#31
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Man, these threads are depressing. Time to really start saving. No more bikes for me.
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#32
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One place had a policy for new residents I loved. If they were assured that there were sufficient assets/income to pay the monthly fees for 3 years the resident could stay forever with the home getting whatever Social Secirity, MediCal, etc. might pay even if that was less than the normal expense. Last edited by Ken Robb; 05-15-2014 at 11:50 AM. |
#33
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I'm retired since 1998....age 57. I think you need $1,000,000 for each $30,000-40,000/year you want to spend in retirement......plus your SS....maybe you and your wife. I took the max SS at 62, and though my wife worked most years, she didn't make enough to qualify for max. So we get about $35,000 from SS.
We have no payments of any kind, but do spend more than you might think to keep a couple nice cars, some trips, home maintenace, insurance, and taxes, utilities, food, etc. Our single biggest expense is medical care (even thouigh I'm medicare), and is way more than I expected. So if you want a $90,000-100,000 income before taxes, you do the math. If you want to live frugally, maybe you can maintain a nice home, some vehicles, etc, for less. But not as much less as you may think. And it's not the fun way to live you envisioned. I also think it's tough to live among big spending working people who still have high incomes. So would suggest, if possible, to consider moving in retirement to a less densely populated lower income warmer weather part of USA. With much lower housing prices and lower taxes. It might mean you can get by on a million less (small town in Florida ideal....pick a no state income tax state). Another thing to consider, if you don't mind spending down your assets, so you die with nothing to pass on, you can do it with less. Like contract with an Insurance company (annuity) to pay out until death, or figure it out yourself with withdrawal system from Growth and Income mutual fund. I'm retired from financial services business (VP Merrill Lynch), and still didn't have it all figured out, and you won't either. Just prepare for some surprises. I figure what's happened in past 50-60 years, wars, recessions, weather events, etc, will happen again. If you get a defined benefit pension payment, or military pension, figure what that's worth to you (a lot). But Hey.....wouldn't do it any different, would still retire when I did. Last edited by Ralph; 05-15-2014 at 12:25 PM. |
#34
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Take all the doom & gloom about retirement planning with at least a little perspective, because you could die shortly before or after.
I know someone to whom that happened, tragically, just months after retiring. Just horrible in every respect. Ya just never know when your ticket's going to get called up. |
#35
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This is pretty interesting stuff. I really enjoy the insights from people who have thought about this a lot more than me.
I am 32, just had a kid, and a year and a half ago started my first 'real' job. I feel like I got a late start on the whole retirement savings thing. I work for a municipal government with a a real, honest-to-goodness pension system. When I started, I had trouble deciding if I wanted to join the pension, but in the end I went with it, at the least it reduces some uncertainty. If I stay here until retirement it definitely changes the "number." (I also throw some money every month into a 401(k)). On the other hand it really reduces my return if I end up leaving government service (or this place specifically) and don't retire in the system. Anyways, this is all interesting to me because I need to really think about all this in a more serious way, so thanks for planting the seed, paceline. One nugget of information that a friend recently pointed out is that your children can borrow for college, but no one is going to give you a loan for retirement. Obviously its ideal to plan for both, but if your getting a late start, most children would rather have student loans than their parents living above their garage. Tuition inflation is pretty maddening. I had the experience of going to undergrad for what felt like next to nothing in the early 2000s (I think it was around $3000 a year), and then grad school a decade later for 150% of that a a quarter (granted, grad school, but still). Both were at state schools in the same system. I did some math that put the cost of my 8-month-old's future in-state tuition at $100k over four years - or about $500 /mo for 18 years. We are buying into the state guaranteed tuition plan for our kid, but even the cost of that is pretty disheartening. Anyyyyyways, that's probably a digression for a different post. |
#36
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#37
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Yes, but part of life as a responsible adult is preparing for the future.
