I plan on retiring when I'm...

justbrowsing_IHB

justbrowsing_IHB

New member
I'm a bit skeptical about the thought of living on a fixed income- I just don't think I can beat inflation for an extended period of time with "safe" investments. And when I'm 65+, I don't plan on speculating for double digit real returns. My only hope for long term retirement, besides the lottery, is that my kid(s) will take care of me, but it's just as likely that I'll still be taking care of them.



I've been trying to do the math, balancing lifestyle, saving for retirement, and paying a mortgage on a nice Irvine house (or Newport Beach condo). I feel like at this point in my life, I can only choose 2 of 3 and still be able to sleep well at night. Truthfully, everything I'm saving right now is likely to be used as a down payment since I'm not optimistic about putting money into stocks for the purpose of retirement right now.



Could I cut back on lifestyle? Maybe a bit, but aside from a baby, my life hasn't changed dramatically since I was in college- and I went to a public university.



Less expensive house? Is a 4 bdrm 2000 sq ft SFH in a good school district asking too much? I didn't think so with my salary, but right now it is.



Delay retirement? Yup, if I don't have any health problems that prevent me from working. Big assumption.



I'm not sure if others are having a hard time trying to balance all 3, but I guess some people were hoping that their homes would become their retirement fund. Even if I manage to buy a house at the bottom, I'm not optimistic my home will cover even my medical expenses when the time comes to cash out.



<a href="http://www.usatoday.com/money/economy/housing/2009-06-04-foreclose-mortgage-seniors_N.htm">USA Today: Mortgage crisis robbing seniors of golden years</a>



.....



Conventional wisdom holds that most seniors have paid off their mortgages or have significant equity in their homes, but in reality hundreds of thousands are suffering in the housing crisis.



This population is being hit on all fronts. More than 600,000 seniors are delinquent or in foreclosure, according to AARP. A separate report by AARP found that 25.5 million seniors ages 50 and older have a mortgage. Unlike younger people, many are on fixed incomes and lack the money or job opportunities to catch up on payments when they fall behind.



.....



Americans 50 and older represent nearly 30% of all delinquencies and foreclosures, according to an AARP analysis released in September.



The analysis found that more than 684,000 seniors 50 and older were delinquent on their mortgages or in foreclosure. Among those, nearly 50,000 were in foreclosure or had lost their homes.
 
I'll retire when i'm ready .... Technically I wanted to retire when I was 40... but I revised that.... I'll keep on working and working in the background.

Jus a few more things I'd like to do...



-set up an education fund(s) at my Alma Mater(s)

-develop a family homestead somewhere, near a populus place, but seculded enough for the family.

-Get good enough to compete at Blackpool (Ballroom dancing)

-Help crew and fix The USS Wisconsin ... wherever it goes.



-bix
 
It depends on how you define retirement. I will always take on projects that have interest to me. Perhaps as I get older, these projects and activities will have less to do with making money and more to do with personal pleasure and enjoyment, but I will have projects in planning and things on my to do list the day I die.
 
[quote author="IrvineRenter" date=1244287359]It depends on how you define retirement. I will always take on projects that have interest to me. Perhaps as I get older, these projects and activities will have less to do with making money and more to do with personal pleasure and enjoyment, but I will have projects in planning and things on my to do list the day I die.</blockquote>


To me true retirement is no longer having to work to sustain some acceptable level of lifestyle, until you are dead or demented. A second career or doing projects for fun is virtually the same retirement as long as you're not dependent on any resulting money or benefits.



Basically you have enough money to say "F*@# you" to your boss, customers, etc. <a href="http://www.portfolio.com/news-markets/national-news/portfolio/2009/02/11/Personal-Finances-in-the-New-Economy">(A great article on "F*@# you" money. Sigh... $10M). </a>



I've also been trying to figure out what monthly expenses are for a house that's paid off. Based on your calculator, taxes, insurance, maintenance, etc. runs around 2.5-3.0%. With prop 13, taxes are based on the purchase price, but I'd assume the rest is based on the home's most current value. So let's say you've paid off a $1M house purchased today. 2.5% of $1M is about $2K a month, and that's assuming no appreciation or inflation for the next 30 years. Now let's assume you house appreciates to $3M. Taxes still 1% of $1M but insurance and maintenance is based on $3M = about a total of ~$4500/mo. Is this right?
 
