Retirement Goals

[Quantum673]

How much do you need to be able to retire?

I know there is no right answer. Just got to thinking this evening. What is the goal? How much do I need to be able to retire? I ain’t close that’s for sure but we have done a pretty good job of planning for that day.

Another question for you. What would you do different to prepare if you could. I know mine. I wish I would have put less in 401k. I know that is against the norm. The reason is because that money is trapped until you are 59.5. If I would have put in as much as the company match then took the rest and invested independently, I would be years ahead.

The biggest catch though would be having the discipline to put that extra away in investments and not touch it until retirement. Easier said than done but I wish I would have been able to do it. Opens up a lot of options for an earlier retirement.

Random thoughts to keep my mind busy.

 

[jagermeister]

Best thing I ever did was get "a guy" to handle a portion of my investment assets. I contribute regularly to a pension and a 457 program, but I also contribute regularly to separate brokerage accounts. It's currently allocated to a relatively high-risk portfolio, so at times it can be somewhat volatile, but I can accept that at my current age. Nice thing about it is that money is not tied up whatsoever... All I need is about 24-hours notice and I can withdrawal whatever I want with little-to-no penalty. When I shifted my approach from keeping money in a bank to keeping money in the market, it became a real game changer. Your best weapon is consistency, though. Whatever you do, contribute even when you don't feel like it. Whether it's a big contribution at the end of the year, or a steady monthly or bi-weekly contribution, just make sure you're consistent. TIME IN the market beats TIMING the market.

I've heard most recently that 2-3 million in investment savings is roughly what's needed to retire comfortably. Obviously that can vary, based on your standard of living and expenses, and how early you retire.

The only thing I would do differently is start sooner. I never knew what saving money was until I met my wife... She's been my biggest blessing, from many perspectives, but especially financially. Since I was 12 years old, I've never been unemployed (knock on wood). But I never saved a dime... I earned it, and I spent it on THINGS. I still enjoy buying things on occasion, but I'd be so much further ahead right now if I would have had someone to hold me accountable and plant the seed of investing at an earlier age. Thankfully my bride helped me pull my head out of my ass eventually.

 

[GoetsTalon]

Remember when the American dream was to buy a house? Add retirement to that list.

 

[hickslawns]

Great question. What I "thought" was enough 5-10yrs ago doesn't feel like it would be enough now.

"For me" I don't foresee much lifestyle change. If you didn't spend $10k per year on vacations now, you probably won't when you retire either. Might do a big one the first or second year?

Being debt free is the key for me. I'm not there. I will be when I retire. I think you can live on a lot less money if you aren't making vehicle and mortgage payments.

I have rentals properties. Not a ton of them, but enough to help. I plan to use 50% of my rental income as a monthly "pension check." Could probably get away with 2/3 the income but I'll play it safe.

Health insurance is my biggest question mark. If my wife is still working and carrying the health insurance it makes it easier. If I could get her to take a second or third job I might retire earlier. I'm not counting on it though.

I figure $1 million drawing 4% interest is $40k per year (before taxes). Assuming I can draw 4% safely without touching the principal, I guess I just need to decide if I want $40/60/80/100k/etc per year income and do the math. This seems pretty conservative because the closer I get to my deathbed the less the untouched million(s) will matter.

That leaves my last factor in the equation: do I want to live like a pauper to be able to retire with millions that I cannot enjoy? Or do I find the happy medium of enjoying the ride and risking not having enough money to take me to my grave? I love my kids, but I'm not saving any for them. They've paid their own college. They've seen us stretched to ensure they have what they need. They aren't afraid to work. I don't think they will want us to save it for them. They will want us to enjoy our ride no different than my wife and I feel about our surviving parents. If there is some left over? Good for them. (And I suspect there will be as I'm conservative with planning.)

 

[Sgt Fury]

Talk to a financial planner. When I was getting ready to retire, I asked a few coworkers who had retired how they were doing financially and if they would go with the same financial company again. A few said they were making more money retired than they were when they were working. I met with the ones that were highly recommended and asked many questions. They will ask you many questions about debt you have, debt you may have later, what you want to do after retirement, assets you have, ect. I retired at 56 and the financial people took my lump sum buyout and 401k, invested it and we live off of the interest it generated. They will withhold some of it to cover the taxes. My wife did the same thing when she retired at age 52. We are both 60 now and together make more than when we were working. We have it invested in lower risk things (I told the financial planner I didn’t want to be eating dog food when I was 70 so he better not put my money at risk). They had so many options that our heads were spinning when they finished explaining how they could invest it. There were things they are doing with the money that I’ve never even thought of or heard of. We just got our statement for this month….we made about what we usually make in 6 months in just 30 days. Some months you make very little but on average we get 4-10% every year. We only take a certain amount out each year, put it in our banking account and reinvest the rest into our nest egg. It has grown a lot over the past four years even after taking out what we need to survive every year. I still keep in touch with my retired coworkers and they are still getting great returns with their money.…so the company I’m with has a good track record as some of these guys retired 5-8 years before I did and they’re still happy. A couple retirees who went with different financial companies didn’t do well and some lost everything and had to go back to work…making half of what they were making before retiring, so it’s very important to check references….preferably with someone you know and trust. Sorry for being long winded but retirement is a huge step. After talking to a financial planner, when you can make enough money to cover all of your needs and still have a bit left over, then retire. I’ve always wanted to retire early but was concerned about having enough to live off of for the rest of my life. When I was sure, I took the leap. Having your home paid off is also a huge help. Try to plan to have zero debt when you retire…no mortgage or home equity loans ect. That leaves more money for you to pay your monthly bills and to also have money to enjoy your retirement.

