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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75639  
Subject: Retiree Portfolio - 3 Date: 8/28/1997 10:24 AM
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Recommendations: 0
Subj: Re: An Intrusive Question
Date: 95-07-26 13:45:00 EDT
From: MF Ham
Posted on: America Online

Brazen1...

First, I must say you made a wrong assumption about
my own retirement situation and I don't have the problem
you pose. Actually I'm glad I don't have the problem.
I hate to admit this but here goes: I have taken
a lot of wrong turns in my lifetime and the bottom line is
that I spent almost all of my active working life either
as a member of, or employee of, the Army and Air
Farce(sic). As one result of that I never really paid much
attention to retirement until my family physician
suggested one day that I should seriously consider
early disability retirement. With some mixed emotions I finally
concurred with his recommendation and very soon
I was retired with 56% of my former salary.
It was based on a three-year average I think.

So anyhow, I don't have to worry about the annuity running
out before I croak unless the U.S. goes broke, and I guess
that is a distinct possibility unless some drastic action
is carried out by the wonderful folks inside the D.C.
Beltway.

Otherwise your plan looks pretty interesting. Have you
given any consideration to any of the various annuity
types offerred by the few reputable insurance companies?
Also, at what age are you planning on hanging it up? And
do you believe there will be any form of Social Security
still operational? And Medicare? I can tell you from lots
of experience over the past four years that Medicare is
very nice to have although I do have enough other
insurance that I wouldn't be destitute without it. The
growth of that MUST be curtailed or it will go down the
tubes in a few years.

Does your employer have any form of retirement plan, 401K,
ESOP or whatever? Do you have any dependents who might be
expected to outlive you, like a wife, for example? If you
quit at 65 how many years do you expect (or hope) to live
in continued luxury? I wonder what money market rates will
be for your first year's cash and short term rates for the
next four years?

I'm not sure about the short term bond portfolio, either.
Maybe CD's of varying terms would be better(safer)? Of
course if you can stash "enough" away it'll be no problem.
How much is "enough"?

It seems to me that your basic approach is very
intelligently thought out but what worries me are the
imponderables. None of these are pleasant but that's the way
life is sometimes. Like, will you stay relatively healthy
and then check out quickly and inexpensively, or will you
be subject to any one of a myriad of things which can be long,
drawn-out and terribly expensive?

I'm afraid this lengthy reply to your question is not very
helpful and surely raises more questions than it answers.
I'll bet there are lots of publications treating this
subject in as many conflicting ways. So who's to say your
approach is not at least as good, if not better, than
anyone else's?

I happen to have a very close friend who will be facing
the same dilemma in a few short years and I'm going to
start a dialogue with her on this perplexing subject; if I
see any insightful result be assured I'll post it.
Meanwhile maybe some others will soon weigh in here with
some good answers.

Best, Irv
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