I'm 55 and could be retired if I wanted to but I have a higher spending lifestyle and don't mind my job, I cut back to 3 days a week but still work enough hours for the health insurance and benefits. I had wanted to retire but the closer I got to the magic number felt that I would miss working and it's good to make a paycheck plus benefits (for a smaller number of hours).

I'm working 3 days a week with 4 days off (including weekends) so I call it semi-retired. I am making enough that I am still able to pay all my bills and contribute more to my eventual full retirement nest egg.

On a side note, I think that the market is well elevated price and interest rates are super low which is the double whammy to future returns (lower expected stock growth and when interest rates go up current bond prices will fall). So my nest egg while large, I can't be sure it won't be a good bit smaller after the correction.

I know several people at the other end of the spectrum (Medical Doctors/surgeons) who can easily afford to retire (as you get older you will have less future life to spend the money). In other words a 55 year old will have (in general) longer time in retirement than a 80 year old. Anyway several guys who worked 40-50 years as a medical doctor who for sure have saved much money but they don't step away and in some cases have to be forced to retire because they are too old. I can not for the life of me imagine working another 20 years like these guys have. I mean if you have made top 1-2% earnings for 30-40 and more years you can afford to retire no need to be a 75-80 year old surgeon, but these guys must love to work or the power and prestige that go with it.

20-25 times spending in a year. After taxes and less social security and pension income.

grain of salt here. You say it’s working out. That’s not proven, just that this is what people are planning on for retirement.

Someone who retires at 55 years old can live for another 30-40 years. We don’t know how it’s all working out yet.

My point that working is your best chance to make bags of money and once you stop you’re spending without income.

There are other income streams like Social Security, real estate, dividends and bond interest.

if you make $70k you’ll need around $3.5M in stocks to replace that income on dividends alone which means you’re spending some of your savings as well as the dividends. Once you start spending your dividends as well as some equity or bonds your savings may get smaller and so on.

Compounding interest is great but as you start spending it’s the reverse of compounding.

Fortunately social security and Medicare is available as we get older helps out.

Especially *now* when stocks are at very high PE ratio and bonds are at very low interest rates. Combined these two factors and we can be expecting to gain less than historical averages. I mean the stocks have run up for 12 years now and so the 'high returns' are already backed into the pie. It's far likely that the next 12 years will net less than people have grown used to. Just think when interest rated rise the current bonds will lose value and companies won't have access to 'free money' the road is ahead you can't drive by looking in the rear view mirror.

bear in mind that these types of threads tend to have more people who are saving money so we might have more saved than average but here is the US savings data

According to this survey by the Transamerica Center for Retirement Studies, the median retirement savings by age in the U.S. is:

Americans in their 20s: $16,000
Americans in their 30s: $45,000
Americans in their 40s: $63,000
Americans in their 50s: $117,000
Americans in their 60s: $172,000

What’s the Average Retirement Savings by Age?
2019-2020 Federal Reserve SCF data also shows us the average retirement savings by age in the U.S.:
• Ages 18-24: $4,745.25
• Ages 25-29: $9,408.51
• Ages 30-34: $21,731.92
• Ages 35-39: $48,710.27
• Ages 40-44: $101,899.22
• Ages 45-49: $148,950.14
• Ages 50-54: $146,068.38
• Ages 55-59: $223,493.56
• Ages 60-64: $221,451.67
• Ages 65-69: $206,819.35

So someone who has just $200K (at 65) would be looking at $10K withdrawal rate @5%

Bump that up to $1M and you are talking about $50K so IMO there should be no thought of early retirement until you have 7-figures (plus) in savings.

Obviously as you get older you might bump into retirement not by choice and might have to retire with what you have but the question of EARLY RETIREMENT is not a question of having to retire but the desire to quit working early. I read a lot of retirement forums and a lot of people say they are retired but really mean retired from a high stress job and might work part-time (like at a golf range etc.) that is not the same thing as full time retired where you have no income at all except for what you have saved (plus SS and real estate and pensions etc.)

I understand.

I went to med school so was not really able to save much until I turned 32 that put me behind, but a lot of other people who did not go to medical school aren't saving at all in their 20's. the sooner you start the more it has time to grow.

My kids have some part time jobs and I was able to get them to contribute to ROTH IRAs when they were just 20 years old which can give it 40 years to grow and compound, plus even more because even when you retire you might have 30+ more years for some of the money to compound.

