Retirement

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Aredeeem said:
I have to agree. Two million dollars is a absurd amount that the vast majority will never come close to. Why not save 4 million and double your chances of success? I’ve been out for three years and between Social, defined pensions, and some investments I’m ok. If I had to wait until I accumulated 2 million dollars I would have never retired. It’s not as complicated as most people would have you think it is.
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$2M isn't what it used to be. I've always assumed the 4% withdrawal rule had more to do with an expected 25 years of life in retirement--4%x25 is 100%. That ignores the fact that a portfolio can have low risk investments so as to offset withdrawals; but then again inflation factors in, so... not sure how to view that.

Anyhow. 4% of 2M is $80k. But $80k 20, 30 years into the future is like $40k in today's money. That might be fine in some areas of the country, and that's great. In others, perhaps not so much.
 
AutoMechanic said:
Not me I’ve got a long while till retirement. But I do have an IRA and everything that I put money in and am saving up because my personal finance class in high school said to do that while you’re young so that is what I did.
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I wish that I had started saving in my 20's. Got started later in life, but I am doing ok. Would have had a ton if I started earlier.
Keep up those savings.
 
AutoMechanic said:
Not me I’ve got a long while till retirement. But I do have an IRA and everything that I put money in and am saving up because my personal finance class in high school said to do that while you’re young so that is what I did.
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Good for you! If you start now and only put in a low percentage, but keep at it, you can still build a huge nest egg, letting time in market work for you. Although if possible, a couple of good years of high percentage while young to get the initial amount in there, then pull back on that percentage when life catches up to you, will reap rewards.
 
AutoMechanic said:
Not me I’ve got a long while till retirement. But I do have an IRA and everything that I put money in and am saving up because my personal finance class in high school said to do that while you’re young so that is what I did.
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Smart move on your part. If you start saving for retirement early it is SO much easier to build a nest egg to retire on. I suggest putting it in an index fund such as one pegged to the S&P 500 and don't worry when the stock market drops because you will just be buying more shares for the money when it is low. Then when it comes back up your investment value increases. It's called dollar cost averaging.
 
5 months to go till retirement. It’s a couple of years earlier than I had financially planned, but a serious health issue helped me decide on the earlier date.
I’m a bit concerned about jumping into the unknown, but that’s mixed with optimism too. Looking forward to spending more time with my elderly parents, my kids, and friends. Also road trips, a bit of travel, projects in the garage...
My wife wants to continue to work part time for a couple of years. I think that will be good for us, so that we ease into retirement and don’t get on each other’s nerves. 😄
 
jhs914 said:
Smart move on your part. If you start saving for retirement early it is SO much easier to build a nest egg to retire on. I suggest putting it in an index fund such as one pegged to the S&P 500 and don't worry when the stock market drops because you will just be buying more shares for the money when it is low. Then when it comes back up your investment value increases. It's called dollar cost averaging.
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That’s a great idea. We touched briefly on that but I don’t remember exactly how everything works.
 
Pablo said:
I retired January 7, I'm 62.5. I just got so finally sick of working for the man and oddly learning (software mainly) tools that were absolutely worse than the previous tools being rammed down our throats. I justified the last little while purely by money earned and saving $60,000+ per year. I reached the breaking (tipping?) point, I guess you could say.

I still run my businesses and actually have time to do so. Retirement is everything promised plus some, because it is what you make it. There is no need to plan every day, but depending on your personality you may need some structure. Could be budgetary could be motivational, could be time management. Whatever it is, it should not involve just sitting there watching TV or the internet (as I ironically type this).

Save at least $2 million, maybe a bit less if you live away from a coast. Make a budget. I don't care if you never did before, while you were working. Just make a simple spending outgo list, and an income list. I personally don't think it's something needing daily or even weekly updating but just tabbing your outgo can be very helpful. Say you allow $100 per month for meals out, but you use $50, and you have $200 going to saving for a trip, I allocate the extra $50 to the trip savings. Just an example that helps if your income is fixed. That said until we are 65 our largest expense will be health insurance, and I STILL am waiting on the final package with $ amounts, but I budgeted worst case marketplace costs.

