I agree that very few of them beat the averages ... how could they? They have offices to run, computers, phones, postage and staff ... and buy and sell a lot of stocks, and though their fees are low, many of them pretty well turn over their whole portfolio annually. Those that do that ... have a lot of capital gain to report to you (you hope!) annually ... of which the income tax people want their, in that case, ongoing, share. And they have that management expense fee (often higher than the income tax cost) that reduces their effective rate - and they get their guaranteed rate, whether they produce or not! Also - when it comes time to sell those units, you'd better have kept records of not just your original cost ... but also of all of those declared payouts that were reivested, in order to calculate your capital gain. Many mutual funds keep track of your average cost per unit ... that works O.K. ... until they get bought out/merged, etc. and usually the new system just starts from when they took over. Have you checked Morningstar, the agency that rates them? What about learning how money works and buying individual stocks yourself? I bought shares in one of Canada's half dozen or so nationwide banks over 40 years ago for about $4.20 per share, that was paying about a dime or a bit more as annual dividend. A year ago May each of those shares was "worth" (i.e. "could be sold for") $107.00 ... but they were heavily involved with the U.S. stinky problem mortgage situation, so their price slipped down through the 90s, 80s, 70s, 60s into the 50s ... and have recovered a bit to low 60s. Some here recently said that, of course, I sold ... no, I hadn't. Partly, at the time of the high price, didn't have any idea that it would slide so far ... plus, it went from 4.5 doubles in 41 years to about 4 doubles in those years ... which, apart from the increased income via dividends over those 40 years, is a pretty good rate of growth. But if I were about to buy more bank shares, it'd be a different one, as this is not their first goof in recent years. Recently dividend rate grew from $2.80 to $3.08 to $3.48, which earlier in Canada were tax-advantaged, and recently that advantage increased substantially: so that a person with solely that kind of income went from tax-free $28,000. - 30,000. tax-free, to $46,345. tax-free, an increase of over 60% in one year. Further ... I've subscribed to what I consider Canada's best personal money management magazine for quite a number of years, that carries no ads, is pretty well all text - and the writers respond to subscribers' questions. Local subscribers meet regularly in about 40 places across Canada and I've met with about 20 others monthly here for about 8 years or so: many perspectives and I've learned a lot, there. Cost? Gas to get there, wear and tear on the car - plus, time ... a couple of hours a month, and another at the coffee house after, with a few of the guys and gals. If I'd put that $4.20 into the average even equity-based mutual fund 41 years ago, would the size of that asset have doubled that well? Rather doubtful, I think. A couple of mine have - several haven't. But I don't want to dump 'em this year, due to forced sale of a major holding - Canada's largest telco going private (damn it!). And that's with the income reinvested - and my shares paid me dividends quarterly, with frequent increases, for 41 years. However - the big proviso - the average growth rate has not been that good. I've avoided some taxes as I went along, but that piper will have to be paid, one of these days. Whether while I'm alive ... or for my executor to take care of, before dispersal of my estate to my kids and charities. Had I put that $4.20 into a bank account, GIC, bond, etc. where the number of dollars of principal has been guaranteed, would I have developed any such result? No way! Apart altogether from the tax advantages in the equity-based game (whether of the mutual fund or individual investment variety)! Did I say earlier ... that I prefer to run my own show? Further ... though it was 60 years ago, I grew up on a farm, and farmers are used to irregular income, with loss of some potential income when a cow dies, or reduced yields due to drought or flood (but the price of diesel fuel, fertilizer had to be paid, regardless). And seasonal income, for many. How many town folks could handle getting paid once or twice a year? Plus, they manipulate not only capital, but labour - to repair the tractor, or trade it on a bigger one? Which would require getting bigger tillage equipment, as well. Put a new roof on the barn, this year ... or build it larger? Farmers were much more used to uncertainty than city folks. Or, rather, than city folks used to be. Now, with pensions shrinking and disappearing like fog in the morning sun ... and, in many areas, the values of one's equity in one's owned home (well, "partly-owned", considering the mortgage), and with employment being uncertain, with full-time work scarcer, there have been major changes in the economic picture for city folks, as well. Back up and look at the far horizon ... occasionally, at least. Good wishes for increasingly more effective use of not only your income, but of your assets, as well. ole joyful

