Wednesday, September 9, 2015

Two Common Math Errors That Can Ruin Your Retirement

May 14, 2015
The Fiscal Times: 7 Common Myths that Can Ruin Your Retirement

Factoring in inflation, and that non-recurring expenses tend to increase with age, that amounts to some $40,000 per year for a 30-year retirement.

I've been retired 16 years. I apparently need $40,000 per year for health care expenses to go another 30 years. That's a whopping $1.2 million. WTF! Two people would therefore need $2.4 million. It better at least come with a bonus foot massage!

A typical couple would need nearly $250,000 on hand to have a 90 percent chance of covering all their medical expenses in retirement.

How am I supposed to turn $250,000 into the $2.4 million you just claimed that I need? I know. I'll invest in a 30-year treasury at 3% and let the power of compound interest perform a g#%^*mn f%^king miracle, lol. Sigh.

At an average 3 percent rate, your costs will double every 10 years.

1.0323.5 = 2.00

Assuming a 3% inflation rate, it would take 23.5 years for costs to double. Not 10. If close only counts in horseshoes, hand grenades, and nuclear war, then you've gone scoreless but at least you still have all of your limbs and are completely free of radiation, lol. Sigh.

The financial math in this article is not like rocket science, assuming you don't want the rocket to tip over on the launch pad then expend all its fuel in a single explosion.

Myths, assumptions, and bad math, baby. That's what I'm talking about. Sigh.

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