|
Posted by Samson on August 2, 2007, 6:32 am
A question about compensation for elected officials has come up in a
local community forum. One of the ways that the city council members
are compensated is with life time health benefits if they serve six
(probably consecutive) years. How does one go about calculating
that?
Let's say that there is at least one known factor: The health
insurance policy goes for about $300 a month for a member who is 50
years old.
Thanks,
Samson
|
|
Posted by Bill Woessner on August 2, 2007, 10:14 am
> Let's say that there is at least one known factor: The health
> insurance policy goes for about $300 a month for a member who is 50
> years old.
For a rough estimate, you can apply the rule of 25. The rule of 25
says that, to generate $1 of annual income you need $25 in
investments. This accounts for inflation and assumes that you never
touch the principal. The rule of 25 is pretty conservative, but it's
a good starting point.
So $300 per month is $3,600 per year. Multiply by 25 and you get
$90K. That's a nice bonus for 6 years of service.
--Bill
|
|
Posted by bo peep on August 2, 2007, 10:54 am
> The rule of 25
> says that, to generate $1 of annual income you need $25 in
> investments.
Since health care costs inflate noticeably faster than the cost of
ordinary goods and services, a x25 factor might not be enough.
|
|
Posted by joetaxpayer on August 2, 2007, 11:11 am
bo peep wrote:
>
>>The rule of 25
>>says that, to generate $1 of annual income you need $25 in
>>investments.
>
>
> Since health care costs inflate noticeably faster than the cost of
> ordinary goods and services, a x25 factor might not be enough.
True, but as I read Bill's reply, I thought that the 25 rule is a very
conservative approach to be sure to not outlive your money, that an
immediate annuity with no beneficiary payout would likely be above the
4%, so your point and mine may just average back to Bill's number.
JOE
|
|
Posted by rick++ on August 3, 2007, 9:55 am
> Since health care costs inflate noticeably faster than the cost of
> ordinary goods and services, a x25 factor might not be enough.
MEdical inflation is about 15% or doubling every five years.
Regular inflation is 3-4% or doubling about every 20 years.
You have to look at total costs for medical inflation. Some
years the premium goes up a lot, while other years they increase
the deductable and copays. You have to track premiums plus
out
of pocket for several "ordinary" years.
|
| Similar Threads | Posted | | bank | April 8, 2007, 6:44 pm |
| When a bank underwrites.... | April 10, 2007, 8:33 am |
| bank CDs vs. T-bills | August 21, 2007, 10:29 am |
| Bank of America? | November 16, 2007, 5:13 pm |
| Bank Accounts | June 13, 2008, 7:24 pm |
| Indymac Bank | July 13, 2008, 4:45 pm |
| IRA To Swiss Bank | September 13, 2008, 3:21 pm |
| open a bank account | November 15, 2006, 4:11 pm |
| Buy bank stocks w/8.5% dividend? | January 20, 2008, 12:06 pm |
| fdic ?--protecting bank accounts ? | March 9, 2007, 4:59 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap