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Insurance is just for Income Replacement just for the working years?
Okay letÂ’s examine some of the latest hat tricks, here it goes. One poster post this tidbit of advice: You want a comfortable retirement? Try 2 mill in investments after 35 years. That's $80,000 a year income and in today's dollars about $40,000. Now at least you can have some type of life. Oh, you'd need to put $500 a month into investments at 10%. The same poster, posted this just a day or two later: And here's a little "stock 101" for ya - a lot of the baby boomers with large stock portfolios will be quite happy with dividend income and won't touch their stock - like my parents. Now this is going against every study out there that suggest people are living beyond their means. Just how many people are saving 2 million in their retirement nest egg? It is suggested that the average 401 has around 46 grand not 2 mill. So letÂ’s get off the oleÂ’ crapper and deal with reality.
Today the average household is bringing in an estimated adjusted income of around 45 grand (if you want to differ google it and offer up what you find). The average qualified plan thru work is around 46 grand at age 55. Now obviously this is not a rosy picture by any means and it isn’t base on income deficiency! 10% of 45 grand is 45 hundred, if that amount was actually being saved the 46 grand average would be much higher, IMHO. Obviously this leaves us in a pickle of a situation, life doesn’t stop at 65 nor does the need to protect the income because as we see there simply isn’t enough investment there. All so obvious is that SS is going to change, in my opinion since privatization isn’t panning out, you’ll see three things happening. First is increasing the age of retirement, already done, it is now at 70 for younger people I believe. Second is a reduction of amount and third could be and I assume once the shit hits the fan “Means Testing” and/or “End of SS Top Out Taxation Rules” will apply. The old adage of children being a financial drain is incorrect, they have always been a financial asset and that hasn’t change as we now understand or should if you have any spark of intelligence.
Now comes yet another wonderful idea from our “Big Brother” government and it is being touted as the cure all by Wall Street. That is to make qualified money 401 savings mandatory or at least the default. In other words a percentage of your check will be invested in the companies 401 program that has little options as to what it offers and many smaller companies don’t even offer. Instead of enrolling in a 401 you have to opt out if you don’t want to contribute. Now lets guess why Wall Street would like such a law, I believe it has passed or Pres. Bush and many in Congress are all for it. Obviously political conservatism has change this year? I transgress though, how good of an idea is this? If you compel someone into savings what happens when they switch jobs or experience a cash flow problem, you know its going to happen. You have three choices, roll it over, ignore it and let it ride or cash it out. I would think you Cash-Outs will increase as with other options, so this may help around the edges but it sure isn’t no cure all!
So we now have the truth, people for the most part will not save enough or nearly enough for their retirement in the traditional method of qualified or non-qualified investment strategy. So once again we can clearly see that the need of insurance is present even in the retirement years. While itÂ’s feasible that two can work part-time jobs it wouldnÂ’t be as feasible as one working a full-time job for several reasons. I do believe most are content that work is going to be a constant and many believe that is the way it should be. While one should have the luxury of not working like they did at younger ages yet the need to produce and be active doesnÂ’t stop for most at some golden magical age. Even I find the notion of the mythical retirement idea that has gain favor in resent years boorish. My personal opinion is that man is meant to be a producer not a parasite. My idea of retirement is running my photography studio with an Art Gallery, yea sipping wine at noon hosting an art show for some aspiring artist.
So we can clearly see that the need of protection goes beyond retirement age for the vast majority of people. Now letÂ’s throw in the idea of a Legacy. I run into people all the time that state they would like to leave their children, church or a host of other organizations monies at the time of their death. Now this is quite common to many, the desire to leave a legacy. Nothing wrong with the idea, I wouldnÂ’t place it at the top of list.
Now we have the problem of funding this wonderful product of permanent insurance product that has CV at retirement that can greatly aid the need of income money. At least that is what I find, everyone likes that idea, and itÂ’s the premium they might balk against. So obviously that is where this is going, not defending insurance per say but understanding the various ways to fund it.
