(Topic ID: 286379)

Retirement! Hacks, tips and insights to get there faster.

By DadofTwins

3 years ago


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  • 971 posts
  • 158 Pinsiders participating
  • Latest reply 56 days ago by Zambonilli
  • Topic is favorited by 120 Pinsiders

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Topic poll

“At what age do you plan on retiring?”

  • 45-55 96 votes
    30%
  • 56-65 169 votes
    53%
  • 65 and over..... 53 votes
    17%

(318 votes)

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34
#901 3 months ago
Quoted from Jackalwere:

I'm off track. I was hoping to retire last year but was unable to pay off the house due to settling my roommate's estate, I had to close his IRA to distribute funds to family and took a $32k tax hit, which I have overcome but had to refinance his house in my name instead of paying it off. The good news is the estate is settled so I'm done with that, and my house payment is only $600/month despite the 6.5% interest rate.
My company wanted me to stay longer so they gave me a new, less stressful job. They want me there for 5 more years but I will probably be done in 1-2 years. In 2 years I'll be 58 so I'll do the rule of 55 and draw off my 401k for any major unforeseen expenses that cash can't cover until I reach 62. For medical I don't need COBRA now, I'm planning on using VA, just have to get ACA until I'm off the VA waiting list. I also have funds in my HSA.
My property values continue to rise, the 3 properties are at almost a million in value. The plan now is to snowbird, sell the main house, sell the beach house, develop hookups for my paid acreage next to the beach house, and camp there during the summer in a travel trailer with a small shop/garage for more room. This will also keep taxes low and it's still 5 minutes to the beach. Then retreat to a winter condo in Florida or Texas.
I go back and forth on paying taxes and HOA for a condo, but on the other hand I'd have to pay taxes on a home and I won't have to deal with yardwork, pests, maintenance etc., just paddle my kayak, fish, volunteer, and play pinball. In fact most HOAs + property taxes are around $1100-$1200, cheaper than an apartment. I'll buy with proceeds from the house and beach house sales and be debt free with a ton of equity. Plus I can have someone run my condo as an airbnb or Vacasa while I'm not there during the summer if I want more money, just have to buy in a place that's not 55+ only.

Well fellow Pinsiders, somehow I did it. I hit retirement just 3 months after my previous post (in which I had thought I was 2 years away). Today was my last day. The company put forth an Early Retirement Offer (ERO) but it was age-restricted and I did not qualify. I was bummed because it was a great package. The company was hoping for 60% participation but I heard that only 20% signed up. Realizing that more cost-cutting was going to be needed, I approached my boss and volunteered - if there was another reduction in force I'd like to be considered. The one part of my new position that I had been looking forward to was increased travel, but travel was one of the first expenses to be cut during cost reductions, and with not much else to look forward to in the job, I was prepared to leave next spring.

The company did some further cost-cutting and having "volunteered", I ended up with a great severance package (mostly due to my many years there):

- Over 52 weeks of pay, paid out as a lump sum
- Over 52 weeks of medical/dental/vision coverage through COBRA, with same benefits and premiums that I had before, so no change in cost
- Some of my future unvested stock options vested immediately ($3k) (but I did have to forfeit the rest, over $10k)
- Receive normal bonus in December (about $4k)
- Vacation cashout (not part of package, normal policy, about $1.5k)
- Job placement assistance
- Ability to claim unemployment (not possible with the ERO, at least not right away)

Had I given a 2 week notice next spring, I probably would have only received a goodbye lunch and given a gift card and a plaque. Sometimes you just have to be in the right place at the right time. I'm going to do some traveling for a few months to visit friends and family. I decided I'm going to rent a furnished apartment or house in Texas or Florida for winters, instead of buying a condo. Property has gotten expensive in Florida, and insurance is through the roof. One attractive thing about renting is that it will take years to make a dent in my savings, and I can move around to different cities whenever I want with minimal costs (no furniture).

I'm calling this a semi-retirement. In a couple of months I hope to take a part time job doing something remote and low stress, like data entry, just to have some extra spending money, but I will not return to work full-time.

