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Retirement Plan?

Old 02-24-2018, 12:09 PM
  #41  
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Did right:
Stayed in the Navy Reserve. Retirement checks start at 55 and healthcare at 60.

Index Funds

Did wrong:
Did not put enough into 401k early in my career.

Made some speculative investments and lost my ass on those.

Got divorced. Great for my personal well-being, but disastrous for my financial well-being.

TBD:
Real Estate. I have a rental property that I am net positive on, but one bad tenant really hurt me.

Retirement plan:
I want a small house or condo near water and a big boat. Big enough to live on for a few months per year. OBX in the summer and Key West in the winter. Run occasional charters or commercial fish for the tax write off. Young wife with big boobs to work full time and pay for my health insurance until I'm 60!
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Old 02-24-2018, 04:14 PM
  #42  
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Originally Posted by Striper In View Post
I'd leave right now (58) but health insurance has me locked.

Not even sure where to begin to look how much it would be.
Same here. We are paying for COBRA insurance from my last job to the tune of $1,100 a month. I have been not working for 6 months and just recently started to look for a job, mostly because we have been taking money out of the bank every month to pay bills including the $1,100/month for health insurance. Take away this payment every month and we would be fine with just my wife's income.

I am 58 and have been working full time since I was 12 years old and I'm just tired and don't want to do it anymore. My wife is constantly worried about money and acts like the money we have in the bank isn't ours and we shouldn't be touching it! If she would be OK with me retiring I would do it.
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Old 02-24-2018, 06:18 PM
  #43  
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Originally Posted by Lorne Greene View Post
What did you get right and what did you get wrong in your retirement plan?

I don't really know how to start planning. My current plan is to buy a house on the coast of NC cash, have $1.5M in cash, stock IRA, 401. I want to leave the $200K job behind between 55-60 and find something to do that I like whether it's working at a small company for $60K/yr or working at Home Depot. I am looking forward to a major reduction in lifestyle complication which I am starting on now.

What am I missing?
$1.5M in 17 years will not be what it is today, you need to plan on inflation if you want $1.5 in today's dollars. By the way no way that will be enough. Professional financial planners will plan for you or your wife whoever is younger to live until 90-95 years old because you have to err on the side of caution.

My retirement plan was to own a business build it and sell it.
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Old 02-24-2018, 07:00 PM
  #44  
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Originally Posted by Saltydawg15 View Post
$1.5M in 17 years will not be what it is today, you need to plan on inflation if you want $1.5 in today's dollars. By the way no way that will be enough. Professional financial planners will plan for you or your wife whoever is younger to live until 90-95 years old because you have to err on the side of caution.

My retirement plan was to own a business build it and sell it.
I've heard the "you don't have enough money to retire" thing about 500 times. We don't have $1.5M in retirement money but that sure seems like enough depending on your standard of living. Just the interest alone in a savings account would be around $45K of income a year without withdrawing anything.

We are debt free, everything we have is paid for including the house. I haven't worked in 6+ months and we have been doing fine with just my wife's income that is less than $50K/year. If you plan things right and live a little conservatively $1.5M is plenty of money to live on.....obviously that depends on how long you live.

I don't know any person that said they retired to early or that they ran out of money after they retired. If you are spending to much money than you need to adjust your spending. Our retirement income will be from interest and stock dividends, add to that 2X Social Security payments.

If $1.5M isn't enough how much is enough given the OP situation?
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Old 02-24-2018, 07:40 PM
  #45  
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Work till I die? haha jk

Have multiple plans in action for retirement before the avg age. And considering the late start I got due to stupid shit as a teen/college years Id say Im doing pretty damn well.
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Old 02-25-2018, 04:28 AM
  #46  
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Originally Posted by RussH View Post
I've heard the "you don't have enough money to retire" thing about 500 times................

I don't know any person that said they retired to early or that they ran out of money after they retired. If you are spending to much money than you need to adjust your spending.
Quite the opposite for me. I wish that I'd done it a year earlier.
Part of retirement planning is budgeting. A lot of retired people can't continue to spend like they're still working full time.


Originally Posted by RussH View Post
If $1.5M isn't enough how much is enough given the OP situation?

Yeah, I'd like to know also. That's a lot of money.
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Old 02-25-2018, 04:42 AM
  #47  
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Originally Posted by Lorne Greene View Post
I may have misworded the original statement. I am targeting to have 1.5M by the time I am 55 in cash, IRA, 401 etc.
Originally Posted by HS2300 View Post
1.5 million in real dollars or nominal dollars?

