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Consuelo Mack WealthTrack, the focus is avoiding the biggest fear of retirees, running out of money
Continuing last discussion topic on retirement and social security, Erin Botsford, financial planner and author of "The Big Retirement Risk" discusses her "lifestyle driven" approach to investing. The transcript is enclosed for your reading.
Probably one of the most important thread that no one has responded to so, I'll take a stab at it.
Erin's point of predictable, safe, or guaranteed income for a retirees needs (food, housing, utilities, health insurance etc.) requires each of us to do a bit homework. Making a spreadsheet of these costs. Taking into account that that this number will increase due to inflation and other reasons should be part of this number's need for future funding.
Income producing investments seems to be the bottom line. ETFs and mutual funds might have these features but many don't. In her opinion, investments that don't produce a reliable income should be small, diversified and used for to help fund things other than needs such as, our wants (Cable TV, dinner out,etc.), our likes (vacation, 2nd home, etc and our wishes (legacies).
She also is a big fan of Long Term Care insurance which I need to become more familiar with.
We have maintained a list of expenses via daily, monthly, semi-annual or annual for a number of years. We use about 20 categories, including a spillage area; as I know I forget things like a candy bar or soda. We have used an inflation adjuster going forward; but we indeed have a very clear picture of normal expenses over many years. All simple in form, tallied on yellow legal pads. Also, bee; I must consider cable tv as a need, for the knowledge base. Not just for the business channels, as we have been avid viewers of the many fine programs over the years from public tv. More areas to enjoy and also gain knowledge from than an average person has hours in the day.
Like many people who are caregivers for their aging parents, managing their retirement expense is a daunting task. My sister help out with the day-to-day stuff while I oversee the bigger picture. The biggest expense we face is healthcare and long term care. As I said on several occasion, it is challenging to generate sufficient income given today's low return environment without incurring unnecessary risk. So it is important to stay informed and make prudent decisions.
Hello Sven- My mother ran out of money several years prior to her death, primarily due to the 24-hr live-in help requirements. Fortunately her house was paid for, and had appreciated in value (remember things like that?) As my brother could be of no financial help, my wife and I lent my mother the required amounts, taking a market-rate simple interest loan against the house- about the same rate as a passbook savings account.
After her death we repaid ourselves the loan before splitting the remaining property value with my brother. This whole approach was very cost-effective, and everyone involved was satisfied with the situation.
Comments
Probably one of the most important thread that no one has responded to so, I'll take a stab at it.
Erin's point of predictable, safe, or guaranteed income for a retirees needs (food, housing, utilities, health insurance etc.) requires each of us to do a bit homework. Making a spreadsheet of these costs. Taking into account that that this number will increase due to inflation and other reasons should be part of this number's need for future funding.
Income producing investments seems to be the bottom line. ETFs and mutual funds might have these features but many don't. In her opinion, investments that don't produce a reliable income should be small, diversified and used for to help fund things other than needs such as, our wants (Cable TV, dinner out,etc.), our likes (vacation, 2nd home, etc and our wishes (legacies).
She also is a big fan of Long Term Care insurance which I need to become more familiar with.
Thanks for the link.
We have maintained a list of expenses via daily, monthly, semi-annual or annual for a number of years. We use about 20 categories, including a spillage area; as I know I forget things like a candy bar or soda. We have used an inflation adjuster going forward; but we indeed have a very clear picture of normal expenses over many years. All simple in form, tallied on yellow legal pads.
Also, bee; I must consider cable tv as a need, for the knowledge base. Not just for the business channels, as we have been avid viewers of the many fine programs over the years from public tv. More areas to enjoy and also gain knowledge from than an average person has hours in the day.
Take care,
Catch
Like many people who are caregivers for their aging parents, managing their retirement expense is a daunting task. My sister help out with the day-to-day stuff while I oversee the bigger picture. The biggest expense we face is healthcare and long term care. As I said on several occasion, it is challenging to generate sufficient income given today's low return environment without incurring unnecessary risk. So it is important to stay informed and make prudent decisions.
Sven
http://www.amazon.com/The-Big-Retirement-Risk-ebook/product-reviews/B006IRS056/ref=sr_1_sc_1_cm_cr_acr_txt?ie=UTF8&showViewpoints=1
After her death we repaid ourselves the loan before splitting the remaining property value with my brother. This whole approach was very cost-effective, and everyone involved was satisfied with the situation.