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    #16
    3 million is doable, but if you make more money it provides more comfort. If you're looking at your finances and it's not workable without high returns and rosy employment situation that never goes bad, you might want to change jobs or work more hours.

    Might be a good idea to skip out on the college, emergency, downpayment, food, clothing, etc. funds for your kids. If you raised them to 18, that's enough as far as supporting them. If you can afford to support further, great, but if youre risking your own financial wellbeing, might not be a good idea.

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      #17
      Originally posted by Scallywag View Post
      Problem is, we need 3 million + a paid for home at retirement because of our son with special needs who might live with us for the rest of our lives. I can't see us getting to 3 million because of how late we started and it is starting to worry me. We can push around $700 a month into his 401K on top of the downpayment savings but I just don't know if 3 million is doable (especially as we currently have only 500K invested - this does not include a college fund for our daughter, emergency fund and downpayment fund).
      $3 million is a lot, for sure. Is a lot of that due to your son's needs? Using the 4% rule, that would give you $10,000/month of income. That's a fair amount of spending, but if much of it is medical care stuff not covered by insurance, that makes sense.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

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        #18
        Also, while I agree that having a paid off home at retirement is a good idea, as long as you'll have sufficient retirement income to pay the mortgage, still having a loan isn't terrible. And I would hope that you are both well-insured so that your kids are provided for upon your deaths.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

        Comment


          #19
          Originally posted by disneysteve View Post
          Also, while I agree that having a paid off home at retirement is a good idea, as long as you'll have sufficient retirement income to pay the mortgage, still having a loan isn't terrible. And I would hope that you are both well-insured so that your kids are provided for upon your deaths.
          Did you mean whole life insurance? The $3 million will be a trust fund for our son to provide for him. The "house" will be either sold at our deaths or rented out and the money paid into his special needs trust.

          Comment


            #20
            Originally posted by Scallywag View Post
            Did you mean whole life insurance? The $3 million will be a trust fund for our son to provide for him. The "house" will be either sold at our deaths or rented out and the money paid into his special needs trust.
            You wouldn't want to use whole life insurance for that (or just about anything else) -- you'll pay 10-20 times more than simply getting basic term life insurance policies. But until you build up more reserves, you will certainly need a healthy amount of that term life insurance, with instructions to form the special needs trust upon your death(s).

            But $3M may be a rather high target for what you need. $3M invested decently could easily throw off $140k/yr or more. I obviously can't speak to his specific needs, but even a full time care facility (likely the most expensive route) doesn't cost that much, let alone more reasonable in-home care assistance, even including the cost of a hired financial trustee. In your specific circumstances, you may just want to get 30-year $1M-$1.5M term life insurance policies on each of you. That would likely cost you $2k-$3k/yr, but would alleviate much of your perceived obligation of personally building up a large pile of cash for your son. Provide for yourselves first. Take steps to provide for your son/children if required... but if you're going to help him, you've got to be in a strong place first. Just my thoughts...
            "Praestantia per minutus" ... "Acta non verba"

            Comment


              #21
              Why do you need $3M? Are you planning on living where you are living? Why aren't you saving more if you are in SF and it's a HCOLA. The salary should be commesurate and you should be able to stash away $100k+ a year. That plus buying a home in SV = $3M. When you leave say in 15 years you should be cashing out on the housing there and then saying hello new place, cash for home, and retirement. With $500k it should be enough to hit $3M elsewhere in say 15-20 years. Mostly because the housing appreciation should take care the bulk.

              But to further yourself along saving $100k a year for 15 years puts you at 1.5M without any prior savings, ROI, and home appreciation.

              I know people will say I'm crazy but seriously a lot of people live in HCOLA and plan on leaving and cashing out. I don't think that it's impractical to plan on cashing out $1M+ in home equity in some areas of the country. To know that you bought a home say for $1m and live there say 10-15 years and will pay off a good chunk then sell? Why shouldn't that be part of the retirement strategy?

              It's part of my strategy. Use our home equity and cash out around 2034/2035.
              LivingAlmostLarge Blog

              Comment


                #22
                Originally posted by kork13 View Post

                But $3M may be a rather high target for what you need.
                $3M sounds like a big number, but it really may not be. I mean I'm shooting for at least $2.1M just for my wife and I to retire (which doesn't factor in SS payments). If the nest egg also has to support a 3rd person, and one with special needs at that, for his lifetime, $3M really isn't that much.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #23
                  Originally posted by LivingAlmostLarge View Post
                  Why do you need $3M? Are you planning on living where you are living? Why aren't you saving more if you are in SF and it's a HCOLA. The salary should be commesurate and you should be able to stash away $100k+ a year. That plus buying a home in SV = $3M. When you leave say in 15 years you should be cashing out on the housing there and then saying hello new place, cash for home, and retirement. With $500k it should be enough to hit $3M elsewhere in say 15-20 years. Mostly because the housing appreciation should take care the bulk.

