(Topic ID: 286379)

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

By DadofTwins

8 months ago


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  • 496 posts
  • 110 Pinsiders participating
  • Latest reply 4 months ago by ReadyPO
  • Topic is favorited by 82 Pinsiders

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Topic poll

“At what age do you plan on retiring?”

  • 45-55 76 votes
    33%
  • 56-65 114 votes
    50%
  • 65 and over..... 37 votes
    16%

(227 votes)

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There are 496 posts in this topic. You are on page 3 of 10.
#101 8 months ago

Our current stock market valuation is around the third highest of all time (just behind the dot com bubble and just before the crash of 09) the expected (average) stock market returns that everyone quotes at 10% is from all time the last 100-120 years when the stock valuation was at all different levels (high and low).

However if you start (now) when the stock valuations are very high, the future expected returns are going to be lower than historical average. That's what I mean when I said the good returns have already been backed into the pie. If average is 10% but we've been gaining 15% for the last 10 years then obviously the future will be lower than 10% to return to the average 10%.

people are saying expect more like 4-5% growth not 10% growth.

Unless you think this time is different.

The average U.S. equity P/E ratio from 1900 to 2005 is 14 currently the PE is 35

#102 8 months ago

Quoted from rai:

Are you saying your money would grow to $4.5M even while taking out millions to live on

$60k at 4% is 1.5mil correct? The market over the last 30+ years averages at 10-12%. That leaves us 8% to grow your hypothetical monies.

At 6% yoy return your 1.5mil turns almost into 5mil. I gave 2% to the market gods.

Quoted from rai:

Also investment income is not constant, some years you can earn -30%

Only happened once in 30 years. So have some cash on hand.

One more for good measure

#103 8 months ago
Quoted from Friengineer:

$60k at 4% is 1.5mil correct? The market over the last 30+ years averages at 10-12%. That leaves us 8% to grow your hypothetical monies.
At 6% yoy return your 1.5mil turns almost into 5mil. I gave 2% to the market gods.

Only happened once in 30 years. So have some cash on hand.
One more for good measure

You are correct, I was thinking of taking 4% per year, adjusted for inflation as the typical 4% rule and the market has returned

#104 8 months ago

I haven't seen it mentioned, but I would say number one is to learn as much as you can about money and finance. Learn what an annuity is and how it works, and most of your questions about return rates, how much is needed to generate a certain return, how much return you get from a certain amount, etc. will be answered. Also spend some time learn about about how the stock and bond markets work.

Get a subscription to the WSJ and read it every day.

Don't entrust all your money and investments to a financial advisor.

Don't use a thread on Pinside or any other internet forum to make all your decisions. There are lots of good ideas and references here to be found, sure, but also some are questionable.

One thing I noted is some comments about putting a certain percentage of salary to a 401k. There are limits as to how much you can put in those, so a given percentage might be too big, depending on the salary. I would say a better approach would be to put in the max you can every year (for 2021 $19,500 for <55, $26,000 for 55 or older). In many cases there will be some sort of company match that adds to it, that is like free money but only if you contribute.

Rai's post about retirement savings in America shows how terrible the planning is for most Americans, especially in the baby boomer range. 200 grand is not going to get you far from 65 on to the rest of you life. You can see from this thread that Pinsiders are generally way of ahead of the curve on this. This is not surprising if you read through the thread where Pinsiders talk about what they do for a living. This is not an "average" slice of America here.

Finally, don't be one of these people

Roughly 40% of Americans think winning the lottery would be a good retirement plan, according to a survey from financial company Stash. The idea is even more popular among younger workers, with nearly 60% of millennials saying winning the lottery is a reasonable way to prepare for retirement.

https://www.fool.com/retirement/2019/04/25/40-of-americans-are-taking-a-massive-retirement-ri.aspx

#105 8 months ago

When you start thinking in terms of ROI on happiness, some choices become pretty natural. Even more so if you convert dollars to time spent sitting in your chair at work, even more so when it's compounded at 4-8% yearly.

In other words, at some point I started to think how much time I'll have to spend at work for a nice car, thus I drive a 3000$ used Kia that's in good shape with low mileage. Am I any less happy? Maybe 0.5% less than if I had a cooler car, but I'll be spending probably 2-3 years less at work so that's good ROI.

Start doing that for a bit and you've got most of the work done. That doesn't mean being a cheapskate. I don't care how much my daughter's gymnastics class costs, that's good ROI. Having a nice logo on my shirt gives me jack squat so no money there. I'm trying to push off on the whole family Disney trip because I'm sure it's great memories but I'm pretty sure we can juice more happiness out of the little fortune that would cost.

Also, not just taking for granted that you have to pay for stuff because that's how it is. The 3000$ car is only insured for liability. If I crash it and I'm still alive I'll buy another one cash.

Living below your means is freedom. My girlfriend was able to not work a whole year to stay with our second born because we lived off one salary. That cost me a few 10Ks out of pocket. No problem. I'm penny pinching where it doesn't matter so I can spend where it does.

I have a number in mind I can probably reach within 4 years (I'm 40), then I just won't have to worry about the money coming in, but I'll still want to work at projects, jobs (though not full time), independently of how much money they bring in (though I'd like it to be >0).

I already had pretty much that mindset but Mr Money Mustache accelerated it.

