Resetting the Retirement Clock

[billyjoe]

Remember when they made a big deal about resetting the doomsday clock whenever nuclear annihilation was near? I think it was a minute before midnight when the missiles were aimed at us from Cuba.
My modern equivalent is the retirement clock. Is yours set ? Here's a simple way to have your own retirement clock or calendar. Determine when you want to retire. Let's say you pick 10 years from today. Now determine how much $$ you want at retirement. Say you want $1,000,000. Count value of stocks, bonds, mutual funds, securities that have an exact dollar value.Include 403b, 401k, roth ira's, sep. regular ira's. Don't count on inheritance, house value, collectibles etc.
For our example you just got monthly or quarterly statements that ad up to $520,000. You need only to gain $4000 per month for the next 120 months to retire with exactly $1,000,000 in 10 years. After today you might have to add a couple months to the calendar. It's fun when the market goes up 150-200 points . You can just rip those extra days back off the calendar. If you are close to the magic age and the calendar is thick, you've got a problem.

billyjoe

[DSteckler]

Remember when they made a big deal about resetting the doomsday clock whenever nuclear annihilation was near? I think it was a minute before midnight when the missiles were aimed at us from Cuba.
My modern equivalent is the retirement clock. Is yours set ? Here's a simple way to have your own retirement clock or calendar. Determine when you want to retire. Let's say you pick 10 years from today. Now determine how much $$ you want at retirement. Say you want $1,000,000. Count value of stocks, bonds, mutual funds, securities that have an exact dollar value.Include 403b, 401k, roth ira's, sep. regular ira's. Don't count on inheritance, house value, collectibles etc.
For our example you just got monthly or quarterly statements that ad up to $520,000. You need only to gain $4000 per month for the next 120 months to retire with exactly $1,000,000 in 10 years. After today you might have to add a couple months to the calendar. It's fun when the market goes up 150-200 points . You can just rip those extra days back off the calendar. If you are close to the magic age and the calendar is thick, you've got a problem.

billyjoe

You're forgetting about the impact of inflation. With an annual inflation rate of 3%, one million dollars ten years from now will have the buying power of $744,000 today.

Assume someone has $1 million in ten years and it's generating a return of 6% per annum. That's 60,000 per year. Adjusted for inflation, however, that has the buying power of only $44,640 today.

To have today's buying power of $1 million in ten years you need a target of $1,340,000.

You're also forgetting that someone with that much of an annual return may actually be in a higher tax bracket than they are now.

My suggestion would be to retain a certified financial planner and speak with him or her about your financial and investment needs for the future.

[billyjoe]

Dave,
If you purchase a stock today and want to sell it for 15% gain, when you reach 15% do you change your goal to 16% or 17% since 15% isn't what it used to be? I was using hypothetical numbers just to simplify everything. A person also wouldn't actually take all the retirement in a lump sum at exactly 65 so there would be interest anyway accumulating as the balance was used up. Funds not in cash would hopefully continue to grow also.

billyjoe

[Websman]

Retirement? Billyjoe...You're a young man.

[Lyehopper]

oh my God!

My suggestion would be to retain a certified financial planner and speak with him or her about your financial and investment needs for the future.

That's bad advise Dave.... Most "certified" financial planners are nothing more than insurance salesmen with a negative networth themselves. They wear a $2,400 custom suit and a starched shirt and gold cufflinks and drive a leased Mercedes around.... They offer free dinner/retirement seminars with "professional" charismatic guest speakers.... Then they pitch annuities and other trash products to ignorant trusting clueless widows.

[Websman]

When I retire, I'm going to work for Lye on his farm...

[DSteckler]

Dave,
If you purchase a stock today and want to sell it for 15% gain, when you reach 15% do you change your goal to 16% or 17% since 15% isn't what it used to be?
billyjoe

Your gain has nothing to do with the buying power of a dollar, Billjoe. If it takes 10 years to reach a 15% gain, that gain when you cash out won't buy you as much in 10 years as it would if you made it in 1 week (taxes nothwithstanding).

