"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:24695$44899769$42a1e606$18200[at]FUSE.NET...
- quote -

decrease, at least until we start getting Medicare (me in 4 years, he in
13), when we'll start paying for that benefit. He has a PERS defined benefit
plan, under which full insurance is paid for both of us. I've looked at the
benefits and they're better than what we currently have and for which we've
been paying part of the premium. Although neither of us currently take any
medications, it has a prescription drug benefit, so at least we won't have
to pay that part of the Medicare plan.

But the other part of the problem is whether or not we expect to have
significant health problems that would incur those co-pays. If over 50% of
the people in this country are overweight, there is a HUGE health care
crisis looming, perhaps one of the reasons you're seeing your premiums
increase. A good pair of shoes for walking is a heck a lot cheaper than
diabetes, heart disease, or stroke. (With a little research, you'll find
that walking can provide the same cardiovascular benefits as running, with
fewer injuries and long-term health problems.)

Elizabeth Richardson

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:422ig.7874$mF2.4573[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -


(a) I will have insurance. Mine currently costs on the order of $200.00 a
month. My parents cost on the order of $600 a month (each) -- $1200
for the two of them (roughly equivalent to my current mortgage payment,
hence the comment about "the wash" between mortgage and healthcare
above.

My wife's mother, who had a heart condition before she died, was paying
over a grand a month for her coverage alone (divorced and no idea what her
husbands was).

Granted, this is a small pool of folks to base my decision on, but it's just
part of
the overall picture that leads me to believe my healthcare costs will rise
significantly.

(b) I run a small business with 8 employees. Our health plans have gone up,
and up, and up -- 2006: up 12% from the year before. 2005: up 26% (!!!!)
from the year before. 2004: up 13% from the year before. 2003: up 17% from
the
year before. This is not from a single carrier -- each year, come renewal
time,
we investigate all carriers and look at pricing -vs- benefits. All are
similar. Sure ... I
believe in the 3% inflation numbers Uncle Sam is publishing. Yeah, right.
(NOT!)

In addition to costs rising significantly more than the published inflation
rates, we've also noted that there's decreased coverage. Every year, there's
something else added to the exclusions, there's a bit more tacked onto
copays -- paying more and more every year for fewer and fewer benefits.

(c) When (not if -- because you *know* it's gonna happen) the whole
bag of institutionalized thievery currently referred to as "Universal Health
Care" happens, you can't possibly think it's going to be any cheaper to
insure another 40 or 50 million folks who currently don't have insurance --
you aren't expecting costs to rise to pick up those additional 40 or 50
million
lives? Sure, you won't be paying a "premium" per se, but you'll be paying
it anyway in additional taxes.

(d) Medicare is currently in the same boat as Social Security, only it's
worse (funny how you hear more about SS, when it's in better shape
than Medicare). The only way out of that mess will be a complete
replacement by (c) above, or both (1) reduced benefits and (2) increased
revenues (additional taxes).

***

It's got nothing to do with "retirement", per se, but just prudent planning
for current trends over the passage of time. The costs would increase
significantly whether or not I elect to quit working and retire.

You honestly think your healthcare costs are not going to increase? Pass
the bong, lady -- I want some of what yer smokin' <grin

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:90563$448868fb$42a1e606$21421[at]FUSE.NET...
- quote -

Why do you think your health care expenses will increase during retirement?
Will you no longer have insurance? Are you not exercising and eating a
healthy diet? Do you have a family history of diabetes or heart disease? (By
the way, 65% of deaths from those 2 conditions are preventable.)

Elizabeth Richardson

Sgt.Sausage wrote:

- quote -

My guess is that the equation is something like 100% of the first 50K,
plus 40% of the amount above that. Of course YMMV, as some people have
cheap hobbies and others will take three month cruises.
JOE

On Thu, 8 Jun 2006 13:27:44 -0500, Sgt.Sausage <nobody[at]nowhere.com> wrote:
- quote -

Everyone makes their own assumption, my assumption is that I will have
medical insurance.

- quote -

That would be inversely related to the amount of medical expenditures,
by the way.