#106 8 months ago
Quoted from rai:

You are correct, I was thinking of taking 4% per year, adjusted for inflation as the typical 4% rule and the market has returned

I noticed youre in florida which doesn't have an income tax. Moving to a retirement friendly, low tax state should be considered as well!

Reduce your property taxes and or income taxes by choosing where to live will help

#107 8 months ago

Follow this blog. Read everyday. Enjoy.

https://www.early-retirement.org/

15
#108 8 months ago
Quoted from PhilGreg:

When you start thinking in terms of ROI on happiness, some choices become pretty natural. Even more so if you convert dollars to time spent sitting in your chair at work, even more so when it's compounded at 4-8% yearly.

I agree with your conclusion but for a different reason. This picture represents what I am working for for my family. This is not meant to be a flex, but instead represents my "why". I dreamed of this moment for 18 years and made it happen 3 years ago. I am 43 and have this now. My family and I love what this allows us to do and the joy that being here brings. I am also 20+ years younger than my neighbors. To a person, they all congratulated us and told us they wished they lived their dreams earlier.

Obviously, this view and property comes at a price. The price is high, but for me, it is worth it. We found a way undervalued property and put our own sweat equity in it to make it a dream home. Still a ways go go, but this is how you manifest dreams into reality. It also is a great investment. It has been appreciating greatly every year since we purchased. If things go bad and something apocalyptic happens to my finances, I can eject and be more than fine.

Since moving here, I have lost over 20 pounds, my blood pressure has gone down, and just seeing the water calms me down every day. My level of happiness has sky rocketed, and so has that of my family. You can't put a price on that.

Different strokes for different folks, and everybody's drivers and situations are different. I would recommend to everybody to stop focusing on timelines and instead focus on your why. Once you understand your why, it will guide your actions on the how and the what you do to secure your's and your family's futures.

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#109 8 months ago

The FIRE methodology is about finding what truly makes you happy and fulfilled. About not keeping up with the Jones and finding ways to trim your budget so you can apply the money saved to your retirement funds. It's about giving you the ability to quit the "9-5" job you don't want to go to, and find a job that may pay way less but is more fulfilling or do nothing at all. It all goes hand in hand.

#110 8 months ago

Invest in low cost index funds such as those available at Vanguard. Never use a financial advisor- you can do it yourself and avoid high fees, commissions, front loaded funds, etc.

Absolutely life changing financial information www.bogleheads.org

Plenty of retirement, investment, social security, health care experts there. Use it like you come to Pinside for pinball help.

#111 8 months ago
Quoted from zacaj:

Where do you guys have the money to expect these specific return rates?

The US stock market has returned about 10% a year over the last century or so. Good quality (but rare) mutual funds are closer to 12%. I always plan on an 8% long term average but historically it's been much more IF you don't screw it up yourself.

#112 8 months ago

Please not that this in not investment advice... and I would love to hear counterpoints....

My wife and I have invested a significant portion of our funds into closed-end mutual funds. Funds like PCN, PDT, HDT, and etc pay a 5-8% dividend and they pay it in monthly installments. It is almost like having a paycheck. Since a portion of their payment is both dividend and capital gains there is also a tax-advantage with many of these funds. One fund in particular, PDT has had a share value between $11 to $18 over the 10 years we have been invested. When the share price drops down below $14 we buy. We never try to "time" the market by buying/selling. we just buy and hold. Each share pays $0.0975/month. Other funds have had a bit more volatility, but for the most part they all have betas below 1 and returns north of 6%.

Maybe there is a downside (like the share price likely won't go up too much) but for the most part these close-ended funds are about the closest thing I have found to a non-managed portfolio that can provide a reasonably consistent return.

#113 8 months ago
Quoted from DBLM:

Obviously, this view and property comes at a price. The price is high, but for me, it is worth it.

Congrats, awesome place!
Yeah absolutely - the idea is to not just buy the best and greatest of everything because you have the money. Same with cars - some people are car people and that's their passion and it makes them happy, makes sense to allocate a lot of money there and I'm definitely not putting that down.
On the other hand when I go to work and I'm driving a bottom 10% car while making top 10% money I'm thinking damn some of those people didn't think this thing through - they can't ALL be car people.
Then you have the safe rationalizations to not stray alone away from the pack (oh it's for the safety, my dad said you can't afford a used car, I need the SUV in case I go fishing every other year, etc.)

#114 8 months ago
Quoted from PhilGreg:

Living below your means is freedom.

Bingo.

Quoted from NC_Pin:

My wife and I have invested a significant portion of our funds into closed-end mutual funds.

The only fundamental downside to closed ended funds is that not only are the underlying investments trading based on investor sentiment, but the fund value itself is open to speculation. Also, while paying out capital gains as income over the last 12 years may have been a winning proposition the next 12 years might feel a bit different.

#115 8 months ago
Quoted from arcyallen:

The only fundamental downside to closed ended funds is that not only are the underlying investments trading based on investor sentiment, but the fund value itself is open to speculation.

You do see that come into play, especially with some of the lesser known or historically volatile funds. However, i play them all long so as the sentiment waxes and wanes it mostly washes over the years.

#116 8 months ago
Quoted from arcyallen:

The US stock market has returned about 10% a year over the last century or so. Good quality (but rare) mutual funds are closer to 12%. I always plan on an 8% long term average but historically it's been much more IF you don't screw it up yourself.

this is a great point. A lot of people will go chasing the best mutual fund or best stock but they end up buying what was great yesterday or last year. As a result the average investor gets less than what the market returns (also you need to account for fees).