[New-born baby]

Set a goal

When I retire, I'm going to work for Lye on his farm...

Slopping hogs . . . now, that's what I call setting a goal for yourself. <VBG>

Just kiddin' the Vulcan!

On the more sober side, I would agree with Dave about the inflation bit. And 3% is pretty mild inflation, imho. I'd say it is much more than that.

[DSteckler]

That's bad advise Dave.... Most "certified" financial planners are nothing more than insurance salesmen with a negative networth themselves. They wear a $2,400 custom suit and a starched shirt and gold cufflinks and drive a leased Mercedes around.... They offer free dinner/retirement seminars with "professional" charismatic guest speakers.... Then they pitch annuities and other trash products to ignorant trusting clueless widows.

Wow, Lye...sounds like you got taken once or twice by a smooth talker. Lots of anger in your post! I'm sure I can refer you to a fee only certified financial planner in your part of town who doesn't pitch any products, offer seminars, drive a Benz, and who wears bluejeans on the weekend. Just send me your zip code and I'll try to find you one within 25 miles.

[Lyehopper]

Slopping hogs . . . now, that's what I call setting a goal for yourself. <VBG>

Just kiddin' the Vulcan!

On the more sober side, I would agree with Dave about the inflation bit. And 3% is pretty mild inflation, imho. I'd say it is much more than that.

I don't raise hogs....

NBB.... Do you "soberly" agree with Dave on his advice for BillyJoe to "retain a certified financial planner"? Have you ever known any "certified financial planners" who had their own financial house in order?

[billyjoe]

Lye,
I'll shovel sh#@ for stock tips. Webs probably wants minimum wage + goji.
billyjoe

[New-born baby]

Slop the Financial Planners, LYE

I don't raise hogs....

NBB.... Do you "soberly" agree with Dave on his advice for BillyJoe to "retain a certified financial planner"? Have you ever known any "certified financial planners" who had their own financial house in order?

Lye, I'd just tell you that Webs can slop the Financial planners if he came to work for you. They qualify as hogs, don't they? I've never met any CFPlanners like Dave is talking about. I have one man in my church who is an engineer for Honeywell, and has spent the last two years earning his license to be a "certified" man. He says that most of their planning is about how they can take your retirement and scalp it for their own pocketbooks. In his opinion, they're just a bunch of crooks who charge obscene rates and do unethical things to fill their wallets. But perhaps Dave knows a higher class of
certified planners than we do. This is no insult to Dave.

[Runner]

Hey what happens to your long-term port if the bird flu thing shuts down the world economy? I bet the advisor can answer that....

[IIC]

You're forgetting about the impact of inflation. With an annual inflation rate of 3%, one million dollars ten years from now will have the buying power of $744,000 today.

Assume someone has $1 million in ten years and it's generating a return of 6% per annum. That's 60,000 per year. Adjusted for inflation, however, that has the buying power of only $44,640 today.

To have today's buying power of $1 million in ten years you need a target of $1,340,000.

You're also forgetting that someone with that much of an annual return may actually be in a higher tax bracket than they are now.

My suggestion would be to retain a certified financial planner and speak with him or her about your financial and investment needs for the future.

Unbelieveable...I just saw this thread...read from the bottom up...I HONESTLY did not not look at the name of the poster before I read the post...I KNEW the above post was from Dave...I just KNEW it.

Now...I agree w/ the inflation part...I always use 3.5% projecting long term...But a "CERTIFIED" Financial Planner???...Those who can't...teach...or they plan...C'mon Dave...Planners are for people that don't know what they are doing...Same as teachers...Doug

[Runner]

I once herd that if you want to get wealthy take advice from someone who is wealthy. A ditch digger most likely will not be able to instruct you how to be wealthy. A person can only teach what they themselves have done. If you really listen to how people around you speak they tell you how they live.