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  #21 (permalink)  
Old 07-26-2017, 11:09 AM
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I see, that makes sense. So if I am understanding you correctly, the existing tools out there are as good as they can be given the information available today?
Exactly. I'm 52. I'm hoping to retire at 62. I can plug in all of the numbers I have today but I need to guess at the annual return on my portfolio. If my guess is off by 1 or 2 percent, that drastically changes the end result.

I just ran the numbers and the difference of 2% on my portfolio over the next 10 years would be almost $400,000.

I also can't predict what my income will be each of the next 10 years. Heck, I can only make an educated guess at how much I'll earn next year. I'm not even sure how much I will make this year and it's already the end of July. So how do I plug in income figures into a retirement calculator?
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Old 07-26-2017, 11:14 AM
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I also can't predict what my income will be each of the next 10 years. Heck, I can only make an educated guess at how much I'll earn next year. I'm not even sure how much I will make this year and it's already the end of July. So how do I plug in income figures into a retirement calculator?
Yeah, I hear you, that makes sense. Do any of the calculators you have used add error bars or confidence intervals?
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Old 07-26-2017, 11:16 AM
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Do any of the calculators you have used add error bars or confidence intervals?
I haven't really played with any of them so I'm not sure.
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Old 07-26-2017, 11:30 AM
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Originally Posted by disneysteve View Post
I think the problem is that any calculator or planner involves making assumptions, some pretty significant assumptions. Nobody knows what the future holds. Will you live to be 70 or 82 or 97? Will Social Security continue to exist in its current form? When will the next bear market strike and how bad will it be and how long will it take to recover? How much will my house sell for 10 years from now? What's going to happen to health insurance in this country?

There is no possible tool that can answer these questions. Yet it is those answers that are truly needed to know how much you need to be adequately prepared. Short of that, we all just have to save as much as we possibly can and hope for the best.
Right. Results will depend on data inputted. In order to input data about the future, you need to make assumptions. And as the wisest Jedi master said: "Impossible to see the future is."

Even if someone comes up with the very best possible system ever, decades down the road something is going to happen and smart people will realize that the "old" (at one time brand-spanking-new-and-super-smart) rules no longer apply.

I am learning to be at peace with not knowing ... and just so I'm not misunderstood, that does NOT mean that I'm just sticking my head in the sand and doing nothing.

Last edited by scfr; 07-26-2017 at 12:05 PM.
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Old 07-26-2017, 11:56 AM
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P.S. - For a less philosophical answer: If someone can just tell me what my health care costs will be between now and the age of 100, and guarantee those numbers, I think I'm good to go for the rest of my life.
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Old 07-26-2017, 02:56 PM
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Here's one that's probably only a problem for savers.

Opening up (your wallet) and telling yourself that it's okay now...

My parents are the worst offenders. We had a fight the other day about who to get to service our lawns because they like to low ball everyone in the neighborhood and just can't do the normal schedule service everyone else is on(they want people to cut less to save more money).

At the end of the day, it's not even worth the fight. Their NW is about 2 million, retired. Mine is close to 1.6 million now..and yet we tear each other's head off because of an extra 70 dollars/month. I'm in the camp of I don't care..just want reliable service..they are in the camp of "you guys sure like to waste money".

I pay for their electric bill, they had the lawn thing handled..now I took the lawn thing over cause man it shouldn't be that big of a deal.
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Old 07-26-2017, 03:12 PM
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I had my financial plan all figured out, I had close to 500k in my 401k at age 45 as a single mom nurse. Then I get sick and didn't get better and am now living on disability. So I can no longer contribute to retirement, that greatly disturbs me. And I took a huge salary cut. On SSDI I only make 22k, but starting this month I get another 13k a year in long term disability but this money comes from my former employer, is a really crappy policy and is really hard to keep so I do not count on that money at all. I save it. So my biggest hang up is planning for a new financial future that looks nothing like the one I thought I would have. But I'm really good at stretching a dollar til it screams!
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Old 07-26-2017, 06:05 PM
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Originally Posted by Singuy View Post
Here's one that's probably only a problem for savers.

