South Florida, a senior enclave, sees more people ‘unretiring’ due to living costs

[JeffKeryk]

I said I could go either way. Not the same as questionable. A lot of them are situation specific.

Consult your advisor - but IMHO:

Pay off the home: If you have a 3 handle on your note, and t-bills pay 5.3%, take the arbitrage. Look at it this way - you beat the bank at their own game. That never happens. Bask in it - don't give them their money back. Now if it makes you sleep better at night - sleep is better than money.

Dividend stocks pay high dividends for a reason - there usually pretty bad companies. Dividend funds even worse sometimes. If you want to own a specific stock and it happens to pay a dividend, icing on the cake. If your looking for an income stream, bonds are better - IMHO.

Tech for the long term? Define long term. 20 years, OK. Less than 20 years - I remember 2001, and 2008. We shall see next go around.

Muni bonds are purely a tax question. You need to be in a really high tax bracket to make Muni's work at current spreads. If I may ask (and don't feel obligated), what your double tax free muni's current yield - calculated not face value?

Again, IMHO and situation dependent. Depending on the situation I could go the other way too

Paying off a home removes uncertainty. Sure there can be arithmetic that shows other strategies make more sense, but there is nothing like having a free-and-clear home. Nothing like it.

Dividends paying funds really come into play in retirement. Paying a lotta taxes when you don't have a job is freakin' unbelievable.

Long term tech; just look at the S&P, etc.:

Bond funds are not for every portfolio, for sure. For me it is a double tax free CA Muni Bond Fund that offers safety (is there is such a thing) and a nice income. Part of a highly diversified portfolio for certain investors. In my case, I could live on this fund and SSI very comfortably. Minimize risk and uncertainty later in your investing career.

 

[Passport1]

I highly recommend marrying up also.

Good advice but hypergamy today is a possibility only for the distaff side. Marriage today is a messy and dangerous minefield for men.

 

[Gus_Mahn]

It doesn't matter what you have. It matters what you spend.
Having a wife makes everything more complicated, especially if she has kids.

 

[CKN]

If you do a U-Tube search, you'll see tons of people with varying degrees of opinions on retirement. Working until your 70 will get you the biggest benefit, if that works for you. If you find yourself in a situation where your health isn't the greatest, early retirement sounds appealing. But can you afford to keep going until then ?. Having cash in the bank to handle a situation like if your car dies and needs replacement, Or the roof of your house dies and needs to be replaced, can empty the funds quickly. We paid off all our bills before we retired, and with our income now, were comfortable. Were not the kind that spend fortunes on vacations and other things, so that helps keep things in balance. With our new used car, we paid off half and make lower payments so it doesn't have a big effect on finances. Thing is, you can't start retirement broke. Worrying about dying shouldn't be your problem , worrying about living should be the concern. Steve Martin the comedian once said in a skit, Let me tell you how to have 1 million dollars and not pay tax on it. First thing get a million dollars.,,,

Again- reverse mortgages are a great way to put a roof on a house if you don't have the cash. They ( Reverse Mortgages) are on of the most misunderstood loan instruments around.

 

[We're Metals]

Paying off a home removes uncertainty. Sure there can be arithmetic that shows other strategies make more sense, but there is nothing like having a free-and-clear home. Nothing like it.

I choose to rent. I like renting. Renting fits my lifestyle. Ive never wanted to own a home though I have in the past. I have encountered nothing uncertain about renting (other than bad neighbors). Nothing like it.

In my experience, I have not had a rent increase of more than 5% YOY. Maybe I'm just lucky or like to move.
Though I have had an emergency roof replacement, HVAC repairs into the thousands and damage come from renters.

 

[TomYoung]

Again- reverse mortgages are a great way to put a roof on a house if you don't have the cash. They ( Reverse Mortgages) are on of the most misunderstood loan instruments around.

They are not that hard to understand. They are loans that are secured by whatever equity is in the home, and they charge interest constantly, so it hits people on limited income twice... or three times if you consider the equity that goes "poof." But, hey, you've got a new roof.

 

[CKN]

They are not that hard to understand. They are loans that are secured by whatever equity is in the home, and they charge interest constantly, so it hits people on limited income twice... or three times if you consider the equity that goes "poof." But, hey, you've got a new roof.