[quote author="justbrowsing" date=1244543658][quote author="IrvineRenter" date=1244287359]It depends on how you define retirement. I will always take on projects that have interest to me. Perhaps as I get older, these projects and activities will have less to do with making money and more to do with personal pleasure and enjoyment, but I will have projects in planning and things on my to do list the day I die.</blockquote>


To me true retirement is no longer having to work to sustain some acceptable level of lifestyle, until you are dead or demented. A second career or doing projects for fun is virtually the same retirement as long as you're not dependent on any resulting money or benefits.



Basically you have enough money to say "F*@# you" to your boss, customers, etc. <a href="http://www.portfolio.com/news-markets/national-news/portfolio/2009/02/11/Personal-Finances-in-the-New-Economy">(A great article on "F*@# you" money. Sigh... $10M). </a>



I've also been trying to figure out what monthly expenses are for a house that's paid off. Based on your calculator, taxes, insurance, maintenance, etc. runs around 2.5-3.0%. With prop 13, taxes are based on the purchase price, but I'd assume the rest is based on the home's most current value. So let's say you've paid off a $1M house purchased today. 2.5% of $1M is about $2K a month, and that's assuming no appreciation or inflation for the next 30 years. Now let's assume you house appreciates to $3M. Taxes still 1% of $1M but insurance and maintenance is based on $3M = about a total of ~$4500/mo. Is this right?</blockquote>


Yes, certain parts of the cost of ownership do increase with inflation. Even Proposition 13 allows for 2% a year of property valuation increase. Overall, the cost of ownership will not increase near as much for owners as it will for renters.
 
I heard from someone from China, that when people get old and die, their family puts their ashes in a jar and buries it on a hill above the family farm fields, so they can continue working to oversee keeping the field safe. So I guess in China (ex. work, then raise your grandkids, then die and watch the field), you never really retire . Retirement as a concept didn't exist in America for quite awhile ...



The Origins of Mandatory Retirement (1800?1900)

<A href="http://www.answers.com/topic/retirement">http://www.answers.com/topic/retirement</A>



In general, skill and experience became effective substitutes for the loss of strength and endurance in later life. Society seems to have expected older Americans to remain productive and elderly individuals lived up to this expectation for as long as they could.
 
if by retired, you mean leave-work-at-3:30-to-catch-early-bird-prime-rib-specials... then i'm already retired.
 
[quote author="IrvineRenter" date=1244595134][quote author="justbrowsing" date=1244543658][quote author="IrvineRenter" date=1244287359]It depends on how you define retirement. I will always take on projects that have interest to me. Perhaps as I get older, these projects and activities will have less to do with making money and more to do with personal pleasure and enjoyment, but I will have projects in planning and things on my to do list the day I die.</blockquote>


To me true retirement is no longer having to work to sustain some acceptable level of lifestyle, until you are dead or demented. A second career or doing projects for fun is virtually the same retirement as long as you're not dependent on any resulting money or benefits.



Basically you have enough money to say "F*@# you" to your boss, customers, etc. <a href="http://www.portfolio.com/news-markets/national-news/portfolio/2009/02/11/Personal-Finances-in-the-New-Economy">(A great article on "F*@# you" money. Sigh... $10M). </a>



I've also been trying to figure out what monthly expenses are for a house that's paid off. Based on your calculator, taxes, insurance, maintenance, etc. runs around 2.5-3.0%. With prop 13, taxes are based on the purchase price, but I'd assume the rest is based on the home's most current value. So let's say you've paid off a $1M house purchased today. 2.5% of $1M is about $2K a month, and that's assuming no appreciation or inflation for the next 30 years. Now let's assume you house appreciates to $3M. Taxes still 1% of $1M but insurance and maintenance is based on $3M = about a total of ~$4500/mo. Is this right?</blockquote>


Yes, certain parts of the cost of ownership do increase with inflation. Even Proposition 13 allows for 2% a year of property valuation increase. Overall, the cost of ownership will not increase near as much for owners as it will for renters.</blockquote>


Thanks, didn't know about the 2%. One meme on some of the blogs I frequent is that as the dollar gets devalued, the cost of everything we need will be more expensive, but wages won't go up as much due to globalization. If this is true, I can see how it may be difficult for a retiree to keep their paid-off house, especially in an area with a high-cost of living and frequent bubbles. Too bad, I had this fantasy that I'd spend the rest of my life in the one house that I'll eventually buy. I'm starting to understand why people retire in places like Vegas and Arizona- economic necessity.



So how do retirees afford to keep their homes in states without something like prop 13? Savings, wise investments, and obedient children?
 
[quote author="acpme" date=1244606020]if by retired, you mean leave-work-at-3:30-to-catch-early-bird-prime-rib-specials... then i'm already retired.</blockquote>
You are that old? haha
 
[quote author="justbrowsing" date=1244687865][quote author="IrvineRenter" date=1244595134][quote author="justbrowsing" date=1244543658][quote author="IrvineRenter" date=1244287359]It depends on how you define retirement. I will always take on projects that have interest to me. Perhaps as I get older, these projects and activities will have less to do with making money and more to do with personal pleasure and enjoyment, but I will have projects in planning and things on my to do list the day I die.</blockquote>


To me true retirement is no longer having to work to sustain some acceptable level of lifestyle, until you are dead or demented. A second career or doing projects for fun is virtually the same retirement as long as you're not dependent on any resulting money or benefits.



Basically you have enough money to say "F*@# you" to your boss, customers, etc. <a href="http://www.portfolio.com/news-markets/national-news/portfolio/2009/02/11/Personal-Finances-in-the-New-Economy">(A great article on "F*@# you" money. Sigh... $10M). </a>



I've also been trying to figure out what monthly expenses are for a house that's paid off. Based on your calculator, taxes, insurance, maintenance, etc. runs around 2.5-3.0%. With prop 13, taxes are based on the purchase price, but I'd assume the rest is based on the home's most current value. So let's say you've paid off a $1M house purchased today. 2.5% of $1M is about $2K a month, and that's assuming no appreciation or inflation for the next 30 years. Now let's assume you house appreciates to $3M. Taxes still 1% of $1M but insurance and maintenance is based on $3M = about a total of ~$4500/mo. Is this right?</blockquote>


Yes, certain parts of the cost of ownership do increase with inflation. Even Proposition 13 allows for 2% a year of property valuation increase. Overall, the cost of ownership will not increase near as much for owners as it will for renters.</blockquote>


Thanks, didn't know about the 2%. One meme on some of the blogs I frequent is that as the dollar gets devalued, the cost of everything we need will be more expensive, but wages won't go up as much due to globalization. If this is true, I can see how it may be difficult for a retiree to keep their paid-off house, especially in an area with a high-cost of living and frequent bubbles. Too bad, I had this fantasy that I'd spend the rest of my life in the one house that I'll eventually buy. I'm starting to understand why people retire in places like Vegas and Arizona- economic necessity.



So how do retirees afford to keep their homes in states without something like prop 13? Savings, wise investments, and obedient children?</blockquote>
Lower property values = lower property taxes (not to mention less volatility in home prices).
 
[quote author="usctrojanman29" date=1245073847][quote author="acpme" date=1244606020]if by retired, you mean leave-work-at-3:30-to-catch-early-bird-prime-rib-specials... then i'm already retired.</blockquote>
You are that old? haha</blockquote>


haha nope... when we go to catch the prime rib dinner at cannons, we are the youngest people there by at least 40 yrs!
 
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