+ Reply to Thread
Results 1 to 23 of 23

Thread: Retirement

  1. #1
    Administrator   
    Join Date
    09-06-06
    Location
    Idaho
    Posts
    3,326

    Retirement

    I'm curious how many forum members are actively saving for retirement and what vehicle you are choosing (401K, Roth 401K, IRA, Roth IRA, pension, etc).

    In general the group of people nearing retirement are very poorly prepared to retire (I don't know anyone with much of anything in their 401K that's within 5 years of wanting to retire) so they are planning to use social security as their primary income.

    My wife and I are early 30's and actively contributing pretty highly, we are bogleheads and invest in 401k, Roth IRA, taxable account, and 429s (college savings accounts for kids). We will delay social security until 70 to maximize the survival benefit for my wife and also to get the delayed claim credits (roughly 8% a year guaranteed is hard to beat).

    The Bogleheads approach begins with an investor deciding on percentage allocations to various asset classes, such as U.S. stocks, international stocks, U.S. bonds, etc. The desired allocations are then implemented using low-cost vehicles which are true to the targeted asset classes. Tax costs are carefully considered, influencing decisions as to what investments to place in taxable versus tax-advantaged accounts.
    Bogleheads emphasize regular saving, broad diversification, and sticking to one's investment plan regardless of market conditions. Information relevant to the group's core beliefs is available in The Twelve Pillars of Wisdom and Vanguard's Investment Philosophy, and are explained in greater detail in Bogleheads Investment Philosophy.
    - http://www.bogleheads.org/wiki/The_Bogleheads
    Si vis pacem, para bellum

  2. #2
    Administrator   
    Join Date
    11-19-03
    Location
    AZ
    Posts
    13,086
    I was working for retirement in 9 years when I discovered that my retirement check, after 20 years, with the medical insurance costs taken out, would be about $600 a month. I then realized I will never retire, so I my "plan" is to die at work in 20 years.
    If total government control equals safety, why are prisons so dangerous?

    http://czforumsite.info/

  3. #3
    Senior Member  
    Join Date
    01-21-11
    Location
    Missouri
    Posts
    131
    I had a pension and a 401K... had to cash them both in a few years ago when the economy tanked and I ended up without a job for almost 2 years. (Not for lack of looking either.) Of course regardless of anything, the household had to keep running and bills had to be paid. Three kids, wife, medical expenses, etc. ate it all up faster than you'd think... Now I'm 38 and having to start it all over again...

  4. #4
    Senior Member  
    Join Date
    03-26-08
    Location
    the wilds of Western Mass
    Posts
    620
    Quote Originally Posted by JEStucker View Post
    ...Now I'm 38 and having to start it all over again...
    I feel your pain, but I'm 50.

  5. #5
    Senior Member  
    Join Date
    10-31-08
    Location
    Miami Beach,Florida
    Posts
    12,836
    Quote Originally Posted by Joist View Post
    I feel your pain, but I'm 50.
    I feel all your pains, but I'm 71. With some continued luck from the Dow (30% equities, 70 percent bonds) plus Social Security, I may just manage not to outlive my portfolio.Maybe.

    My older sister was a Stock Broker from 1957 to 1994. 37 long years..From the age of 15 she taught me a lot. Thank you,Sis. It helped.
    "A man's got to know his limitations."

    'Harry Callahan' Magnum Force 1973

  6. #6
    Administrator   
    Join Date
    09-06-06
    Location
    Idaho
    Posts
    3,326
    I really liked 70 bonds, 30 equity. 70 fixed, 15% reit, 15% equity is as low as I will go in retirement, that portfolio even with bonds losing nav is down less than 1% and with distributions is up nearly 2% this year.
    Si vis pacem, para bellum

  7. #7
    Senior Member  
    Join Date
    09-15-07
    Location
    SE Minnesota
    Posts
    3,260
    401k, Roth IRA, Health Savings Account, other non-retirement savings, a few US Savings Bonds, and my house is paid for. Mostly accomplished by living below my means.

