Retirement Finance Discussion

Natebonebusta

Eight Pointer
My retirement planning stage is over. I'm in retirement. I already mentioned how much savings I needed in retirement. I determine what are my expected annual expenses. From that number, I subtract my pension. I need 25 times my expenses (after pension) in savings. This is based on the 4% safe withdrawal rule that's been studied by many. It is based on historical 30 year periods back to the Depression. As always, past results don't guarantee future results. Therefore, my wife and I didn't retire until we met our calculated savings number plus some extra as a cushion for the unexpected.

I am planning to live to 95 years old based on family history. I may die tomorrow. But I would rather die with money still in the bank than under a bridge under a cardboard box. The 4% rule above assumes a person still having 50-70% in the stock market. If you completely conservative with bonds and CDs, the plan will likely fail. Therefore, I am still maintaining that percentage. I moved from 100% stock investments up until retirement. I have moved some to 1-3 year Treasuries ETF and some to 6 month Treasuries. Also have some 1 year CDs. The stock investments are divided up into S&P 500 ETF, small company value ETF and total international stock ETF.

As for revenue streams, I will have three traditional ones - pension, SS, and investments. I do not have an interest in rental properties. I just don't want to be a landlord and deal with people. Yes, I know I could hire a management company. I just don't want to deal with issues like tenants trashing a place or the government allowing tenants to stay without paying like during Covid.
This is pretty much the road map that my wife and I are following. I don’t plan on working a day past 60. My current plan is to step away from the state in 5.5 more years with 26 years worked. Then I’ll pick up part time work somewhere 20-30 hours a week.

My number, well I’d love to be at 3.5 mil by 60. I started too late for that. Current estimations show 2mil at 60, with pensions and future SS the gap should be much less than that.

What I will say to the young in the audience is save early and often. Open a Roth IRA . Don’t steal from your future self, they will pissed!! If you have a lot of TIME that is your biggest asset. If you start early, small amounts will secure your retirement. Even delaying 5 years can cost you hundreds of thousands in growth.

If you delay, you have to buy your time back at a much higher cost.

YouTube is loaded with some quality info, and lots of get rich quick mixed in. Slow and non exciting is the way.
 
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Homebrewale

Old Mossy Horns
This is pretty much the road map that my wife and I are following. I don’t plan on working a day past 60. My current plan is to step away from the state in 5.5 more years with 26 years worked. Then I’ll pick up part time work somewhere 20-30 hours a week.

My number, well I’d love to be at 3.5 mil by 60. I started too late for that. Current estimations show 2mil at 60, with pensions and future SS the gap should be much less than that.

What I will say to the young in the audience is save early and often. Open a Roth IRA . Don’t steal from your future self, they will pissed!! If you have a lot of TIME that is your biggest asset. If you start early, small amounts will secure your retirement. Even delaying 5 years can cost you hundreds of thousands in growth.

If you delay, you have to buy your time back at a much higher cost.

YouTube is loaded with some quality info, and lots of get rich quick mixed in. Slow and non exciting is the way.

Two things have stuck out to me. One was the literature I received on my first day of work for the 401k. I think BB&T was the administrator back then. It had an illustration that if you invested $1000 annually for the first ten years and then stopped adding more money to the account, you would have more money than if you waited 10 years and then invested $1000 annually for the next 30 years. It was to show the power of compounding and starting early.

The other thing is that it doesn't require large amounts of money to build a sizable account as you said. The average return of the S&P 500 since its inception in 1957 is 10.5%. If someone opens a Roth IRA at age 22 and invests $300 per month at 8% for 40 years, they will have $966k in a tax-free account. Work an additional year and it'll be over a million.
 
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KTMan

Twelve Pointer
Contributor
Retired at 52 from the state. Didn't owe a dime when i retired. Even though I was advised not to payoff my mortgage loan I wanted peace of mind so I got supper aggressive and paid it off the last 5 years of retirement.

Means of income are my pension, rental properties (which is about 2.5x pension). My lawn care business.

Investments: 401k, 3 mutual funds, and I have a Charles Schwab account that I gamble on individual stocks.

Know idea how much anyone needs but Ive decided im going to enjoy it and spend it on my family while I'm alive.
 

Helium

Old Mossy Horns
The short and sweet for the wife is 18% of her salary in 401k. It grew fast. She has a small Roth.

I on the other hand don't plan to fully retire as I will be a cattleman until the day I die, God willing. Those bovines will be a significant source of revenue so long the industry can stave off the gooberment regulations but that's crumbling.

I have a significant percentage in the stock exchange. 401k, Roth, and taxable accounts. I have assets that can be sold but would rather not, still the options there. Emergency source so to speak. I don't bank on SS check so whatever I get will be a nice 'surprise'.

I haven't announced it here yet but I took a new job that pays well with several bonus incentives so my free time to take pictures of deer has shrunk considerably. Part of my package is restricted stock which turns out to be 7% of my base pay. I will be participating in the purchase plan as well, more than likely will be maximizing what I can buy. I have resumed 401k contributions, for now have planned 6% to get the match with automatic increase and max the Roth. I haven't figured out my tax obligations yet so more than likely the 401k contributions will be increased.

Even with this planning I want a revenue stream that has no ties to the exchange or cows. Problem is most are capital intensive.

This is all coming from a man driving a 20 year old truck and a mortgage less than $450. I can really delay gratification. I'm struggling to convince myself to go ahead and buy that brand new truck and enjoy some of my money in case I die young. Either way my kids are going to have a good head start as they are the sole benefactors. I know... why not the wife. Trust me she will be fine.
Wait a minute… are you the first farmer to ever admit making $$?😂
 

brownisdown

Twelve Pointer
Contributor
The short and sweet for the wife is 18% of her salary in 401k. It grew fast. She has a small Roth.

I on the other hand don't plan to fully retire as I will be a cattleman until the day I die, God willing. Those bovines will be a significant source of revenue so long the industry can stave off the gooberment regulations but that's crumbling.

I have a significant percentage in the stock exchange. 401k, Roth, and taxable accounts. I have assets that can be sold but would rather not, still the options there. Emergency source so to speak. I don't bank on SS check so whatever I get will be a nice 'surprise'.

I haven't announced it here yet but I took a new job that pays well with several bonus incentives so my free time to take pictures of deer has shrunk considerably. Part of my package is restricted stock which turns out to be 7% of my base pay. I will be participating in the purchase plan as well, more than likely will be maximizing what I can buy. I have resumed 401k contributions, for now have planned 6% to get the match with automatic increase and max the Roth. I haven't figured out my tax obligations yet so more than likely the 401k contributions will be increased.

Even with this planning I want a revenue stream that has no ties to the exchange or cows. Problem is most are capital intensive.

This is all coming from a man driving a 20 year old truck and a mortgage less than $450. I can really delay gratification. I'm struggling to convince myself to go ahead and buy that brand new truck and enjoy some of my money in case I die young. Either way my kids are going to have a good head start as they are the sole benefactors. I know... why not the wife. Trust me she will be fine.
you drive a dodge so ain't much of an upgrade for a new one except won't smell like cow poop for a few days......lol
 

T-Rock

Twelve Pointer
Contributor
Had I stayed in the military I could have retired in 2002 😁

Had I stayed on with the NC DOT Diving, could've retired in 2007 😁

Ended up semi-retiring for the summer of 2022 to roll over 1 retirement fund to pay off a Divorce and pay off the place I’m in now which is a fixer upper we had originally planned on flipping during the Delta surge of Covid, and start construction on a Log Cabin, but life comes at you fast…. 😳

Beginning to think I’m a good example of what not to do,but fortunately I’m pretty much debt free :unsure:

I have 1 more fund which I’m hoping continues to do well (403b with the company match).

