Friday, January 04, 2008

Retire Rich...

An interesting interview by Walter Updegrave with Henry "Bud" Hebler about retiring rich. Mr. Hebler runs the website

Mr. Hebler addresses some myths about retirement. The first being that your spending will decrease as you age. I absolutely agree with this, I don't think my parents have cut back that much. Also how hard is it to go and have takeout or eat out instead of cook? Go to the theater, join more activities like golfing, ballroom dance, etc.

He suggests buying an annuity immediately. I'm not sure I agree with this. However, I assume he suggests this because many people are not financially savvy and probably cannot invest their nest egg well. I would suggest a simple retirement portfolio using vanguard index funds because it's cheaper. But obviously again my parents fall into this category. And since they refuse help, perhaps an annuity is better.

I agree that you can't forsee all possible events. And people should set aside money for these unforseen events. Finally, he suggested that 10% used to be enough to save for retirement. Now he says 15-20% is more required because people don't have pensions.

I agree with that fully. Another thing people fail to realize is previously employers provided healthcare after retirement. Not anymore. Now people have to pay more medical after retirement. And this is expensive and costs are rising quickly.

But overall a neat, concise interview. Enjoy.


Anonymous said...

LAL-I read this same article and checked out the guy's website. He makes a lot of sense. Things that I didn't realize, like I didn't know medicare didn't pay dental, eye exams or hearing aides. He has a lot of free charts and calculators to download. Plus I'm getting his book out of the library.
The best thing is getting advice from someone who already is doing it.

Living Almost Large said...

Yep, absolutely. Medical costs are something people seriously underestimate in retirement. They also underestimate the cost of prescriptions in retirement. Medicare D helps, but it's not enough.

Do you know what prescriptions costs now out of pocket? Sure walmart has $4 prescription, but they only have it for specific ones.

You want something not on the list? It's pricy. My one prescription does not have a generic nor is it available on Walmart's $4 list. So if I had to pay full price and it would be $45/month ordering online!

So I can't imagine being older and needing lots of medicines and paying full price.

Anonymous said...

My parents are in their mid-70s and have what health insurance benefits along with my dad's pension from his former employer. This insurance is considered "Medigap" insurance because it covers what Medicare doesn't. But the premiums go up every year -- I think their latest increase was 80%!!! The premium is deducted from dad's pension so they joke that pretty soon he won't get any net pay. At least this coverage pays for their many prescriptions. Many people don't realize that one also has to pay premiums for Medicare, which are deducted from your Social Security check. So even though you paid into the Medicare system your entire working life, you keep paying for it once you use it, too. The one thing that's really surprised my parents about retirement is how much of their budget now goes for medical insurance and expenses.


Living Almost Large said...

Absolutely. Medicare premiums are $81/month per person I believe. Also that doesn't include Medicare part D. And it only covers some of the prescriptions.

Why do you think older americans go to Canada or Mexico to buy prescriptions?

Also watching the Republicans debating the Health Insurance in the US, and NONE of them could answer why they would make people pay for individual health insurance.

Average price per family is $15k/year. The tax break? $3k/year for the median family income of $60k/year. Um, the moderator said how do you afford $15k/year?

It's not affordable, so retirees should be scared about affording medical insurance later.

minimum wage said...

I've done that math and I understand retirement will probably never be an option for me, and that I will probably become destitute when I can no longer work.