We probably will hold off on social security no need to take early. Nice to know we will have that at 66y 8mo. I have a small pension, wife also but she must wait until 65. I have my Amsoil income, can take SBP income, plus income on savings (oh yes taking money out is very mentally difficult) - will need to draw down a little to match budget outgo.

Stay healthy - exercise EVERY DAY. If you take a 30 minute+ walk, that counts. Eat OK, avoid sugar/white simple starch bombs.

Right now - or rather almost every day I have spent cleaning the absolutely nasty messy shop that I never had time to do before. It has reached the amazingly organized stage just the last few days. I rewarded myself by buying a new DeWalt shop vac ( :LOL: ) - this all in prepping to move IF we find the right place. When will move it will not be so bad. Everything in toolboxes and milk crates. Sell down any inventory.

One thing: We did NOT anticipate a real estate gold rush............we simply cannot find a decent sub $1 million dollar place on the west (wet) side of the mountains..............we are formulating a plan and there is no real rush. We just don't think of this as our retirement home. I guess the good news our house has tons of (almost all) equity and it's tripled in value and will sell in minutes with offers over asking.

I will close with this: I had plenty of time to post this, but need to get off my ass and go sit down and fill some paperwork out :ROFLMAO::giggle:🤭🈴

EDIT: PS I absolutely look at retirement as starting fresh, the 3rd leg of my life.
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At least $2 Million is a good goal for young ones. It is not hard to get there. One key is to sit down and do a soul searching where your money is going and where you can cut. Pay yourself first i.e. 40XK, IRA and savings. I was luckily born in 3rd world and I was able to do with less and able to retire at 58 after 30 years at one employer after college and not think twice when they offer a package. I know it can be done just a no brainier to put your money in a low fee Index fund and let it grow. Here is a good article to read for those who are still investing.
https://www.wired.com/1999/09/stock... means the Dow will,120,000 by year-end 2025.
 
I have 2 to 4 years to go.
supton said:
$2M isn't what it used to be. I've always assumed the 4% withdrawal rule had more to do with an expected 25 years of life in retirement--4%x25 is 100%. That ignores the fact that a portfolio can have low risk investments so as to offset withdrawals; but then again inflation factors in, so... not sure how to view that.

Anyhow. 4% of 2M is $80k. But $80k 20, 30 years into the future is like $40k in today's money. That might be fine in some areas of the country, and that's great. In others, perhaps not so much.
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This is true but like most money matters, it's not what you make, it's what you spend. My wife likes to shop and I like to golf but $20,000 a year for that will keep us happy along with 3 or trips a year to Vegas. Other than that, we are simple folks. No fancy cars or expensive hobbies. Go out dinner now and then, casinos at home. If we stay in our house, taxes and health insurance will be our biggest expenditures until we hit, God willing, 65. If we pull some money from retirement funds and supplement with SS we should be fine. 30 years in the future, we'll be very old, God willing, and won't be spending as much money on fancy dinners and trips to Vegas. Should work out. Based on our household income the simple calculators say we should have well over 2M to maintain our lifestyle. But a lot of the money we make goes not into a lavish lifestyle but into savings for retirement.
 
Saw the omen in 2012 when they outsourced the entire department. I was 65 and part time then. The only thing I miss is the interaction with co workers, the bureaucracy and idiots at the top will never be missed. I Love retirement, wish I did not have to get older though.

Oh, even with insurance the health care expenditures are huge so plan for it!
 
I think the first referenced $2 million includes the present value of current and future payments, and other assets. If you are able to collect a decent Social Security payment, have a defined benefit pension, or even have your house paid off, you don't need that much. It all depends on your needs and lifestyle.
Retired 5 years ago at 64. Most of my life has been spent accumulating assets. Trying to adjust from a frugal savings lifestyle to one spending the assets I've accumulated (or just the income from those assets) has been interesting. As I get older, I find myself simplifying my lifestyle rather than making it more complicated, and that usually means less consumption. At least I'm in a good position to assist two adult kids, one going back to school to learn a real trade, and another Covid unemployed.
 
supton said:
$2M isn't what it used to be. I've always assumed the 4% withdrawal rule had more to do with an expected 25 years of life in retirement--4%x25 is 100%. That ignores the fact that a portfolio can have low risk investments so as to offset withdrawals; but then again inflation factors in, so... not sure how to view that.