You basically don't understand the loan.
House is worth $300,000.00 (assuming paid off)
Bank (always will loan you a conservative amount vs. what property is worth)
Bank Loans you $100,000.00
Your property goes up $50,000.00 in value
Heirs sell house for $350,000.00
Heirs pay Bank Back $100,000.00
Heirs keep the remainder of equity.
Yea-in theory property could go down
Then it's a reverse equation-but there is still equity-unless there is a great depression.

Very simplistic example-but you get the idea.

 

[TomYoung]

Exactly........

The four percent rule is solid. I understand the impetus to think the way to go is to spend all your money, and have a good time, and plan to leave nothing behind. The problem is that it leads to the very real possibility of getting to a certain point in retirement and having nothing but a small social security check. That should frighten folks. BTW, the advice on this thread is about 75% from Hell, from people without even a scintilla of financial background. I would place those who take issue with the four percent rule (really a guideline) into that group. The original thread, the article, is about people running out of money. Following the four percent rule makes it so that never happens. Unfortunately, there is no free lunch in retirement. There is planning and preparing, and there is poverty. Choose one.

 

[CKN]

The four percent rule is solid. I understand the impetus to think the way to go is to spend all your money, and have a good time, and plan to leave nothing behind. The problem is that it leads to the very real possibility of getting to a certain point in retirement and having nothing but a small social security check. That should frighten folks. BTW, the advice on this thread is about 75% from Hell, from people without even a scintilla of financial background. I would place those who take issue with the four percent rule (really a guideline) into that group. The original thread, the article, is about people running out of money. Following the four percent rule makes it so that never happens. Unfortunately, there is no free lunch in retirement. There is planning and preparing, and there is poverty. Choose one.

I would agree asking financial advice on an oil forum is a marginal idea.

 

[SC Maintenance]

Paying off a home removes uncertainty. Sure there can be arithmetic that shows other strategies make more sense, but there is nothing like having a free-and-clear home. Nothing like it.

Thats not finance, thats preference, and I covered that. Do what makes you feel best.

Dividends paying funds really come into play in retirement. Paying a lotta taxes when you don't have a job is freakin' unbelievable.

Dividends are taxed as regular income, so your lost me there? There are specific high paying dividend stocks I would own, but not many. Certain bank preferreds for example. But you won't find those in a fund.

Long term tech; just look at the S&P, etc.:

S&P is not considered tech?

Bond funds are not for every portfolio, for sure. For me it is a double tax free CA Muni Bond Fund that offers safety (is there is such a thing) and a nice income. Part of a highly diversified portfolio for certain investors. In my case, I could live on this fund and SSI very comfortably. Minimize risk and uncertainty later in your investing career.

Are we talking bond funds or Muni's? I like bonds, and certain bond funds. AAA muni 10 year pays 2.7% about today and AAA corporate's pay 4.7%. So unless your tax liability is over 42% a muni won't help you. Now if you want to own muni's for other reasons, and there are some speculative reasons to own a muni - then thats a different strategy. And its also speculative so if your in retirement there is that.

 

[TomYoung]

You basically don't understand the loan.
House is worth $300,000.00 (assuming paid off)
Bank (always will loan you a conservative amount vs. what property is worth)
Bank Loans you $100,000.00
Your property goes up $50,000.00 in value
Heirs sell house for $350,000.00
Heirs pay Bank Back $100,000.00
Heirs keep the remainder of equity.
Yea-in theory property could go down
Then it's a reverse equation-but there is still equity-unless there is a great depression.

Very simplistic example-but you get the idea.

Oh my God, it is you who does not understand that any loan has interest. So you don't pay back the $100,000. You pay back that $100,000 plus interest for every year that you have the loan. I hope you did not sign on the dotted line without understanding this basic, rudiumentary concept.

 

[andrew_j]

And do what? Enact social programs for those who made the mistake of counting on Social Security for their primary retirement monies?
That's mistake number one for them.

The mistake was allowing 401k to be created to alleviate pensions. It failed many unfortunately.