One thing I didn't know about the Rule of 55 that I saw on Forbes.com (and my tax advisor confirmed) is that if you take a new job that has a 401k, you cannot withdraw from your previous 401k penalty free. I knew that - the Rule of 55 applies to the 401k of your most recent company. What I didn't know is the exception: if you take a withdrawal from your previous 401k BEFORE you start a new job, you can continue taking withdrawals from that previous 401k penalty free even after you are in the new job. So it's good to take a distribution - even a small one - in order to access it again if you need to.

My stress has evaporated and I feel really good - I feel free! I'm a tiny bit terrified but at the same time overwhelmingly exhilarated to take this next step. I hope all of you experience that same feeling by getting there sooner than expected...

#902 3 months ago

Congrats! That sounds like an incredible offer

#903 3 months ago
Quoted from ZexZ:

I am a financial adviser and financial analyst in Canada and technicly, I retired 4 month ago at 33 with 60k/year with an increase of 7%/year for ever.

The present is not the futures and yes rate will go back down eventually.

Congrats! Well done. I am curious why you are certain rates will go back down?

I can not foresee rates going below 5-6% for years in fact I believe I will never see them that low again while I am alive

#904 3 months ago
Quoted from Jackalwere:

What I didn't know is the exception: if you take a withdrawal from your previous 401k BEFORE you start a new job, you can continue taking withdrawals from that previous 401k penalty free even after you are in the new job. So it's good to take a distribution - even a small one - in order to access it again if you need to.

Did not know this, seems like a no-brainer even if you have no plans to seek new employment

#905 3 months ago
Quoted from Jackalwere:

Had I given a 2 week notice next spring, I probably would have only received a goodbye lunch and given a gift card and a plaque.

Congrats, on your retirement and negotiating a good ending with your company. Every company I've worked for has given more to the employees fired for performance and disciplinary reasons than anyone trying to leave on good terms. Pretty messed up dynamic right now where you're better off never giving notice and you at least get some severance.

#906 3 months ago
Quoted from Jackalwere:

Well fellow Pinsiders, somehow I did it. I hit retirement just 3 months after my previous post (in which I had thought I was 2 years away). Today was my last day. The company put forth an Early Retirement Offer (ERO) but it was age-restricted and I did not qualify. I was bummed because it was a great package. The company was hoping for 60% participation but I heard that only 20% signed up. Realizing that more cost-cutting was going to be needed, I approached my boss and volunteered - if there was another reduction in force I'd like to be considered. The one part of my new position that I had been looking forward to was increased travel, but travel was one of the first expenses to be cut during cost reductions, and with not much else to look forward to in the job, I was prepared to leave next spring.
The company did some further cost-cutting and having "volunteered", I ended up with a great severance package (mostly due to my many years there):
- Over 52 weeks of pay, paid out as a lump sum
- Over 52 weeks of medical/dental/vision coverage through COBRA, with same benefits and premiums that I had before, so no change in cost
- Some of my future unvested stock options vested immediately ($3k) (but I did have to forfeit the rest, over $10k)
- Receive normal bonus in December (about $4k)
- Vacation cashout (not part of package, normal policy, about $1.5k)
- Job placement assistance
- Ability to claim unemployment (not possible with the ERO, at least not right away)
Had I given a 2 week notice next spring, I probably would have only received a goodbye lunch and given a gift card and a plaque. Sometimes you just have to be in the right place at the right time. I'm going to do some traveling for a few months to visit friends and family. I decided I'm going to rent a furnished apartment or house in Texas or Florida for winters, instead of buying a condo. Property has gotten expensive in Florida, and insurance is through the roof. One attractive thing about renting is that it will take years to make a dent in my savings, and I can move around to different cities whenever I want with minimal costs (no furniture).
I'm calling this a semi-retirement. In a couple of months I hope to take a part time job doing something remote and low stress, like data entry, just to have some extra spending money, but I will not return to work full-time.
One thing I didn't know about the Rule of 55 that I saw on Forbes.com (and my tax advisor confirmed) is that if you take a new job that has a 401k, you cannot withdraw from your previous 401k penalty free. I knew that - the Rule of 55 applies to the 401k of your most recent company. What I didn't know is the exception: if you take a withdrawal from your previous 401k BEFORE you start a new job, you can continue taking withdrawals from that previous 401k penalty free even after you are in the new job. So it's good to take a distribution - even a small one - in order to access it again if you need to.
My stress has evaporated and I feel really good - I feel free! I'm a tiny bit terrified but at the same time overwhelmingly exhilarated to take this next step. I hope all of you experience that same feeling by getting there sooner than expected...