                  But to further yourself along saving $100k a year for 15 years puts you at 1.5M without any prior savings, ROI, and home appreciation.
                  If only it was as simple as "buy a house in SF / SV and save 100K a year"! I wonder who is able to save 100K a year who isn't in hi-tech or a doctor?

                  Comment


                    #24
                    Originally posted by Scallywag View Post
                    I recently heard about the three fund portfolio promoted by the Bogleheads. The portfolio comprises mutual funds for Total Stock Market, Total International Stock Market and Total Bond Market. Does anyone have any feedback about this investment strategy? The Bogleheads claim that this 3-fund portfolio has beaten the market since 1950!

                    Thanks!

                    I've been investing mostly this way for a decade or so. I did hold some small value index for many years and currently keep 10% of equities in reit index.

                    I'm not sure how total market funds would beat the market, but they do beat the vast majority of actively managed funds over time. And the beauty of this is...you know UP FRONT that you have a winning fund. With actively managed funds, the small percentage which will beat their respective indexes over time can only be known in hind sight, when it is too late to participate in their performance.
                    Last edited by Petunia 100; 06-02-2020, 08:51 AM.

                    Comment


                      #25
                      Originally posted by Petunia 100 View Post

                      I've been investing mostly this way for a decade or so. I did hold some small value index for many years and currently keep 10% of equities in reit index.

                      I'm not sure how total market funds would beat the market, but they do beat the vast majority of actively managed funds over time. And the beauty of this is...you know UP FRONT that you have a winning fund. With actively managed funds, the small percentage which will beat their respective indexes over time can only be known in hind sight, when it is too late to participate in their performance.
                      Thank you. I actually just put in sale orders on all my active funds and moving into the 3-fund portfolio. I just wish I'd discovered the Bogleheads years ago.

                      Comment


                        #26
                        Originally posted by kork13 View Post
                        You wouldn't want to use whole life insurance for that (or just about anything else) -- you'll pay 10-20 times more than simply getting basic term life insurance policies. But until you build up more reserves, you will certainly need a healthy amount of that term life insurance, with instructions to form the special needs trust upon your death(s).

                        But $3M may be a rather high target for what you need. $3M invested decently could easily throw off $140k/yr or more. I obviously can't speak to his specific needs, but even a full time care facility (likely the most expensive route) doesn't cost that much, let alone more reasonable in-home care assistance, even including the cost of a hired financial trustee. In your specific circumstances, you may just want to get 30-year $1M-$1.5M term life insurance policies on each of you. That would likely cost you $2k-$3k/yr, but would alleviate much of your perceived obligation of personally building up a large pile of cash for your son. Provide for yourselves first. Take steps to provide for your son/children if required... but if you're going to help him, you've got to be in a strong place first. Just my thoughts...
                        I cannot get a life insurance policy due to my pre-existing conditions. The 3 million will be the nest egg for three people to live on - anything left over at our demises will go to our son with significant needs, and I project a minimum of 40 years (for a projected life expectancy of 50 years). But you're right about term life, though.

                        Comment


                          #27
                          Originally posted by Scallywag View Post
                          The 3 million will be the nest egg for three people to live on - anything left over at our demises will go to our son with significant needs, and I project a minimum of 40 years (for a projected life expectancy of 50 years).
                          When you first posted the $3 million figure, it sounded high, but the more I thought about it, I realized it really isn't. I'm shooting for at least $2.1 million for my wife and I. Add a third person, and especially one with special needs, and suddenly $3 million doesn't sound high at all.

                          Does that factor in Social Security money (my figure doesn't)? If it doesn't include SS, have you run the numbers when you count SS? I would think that could knock down the true need quite a bit. And how does SS work with your son? Will he be able to collect anything when you die? I have no idea how that works.
                          Steve

                          * Despite the high cost of living, it remains very popular.
                          * Why should I pay for my daughter's education when she already knows everything?
                          * There are no shortcuts to anywhere worth going.

                          Comment


                            #28
                            I am also in the camp that thinks International funds are trash. They are flat when the U.S booms, and they bust when the US bust. It's better to go with a Russel 2k fund than betting on Zimbabwe being the next economic superpower of Africa.

                            Comment


                              #29
                              Originally posted by Singuy View Post
                              I am also in the camp that thinks International funds are trash. They are flat when the U.S booms, and they bust when the US bust. It's better to go with a Russel 2k fund than betting on Zimbabwe being the next economic superpower of Africa.
                              I'm slowly leaning away from international funds, or at least lowering the allocation. Or put more in US funds.

                              The core setup of my portfolio is VTSAX, VTIAX, VBTLX, but with less than 20% spread out within a few individual stocks, 1 ETF, and 2 active mutual funds.
                              "I'd buy that for a dollar!"

                              Comment


                                #30
                                I wanted to invest in India & China but wary as I am familiar with India and don't like the current political situation there and China seems to be heading to war with India, and has issues in HKG & Taiwan.

                                So I desist.

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