FAA shares blame also

Newps wrote:



Matt Barrow wrote:

"Newps" wrote in message
...


Stan Gosnell wrote:
In the long run, the

stock market will never increase at anything close to 10%,


The average is 11%.



There's a lot of people have done very well just doing indexes.


That is the indexes. As a federal employee that's also all i have
access to. I should have between 1 and 2 million in my 401k when I
retire, depending on the market and when I decide to go.

The real question is, what will the cash flows be if you have say $1MM
and live for 20 years? People often forget that 401K contributions are
often taxable as many use before tax contributions and also you need to
figure the withdrawals considering both the ongoing earnings of the 401K
and the need to increase withdrawals each year to cover inflation.
Often the net amount you get each year is surprisingly small after taxes.

You need to make a gamble on your lifespan when you set up your 401K
withdrawals to avoid running out of money before you run out of life.
SS takes care of that by paying until you die and giving COLA increases
each year as well. If you live a long time, you can win with SS, but if
you don't, then you lose, although your spouse will get a portion of
your benefits in many cases.


Matt

Matt Whiting wrote:



The real question is, what will the cash flows be if you have say $1MM
and live for 20 years? People often forget that 401K contributions are
often taxable as many use before tax contributions and also you need to
figure the withdrawals considering both the ongoing earnings of the 401K
and the need to increase withdrawals each year to cover inflation. Often
the net amount you get each year is surprisingly small after taxes.

You need to make a gamble on your lifespan when you set up your 401K
withdrawals to avoid running out of money before you run out of life. SS
takes care of that by paying until you die and giving COLA increases
each year as well. If you live a long time, you can win with SS, but if
you don't, then you lose, although your spouse will get a portion of
your benefits in many cases.

My 401k is only one of three legs of my retirement income. Assume I go
until 56 when the FAA says I must retire. I get social security upon
retiring, probably about $29K per year. I also get a pension. Leaving
at age 56 I will get 42% of my base pay, that's another $57K per year.
So if I take only 5% of my 401k per year that gives me $50K and my 401k
grows. More likely I'll take 10-12% per year and leave the principal
alone. 11% would be $110K per year for a total yearly income of damn
near $200K per year. Most people try and figure at what percentage
below 100% they figure they can live on after retirement. My income
should increase by 50% and with some more 30% market returns like we had
in the 90's maybe more than double. But for now at age 40 I will
continue to put the IRS max into my 401k, currently $14K per year.