If the goal is 1.5 in real dollars, then you need to adjust for inflation. If you are 38, then 55 is 17 years away. A great deal of the buying power of 1.5 million will be lost in those 17 years.
In 17 years at 2% inflation, that $1.5m in round numbers is $1.1m today - at a 4% withdrawal rate, that is $44k in income - you would have to live pretty frugally on $44k/yr.
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Old 02-25-2018, 05:24 AM
  #48  
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Originally Posted by LI32 View Post
In 17 years at 2% inflation, that $1.5m in round numbers is $1.1m today - at a 4% withdrawal rate, that is $44k in income - you would have to live pretty frugally on $44k/yr.
...and that $44k is pre-tax...
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Old 02-25-2018, 05:46 AM
  #49  
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Originally Posted by HS2300 View Post
...and that $44k is pre-tax...
Originally Posted by LI32 View Post
In 17 years at 2% inflation, that $1.5m in round numbers is $1.1m today - at a 4% withdrawal rate, that is $44k in income - you would have to live pretty frugally on $44k/yr.
I don't know what investment calculators you use, if any, however $1,100,000 with a 6% AAR and 2% inflation would allow more than $60k/ year for thirty years. That 60k would adjust for inflation and actually be ~$107k year thirty.
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Old 02-25-2018, 06:06 AM
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Originally Posted by aubv View Post
I don't know what investment calculators you use, if any, however $1,100,000 with a 6% AAR and 2% inflation would allow more than $60k/ year for thirty years. That 60k would adjust for inflation and actually be ~$107k year thirty.
I think LI32 was referring to the widely accepted 4% draw down rate, while 6% is the ARR.

For me, as a Fidelity Investments customer, I use the variety of calculators on their website. I also use other calculators found on the web. I have worked in Financial Services for 28 years, so I have a deep understanding of the assumptions, calculations, etc.

I personally think 6% ARR and 2% inflation in a good starting point, but need to be run through a Monte-Carlo calculator with one's age, etc. to calculate the results and probabilities.
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Old 02-25-2018, 06:25 AM
  #51  
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I'm about to turn 64 and retired 2 years ago at 62 after 40 years in the aerospace industry of which almost 30 years was with 1 company. (well- sort of 1 company as they were bought/sold/merged at least 4 times).
Never "loved" working and had always dreamed of retiring early to do what I wanted to do, when I wanted to, instead of what someone else thought I should be doing with my life.

What I did wrong-
1) never started participating in pension plan or saving any money until we were almost 30 and starting a family even though a great pension plan was available. Something about being young, married and owning a house that makes you feel like you never have enough money to put some away and pretend you don't have it. And you need to remember that this is before the 401K and the internet were invented. As it turned out, buying first home at 23 was a good investment decision in its own right.
2) when I did begin all of the above, I should have taken the negligible tax hit to put some of my pre-tax 401K into a Roth instead. Reason? Because my strategy was to wait until 66 to take SS and therefor, the 401 savings I take between early retirement age and 66 are higher. If I'd had the Roth I would have used that before getting SS and it would have lessened the tax bite during the first few years of retirement. Minor detail but one I overlooked.

What I did right-
1) Once I started saving, used 401K and put in what I needed to get max match and over the years increased some every year. There was a lot of luck involved here but invested funds were pure stock while I was younger (max risk) which after 50 I started to dilute with bonds and lower risk options. Also during the middle of my career, the company match had an option of company stock which is what I chose and we did very, very, very well. I think it's still one of the best run companies on the planet and a significant chunk of my IRA value now is due to the way that company stock appreciated over the years.
2) finally contributed to pension plan. If I had started when I should have I'd really be on the gravy train. It certainly doesn't compare to that of most public sector plans (mine pays me maybe 25% of some teachers I know that are retired) but it's a good solid base. It would have been a little better than it is if the company hadn't at first cut it back then killed it altogether. I would have had another 8 years in it.
3) owned homes that appreciated in value over time or at least didn't decline. To me, renting is a total flush of cash. In owning real estate as a primary residence your worse case scenario should be that you end up selling at a modest loss after enjoying it for years, When you finally sell, you recoup all or most of your investment, you've then lived there for a lot less than you would have paid in rent and your income taxes were lower over the years because you had sizable deductions for taxes and interest at a minimum.
4) Paid for college educations for 2 kids at great private schools because we didn't want them starting life up to their eyeballs in debt. There were rules around that of course but everybody followed through.
4) Wife and I both retired at 62 (mid fifties would have been better), own 2 homes and do what we want, when we want to.

Yup--- you bet we're lucky and we know it. Started with nothing and every penny we have had in our lives we earned ourselves.
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Old 02-25-2018, 06:39 AM
  #52  
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Some questions you have to answer for yourself first.

Are you planning to change your life style?

How much income will you need to live in retirement?

Work with a financial advisor to develop a stratagy and don't forget about estate planning.

I am going early and will need to bridge insurance for several years.
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Old 02-25-2018, 07:17 AM
  #53  
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Originally Posted by LongJohnSilver View Post
I'm about to turn 64 and retired 2 years ago at 62 after 40 years in the aerospace industry of which almost 30 years was with 1 company. (well- sort of 1 company as they were bought/sold/merged at least 4 times).
Never "loved" working and had always dreamed of retiring early to do what I wanted to do, when I wanted to, instead of what someone else thought I should be doing with my life.

