What's the number?

Quote:

---

Originally Posted by Big Steve

Are you talking about general inflation or sector inflation? Big difference. Some sectors are flat or deflating, e.g., some commodities, fuel, stuff made by cheap labor, but there is and likely will be significant inflation in sectors that are most important to retirees, i.e., food, pharmaceuticals and medical care. If Trump triggers a trade war, more sectors could inflate. Furthermore, re general inflation, Trump's proposals -- specifically big tax breaks for the wealthy and big spending on infrastructure jobs (likely to be crony capitalism siphoned through private sector contractors) -- are inflationary.

---

I think that a major factor for non inflation (as opposed to deflation) is the great end game for the Boomers, which is in full swing and will last for twenty years. Most have no or very little savings, and this is the same generation that spent like drunken sailors since about 1980, as they went through adulthood. So, you know, can't get blood from a stone if you start upping prices on drugs and food. The younger working generation is saddled with well over a trillion in student debt, can't afford what is still an expensive housing market where good jobs are, and aren't exactly watching the high paying jobs come their way, especially if they have no degrees. As far as this infrastructure spending, well, paving roads and building bridges is somewhat automated these days too, and it's not as though the Republicans, who will be in charge for a while, are going to be spending trillions for the rabble to dig holes and fill them back again. Nope, from what I see of that cabinet, they're just going to make themselves even richer, and throw some bread and circus at the masses to keep them quiet. Like that education secretary. What a joke. Much evidence is out there about how investments in education are vital for modern economies, and he appoints a fabulously rich woman who has already failed the Detroit school system with her advocacy. Sorry, but only the richest school systems, like mine, are going to produce successful kids. The rest are doomed. And won't fuel inflation, for sure.

^ ^ ^ 90% polyasshat rant

Fed sees some general inflation coming. It's beyond argument that pharmaceuticals, HC and food have been inflating and there's no reason to see that trend change. Other sectors will not inflate or actually deflate, but retired people aren't buying recycled steel.

Yeah, sure, if the next generation cannot afford housing in NYC, SF, Seattle, Denver and other booming cities, then demand should subside and prices soften, no?

Flat general inflation is a two-edge sword for retirees: Stuff stays affordable (see above re exceptions) but super safe bond yields stay near zero.

While past performance doesn't guarantee future returns, IMHO it's the best thing we've got to predict it for planning purposes.

I agree with Big Steve's comments above, and add in regards to Soc Sec -- for anyone considering retiring early, yet waiting to collect SS benefits until FRA or 70, I found it interesting that it doesn't really make much difference in your projected SS benefits if you work 25 years or 40 years. Research SS "bend points" for an explanation:

https://www.ssa.gov/oact/cola/bendpoints.html

An early retirement blog goes into more detail and runs through some example numbers:
http://rootofgood.com/early-retirement-social-security/


Basically, once you've qualified for SS benefits, you can calculate out the remainder of your SS earnings window by entering a bunch of zeroes for years in which you aren't contributing to SS, and see what happens:
https://www.ssa.gov/retire/estimator.html

Quote:

---

Originally Posted by Big Steve

^ ^ ^ 90% polyasshat rant

Fed sees some general inflation coming. It's beyond argument that pharmaceuticals, HC and food have been inflating and there's no reason to see that trend change. Other sectors will not inflate or actually deflate, but retired people aren't buying recycled steel.

Yeah, sure, if the next generation cannot afford housing in NYC, SF, Seattle, Denver and other booming cities, then demand should subside and prices soften, no?

Flat general inflation is a two-edge sword for retirees: Stuff stays affordable (see above re exceptions) but super safe bond yields stay near zero.

---

I think it's much more demographics and technology, not politics, but, that helps. You and I just spent our lives in quite possibly the best period evah in history for the average schmoe, maybe never to be equaled for a century or two. I really can't see a lot of inflation happening when jobs become scarce and 50 million Boomers die off slowly with no money besides SS. The Fed has proven many a time that they are stuck in a clueless bubble, so, I wouldn't watch them for guidance. I mean, watch what happens if they jack rates. The market will lose 10% overnight, and the mortgage market will nearly freeze. Nobody has any money. They just have debt.

Well, again, you're talking about general inflation. There is considerable inflation in some sectors and in some areas, deflation in other sectors. Sector inflation is germane to the subject matter of this thread.

All indication is that The Fed will raise rates today. Do you predict a 10% drop in the S&P tomorrow? Really? Are you shorting?