My plan is rental properties for supplementation of what little I get from uncle sugar and a 403b to be held in reserve…

Other than that I’ll zip my pie hole and learn as much as I can since I’m possibly gonna hit the green pastures in a year or two

Thanks for starting this thread…
 

Natebonebusta

Eight Pointer
Another word of advice is don’t get caught in the double income trap. If you are a household of two incomes, do your absolute best to live on one and invest the other.

Two incomes usually mean lifestyle creep where all those extra dollars find a way of leaving your possession on stuff you can’t recall a month later.

General investing advice is 10-15% of your income goes to investing. And for 35-40 years that’s good advice. Want to get out sooner? Your rate of savings has to increase. 20-25% is a much better goal to shoot for.
 

bwfarms

Old Mossy Horns
Forgot to add I'm contributing to an HSA that gets annual seed money. Possibly keep undrawn to supplement healthcare in retirement.
 

Chicken209

Six Pointer
There is no wrong or right answer to this. You only need to have enough money to live within your means. Everyone’s idea is different. I retired at 49 with a state pension. That isn’t much money. But me and my wife decided to spend our money on things that make us happy. You can spend your entire life saving and investing this and that. But your gonna die. Enjoy some things now. Don’t wait. You never know when your last day will be. Enjoy your hard work and savings while you can.
 

Soilman

Old Mossy Horns
Contributor
My plan currently is to retire at the end of 2025 with 37 years of service. That will put me at 62 years old. I should have a government pension, a Thrift Savings Plan (basically the government equivalent of an IRA) and social security. The TSP matches up to 5 or 6 % and I've been contributing well over that to it for 36 years. I also have some smaller savings and investments. This gives me a stool with at least 3 +legs. I did a rough figuring a year or so ago and looks like I might be making slightly more in retirement than I do currently. My hope and plan is that I will also be able to continue working part time a couple days a week doing the same work I do now, but without all the responsibilities. Not sure how long I'd do it, but probably 3-4 years at least. That should give me so play money for projects and trips.
All factors are not yet in, but if metered out correctly, my finances should take me into my 90's. This includes a reduction for spousal benefits. . I doubt I make it that long though.
I'm planning on making a visit to a certified financial planner with experience in government retirement shortly to make sure all my "I's" are dotted and "T's" are crossed.
Of course, as I always tell people with discussing retirement, this is just my PLAN. Everything could change if Biden and company retains control. If that happens, I figure I'll be able to afford to retire about 2 years after my funeral.
 

.35Rem

Eight Pointer
When my wife reaches 65 in 5 years, we will have mult income streams including pensions, SS, and retirement investments.

We know how much we need and we are exceeding that in spending. Need to get a handle on it. Most of that is discretionary spending. I worked over time a lot my last 20 years and paid off everything except the mortgage.

I ret at 60, she will at 62. Her pension is much smaller than mine and while she’d like to ret at 60 too she wants to max it out.

We are both holding off on SS until 65 and bridging the gap with traditional IRA. So far it’s working. I credit my Captain when I was a 1stLt at my 2d duty station who sat me down and discussed finances. No one had ever done that with me before and he made an impact. I’ve tried ever since to pay it forward. At my retirement in Nov22, I gave him credit for making that day possible.
 

Firedog

Old Mossy Horns
Contributor
There is no wrong or right answer to this. You only need to have enough money to live within your means. Everyone’s idea is different.
^^^^ That is a fact and really why I wanted to start this thread, just to see how different those ideas are, especially among a group of, mostly, like minded people.

Read something yesterday that said the average person thinks they will need around 1.5M to retire, but the average retirement funds for folks 55 to 64 are just north of 500K... those two dogs won't hunt, at least not together. Living within your means is a moving target.. my thought has always been to try and figure out what I want my means to be and work to that number, then living within them is much easier. I also operate under a couple of assumptions.. 1) I am here for a good time and not a long time.. I don't expect to live much past 80 if I even get that far.. I have not been nice to my body and I can feel that daily.. but man I have had a good time. 2) my expenses in retirement will shrink as I age.. early I will want to travel, see and do, play golf etc, but as I get to the point I can't do many of those things those cost go away.

