Living beyond your means

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It would drive me crazy to be deep in debt. I live in a basic house, have sensible (priced) cars and the only impulse buy was my Harley, which is now paid for. I know people who live way beyond their means and it doesn't seem to bother them. Glad it's not me, though.
 
Retire on $1 million 401K is possible if you have no other debt. That means pay off your house. And remember that $1 million in a 401k is not actually all yours. You have to pay income tax on it as you take funds out. So careful planning needs to happen if you want to minimize tax bills in retirement. Also careful planning is required on blending Social Security with 401k.

In some cases in may make sense to spend down 401k funds first and delay taking any SS until age 70. This is because delayed SS payments go up 8% a year past 65 until a person has to take it at 70 yo. This is a fairly complex strategy and takes a hefty 401k fund to start off but it is workable alternative. Also depends on age bracket. At some point in the future SS fund is going to go broke but for current folks very near retirement age it will be fine. If I was 40 yo I would not be counting on SS to fund much of my retirement.
 
Originally Posted By: rjundi
I am perfectly fine paying $600/month for property taxes. It is a great filter that results in really low crime, excellent schools and mostly decent kids in the community.



Same here. The range of services available to homeowners and school district residents at no/little additional cost is really nice, as is knowing the elementary school down the block is an excellent school n an excellent district. I value things like good schools, quick emergency response, and well-maintained roads. Those need funding somehow...
 
Man you folks must have schools out of this world and streets paved with gold.

$7,200 a year in property taxes, no wonder NY needs to advertise for business to come there.
 
Originally Posted By: jcwit
Man you folks must have schools out of this world and streets paved with gold.

LOL! We're lucky to have them paved with anything. Potholes galore!
 
Originally Posted By: Quattro Pete
Originally Posted By: jcwit
Man you folks must have schools out of this world and streets paved with gold.

LOL! We're lucky to have them paved with anything. Potholes galore!


The main thoroughfares are pretty good. There's also a lot of road construction going on. It's not perfect, but it's better than other states I've traveled through. Seeing how they replace rotted concrete bridge pylons while keeping the bridge in service has been interesting.
 
Originally Posted By: sciphi
Originally Posted By: Quattro Pete
Originally Posted By: jcwit
Man you folks must have schools out of this world and streets paved with gold.

LOL! We're lucky to have them paved with anything. Potholes galore!


The main thoroughfares are pretty good. There's also a lot of road construction going on. It's not perfect, but it's better than other states I've traveled through. Seeing how they replace rotted concrete bridge pylons while keeping the bridge in service has been interesting.


Been thru Indiana lately? If so what part?
 
Originally Posted By: doitmyself
I choose to live a modest, financially responsible life, which includes responsible use of credit. Accumulation of wealth and material things is not what matters to me.

"What we do for ourselves dies with us. What we do for others and the world remains and is immortal." -Albert Pine


finally, someone who gets what it's all about!
 
An easy money saver is cell phone bills.

Some of you are easily paying $1200 per line/year.

I have a smartphone with unlimited talk/text/data for $25 a month. There is no contract required, just pay month to month. The service has been outstanding. No I do not work for them, but ive had them for 6 months. Frugal radio personality clark howard says they are the best cell phone value of 2014.

www.republicwireless.com

I tried them after reading advice from another forum.
 
Originally Posted By: Clubber_Lang
I have a smartphone with unlimited talk/text/data for $25 a month.

Doesn't work for everybody. I travel quite a bit around the country, and more then half the country is a roaming area for them. If you read the fine print, you don't really get unlimited data when roaming. They cripple your speeds do who knows what...

Quote:
Our Terms of Service permit us to reduce your speed for a billing period if you exceed 5GB of data while using cell or if you exceed 100MB of cell data while roaming during the billing period.


Still, a good deal for someone who stays put.
 
Originally Posted By: Quattro Pete
Originally Posted By: Clubber_Lang
I have a smartphone with unlimited talk/text/data for $25 a month.

Doesn't work for everybody. I travel quite a bit around the country, and more then half the country is a roaming area for them. If you read the fine print, you don't really get unlimited data when roaming. They cripple your speeds do who knows what...