I know more than a few people who sold their stocks during the Covid crash or during the great recession when the stocks were way down and they they pop back in after they saw the recovery and saw they had made a huge mistake. Bear in mind these 'nest eggs' were not being used on one case the person was still working so the retirement money was for years down the road. Also why people in retirement usually have a separate spending bucket of cash or cash and bonds that they refill when stocks are high so they can avoid selling during a steep crash.

For the twenty years ending 12/31/2015, the S&P 500 Index averaged 9.85% a year. A pretty attractive historical return. The average equity fund investor earned a market return of only 5.19%.

Why is this?

Investor behavior is illogical and often based on emotion. This does not lead to wise long-term investing decisions. Here's an overview of a few typical money-losing moves that average investors make.
Buying High

Study after study shows that when the stock market goes up, investors put more money in it. And when it goes down, they pull money out. This is akin to running to the mall every time the price of something goes up and then returning the merchandise when it is on sale - but you are returning it to a store that will only give you the sale price back. This irrational behavior causes investor market returns to be substantially less than historical stock market returns

What would cause investors to exhibit such poor judgment? After all, at a 9% return, your money will double every eight years. Rather than chasing performance, you could simply have bought a single index fund, and earned significantly higher returns.
Overreacting

The problem is the human reaction, to good news or bad news, is to overreact. This emotional reaction causes illogical investment decisions. This tendency to overreact can become even greater during times of personal uncertainty; near retirement, for example, or when the economy is bad. There is an entire field of study which researches this tendency to make illogical financial decisions. It is called behavioral finance. The study of behavioral finance documents and labels our money-losing mind tricks with terms like "recency bias" and "overconfidence."

With overconfidence, you naturally think you are above average. For example in one study, 81% of new business owners thought that they had a good chance of succeeding, but that only 39% of their peers did. In another study, 82% of young U.S. drivers considered themselves in the top 30% of their group in terms of safety.

When it comes to investing, overconfidence causes investors to exaggerate their ability to predict future events. They are quick to use past data, and to think they have above average abilities that enable them to predict market movements into the future.

#117 8 months ago

I think it would really suck to be bagging groceries at 80 because one retired during the prime earning years and they ended up spending more than they thought in retirement.

Unless you just want a part time job out of boredom or it's a cheap way to socialize.

All I know is I won't be hanging out with the FIRE folks in retirement. They'll expect me to pick up the tab or want to come visit me for a cheap vacation or simple won't want to leave to the house because you know - gas costs money, going out for lunch costs money, golf costs money, beach parking costs money...

Being frugal is a good idea but there is a difference between having money and being careful with it and being frugal because you have no other choice.

#118 8 months ago
Quoted from Dogford_Studios:

All I know is I won't be hanging out with the FIRE folks in retirement.

You don't have to wait for retirement! When Covid subsides you can come hang out with some FIRE'd folks in the state next door. We can leave the house, I'll buy you lunch, we'll even drive that gas guzzling car! But we're not golfing. I have my limits

I also will have to check my schedule, because although I don't bag groceries I do drive a day a week or so for the local VW, Acura and Audi dealership. For fun. They even pay me minimum wage while I listen to podcasts, talk with family on the phone, and experience $80k vehicles that I could afford to buy but choose not to. Besides, fancy leather seats always smell better when they're new!

#119 8 months ago
Quoted from arcyallen:

You don't have to wait for retirement! When Covid subsides you can come hang out with some FIRE'd folks in the state next door. We can leave the house, I'll buy you lunch, we'll even drive that gas guzzling car! But we're not golfing. I have my limits
I also will have to check my schedule, because although I don't bag groceries I do drive a day a week or so for the local VW, Acura and Audi dealership. For fun. They even pay me minimum wage while I listen to podcasts, talk with family on the phone, and experience $80k vehicles that I could afford to buy but choose not to. Besides, fancy leather seats always smell better when they're new!

You are not really selling me on this FIRE thing...

10
#120 8 months ago
Quoted from DBLM:

You are not really selling me on this FIRE thing...

I don’t know anything about it ...

But there is a fine line between “living within your means” and being a miserable f**ker. Lol

Don’t be one of those.

rd

#121 8 months ago

The upside of hanging out with FIRE folks is you don't feel the need to keep up with the Jones. Peer pressure can be tough on the wallet if you hang with a spendy crowd.

I'm probably more of a natural FIRE folk anyway. We clip coupons, garden, go camping, go hiking, do a lot of activities that don't cost money.

#122 8 months ago

#123 8 months ago

If you are into podcasts, I recommend listening to "Radical Personal Finance". He has a large back catalog that has tons of great information, and his Friday Q&A call podcasts are filled with a lot of people calling in with similar questions.

#124 8 months ago
Quoted from o-din:

One more tip for early retirement. Even if you get caught, you end up with three hots and a cot and free medical care.
[quoted image]

My former brother-in-law robbed 5 bank. He should have quit at 4, he'll be getting out any year now.

#125 8 months ago

My father-in-law retired at 47. High school grad, never went to college. Worked for the state of CT in the highway department.