As for me, I am reading and learning as much as I can. I am pleasantly surprised at the volume and depth of the responses.. Lots of folks get quiet when finances are brought up.

My goal has always been to walk away from Corporate America at 55 if at all possible and my wife doing the same 3.5 years later when she hits the same number. The math is ever changing but I am trending towards closer to 57 than 55 at this point.. Not that I will go full on retirement and do nothing at that point but cut way back to a few days a week doing something I walk away from at the end of a day and don't give a single thought to until I get back the next time.

The real trick is the health insurance gap between the time the wife retires and when we qualify for Medicare. We are on her companies insurance today and it is truly an awesome plan, which in no small part stems from them being a Danish company with European views on employee health.. (my company has the same ins. provider and essentially the same plan, but it would cost 2 or 3x what we pay for the family just to cover me).

I have 3 401K accounts, (wife has 1), a small IRA, a small pension lump sum, 1 rental property (for now) that will yield between 1500 and 2000 a month passive income, my Volunteer Firefighter 'pension' (a whole 220 a month), SS assuming it is still around in its current form, and my personal investment accounts. I don't dabble much in individual stocks, but have done ok with that. Also have 2 years worth of living expenses in high yield savings accounts for emergencies. Will have the house and rental property both paid off in the next 4 years, assuming I don't buy another rental, and those payments are calculated into the living expenses I have put away already. No other debt. Don't forget to calculate property taxes into the expense mix. The plan is to sell our house in Wake County and build a retirement house in the mountains with those proceeds.. that will make us free and clear in a new house with less maintenance in our last years, spend all the money and leave the kids the real estate .
 

DBCooper

Old Mossy Horns
Contributor
The stock market thread started to go off the rails towards a retirement discussion so I figured why not have a thread just for thoughts on retirement financing. Not looking for anyone to divulge how much money they have or where more of a discussion about how you are planning to finance it, strategies, ideas etc.

Couple of starter questions:

Are you even planning for retirement (saving)
How much savings do you think you need to retire the way you want to at 65 assuming you will live until 90?,
How old do you assume you will live to in your current planning ?
Are you diversified or all in the market and if so in what?
Are you implementing a plan for multiple revenue streams, if so how many.?
For those that are already living the dream, did you do enough when you were working? What would you have done differently?

Again not trying to get into anybodies business, just an interesting subject that is getting much bigger in my personal windshield. The you know the more you know.. somebody might learn something, hoping it is me.
Are you even planning for retirement (saving)

Yes.

How much savings do you think you need to retire the way you want to at 65 assuming you will live until 90?,

+/- $2.5M - retiring at 62

How old do you assume you will live to in your current planning ?

Our financial guy had us both living to 95 at first. Once I told him my grandpa died at 73 and my dad at 63, we re-adjusted ;)

Are you diversified or all in the market and if so in what?

We have two Roths and the rest is in 401Ks. By retirement (little over 2 yrs), we will have 0 debt. We still owe a little on our home.

Are you implementing a plan for multiple revenue streams, if so how many.? See above. Market-driven as to which we draw from.
 

thandy

Ten Pointer
I started adding to my 401k young, not sure why but someone along the way told me it was a good idea. I have worked for the same company for 27 years and started with them at 18 years old. I was hoping to retire at 55 but we did some major upgrades to our house and took out a 15 year mortgage against it. I didn't want to do it but got tired of arguing with the with her over it. She is a financial advisor and has managed my 401k since we got married 25 years ago. I should have over 1 million in mine by 55 and if we can get the house paid back off by then should be pretty much debit free. My plan now is to work till I am 58 -60ish and retire. The wife wants to keep working so I will be a stay at home hubby until for 5ish years. She will have just as much if not more in her 401k by the time she retires plus some other investments she has made along the way.

