Living beyond your means

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Originally Posted By: Clubber_Lang
Use Roth 401k. Pay taxes now, not later. When you retire taxes will be sky european utopia style high


I've thought of that, but I thought Roth was limited to $5k/year?

I could, but eh, I don't like the complication. The majority of my retirement contribution still has to go to 401k, in order to get employer match. I haven't thought through the complications of having a Roth yet; this is the first year I could start one.
 
Originally Posted By: cashmoney
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.


Cripes. I'm 37 and have more than half that already--and I'm trying to figure out how to get more aggressive about what is going in.

I have to say, I'm rather worried about SS becoming somehow "needs adjusted" and losing out on that. Currently 12.6% of my income goes into that. What I wouldn't do to have another 12.6% going into my 401k (or Roth for the matter). I have high expections of getting that back!
 
Originally Posted By: supton
Originally Posted By: Clubber_Lang
Use Roth 401k. Pay taxes now, not later. When you retire taxes will be sky european utopia style high


I've thought of that, but I thought Roth was limited to $5k/year?

I could, but eh, I don't like the complication. The majority of my retirement contribution still has to go to 401k, in order to get employer match. I haven't thought through the complications of having a Roth yet; this is the first year I could start one.

401K, Roth 401K, Traditional IRA, Roth IRA - 4 different options. Not all (read not many) employeers offer Roth 401Ks even though they may offer a Traditional 401K, although as I understand it it's becoming more common, I've yet to see one available to me in my own career.
 
Dont expect any SS after the next 7-10 years. The system is entirely insolvent. At best it will be reserved
for the "underprivledged" After all that is only "fair." In other words,
people with nothing saved are most likely to be "rewarded"

Also i think u can fund roth up to 14k/year
 
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The fact of the matter is that most people are not going to be able to ever retire. They will have to work at some job until they are unable than try to make ends meet until they can get on disability.

Plus retirement isn't that great unless you have the money to enjoy it.

OTOH I'd have no problem at 70 running up $100k or more in CC debt. Because when you croak its gone!
 
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Originally Posted By: Clubber_Lang
Dont expect any SS after the next 7-10 years. The system is entirely insolvent. At best it will be reserved
for the "underprivledged" After all that is only "fair." In other words,
people with nothing saved are most likely to be "rewarded"




The SS system is not insolvent, that is not how the social security works. Read the link below to understand how SS system actually works.

The most dire predictions are that with no adjustments to the current SS system it will not be able to make full payments after 2033. Not being able to make full payments does not mean payments stop. Adjustments to SS system need to be enacted by the do nothing congress, senate, and administration working together to enact legislation to modify existing system before 2033 - perhaps adjust payments COLAs, increase retirement ages, increase SS tax, etc. so that the system can continue making full payments.

SS means testing is certainly one of the things folks are very worried about. I think means testing is unlikely to be enacted into law in the next 20 years. Mostly because politicians are scared to death of older folks as they are the ones that control primaries and most elections. Means testing may become necessary at some point but it would likely be put into effect for people currently under 35.

If means testing was enacted currently it would be a good reason for smart folks to spend down 401k assets first and defer taking any SS payments until age 70.

The SS System cannot go bankrupt - how social security system actually works -
http://www.forbes.com/sites/johntharvey/2013/01/07/social-security-rerun/
 
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The social security system operates off of unfunded liabilities. Do you have any idea how high unfunded liabilities are in the US? From memory i believe around 140 Trillion dollars. The US is 17 trillion in debt. 40 cents of every dollar uncle sam spends is "borrowed" by printing money out of thin air! This is how the federal reserve scam works.

Goods becoming more expensive is actually the dollar loosing its value. But the US has to continue to devalue the dollar just to make minimum i repeat minimum payments for the money it constantly borrows.
This is an endless cycle we cant escape.

Tell me how all that is sustainable. I'd like to hear your answer.
 
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In two months I'm putting the money down on a brand new $570,000 four bedroom luxury two storey home, built just for us. Me and my wife have lived very cheap for the past five years, renting and working furiously. We've managed to save a 25% down payment. In 15 years of bi-weekly mortgage payments, my wife and I will own it. This is our first home purchase, and we both agree it will be our last for the next 30 years. This is where we will raise our future kids, heck maybe I'll die there who knows.

We own both our vehicles too, both were purchased brand new and paid for VIA credit at low interest. I financed my '13 F150 out of choice and paid it off in a year, why? To further improve our credit rating (needed for our first home purchase). We also make all consumer purchases on a joint credit card. We have never paid a cent in interest, collect points, and get 1% cash back at years end. We don't use a credit card as a loan shark, we use it for the benefits.

I got into a high paying career the week after my high school final exams and have taken the economic boom here for everything it's worth. I still am. I've also stood on my own two feet financially, and lived on my own since the age of 19. After marriage I paid off my wife's school loans, and the ROI her education and employment has provided us has been tenfold.

I turn 27 in two months, my wife is 30. We must be doing something wrong.
 