Soak it in...congratulations!

#907 3 months ago

With CD's at a decent rate right now, what's the concensus on contributing to a CD this year or my IRA?

#908 3 months ago
Quoted from JBtheAVguy:

With CD's at a decent rate right now, what's the concensus on contributing to a CD this year or my IRA?

Depends. Some of those CDs are Callable. Compare rates to treasuries and decide. Treasuries also provide more liquidity.

-1
#909 3 months ago

Fed will start dropping rates in the spring. You think they wanna get blasted on truth social for another 4yrs?

Quoted from JohnTTwo:

Congrats! Well done. I am curious why you are certain rates will go back down?
I can not foresee rates going below 5-6% for years in fact I believe I will never see them that low again while I am alive

#910 3 months ago
Quoted from JBtheAVguy:

With CD's at a decent rate right now, what's the concensus on contributing to a CD this year or my IRA?

When do you need the money? If it’s in the next few years, buy a penalty-free CD on raisin.com. If it’s for retirement, stash it in your IRA.

I parked some cash in a 5.4% penalty-free 16-month CD, which feels like the best place for it right now. But I’ve also maxed out my 401-k (I make too much to contribute to an IRA).

If you want ready access to your money, get a high-yield savings account (HYSA). I’m getting 4.6% with SoFi, but I don’t expect that rate to last, which is why I’m also buying CDs.

#911 3 months ago
Quoted from swampfire:

When do you need the money? If it’s in the next few years, buy a penalty-free CD on raisin.com. If it’s for retirement, stash it in your IRA.
I parked some cash in a 5.4% penalty-free 16-month CD, which feels like the best place for it right now. But I’ve also maxed out my 401-k (I make too much to contribute to an IRA).
If you want ready access to your money, get a high-yield savings account (HYSA). I’m getting 4.6% with SoFi, but I don’t expect that rate to last, which is why I’m also buying CDs.

You could get the same rate or better in treasuries AND they are free from state income tax (assuming it’s not in a tax deferred account). CDs are rarely the best choice. I’ve been buying 3-month treasuries for much of the past 8 months with the cash portion of my portfolio, average ytm of about 5.5%.

Check money market funds at your brokerage. I am getting 5.26% in a Schwab mmf. It is a prime fund, but even their govt fund is offering 5.06% (mmf symbols SNOXX OR SWVXX).

#912 3 months ago
Quoted from Lermods:

You could get the same rate or better in treasuries AND they are free from state income tax (assuming it’s not in a tax deferred account). CDs are rarely the best choice. I’ve been buying 3-month treasuries for much of the past 8 months with the cash portion of my portfolio, average ytm of about 5.5%.
Check money market funds at your brokerage. I am getting 5.26% in a Schwab mmf. It is a prime fund, but even their govt fund is offering 5.06% (mmf symbols SNOXX OR SWVXX).

An alternative to buying treasuries is a fund like TBIL for more liquidity. I’ve also been putting some cash in a long term U.S. bond fund (TLT). It may be a bit more risky, but if interest rates stay steady or drop (likely at this point), the fund will increase nicely.

#913 3 months ago
Quoted from Spelunk71:

An alternative to buying treasuries is a fund like TBIL for more liquidity. I’ve also been putting some cash in a long term U.S. bond fund (TLT). It may be a bit more risky, but if interest rates stay steady or drop (likely at this point), the fund will increase nicely.

Can someone explain when a bond fund goes up? I've done the three-fund portfolio,with my age in bonds, for 20 years and I've lost my ass on BND. You're saying once interest rates drop, then the BND finally does something? Should I sell then? Should I just buy silver ? I always thought the BND was to keep a floor of growth for the three-fund portfolio but when stocks crashed it lost as well.

#914 3 months ago
Quoted from Zambonilli:

Can someone explain when a bond fund goes up? I've done the three-fund portfolio,with my age in bonds, for 20 years and I've lost my ass on BND. You're saying once interest rates drop, then the BND finally does something? Should I sell then? Should I just buy silver ? I always thought the BND was to keep a floor of growth for the three-fund portfolio but when stocks crashed it lost as well.

Interest rates go up, bond prices go down. Personally, I don’t buy bond funds, rather own an individual security so I know exactly what I’m buying. The reason bnd didn’t do well is because stocks went down as interest rates were rising.

#915 3 months ago
Quoted from swampfire:

I make too much to contribute to an IRA

Income limit applies to deduction for IRA contributions. You could always make after tax contributions to a traditional, or you could backdoor a Roth. I’ve been doing a backdoor for years, easy with vanguard. Gets confusing if you have a balance in a traditional IRA though.

#916 3 months ago
Quoted from Spelunk71:

An alternative to buying treasuries is a fund like TBIL for more liquidity. I’ve also been putting some cash in a long term U.S. bond fund (TLT). It may be a bit more risky, but if interest rates stay steady or drop (likely at this point), the fund will increase nicely.

If I am looking at the correct security, TLT has been awful down 10% past year and -4% annualized past 5 years, not sure why you are in it. I dont speculate on where rates are going, just in bonds to capture yield. Tbil has been better, but you would do a lot better in individual securities. Tbil has returned a little over 4% past year less the .15% fee the fund charges. You could have been rolling 3 month treasuries at 5.4-5.5% with state tax free. Not sure if Tbil offers state tax free since it’s a fund.

#917 3 months ago
Quoted from Lermods:

If I am looking at the correct security, TLT has been awful down 10% past year and -4% annualized past 5 years, not sure why you are in it. I dont speculate on where rates are going, just in bonds to capture yield. Tbil has been better, but you would do a lot better in individual securities. Tbil has returned a little over 4% past year less the .15% fee the fund charges. You could have been rolling 3 month treasuries at 5.4-5.5% with state tax free. Not sure if Tbil offers state tax free since it’s a fund.

Yes, TLT has been awful as interest rates were rising. I just got into it recently. You’re right it is speculative. As long as rates don’t keep rising (and go down eventually) it will turn around (already been up in recent weeks). I just parked some cash in TBIL for convenience, but you’re probably right buying treasuries is a better approach longer term. My understanding is the funds offer the same state tax benefits.

#918 3 months ago
Quoted from Lermods:

You could get the same rate or better in treasuries AND they are free from state income tax (assuming it’s not in a tax deferred account). CDs are rarely the best choice.

I did the comparison. The 5.4% CD has no interest rate risk, because it’s no-penalty CD. GA’s tax rate of 5.75% knocks my yield down from 5.4% to 5.09%. The 2-year treasury yield is 4.88%, and if rates go up the value of that note goes down. Of course if rates go down, its value goes up. But for holding to maturity, the CD wins here - I just wish it was 24 months, not 16.

I bought a little bit of TLT in my IRA last week, which is pretty much a pure gamble that rates will fall.

#919 3 months ago
Quoted from swampfire:

I make too much to contribute to an IRA

I feel dumb - I haven’t checked the contribution limits in years, and I’m under the limit now (I also took a pay cut from the last time I looked). I can contribute to a Roth IRA now.

#920 3 months ago
Quoted from swampfire:

I did the comparison. The 5.4% CD has no interest rate risk, because it’s no-penalty CD. GA’s tax rate of 5.75% knocks my yield down from 5.4% to 5.09%. The 2-year treasury yield is 4.88%, and if rates go up the value of that note goes down. Of course if rates go down, its value goes up. But for holding to maturity, the CD wins here - I just wish it was 24 months, not 16.
I bought a little bit of TLT in my IRA last week, which is pretty much a pure gamble that rates will fall.

That’s a pretty good rate for a no penalty cd. An 18 month treasury yields about 5.1%, 5.25% for one year. I’ve just been rolling 3 month bills as rates have been rising, but does seem rates may have peaked for now, which should bode well for equities or maybe buying longer term treasuries.

#921 3 months ago
Quoted from JBtheAVguy:

With CD's at a decent rate right now, what's the concensus on contributing to a CD this year or my IRA?