Quote:
Our Terms of Service permit us to reduce your speed for a billing period if you exceed 5GB of data while using cell or if you exceed 100MB of cell data while roaming during the billing period.


Still, a good deal for someone who stays put.


Thats just for data tho, and all they do is reduce the speed. Most of the rip off companies do that anyway. You can aldo get phone and text only for $15 per month (unlimited) if i remember correctly.
 
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They don't do roaming or work outside of the country.

All those little cell services are good if you don't really need much, and don't travel but Verizon and At&T own the towers and blow them out of the water. I can't tell you the number of times one of my friends with a discount phone needed to borrow mine because his was not picking up service.

A 4G plan is $40 a month, that's not that cheap.

I pay $305 a month for 4 Iphone 5S's and a flip phone.
 
They do roam. The preferred connection is wifi, then sprint. However they lease off all the towers so you can pick up a signal from verizon, at&t, ect. No roaming fees at all. I have traveled up and down the east coast with someone who had verizon. Republic constantly had service when verizon had dead spots occasionally.

Its true you cant use it out of the country. Fine for me im not a world traveler.

Most people i tell dismiss it by saying theyve never heard of it, or my favorite "im not giving up my iphone"

Whatever floats your boat, i have better uses for the 600+ i save a year.

Ill vouch for a business with exceptional value.

www.republicwireless.com
 
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Originally Posted By: cashmoney
Retire on $1 million 401K is possible if you have no other debt. That means pay off your house. And remember that $1 million in a 401k is not actually all yours. You have to pay income tax on it as you take funds out. So careful planning needs to happen if you want to minimize tax bills in retirement. Also careful planning is required on blending Social Security with 401k.

In some cases in may make sense to spend down 401k funds first and delay taking any SS until age 70. This is because delayed SS payments go up 8% a year past 65 until a person has to take it at 70 yo. This is a fairly complex strategy and takes a hefty 401k fund to start off but it is workable alternative. Also depends on age bracket. At some point in the future SS fund is going to go broke but for current folks very near retirement age it will be fine. If I was 40 yo I would not be counting on SS to fund much of my retirement.


Everything I've seen indicates to draw no more than 4% from your fund, in order for it to last. That's $40k/year. I don't feel like figuring out what the Fed tax rate is for $40k/year, but between that and state/local taxes that would be rather meager income I'd think afterwards. Not to mention, inflation. Ouch. Rule of 72? Take 72, divide by the interest rate, to find the time to double? I heard the Fed was going to limit inflation to 2% but they didn't indicate exactly how they were going to do that. At 3 to 5% inflation a retiree has to figure the cost of everything will double during their retirement. [When I say $40k/year is meager, I mean, looking at my perspective, when everything quadruples in price when I retire--$40/year then is like $10k/year in today's money.]

Personally I'd love to aim for my 401k to pay for my needs, then (hope?) use my SS for pocket money. That would be nice. But that whole inflation thing is a real variable that is beyond anyone's control.
 
Use Roth 401k. Pay taxes now, not later. When you retire taxes will be sky european utopia style high
 
I've had for years now a Tracphone. Uses Verizon towers. But a basic phone, a "dumb" phone if you will. $7/month. I just picked up a smart phone from Tracphone, an LG39C, which seems like a halfway decent if a bit low end smartphone. It technically uses the Verizon towers; but it won't roam, so it has a smaller coverage area. If one was really concerned, they could use a dumbphone for their main number, and this smart phone for when they absolutely need data on the go (disable data on the phone the majority of the time). That would be $14/month, although you'd have to carry two phones... which seems to be on the rise (personal and work phone? seen more than one person do that).

Between not having cell plans (for two) and not having satellite I can almost make a car payment. Well not really. But it certainly takes a chunk out of a car payment. I totally love not having cable anymore. Don't know what is on TV nor in the theaters--and I don't care. It was nice when I did, and I don't belittle anyone who does: but I got other things on my mind.
 
For the vast majority of folks in the US attempting to fund a 30 year retirement with $1 million in their 401k would be a really happy problem for them to have.

As of February 2014, Fidelity reported that the average 401K balance for folks in US 55 yo and older is $165,200. These people better have paid off houses and cars or they are going to be eating dog food a couple of nights a week.
 
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