Originally Posted By: CurtisB
In two months I'm putting the money down on a brand new $570,000 four bedroom luxury two storey home, built just for us. Me and my wife have lived very cheap for the past five years, renting and working furiously. We've managed to save a 25% down payment. In 15 years of bi-weekly mortgage payments, my wife and I will own it. This is our first home purchase, and we both agree it will be our last for the next 30 years. This is where we will raise our future kids, heck maybe I'll die there who knows.

We own both our vehicles too, both were purchased brand new and paid for VIA credit at low interest. I financed my '13 F150 out of choice and paid it off in a year, why? To further improve our credit rating (needed for our first home purchase). We also make all consumer purchases on a joint credit card. We have never paid a cent in interest, collect points, and get 1% cash back at years end. We don't use a credit card as a loan shark, we use it for the benefits.

I got into a high paying career the week after my high school final exams and have taken the economic boom here for everything it's worth. I still am. I've also stood on my own two feet financially, and lived on my own since the age of 19. After marriage I paid off my wife's school loans, and the ROI her education and employment has provided us has been tenfold.

I turn 27 in two months, my wife is 30. We must be doing something wrong.



Very impressive for folks your age. Sounds like you have executed on your short term goals and have a very smart plan for the future - congratulations!
 
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Originally Posted By: CurtisB
In two months I'm putting the money down on a brand new $570,000 four bedroom luxury two storey home, built just for us. Me and my wife have lived very cheap for the past five years, renting and working furiously. We've managed to save a 25% down payment. In 15 years of bi-weekly mortgage payments, my wife and I will own it. This is our first home purchase, and we both agree it will be our last for the next 30 years. This is where we will raise our future kids, heck maybe I'll die there who knows.

We own both our vehicles too, both were purchased brand new and paid for VIA credit at low interest. I financed my '13 F150 out of choice and paid it off in a year, why? To further improve our credit rating (needed for our first home purchase). We also make all consumer purchases on a joint credit card. We have never paid a cent in interest, collect points, and get 1% cash back at years end. We don't use a credit card as a loan shark, we use it for the benefits.

I got into a high paying career the week after my high school final exams and have taken the economic boom here for everything it's worth. I still am. I've also stood on my own two feet financially, and lived on my own since the age of 19. After marriage I paid off my wife's school loans, and the ROI her education and employment has provided us has been tenfold.

I turn 27 in two months, my wife is 30. We must be doing something wrong.


Choose wisely on kids when time comes. They cost lots.
 
Originally Posted By: Clubber_Lang
The social security system operates off of unfunded liabilities. Do you have any idea how high unfunded liabilities are in the US? From memory i believe around 140 Trillion dollars. The US is 17 trillion in debt. 40 cents of every dollar uncle sam spends is "borrowed" by printing money out of thin air! This is how the federal reserve scam works.

Goods becoming more expensive is actually the dollar loosing its value. But the US has to continue to devalue the dollar just to make minimum i repeat minimum payments for the money it constantly borrows.
This is an endless cycle we cant escape.

Tell me how all that is sustainable. I'd like to hear your answer.


That's factually incorrect.
 
Originally Posted By: hattaresguy
Originally Posted By: Clubber_Lang
The social security system operates off of unfunded liabilities. Do you have any idea how high unfunded liabilities are in the US? From memory i believe around 140 Trillion dollars. The US is 17 trillion in debt. 40 cents of every dollar uncle sam spends is "borrowed" by printing money out of thin air! This is how the federal reserve scam works.

Goods becoming more expensive is actually the dollar loosing its value. But the US has to continue to devalue the dollar just to make minimum i repeat minimum payments for the money it constantly borrows.
This is an endless cycle we cant escape.

Tell me how all that is sustainable. I'd like to hear your answer.


That's factually incorrect.



Agree - concerning unfunded liabilities - that occur only in pension funds. The US SS system is not in any way shape or form a pension fund. It is a direct transfer payment system meaning that today's SS taxes are immediately paid out directly to those drawing SS payments. Solvency of the system (meaning that current SS taxes are equal to current SS payments, depends on combination of the following 1)US working population growing, 2) GDP growing, 3) productivity increasing over time. Please take the time to read the link I posted early about how the SS actually is designed and how it works. There are too many people in the US who are ill informed on basic workings of our financial and government systems. Too many people's heads are filled with half truths by the shouting moron stars of the popular media. A media that is actually only interested in selling commercial time for fast food, laxatives, and boner pills to the gullible instead of actually educating their viewers on complex issues.
 
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The problem with SS is that your money is being paid out to an ever growing senior base. Increased lifespan is great, but it represents too many people drawing SS from working peoples federally taxed checks. This trend will continue and I gaurantee that you will never get out of SS what you paid into it if you are less than 50 years old.

You guys are conveniently ignoring the nations absurd national debt, which is mathematically impossible to pay back. Do you think this problem is going away? As I said before we are borrowing 40 cents of every dollar in federal spending. Do you seriously believe that this will not catch up to us? Things will eventually have to be severely cut, and one of those cuts will be to your SS payout which will be drastically reduced. Tell me why it is so great to confiscate money from your paycheck to pay to older generations, while the younger generations do the same for you.