What I did wrong-
1) never started participating in pension plan or saving any money until we were almost 30 and starting a family even though a great pension plan was available. Something about being young, married and owning a house that makes you feel like you never have enough money to put some away and pretend you don't have it. And you need to remember that this is before the 401K and the internet were invented. As it turned out, buying first home at 23 was a good investment decision in its own right.
2) when I did begin all of the above, I should have taken the negligible tax hit to put some of my pre-tax 401K into a Roth instead. Reason? Because my strategy was to wait until 66 to take SS and therefor, the 401 savings I take between early retirement age and 66 are higher. If I'd had the Roth I would have used that before getting SS and it would have lessened the tax bite during the first few years of retirement. Minor detail but one I overlooked.

What I did right-
1) Once I started saving, used 401K and put in what I needed to get max match and over the years increased some every year. There was a lot of luck involved here but invested funds were pure stock while I was younger (max risk) which after 50 I started to dilute with bonds and lower risk options. Also during the middle of my career, the company match had an option of company stock which is what I chose and we did very, very, very well. I think it's still one of the best run companies on the planet and a significant chunk of my IRA value now is due to the way that company stock appreciated over the years.
2) finally contributed to pension plan. If I had started when I should have I'd really be on the gravy train. It certainly doesn't compare to that of most public sector plans (mine pays me maybe 25% of some teachers I know that are retired) but it's a good solid base. It would have been a little better than it is if the company hadn't at first cut it back then killed it altogether. I would have had another 8 years in it.
3) owned homes that appreciated in value over time or at least didn't decline. To me, renting is a total flush of cash. In owning real estate as a primary residence your worse case scenario should be that you end up selling at a modest loss after enjoying it for years, When you finally sell, you recoup all or most of your investment, you've then lived there for a lot less than you would have paid in rent and your income taxes were lower over the years because you had sizable deductions for taxes and interest at a minimum.
4) Paid for college educations for 2 kids at great private schools because we didn't want them starting life up to their eyeballs in debt. There were rules around that of course but everybody followed through.
4) Wife and I both retired at 62 (mid fifties would have been better), own 2 homes and do what we want, when we want to.

Yup--- you bet we're lucky and we know it. Started with nothing and every penny we have had in our lives we earned ourselves.

For the first of your two items labeled "4)"... , was the college expense before college tuition became ridiculous?
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Old 02-25-2018, 07:59 AM
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A couple of I have found and used. I use many more but these slider inputs give dynamic results.

https://www.marketwatch.com/retireme...ing-calculator


Retirement Nestegg Calculator
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Old 02-25-2018, 09:44 AM
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For the first of your two items labeled "4)"... , was the college expense before college tuition became ridiculous?
just think what I could have done if I was good with numbers?

It was 2003- 2010 so it was still plenty expensive. My wife was a college professor and had a tuition remission benefit that they both were able to take advantage of at the schools they chose (although it was never a guaranty). It was a super nice benefit but still cost us way more out of pocket than a public university. My son graduated from WPI and at the time it was pricier than Harvard!
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Old 02-25-2018, 10:09 AM
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Interesting, the second calculator said that I needed to save $150,000 a month! I guess that I am screwed.
Actually I am fine, the calculator doesn’t work for my particular situation.
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Old 02-25-2018, 10:17 AM
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I plan use my 4 kids college funds to retire early. I thought I was going to have to pay for that but apparently it's cool just to let them borrow the money and then not pay it back.
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Old 03-06-2018, 06:46 AM
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I started saving for retirement at age 42 .Before then I had nothing . Working for the family business . My stepfather sold the business after promising to give it to me for 25 years . I borrowed money from the bank to buy my first house ,. I then played the mortgage game by refinancing and buying other rental income properties . I now own nine houses . two have mortgages with less then four years left on them. The income totals 12k a month . Once I can no longer take care of them , I will sell them all and collect 1.5 million .I am 51 years old now .I will retire soon with no debt . My plan seems to be working out .
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Old 03-06-2018, 06:51 AM
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Originally Posted by joesacc View Post
I started saving for retirement at age 42 .Before then I had nothing . Working for the family business . My stepfather sold the business after promising to give it to me for 25 years . I borrowed money from the bank to buy my first house ,. I then played the mortgage game by refinancing and buying other rental income properties . I now own nine houses . two have mortgages with less then four years left on them. The income totals 12k a month . Once I can no longer take care of them , I will sell them all and collect 1.5 million .I am 51 years old now .I will retire soon with no debt . My plan seems to be working out .

One word for you...


NICE!
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Old 03-06-2018, 07:31 AM
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Originally Posted by joesacc View Post
I started saving for retirement at age 42 .Before then I had nothing . Working for the family business . My stepfather sold the business after promising to give it to me for 25 years . I borrowed money from the bank to buy my first house ,. I then played the mortgage game by refinancing and buying other rental income properties . I now own nine houses . two have mortgages with less then four years left on them. The income totals 12k a month . Once I can no longer take care of them , I will sell them all and collect 1.5 million .I am 51 years old now .I will retire soon with no debt . My plan seems to be working out .
Awesome!
it just goes to show that there are many ways to make money as long as you do some sort of savings plan or investing!
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