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CSX Corp. Message Board

  • patient_lt_investor patient_lt_investor Jun 21, 2013 12:32 PM Flag

    How to Make your IRA/Traditional401k Plans Last Into Perpetuity

    So many retirees are concerned/worries about running out of money before they die. And, with people living so much longer, they have good reason to be concerned. However, there is a simple solution to this problem. Manage your IRA/401k plans so that they last forever or until you die, whichever comes first.

    Here is a real/true/factual example of how you can do this. I have all the monies in my IRA/401k accounts well diversified, very important. All of these monies, in these accounts, are invested in numerous 'quality' stocks that pay good dividends, between 2.5% and 8% averaging over 4%. You can find good companies that pay these yields if you do your homework and due diligence.

    Example of how this system works: Suppose I have $400k in my retirement accounts. Under current rules, I'd be required to make an annual withdrawals of $14.5k when I reach the age of 70 1/2. However, with my annual accrual of 4% of the $400k in dividends, $16k, I'd actually replenish all the money that I withdrew for the year.

    This is a practical system, not any pie in the sky. I am not currently of the age of 70 1/2, but I have already implemented the dividend reinvestments and fully expect my retirement accounts to last into perpetuity or until I die, whichever comes first. This is certainly an interesting scenario, think about it.

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    • Patient It Investor, it seems everyone has a special and fool proof way to invest for retirement. Recently, I took my mother, who is approaching her 96th birthday, this year. To see her and my late father's attorney, to make changes to her estate planning. They never invested in stocks, they only put thier money in saving accounts, at a local bank.
      When I found out how much they saved over the years, I was in shock. I repeately told my parents I did not care, what they owned or what they were worth. I wanted them to be alive, healthy and enjoy their retimement. Which they did.
      I am very happy for mother, in her golden years. She told me, that my father's railroad retirement, was a great comfort to them both. My father retired from the old MOPAC RR, after 40 plus years.

      One thing I have learned about saving for retirement. Start early and alway same something. The end results will be very rewarding.

      • 1 Reply to dirtpoordog
      • dirt.....great story. Do you think they kept savings secret, so you would learn to provide for yourself ?
        That's why my kids don't know account value

        My job on saving, was to protect me and spouse throughout retirement. Got that covered.

        My next job is to try and teach my children and grandchildren, " what little I know", to prepare for future, though savings/investments, and that is ongoing.

        solid..... I seen your reply....totally agree..... My only need starts in 3 years...which is to help cover college cost for 6 grandchildren.... age difference helps spread this cost...

    • Have you read "The Warren Buffett Way"? I am rereading it.

    • PS. This example does not take into account an added bonus feature, besides the dividend accrual, the pps of the shares that you own, in your retirement accounts, may substantially increase in value. There is no reason that your retirement accounts can't adequately sustain themselves for the rest of your life.

 
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