She is good at what she does. She took 3ish grand each when my oldest two were born and invested it, by the time they were 16 and looking for a car they each had over 15k in there accounts. Her great grandpa gave us that money before he passed and told us to use it towards a car for them. The 3rd kid has a some Apple stock and we plan of doing the same thing for her when she turns 16. No idea whats in that account but it will be more than the other two had.
 

Moose

Administrator
Staff member
Contributor
I took early retirement @56 from county government. I had plan to work till I was 60.5 and get full retirement but things changed.

I didn't really start saving for retirement till after I got married age 30.

The early years was 401k minimal paycheck contribution and the county retirement. Paid off debt and really tried to avoid a lot of debt. Around those early years I was given a modest gift of money from a family member. Other family members got the same gift..... many took a vacation, or bought a vehicle or appliance. Me I did a boring thing of buying 4 DRIP stocks.... it was less then $3000 today those 4 stocks are worth about 30k.

Working for the county I watched many of my co workers retire over the years and over half of them returned to work cause they couldn't make it on what they retired on. I swore that wouldn't be me when the time came.
I really plowed money into my 401 k . Whenever I got a raise I put half or more into 401k. County also put 5% match of my annual salary.
I tried to educate those who worked for me to do the same but I'm afraid many didn't take that advice.
I also have benefited from lifetime health insurance that made it possible for me to exit early.
My initial plan was to take a parttime job but when covid hit I decided I didn't need it.
My wife is still working in her family buisness my FIL still working "part-time " in his 80's. I don't see my wife retiring anytime soon.

The next thing I got to figure out is when I'll start taking SS.

My advice to those starting out is similar to what others have already shared....
Live below your means
Forego current luxury to save for the future...
Avoid debt as much as you can.

While I don't necessarily follow Dave Ramsey's plan to a T there is some great principles to get ya on the right track
 

QBD2

Old Mossy Horns
I’ve put a minimum of 10%, and as high as 20%, of my salary in an IRA since I was 19. Never counted on SS being available for me. Also have land and timber making silent money.

I’m gonna quit when I get ready to, and I don’t really care if there’s enough to last…leave a bill not a will!
 

Redneck Rocker Dude

Old Mossy Horns
I "started over" at 27 when I switched from state to fed, but I've got my state retirement money set aside for a down payment on a house when/if the interest rates ever become acceptable again. I also started taking retirement serious and I invest 8% out of every check, with the goal to eventually get to 15% over time. Thankfully I've got a pension that'll be an addition, and I "plan" to work until 59 1/2 so I can walk away able to withdraw from my TSP. My wife is younger than I am and her family isn't as "financially savvy" as I was, but i'm trying to get her on board with taking it more serious. All in all we've got a long way to go but we are young, and now that i'm in the fed system I don't plan on leaving.
 

Firedog

Old Mossy Horns
Contributor
My advice to those starting out is similar to what others have already shared....
Live below your means
Forego current luxury to save for the future...
Avoid debt as much as you can.
The bolded one is one of those I can only get behind to a degree. Nobody is guaranteed a 'future' not even tomorrow. So I have always tried to balance it.. I am going to enjoy today and the benefits of the money I make now too. Not saying this is what you are advising, as I agree with your list, but I know some people who are miserable today worrying about the future.. they will be miserable for 40 years to enjoy 10-25.. maybe. I don't want to be that guy either.. that is as bad as getting to retirement age with nothing..
 

Natebonebusta

Eight Pointer
The bolded one is one of those I can only get behind to a degree. Nobody is guaranteed a 'future' not even tomorrow. So I have always tried to balance it.. I am going to enjoy today and the benefits of the money I make now too. Not saying this is what you are advising, as I agree with your list, but I know some people who are miserable today worrying about the future.. they will be miserable for 40 years to enjoy 10-25.. maybe. I don't want to be that guy either.. that is as bad as getting to retirement age with nothing..
Studies I have read discuss people who save to the point when they hit 35-40 years of doing it, can’t go the opposite direction and spend any because that muscle has atrophied.

Balance is always the difficult part. I worry how much will be enough for the future. It’s impossible to predict. What I don’t want is to miss the quality years I have left.

This is a great thread, thanks for starting it!
 

Firedog

Old Mossy Horns
Contributor
Balance is always the difficult part. I worry how much will be enough for the future. It’s impossible to predict. What I don’t want is to miss the quality years I have left.
Agree.. but I have always thought about it this way.. I can always make more money if I need to.. I can never get time back. I admit I have swung too far in both directions at times. More about collecting memories and experiences now and less about things. I am really enjoying reading how folks are looking at this.
 

Moose

Administrator
Staff member
Contributor
Your right FD....

I guess you need to weigh things out and set your priorities......

I love hockey in the early days I'd go see a few games a year..... now today I'm a STH...

There are countless other examples like hunting trips i enjoy today compared to what i did when i was starting out. I guess ya got to weigh the priorities.

I have some regrets on things I should of spent money on that I didn't at the time. But overall I'm happy how things have turned out.

The faster you start and build the saving muscle the faster it can begin producing. Build up the momentum and later on you can enjoy better things. But could point don't do it at the cost of not enjoying where ya are at currently.
 

Eric Revo

Old Mossy Horns
Contributor
My story is a bit different as my retirement plans went out the window a couple of years ago, well actually went out the door along with half of whatever I had planned to use as supplemental income. Thankfully I have property that can be used as rental income if needed, several options of roofs over my head , a decent retirement from a previous job, my current job retirement in 4 years, unlike several I am depending on SS at 67(not relying on it but it will be part of my planned income monthly), a decent amount in my IRA and TSP accounts that I didn't have to split and other "things" that I plan to liquidate as I get older. I should actually make more retired than I currently do as a salaried employee, hopefully.
Life throws us curveballs and it's best to be able to dodge them the best that we can instead of letting them hit us in the face and take us out. My family history on both sides is that of death at 60 or shortly afterward for the menfolk and living well into their 90's for the womenfolk, hopefully that changes with me.
 

timekiller13

Old Mossy Horns
Forgot to add I'm contributing to an HSA that gets annual seed money. Possibly keep undrawn to supplement healthcare in retirement.
I forgot about mine and my wife’s HSA.

A big hurdle I hear from a lot people when it comes to retiring is insurance. A well funded HSA can be a nice supplement and help with that insurance hurdle.

Depending on how much income you have at retirement age and if you are not yet eligible for Medicare, one could probably get a high deductible plan on the marketplace and use the HSA to cover the rest.

I’ve also met a couple primary care providers who are now offering “insurance” plans through their practices. They have tiers based on your health/age and anticipated number of annual visits. One showed me the different tiers and they ranged from $20-$80/month. Smart move on these PCPs part. They have eliminated insurance billing and coding for the most part. Cash only. But they still offer your basic services (labs, physicals, sick visits etc).
 

DBCooper

Old Mossy Horns
Contributor
Agree.. but I have always thought about it this way.. I can always make more money if I need to.. I can never get time back. I admit I have swung too far in both directions at times. More about collecting memories and experiences now and less about things. I am really enjoying reading how folks are looking at this.
This is the reason (above) Dave Ramsey leaves me SMH. 🤷‍♂️

Dave assumes no one makes enough money to enjoy life. His first question to callers SHOULD be....."What is your household income, after taxes"?

He's usually three or four derogatory statements in before he asks that nugget.
 

roundball

Old Mossy Horns
Contributor
Probably older than many of you, long career with IBM, and their retirement pension amount was capped at 30 years. I was still relatively young enough that I was able to get the same job with the State, and built up a 16-year retirement pension there that was actually a little more than the 30-year pension from IBM.
While working with the State, I used the IBM pension to pay off the house, any debts, did some major home improvements, and built up savings. Retired at age 65 to get the full amount of SS.
We were never extravagant, drove cars 15 years on average. We’ve been enjoying retirement for 14 years now with three sources of annual income and so far haven’t had to use any of our savings for retirement living.
 
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