Comments on: Forget Wealth Building to Retire Comfortably

By: Bernz

Bernz — Mon, 10 Jan 2011 20:31:28 +0000

Great advise here…I have been looking at investing in REITS myself and have in fact started on one last December 2010. I’ve also invested in high dividend paying stocks such as gas pipeline related companies. And I could not agree with you more in regards to going for a continuous flow of regular retirement. Just can’t beat that.

By: A1

A1 — Mon, 12 Oct 2009 20:47:00 +0000

Having had rental properties in the past – can agree wholeheartedly with D’Anna’s comments above…beware, it’s not always roses with rentals.
Some tenants honestly believe all their rent $$$ stay in the landlord’s pocket – and they deeply resent even tiny rent increases to offset the landlord’s increased expenses over time.

We’ve always regarded our retirement financial assets as income-producing buckets, not meant to be spent themselves. Those who blindly follow the advice to take out a fixed percent of total assets per year while in retirement risk running out of funds. Recently read an article which wisely councils taking out a variable amount based more on true needs and considering the amount of $$$ generated each year.

That advice helps a lot right now, as our CDs mature at one rate and renewal options offer less than half the old rate. OUCH…

Our personal monthly budget spreadsheet has 3 pages: Acct. Balances, Institutional totals & Income.

At a glance we can get monthly balance & income info. on individual accts., the total amount at each institution or category. There’s further breakdowns into currently taxed and tax-deferred accts. to help with estimated income tax filings.

In addition, we use a simply handwritten Personal Monthly Budget Sheet which lists the various bills and expenses over the current month. Very good to use when creating a yearly budget.

It may sound involved and a hassle – but it’s not and it really doesn’t take that long – unless you’ve got really huge amounts involved – and it often helps to answer questions about how you got to where you are financially.

By: MoneyNing

MoneyNing — Sat, 26 Sep 2009 17:22:05 +0000

Like others have said, annuities are expensive and there’s a very good chance that other investments are a much better bet. However, there’s nothing for sure in life and there’s a minor chance that an annuity will pan out better than others. An annuity can give lifetime payments, so for some that are very risk adverse, it works very well.

However, just make sure that you spread your investments out to different insurance companies because a company that goes bankrupt won’t be paying out your annuity.

By: MJP

MJP — Sat, 26 Sep 2009 15:43:13 +0000

At present, annuities that are indexed to inflation are extraordinarily costly compared to the alternatives. Plus, what will you do with your money until you are ready to purchase the annuity?

By: Jim Bauer

Jim Bauer — Sat, 26 Sep 2009 14:04:09 +0000

I firmly believe people need to take the time and take personal attention to their finances. This business of ‘turning over ones wealth to an expert’ has never sit well with me, but then I actually enjoy the process of investing. In my view annuities can be an interesting and even attractive vehicle for fixed income, but I think they fit better in a portfolio after retirement, not before. Before retirement one should be more focused on growth, something an annuity doesn’t offer.

By: Evolution of Wealth

Evolution of Wealth — Sat, 26 Sep 2009 12:54:16 +0000

I like the way your post is thought provoking. I love that you take an alternative approach. You see that what most financial planners are doing is setting people up for failure. I love that.
Let me ask you your take on something. An annuity. What I mean by that is creating a guaranteed income stream for life. This can also have inflation increases built into it. Do you like these? I mean this is what the traditional pension plans of the past did for people. It took their focus off of investing and gave them an annuity for life.

By: Al D'Anna

Al D'Anna — Sat, 26 Sep 2009 02:28:45 +0000

It all sounds like pie in the sky to me. I am retired. I have some rental houses but the income and expenses can vary wildly from year to year. Most of my income comes from laddered CD’s. The ladder is mature with all 5 yr rungs. The interest rates average 5%. This is so much higher than inflation protected bonds. There’s no way to escape the fact that if you want your money to do some heavy lifting with reliability you need 1.2M when you retire and much of it needs to be in laddered 5 yr CD’s. You still have to eat if you lose your tenants and need to replace a roof.

By: Neil George

Neil George — Fri, 25 Sep 2009 15:56:45 +0000

Allow me to second (or third) the idea of focusing on income. I never want to see my principal decrease. And, one should be very careful to diversify among many asset classes — there are a host of safe, high-paying securities most investors have never heard of. You just have to do your due diligence, including a thorough stress test of each security and the company behind it. Then it’s possible to enjoy the benefits of solid income without stress.

By: Jen

Jen — Fri, 25 Sep 2009 07:26:20 +0000

Ning,
I was also operating under the belief that I had to have a certain amount of money in my bank account when i retired. Like you mentioned, thinking about my retirement plans in terms the monthly income I have to have makes it all seem a little less depressing. Thank you for the sound advice.

By: Jim Bauer

Jim Bauer — Thu, 24 Sep 2009 20:47:37 +0000

…and not to mention the age old concept that money makes money. The way I see it wealth creation is really a process of accumulating funds from which you’ll derive an income that will ultimately replace the part where you have to go to a job in order to earn it.