<p>" think this is because now we have more two-earner families and many folks don’t want to spend their free weekend time doing these chores anymore. "
-Exactly. We do not do anything at home at all. Hire them all, cleanning lady, grass cutting, snow removal. We do not even own the mower. Do not like doing anything else either like cooking, so Costco is a blessing since we do not like to go out either. I am looking at (hopefully!!) having daily maid at place of future retirement. But then the big looming question is what to do instead of 8 hours at work? I do not think that my 3 hobbies would be enough to cover additional 8 hours. So, while having $50 mlns for retirement would be nice, it would be even nicer if they keep me at my current position until I am ready to be placed into the box, preferrably if they let me work from home (which may be several different locations). Nope, my dream of working from the beach will not happen, I know, but it is elevating to have a dream, so I will keep on dreaming. On the other hand $50 mlns is not such a big deal in this big schema, we just want to have enough for the second home or two, we do not even like to travel, I do not care to shop, so how I will spend this $50 mlns would be another big question. </p>
<p>
On donuts?</p>
<p>^What I do with these donuts, I mean the rest of them after I consumed one. What do you have in mind? Where I will store them? I am confused…</p>
<p>"^What I do with these donuts, I mean the rest of them after I consumed one. What do you have in mind? Where I will store them? I am confused…"</p>
<p>I’m not sure how many donuts $50 mins will buy, but either way, nobody eats just one. After that, you can share with others, store in your refrigerator, and keep for a long time in your freezer. You can buy a freezer just for those donuts, if you like.</p>
<p>But you will need those donuts after you lose your job, because as you have told us, there are no other computer programming jobs out there. There are no contracting jobs, no temporary jobs, no businesses that will hire you in any capacity. There are no opportunities to volunteer your services, because no nonprofits want any volunteer help whatsoever. There are no books that you can buy, just to work problems for your own entertainment, and there are no free problems you can work over the internet. Because you can’t, you can’t, you can’t.</p>
<p>So I’m thinking you might to eat more than one of those donuts. 8-| </p>
<p>I have an investment problem that I need to figure out over the next year: In my early 20’s, I invested in Wells Fargo’s Golden Guarantee IRA while they offered it for two years – a fixed 10% (actually a little better than that since they compound daily) interest rate, federally guaranteed until I turn 60. I’ve treated it as a bond for the purposes of looking at assets, and left it alone. </p>
<p>But now what has grown to a good sized lump after 36 years needs a new strategy next year. It can’t go to equities, since I need to reduce equity exposure anyway. Ideas on the best way to proceed? (This has been my set-it-and-forget-it investment since before grad school.)</p>
<p>@arabrab, if your health is pretty good, I’d think about a SPIA. Otherwise, maybe a TIPS ladder. </p>
<p>SPIA annuity? What is TIPS ladder?</p>
<p>Over my head…</p>
<p>SPIA = Single Premium Immediate Annuity–you pay X dollars now and will get immediate payments of Y dollars every month every month or year (whatever you and annuity company agree to). It can have a cost of living increase and/or guarantees of minimum payout and/or guaranteed payout to estate and/or surviving spouse. Each of these extras will result in a lower payout, so you have to weigh what you want.</p>
<p>It’s the most similar to traditional pensions–pay a lump sum now and get a guaranteed stream of income. Ask your tax advisor about tax consequences.</p>
<p>TIPS ladder is explained here <a href=“http://money.usnews.com/money/blogs/on-retirement/2010/06/10/how-to-ladder-your-retirement-savings”>http://money.usnews.com/money/blogs/on-retirement/2010/06/10/how-to-ladder-your-retirement-savings</a>. Bogleheads.org is a forum that has lots of good info as well, plus many wikis on various financial topics.</p>
<p>@SOSConcern , I apologize for not spelling it out better; post-lunch laziness. Thanks HImom for making up for my shortfall. </p>
<p>SOS, I don’t always recommend those, but they are “set it and forget it” investments that fall in the bond-like space. TIPS ladders are a PITA to set up, however, and if you don’t want the hassle, maybe a long-term TIPS fund would be better. I’d recommend I-Bonds (from TreasuryDirect.com) but they have an annual limit. Still, not a bad place to park some money. </p>