    I plan on working about 10 more years. Pretty sure my employer plans on laying me off as soon as they notice how old I really am. (I look young for my age, but gray hair is starting to give me away) If I can hold out 1.5 more years, that'll be good because I'll be "retirement eligible." (unlocks some other funds, plus I'll get a better severance)
    "Nobody wins in a Dairy Challenge" —Kenny Rogers

  8. #8
    Senior Member  
    Join Date
    08-25-05
    Location
    Tennessee
    Posts
    2,376
    I am still in my 20's, but I have a Roth. I assume SS will fail before I reach the age, but if it is actually still there I plan to delay starting to maximize whatever it does give me.


    Ideally, I plan to keep the Roth going, and store as much into whatever company retirement accounts I can that is a good deal for me. If they will match a 401k for example, that'd be nice.
    Lets give Tennessee the best gun laws in the country!
    http://www.tfaonline.org/index.php
    http://www.tfaonline.org/forum
    NRA - Benefactor, TFA - Life, GOA - Life

  9. #9
    Senior Member  
    Join Date
    12-31-08
    Location
    Illiana
    Posts
    5,654
    I'm 57, and managing my IRA and 401K is one of my daily to-do's. I worked for many years for an employer with a defined benefit plan, and had the opportunity this year to convert that to an IRA rollover (transaction in process).

    I'm in that in between area -- I certainly won't starve, but my skill in managing my money for the next 10-15 years will make a big difference in the lifestyle choices I have in my 70s.

    I concur that delaying social security as long as reasonably possible is a big potential monthly benefit. That presumes that you have enough income without it (e.g. are healthy enough to continue working...)

    When I was in my 30s I thought I wanted to retire at 55. However, a few pauses from work for medical and job search reasons convinced me that I need something useful to do, and I now plan to work for another 9 or 10 years... I like what I do and find the routine more comforting than oppressive. Plus, if you are good at your job and one of the senior people, it's pretty easy to get Friday afternoon off once in awhile....

    As for asset allocation, I am from the Peter Lynch school -- largely if not completely in equities. However, I am educated as a financial analyst and have advantages in this area that many do not, so I wouldn't necessarily advocate that others follow my example.
    Paul
    People have some respect for the complexity of technology. But almost every ignorant fool thinks he understands money and economics.

  10. #10
    Administrator   
    Join Date
    09-06-06
    Location
    Idaho
    Posts
    3,326
    Have you considered moving part of the assets to a SPIA? The nice thing about them is you get a relatively high payout and it pays until your death so you can't run out of money.

    The potential negative is if you don't live long enough to recover the principal you paid into the SPIA but you can get a minimum term rider so it pays a minimum of 15 years for example.

    It can be a great way to bridge an income gap because the payout percentage is higher than what you can safely withdraw from a 401K. Payouts are smaller right now because of low interest rates but still considerably more than bond yields, you can get a quote at immediateannuities.com.

    We are 23-28 years away but if we were to retire today we'd cover our base living expenses with a SPIA, maintain 2-3 years cash and withdraw 4% of the remaining balance year.
    Si vis pacem, para bellum

  11. #11
    Senior Member  
    Join Date
    12-31-08
    Location
    Illiana
    Posts
    5,654
    I've never been a big annuity fan for my own situation. They can make sense for some folks though.

    Remember, the people selling the annuity have to make a profit somehow, and they are making it off the money you give them. What you have to ask yourself is, are you happy with the value you are getting for that? If so, great, if not, well, move on to plan b, or c, or d.....

    I am generally more comfortable with the 4% withdrawal (at a maximum) philosophy. But that doesn't necessarily work for everyone either.

    One of the difficult things in addressing a topic like this -- everyone is different in their degree of comfort with managing money, and their tolerance for risk, and their willingness to go through a financial planning process.