His tips would be:

- Very rarely go out to eat. Take out pizza on payday.
- Fix your own cars.
- Don't bother with things like cell phones, movie theaters or cable TV (until retirement)
- Buy a cheap piece of land and build your own house. Later buy some cheap land and build a weekend cabin.
- Work a lot of overtime.
- Retire with a state pension (good luck that that these days).
- Have a smart daughter who gets a full collage scholarship.
- Buy a two family house in the state you plan to retire in. Rent it out for 10 years. Then move into half and rent the other half.
- Sell the house and cabin back east and move west.
- Fly Fish 267 days out of the year in Montana.

#126 8 months ago

I take it that the FIRE crowd does not participate in casino gambling for fun. I Guess others are helping my SGMS and BALY shares climb.

#127 8 months ago
Quoted from Dogford_Studios:

All I know is I won't be hanging out with the FIRE folks in retirement. They'll expect me to pick up the tab or want to come visit me for a cheap vacation or simple won't want to leave to the house because you know - gas costs money, going out for lunch costs money, golf costs money, beach parking costs money...

It's always fun to see some individuals get "alligator arms" when the check comes. Then as I take care of the check, one schlep will usually offer about half of the proper tip. When we meet again for a meal; I just take care of the check in advance. If it's a restaurant where I don't run a tab, I have the waiter/waitress add 25% themselves.

I like to enjoy life and the fruits of my labors. Who knows how long I have left? I sure as hell ain't going on a deli meats (three choices) or Ramen dinner diet.

#128 8 months ago

This is a very interesting thread.

I agree that a person should obtain as much knowledge about finances as possible. My humble recommendation would be to find a money philosophy that you understand and believe in and then plow ahead with that plan. I read a ton of books in my mid to late twenties regarding how to retire early or how to become a millionaire and I think you guys have cover almost all of the key concepts. And as some have mentioned, real estate is not their cup of tea. Books like the "Rich Dad" series, Millionaire Next Door, all contributed to my views on money - how to make it and how to spend it. But perhaps the most influential book for me was 'Die Broke'. It's philosophy on wealth accumulation and retirement really resonated with me. And it's one that I have followed to some moderate success. The book attempts to convey 4 premises 1) Quit Today, 2)Pay Cash, 3) Don't Retire, 4) Die Broke. To quote Stephen Covey "begin with the end in mind". lol

#129 8 months ago

A common theme here is reading. We have different circumstances and talents, but we all benefit from learning. Take in several opinions and theories before you declare the one you just read to be the answer. You are never too old to learn.

#130 8 months ago

I all but max out my 401k, put some money in a Roth, but a little bit of stock every year and then spend the rest of it like it's free.

So I guess I'm kind of in the middle.

#131 8 months ago

I started planning for retirement when I was in college. I've made a lot of stupid mistakes over the years (such as buying a brand new house 6 months after graduation, living in it for 6 months, and taking a new job in a different state. Took 2 years to sell that house and lost $50k paying mortgage, realtor fees, and selling the house for a loss). I try to read at least one financial / early retirement type book per year to keep me motivated. I've read all the usual ones mentioned in this thread.

I have a day job making 6 figures and multiple side hustles that some years make as much as the day job. I'm 43 now and every day I think about retiring. If it was just me, I'd have been done years ago, but I have a disabled wife and autistic son that I'll probably have to support for life. Like many of you said, health insurance is the big issue. One thing I've read in multiple books that I haven't seen mentioned is health sharing ministries as an alternative to traditional health care. I'm an atheist, so I don't think those apply to me. Maybe I could keep that part secret. Also some books have mentioned it being cheaper to travel and purchase travelers health insurance. You can get the same coverage for less that way because they know that procedures you have done in foreign countries will cost you much less. They're giving you a discount not to use the US health system.

As far as FIRE and early retirement, I need next to nothing to stay busy and happy. When I take a couple weeks off from work, I only leave the house a couple times for groceries and maybe bowling or golf. I read daily. I have years worth of books on my shelves that I'll get to "someday". I have a gym in my basement. I work out every day. I have an acre or two and spend warm days outside working on my yard or hitting golf balls around. I'm not afraid to spend money, but most of what I enjoy costs little to nothing.

My plan is to quit the day job soon, continue to do the side hustles, collect a few passive income streams from investment dividends, and hopefully find a cheap high deductible plan under the ACA. Ideally I'd like something around $500-800 a month for a family of 3. I think being self-employed, I'd qualify with some significant discounts. With both wife and child qualifying as disabled, there may be some benefit there too.

#132 8 months ago

I am still young (34), but believe in the following tenants and is my own financial strategy. My circumstances may be unique, but this is how I am proceeding and what is working for me.

Education: Get a new degree or certification every year. Keeping your skills relevant is the key to ensuring you have a skill set that will carry you into retirement. I know too many old farts in my industry who let their skills grow tepid and as a result couldn’t find a job when forced out in their 50s and started a second low paying career late in life. I have skill sets in project management and cyber security. MBA, MS, PMP, CISM, CISSP, CCSP, PMI-ACP, CSM, CSPO, Proj+, A+, Net+, Sec+, ITIL means jobs security and income. I have started saving for the kid’s college early. I could also see going back to school for another undergrad as I approach retirement age. I am a few months away from a History undergrad now.

Housing: Don’t go nuts. I believe that eliminating payments is the key to growing your wealth. No more than 25% of your income should go to rent/mortgage, and if a mortgage no more than a 15 year. If all goes according to plan will have the house paid off before kids start college.
Lifestyle: How much do you really need? I like the pinball hobby because you can get out what you put in so how expensive is it really?
Debt: Other than the house, don’t do it.

Investing: Maximize your tax differed accounts. Max out the ROTH, and the 401k at least to the employer match, if not to the max. Put your funds in aggressive ETFs and mutual funds. Do I think my funds will go up next year? Maybe. Do I think they will go up in the next 31 years… yes. I have a small (~10% of retirement) day trading fund for my risk taking. Not my whole nest egg.

Affairs: Don’t do it (can’t control everything your spouse does, but keep them happy). Happy wife happy life.

Retirement Age: As far as my “close to retirement plan” I plan to keep working as long as I can, but maybe not as many hours as I can. I happen to be one of those weird people that likes their job. I enjoyed my time in the Marine Corps, and I enjoy my time in government contracting. I have seen too many people work their entire lives to retire at 65, and then drop dead 2 months later. I have also seen folks forced out in their 50s and forced to retire early or start second careers, with detrimental financial impact (see education note).

Retirement Work Hours: In the area I’m in, what I have seen that I really like, is a few older folks that work part time here. If you have in demand skills, they will let you work less than full time. My main workmate here is 72. He started working 4 days a week when he hit 55, 3 days a week when he hit 60, and 2 days a week when he hit 65. He’s a “retired” full bird Air Force Colonel so doesn’t need to work, but likes his job, and doing this keeps him happy and healthy. I don’t plan to work until I’m 70, but if I could start taking 3 day weekends when I hit 50 or 55 I would be very happy. This would also take care of health insurance if that works the same way 30 years from now as it does today.

I would like to be in a position where I don’t have to work in my mid to late 50s, but likely will continue to do so. Easing into retirement sounds like a much better plan to me than diving in all at once if I can control that.

Disclaimer: I have been very fortunate in life. Your mileage may vary.

Beginner note: If you want basic investing/how to handle money advice, I have found the following flowchart to be excellent.
Primary (resized).jpg

#133 8 months ago

A fellow employee once told me to live by these 4 rules. He talks to this day about people breaking rules 1 and 2, himself included lol.

1. Don't get married
2. Don't have kids
3. Put at least 10% into your 401k
4. Never buy anything from a TV infomercial

#134 8 months ago
Quoted from sataneatscheese:

I am still young (34), but believe in the following tenants and is my own financial strategy. My circumstances may be unique, but this is how I am proceeding and what is working for me.
Education: Get a new degree or certification every year. Keeping your skills relevant is the key to ensuring you have a skill set that will carry you into retirement. I know too many old farts in my industry who let their skills grow tepid and as a result couldn’t find a job when forced out in their 50s and started a second low paying career late in life. I have skill sets in project management and cyber security. MBA, MS, PMP, CISM, CISSP, CCSP, PMI-ACP, CSM, CSPO, Proj+, A+, Net+, Sec+, ITIL means jobs security and income. I have started saving for the kid’s college early. I could also see going back to school for another undergrad as I approach retirement age. I am a few months away from a History undergrad now.
Housing: Don’t go nuts. I believe that eliminating payments is the key to growing your wealth. No more than 25% of your income should go to rent/mortgage, and if a mortgage no more than a 15 year. If all goes according to plan will have the house paid off before kids start college.
Lifestyle: How much do you really need? I like the pinball hobby because you can get out what you put in so how expensive is it really?
Debt: Other than the house, don’t do it.
Investing: Maximize your tax differed accounts. Max out the ROTH, and the 401k at least to the employer match, if not to the max. Put your funds in aggressive ETFs and mutual funds. Do I think my funds will go up next year? Maybe. Do I think they will go up in the next 31 years… yes. I have a small (~10% of retirement) day trading fund for my risk taking. Not my whole nest egg.
Affairs: Don’t do it (can’t control everything your spouse does, but keep them happy). Happy wife happy life.
Retirement Age: As far as my “close to retirement plan” I plan to keep working as long as I can, but maybe not as many hours as I can. I happen to be one of those weird people that likes their job. I enjoyed my time in the Marine Corps, and I enjoy my time in government contracting. I have seen too many people work their entire lives to retire at 65, and then drop dead 2 months later. I have also seen folks forced out in their 50s and forced to retire early or start second careers, with detrimental financial impact (see education note).
Retirement Work Hours: In the area I’m in, what I have seen that I really like, is a few older folks that work part time here. If you have in demand skills, they will let you work less than full time. My main workmate here is 72. He started working 4 days a week when he hit 55, 3 days a week when he hit 60, and 2 days a week when he hit 65. He’s a “retired” full bird Air Force Colonel so doesn’t need to work, but likes his job, and doing this keeps him happy and healthy. I don’t plan to work until I’m 70, but if I could start taking 3 day weekends when I hit 50 or 55 I would be very happy. This would also take care of health insurance if that works the same way 30 years from now as it does today.
I would like to be in a position where I don’t have to work in my mid to late 50s, but likely will continue to do so. Easing into retirement sounds like a much better plan to me than diving in all at once if I can control that.
Disclaimer: I have been very fortunate in life. Your mileage may vary.
Beginner note: If you want basic investing/how to handle money advice, I have found the following flowchart to be excellent.
[quoted image]

"Housing: Don’t go nuts. I believe that eliminating payments is the key to growing your wealth. No more than 25% of your income should go to rent/mortgage, and if a mortgage no more than a 15 year"

That's a great rule to live by, I've read that from Dave Ramsey and Chris Hogan. Don't spend anymore then 25% of take home pay (after taxes and 401k deductions) on housing with a 15 year mortgage. More often not living by that rule means living in a smaller / less expensive house and to avoid the "keeping you with the joneses" lifestyle.

One of my favorite Chris Hogan clips, real rich vs fake rich.

#135 8 months ago
Quoted from PanzerFreak:

"Housing: Don’t go nuts. I believe that eliminating payments is the key to growing your wealth. No more than 25% of your income should go to rent/mortgage, and if a mortgage no more than a 15 year"
I've heard that from Dave Ramsey and Chris Hogan, a great rule to live by. Don't spend anymore then 25% of take home pay (after taxes and 401k deductions) on housing with a 15 year mortgage. More often not living by that rule means living in a smaller / less expensive house and to avoid the "keeping you with the joneses" lifestyle.
I like what my cousins financial advisor, a friend of his, told him years ago. They were looking at homes in a very expensive neighbor and he told my cousin "This is where all the poor people live".

Housing is cheap in MO. My second house was $130k for 1700 SQFT with 1.5 acres in a gated golf course community. I paid it off in 5 years and sold it for $155k after living in it for 6 years when I took a new job. My current house was $250k for about 3000 SQFT, an acre, oversized 3 car garage, etc. I also paid this one off in under 5 years. Zillow says it's worth over $400k now and realtors are actively calling home owners in my subdivision looking for people wanting to sell. I'd sell in a heartbeat if I could find a place to go. I'm looking to downsize back to something around 2500 SQFT in a cheaper town with lower property and sales taxes.

#136 8 months ago
Quoted from DadofTwins:

There is no 1 plan that fits everyone's goals, but that is what's neat about threads like this. We can all contribute and we can all hopefully use something someone else has contributed and apply it to our own goal.

Exactly what I was saying like so much about this thread

#137 8 months ago

This thread is awesome - very inspiring and also slightly depressing as I am 55 and seemingly about in the middle of the folks on here. Mistake I made was not contributing to 401k early - trying to catch up a bit now. Also got the divorce so that was a setback but thankfully it was amicable so damage was minimized.

One suggestion for those that are paying on a mortgage is make extra payments. I took out a 15 year loan 6 years ago and did payments every 2 weeks so you get an extra principal payment annually that way and when I had extra coins paid more on it. I am now a year away max of paying off my crib. Super excited to get rid of that payment soon.

On that note my uncle years ago stated be careful on paying off your house as there are the scammers out there that "steal" the title and take a loan out on the property. I am pretty paranoid with all these scammers these days on all fronts. I have a HELOC which I will keep (no balance) in case of emergency and also to have the bank on the title to help protect against someone trying to F with my title when the crib is paid off.

Did any of you that have your house paid off take any extra steps to protect your title? I see some advertisements of title lock or something like that.

Thanks and good job to everyone on here!!

#138 8 months ago

Most of you posting in this thread have done very well planning for the future. Younger people should take some of your advice.

Maybe it is up to me to speak for the other side. Those of us who have not done as well (and do not have time to rectify our situations). I just retired on January 1, 2021 and will turn 72 in a couple months. Worked almost nine years at my first job out of college and would have qualified for a pension after ten years, but the company sold off their consumer products line (specifically to avoid pension liabilities) and the entire office staff lost our jobs. So no pension for me. Worked for ten years at my next job (contributing the maximum 4% allowed at the time into a new 401K plan) until the owner sold out to a company that only wanted the product line, at which time the entire office staff lost our jobs. Worked for 27 years (through 2020) at my last job and retired.

I have never smoked or taken any illegal drugs. I hate the taste of alcohol (beer included). I do not gamble and I consider playing the stock market gambling. I think the argument that stocks will always go up over time just because they have in the past is invalid, because they are at an inflated high level now and the economic circumstances of the previous century that promoted their growth no longer exist and will never be repeated. Unfortunately, this risk aversion has caused me to keep my 401K funds in money markets over the years instead of stocks and/or bonds, so my savings have not compounded like they could have.

I have been married for 40 years and have no kids (by choice). In keeping with my conservative nature, I saved for ten years before buying my first house (on a 15 year mortgage which I paid off in 12). All ten new cars which my wife and I have purchased over the last 40 years have been paid for by saving before buying (no car payments). We have only 2 credit cards and pay them off in full every month (never any interest or late fees). Most of my pins were bought in the '90s. I have only purchased two pinball machines in the last 14 years (Mustang premium and EHoH LE). I have no plans for any other pin purchases.

The big fear is failing health requiring one of us to need to go into a nursing home or memory care facility. This would wipe out our savings and leave the remaining one in bad financial shape. It is far too costly at my age to get long term health insurance. But hey, we both have serious ongoing medical issues, and if one of us dies then the other would be better able to hang on financially.

I have always said that if you live frugally and set aside plenty for retirement you will die young and not get to enjoy it, but if you enjoy life now and don't save enough for the future then you will live into your 90s struggling for years in poverty. I guess it may be time for me to pay the piper.

