The Real Toll Car Depreciation Takes On Your Net Worth.


Getting the Most Value from Your “Geriatric Cruiser”

By Dennis Miller

For many a car lover, retiring rich requires the end of a lifelong love affair. I empathize with them all; I’ve had my own romance over the last 50-plus years.

Cars have a special resonance for people of my generation. George Lucas’ classic coming of age film American Graffiti is proof positive of that. As teens we flocked to auto dealers when new models came out and fantasized about actually being able to own our favorite. And let’s face it: cool cars were chick magnets. In our 20s and 30s, with the help of a friendly finance company, those dreams became reality, and every few years we’d get the new car itch again.

As children left the nest, many of us upgraded to the luxury brands befitting our positions in life. My first luxury car was a Cadillac, though a friend told me I was too young to drive one.

When my parents moved into a senior community in Sarasota, Florida, I asked Dad, “Do all retired people drive white Buicks?”

Dad grinned and said, “No, some drive Toyotas, Chevys, and Fords—practical cars. But yes, most are white.”

My niece calls these cars “geriatric cruisers.” And I should confess to agreeing with that stigma for quite some time. At 74, I’m not quite ready to throw in the towel and buy a geezer-mobile. Nonetheless, our children were horrified when we traded in our Lexus and bought a Toyota Sienna. There’s nothing cool about a minivan.

Let’s face it: for many of us, our car is strongly linked to our self-image. But with age comes wisdom (hopefully). Unless your portfolio is exceptionally flush, retirement is a good time to break up with luxury cars and use some logic. Cars are for transportation, and they are very expensive.

The Real Price of the Crown Jewel of Geriatric Cruisers

A nicely equipped 2014 Buick Regal—the crown jewel of geriatric cruisers in our part of the world—should cost around $40,855 out the door. Let’s put that in perspective for a retiree: If you have a $1,000,000 portfolio earning 5%, you have $50,000 in income. After paying taxes on your investment income, that Buick Regal will wipe out your net income for the year.

Then there’s the cost of operating the vehicle: gas, oil, maintenance, insurance, licensing, and other fees. The biggest ongoing cost, however, is depreciation. Although no one writes a “depreciation check” each month, it’s still eating away at your net worth.

Depreciation is the reduction in an asset’s value over time. For automobiles, the first hit comes in a matter of minutes. Drive the car around the block, and it’s no longer a new car; it’s used.

The average first-year depreciation for a car is [Continue reading]

Are Annuities for You? Plus 9 Buying Tips


9 Need-to-Know Tips for Buying Annuities… And Knowing When They’re Not For You

You’re probably something of an expert in your own field—and that field probably isn’t insurance or annuities. How, then, can you work through the minefield of clauses, guarantees, and pages of small print? Here are nine ways to start.

AnnuitiesWhile you may feel uncomfortable doing this, you’re the one putting down thousands of dollars, and you have every right demand this. Remember: caveat emptor! It’s the buyer who must beware; you must protect yourself. Ultimately, the language in the annuity contract is what matters, but it doesn’t hurt to memorialize your verbal agreement with the agent in writing.

Hopefully your agent is totally honest and will help write the agreement, and both parties can sign and date it. If the agent starts to waffle, trust your instincts.

  • Tip No. 1 – Buy an annuity only for the contractual guarantee. You’re only guaranteed what’s written into the contract. The language must be simple to understand. If you don’t understand it, don’t sign it.For example, one contract I’ve seen said: [Continue reading]

Give Your Kids or Grandkids a Financial Boost

Roth IRA for Child

Summer is  a great time to teach your children about saving money for retirement and an interesting way to do it is by setting up a Roth IRA for them. Remember a Roth IRA is slightly different than a standard IRA. In a standard IRA you contribute … [Continue reading]

Key Facts About Your Family Insurance Plan

Insurance

Every family needs several different types of insurance. Some offer protection for the near term, and some for the long term. Both types are important for protecting your family's financial future. Make sure your family insurance plans are up to date … [Continue reading]

Why We Lied to Our Kids about Their Inheritance

Mark_Ford

How to Preserve Family Wealth and Provide Financial Benefits to Your Children Without Spoiling Them: A Lifetime Project The finest inheritance you can give to a child is to allow it to make its own way, completely on its own feet. – Isadora … [Continue reading]

Retirement Guard Duty 101

Retirement 101

By Dennis Miller I was just a kid—barely wet behind the ears. At two minutes before midnight, the sergeant of the guard and I marched onto the runway tarmac. Following protocol, I formally relieved the previous guard of his post. This was … [Continue reading]

10 Ways to Screw up Your Retirement

Retirement Planning

By Dennis Miller, Senior Editor, "Miller's Money Forever" There are many creative ways to screw up your retirement. Let me show you how it’s done. 1) Supporting adult children-- My wife Jo and I have friends with an unmarried, unemployed … [Continue reading]

Everyone Can Learn at Harvard (Infographic)

MOOC

The Rising Power of MOOCs: Now, everyone can learn at Harvard (or Yale, or…) 3 years ago, MOOCs were an idea. Now…. 5 million: number of students signed on to MOOCs, around the world 33,000: the average number of students that sign up for a … [Continue reading]