Okay letÂ’s examine some of the latest hat tricks, here it goes. One poster post this tidbit of advice: You want a comfortable retirement? Try 2 mill in investments after 35 years. That's $80,000 a year income and in today's dollars about $40,000. Now at least you can have some type of life. Oh, you'd need to put $500 a month into investments at 10%. The same poster, posted this just a day or two later: And here's a little "stock 101" for ya - a lot of the baby boomers with large stock portfolios will be quite happy with dividend income and won't touch their stock - like my parents. Now this is going against every study out there that suggest people are living beyond their means. Just how many people are saving 2 million in their retirement nest egg? It is suggested that the average 401 has around 46 grand not 2 mill. So letÂ’s get off the oleÂ’ crapper and deal with reality.
Today the average household is bringing in an estimated adjusted income of around 45 grand (if you want to differ google it and offer up what you find). The average qualified plan thru work is around 46 grand at age 55. Now obviously this is not a rosy picture by any means and it isn’t base on income deficiency! 10% of 45 grand is 45 hundred, if that amount was actually being saved the 46 grand average would be much higher, IMHO. Obviously this leaves us in a pickle of a situation, life doesn’t stop at 65 nor does the need to protect the income because as we see there simply isn’t enough investment there. All so obvious is that SS is going to change, in my opinion since privatization isn’t panning out, you’ll see three things happening. First is increasing the age of retirement, already done, it is now at 70 for younger people I believe. Second is a reduction of amount and third could be and I assume once the shit hits the fan “Means Testing” and/or “End of SS Top Out Taxation Rules” will apply. The old adage of children being a financial drain is incorrect, they have always been a financial asset and that hasn’t change as we now understand or should if you have any spark of intelligence.
Now comes yet another wonderful idea from our “Big Brother” government and it is being touted as the cure all by Wall Street. That is to make qualified money 401 savings mandatory or at least the default. In other words a percentage of your check will be invested in the companies 401 program that has little options as to what it offers and many smaller companies don’t even offer. Instead of enrolling in a 401 you have to opt out if you don’t want to contribute. Now lets guess why Wall Street would like such a law, I believe it has passed or Pres. Bush and many in Congress are all for it. Obviously political conservatism has change this year? I transgress though, how good of an idea is this? If you compel someone into savings what happens when they switch jobs or experience a cash flow problem, you know its going to happen. You have three choices, roll it over, ignore it and let it ride or cash it out. I would think you Cash-Outs will increase as with other options, so this may help around the edges but it sure isn’t no cure all!
So we now have the truth, people for the most part will not save enough or nearly enough for their retirement in the traditional method of qualified or non-qualified investment strategy. So once again we can clearly see that the need of insurance is present even in the retirement years. While itÂ’s feasible that two can work part-time jobs it wouldnÂ’t be as feasible as one working a full-time job for several reasons. I do believe most are content that work is going to be a constant and many believe that is the way it should be. While one should have the luxury of not working like they did at younger ages yet the need to produce and be active doesnÂ’t stop for most at some golden magical age. Even I find the notion of the mythical retirement idea that has gain favor in resent years boorish. My personal opinion is that man is meant to be a producer not a parasite. My idea of retirement is running my photography studio with an Art Gallery, yea sipping wine at noon hosting an art show for some aspiring artist.
So we can clearly see that the need of protection goes beyond retirement age for the vast majority of people. Now letÂ’s throw in the idea of a Legacy. I run into people all the time that state they would like to leave their children, church or a host of other organizations monies at the time of their death. Now this is quite common to many, the desire to leave a legacy. Nothing wrong with the idea, I wouldnÂ’t place it at the top of list.
Now we have the problem of funding this wonderful product of permanent insurance product that has CV at retirement that can greatly aid the need of income money. At least that is what I find, everyone likes that idea, and itÂ’s the premium they might balk against. So obviously that is where this is going, not defending insurance per say but understanding the various ways to fund it.