I have been thinking a lot about comfort zones since Katrina. People refused to get on planes to go to states with low unemployment rates, and inexpensive housing so I asked myself where I would be willing to go. I am from Washington State. I would be pretty comfortable going to Oregon, Idaho, Colorado, Montana, the Dakotas, and Arizona. Anything else seems too far away, too foreign, too unfamiliar. I think this carries over into retirement planning. I couldn't go to Georgia because it is too far away. Until it got too expensive, people from Washington who wanted a warmer climate when they retired went to Caifornia. Now it is Arizona and Arizona is where I plan to go. It seems to me that people in the Northeast are more likely to stay on the east coast. I don't know what people in the heartland do. Do you go to Texas, New Mexico or ? Part of it is that I don't want to be more than a 3 hour plane ride from my children, but I think there is more to it than that. There may be very little difference from one state to another, but I don't know that and something in me seeks the familiar. Coming from a "blue" state, I will settle into the only "blue" county in Arizona. I would like to be more adventurous, but I always find myself seeking out the familiar. Someone I knew years ago had moved to Washington from the east coast. She said that it was so important to her that television was the same everywhere. Some people derided her comment because of her reliance on television, but I think I know what she meant. Once while visiting in South America, I found myself watching Plaza de Sesamo (Sesame Street) just for the familiar characters.

I'm not retired yet, but I'm getting close. I anticipate retiring at age 55. We've planned carefully, and we expect things to work out like this: Early retirement years: With our house and cars paid for, my pension will cover the bare-bones of our month-to-month needs. I will have my basic medical paid, and I will be able to cover him (at cost). We will be eleven years too young for Social Security. We intend to work either part-time or seasonally rather than dip into our savings too early. For example, if I substitute teach 8 days a month, I'll have as much money as I make now. We're also interested in "fun work" such as working at the seasonal Renaissance Faire. We have plans for travel and other such things in these years. We are not against using our savings at this point, but we want to do it sparingly /want to see that money continue to grow for later years, when we may need it more for medical issues, and we may see inflation eat into our spending power. Middle retirement years: 67 is full retirement age for both of us, and we're operating on the assumption that we'll begin collecting Social Security at 67. With two Social Security checks, we stop any part-time work in which we've been involved, and we will have more money than we are spending now ... and we won't have withdrawn much from our retirement savings. Later retirement years: Looking at our ages and health, this probably means just me. I'm assuming his Social Security will be gone, and we are assuming that inflation will hurt the value of my pension ... so it may not be enough to cover my basic needs at this point, especially because I may be paying for house cleaning, etc. -- things that I won't need to pay for in early retirement. However, at this point it'll be fine for me to dip into our savings. We have calculated the above general thoughts using real numbers, and we feel confident about financial security in our retirement years. Our biggest concern, of course, is medical needs. Regardless of what was taught, any teacher should use correct spelling, punctuation, and sentence structure. I do agree that anyone who teaches should be able to write well; however -- in my experience -- it's the elementary teachers who come across worst in terms of the written word. All retirement programs that cover governmental employees (at any level of government) are funded by taxpayers. Did you mean something else? False, but not entirely false. I'm a state employee. When I retire, I will have contributed 8-10% of my salary to the state pension fund for 30 years. That money has been invested and has grown. The taxpayers won't be funding my retirement; rather, the state will be returning my own investment to me. HOWEVER, a pension is a defined benefit program, which means I cannot outlive my investment. If I retire at 55 and live only 5 years, the state wins ... they get to keep a bunch of my money. and I'd die unhappy knowing that I couldn't leave that money to my kids. On the other hand, if I live to be 105, my money will run out, and -- yes -- the taxpayers will kick in for my later years. Actuaries work on these numbers, and they predict how long the average employee will live -- and that's how they decide how much to withdraw from our paychecks. On average, people will live just about long enough to "make back" their own contributions plus interest earned. I'm fine on retirement funds and withdrawing 3.8% per year. I'll take SS at age 62 since there's no reason not to and will leave me more disposable income. Well, there is one reason not to take SS at age 62: For every year you take your benefits early (early meaning prior to your full retirement age, which is probably 67), you sacrifice 6% of your benefit. To say it differently, if you could collect $1500 at full retirement age ... and instead you take it five years early (at age 62), your monthly benefit would only be $1050 ... that's a great deal of income to give up for the rest of your life. Obviously, I made several assumptions in that equation, but consider exactly how much that 6% per year would be for you personally.