Anyhow. 4% of 2M is $80k. But $80k 20, 30 years into the future is like $40k in today's money. That might be fine in some areas of the country, and that's great. In others, perhaps not so much.
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The 4% rule basically allows you to retire regardless of what age you're at and never run out of money. That basically assumes that the money is invested and that even if you retired in a down market, it would eventually catch up and you won't run out of money. Some that pursue FIRE (financial independence, retire early) have done so in their 30's and some have done it with a small nest egg like 1/2 million, but that only leaves you with 20k a year and then when you read what they're really doing, they're freelancing to cover insurance and pocket money. If this country ever figured out low cost health insurance, probably a lot more people would retire which would open up slots for the unemployed.

Here's an S&P 500 calculator for you, If you had $2 million 30 years ago and took out 7k a month you'd have $23 million after 30 years. If you hadn't taken the money out, it would have been over $35 million.

https://dqydj.com/sp-500-periodic-reinvestment-calculator-dividends/

If you had invested $500 a month for 30 years, you'd have almost $900k, if you made that 40 years, you'd have about $3 million. After 20 years, it's just about $370k. That's why it's important to start early. I think Warren Buffet is known to go around talking about the 300k haircut which is what you would have in the future if you skipped a haircut today. That would have to be a very long time horizon or a very expensive haircut though.
 
I was 56 when offered a buyout in 2019 and took it, almost 25 years with the same company but I was not happy and was considering resigning. When they made the offer, I checked with an employment lawyer who confirmed that they were being very fair. It was bittersweet to leave, but the CEO and I were not getting along, so better that I go.

I did not rush into finding another job, with my wife happily employed in a great job, we both decided that I could do something part-time for a basic wage - provided I was having FUN. Both our boys are finished their education, the mortgage was paid off before I turned 40, and we've both been very diligent about saving for our retirement.

So for the last 15 months I have been working 2 days per week as the grounds maintenance and building handyman for a Flying Instruction School at our local airport. I cut the lawns, plow snow, paint offices, repair equipment, organize small projects and have as much time off as I need.
I also do the services on the Kubota lawn tractor, the GMC pickup truck, and the big Kubota plow tractor. (y) Not interested in the planes, but the people are quite different from the automotive industry crowd that I was so familiar with for much of my career.

I enjoy myself more now, the COVID part sucks, but at least there is a glimmer of hope for later this year that it might be more normal?
 
I meant $2 million dollars currency. Not all cash but, invested assets and the like. Not including primary residence. Not precisely, either 1.7meg, etc

And I did qualify it. If you are living in a low cost of living area, then absolutely no need for that much. Several of you clearly understood where I was coming from.

But I absolutely am here to tell you, on the west coast city areas at the very least, $1 meg, you will not have much of a retirement. Sure if your house is paid off or you have a sub $1000 mortgage it will help, but I am living in reality. San Diego, OC, LA, Santa Barbara, Santa Cruz, San Francisco Bay area, Silicon Valley, Portland, Olympia, Tacoma, Seattle, Everett, Bellingham areas...............living is EXPENSIVE. Well OK those places may not be "reality" but I definitely said less if you live elsewhere. Most places on the west coast, property taxes will be $600-700+ month alone. Food is more expensive here, gas is too. All taxes except Fed, are more.

Yep someone did say, it's not what you have, it's what you spend. That pretty much is the point.

If you saved $500K and you own your house, and you live decently in Nebraska or the like, then yes you do not need $2,000,000. I would not feel comfortable here with too much less.
 
Retired almost 20 years ago and still have a deep bucket list. Lost two lifelong friends over holidays which hurts. We make an effort to stay healthy and volunteering for town offices keeps the brain exercised. Would have worked longer but the long hours, callout and understaffed shop decided that for once was going to think what was happening to my family and health before something decided for me.
 
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