I watch some videos saying the average life expectancy is like 78 so you don't need to plan for a 20+ year retirement, but, if you reach 65 your life expectancy is 83 . Also just because the life expectancy does not mean you should plan to die at 83 because many people live into their 90s. Someone who retires at 50 years may need to live off their savings (and SS) for the next 45 years.

quote

Age 90 isn't some wild outlier. The SOA's data suggests that a 65-year-old male today, in average health, has a 35% chance of living to 90; for a woman the odds are 46%

I agree with this point except that buying power goes down from inflation.

So if you start at retirement at age 60 with $60K spending per year (2021) by the time you are 80 that $60K would only buy you around $40K worth of goods and services.

Absolute spending most likely does lower as you get older but inflation goes up, and things like property taxes, home insurance, utilities will not go down as you get older (unless you move to a smaller house which is possible.)

--

money doubles every 7 years only if you earn a constant 10% and only if you are not spending (drawing down) reverse compounding. Are you saying your money would grow to $4.5M even while taking out millions to live on?

So if you are drawing down 5% every year you would need to earn more than 15% double to in 7 years. Also investment income is not constant, some years you can earn -30% that doesn't jibe with you all who are looking at the last 12 years (Bull Market).

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

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

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.

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.

Only pay penalties and taxes on the unused earnings.

SS is designed to pay out the same globally no matter when you take it. But you one individual are not going to make out the same as anyone else in the global pool.

It's like the story about something has a 1 in 1000 chance of killing you, it's not a big deal to you unless you are that one person who it kills.

So firstly if you take it early and you live past 80-81 years you will get less money and the longer you live the far worse of a deal you would get because you took it early. Now if you wait until you are 70 and you die at 69 and 364 days you didn't collect anything but you are dead so you don't really know that you missed out. If you live and you see the calendar turn and you get to be 83 or 93 you will notice you are getting checks that are nearly half of what you could have gotten if you had waited 8 years.

Now if you are sickly then maybe take it early but if you are healthy you have a pretty good odds of living to 90. I think a lot of the mortality has a racial factor meaning some races of Americans don't live as long as some others (statistically) and you can look at your relative my father is 88 and my mom is 80 both are still kicking.

Also if you are married the chance of one of you living past 90 are even higher (the chances are additive).

Also very important the surviving spouse gets to take the higher of the two SS checks when one dies but only one check when one dies. So if you both take early then one dies the survivor is living on a smaller income than if one of you had waited.

The truth is if you can afford to wait (This means if you have other money like a brokerage and retirement account) you should probably live off that and delay SS until 70 (the check goes up like 8% higher each year you wait). If you are poor (relatively speaking) and you need the SS to live when you are 62 than you can take it but you will probably be poorer all through your retirement especially if you livd to be 80' 90's and higher.

Another strategy is if you are married have one take it early (usually the lower earner) and the higher earner take it later and get locked in for the highest check and the highest survivor benefit.

Try out this https://firecalc.com/ you can change a lot of perimeters like if you get social security or pension or if you want to leave money to your heirs or different spending models.

Also this quick and dirty calculator.

https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

I guess what it boils dow to (imo) no simple answer. But if you can afford to not take SS early you should probably let it build up as ‘longevity insurance’.

Likely half will live past the breakeven point and if you are in that half you’ll be sticking it to Uncle Sam buy getting larger paychecks for as long as you live.

And SS is indexed for inflation unlike some pensions.

One fear is the government will lower benefits some time down the road but hopefully not if they can raise taxes a bit and/or raise the minimum retirement ages (both have been done already and can easily be done some more).

I have three pools of money to draw from when I retire. Taxable savings, tax deferred savings and SS.

I plan to live off my taxable investments while letting my tax sheltered and SS grow. Can roll some of the tax shelter money into Roth IRA when I stop working and am in a lower tax brackets.

If someone lives to 65 he/she has a 33% chance to live past 90. If you’re a married couple the chance is greater than not that one of you will live past 90.

Won't be 100% increase just needs to add like 1-2% and increase the amount subject to tax, to make it solvent, here the history of the tax increases both percentage taxed as well as the amount of income taxed.

started at 1% in 1937 (plus 1% from employer) now is at 6.2% (plus 6.2%) from employer. If you are self employed you pay the whole 12.4%

Amount subject to tax was $3K is now $130K

Also as noted SS is now subject to income tax and the full retirement age has been adjusted up.

https://www.patriotsoftware.com/blog/payroll/social-security-tax-increase/

While Social Security is not a great return on my investment it's not inconsequential and don't forget if you retire early you won't earn as many credits thus have a slightly smaller monthly payment. SS calculated the highest 35 years of earnings adjusted up for inflation and if you don't work a full 35 years you get $0.00 for those years. SS is also progressive so you are not rewarded as much for working extra years (the difference between only 30 years and 35 full years might only be $100 a month)

The highest a single person can get in 2020 (had they made the maximum for 35 years and waited until 70 to collect) is $45,480 per year (per individual).