    I have one friend who is so risk averse that he will consider no investments other than gold or treasury securities. He's a smart guy and he understands the concept that one can do better -- but he doesn't trust any other investment at an emotional level.

    My sister is a professional CFP and has a wide mix of clients. Some like annuities because it greatly reduces their decision making. Others prefer to be more involved in managing the money themselves. It's as much a personality issue as it is financial....
    Paul
    People have some respect for the complexity of technology. But almost every ignorant fool thinks he understands money and economics.

  12. #12
    Senior Member  
    Join Date
    10-31-08
    Location
    Miami Beach,Florida
    Posts
    12,836
    Quote Originally Posted by pmeisel View Post

    As for asset allocation, I am from the Peter Lynch school -- largely if not completely in equities. However, I am educated as a financial analyst and have advantages in this area that many do not, so I wouldn't necessarily advocate that others follow my example.
    I too am from the Peter Lynch school.Until I retired at age 61 in 2003 (induced by severe hearing loss), I had 100% of my self created 457 plan in equities.(Government employees are not allowed to use a 401(k).

    However since then, knowing I could never again possess a well paying job, my risk aversion heightened to the point that today, I'm only 30% in stocks. It is all mental as you point out,Paul. Many times I've looked at my portfolio in the last 10 years and realize not staying in stocks has cost me. Especially since that terrible low of March 9,2009.

    But peace of mind and sleeping soundly are important and ruminating is a really big time killer. So I have no regrets. I'm lucky to be where I am.

    But under normal conditions,I agree. Stay in stocks as long as you can. Since 1926 they have outperformed everything:real estate,metals,bonds,you name it.

    And if I can suggest a few Mutual Fund companies that I really trust and have dealt with for decades: T.Rowe Price and Dodge & Cox. They both have served me very well. I can heartily recommend them both.
    "A man's got to know his limitations."

    'Harry Callahan' Magnum Force 1973

  13. #13
    Senior Member  
    Join Date
    09-15-07
    Location
    SE Minnesota
    Posts
    3,260
    My bond funds are all underwater this year, down quite a bit. *Old* US Savings Bonds are paying pretty good interest until they mature in a few years. (new ones pay horrible rates, thank-you Lloyd Benson.)
    "Nobody wins in a Dairy Challenge" —Kenny Rogers

  14. #14
    Member  
    Join Date
    08-23-07
    Posts
    7,959
    In my case, retirement is very far away. Our investments are mainly real estate and production equipment that is "leased" to the corporation.

    I suspect when I am ancient and the children have finished college. (Hopefully participating in the family corp) we will take my Dad's advice of land, gold and cattle. Until then, it's the high risk/high yield investments. Later when the net worth justifies we will start on serious retirement strategies. We just aren't ready for the Keogh plan yet.

  15. #15
    Senior Member  
    Join Date
    09-24-08
    Location
    Approximately US60 & AZSR87
    Posts
    3,083
    I had a pension and a 401K... had to cash them both in a few years ago when the economy tanked and I ended up without a job for almost 2 years. (Not for lack of looking either.) Of course regardless of anything, the household had to keep running and bills had to be paid. Three kids, wife, medical expenses, etc. ate it all up faster than you'd think... Now I'm 38 and having to start it all over again...
    I can relate. I haven't found a job since June 2008. The economy implosion of 2008 completely wiped out my entire life's savings, SEP IRA, personal IRA and my investment account. I'm 58 and lucky to be able to keep a roof over our head with barely enough freelance projects - of which taxes eat the lion's share. Thankfully, the only thing I owe money on is the house.

    Chances are I will die before I can retire.

    Zip
    "Few of the great tragedies of history were created by the village idiot, and many by the village genius." Thomas Sowell
    "Sometimes absurdity is worth it for its own sake." Andrew Breitbart
    "Reality is not optional." Thomas Sowell

  16. #16
    Senior Member  
    Join Date
    09-24-08
    Location
    Approximately US60 & AZSR87
    Posts
    3,083
    (I look young for my age, but gray hair is starting to give me away)
    Cheat. Color it.
    Dye it slowly over time to the condition you want it to be. It will then be easy to keep it the color you want just by combing a little dye into your hair every week or two.

