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retirement planning

littlebeast said:
your perspective is probably very close to most people’s perspective. that is why, when planning for retirement, it is good to run multiple models covering multiple scenarios - and include in them as many variables as potentially apply. and it should be refreshed on a routine basis (to validate or adjust the assumptions used to develop them so that course corrections can be made while there is still time).

the bottom line is - we are all in the drivers seat when it comes to our future. and when driving, it’s very helpful to know among many other things, how much horsepower you have, how good your brakes are, and how much fuel you have in the tank, etc. look at it like an instrument panel - a supercomputer that calculates the myriad of possible effects of every financial decision you make, and when you make it. and while that may seem onerous and a kill-joy for those spontaneous desires we all have - most of those are not that consequential as one-offs. it’s the overall trajectory of the compound effect of those decisions that people need to have information on. having that knowledge can be comforting when it helps take the uncertainty out of what life will be like when a person gets old, what action they can take to influence that, and what the effect of those actions are predicted to be. similar to F1 race strategy (simplified), tweak your speed in balance with your fuel consumption and tire wear to get you to the finish line in the best possible position. the necessary data, in dashboard form, with all of the options displayed - is brilliantly useful.
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I got the numbers from the brokerage for both retiring in 6 months vs 20 months; 88 pages of numbers, gonna take me a few tries to digest it.

Of course it makes predictions about where markets are headed and appears optimistic to me but they say they are somewhat conservative. It doesn't account for possible life changing events like catastrophic illness or buying another house.

Thanks LB, I get that planning for as many possibilities and options is important but in the end it is kind of a guessing game, even though the more data the better.
 
HappyHighwayman said:
$5000 a year over the life of my mortgage would be $150,000 or 20% of the purchase cost of the house
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Last time I looked at our premiums for our four homes in Santa Rosa it was $4100/year total so a bit over $1000 per house per year.
 
GAJ said:
I always paid out of pocket for the auto deductible as I never went to a place that would high ball the estimate thus covering my deductible.
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Ofcourse, i just meant you don't have to cut a check to your insurance company before they'll write you one.

Example if your vehicle is totaled.
 
GAJ said:
I believe now you have a choice of deductible from 5 to 25 percent.

But this is something I did not know as I "assumed" you had to fork out money before getting your payment.

"You do not pay your deductible out-of-pocket.

The deductible is subtracted from your covered damage so you don’t have to pay any of the deductible up front to receive a claim payment."

https://www.earthquakeauthority.com/About-CEA/Frequently-Asked-Questions
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If you have a $50k deductible and the damage is $40k, you get nothing from insurance.
 
What are the odds my house is entirely totalled requiring a re-build? It's like a townhouse as well there's a house attached on one side.
 
HappyHighwayman said:
What are the odds my house is entirely totalled requiring a re-build? It's like a townhouse as well there's a house attached on one side.
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How old is it? Where is it? When was it built. Modern construction, particularly in SF is quite well built, despite beliefs to the contrary. SF ( where I worked for years) is quite strict on earthquake code for newer homes.

It's all a crap shoot. A 9.0 will level San Francisco and every building there.
 
Built-in 2007. It seems quite well built. I'm in Western Addition a block from the Fillmore. Very flat.

Value has almost doubled since 2012 when I bought it.
 
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HappyHighwayman said:
Built-in 2007. It seems quite well built. I'm in Western Addition a block from the Fillmore. Very flat.

Value has almost doubled since 2012 when I bought it.
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Ahh! I remember the Western addition in 1973, before the gentrification.

Yup, flat, good area for foundations. 2007 SF structures are pretty seismically sound. If it were mine I'd still go with some form of earthquake insurance, even if with the highest deductible.
 
Yes apparently where my housing complex is used to be the worst of the worst buildings where the police would only enter in force. It's a very unique by SF standards, they're all legally Single Family Homes, with several on the "outside" forming a wall (with two gates, in and out) and another inside "keep" of houses that are totally behind the gate (some are hybrid with door on the outside and garage on the inside).

So while I am attached and all the houses are roughly the same the only shared expense is the drive, security cameras and gates and doors. I have an under $100 HOA fee.
 
AwakeNAlive said:
I do reconciliations for a living. I can also reconcile points of view.

This is obvious to me: If you don't expect to live in your home for the rest of your remaining life, then it is reasonable to include your current primary residence in retirement planning. If you're hell bent on staying where you are, then it is a different set of circumstances.

For now, I don't let money dictate how I should live my life or during retirement years. I set what is a high priority for me right now and do the the best that I can to grow assets before retirement. As I approach retirement age, I will be in a better position to buy more income producing assets.
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What difference does it make? If you live in your paid off house and don't sell after retirement, isn't that a substantial benefit over someone who have a mortgage or has to rent? Can't one pull money out, take a loan against, or do a reverse mortgage as well? Seems to me there is always value in owning a primary residence, I guess, unless you're upside down in it.
 
You don't need a financial advisor to tell you the benefits and options of owning your house outright.

We're not talking comparison of you and the other guy here. Being better off than someone else.

Net worth is just a number. Anyone who owns a house in the bay area past middle age is probably already a millionaire. So what.

The key point is having enough income generating assets to keep your lifestyle going. Not to mention covering health insurance premiums without the aid of an employer, the property tax and insurance costs, maintenance/ repairs annually. If you intend to stay in a house that does not have room for a tenant, it will not generate income. Getting into debt would be a bad sign. Getting a reverse mortgage should be the last resort.


The folks who have a leg up on retirement in my view are those who own their own home, will have a pension, own rental property, a solid portfolio of investments, health insurance paid for. And of course good health.
 
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The quote for Earthquake insurance seems way too low...I mean if this is the price I'm almost certainly going to get at least the minimum coverage.
 
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