Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (16) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: Re: Poll: Social Security percentage of income Date: 3/24/2013 11:17 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
"I didn't ask what you spent, but what was income. "


You are not comparing apples to apples again



those who have a pension actually have the equivalent of a giant nest egg. If it is COLA protected, they are getting significant appreciation of that 'virtual nest egg' which will pay out each year their pension. If you get a $30,000 pension, that is likely the equivalent (at a 4% SWR) of $750,000 in a private nest egg for someone without a pension. That nest egg, might spin off 6 or 8% a year 'income'.

So.....a person getting a pension is totally different as far a 'income' vs one having only a nest egg (no pension) to live on.

If all my nest egg was in an IRA/401K...then it would not matter - I wouldn't pay taxes on the gains/dividends/distributions each year for the 'growth' part of the nest egg.

If you have ever looked at the curves for the 4% SWR, and the projected growth, then eventual decline of a 'typical' 30 year survival, you'll not that the nest egg should grow most of the time until you are 15 years or so into retirement. If not tax deferred, you get to pay the taxes on that growth.

Those with a pension don't pay it. The pension fund has the growth and likely pays no taxes on the growth.


So......asking me what' percentage' of income is not the same as asking someone on a pension. I have to re-invest a large part of my 'income' just to keep my nest egg in a good condition, yet pay taxes on it. I can't 'spend it' and I'm not going to give to charity based upon it's growth (and the taxes I gotta pay for that growth). You don't seem to have that thought sunk in to your mind.


t.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (16) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement