Go Back  The Hull Truth - Boating and Fishing Forum > BOATING FORUMS > Dockside Chat
Reload this Page >

Devaluation of the dollar VS my retirement savings

Notices
Like Tree24Likes

Devaluation of the dollar VS my retirement savings

Old 06-11-2019, 05:11 AM
  #21  
Senior Member
 
Join Date: Feb 2002
Location: NJ & MV
Posts: 3,836
Default

Originally Posted by Lorne Greene View Post
Stock market return has averaged 10% year for the past 100 years. The fed tries to keep inflation around 2% add in compound interest and you will be fine.

If you are asking this question you should be researching compound interest, inflation rate and market returnes.
Originally Posted by maintenanceguy View Post
If the future looks anything like the last 100 years, you're money will grow faster than the dollar shrinks. Invest in boring old index funds and you should be able to get 10% minimum per year. ....,
Using 10% average annual returns for planning purposes is a BAD IDEA.

Especially if following conventional wisdom as it relates to sector investing and “Safe” bonds...

If you are 100% in stocks, 7% average annual return is a much more realistic number for forecasting...

Originally Posted by SeaJay View Post
Predictions made by financial experts of where inflation and the general economy will be next year are iffy at best.
38 years from now, who the heck knows.
Does that mean one shouldn’t try to forecast in an attempt to have a reasonable savings road map to reach a retirement nest egg goal?
aubv is online now  
Old 06-11-2019, 05:18 AM
  #22  
Senior Member
 
Join Date: May 2017
Posts: 622
Default

I second reading the Boglehead forum, starting with the Wiki.

I echo that you likely should be investing POST tax dollars into a ROTH account. If your 457b doesn't offer a ROTH option, then see if you can do a ROTH IRA.

As important as how much you put in is WHERE you invest it. The Boglehead forum discusses a 3 fund portfolio - total stock market, total international stock market, and total bond market. Each is a low expense index fund, usually at Vanguard. For that low an investment amount, and your age, I would be inclined to go with 100% stock, maybe 80% US and 20% international.

Does your company pension offer investment options? Pick the best that are the lowest expense ratio. If they offer Vanguard funds, that's the likely place.
rickboat is online now  
Old 06-11-2019, 05:27 AM
  #23  
Senior Member
 
Join Date: Oct 2006
Location: LBI NJ
Posts: 2,286
Default

Just forget all that crap. Here's what's to remember. Starting now is WORTH IT'S WEIGHT IN GOLD.

Look at it this way.There is always something important to use your money on. House, car, food, insurance , girlfriend, wife, kids etc. IF you wait just 10 years to start because of (see prior) you will have like half as much at retirement.

You're in an especially tough position w/o SS. (LOL then again maybe we all are for relying on it). START NOW. Just getting started is the hardest part. Then hopefully you can squirrel in more moving forward.

Plus odds are you may not be there for next 38 years. So having a retirement fund started now is a priority
Tireless likes this.
Re-Bait is offline  
Old 06-11-2019, 05:32 AM
  #24  
Senior Member
 
Join Date: Feb 2002
Location: NJ & MV
Posts: 3,836
Default

Originally Posted by rickboat View Post
I second reading the Boglehead forum, starting with the Wiki.

I echo that you likely should be investing POST tax dollars into a ROTH account. If your 457b doesn't offer a ROTH option, then see if you can do a ROTH IRA.

As important as how much you put in is WHERE you invest it. The Boglehead forum discusses a 3 fund portfolio - total stock market, total international stock market, and total bond market. Each is a low expense index fund, usually at Vanguard. For that low an investment amount, and your age, I would be inclined to go with 100% stock, maybe 80% US and 20% international.

Does your company pension offer investment options? Pick the best that are the lowest expense ratio. If they offer Vanguard funds, that's the likely place.
You can live a long happy life never owning a bond or foreign markets....
aubv is online now  
Old 06-11-2019, 05:44 AM
  #25  
Senior Member
 
Join Date: Sep 2007
Location: Deltona FL
Posts: 2,006
Default

X railroader here.

Take advantage of stock options or profit sharing. offered.

Work 15 years in RR you get vested and any SS payments later get rolled over to RR retirement. Rr retirement is good but you pay in more than you do with SS.

Doug
Southern Railway
Jace1022 likes this.
rdmallory is offline  
Old 06-11-2019, 05:47 AM
  #26  
Admirals Club Admiral's Club Member
 
spraynet 1's Avatar
 
Join Date: Sep 2005
Location: Sanford, FL
Posts: 7,220
Default

OP......Your already 99.9% above and beyond all other 22 yr olds. Awesome job young man. Your doing fantastic, keep it up and you may just retire at 50!

Don't sweat the small stuff...
spraynet 1 is offline  
Old 06-11-2019, 07:02 AM
  #27  
Senior MemberCaptains Club Member
 
Join Date: May 2005
Location: South Florida
Posts: 9,139
Default

Everybody said it, you’re looking at this the wrong way - you want to invest as much as possible now for lots of different reasons.

As for inflation in particular - although I don’t think anyone expects to see dramatic US inflation in their lifetime, you can mitigate this by investing in things which are expected to appreciate in value with inflation - for instance, real estate.
Flot is offline  
Old 06-11-2019, 12:14 PM
  #28  
Admirals Club Admiral's Club Member
 
Join Date: Oct 2014
Posts: 5,601
Default

Originally Posted by nicecast View Post
How do you "not pay into social security?" I thought the exemptions were foreigners, religious, students and income level?

And, btw I think that's a bad idea. At 22 you have no idea what the future holds; many people with "secure" pensions are bagging groceries in their seventies. SS contributions are so small you can still have plenty of $ to play the market.
As mentioned RR is a plan all in itself, you put into RR and not SS, the govt. wants to do away with it but have yet to figure out how they can cash in at the same time. RR is far better then SS.
YFMF is offline  
Old 06-11-2019, 12:34 PM
  #29  
Admirals ClubCaptains Club Member Admiral's Club Member
 
Join Date: Mar 2007
Location: Lighthouse Point
Posts: 5,056
Default

OP is smart for investing early. He should be encouraged. 15% is probably better. If he is able to keep it up until 60 and manage wisely he'll be very well off.
magua likes this.
joe.giuliano is offline  
Old 06-11-2019, 12:47 PM
  #30  
gf
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Feb 2001
Location: North of Boston
Posts: 12,975
Default

Originally Posted by Lorne Greene View Post
Stock market return has averaged 10% year for the past 100 years.

That is not correct.
gf is offline  
Old 06-11-2019, 12:50 PM
  #31  
Senior Member
 
Join Date: Dec 2002
Posts: 1,884
Default

Originally Posted by Marlin308 View Post
Invest as much as you can as early as you can. Here is a simple example of compound interest from one of Dave Ramsey’s books me ex sent to our daughter so she can start investing at 18.




This is complete horseshit, I did the math,
At 7% returns they got:
Jack got $457,672
Blake got $454,736

Jack still did a lot better for his money, but neither of them got millions.
Nightowl likes this.
GravyBoat is offline  
Old 06-11-2019, 01:38 PM
  #32  
Admirals Club
THT sponsor
 
williamwallus's Avatar
 
Join Date: Jun 2014
Location: SWFL, Midwest
Posts: 3,240
Default

buy bitcoin and thank me in 1-2 years
USD is going to shit.
williamwallus is offline  
Old 06-11-2019, 01:38 PM
  #33  
Senior MemberCaptains Club Member
 
Join Date: Mar 2002
Location: Pensacola, FL
Posts: 5,156
Default

Originally Posted by GravyBoat View Post
This is complete horseshit, I did the math,
At 7% returns they got:
Jack got $457,672
Blake got $454,736

Jack still did a lot better for his money, but neither of them got millions.
Yeah, I want to see the rest of the page and the assumptions. Doesn't pass the sniff test.
DreamWeaver21 is offline  
Old 06-11-2019, 01:45 PM
  #34  
Joe
Senior MemberCaptains Club Member
 
Join Date: Mar 2001
Location: Mt Pleasant, SC
Posts: 16,100
Default

The US will be bankrupt probably around the same time you intend to retire. I'd stock up on toilet paper and live life early, and often. It won't be very pretty when you hit 60-65. Invest in how to beat the US law systems and sell cocaine wholesale.
Joe is offline  
Old 06-11-2019, 02:03 PM
  #35  
Admirals Club Admiral's Club Member
 
Join Date: Oct 2014
Posts: 5,601
Default

I'll add this as a great way to save/invest, every other raise you get, invest that amount each week/month into an investment account and live off of what you did under the previous years contract.
YFMF is offline  
Old 06-11-2019, 02:08 PM
  #36  
Senior Member
 
Join Date: Jan 2011
Location: Northern Burbs of the Motor City
Posts: 6,298
Default

Originally Posted by maintenanceguy View Post
If the future looks anything like the last 100 years, you're money will grow faster than the dollar shrinks. Invest in boring old index funds and you should be able to get 10% minimum per year. Some years will be good, some will be bad but over the next 40 years, you'll do well. Inflation is around 3%, your growth will be at least 10%. That means your inflation adjusted growth is at least 7%.

Rule of 72: divide 72 by the inflation rate and that tells you how many years it takes for your money to double. Using the "inflation adjusted" 7%, your inflation adjusted money doubles about every 10 years or 4 times in the next 40 years. $1 x 2 = 2, 2 x 2 = 4, 4 x 2 = 8, 8 x 2 = 16. Every dollar invested today is worth $16 in 40 years. And remember, that's the inflation adjusted value. You'll actually have much much more than $16, but adjusting for inflation it's going to be only worth $16. But that's still pretty darn good!

So, the moral of my boring story? Invest as much as you can now when you're young. The doubling ins't worth as much as you get closer to retirement because you have less times for your money to double.

And...NEVER., NEVER, NEVER take money out of your investments. Have an emergency and need $1,000 for a car repair? That repair is going to cost you $16,000 if you pull it from your retirement savings.
This, all day long long
magua is online now  
Old 06-11-2019, 02:12 PM
  #37  
Senior Member
 
Join Date: Aug 2011
Location: Palm City, FL
Posts: 2,201
Default

Originally Posted by GravyBoat View Post
This is complete horseshit, I did the math,
At 7% returns they got:
Jack got $457,672
Blake got $454,736

Jack still did a lot better for his money, but neither of them got millions.
Blake got hooked quaaludes and rescuing cabbage patch dolls. He squandered much of what he intended to invest. I would imagine storage lockers full of dolls has some value not considered......definitely need to see the assumption page.
Ahoy Vay is offline  
Old 06-11-2019, 02:30 PM
  #38  
Admirals Club Admiral's Club Member
 
Join Date: May 2012
Location: Nashville, 'Merica!
Posts: 1,560
Default

Originally Posted by GravyBoat View Post
This is complete horseshit, I did the math,
At 7% returns they got:
Jack got $457,672
Blake got $454,736

Jack still did a lot better for his money, but neither of them got millions.
I don't have the book, my ex does. And proving you wrong is not worth dealing with her. But you've got me curious, so I'll try to check their math.

Based on my trusty HP12C, it appears they used a return of around 10.5% to get Jack's numbers, or they may have used monthly payments instead of annual. Either way I can't get to their precise number. For Blake they used a return of 12%. Not sure why they'd use different rates of returns for this example unless its a math error. By the way if they'd used 12% for Jack his sum at 68 years old should've been $4,094,121, so the book actually underestimates the power of compound interest.

Your numbers using a 7% return are incorrect.

Here's how it would break down for Jack:
$2,400 pmt, 9 years, 7%: FV = $28,747 (sum at 30 years old)
$28,747 PV, 38 years, 7%: FV = $790,139 (sum at 68 years old)

And for Blake:
$2,400 pmt, 38 years, 7%: FV = $414,146 (sum at 68 years old)

Re-Bait likes this.
Marlin308 is online now  
Old 06-11-2019, 03:47 PM
  #39  
Senior Member
 
Join Date: Oct 2006
Location: LBI NJ
Posts: 2,286
Default

Originally Posted by williamwallus View Post
buy bitcoin and thank me in 1-2 years
USD is going to shit.
LOL yeah it's just the worlds currency and it's strongest market.And has higher rates on Treasury then 10 TRILLION dollars of sovereigns which have negative yields!
Re-Bait is offline  
Old 06-12-2019, 06:06 AM
  #40  
Senior Member
 
Join Date: Jan 2007
Posts: 300
Default

Great job on investing at that age. I got into the family business and my sister set up my 401k to max out the first year. Best decision anyone has ever made for me. I wouldn't stress about it to much just keep saving and investing right now and never stop. I backed mine down for a year thinking I could save some extra money and pay off some debt and it didn't work. Good luck in the future.
clink is offline  

Thread Tools
Search this Thread