Well, you can do both at the same time. The CD is the actual investment (like a stock, bond, or mutual fund). The IRA is the "container" that you're putting it into. You can buy a CD in an IRA. There are a lot of variables to consider for choosing an investment, but generally CDs are great short term investments (because they're stable) but horrible long term investments (because they don't earn much). If that money isn't going to be spent for at least 10 years, and you can tolerate the fluctuations, I think a stock based investment would give you better results. And in general, I always recommend maxing every tax advantaged account you have access to. The benefits are enormous over time.

#922 3 months ago
Quoted from Hench4Life:

Fed will start dropping rates in the spring. You think they wanna get blasted on truth social for another 4yrs?

I doubt the Fed knows about it or cares. "As of late April 2022, MarketWatch reported Truth Social had around 513,000 active daily users, compared to Twitter's reported active daily userbase of 217 million."

#923 3 months ago

Today I learned that if my family’s income is under $83,350, the long-term capital gain isn’t taxed at all. This opens up a retirement strategy I hadn’t considered: invest my brokerage account in a fund I’d normally hold in my IRA, sell the investment annually and re-buy to increase my cost basis (assuming the fund is going up). This seems even better than a Roth, since I don’t have to wait 5 years. But I’d do this in addition to a Roth (I just opened one today).

I can see why people hire financial advisors - the tax planning can be daunting.

#924 3 months ago
Quoted from nwpinball:

I doubt the Fed knows about it or cares. "As of late April 2022, MarketWatch reported Truth Social had around 513,000 active daily users, compared to Twitter's reported active daily userbase of 217 million."

I follow Twitter to see the other side of the narrative but it's kind of sickening with all the blatant fake stuff posted there, worse than Facebook. Wish there was somewhere that showed the truth from all sides

#925 3 months ago
Quoted from Irishbastard:

I follow Twitter to see the other side of the narrative but it's kind of sickening with all the blatant fake stuff posted there, worse than Facebook. Wish there was somewhere that showed the truth from all sides

Reuters. Associated Press. Get off social media, no cable news

#926 3 months ago
Quoted from Rdoyle1978:

Reuters. Associated Press. Get off social media, no cable news

Also middle of the road: BBC, The Hill, Wall St. Journal (leans a little right). This company charts media bias, I stick to things around the middle and leans left and leans right: https://adfontesmedia.com/wp-content/uploads/2023/08/Media-Bias-Chart-11.0_Aug-2023-Unlicensed-Social-scaled.jpg

#927 3 months ago
Quoted from Irishbastard:

Wish there was somewhere that showed the truth from all sides

It's hard. Very hard. I've settled on Reuters and Ground.news for most of my intake. Ground.news shows you where the reporting bias is, which is pretty cool. Part of what I've discovered is if you totally ignore a very partisan source, you will likely not see (on occasion) some useful reporting that you otherwise wouldn't.

Sometimes I think the bias is unintentional. Take NPR - I used to read them every day until someone said "Watch. Every day there will be an Identity article (regarding race, gender, etc)". They were right.

#928 3 months ago

Officially filed for my National Guard Military retirement pay yesterday. They say to submit it about 9 months before eligible. Eligible at 59. It was a surprisingly good feeling and the estimate was about $3K higher than I thought, even after the spouse survivor annuity premium. It is the first of our retirement income streams we are collecting. I have to say, though, after 37 years in the military (active, reserve, National Guard), I missed it for about 3 months and then started to relish the free weekends, nights, summers, etc., so maybe it is the same with a full retirement. At times, the Guard was almost a second full time job even when not on active duty, especially the last six years.

Now we are starting to do detailed "what ifs" for full retirement. One factor we didn't count on - we both like our jobs and have things we want to accomplish at them yet - anyone not feeling like fully retiring even though you can?

#929 3 months ago
Quoted from ReadyPO:

Now we are starting to do detailed "what ifs" for full retirement. One factor we didn't count on - we both like our jobs and have things we want to accomplish at them yet - anyone not feeling like fully retiring even though you can?

I retired five years ago. The job/business was fun, but I realized I could have -more- fun doing something else if I removed money from the equation. What would make you really, really happy? I've driven cars for a local VW dealership making minimum wage. I've volunteered at a local food pantry and dog shelter. I've done more travel since then. I enjoy(ed) all of it, and am still looking for "the next thing". I mean, take pinball. I play 1-3 hours a day. I like that better than most any work

If you and your wife love your jobs so much that you'd do them for free, congrats! But if not, then it's time to start dreaming.