My own hobbies tend to not cost much money.

i

"Ignoramus31846" <ignoramus31846[at]NOSPAM.31846.invalid> wrote in message
news:aYFhg.629$7h.475[at]fe55.usenetserver.com...
- quote -

[snip]
- quote -

I don't know about you, but I look for my expenses to go *up*, not
down, as I transition to retirement.

Sure, no more mortgage ... but whopping high healthcare expenses.
It's a wash (under my assumptions) between these two.

I expect to do a lot during retirement, not sit around the house
wishing I had the money to do something. I expect that these things
I do to fill up the 10 hours a day that I'm away from the house today -- I
expect these things to do will cost money. Money that I currently don't
spend. Expenses I don't currently have.

To each his own, and it's all just a guess ... but I'm guessing
my expenses will rise as a result of retirement.

joetaxpayer <joetaxpayer[at]nospam.com> wrote:


- quote -

Here's one that makes the same point:

http://www.dallasnews.com/sharedcont...l.8b92a81.html

-- Doug

"Ignoramus31846" <ignoramus31846[at]NOSPAM.31846.invalid> wrote in message
news:uSEhg.10642$WE6.10102[at]fe42.usenetserver.com...
- quote -

I'm the OP. I don't have a doom-and-gloom attitude about SS but do think
that payouts to individuals have a strong chance of decreasing.

I had to account for it somehow but there's no particular science to it.
Since it's impossible to predict the change accurately as to how much and
when, I just split the difference between total collapse and no change at
all. Hence, 50%.

It's as good a guess as anybody else's that I'm willing to lend credence
to. Other readers will have to invent their own figures to fit their own
outlook. YMMV.
--
Chris Cowles
Gainesville, FL

Ignoramus31846 wrote:

- quote -

And there's likely those whose lifestyle has such high expenses that
don't go away, the cook, the butler, etc.

But I believe there's a slice of the population that, like you, are dual
earners, affording a nanny (which I missed in my remark above), and good
savers. Since banks qualify people with their mortgage as high as 38% of
gross income, I think my example of 20/20/20, 401/Mort/Tax wouldn't be
too off the mark.
Either way, these are expenses that really drop as one pays off a
mortgage, and stops needing to save for retirement.
JOE

On Wed, 7 Jun 2006 13:52:32 -0500, joetaxpayer <joetaxpayer[at]nospam.com> wrote:
- quote -

I did similar calculations recently (your 20% for 401K is a little bit
off).

Our cash outflow without kids, nanny, other kid expenses, mortgage,
some taxes, etc would be considerably lower than currently, by a huge
amount.

We could probably live just as well on about 40-60% of our current
income.

i

BreadWithSpam[at]fractious.net wrote:
- quote -

I believe that there's a level, above which, the percent needed at
retirement is far less.

A couple earning $150K, putting 20% into their 401(k) accounts, 20% to
their mortgage, and over 20% to taxes, has been living on 40% of their
income, and likely less, on average, if they've had children. For such a
couple, the 80% rule of thumb is probably way more than they'd need.
I've seen few discussions that ever do a deeper dive on this approach.
JOE

On Wed, 7 Jun 2006 13:01:42 -0500, BreadWithSpam[at]fractious.net <BreadWithSpam[at]fractious.net> wrote:
- quote -

Agreed, that is, in my opinion, even conservative.

- quote -

A difference of 0.3% in estimated economic growth (population
adjusted), would change estimated income per person by 2.7 or so TIMES
over a period of 34 years (time between age 35 and 69).

What this suggests is that projections that are made for very long
periods of time, are nothing but mere speculation and guesswork.

Whether the cut would be 26%, -26%, or some other number, is difficult
to pinopint with any acceptable degree of accuracy.

- quote -

Yes.

- quote -

Correct.

It is nothing like a Ponzi scheme.

- quote -

Thanks for a sensible post.

i

"Sgt.Sausage" <nobody[at]nowhere.com> writes:

- quote -

Perhaps that ought to be 20+x expected living expenses,
not current salary? If the house is paid off, living expenses
go down. If one is saving 20% of one's salary and living
what's left of that 80% after taxes, one's actual current
living expenses are *substantially* lower than one's salary.

