During my weekend online reading I ran across this interesting article posted by Roger Nusbaum on his blog (http://www.randomroger.blogspot.com/)Here are some extended excerpts:...In 1982 the state of Alaska began to pay a dividend to residents out of something called the Permanent Fund...the fund is funded with oil money which is then managed in the capital markets. The amount of the dividend can fluctuate. This year's dividend was payable in October and was $845 for qualified residents. The dividend has gone down for the last five years. The all time high payout was $1963 back in 2000. $845 is the lowest dividend since 1988. The reduced dividends of late were attributed to stock market losses....Over the last ten years the average dividend has been $1396 per person. ...there is no state income tax in Alaska and the first $150,000 of assessed value is exempt from property tax for people 65 and older....as I read the requirements you can be out of state up to 180 days per year. So three or four months in the desert or Florida or somewhere else and you avoid winter's bite.Here is how some numbers might play out. A quick reminder is that is an idea, as I intended it, for people of modest means who don't spend a lot. Real estate in Alaska is cheaper than most parts of the country. I think it would be realistic to sell a home for $350,000 in many parts of the country, buy a modest house or condo in Alaska for $185,000- $200,000 and a condo in some parts of Florida or the desert with the balance. So maybe eight months in Alaska and four months in some place warmer...(For his example he assumes a couple with a total of $350,000 in a portfolio, and a withdrawal rate of 5%)...More and more retirees will work one way or another. There are numerous health and emotional benefits to working part time after traditional retirement. This could involve consulting, writing, eBay (or other internet venture) or just something you love... It would not take much effort or time to make $500-1000 per month working 10-15 hours per week. If both partners in the couple do this, there is another $10,000-$20,000 per year.So lets see where this couple stands now in relation to their expenses;$2792 Permanent fund dividend$17500 Portfolio Income$15000 Income from part time work$35392 Total(He mentions SS benefits as a likely, but not certain at current levels, addition to the above.)In this example the Permanent Fund contribute close to 10% of a reasonable income need. It makes sense to me that the dividend could increase in the future because of higher oil prices and less volatility in the stock market.There are some flaws here to be sure. The permanent fund could pay out more or less at any time. The fund could theoretically go bust. You'd have to love the great outdoors of Alaska which is not for most people... The point here is not that everyone should move to Alaska. The big picture here is that many of us may need to use some ingenuity to have a financially stable retirement. If stock market returns are below normal and social security is compromised and health costs go way up there will be less people able retire to the country club...
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