Friday, June 22, 2012

Advice to Karen Klein: Take the Money and RETIRE!

By now, everyone who hasn't been living under a rock is aware of the vile bullying of 68-year old school bus monitor Karen Klein, at the hands of some loathsome juvenile delinquents. (No, I don't mince words, or use euphemisms - and neither should anyone after watching this video (scroll toward the middle of the news page):

No sooner had the vid made it onto Youtube than it became viral and a worldwide sensation, with outrage pouring in from places as far away as Australia. People in civilized countries (such as those that still evince some respect for their elders and revile bullying in general) were aghast that the little maggots could even go so far as to taunt Karen over her son who had committed suicide. As they say, that behavior is the pits.

But, as can be observed in the video, Karen remained seated and took the abuse stoically which was a large part of what drew admiration. As news reports point out, Karen isn't being paid a hell of a lot to take this crap, about $15,000 a year. But so many well wishers felt bad for her that they set up a fund, ostensibly to "send her on vacation". As reported on this morning's CBS Early Show that fund now stands at just under $450,000.

Vacation...Vexation.....It's time for Karen to RETIRE!

Why hang around a peaknuckle job where you're not appreciated, and with the potential for such incidents to recur? (Oh sure, the kids have apparently "apologized", but anyone with working neurons knows that's more driven by pressure from irate parents than from heartfelt acknowledgement of what they subjected this woman to.)  Why go back to that crap?

The fact is, the money so far accumulated for Karen is more than enough to allow her to retire comfortably, without ever having to face any potential harassment again, say when a new crop of congenital misfits enters center stage - and whose parents may not be as rigorous about discipline. (Especially after this incident recedes into oblivion.)

Let's look at the financials:

Even after Uncle Sam and her state (New York)  take out their respective taxes, Karen will be left with around $270,000.  With this one lump sum, she can purchase an immediate fixed annuity that will provide her with $1,542 a month lifetime income. As long as she lives (and actuarial tables show the average American woman still kicking at 68 can expect to live to at least 83) she will have that money coming in. Add in Social Security (say $1000 a month estimated) and that yearly income total climbs to $30,492 or more than double what she's earning in her job.

That amount will more than allow for occasional vacations and other luxuries she can't afford currently, by virtue of nearly doubling her disposable income.

If Karen wants to put aside a liquid fund for emergencies, and not tie all her money up in an annuity (or ladders of such) she can still come out ahead. Let's say then she opts to put $120,000 away for reserve money, say in a money market fund (Capital One currently is offering about 0.50%) she can have that money at the ready while also earning interest of about $650 a year. If she buys an immediate fixed annuity with the balance ($150k, and notice how I am not factoring in stocks or bond funds, or mutual funds at all....with good reason...because they are about to take a nose dive when the Eurozone problems come- a -calling) she will generate $856 a month based on a single life income and that adds to $10,273 a year. Add in her estimated Social Security and the annual income total comes to $22, 273/yr. Again, a lot more than she's earning.

For those who'd like to see or get an estimate of different immediate fixed annuities for differing amounts and ages, go to:

Here's the deal: I've seen too many Americans raised and nurtured on the Calvinist 'work til you drop dead'  ethic work too long and postpone what good life, or at least better life, they could have until too late. Time waits for no one, and as a person ages, health problems tend to multiply. The fantastic Swiss Alpine trip planned at age 50 for a retirement in 15 years or 20, may never come to pass if the person or couple is struck by multiple serious health problems. One cannot assume anything!

Thus, when the opportunity presents itself, the best option is always to take the path that most immediately enhances one's life options and quality and using that remaining time on Earth for self-edification, improvement.  Read, learn, volunteer, TRAVEL where and when you can! Karen opined in a news segment last evening that she desired to take "an RV trip across America". Well then do it! And do it at your pace without having to worry about the need to report back to work as a monitor for ingrates and n'er do wells. (Of course, many will say most of the kids weren't like that, and plausibly in the future most won't be either. Maybe, but why take the chance on a repeat that may be even worse, with another generation of kids that may be more degenerate than those that abused here. Hell, life's too short to make such bets!)

Anyway, that's my advice to Karen, for what it's worth. I hope (for one) that she takes it!

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