#930 3 months ago

I'm a ways off from retirement, but could seriously see working in an aquarium store again in semi-retirement. I really enjoy fish, and you spend a good 1/2 of your time explaining to people how to take better care of their fish, what goes together and what doesn't, and keeping the fish on site healthy. The pay is garbage, but I could see running a shift or two for fun. I think thats the only work I'd like to do on the side when I retire.

#931 3 months ago

Has anyone looked into what their 401k target date plan rate of return and fee's are? So many years ago I researched this and was surprised just how much target date plans take out in fee's and how often their returns are less then some other options (index funds). I transferred (sold) all of my 401k assets from a target date fund and dumped it all into a single low fee index fund that basically just tracks the market.

The target date fund I was in has a 3 year rate of return of 4.8%, 5 year return of 6.6%, and a 10 year return rate of 6.8%. Meanwhile the index fund has 3 year return rate of 10%, a 5 year return of 11%, and a 10 year return of 11.2%.

Expense ratios are also much lower with the index fund. Let's use a $200k 401k balance for example. With the target date fund there's a .12% expense ratio, the index fund .015%. That's $2,400 in fee's per year with the target date fund while the index fund fee's would be $300.

#932 3 months ago

Yep, expense ratios are your worst nightmare. Vanguard and their low expense ratio funds have done more for the average person than most financial advisors.

#933 3 months ago
Quoted from PanzerFreak:

So many years ago I researched this and was surprised just how much target date plans take out in fee's and how often their returns are less then some other options (index funds).

Well, target date funds (in addition to holding stock investments) typically have bond exposure...some pretty substantial...as where an S&P500 index fund is just stocks. That makes a big difference in the long term total returns, but also a big difference in volatility. If you're truly willing and able to withstand a 50%+ drop in your investments and have time to let them recover, an stock index fund might work fine. The truth is, though, most people will bail when they see -their- money drop by that much. The last thing you want is to be invested in a way that your $2m nest egg becomes $950k and you sell because you freaked out. Suddenly an extra .1% expense seems miniscule.

Another consideration is whether or not you're saving money or spending money. If you're spending, you really want some bond exposure to cushion the drops. You'll actually end up with a -greater- total return if you have some bonds when you're in the withdrawal stage.

#934 3 months ago

I am also retired since April this year with the age of 55 years.
I had good luck choosing my profession when I was young. I learned the bakers job for three years but was never really intrested to do this for the rest of my life.
As a comstrip I had to join the military for 15 month in this days. They send me to the Airforce as a communication guy and I worked in a communication center as a telephonist. I liked this job, the shift work , the free time between the shifts, to make sport when ever I want, shooting on the shooting ranch. Everything was fine. So I made contracts for 4 years, than for 8 years and very earlie I became a professionel soldier.
I had a post in Denmark for nearly 6 years and enjoied international environment , with Americans, Brits, Polander, Danes, Norwegians, etc, pp
Great time of my live.
After this years communication went out and they made an IT specialist out of me. I worked an other 16 years in shifts in a information systems control center.
For my last promotion to Sergeant Major I swapped the job in my unit. No more shifts (fair enough, if I became older shifts became harder) but therefor 3 days a week in homeoffice. Yeahhhh.
So we planned the mobile it-system for our wings and supported them on exercises and missions. Very intresting and also international.
So on february I joined my "final exercise". Nearly 3 weeks in Las Vegas incl. the Pinball Hall Of Fame. It was just great.

So now I have time for my home and hobbys. As someone earlier wrote: We can live with the retirement money, health care is a expensive thing now (in the service we had this for free all the years) , we have cars, a house , make vacations but have to look a little more on the money but enjoy that we are both at home. We have no kids. If we had they should be able to stand on own feet meanwhile
Our big dream is later on to move to Italy, but right now we have to take a little care on our old parents.

Nice thread !