Correct that was a typo wanted to say now instead of not.

This is something I’m trying to figure out. We did move and bought a more expensive house so we have a mortgage when we retire but lots of other expenses will decrease and won’t be paying as much tax or saving/investing.

Also tho I want to get some expensive toys like a classic car and more pinball machines and will travel more once covid has subsided. I’m betting I’ll spend close to what I spend now until I get older and house is paid off.

Likely the house will be paid off at the time I’m starting to get SS and likely I’ll slow down or not need to buy as much once I’m older. So I’ll need to figure to spend more of my savings the first 15 years and play small ball when I’m older.

I’m curious how it’ll feel to switch gears, going in reverse so to speak after spending 30 years saving and investing to flip a switch and start spending some of that saving.

I love that you did this, also that's quite a bit of driving like 19K miles a year. My brother had an 88 Ford F150 Diesel with 500K miles.

this is not remarkable at all. The Stock market has been on an enormous rise these past 10 years, S&P500 has doubled in 5 years, bonds have also had great returns.

What happens if you had retired in 2000 and the S&P 500 goes from 2100 to 920 in 9 years?

What the market does after you retire is out of your control, you can run simulations and come up with possible returns your starting net worth can go up 10x or it can go down greatly depending on what happens to the economy and stock market after you retire.

“ 1999 – 2009 is called “The Lost Decade” by investors because the most widely followed stock market index, the S&P 500, returned -2% for this 10-year period (and this includes the reinvestment of dividends!). This is a reminder to investors that large U.S. stocks can go long periods of time without generating any gains.
The fact that investors ended up in the same place they started 10-years later does little to really help understand just how painful this period was for many investors. As the below graph shows large U.S. stocks were up and down like a yoyo during the decade falling by about -50% twice during this period.”
12B5B06E-313C-4ADC-A5D6-0F03B108B609 (resized).jpeg

Studies show people spending 25% less when they retire.

Someone said you should make sure you have hobbies to keep your time occupied. Like they said you should have 2 or 3 hobbies on steroids.

I’ve seen my parents and others who have retired who’s day consists of getting up eating 2-3 meals and sitting on the couch for 10 hours. It’s a little depressing, my parents never had any hobbies or occupations outside of work and the kids. Once both were no longer around they never did much. My dad doesn’t even watch any sports. They’re not on the internet or reading books.

Cash is trash, hyperinflation will make cash worthless.

What makes anyone think we will have hyperinflation? Inflation has been and forecast to be very modest.

I was talking to my wife about if we can afford to retire. Yes we can but both feel like working is easy money and or fun enough now that we both cut back to working half time.

The extra income plus letting our savings grow will afford us more enjoyment. I understand Mr Mustache is happy without luxuries, eating out, Starbucks, cleaning and lawn service, nice cars etc. but we’d actually prefer nice stuff.

Also Mr Mustache bringing in a lot of income from blogs and speaking etc. just looking it says he’s making $400k per year. Just keep in mind people like him, Dave Ramsey etc are multi millionaires. Sure listen to their advice but be aware that they are able to buy luxury cars, houses etc. if the choose to.
22943002-7F86-449F-AF6F-D690739D5B98 (resized).jpeg

.

IMO there are many things to consider.

If you are just paying early $1K extra a month but you are not paying off the mortgage in full that is different from the guy who has a small bit left and wants to pay it off completely. Because paying a bit each month is effectively trapping that money so if you needed to get more than you have on hand you might have to take another loan like a HELOC since you paid the money it's not a free agent and you still have the full mortgage every month, it's not like other loans where the payment decreases when you pay extra or you can skip payments if you paid extra. But if you are close to the end and you want to throw $50K at it to be done then you will have the previous monthly payment free.

Also paying off at the beginning of a long mortgage gets more bang for the buck every dollar you pay can save you $2 over time.

I just got a big mortgage and paid 20% down and then another 10% right off the bat because I had sold another house. I was paying a bit extra every month but just stopped so that I would have extra money to invest and we are also doing a new kitchen, maybe after the big renovations are over I will throw a bit on each month because I plan to retire soon and would like to be closer to done with it.