    I'm way past that. What isn't gray is gone. And their really isn't very much left, to be honest.

    Zip
    "Few of the great tragedies of history were created by the village idiot, and many by the village genius." Thomas Sowell
    "Sometimes absurdity is worth it for its own sake." Andrew Breitbart
    "Reality is not optional." Thomas Sowell

  17. #17
    Senior Member  
    Join Date
    07-12-09
    Location
    Suburban Wasteland of NC
    Posts
    768
    I'm doing the Thrift Savings Plan (TSP) with 60% in the C fund, 20% in S, and 20% in I. I recently changed my contributions to 60% S, 20% C, and 20% I after seeing their chart showing the S fund outperforming the other 2 over the last decade. Didn't change what's already in there though. They recently started the Roth option, which I switched my contributions to. I emailed them about it, but they haven't set up a mechanism to allow transferring my existing money to Roth yet.

    I was an idiot and didn't change my contributions from T-Bonds, which is what the TSP defaults to, until Sept of last year. I started the thing when I was 20 or 21, but now am playing catch up. As of the end of July it's been doing 20.72% on the fiscal year.

    I'm also playing catchup because I was an idiot and am just now doing what I should have done in 2008: start up a fund outside of TSP. I've got 1 fund going so far with Fidelity that's made 4% in the 2 weeks since I started it, and as long as I stick to the plan I drew up I'll have 3 more funds up and running with them by Christmas. It's easier to do that since I'm here and there's really nothing to spend money on, the trick will be to keep contributing once I'm back in the states next year. The idea is that these funds will serve as a down payment on a house eventually. We're moving in late 2014 and then will be moving again 3 years after that, so no point in buying now.

    Obviously I don't expect the Fidelity funds to continue going up like a rocket indefinitely, but they've made over 10% for the last decade and I don't plan on needing the money for a house for at least 5 years out.

    On a sidenote, I wish they'd put what I pay in FICA tax in my TSP instead of taking it and doing God only knows what with it. I think I'm about as likely to win the lottery as collect much of anything from social security in 36 years*, and I've only bought a ticket once.

    *The SCOTUS has already ruled that you have zero claim on the money that you've paid in FICA taxes over a working lifetime (http://www.cato.org/publications/com...ocial-security) and last I heard social security was on track to go bankrupt well within the next 30 years.
    Last edited by happygeek; August 3rd, 2013 at 08:48 AM.

  18. #18
    Senior Member  
    Join Date
    12-31-08
    Location
    Illiana
    Posts
    5,654
    But peace of mind and sleeping soundly are important and ruminating is a really big time killer. So I have no regrets.
    As well you shouldn't. As one blogging investment advisor that I follow ("Random Roger") says: Your goal isn't to beat the market. Your goal is to have enough to provide for your lifestyle. So you have succeeded.

    As for working until you die, that's not bad if you like what you do. I have seen quite a few in their 70s and 80s who have slowed down a bit but won't step away -- their work is part of their psyche and they can't be happy without it.

    The nature of my job is such that I don't think I'll be able to stand the pace past my late 60s -- but I am working on a couple plan B's that will allow me to do something similar at a reduced schedule. I need the mental stimulation -- golf, fishing, and hunting just wouldn't be enough.
    Paul
    People have some respect for the complexity of technology. But almost every ignorant fool thinks he understands money and economics.

  19. #19
    Member  
    Join Date
    08-23-07
    Posts
    7,959
    Quote Originally Posted by pmeisel View Post
    As well you shouldn't. As one blogging investment advisor that I follow ("Random Roger") says: Your goal isn't to beat the market. Your goal is to have enough to provide for your lifestyle. So you have succeeded.