#139 8 months ago
Quoted from littlecammi:

Most of you posting in this thread have done very well planning for the future. Younger people should take some of your advice.
Maybe it is up to me to speak for the other side. Those of us who have not done as well (and do not have time to rectify our situations). I just retired on January 1, 2021 and will turn 72 in a couple months. Worked almost nine years at my first job out of college and would have qualified for a pension after ten years, but the company sold off their consumer products line (specifically to avoid pension liabilities) and the entire office staff lost our jobs. So no pension for me. Worked for ten years at my next job (contributing the maximum 4% allowed at the time into a new 401K plan) until the owner sold out to a company that only wanted the product line, at which time the entire office staff lost our jobs. Worked for 27 years (through 2020) at my last job and retired.
I have never smoked or taken any illegal drugs. I hate the taste of alcohol (beer included). I do not gamble and I consider playing the stock market gambling. I think the argument that stocks will always go up over time just because they have in the past is invalid, because they are at an inflated high level now and the economic circumstances of the previous century that promoted their growth no longer exist and will never be repeated. Unfortunately, this risk aversion has caused me to keep my 401K funds in money markets over the years instead of stocks and/or bonds, so my savings have not compounded like they could have.
I have been married for 40 years and have no kids (by choice). In keeping with my conservative nature, I saved for ten years before buying my first house (on a 15 year mortgage which I paid off in 12). All ten new cars which my wife and I have purchased over the last 40 years have been paid for by saving before buying (no car payments). We have only 2 credit cards and pay them off in full every month (never any interest or late fees). Most of my pins were bought in the '90s. I have only purchased two pinball machines in the last 14 years (Mustang premium and EHoH LE). I have no plans for any other pin purchases.
The big fear is failing health requiring one of us to need to go into a nursing home or memory care facility. This would wipe out our savings and leave the remaining one in bad financial shape. It is far too costly at my age to get long term health insurance. But hey, we both have serious ongoing medical issues, and if one of us dies then the other would be better able to hang on financially.
I have always said that if you live frugally and set aside plenty for retirement you will die young and not get to enjoy it, but if you enjoy life now and don't save enough for the future then you will live into your 90s struggling for years in poverty. I guess it may be time for me to pay the piper.

A reverse mortgage is probably perfect for you if you need the money for long-term care. Especially with no children thinking they will get an inheritance.

As Tom Selleck says: It does not have to be paid back until you "leave the home"....

#140 8 months ago

My one mistake...

I did most thing correct max 401K, 529 plans for the kids tuition.

My one regret was back in 2007 but I wanted to act like a baller and I bought a new (new model) V8 M3 sports car. I'm really into cars and I loved the car but the timing of the stock market was not ideal because it was just before the great recession, I was tempted to buy something half the price but decided to splurge. As it turns out the car was great except the dealer experience and how it needed to be in for costly service and I sold it after 5 years when it was clear that I didn't want to be spending if something more expensive went wrong.

Anyway lost a lot on depreciation and at the same time, the stock market crashed so I would have been able to stock up on stocks. I still have a lot of AAPL shares from 2009 that have gone up 30x in value. I just regret that I missed out on buying a few thousand more shares of AAPL due to the car. It's not like it will make or break me but if I had bought a $40K car and invested $30K instead of buying a $70K car I would have been much better off today.

#141 8 months ago

Some of these are funny... well one way to "get rich" is to not spend any money.

yah no shit.. You know whats a great way to lose weight? Dont eat food.

Being a penny pinching weirdo is not a great quality of life.

You dont need to be an asshole and do stupid shit like buy a boat (or pinball machines heh) but having money and acting like you dont is sad.

#142 8 months ago
Quoted from DadofTwins:

Hello all. The goal I have for this thread is a place where we can discuss everything retirement.
1. Early retirement!
2. Health insurance hacks for early retirement
3. Ways to get to retirement quicker
4. Investing/savings strategies
5. Unexpected things in retirement
My wife and I are 45 and 43. We were looking to retire when I reach the age of 50. Obviously, the biggest obstacle nowadays is health insurance. While 7 years is a long time off, I would love to hear some ways others have dealt with health insurance in early retirement.

I looked at a lot of ways to retire early (at 51 years old) and after talking to my financial guy, my doctors and my wife I decided to go with the Brain tumor plan luckily I had good long term disability when I got let go from my job of 20 years LTD made me apply for SSDI which was approved in 3 months. I will buy Cobra until I qualify for Medicare in July of 2022. I am allowed to make just over $1100 per month working, once I get my seizures under control and my driving privileges back I will see what I can do. I was thinking about starting a business going around to businesses and refilling ass gasket dispensers and replacing urinal pucks but I am still brainstorming.

On a serious note I was getting ready to sign a life insurance policy just before I was diagnosed. I had a preferred rate plan sitting on my desk, I just needed to sign it and send it back. Now my insurance agent tells me I’m uninsurable, so if you’re thinking about getting life insurance I recommend doing it, you never know.. I wish I had!

Life doesn’t always turn out the way you think its going to, so you just have to work with what you’ve got.

#143 8 months ago

Not that a bunch of stuff in the thread is not true and works... a lot of it I have done myself and it works.