#935 3 months ago
Quoted from PanzerFreak:

Has anyone looked into what their 401k target date plan rate of return and fee's are? So many years ago I researched this and was surprised just how much target date plans take out in fee's and how often their returns are less then some other options (index funds). I transferred (sold) all of my 401k assets from a target date fund and dumped it all into a single low fee index fund that basically just tracks the market.
The target date fund I was in has a 3 year rate of return of 4.8%, 5 year return of 6.6%, and a 10 year return rate of 6.8%. Meanwhile the index fund has 3 year return rate of 10%, a 5 year return of 11%, and a 10 year return of 11.2%.
Expense ratios are also much lower with the index fund. Let's use a $200k 401k balance for example. With the target date fund there's a .12% expense ratio, the index fund .015%. That's $2,400 in fee's per year with the target date fund while the index fund fee's would be $300.

You have $2M in retirement funds?

Also you have to realize the target date funds include bonds and international stocks and you are comparing them to a us based index fund I assume. So you can’t just straight up compare their returns because they are tracking different indexes. US funds have performed much better than those other two classes lately but not always.

#936 3 months ago
Quoted from PanzerFreak:

Expense ratios are also much lower with the index fund. Let's use a $200k 401k balance for example. With the target date fund there's a .12% expense ratio, the index fund .015%. That's $2,400 in fee's per year with the target date fund while the index fund fee's would be $300.

What am I missing .12% of 200k is $240 (0.0012 x 200,000)
$2,400 would be 1.2%

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#937 3 months ago

I have officially handed in my notice and I finish up just before Christmas. I'm only 54 so will definitely be looking for some things to occupy my time but I can choose what I do because it interests me in some way. I am surrounded by a lot of very stressed out people at work right now and I am so glad that I am not one of them!

We are just heading into summer here so I'm looking forward to spending it at the beach!

#938 3 months ago
Quoted from BMore-Pinball:

What am I missing .12% of 200k is $240 (0.0012 x 200,000)
$2,400 would be 1.2%

Americans don't know how to do math.

#939 3 months ago
Quoted from rai:Americans don't know how to do math.

I made a simple mistake, it happens. May want to learn the same thing. Expense ratios are still much lower in the index fund versus target date, especially on larger accounts.

Quoted from rai:

You have $2M in retirement funds?
Also you have to realize the target date funds include bonds and international stocks and you are comparing them to a us based index fund I assume. So you can’t just straight up compare their returns because they are tracking different indexes. US funds have performed much better than those other two classes lately but not always.

Why are you asking how much I have saved?

#940 3 months ago
Quoted from PanzerFreak:

Why are you asking how much I have saved?

I asked because at 0.12% ER, thats how much you would need to have to pay $2400 in fees, I didn't see you had said $200K.

It's not just a matter of picking the lowest ER fund, you are splitting hairs if you think $240/year or $30/year is going to make a difference. plus you were comparing one funds returns (probably US large cap) to a different fund that is a balanced fund with US/International and Bonds. The target date is not going to beat the US large cap because of its composition not because of its ER.

Quoted from PanzerFreak:

The target date fund I was in has a 3 year rate of return of 4.8%, 5 year return of 6.6%, and a 10 year return rate of 6.8%. Meanwhile the index fund has 3 year return rate of 10%, a 5 year return of 11%, and a 10 year return of 11.2%.

The last several years US large cap stocks have been better, several years US large caps were up 25-30% while bonds or international stocks were not so good. So naturally the large cap index fund had a better return than a blend of US/international and bonds in a target date fund.

But not every year or group of 10 year periods will be the same, sometimes bonds do better than stocks and sometimes international do better than US. But the last decade the US stocks have dominated because of the big stocks like Microsoft and Apple. If you went down the rabbit hole of comparing returns you could say just buy Apple for the last decade and you beat any index fund. But that is looking backwards nobody knows what the next 20 years will bring.

In 2008 Bonds returned 43% more than large cap stocks and there have been years in a row that bonds have done better than stocks. But if you look at the last 5-10 years bonds haven't done anything.

Screenshot 2023-11-21 at 4.22.38?PM (resized).pngScreenshot 2023-11-21 at 4.22.38?PM (resized).png

2 weeks later
#941 79 days ago
Quoted from Jackalwere:

...- Over 52 weeks of pay, paid out as a lump sum...