Quote:

---

Originally Posted by Big Steve

No, I didn't say that. You're conflating retirement age with SS start age. In my hypothetical the husband stops working at 66 (FRA) but delays taking SS until age 70.

---

OK, I think you made an error in your original scenario then:

Quote:

---

...supplementing wife's part-time work income to allow husband to retire at age 70.

---

Quote:

---

Originally Posted by The AD

OK, I think you made an error in your original scenario then:

---

No error. In my hypothetical H retires at 66. W, 62, works part time, couple taps their retirement to supplement wife's part-time work income for 4 years until W (66) retires and H (70) takes SS. Both retire at age 66. H is 4 years into his retirement when he takes SS.

Anyway, it's just a hypothetical offered to make the point about drawing down on principal of savings/retirement so that older spouse can delay taking SS until age 70.

Another hypothetical might have an individual with $250K at age 62 -- or a couple with $400K with the older spouse at 62 -- with a plan to work part-time to tread water until taking SS at age 70. Or a 62 yo individual with $400K or a couple (older spouse 62) with $600K with the plan to retire and live low to the ground for 8 years until taking SS at 70. All those hypothetical cases (which assume house paid off and no debt) lead to the same place: If possible, individual or older spouse should take SS at 70 if possible unless they are pretty damn certain they will die before age 80 or so.

Quote:

---

Originally Posted by Big Steve

No error. In my hypothetical H retires at 66. W, 62, works part time, couple taps their retirement to supplement wife's part-time work income for 4 years until W (66) retires and H (70) takes SS.

---

Not to belabor the point, but you said "...allow husband to retire at 70." 70 isn't 66.

Quote:

---

Originally Posted by The AD

Not to belabor the point, but you said "...allow husband to retire at 70." 70 isn't 66.

---

Oh, okay, I see the disconnect. Before that I wrote "Husband retires at full retirement age (FRA)," which currently is 66 y.o. (It'll be 66 + 4 mo. for me). I meant to then say "allow H to take SS at 70," which would be 4 years after he retires. I corrected that ambiguity.

Quote:

---

Originally Posted by iceman

Chup, inflation is going to be pretty much of a non-issue for a long time in my opinion (which ain't worth much but hey). Second, as 4M said, his advice is definitely age-dependent and he doesn't advocate dumping all equities for a person in mid-career, he's suggesting you take some out when they're up and sit when they're down and gradually build a safe platform, hopefully equivalent to 20x your take-home pay, eventually.

---

"Take some out when they're up and sit when they're down" = market timing. Fine, if that's the desired approach, but not for me.

This aspect is the part I disagree with, because it shows poor behavior on the part of the investor -- a quote from Bernstein from 4matic's link, where I suppose he's trying to support his market timing theory of "stop when you've got enough":

"A lot of people had won the game before the [2008] crisis happened: They had pretty much saved enough for retirement, and they were continuing to take risk by investing in equities.

Afterward, many of them sold either at or near the bottom and never bought back into it. And those people have irretrievably damaged themselves."

Those investors screwed themselves. If they hadn't panic-sold during the drop, and if they had owned broadly-diversified funds, they would have recovered fully in two years. And if they had continued to do absolutely nothing (i.e. no panic selling), they would've seen their money not only recover but grow to new heights in the next couple years. If Bernstein had a crystal ball and foresaw the 2008 drop, then he could've made a fortune by selling high (before the drop) and buying low (at the precise bottom).

In addition, I don't know where Bernstein suggests investors should put their money in order to generate an absolutely safe 4% annual return, in today's market. No CD, money market, or deposit account will generate that.

Quote:

---

Originally Posted by Big Steve

It's beyond argument that pharmaceuticals, HC and food have been inflating and there's no reason to see that trend change.

---

There's a strong argument for the end of HC and pharmaceutical inflation - we can't support the continued growth of the sector. I'd look at the behavior of Valeant as an example of how much work is going into inflating pharmaceuticals now. Not sustainable for the term of your life. Food inflation's not growing that fast right now either. Actually deflated for Sept & Oct.

Of course what matters is the prices of goods you care about, not the sector, and that's likely gone up.

Quote:

---

Originally Posted by dunfree

Of course what matters is the prices of goods you care about, not the sector, and that's likely gone up.

---

Agree. For The Wife and me they've mostly gone down because we moved out of Seattle to a small town where many things are less expensive.