First of all, thank you for your caring, for your own personal stories and for your wonderful advice. I really needed it all! I'm sure that this cold virus that's knocked me out these last 3 days is because my non-stop stress had left my immune system a bit lacking. BTW, I am so liking and needing all of your advice here, that I'm printing it ALL out to keep rereading. It's like a pick-me-up before bed and first thing in the morning after DH heads off to work. Second, Oakley, I hear you and everyone who's warned me that having DH around a lot more during the day will be a lot like having him in my way and under foot (LOL)!. Just a (kind of) funny story: Last month, instead of heading straight into his study after dinner, DH told me that we needed start getting into the retirement mode and so he was going to help me clear the table and do the dishes every evening. Ummm, ok. Next thing you now, he's telling how to do dishes "better"! I put up with it for 2 nights and then kicked him out of the kitchen! Don't get me wrong, he's the kindest, most thoughtful guy and he actually is really good at just about everything, including cooking. But, he's been the boss of his/our clinic for 37 years with no one above him and so he's just used to telling his staff and his patients what to do. I not take well to being "bossed around". He's learned this over the years, but (sigh) I see it starting up again some after he retires. To all of you who suggested not throwing him a retirement party for our close friends between Christmas and New Years, good advice. I'll wait until after. Thank you. To all who suggested hobbies: DH has been an avid golfer for almost all of his life. He is the last of his foursome to retire, so he will have that for sure. Like I mentioned, he is an excellent cook who loves it, and he does want to help cook and plan our meals. That's ok. He's good company to grocery shop with to some extent, although like most men who don't shop on a regular basis, he tends to forget and block the aisles with his cart. AND, being a doc and former pharmacist he drives me crazy sometimes reading the ingredients on every package! Anyhoo, he loves to read, and hike, and work around the house. And since we have many projects waiting for him, I'm sure he'll have plenty to do. As for me, I don't golf and don't enjoy hiking. But, I do plan to start volunteering again after the first of the year. Regarding volunteering, good idea that we should start talking about it now! With both DH and I having worked in medicine for many years, we do want to get involved in that aspect. I did MUCH volunteer work at my kids' school over the years and am thinking about that again. Another opportunity may be with Habitat for Humanity, which one of our good friends is involved in. For DH, as although I love to decorate, I don't like sawing, hammering, etc., and absolutely hate painting. Also, I've just learned that one of my neighbors is involved in gathering and distributing home goods for foster kids who have timed out of the system/program. She and others help set them up in their own places with furnishings and utensils, etc. That would be right up my alley! Regarding becoming couch potatoes versus keeping in shape, we have an Elliptical, Body Blade, weights and a Bowflex here and are planning on turning one of our guest rooms into a workout room right after Christmas. I'd also like to join a gym, for swimming, which I love. DH is slender and in great shape, but sinks like a rock in the water, so he’s not interested in swimming for exercise (LOL)! And, neither one of us is much into watching tv series, etc. We do love watching the news every morning and evening, but some golf, college football (we're BIG Sooner fans!), some History Channel and (for me) some HGTV is pretty much it. My darn keyboard is acting up. It keeps missing letters and freezing up! I don’t want to lose what I’ve already written, and so I’ll post this and go on from here.