Opening up (your wallet) and telling yourself that it's okay now...

My parents are the worst offenders. We had a fight the other day about who to get to service our lawns because they like to low ball everyone in the neighborhood and just can't do the normal schedule service everyone else is on(they want people to cut less to save more money).

At the end of the day, it's not even worth the fight. Their NW is about 2 million, retired. Mine is close to 1.6 million now..and yet we tear each other's head off because of an extra 70 dollars/month. I'm in the camp of I don't care..just want reliable service..they are in the camp of "you guys sure like to waste money".

I pay for their electric bill, they had the lawn thing handled..now I took the lawn thing over cause man it shouldn't be that big of a deal.
Do you live with your folks? Otherwise why in the world are you paying for their electric or getting in fights about the length of their grass? If you aren't living with them, let them continue on with their frugal ways which is probably how they go to where they are financially in the first place. However if you live with them, then of course you should be contributing something.
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Old 07-26-2017, 06:14 PM
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Originally Posted by Gailete View Post
Do you live with your folks? Otherwise why in the world are you paying for their electric or getting in fights about the length of their grass? If you aren't living with them, let them continue on with their frugal ways which is probably how they go to where they are financially in the first place. However if you live with them, then of course you should be contributing something.
No we don't live together. It's very weird how for some reason I ended up paying for their electric bill and they ended up taking care of my lawn.

The electric bill part is perhaps they are out of the country a lot prior to my first born so I had to take care of all the misc costs of maintaining their house while they were away. As for the lawn, I was taking care of it but they claimed they can find someone cheaper..and the cheaper person will only do both houses to get the deal..so they ended up picking up that tab.

I know in the American culture, everything is pretty clear when it comes to bills..but in the Asian culture not so much.

Last edited by Singuy; 07-26-2017 at 06:18 PM.
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Old 07-26-2017, 09:07 PM
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No we don't live together. It's very weird how for some reason I ended up paying for their electric bill and they ended up taking care of my lawn.

The electric bill part is perhaps they are out of the country a lot prior to my first born so I had to take care of all the misc costs of maintaining their house while they were away. As for the lawn, I was taking care of it but they claimed they can find someone cheaper..and the cheaper person will only do both houses to get the deal..so they ended up picking up that tab.

I know in the American culture, everything is pretty clear when it comes to bills..but in the Asian culture not so much.

Didn't realize you were from a different culture. I realize that can make a difference. My father-in-law is a bit like your folks. Always wants to be the one setting things up AND collecting the money but I always feel like somehow we are getting screwed. The guy who shovels our snow usually comes before I am up in the morning so I gave my FIL the cash (the guy doesn't use banks) to pay him. The next thing I knew he was using the money to buy himself something at the store, and then he had the guy go do some extra work and in the confusion (for us) we ended up owing the guy money for something we hadn't asked him to do! This sort of thing used to happen all the time, but as we kept stopping them it has gotten better. But he would get mad every time we tried to break off these 'co-op' things. Like for us we run businesses from home so we need REAL invoices for bills, not something written on a piece of paper or card (which incidentally we never ever got to see the actual bill). Boy would he get grumpy. It doesn't help that we live right next door and he gave my husband the property our house is on. He and my MIL have a hard time remembering that it isn't their property or concern anymore.
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  #31 (permalink)  
Old 07-27-2017, 05:05 AM
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One of my biggest problems is parting with money that I set aside for particular expenses or emergencies. I guess it's a good problem to have, but it is annoying when I can't spend money for something in particular when I've taken the time and effort to save up for it.
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  #32 (permalink)  
Old 07-27-2017, 05:58 AM
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One of my biggest problems is parting with money that I set aside for particular expenses or emergencies. I guess it's a good problem to have, but it is annoying when I can't spend money for something in particular when I've taken the time and effort to save up for it.
Once I have money in the bank for anything, I hate taking it out even if for the very thing it was being saved for! The only time I didn't have a problem was taking out the money to go to our son's wedding.
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Old 07-27-2017, 10:48 AM
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One of my biggest problems is parting with money that I set aside for particular expenses or emergencies. I guess it's a good problem to have, but it is annoying when I can't spend money for something in particular when I've taken the time and effort to save up for it.
@bjl584 — what do you mean by this? Are you saying that when you save up money for a particular expense but then instead need to use that money for an unexpected emergency/expense then that is frustrating?
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  #34 (permalink)  
Old 07-27-2017, 10:51 AM
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@bjl584 — what do you mean by this? Are you saying that when you save up money for a particular expense but then instead need to use that money for an unexpected emergency/expense then that is frustrating?
I think he meant that spending the money as intended can be difficult. When you have a saver's mindset, it can be hard to let go, even when it is for the exact purpose you were saving.