So, yeah, you need to pay off all of your bills, live below your means, pay off that mortage, stay healthy (cycling helps!), and have your kids relatively young. If you don't have a pension opportunity, save 15% or more of your income each year ONLY for retirement, and start doing that in your 20's. That doesn't include what you save for the down payment on that house, or the kids' educations, or anything else, like that Porsche someone mentioned earlier. Shelter as much of your income as you can in a Roth, 401k or IRA vehicle. Pay taxes on the rest of it so you'll only be taxed on what you earn off of it. Work with a good CFP or wealth management firm, but also read financial stuff on the Web or WSJ. None of that sounds like much fun, but if you want to retire while you can still enjoy retirement, that's the plan. Million bucks a person in liquid invested assets (not including your home), your health, and a modest lifestyle. BTW, Mrs. Doc informs me that a modest lifestyle does include significant european travel. |
#38
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Then there's the issue of grad school. Most of us didn't feel the need to go there, and lived a pretty decent life making money and pensions without a MBA or law degree. That isn't happening today. You have to get an advanced degree to compete, and, even then, good luck. So millions of kids are entering adult life with a lot of debt, that can't be discharged in bankruptcy. About $30,000 on average, and law school grads are about $100000 in debt (and only half of them are getting hired). Tough times. Glad I was young when I was young.
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It's not a new bike, it's another bike. |
#39
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I don't know. The place was OK, I guess, but, let's face it, it's a building filled with dying people who are so bad off they have to be put there. Not the way I want to spend my end.
__________________
It's not a new bike, it's another bike. |
#40
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Dignity at a certain point is a matter of nuance.
You are correct. It's unfortunate reality, no matter how nice the cafeteria is. |
#41
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This is not to be depressing at all. Not at all. It is something that is extremely positive. Because you can choose to get your hands on and around this circumstance that is inescapable and unavoidable in life. That virtually no one else can do for you. That virtually you alone, along with your spouse/partner, will reap the rewards or bear the consequences of. Just do it. Time is money. The cumulative effects of compounded returns. If you are young, time is on your side. This is not depressing, it is easy because these simple facts are all you need to know! Yep but the thing is, nobody but them knows what their household balance sheet looks like. And anyone that is falling for the smoke & mirrors of modern consumerism, whether it be used as a salve or a veneer, is falling down the rabbit hole. Old money I've always found to be the cheapest and most frugal money. They know. No mistake, it is nice to have money. IMO it is far nicer to have money and know who and what you are so the money doesn't become and define the essence of you. |
#42
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If I go while my nieces and nephews are young they will not have to wonder how to pay for college. Quote:
The easiest way is to automate the process. Have money deducted from your pay automatically for a 401(k). Have money automatically deducted for a Roth IRA. If it's automated you can't suddenly decide to not contribute. Also, live on what you make now. If you get raises, save them. I was told early on at my company by wise people that when I get my annual raise (it's a contract thing) I should just up my 401(k) contribution by that amount or at least some fraction of that amount. For example, I can set regular intervals for a contribution increase with my 401(k). I know when I am going to get a raise so why not set it to take place at that time? When it comes to savings and retirement planning, knowledge is power. I've had the great fortune to have smart people talk to me about this, including one here who has very graciously taken his time and educated me on a few things. He knows who he is but I'm not going to name him. Read up on this. Spend less than you earn. Save until it hurts. Pay yourself first. These are all things I read and they all make sense. |
#43
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i believe the official term for that is "fake it 'till ya make it."
and it's the cornerstone for the revolving credit markets. |
#44
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We've both got 401(k)s, I've got some stock from work, but aside from that not a whole lot of savings. Priority #1, as soon as it becomes possible, is to pay that student debt down, after which we'll probably try to move to a house somewhere where costs are a little lower than the greater Boston area, and then we can start saving for ourselves/the little one. As much as I'd love to try to calculate a number, at this point, all we can do is both give to the 401(k) to get full company match and toss my 5% into the company's stock at 80% of cost. Otherwise we're in conservation mode until daycare costs disappear and we start putting some dents in the student loans. Were I to do it all over again, I wouldn't have opted for $33k/year private undergrad education (and that was 10 years ago, it'd be probably $55K now). |
#45
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Hope this doesn't get me hated , but I thought it might be useful to help some people think about trading off buying something now for how much money it might be worth in the future.
Suppose that you could spend $3,000 today on bike stuff, or invest it at 8% instead. At 10 years, the investment would be worth $6,477, at 20 years it would be worth $13,983, and at 30 years it would be worth $30,188. At a 10% return (which is about average stock market return over last several decade): At 10 years, the investment would be worth $7,781, at 20 years it would be worth $20,182, and at 30 years it would be worth $52,348. One can see from these figures how much larger the 30 year value is than the 20 year value, and then the 20 compared to the 10. This illustrates the importance of starting early! Last edited by SlackMan; 05-15-2014 at 12:56 PM. Reason: because I can't spell the first time! |
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