 

[CKN]

Oh my God, it is you who does not understand that any loan has interest. So you don't pay back the $100,000. You pay back that $100,000 plus interest for every year that you have the loan. I hope you did not sign on the dotted line without understanding this basic, rudiumentary concept.

I said it's a simplistic example.
I didn't retire at 55 years of age-being a dummy-trust me.
The point being is the bank is conservative in the loan amount. The equity doesn't go "poof" unless you live to be over 100 years of age.

What's the alternative if you don't have the monies for a capitol improvement-such as a roof? Assuming a paid off home-no senior should be forced out of their house with these loan instruments.

 

[TomYoung]

I said it's a simplistic example.
I didn't retire at 55 years of age-being a dummy-trust me.

Real world: get reverse mortgage for $100,000 on $300,000, die thirty years later, heirs pay $300,000 to mortgage company. End of story. And your roof has been replaced twice in the interim.

 

[CKN]

Real world: get reverse mortgage for $100,000 on $300,000, die thirty years later, heirs pay $300,000 to mortgage company. End of story. And your roof has been replaced twice in the interim.

Your argument is tired and nonsensical.

 

[JeffKeryk]

I choose to rent. I like renting. Renting fits my lifestyle. Ive never wanted to own a home though I have in the past. I have encountered nothing uncertain about renting (other than bad neighbors). Nothing like it.

In my experience, I have not had a rent increase of more than 5% YOY. Maybe I'm just lucky or like to move.
Though I have had an emergency roof replacement, HVAC repairs into the thousands and damage come from renters.

The way I look at it is, you either pay your mortgage or someone else's.

My mortgage is paid off. My house is worth a lot... I didn't pay anywhere near that.
Not very big, 1200 SQ ft but very comfortable.
I live in a beautiful place. I am lucky. I love it here.

I have little financial insecurity. At 71, my working days are over. Kinda nice...

 

[TomYoung]

Your argument is tired and nonsensical.

I ran the numbers at $100,000, 30 years and a generously low interest rate of 5% on a readily available calculator.

The total amount is $446,774.43 after 30 years. I don't see anything "tired" or "nonsensical" about the facts.

 

[JeffKeryk]

Thats not finance, thats preference, and I covered that. Do what makes you feel best.


Dividends are taxed as regular income, so your lost me there? There are specific high paying dividend stocks I would own, but not many. Certain bank preferreds for example. But you won't find those in a fund.

S&P is not considered tech?


Are we talking bond funds or Muni's? I like bonds, and certain bond funds. AAA muni 10 year pays 2.7% about today and AAA corporate's pay 4.7%. So unless your tax liability is over 42% a muni won't help you. Now if you want to own muni's for other reasons, and there are some speculative reasons to own a muni - then thats a different strategy. And its also speculative so if your in retirement there is that.

My personal finance goal was to minimize recurring costs and risk. It worked. My strategy is based on contingency planning.
Most of the stuff paid off pretty well. The tech is off the freakin' charts.

To answer your questions, I have dividend paying funds that, as you say, I pay taxes on.
I also have a CA Muni Bond Fund that I do not pay taxes on. Wasmer Schroeder actively managed.

If all else went to heck, I have a roof over my head. Security is incredible.

 

[joekingcorvette]

The trick folks is to live below your means. Always try to save some money and invest wisely and be very cautious with working with financial advisors. There are companies out there that you can invest money with and it costs very little. Plus you have complete control to buy, sell or trade stocks at will. Generally it's better to start young with a smaller home and trade into larger homes as your income allows. There are no blanket statements that work for everyone since situations are different. Read financial articles and invest in companies that seem to be good investments. Always have a large emergency fund for unknown obstacles that happen in life. Above anything else good health is everything and keep yourself in good shape mentally and physically.

 

[doitmyself]

The trick folks is to live below your means.

No, the trick is to choose what is best for oneself, not follow what someone else on a social media platform declares is best. This thread is proof that everyone is living life differently based on their opinions, upbringing, life events, values, on and on. I.E., I know numerous old people that choose to rent, abandoning homes that they considered to be boat anchors to living happily. They are equally correct as the ones here espousing the joys of home ownership. How hard is it to accept that everyone is different? Sigh.