Example: This weekend I will pay fall tuition for my daughter. We have the money. We have saved specifically for that reason. But I still won't like sending off that $15,000.
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  #35 (permalink)  
Old 07-27-2017, 10:58 AM
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Originally Posted by disneysteve View Post
I think he meant that spending the money as intended can be difficult. When you have a saver's mindset, it can be hard to let go, even when it is for the exact purpose you were saving.

Example: This weekend I will pay fall tuition for my daughter. We have the money. We have saved specifically for that reason. But I still won't like sending off that $15,000.
Ahhh, gotcha. Yeah, I don't like spending money either
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  #36 (permalink)  
Old 07-30-2017, 04:32 AM
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My biggest pain is having a spouse that tells me she is down to save money and spend less, but then ends up not doing that. I am guilty of it as well, but I wish she was more financially savvy and cared a little more. Sometimes I need a little motivation.

The other pain is my fault - not including everything on a budget. I have improved my budget over the years, adding in bills that aren't every month but still need to save for them, and not too long ago I started putting rent as a bill by the 31st since if it were on the next months bills, I wouldnt know to have $1500 in the bank by the end of the month. One month I had $500 extra and then I looked at the next month and realized I didnt pay rent yet and so all of a sudden I was down $1,000. But one thing I have learned is that there are hundreds of expenses that come up without actually having a budget for it. I need to get better at having a Misc. budget for these things.
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Old 07-30-2017, 09:11 AM
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My biggest pain is having a spouse that tells me she is down to save money and spend less, but then ends up not doing that. I am guilty of it as well, but I wish she was more financially savvy and cared a little more. Sometimes I need a little motivation.

The other pain is my fault - not including everything on a budget. I have improved my budget over the years, adding in bills that aren't every month but still need to save for them, and not too long ago I started putting rent as a bill by the 31st since if it were on the next months bills, I wouldnt know to have $1500 in the bank by the end of the month. One month I had $500 extra and then I looked at the next month and realized I didnt pay rent yet and so all of a sudden I was down $1,000. But one thing I have learned is that there are hundreds of expenses that come up without actually having a budget for it. I need to get better at having a Misc. budget for these things.
I have found that keeping spiral notebook with a page for each day of the month, divided into 4-5 paydays, helps me. I know when yearly specific bills will be due as at the end of the year I copy over all those onto the next year's notebook. So, the $500 business insurance in Feb. is never a surprise, nor is my husband’s life insurance policy due in November, nor the property and school taxes, etc. Then I write down the mortgage, health insurance, etc. under the payday date that they are due buy. So, if I have extra money for some unknown reason on some day when paying bills, I start paying the next weeks bills.

I started doing this over 20 years. While I could never follow a budget, this system works for me. The important things are taken care of, right down to car registration. I even write reminder notes in the month I must do something, like get a mileage reading on the car on 12-31 or 1-1 as I need it for doing taxes. I write little reminders about getting out car inspected when due (started doing that as I heard two guys at Taco Bell talking about getting their cars inspected and when I left, I checked and sure enough we were almost 2 months past our inspection time!)