SS was a huge mistake and is a Ponzi scheme. Why cant we just be responsible for our own retirement funds? That is the question we should be asking ourselves.
 
Originally Posted By: hattaresguy
Originally Posted By: Clubber_Lang
The social security system operates off of unfunded liabilities. Do you have any idea how high unfunded liabilities are in the US? From memory i believe around 140 Trillion dollars. The US is 17 trillion in debt. 40 cents of every dollar uncle sam spends is "borrowed" by printing money out of thin air! This is how the federal reserve scam works.

Goods becoming more expensive is actually the dollar loosing its value. But the US has to continue to devalue the dollar just to make minimum i repeat minimum payments for the money it constantly borrows.
This is an endless cycle we cant escape.

Tell me how all that is sustainable. I'd like to hear your answer.


That's factually incorrect.



Care to expand on that?
 
Originally Posted By: Clubber_Lang
Why cant we just be responsible for our own retirement funds? That is the question we should be asking ourselves.



I have and I am. Which is how I retired early at age 52!
thumbsup2.gif
 
Originally Posted By: Clubber_Lang

You guys are conveniently ignoring the nations absurd national debt, which is mathematically impossible to pay back. Do you think this problem is going away? As I said before we are borrowing 40 cents of every dollar in federal spending. Do you seriously believe that this will not catch up to us? Things will eventually have to be severely cut, and one of those cuts will be to your SS payout which will be drastically reduced. Tell me why it is so great to confiscate money from your paycheck to pay to older generations, while the younger generations do the same for you.


Yes, people actually believe in this because they've been told by the "experts" on TV that it is really not debt and that we can walk away from it . We had similar threads in the past and a lot of people don't see the national debt as a problem.

My concern is, why haven't we walked away from this debt already? Why are we still paying the interest and to whom?
 
National debt is a serious issue that has to be carefully managed or it will get out of control. National debt that grows at the general pace of long term growth in GDP is absolutely fine. At this point the national debt is growing faster than the rate of GDP growth. I am all for drastically decreasing size of federal government in most areas but on a national level deficit spending in recessions is absolutely necessary to shorten and mitigate the downside portion of natural economic cycles (recessions).

National budgets and deficit financing on a macro level is not at all like micro level economics. Tightening a national budget in a recession is a guaranteed way to collapse the economy. But drastically tightening your home budget in a recession is a very good plan. Everyone in the US that graduates from high school should be required to have two years of economics - a year of macro and one year of micro econ. We'd have a lot better and more informed discussions if that was put in place.

The recent surge in national debt was not helped by the US spending $6,000 per second for the last 12 years financing wars in Iraq and Afghanistan. Yes you read that correctly - $6,000 per second for 12 years so far...
 
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Originally Posted By: Clubber_Lang
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



This is also on Sprint's network I am guessing? If I can talk and text all I want, I'm game. I was looking at Kroger's I wireless (on sprint's network) for 35/month with unlimited talk/text some data.


I pretty much use for what it is for (talking!), but I like the idea of using mostly wifi....many places around here offer it...
 
Originally Posted By: Clubber_Lang
The problem with SS is that your money is being paid out to an ever growing senior base. Increased lifespan is great, but it represents too many people drawing SS from working peoples federally taxed checks. This trend will continue and I gaurantee that you will never get out of SS what you paid into it if you are less than 50 years old.


Yes but that's because labor can't be saved over a generation. When today's 50-somethings need nursing care in 30 years today's babies will be taking jobs, paying SS, and that money will go across town and be spent that week. There will be tons of employment opportunities but it will be menial type work changing geezer diapers. Investing will be "weird" with old folks dumping real estate and stocks to pay for basic care in a nursing home somewhere.

The most plausible way to save labor is to make *very* durable goods like infrastructure-- bridges etc-- that we won't have the revenue base to maintain adequately in a generation and by getting the most, youngest people the most educated they can be so they can work that education for 50 years.

However we "fix" SS, one's neighbor will get the same benefit as themselves and compete for the same help. The way to come out ahead, as always, is to save more than the competition and remain on good terms with your kids, who might be keeping after you later.

The real fix is to slash SS now, to "correct" those on it coming out like bandits, and helping along the curve of their cashing out investments instead so the market has a softer landing.
 
Originally Posted By: Quattro Pete
Originally Posted By: A_Harman


It at least saves you paying the additional interest in excess of the purchase price on a depreciating asset.

And again, that is only looking at one part of the equation. On the other hand, you could have invested that cash that you dumped into the car purchase and earned interest. If that investment interest is higher than what your loan interest is, then you're making more money by taking out a loan on that car.


MAYBE you can find an investment that will earn you a higher rate of return than what you will DEFINITELY be paying on the car loan. You could take that money to your local casino and bet it all on Red 23.
 
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