Quote:

---

Originally Posted by El Chupacabra

In addition, I don't know where Bernstein suggests investors should put their money in order to generate an absolutely safe 4% annual return, in today's market.

---

No shit. PM me if you figure that out.

Quote:

---

Originally Posted by Big Steve

Well, again, you're talking about general inflation. There is considerable inflation in some sectors and in some areas, deflation in other sectors. Sector inflation is germane to the subject matter of this thread.

All indication is that The Fed will raise rates today. Do you predict a 10% drop in the S&P tomorrow? Really? Are you shorting?

---

Yeah, but, we're being small minded by thinking about just the American economy, and it's just our old people buying drugs or food. China will be another great contributor to worldwide low growth/recession as they slowly sink into Japan II, and it's already happening, crashing Brazil and other raw material exporters. Their great stimulus, along with our bank bailout, prevented another great depression, but that's losing steam and hitting it's minsky moment, at the same time the one child policy will make that country very old very fast. They have their own issues, because 70% of that population are still peasents, and they're making more robots than anybody. Nope, Europe ain't going to suddenly take up the slack, either, with their money and immigration issues.

Down somewhat today, but, yeah, ten percent if they persist in being stupid. Nobody has any money.

Quote:

---

Originally Posted by El Chupacabra

"

In addition, I don't know where Bernstein suggests investors should put their money in order to generate an absolutely safe 4% annual return, in today's market. No CD, money market, or deposit account will generate that.

---

Don't believe a specific return was ever mentioned. Just a draw rate.

For a 50 YO, white male, former smoker, 5'10", 186 lbs, married, with a college degree, that has more than 8 drinks a week, and only works out 1-2 times per week, in decent current health with no diabetes....

the number is $8,597,033.63*

and you will die penniless, but happy as F#@$, at 88


* assumes spending $100k principal per year adjusted for 4% inflation

Portfolio theory dorks. Article verbalizes my opinion of backward looking return models. It's either valid, or it isn't.

http://bv.ms/2h0ZYp0

As long as the Euro drops, Benny sees deflation in Euro travels.

Fed bumps rates yesterday, stock market up today.

Quote:

---

Originally Posted by Big Steve

Fed bumps rates yesterday, stock market up today.

---

not sure if this was supposed to be in the stock mkt thread or not, but i'll go with it.

the mkt has no fear imo, it may take world war 3 to set off the next downturn.

Quote:

---

Originally Posted by 4matic

Portfolio theory dorks. Article verbalizes my opinion of backward looking return models. It's either valid, or it isn't.

http://bv.ms/2h0ZYp0

---

Yes, really look at backward looking models to determine worst case scenarios on various allocations. Playing defense first for my situation.

For example, in the last 90 years a 60/40 stock/bond allocation had worst year of about a 25% loss.

Prolly wouldn't make that choice with only 3-4 years left. With 8-10 years? Not a problem IMO.

Quote:

---

Originally Posted by Big Steve

Fed bumps rates yesterday, stock market up today.

---

Yeah, like I said, what the fuck do I know.

Quote:

---

Originally Posted by SkiCougar

it may take world war 3 to set off the next downturn.

---

Or Inauguration Day

Quote:

---

Originally Posted by Benny Profane

what the fuck do I know.

---

^ how to pizza down flat slopes at that coreest of core resorts that is "Keystone"

http://www.wsj.com/articles/americas...tic-1481721719

Cut and paste the article for us Bunny. Some of us don't have a subscription to das kapitalist rag.

How many days you got?

Quote:

---

Originally Posted by HansJob

Cut and paste the article for us Bunny. Some of us don't have a subscription to das kapitalist rag.

---

Copy the headline, paste into google search (or just in url head), and then click on link. Works with Barron's, too. You're welcome.

Thanks man.

Thomas Piketty, in "Capital in the 21st Century" says that historically the return on capital has been 5% and the growth rate of the economy 2%, for multiple countries, several centuries. The high returns and growth rate of the second half of the 20th century were an anomaly--the result of recovery from 2 world wars and the great depression. He believes that we will return to 5%/2% as the new (old) normal . Furthermore, since the income of the rich increases at the rate of capital return while the income of people who actually work increases at the growth rate of the economy the widening gap between rich and the rest of humanity is structural. (I don't quite understand the connection between the growth rate of the economy and the increase in income of the working class, but apparently it's basic economics. Or is it?)

