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July 27, 2011


Well said!!!!!!!!!!

Thanks for the link and the research!
I directed my readership to come read this if they missed your comment!!!

Thanks, Kay. Please note that I had left out a word or explanation here and there in the comment that I left on your blog. Sorry.

BTW: One thing that I failed to mention in this (above) posting is that, unlike my other investments, there is no way to withdraw principle from SS. I should have accounted for that in my calculations. However, no one has yet told me how long I am going to live so I don't know how much to draw down.

I think that the conservative advice that one usually gets is to draw down 4% of one's principle per year starting at full retirement age (65+, for me, but I actually retired at 66). Thus, for 2004, my calculation should have resulted in a return on investment = 12.95 - 4 = 8.95%. This is still not a bad return on investment. In addition, each year my ROI increases because, for any other investment, my principle would have decreased by 4%. (At least, that's the way I see it. Am I confused?) As you well know, I am not an economist so some of my simplifications may give a real economist hiccups - on which they should feel free to comment. (Just be nice, though.)

I'm hardly an expert but your figures look good to me. I'm just grateful for my SS and worried right now. So are lots of other elders who weren't as blessed as many in this country.

This looks like an honest attempt that demonstrates that we do pay in less than what many of us (not all) receive. Seems to me 8% or 12% is modest long term growth. I just don't know that this country will be in a position in the future, given the world picture, to expect even that kind of gain. I won't be around to know how that will pan out.

I certainly agree there's serious need for more tax income but the fight seems to be where it comes from. I think it's pretty obvious it isn't very fair presently as Warren Buffett has noted quite simply by comparing percentages between him and his secretary. I'm disgusted with businesses/corporations who exercise great effort to avoid paying any taxes at all. There are a lot of loopholes that need changing and lots of groups undeservedly being subsidized.

Joared--The long-term growth rate was a guesstimate on my part. Obviously, had I assumed a higher long-term growth rate, the ROI would have been smaller; and, an assumed lower long-term growth rate would have produced a higher ROI. Thanks for your input.

A female newspaper columnist (probably an economist, but perhaps Marilyn vos Savant) once wrote a column advising young people how to save money. She observed that it is much easier to save a large amount of money if one has a large amount of income. She gave an example that went something like, "You can save 50% of $10,000/year and come out with a lot of money; but, if you save 10% of $50,000/year it is a lot easier to save the same amount!" She advised getting a good education in a field in which one might expect to make good money.

NPR had Pres Reagan's former economic advisor (can't remember his name or title) talking about the deficit and debt, this morning. He reminded people that Pres Reagan increased taxes three (or four?) times to keep the debt from growing more than it did.

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