Some people say if you can't decide to pay early or invest you can split the difference and do a little of both.

Here’s another retirement calculator that you can plug in your numbers as well as Social Security etc.

This one is interesting that it also shows you your likelihood (or not) of living to an old age.

https://engaging-data.com/will-money-last-retire-early/#comment-13928

Back in the 80s the tax bracket could be as high as 70% so if you were able to deduct mortgage interest that could have been a 70% deduction.

Now it’s almost impossible to deduct mortgage interest but the top tax bracket is just 37%

Some people can retire early with pension like military or fire or police department.

A lot of people I’ve seen ‘retire’ from the 9-5 job but might have a side hustle like real estate, consulting or hobbies that can earn money or just take a part time job.

Have you guys looked at life expectancy calculators? It’s very fuzzy I just did one said my life expectancy was 92 means 50% chance I’ll live past 92. Another one has my life expectancy at 87 that’s a big difference.

It’s very dependent on the calculator inputs for example the US government calculator just asked my age and sex gave me 83 life expectancy. I’m lumped in with all people my age who may have severe health issues etc..

Other calculators asking health, weight, smoking history, medical history, race education history, come up with vastly different results.

Not Smoking probably as important as diet.

I’m a physician and see many people who don’t do regular medical checkups and screening tests or physical activity, don’t wear seat belts etc.

HSA is one but you have to be in high deductible plans.

Don’t neglect saving in a taxable account. Sure you pay taxes now but you only pay on capital gains when you sell and dividends. This can be lower tax rate than your retirement account when you are withdrawing.

When you retire you can live off the taxable account initially defer SS as long as possible while you backdoor Roth convert your tax shelter in lower tax bracket. Once you start taking SS and RMD your taxes can be close to what you are paying now.

You only pay the higher rate on earnings above the threshold not ALL your earnings.

If you are only $20k into the next tax bracket you only pay the higher tax on that amount (not ALL your earnings).

Also look into Tax Loss Harvesting (TLH) if you do have any investment losses you can sell those stocks and offset them against LT or ST gains (depending on what type of loss it is).

Some IRA's will allow you to trade options and or your high reward trading inside a IRA so you won't get as much Short term gains in taxable.

I agree that charitable contributions are not helping to save for retirement as you will always be saving less by giving away money so this is not a hack to save money but they say you can gift shares of stocks that you can deduct (gift value) the full amount so you will get more bang for your buck than gifting cash.

Say you have $1000 of stocks that you paid $10 for if you sold the stock to and gifted cash you would have to pay tax on $990 of gains whereas if you gift the shares you would not pay any capital gains.

Fun times with taxes.

Also with Social Security distribution can be tax free or it can taxed (up to 85% of your SS can be taxed).

So you don’t want to collect SS when you are still working which a lot of people do.

https://chambersfinancialgroup.com/blog/what-is-the-social-security-tax-torpedo

I use vanguard index funds S&P500 or Total Stock Market fund.

However nothing that is invited in equities will guarantee a consistent return. You can look at past performance but that doesn’t say what the future returns will be. Likely since we have had 10+ great years we will be looking at some pretty down years in the future.

Here’s a graph the worst year for the S&P500 index was minus 42%, that just counts a calendar year so real one year loss has been even more.

Edit: I just looked the worst one year loss has been 48% (March 08 to March 09). This is why I’m not keen to retire any time soon because bonds and cash are not beating inflation and stocks might have a serious correction as soon as I retire. Everyone is loading up on equities because there is nothing else (bonds are not what they used to be). Both Stocks and bonds have over performed so they are both due to underperform their average return rate.

B1B366D2-0D07-4A7B-A657-40B5715C2713 (resized).jpeg

Also if the covid sell off was down somewhere near -40%

Just a recovery to pre crash level would be an 80% gain.

I’m fortunate and more wealthy than my parents by far, so I’ve enabled and encouraged my children to invest in the ROTH IRAs starting at ages 20/21 and they’ve been able to max out a few years. Just that alone could be a million when they retire.

I’m not sure if a massive crash will occur but most likely future returns will be more muted following a massive 12 year bull run.

IOW if stocks typically return 8-10% than after a decade of superior (15%) or more gains. The future decade plus or minus will most likely give below average gains.

I’m closing in on retirement, but luck my job is one I’m able to cut back. Such that I work just 3 days a week. I’m semi retired in that my pay might not cover me but I’m only having to dip into my taxable savings withdrawal half of one percent. While still contributing to my tax advantage accounts.