- quote -

4% is the rule-of-thumb target I assume - which means 25x living
expenses. (with, "living expenses" perhaps lowered by
such things as no mortgage, SS or other pension payouts, etc).



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

Ignoramus28229 <ignoramus28229[at]NOSPAM.28229.invalid> writes:
- quote -

The OP said he was going to assume that his SS would be 50%
of what the currently promised payouts are. That's actually
fairly reasonable.

Under the current system, assuming no changes in benefit formulas
according to the SS Trustee's own report, benefits at age 69
for a current 35 year old will be cut by only 26%.

- quote -

So long as people are working and paying SS taxes, there will
be money available for SS benefits payouts. Even if there
isn't enough coming in to fully fund the payouts, barring some
major legislative change, the current laws would still require
the government to make the payments (laws might come into conflict
if, say, there's a debt ceiling that's actually enforced).

- quote -

Which is why assuming a reduced payout is perfectly reasonable.
Now, whatever payout reductions do take place, expect them to
be done somewhat progressively - ie. the poorest will have
their lower payouts reduced the least. The existing payouts
are already progressive, so this wouldn't be any kind of a surprise.

For more than you ever wanted to know about the SS system's
finances, see the annual SS Trustee's report at the
government's SS siate: http://www.ssa.gov

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"Will Trice" <wwtrice[at]paragondynamics.com> wrote in message
news:4481BDF7.1070603[at]paragondynamics.com...
- quote -


I'm not at all suggesting that there even *exists* a better published
measure -- there likely isn't. All I'm saying is take the published number
with a large grain of salt, and make your own personal adjustments
accordingly.

On Sat, 3 Jun 2006 05:15:01 -0500, Chris Cowles <spam_magnet[at]remove-me-bellsouth.net> wrote:
- quote -

For your house, I used the following numbers:

Our home is conservatively valued at ~$325K with a mortgage of
$145K. That makes house equity 180k (not > $200k).

Also, you have unsecured debt of $30k, which, if subtracted from
your house equity, would get to 155k.

For liquid investments, I used the following information from your
post:

``From previous jobs and savings, we have retail and rollover IRAs with
a combined value of $38K, 2 Roths each with a value of ~$6K, and a
403b with a value of $28K. All are held at Fidelity. We've each been
contributing $2K annually to the Roths for the past few years and plan
to continue.

The combined value of her holdings in the HCA plan is ~$36K.

In recent years my employer switched from a defined benefit to defined
contribution pension with 2 components. One is a basic 403b with a 75%
match up to 4% of my salary, which I'm contributing. It's managed by
Lincoln Alliance and has decent investment choices. It has a current
value of ~$18K.

The balance of the 'cash' fund is ~$29K.


38+6+28+36=108

(I am a little confused about double mention of 403b. )

i

Sgt.Sausage wrote:
- quote -

<snip
- quote -

Even those who complain about the use of hedonics (which is only used in
7 of 211 categories and causes inflation *increases* in most of those)
and other such statistical methods only claim that the CPI-based
inflation rate is low by about 1%. That's not going to get you to 6%+
inflation, especially over 40 years. Obviously, the CPI is not perfect
and is somewhat subjective, but it seems to be widely accepted. Perhaps
you can suggest a better published measure?

-Will

"Sgt.Sausage" <nobody[at]nowhere.com> writes:

- quote -

Yes, the so-called "core CPI" leaves out energy and food.
However, that's *not* the CPI measure used for COLAs and
not the CPI that is generally reported as "the inflation rate".
That is the CPI-U which *does* includes energy and food.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

"Ignoramus28229" <ignoramus28229[at]NOSPAM.28229.invalid> wrote in message
news:cZ_fg.289$nO5.241[at]fe54.usenetserver.com...
- quote -

That's why I estimated SS will be cut by 50%. It's clearly a WAG. I just
wanted it to be on the conservative side.
--
Chris Cowles
Gainesville, FL

"Ignoramus27153" <ignoramus27153[at]NOSPAM.27153.invalid> wrote in message
news:MTIfg.801$iQ2.472[at]fe70.usenetserver.com...
- quote -

By liquid investments, do you include or exclude retirement accounts in
mutual funds? Including them we have > $175K, and the house equity is $200K. We have cash, in addition.