With the number of centenarians jumping from an estimated few thousand in 1950 to more than 340,000 worldwide today, it's a real possibility you'll live to be 100.
Indeed, Associated Press writer Hope Yen reports that AARP is trying out a 10-month pilot project in Albert Lea, Minn., where the ultimate goal is that every participant lives for two years longer. Hard to measure... but worth a shot. AARP will make it easy for residents to get around on foot or by bike, buy healthy fast foods, and hang out with friends.
The question is this: Say you were to live to 100, or even two years more? Could you support yourself with your current resources through those years.
I certainly can't, but I'm getting there. The life insurance will pay me if I'm sick, so I'm covered there. My retirement account is growing steadily, with automated deposits plus carefully picked investments, to eventually give me a non-working salary sometime after age 59 1/2. There are plenty of other variables... including the thought that, given my family history, it's highly unlikely I'll live to 100.
But I can always try.
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Comments: 23
I have two apartments that I am paying the bank for (the same bank holds both loans). One loan will be completed in about 10 years, the other in about 15 years. (So my discretionary income will increase two times.) In another 10 years I will start to receive social security payments. My pension continues for life. I have 2 tax deferred annuities- I can pull extra money from them as soon as 2 years from now, but if I don't I still have to start receiving money from those accounts when I am over 70.
I doubt I'll live to 100, but as I've been avoiding red meat since I was a teenager, I am not sure what effect that'll have on my longevity,
As for your diet, the studies are mixed on red meat consumption. However, I'd say you're doing just fine.
I've been following Dave Ramsey's "Total Money Makeover" plan, and I'm on Baby Step 7. So I'm set financially. Our plan is for my wife to live comfortably (but frugally, of course) until she’s 95 with our retirement fund and Social Security. It’s possible that she could live to 100, but I hope the market will perk up in the future. My assumptions are these: 8% investment rate, 3.5% inflation rate, annual expense at 75% of current take-home, and no major medical event. All of these factors can influence our outcome – but the one I fear most is the last one..
I understand completely Jeff.
Given your investment prudence, I can see you making that 8 percent on your investments. As I've said before, there are indeed some buys to be had -- and the return can be much more if done prudently (my annualized return on my last investment, three months in the market, was 1200 percent).
That said... while 8 percent used to be expected as far as steady growth goes, but now I'd say the expected rate is more like 4 percent if your investments are performing "solidly."
As to the inflation rate, if you would have asked me six months ago I would have said to alter that to something more like 5 percent for the near term. (Think, worst case, hyper inflation.)
However, prices on the basics have dropped tremendously since then ($1.49 for a carton of eggs versus $3.29 six months ago). Those items aren't exactly barometers for inflation anymore though, given that I can tell from the prices of other items like the stores are using the basics as loss leaders in the hopes shoppers will plunk down $18.99 for a bottle of washing machine detergent.
That's the way to go.... (play on words intended ; )
It's more important to plan in case you may live to be 90 or 100.
You don't want to be a financial burden to your immediate family, friends, or the state.
Although we have just purchased our first home, if everything continues as planned, we'll be continuing to pay off the car loan & credit card debt from poor desicions past over the next two years on a "snowflake/snowball" plan.
The next problem is that we have no real safety net. We are exploring options, investments, commodities, metals, etc., but don't really have enough cash to break into any of those scenes. We also only have a small emergency fund to work with.
Neither one of us has any pension coming in our future, but he has an extremely small 401K left to work with (thanks to the AIG situation). I have never had an opportunity to have a 401K at any of my jobs, and I cannot currently afford to further my education. I've never been to college. He has a bachelor's degree, but it is in a field that he has never worked in, and is no longer qualified for/up-to-date with.
1. $1,000 to start an Emergency Fund
2. Pay off all debt using the Debt Snowball
3. Three to six months of expenses in savings
4. Invest 15 percent of income into Roth IRAs and pre-tax retirement
5. College funding for children
6. Pay off home early
7. Build wealth and give! Invest in mutual funds and real estate
Follow steps 1 - 3 sequencially
2. I've got no more debt. (the snowball plan works very well).
3. Working towards 1 years living expenses in savings. Passed the 6 month savings, so I thought I'd just keep going.
4. Was putting 15% in but lowered it to 5% until the recession eases a little. (Didn't want to have to start using any of my other savings to make it through from paycheck to paycheck).
5. The kids are already out of college, and have no college debt. (As I advised them).
6. My home is paid off, as well as both vehicles.
7. I make investments in gold and silver. Do have a stocks, just to play with and experiment.
I'm not sure I understand that (give!) thing you refer to. Can you supply examples?
My definition of giving is to donate up to 10% of my earnings (not unearned income) into non-profit organizations that help those who are in sever need (food, health, shelter, clothing, transportations, etc.). We have donated my used cars, bought gas, clothing, and food for people, helped with shelters, on top of donating 10% to church. We are so blessed.
I donate to toys for tots, and at xmas time, I donate to the turkey dinner food packages to the elderly that is sponsored by our local community bank president.
I also donate food and funds to Harbor House, which is run by a local lady who takes in all kinds of animals, but mostly dogs and cats, who've abadoned an abused.
I also take in ferral cats, have them fixed and they live out their lives on my ranch.
Two people are used as example. One buys Starbucks coffee and pays $4.50 five times a week from 25 until 65, and the price rises at the rate of 3% each year. The second person wants the coffee, but instead chooses to save the money she would have used to purchase the coffee from age 25 until 65 into an investment inside a Roth IRA that grows at 12% a year. The net balance for the investment at age 65 is almost $1.5 million. That's a small sacrifice for a huge gain.
You can be 25, 35, 45 or any age to start saving - the only thing is to start now if you haven't started already. Read my other personal finance posts.