“I have read some commentators saying that IRAs are vulnerable to government ‘take-over’ but I know of no one seriously suggesting this. At first blush, I thought that if this were even suggested there would be a revolt. But with so few people having any retirement savings at all, a redistribution of income this way might be popular. Gold coins? Real estate?”
You get enough people who think it’s their right to confiscate and redistribute other people’s money in power, and it’s a possibility. The only revolt there could be is people cashing in their accounts, and moving away, if that was against the law. Things don’t work quickly, so people would adjust their actions accordingly. But getting that many politicians onboard would be next to impossible, as they would lose any large donations they ever got.
I’m not feeling good about putting a bunch of money into the market right now. Our money is invested almost entirely in equity funds, fairly high risk, little cash. I don’t feel like buying any more real estate, especially since it is highly priced. What we’re doing now with any extra money we have, is paying off debt as fast as we can. Seems a little silly, with interest rates so low, but it is safe. And it feels really good to watch the debt level go down.
I don’t know about those commentators. Are they the same ones who say only buy gold, hide your guns because the government is going to confiscate them, elections are going to be cancelled and we’re going to have a dictatorship?
“I don’t know about those commentators. Are they the same ones who say only buy gold, hide your guns because the government is going to confiscate them, elections are going to be cancelled and we’re going to have a dictatorship?”
Those are the ones that are also running massive advertisements for gold in the commercial break. I don’t know about elections being cancelled, but maybe we could have a dictatorship if we have an emperor who thinks he can order the military to commit war crimes because he tells them to. Wouldn’t that be nice if everyone just did whatever you told them to because you “said so,” kind of like the reasoning you gave when your kids were four? Wait…it didn’t work for me then, so maybe I shouldn’t be dictator.
@MiamiDAP and @ChoatieMom, I don’t think I am working because I can’t figure out what else I would enjoy, per @MiamiDAP. I have loads of ways to fill my time if I were to retire from my full-time occupation. I would do more pro bono projects, serve on a couple of boards, be more aggressive about writing books, do more traveling for pleasure, read more books, … . But, I prefer doing what I do and over time, I will add in more of the other activities. I did just join an NGO board and found a co-author to help me write a new book on an area outside my normal professional work.
One has to be educated to make decisions in retirement that they are comfortable with. I would not on a first time sit down make any financial decisions, and would probably find someone better to deal with than the ‘wealth advisor’ suggested by company’s HR or who-ever. Do not do any investing w/o really understanding everything about the investment and fees.
One wants to reduce their risk on return volatility as one goes into retirement, because one wants to Sleep Well at Night (SWAN).
Dh and I may be a little nutty, but we decided last year to give our kids most (if not all) of their inheritance in advance of our demise by buying them each a house. Not holding their mortgages, as we’d done in the past, but outright gifting them. It made for some extra paperwork at tax time, but otherwise it was a great experience. One has serious health problems and may end up on disability at a young age, so that was a factor in our decision. They’re happily employed and reasonably careful about money (one’s a little too frugal and one’s not quite as much as we’d like) and we haven’t seen that change.
The financial adviser provided to dh by his employer ran the numbers and with the balance of our savings and investments we’re covered until we’re 99 assuming nothing truly catastrophic. Dh has a small pension from one employer plus we didn’t count social security - just in case. Dh got distracted by an annuity sales pitch, but it was easy to set him straight. ; ) Most of the time, we’re both pretty conservative and like to SWAN.
Although we’re in a too-big house, it’s otherwise well suited for aging in place and taxes are very low. We don’t spend much on anything and don’t envision our standard of living changing in retirement.
After what we’ve been through with our parents, we’ve agreed that we’ll take matters into our own hands if late life health problems become too much.
@Silpat, that’s a very lovely legacy you’re giving your kids. It’s tough when our kids have health challenges that may cause them to be disabled very young. I’m sure you have given the kids great peace of mind!
We saved $250K into a 529. Kid chose a service academy. We’re keeping the funds until he graduates (in case he leaves and needs the funds for civilian college; he says never, but you never know), and then we’ll put half into our retirement kitty and give the rest to him for choosing to serve his country. He uses our broker and just opened a Roth IRA to start squirreling away some of his meager military pay; she will help him invest his half of the 529 into a proper portfolio when the time comes.
We plan to spend our retirement funds, not make our son rich when we’re gone. We’ve raised him to be wise about money and figure he’s earned some of the 529 (I would have given it all to him, but DH and broker had other arguments) and want to help him get started. The rest is up to him.
@shawbridge, I never doubted that you have a rich and rewarding life both in and outside of work. I DO envy you your job satisfaction. You have the best of all worlds.
@silpat, that’s a decision that my father, his identical twin, and their father made and acted on after getting agreement from their loved ones (literally a sanity check). [Rant]Had medicine and the legal system not been under the thumb of religion, they could have had their way eased in a way that we allow our cats and dogs. To this day, I resent missing the extra month I could have had with my Dad had he been assured by his doctor that when the time came, he could exit with dignity and without pain. [/Rant]
@IxnayBob, I’m sorry you and your family had to deal with that sad situation. Watching my dad’s lingering death was one of the things that led dh and me to our decision. We haven’t broached the topic with our PCP out of fear that he will strongly disagree due to his own religious convictions. I’ve been “hoarding” for some time thanks to post-op supplies from over a dozen operations and other causes. It’s not the best answer, but at least it’s a back-up plan in case the laws haven’t changed when the time comes.
@sax, very good question. I am confused about how to invest in a low/zero/negative interest rate environment. In principle, low interest rates are good for equities, but not if the reason for low interest rates are the anemic economic prospects in the country/world. I’m thinking real estate may be good as it benefits from low interest rate mortgages. I’d guess that both owning properties directly and REITs benefit from cheap mortgages.
What do the Bogleheads say?
@Silpat and @IxnayBob, after observing various relatives die, ShawWife and I both want to ensure that we die with dignity if we can and not hooked up to tubes for years.
To counterbalance all the doomsdayers out there, I recommend reading Warren Buffet’s Berkshire Hathaway annual report shareholder letter that came out last week, something I look forward to every year. Here’s a tidbit - rad pages 6 & 7 for his reasoning:
"It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course,
only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not
live as well as they themselves do.
That view is dead wrong: The babies being born in America today are the luckiest crop in history."
“For 240 years it’s been a terrible mistake to bet against America, and now is no time to start. America’s
golden goose of commerce and innovation will continue to lay more and larger eggs. America’s social security
promises will be honored and perhaps made more generous. And, yes, America’s kids will live far better than their
parents did.”
Retirement location really makes a cost difference, especially for nursing homes. (We are mostly looking at LTC insurance possibilities to cover for home care / assisted living, but still good to know the scoop). I think the top nursing home cost we saw was Boston area - $150K/yr… about twice as much as lower COL areas. Years ago when my mom moved my grandfather from upstate NY nursing home to CO nursing home, it reduced daily rate by more than 30%. That was not why she moved, but it did help.