It will be a tough adjustment when I go full retirement and start taking 4%. Even knowing that I’ll be ok, it won’t be easy to change form constant investment for 30 years to see constant withdrawals.

Exactly. It has to be done in a specific way that make sure it's not counted as a withdrawal, it has to be a roll over (or whatever they call it).

Best to do when you are not in a high tax bracket. Currently there is a step from 12% to 22% and another step from 24% to 32% (that's 8% higher tax) so I would def avoid making a conversion that would put you into a high tax bracket like 32%

Also bear in mind that assets (stocks) are at all time high so converting them now is the highest ever time to do it. (I realize in the future they will be higher yet) but the point I want to make, is if you had a time like 2020 when assets fell 40% all at once you could convert a lot more shares because they are cheaper so you would be converting at a temporary low point.

Conversion is counted as income on taxes, also Social Security is also taxed as income. For me this means that after I retire (low/no income) before I take SS payments. I can convert into Roth when my income tax is low, and live off of my taxable accounts.

This is sometimes called a tax doughnut hole.

Working (high taxes) -retired (low taxes)- and finally Social Security + RMD form tax shelter (high taxes)

you want to take advantage of the low tax years to do conversions.

how did you find it?

I'm in at 2.5% but it's a 10 year ARM so in 9 years it'll reset.

If you look at the tables you see the life expectancy is around 80-83 the older you are when you look at the table the older the life expectancy is because you have outlived all the people who die young. Anyway there are literally millions (almost 2 million) of folks in the US over 90 years old. So the point is these long livers are making bank if they took the latest possible SS benefit. If you take late say 70 and you die at 72 big deal you are dead, but if you take early like 63 and you live to 93+ you are stuck with the lowest payments possible for a super long time.

There's a site that can calculate the best time to take SS, but if you have a good amount and don't need SS to pay the bills, it's usually best to delay. But a lot of people don't save enough and actually can not live without their SS money once they stop working.

*****Most***** payouts are from yearly payroll taxes. Even if the trust fund is raided there will be ongoing payroll tax to pay some of the promised money.

The US has never defaulted on a payment so likely there will be more money printed or higher taxes to fund SS.

SS payroll taxes have been raised numerous times already initially SS tax rate was 2% (1/1% from employees and employers) now it’s 12.4% combined.

You are not planning for any benefits?

Did you not read my post that said *most* payments are paid out of ongoing taxes.

In the future there will people paying into payroll taxes just like now, 12.4% of all wages are paid into the system to be paid out to those taking benefits. That 12.4% in not going away, it will like be higher than 12.4% in the future, at one point it was just 2% tax now it's 12.4% the tax rate only goes up it has been increased numerous times in my lifetime so it's most likely to go up again. Also the amount of salary subject to tax is going up every year, it used to cap out at $60K when I started working it's not caped out at $140K or something and some say it may have no cap in the future that all means more payroll tax is collected every year. It's always going up so even if the trust fund goes to zero there will always be constant flow of a trillion of dollars to pay out every year.

Look at this graph 89% of all taxes are paid out from ongoing taxes as well as tax on the SS benefits. That is not going away, the payments to retirees will always be there as long as the government can collect taxes there will be benefits to pay out.

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When SS first stared in 1937 the most that a person could pay in was $60/year that's 2% on the first $3K income.

Today $17,708 is the maximum that is paid into Social Security and this goes up every.

I'll never be less than 70% in stocks, bonds probably just keep up with inflation (especially now) cash loses money over time. Basically my bond allocation will be so that if/when there is a big loss in the stocks I can live off the bonds while the stocks are not touched and have time to recover.

I never said otherwise, I was pointing out that Social Security does collect a crap ton of taxes (both from employee and employer) and some people (self employed) are responsible for both sides of the tax.

I was going to disagree with that article but then at the end he said if you don’t have anything else to do with the money it’s ok to pay down mortgage and also he said that invested money could lose value so it’s ok to pay down debt. Basically covering all the bases.

I’ll say that both stocks and home prices are at or near all time highs so I won’t count on massive increase in stock or house prices and maybe some correction in both so just don’t say ‘inflation is 6% so therefore house prices will appreciate at 6% too’.

Also older folks that are approaching retirement may want to pay down mortgage because it’s one of the biggest monthly expenses so less to stress your retirement savings.

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.

Americans don't know how to do math.

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.

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.

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