Piketty foresees one of two outcomes--a global tax on capital (wealth, as opposed to income), or revolution. One could view Brexit and Trump's election as opening battles in this revolution, which will escalate when Brexit and Trump voters find out that nothing has changed.

If I get laid off in June and have fully funded my 401k for that can I contribute to a tax deferred IRA in the same year since I am no longer covered by a company sponsored plan?

Quote:

---

Originally Posted by 4matic

If I get laid off in June and have fully funded my 401k for that can I contribute to a tax deferred IRA in the same year since I am no longer covered by a company sponsored plan?

---

Some limits apply where you were covered for part of a year. Depends on income, etc.

See: https://www.irs.gov/publications/p59...link1000230467

This thread is less fun than now it was a year ago or five years ago. Stop bickering!

Looking back at my contribution to the thread, very early on, I've made a lot of progress. I am currently on track for $4.5mm in retirement savings if I keep the savings rate going at the current pace until 65, but I still don't want to work that long.
I wound up marrying the Canadian and need to better understand how to extract value from my ability to move up north with her someday. How does Canada price provincial health care plans? What if I am retired? What if I have most of my money in the US? How do I bring USD my money into Canada without serious tax penalty or exchange rate costs?
My Canadian wife is close to delivering our first kid! We'll probably have 2. I am almost 40. How does this torque my spending, saving, and retirement planning? Probably a lot. Daycare for infants in San Francisco costs upwards of $30k/year per kid - that takes a bite out of the savings rate!

I'd like to get out of San Francisco, but I can earn the most here and have a nice sized rent controlled apartment that costs about what the equivalent would cost in Seattle (our preferred destination). Going back to Portland saves some money and improves lifestyle, but risks employment options and earning ability for both my wife and I. At least I own a rental property in one of Portland's hottest neighborhoods and raised the rent to market rates recently.
The wife makes non-profit money, so between her and the rental house we can afford to live modestly and put a few bucks away, but the kid is going to be a headwind to that.

I try not to obsess over optimizing the variables. We're pretty well trimmed on the big items in the budget, to the point that quitting cable TV is our current biggest opportunity to cut spending (wife's not going for it). I'd like to up our incomes, but she works in a non-profit and her last raise didn't cover the annual cable TV bill, so it's on me to get promoted or change jobs, and maybe start a business while I bounce a newborn on my knees.

welcome to Canada eh

not sure about them other questions but you probably wana pop that kid out up here so that he/she will be a Canadian citizen and besides ... free delivery

actualy its not free, you do pay some MSP but it doesn't amount to much maybe 200 $ a month or sft?

some other canucKlehead can tell you or google it

and there is no such word as "Copay" in the canadian language

Quote:

---

Originally Posted by Platinum Pete

I've made a lot of progress. I am currently on track for $4.5mm

---

How many yachts can you water ski behind?

That much savings puts you in the .5 percentile and provides $200k a year forever. I'm not seeing much of a problem. Let your wife do what makes her happy if you can just stay in this path.

Quote:

---

Originally Posted by 4matic

If I get laid off in June and have fully funded my 401k for that can I contribute to a tax deferred IRA in the same year since I am no longer covered by a company sponsored plan?

---

Probably not, but at least you can transfer your money out of that crappy 401k (most, if not all 401ks are crappy) and put that money into a much lower cost IRA at Vanguard.

Two ideas: relative assets/savings and projected needs/wants.

% rankings can be input here: http://www.shnugi.com/retirement-acc...etqliq=1900000

Wants/needs = subjective once above "subsistence" levels.

I just try and make more money than I did last year. I like what I do, so I don't see myself stopping, regardless of wealth.

20M and I guess I would stop flipping the cars I buy.

Whatever # allows you ski, bike, hike, surf, as many days/week as possible. Less is more...no amount of money is worth your free time, want what you have

Quote:

---

Originally Posted by 4matic

How many yachts can you water ski behind?

That much savings puts you in the .5 percentile and provides $200k a year forever. I'm not seeing much of a problem. Let your wife do what makes her happy if you can just stay in this path.

---

C'mon man, if you read the sentence past the one you quoted you'll see that I don't want to keep grinding until 65. It's nice to have a solid start on the nest egg and the goal is to not have to go til 65.

If you have 2.5m + rental income on lien free RE, why not switch to a part time job you enjoy at 50 and go with 30yr USTs or comparable? Seems like that would put you in position to coast outside of the highest COL areas.