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Author: vjane Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19021  
Subject: women & retirement planning Date: 11/14/2000 6:51 PM
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Regarding "Fools & Retirement" of 11/14/00, I am a severe case of the unprepared woman. I'm 49, single, no children. Spent 13 years being a musician (singer-songwriter) and am now a freelance writer as well. Neither vocation is known as a rewarding career in monetary terms. I have never had any savings at all, own no real estate, etc. My social security payments over the years have been pitiful, as most of the time I haven't even had any taxable income.

Just this month I am finally putting together a retirement strategy. I now work part-time for lawyers to pay rent. I can join my law firm's 401(k) plan and have about $5,000 in cash to invest independently as well. I may have some other money if my aging parents are able to keep from spending theirs on catastrophic health care expenses, but as it is their money I don't include it in my future scenarios. If I do inherit, I think my two (single, childless) sisters and I will just keep our shares together and invest as a unit to take advantage of the compounding effect.

I've been able to SEE the handwriting on the wall for years, but I have never had a stable enough or large enough income to convince myself that I could take out even a small amount monthly for savings. Unfortunately I will have to bear the consequences of that mistaken belief in later years. But I do not regret following my talents and inclinations to work as a creative and analytical person in fields that are not well supported by American culture. I do resent that women are so marginalized when it comes to financial planning. Thanks for the Motley assistance. It's encouraging and lucid. Wish me luck!!
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Author: rhecker One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5585 of 19021
Subject: Re: women & retirement planning Date: 11/15/2000 8:05 AM
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Good luck!

I just wanted to clarify something you said:

If I do inherit, I think my two (single, childless) sisters and I will just keep our shares together and invest as a unit to take advantage of the compounding effect.

Keeping the money together or dividing it into thirds will not affect the benefits of compounding.

For example, say you and your two sisters inherit $150,000. Divide it into thirds and you each get $50,000. If each of you invested in the same index fund with the same starting and ending dates and that index fund earned 10% each year, then each of you would have about $130,000 in 10 years. If you invested the same $150,000 as a whole into the same index fund as the above example with the same starting and ending dates, the $150,000 would become $390,000, which you could then divide between the 3 of you to get $130,000 each. No difference.


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Author: OldToad One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5586 of 19021
Subject: Re: women & retirement planning Date: 11/15/2000 8:40 AM
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As a side thought -

It would be better for family "harmony" to split the funds when(if) you get them. Then you won't have the possibility that any one of the sisters could feel that she is getting too much or too little of her share, especially if, in the future, any one of you needs to dip into the account for her own expenses.

Definitely a small $0.02.

Have a great day!

OldToad

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