of thinking you are financially "ready" to retire without looking at the bigger picture of 10-30 years down the road!
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Deleted
Joined: Apr 26, 2024 3:18:23 GMT -5
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Post by Deleted on Dec 3, 2022 11:55:37 GMT -5
Another thought: look into whether or not you want to roll over any employer retirement accounts. Apparently rollovers can be attached by creditors (say, if you cause a lot of damage in a car accident and don't have enough insurance) so there are disadvantages, but mine were out the door of my employer as soon as possible after I left! The plans weren't great and I liked having everything consolidated, with more investment options. Some things will have to be sold (e. g. funds available only to participants in your employer's plan) but with a direct rollover there are no tax consequences- just decisions to be made as tp how and when to reinvest the proceeds.
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tskeeter
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Post by tskeeter on Dec 3, 2022 14:34:51 GMT -5
I think the biggest risk to our retirement security is the sequence of returns risk. Unless your retirement resources contains a significant cushion, a substantial market downturn during the first three to five years of your retirement could blow all of your calculations out of the water.
When I did “how soon can I retire” calculations, I reduced our retirement fund balances by 20% to 25% to compensate for the sequence of returns risk. That percentage was probably a bit excessive, but I wasn’t ready to take any risk at all when it came to funding our retirement.
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Post by minnesotapaintlady on Dec 3, 2022 14:50:23 GMT -5
I think the biggest risk to our retirement security is the sequence of returns risk. Unless your retirement resources contains a significant cushion, a substantial market downturn during the first three to five years of your retirement could blow all of your calculations out of the water. When I did “how soon can I retire” calculations, I reduced our retirement fund balances by 20% to 25% to compensate for the sequence of returns risk. That percentage was probably a bit excessive, but I wasn’t ready to take any risk at all when it came to funding our retirement. That's why I don't want to pull the trigger until I have at least 3 years worth of cash or safe investments like I bonds or treasuries. I have one year's worth now, so have a ways to go to retire in 5. But I guess I could just sell off a bunch of stocks in my IRAs too.
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tskeeter
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Post by tskeeter on Dec 3, 2022 14:57:48 GMT -5
I'd add a major appliance replacement fund, including water heater. So, washer/dryer, dishwasher, refrigerator, range, maybe even the relatively cheap microwave and garbage disposal. Plus add enough to address major plumbing and electricity issues, and to repaint your house. You'll need to hire those out unless you're Tractor. Make your landscaping (if you're a homeowner) as low-maintenance as possible. Look critically at your house layout and be ready if needed to have one room serve as a bedroom, even temporarily, on the main floor. Accidents happen and it takes longer to heal as you age. If you don't have one, get an umbrella insurance policy, because your pockets will be deeper. Also, while you're still healthy and young enough, consider getting a 20-year level term life policy if you have anyone dependent or just better off with your contributions financially. Unless you have enormous retirement accounts, of course. You can always jettison the life insurance but it will be much tougher to get later. Have professional portraits done of yourself and your immediate family. You'll be happy to have them later. Hope for the best. Don't worry, be happy. In addition to finnime’s list, you might also think about whether or not you’ll need to replace floor coverings during your retirement. After 17 years our carpet was showing wear in high traffic areas and had stretched so that it was puckered in several ares. Re-stretching proved to be only a temporary solution. In addition, carpet is no longer the standard flooring material in the neighborhood. Over the years, neighbor after neighbor has upgraded the flooring material in their homes. The cost to keep the flooring consistent with the rest of the neighborhood was enough to pay for replacing all of the appliances a couple of times over.
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TheOtherMe
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Post by TheOtherMe on Dec 3, 2022 16:19:04 GMT -5
At least my pension gives me an annual COLA, which is whatever the SS COLA is.
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Deleted
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Post by Deleted on Dec 3, 2022 17:28:11 GMT -5
I wish we could have had something like this before we retired - so many good suggestions. Of course, DH was so desperate to retire it would not have mattered to him.
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NastyWoman
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Post by NastyWoman on Dec 3, 2022 18:58:28 GMT -5
I think the biggest risk to our retirement security is the sequence of returns risk. Unless your retirement resources contains a significant cushion, a substantial market downturn during the first three to five years of your retirement could blow all of your calculations out of the water. When I did “how soon can I retire” calculations, I reduced our retirement fund balances by 20% to 25% to compensate for the sequence of returns risk. That percentage was probably a bit excessive, but I wasn’t ready to take any risk at all when it came to funding our retirement. That's why I don't want to pull the trigger until I have at least 3 years worth of cash or safe investments like I bonds or treasuries. I have one year's worth now, so have a ways to go to retire in 5. But I guess I could just sell off a bunch of stocks in my IRAs too. There is always the "option" I fell into. I was so busy working that last year (as of last night I am officially retired for one year) that I did not pay attention to how much I had in my savings account and safe iBonds. Good thing too as I would have invested a big chunk of my savings. As is I ended up with 3+ years worth of spending money in there. And that is before accounting for SS and the small pension I get. Taking that into account I have enough for at least a decade, probably more. All because of the Covid with no travel - and very little shopping effect. And now I will need to start taking RMDs next year...
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susana1954
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Post by susana1954 on Dec 4, 2022 9:42:21 GMT -5
At least my pension gives me an annual COLA, which is whatever the SS COLA is. And mine doesn't. A COLA has to be funded for as many as 30-40 years because teachers could retire as soon as they had 25 years. So we are talking millions each time, and the state just doesn't have it. I understand this. It just makes me glad that I saved in IRAs as well. Teachers already earn $10k more than I did for the same education and experience so that's $5k more a year. And I've only been retired 3 years. Imagine how paltry my pension will look in 15 - 20 years! I am grateful for it, but I feel sorry for anyone who thought they could survive on it even with SS.
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TheOtherMe
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Post by TheOtherMe on Dec 4, 2022 10:02:43 GMT -5
Dad's pension didn't have a COLA. It looked pretty good when he first retired. By the time he died, it was a pittance amount.
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bookkeeper
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Post by bookkeeper on Dec 4, 2022 14:56:24 GMT -5
Some of the best advice I have received on this board was to have two years of living expenses on hand when retired. Doesn't leave you subject to the stress of retiring into a down market.
My brother and his wife retired in May at age 55. They were strict savers and will be fine going forward with two pensions. It is unnerving to give up your paycheck and hope the plan you have made will work out.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Dec 4, 2022 17:34:31 GMT -5
I think the biggest risk to our retirement security is the sequence of returns risk. Unless your retirement resources contains a significant cushion, a substantial market downturn during the first three to five years of your retirement could blow all of your calculations out of the water. When I did “how soon can I retire” calculations, I reduced our retirement fund balances by 20% to 25% to compensate for the sequence of returns risk. That percentage was probably a bit excessive, but I wasn’t ready to take any risk at all when it came to funding our retirement. That's why I don't want to pull the trigger until I have at least 3 years worth of cash or safe investments like I bonds or treasuries. I have one year's worth now, so have a ways to go to retire in 5. But I guess I could just sell off a bunch of stocks in my IRAs too. I’m similarly inclined, but balance is smaller. Now with the new year going to have to start up the ibonds again!!!
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