Do I write done every little bit of money that we spend, not just the big stuff including utility bills and when credit cards were due and of course, for everything the amount to pay. I keep those notebooks and when I look back at a page from right around the time I was divorcing 'Mr. Big Bucks' (spent money like water) I noted that our credit card bills were around $1100/month! More than our mortgage! Must better to see thins how they are at this point. We are paying off credit card bills, but I see an end in sight.

Anyhow, I thought something along these lines would help you out so bills don't become surprises.
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  #38 (permalink)  
Old 08-13-2017, 12:55 AM
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Originally Posted by hehateme000 View Post
The other pain is my fault - not including everything on a budget.
YNAB calls that "embracing your true expenses".

Quote:
I have improved my budget over the years, adding in bills that aren't every month but still need to save for them, and not too long ago I started putting rent as a bill by the 31st since if it were on the next months bills, I wouldnt know to have $1500 in the bank by the end of the month. One month I had $500 extra and then I looked at the next month and realized I didnt pay rent yet and so all of a sudden I was down $1,000.
Make a check register spreadsheet that "looks forward" to the end of next month. Put in deposits (estimates, if you're hourly) for known future paychecks, and withdrawals for known future expenses on the days that they're due.

That way, you'll know exactly how much you'll have on any day up to 8 weeks in the future.

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But one thing I have learned is that there are hundreds of expenses that come up without actually having a budget for it. I need to get better at having a Misc. budget for these things.
Like what?
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  #39 (permalink)  
Old 08-13-2017, 08:53 AM
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Make a check register spreadsheet that "looks forward" to the end of next month. Put in deposits (estimates, if you're hourly) for known future paychecks, and withdrawals for known future expenses on the days that they're due.
Boy would that ever make a mess of MY checkbook! It doesn't help that other than my SS and small pension check (both once a month deals) are the only regular income we have coming in. We earn money through the online business as well as hubby’s business, but we never know when those will hit. So, for me, better to schedule bills in a notebook to deal with as we can over the course of the month. This way nothing is a surprise, like those folks on Dec. 20 saying they don’t have food or presents for their kids for Christmas. With some creativity and thought throughout the year, you can provide a simple Christmas for your children and there is no need to boo-hoo about not having anything. I know at our thrift store that I love, volunteers get a certain amount towards merchandise for the hours that they work. A mom doing just a couple of hours each week for the year, can find some great items to ‘buy’ and use for Christmas presents and stocking stuffers. Not everything that ends up at the thrift store is used. Somethings are bought and never used. Regifting it, you would never know you hadn’t bought it at a store. There are other ways to accumulate what you need, but too many have gotten used to hand-out so they always have their hands out, instead of planning like all of the rest of us must do.
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Old 08-13-2017, 09:06 AM
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Boy would that ever make a mess of MY checkbook! It doesn't help that other than my SS and small pension check (both once a month deals) are the only regular income we have coming in. We earn money through the online business as well as hubby’s business, but we never know when those will hit. So, for me, better to schedule bills in a notebook to deal with as we can over the course of the month.
The spreadsheet is nothing more than an automated version of your notebook.

However, our pay is pretty regular (me salary, and DW hourly but known minimum paycheck), so it might not be a perfect fit for you.

Quote:
This way nothing is a surprise, like those folks on Dec. 20 saying they don’t have food or presents for their kids for Christmas. ... There are other ways to accumulate what you need, but too many have gotten used to hand-out so they always have their hands out, instead of planning like all of the rest of us must do.
Christmas Club to the rescue!!! (Ours incorporates birthdays, too.) A fixed amount goes in every month, and a (different) fixed amount is allocated to every event.

I understand that wouldn't work for someone who's income is highly variable.
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