<p>We actually have some money in SPIA - I just wanted to be sure on the strategies. Annuities are something to be carefully understood. As with everything, there is a lot of ‘junk’ options that benefit the seller and not in the buyers’ best interest.</p>
<p>Thanks for the article on TIPS.</p>
<p>This thread definitely has me continually thinking through on our choices and decisions as we work our way down to retirement.</p>
<p>Thanks to info contributors.</p>
<p>Have read a LOT of bad things about the variable annuities. We personally do NOT have any annuities, but we do have H’s pension, which has COLA and also a survivor benefit if I outlive him. One big issue is to be sure to have a highly rated company–no point in giving them your money and having them go bankrupt before you receive all you paid them for. Moody’s does rate annuity companies.</p>
<p>I don’t have anything in TIPS at this point, but we are pondering this too. I don’t really want to have too much in equities but bonds and many other investments are having very low returns.</p>
<p>@HImom, when I refer to annuities, I always explicitly refer to SPIAs. You probably already know this, but for those reading along at home, they are relatively efficient, have low or no commissions or front-loads, and mostly allow one to benefit if one lives longer than actuarially expected (at the expense of those who don’t). </p>
<p>I started buying TIPS almost as soon as they were created. I have done well with them. I don’t buy any more (I let them mature), but every year we max out on I-Bonds – nothing earth-shattering, but someday it will be nice to have them. </p>
<p>Yes, SPIAs are great and very pension-like, as long as they are purchased from a solid company that will not go under. If we didn’t have a pension that paid more than we are spending in retirement, we’d serious look at this. Will have to explore TIPS more.</p>
<p>Tips have risk. If real rates rise, the price of tips can decline. Duration has an effect.</p>
<p>What kinds of returns can you expect with spia? </p>
<p>If the stock market rises 10 percent, how much is given to the annuity holder?</p>
<p>Arabrab, that was a fantastic account. You made about 35 times your money tax deferred. That is awesome. Congrats on that. </p>
<p>Fixed return annuities are based on long term interest rates. With rates low… Annuity payments are low. </p>
<p>Are you going to need this cashed out money for income?</p>
<p>I meant variable annuity holder in the above post.</p>
<p>@dstark, I think most SPIA return around 6% if they’re straight annuities (i.e., no minimum payment, no inflation protection, etc). That is better than the 3 or 4% SWR most people feel comfortable taking out of savings in retirement. </p>
<p>SPIA are not affected by equity market returns. </p>
<p>Of course TIPS can decline in value, but not if you hold them to maturity :-)</p>
<p>ETA: posted before dstark’s correction; my second para referred to that. </p>
<p>I think most people do not understand tips. People that buy funds that invest in tips can see the value of their funds decline even with inflation. There is reinvestment risk. </p>
<p>If inflation is 2 percent a year and you hold to maturity… With no decrease in real rates… You arent going to make much… Really… You are a loser after taxes…</p>
<p>Spia returns are about 6 percent? How much is taxable?</p>
<p>Variable annuities…What percentage of a stock market rally does the annuity holder receive? </p>
<p>@dstark, from <a href=“http://www.spias.com/”>Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com;
Why do Immediate Annuities pay tax-favored income?
If you use after-tax funds to purchase a single premium immediate annuity, the income payments you receive are only partially taxable. The non-taxable portion of each payment is a level percentage that represents the return of principal over the life of the contract. Depending on your age and the payment option you choose, this percentage will vary. If you are using tax-qualified funds (IRA, TSA, 401k money for example) to purchase your Single Premium Immediate Annuity, the payments you receive are generally fully taxable as you receive them because they represent funds that have not been taxed before.</p>
<p>@dstark, the reason to own TIPS is to insure against “unexpected” inflation. What you lose after taxes and inflation is the premium for the unexpected-inflation protection. TIPS appeal to some of us who lived during some high inflation years. Not for everyone, and I personally am not adding to my stash. </p>
<p>There is no free lunch in bonds, equities, SPIAs, or anything else. What we’re trying to avoid are over-priced, ripoff lunches as in, IMO, Variable Annuities. </p>
<p>I think the after tax return has to be looked at because there are munis out there that may give comparable after tax returns to fixed rate annuities while the principal is intact.</p>