But, one piece of the puzzle that is so important is to realize that everyone’s situation is unique. Make a goal that you are confident you can reach and invest to reach that goal accordingly. Most of my friends that I ask do not have any goal at all and just say “I set aside something”. That’s not a fucking goal! Get your shit written down and make a plan to include how much you will need each day when you are not able to work or, when don’t want to work (retire). You and your family (if you have one) are important and your plan should include you telling them about the plan and them also helping to get to the goal.

#144 8 months ago
Quoted from Elvishasleft:

You dont need to be an asshole and do stupid shit like buy a boat

“Ouch.”

— An asshole and boat owner

#145 8 months ago
Quoted from DBLM:

“Ouch.”
— An asshole and boat owner

Well no offense meant... I get it some people like boats but allot of people buy them as a trophy and barely use them.

that is based on my experience with everyone I know with a boat constantly complaining how much of a cash suck it is.

#146 8 months ago

Awesome subject talking to fellow pinsiders. I know there are financial forums, but this outlet sounds like a cool option to small talk about Retirement plans.

I wish my Parents/School informed me of the value of Compound Interest!!! I've never put the interest to research about the importance to max out 401K allocation early... I'm making sure my kids will learn this lesson when its their turn.

I've finally maxed out ROTH and 401K. I'm late in the game to max out due to financial circumstances (single source income) and not being focused on the end goal.

I'm lucky to have a small pension from my employer along with retaining my Health insurance when I retire. The recent posts about Health insurance has me freaking out. ACA is really $800 and above for a family??

I guess I have it good with my employer insurance paying $193 a paycheck for BCBS.

Quoted from rai:

I did most thing correct max 401K, 529 plans for the kids tuition

Now that I have maxed out my 401K/ROTH options...

That is the one item I am wanting to get some inputs from others. My kids are 6 and 4. I've saved some funds for each kid since they were born into a savings account.

The purpose was to provide an option: Use the cash to go to school or consider it as a down-payment to your career. Perhaps your kid wants to start their own business and attempt to do a startup (instead of school).

Assuming your kid does not have a passion to go to school... is the 529 still worth it? I think you are subject to a 10% withdrawal fees on top of taxes?

This is my fear of dumping the funds into a 529 for my child. Seems even if this is the case it is not a loss funding a 529 for your child.

#147 8 months ago
Quoted from zermeno68:

That is the one item I am wanting to get some inputs from others. My kids are 6 and 4. I've saved some funds for each kid since they were born into a savings account.
The purpose was to provide an option: Use the cash to go to school or consider it as a down-payment to your career. Perhaps your kid wants to start their own business and attempt to do a startup (instead of school).
Assuming your kid does not have a passion to go to school... is the 529 still worth it? I think you are subject to a 10% withdrawal fees on top of taxes?
This is my fear of dumping the funds into a 529 for my child. Seems even if this is the case it is not a loss funding a 529 for your child.

On 529s, if your kid doesn’t use all the funds you can roll it to another person, or yourself for educational expenses up to 1 time per year. Hypothetically, you could keep the money in the 529 if your kid drops out of school and save it for your grandkid. You remain in control of the money.
If your kid is earning an income (they are not at 6) you can drop money into a ROTH IRA up to the max and at a rate equal to that they are getting paid. If your kid works at McDonalads when they turn 16 you can drop $6000 in their name if they earn 6k that year. You can also open a “Custodial Account” in their name. Money grows and is taxable, but it will automatically go over to them when they are 18 or 21 depending on state law. All in all, I believe the 529 is the way to go. Maximums vary by state, but if set up right you could fund your children and children’s’ children education.

#148 8 months ago
Quoted from Elvishasleft:

Well no offense meant... I get it some people like boats but allot of people buy them as a trophy and barely use them.
that is based on my experience with everyone I know with a boat constantly complaining how much of a cash suck it is.

All good. I live on the water so use it a lot. I come buy being an asshole honestly.

#149 8 months ago
Quoted from sataneatscheese:

On 529s, if your kid doesn’t use all the funds you can roll it to another person, or yourself for educational expenses up to 1 time per year. Hypothetically, you could keep the money in the 529 if your kid drops out of school and save it for your grandkid. You remain in control of the money.
If your kid is earning an income (they are not at 6) you can drop money into a ROTH IRA up to the max and at a rate equal to that they are getting paid. If your kid works at McDonalads when they turn 16 you can drop $6000 in their name if they earn 6k that year. You can also open a “Custodial Account” in their name. Money grows and is taxable, but it will automatically go over to them when they are 18 or 21 depending on state law. All in all, I believe the 529 is the way to go. Maximums vary by state, but if set up right you could fund your children and children’s’ children education.

You might consider pre-paid college trusts if your state offers them. sataneatscheese, Maryland does, and it might be something that you look into. Essentially, your trust will pay for 4 years of college in a state school, or give you the equivalent to go out of state. The trust can be used for any accredited educational program, not just college. Every year you make a payment you get a tax break (in the case of Maryland, 2500 a year). I put 11K down, and pay 2,700 a year, so effectively I am paying about 15K for tuition. This can be supplemented with a 529, which we have done. If your child does not go to college or gets a scholarship, you can get your principal back.

#150 8 months ago
Quoted from hockeymag8:

Did any of you that have your house paid off take any extra steps to protect your title?

Our mortgage is paid off, and I have never heard of the scam you're speaking of. I'd check with a local bank or real estate person to see if they can give you any insight.

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