If you are going to live off of that for the next year(i.e. no other, or minimal income, that would be a great time to do some IRA to ROTH conversions.

I did the same, albeit I just saved up a bunch of money and used that for the following year to live off of.

#942 79 days ago

1 simple step... get liver cancer. BH out.

#943 79 days ago

Are most of you going to go with traditional Medicare or a Medicare advantage plan? I'm leaning towards an advantage plan just because it would be similar to what I've had during my adult working life.

#944 78 days ago

I’d be wary of going with Medicare Advantage. My mom (79) told me about a friend of hers who got significantly worse because she got the runaround for weeks trying to see a particular specialist. This article sums up the risks pretty well:

https://www.consumerreports.org/money/health-insurance/pros-and-cons-of-medicare-advantage-a6834167849/

#945 78 days ago
Quoted from DarthPaul:

Are most of you going to go with traditional Medicare or a Medicare advantage plan? I'm leaning towards an advantage plan just because it would be similar to what I've had during my adult working life.

I was just going to ask the exact question!

For some reason (OCD maybe), I started to read articles and watch youtube videos comparing the differences and pros/cons, and I might add a LOT of them. More than likely, it was because of the endless Advantage commercials on TV during the current open enrollment period sparked my interest. I bet there's a lot of different opinions depending on peoples experience. Hopefully, what I've read and watched is unbiased, but I consider it a good starting point nonetheless.

I'm one year out from signing up for Medicare. Short answer is I plan on signing up for a Plan N and Plan D (Plan D is changing for the better in 2024, and even more so for 2025). I considered Plan G+D as another option, but the rates for G are going up at a higher rate than N. I haven't talked to my agent yet, so my opinion might change. In either case (Advantage or Medicare), you'll have to have Medicare Plan A+B.

While the zero cost looks appealing, you can run up some big bills on an Advantage Plan and you have to stay within their guidelines (i.e. network, some tests might need prior authorization, copays, etc.). The somewhat tricky area is if you want to switch out of an Advantage to a Medicare Plan or vice versa (four states make it easy). The time to do it right is when you first sign up for Medicare because it is truly open enrollment (based on your birth date) - no medical questions asked. And once in a supplemental plan (not sure about Advantage), you're good for life unless you start to miss payments. Looking at what to choose, I looked at Advantage vs. Medicare, then if Medicare, what Plan (G, Ghd, or N). And I also considered future health concerns, not so much based on my age now now since I'm healthy. I prefer to think long term, not just a few years out.

Here's some starter videos to wet your appetite:

And some biased opinions:

#946 78 days ago
Quoted from mbwalker:

I just saved a bunch of money and used that for the following year to live off of.

Did you save that money by switching to Geico?

#947 78 days ago

Is anyone taking profits or changing their allocation for 2024, now that we’re back to all-time highs? I cashed out 1/3 of my S&P index fund on Friday, and I’m planning to roll that into VTV (Value index etf) next week. I also swapped my QQQ over to QTEC, which is a NASDAQ 100 equal weight fund. Less exposure to the “magnificent 7” which are highly overvalued at the moment.

#948 78 days ago
Quoted from littlecammi:

Did you save that money by switching to Geico?

No, "But I did stay at a Holiday Inn Express last night."

#949 78 days ago
Quoted from swampfire:

Is anyone taking profits or changing their allocation for 2024, now that we’re back to all-time highs? I cashed out 1/3 of my S&P index fund on Friday, and I’m planning to roll that into VTV (Value index etf) next week. I also swapped my QQQ over to QTEC, which is a NASDAQ 100 equal weight fund. Less exposure to the “magnificent 7” which are highly overvalued at the moment.

I'm curious about this as well as I'm heavily in index currently and had similar thoughts although I don't like the idea of hopping off the train too early cause I've been bitten in the past.

#950 78 days ago
Quoted from Deez:

I'm curious about this as well as I'm heavily in index currently and had similar thoughts although I don't like the idea of hopping off the train too early cause I've been bitten in the past.

I hopped off the train in 2007, and failed to hop back on, so I hear you. The problem with market timing is that you have to be right twice.

I’m trying to get to a specific stock allocation with more Value, so that’s my main goal for 2024. That, and buying lots of dips if they happen.

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