    As for working until you die, that's not bad if you like what you do. I have seen quite a few in their 70s and 80s who have slowed down a bit but won't step away -- their work is part of their psyche and they can't be happy without it.

    The nature of my job is such that I don't think I'll be able to stand the pace past my late 60s -- but I am working on a couple plan B's that will allow me to do something similar at a reduced schedule. I need the mental stimulation -- golf, fishing, and hunting just wouldn't be enough.

    When my gramps "retired" he kept 25 acres, had my brother dig a pond, bought a team of mules and had my uncle build him a set of mule drawn implements. He raised beef cows, vegetables and catfish in his "idle years." He would fill his wagon with veggies and sweet corn and have the mules pull it to a shady spot on the highway and sell them to the tourists. The catfish he sold to a company that came out and netted the fish & took them to their facility for cleaning and processing. The cattle he sold by the half or the quarter. He often claimed he made more money off his 25 acres than he did the whole farm and didn't have to get up at 4 am to milk.

    When people told him he didn't have to work that hard anymore he always said the same thing... "Been more old men been killed by a rocking chair than spending time with a pair of mules. "

    My Gramps was more a man than John Wayne could ever pretend to be.
    Last edited by Selena; August 3rd, 2013 at 03:56 PM.

  20. #20
    Senior Member  
    Join Date
    09-24-08
    Location
    Approximately US60 & AZSR87
    Posts
    3,083
    As for working until you die, that's not bad if you like what you do.
    My job, I love. Often the clientele and especially Government regulators, make it hell.

    I will work until I die only because I have no other option.

    Zip
    "Few of the great tragedies of history were created by the village idiot, and many by the village genius." Thomas Sowell
    "Sometimes absurdity is worth it for its own sake." Andrew Breitbart
    "Reality is not optional." Thomas Sowell

  21. #21
    Senior Member  
    Join Date
    03-15-09
    Posts
    456
    Well, the Powerball paid out last night, but the winner wasn't in my state.


    Guess it's back to the drawing board for me.


















    [/sarcasm]
    -"Who's that jerk who calls himself GoWolfpack?"

    -"I'm that Jerk!"

  22. #22
    Senior Member  
    Join Date
    03-01-08
    Location
    Iowa
    Posts
    112
    I will be 67 in less than four months and I retired at the end of June 2010. My wife is a nurse and works 1/2 time. We have no debt after paying off our mortgage several years ago. We have credit cards but having been paying the account balances every month since the tax deduction for credit card interest was eliminated. I have a 457, a 401(c), an IRA, and a savings account. I have a good pension based on 36 years of service and have two more years of retirement incentive annual payments. My wife has a 403(b) previous employment, a small IRA, and a small "pension" account with her current employer. Of course our retirement investments fluctuate with the economy. I opted for Social Security at age 66. The combination of Social Security and my pension substantially exceeds our monthly average cost of living. I feel very fortunate, particularly because I didn't start my career until I was 28 - after seven years in college and a tour of duty in Vietnam. My first year salary was just over $12,000 and I experience salary freezes a few times during my career. Finally, I am not a financial or investment expert.
    Vietnam Veteran
    NRA Life Member
    RMEF Life member

  23. #23
    Administrator   
    Join Date
    09-06-06
    Location
    Idaho
    Posts
    3,326
    Good for you! My ex wife's mother lives with her, and my current wife's mother is probably going to have to live with us. Neither saved anything and their sole source of income is SS which they claimed at 62 (nearly half what they'd get if they'd deferred it). My grandmother lives on a small pension and social security, no savings.

    We've committed to retiring by 60 (55 is a possibility) and not being solely dependent on social security. We'll defer to 70 and use it as our inflation tied annuity. Even at 70% of benefits social security will exceed our living requirements (we are at max ss benefits).
    Si vis pacem, para bellum

+ Reply to Thread

Posting Permissions

  • You may post new threads
  • You may post replies
  • You may not post attachments
  • You may edit your posts
  •