 

[Jamie]

All the high notes have been hit here already. The important overall thing is to have a plan. Find a fiduciary that understands your goals for retirement. Get out of debt. Another thing to consider is when you actually have a bunch of money invested diversification is important. Avoid having all your eggs in one basket. One 401K or government retirement plan is ok, but having other investments is good "insurance". Learn about the tax implications of your retirement investments as part of your overall plan. Have life insurance and a Will prepared by a lawyer. How much you actually need to retire is very subjective based on your lifestyle, your debts, etc., and why having a fiduciary financial planner is so important.

 

[Dustinb80]

Im in a similar spot as JB. I've had "A guy" for years. Unfortunately he retired and I was "Let Go" by the guy that took over b/c I didn't have enough $. So I went and found a new guy. I've known him for a few years as an acquaintance. He knows my goals and knows that I prefer to be aggressive with the market. We also discussed my debts and how to better pay them down, which I have been working on for a while. I know the market ebbs and flows, Im not one to freak out when shit plummets, it'll come back.

 

[triple_duece]

Well from my years I have learned enough to be dangerous . What I think I know right at this moment is, put only enough that you 401 will match and get an investor for the rest. I put my drop money and some others in a low risk investments. I’m like 55% in bonds that pay up to 5% that’s tax free and the rest is invested in stock. I averaged 7-9% with both. Don’t do like I did and wait to do this when you retire, although I have a pension that covers me and the wife until we are 6’ under. I can tell you no amount money is ever enough. Also staying home cost more cause you find something to do with your time. The hardest part for me was staying home and always having the wife in my ass, so I’m back working until hunting seasons. Working is by choice for me and I like the extra spending money. Yes my advisor said I could draw x amount of money and still have money in 25 years but I’m building it at the moment, I’m a caregiver by heart so I will be leaving my boys with more than I would’ve ever imagined I’d ever have. Nothing is going down and only going up more than people’s income. Just food for thought, I could have it all wrong, after all with my life, nothing has ever been easy if it was worth it. Oh I’m also debt free except for insurance, taxes and cost of living.

 

[giles]

Well from my years I have learned enough to be dangerous . What I think I know right at this moment is, put only enough that you 401 will match and get an investor for the rest. I put my drop money and some others in a low risk investments. I’m like 55% in bonds that pay up to 5% that’s tax free and the rest is invested in stock. I averaged 7-9% with both. Don’t do like I did and wait to do this when you retire, although I have a pension that covers me and the wife until we are 6’ under. I can tell you no amount money is ever enough. Also staying home cost more cause you find something to do with your time. The hardest part for me was staying home and always having the wife in my ass, so I’m back working until hunting seasons. Working is by choice for me and I like the extra spending money. Yes my advisor said I could draw x amount of money and still have money in 25 years but I’m building it at the moment, I’m a caregiver by heart so I will be leaving my boys with more than I would’ve ever imagined I’d ever have. Nothing is going down and only going up more than people’s income. Just food for thought, I could have it all wrong, after all with my life, nothing has ever been easy if it was worth it. Oh I’m also debt free except for insurance, taxes and cost of living.

This is the path I am on. Get everything paid off and then figure out where to invest it. I could retire today and get by, but I want more. I also want to leave some land to my kids. Doesn't seem possible that they will ever be able to afford it at this point. So I will get enough to leave them all some.

 

[Bowhunter57]

I'm having an anxiety attack reading this stuff.

I retired from public employment and that has made a huge difference than if I would've stayed in the private sector. Having everything paid off before retiring has been a huge plus.

 

[Iowa_Buckeye]

What I wish I would have been told when younger? Put as much as you can in Roth or 401k Roth versus traditional pre-tax 401k. Do this while you are in your earlier earning years (lower income/lower tax bracket) and pay less tax on the money. I’m upside down with a large tax-infested 401k balance and will pay higher taxes than I currently am on future RMDs. I do plan Roth conversions after I punch my ticket and before I need to start drawing on my 401k/collect social security. Therefore low earned income in those years, so lower tax impact on the conversions. Living well below your means and aggressive savings is the key.

You can also access your 401k the year you turn 55 if the account is with your current employer. Google ‘rule of 55’.

 

[Quantum673]

One change I have recently made is more stocks with dividends. Strongly recommend taking a look at focusing on dividends. I really wish I would have known what I know now 25 years ago.

 

[Smawgunner2]

I’m 3.5 years away. We need a financial planner. We have a very close relationship with our investment guy but I feel it’s a conflict of interest. I don’t want a planner who also wants to sell us a product or manage our money in any way. So how do you find one?

 

[hickslawns]

I’m 3.5 years away. We need a financial planner. We have a very close relationship with our investment guy but I feel it’s a conflict of interest. I don’t want a planner who also wants to sell us a product or manage our money in any way. So how do you find one?

Maybe have a sit down with your planner and see what they suggest. Then get a second opinion from another? Third opinion? Maybe they will say the same thing or suggest a very similar plan. At that point you could just stay with your guy. Just a thought.

 

[Smawgunner2]

Maybe have a sit down with your planner and see what they suggest. Then get a second opinion from another? Third opinion? Maybe they will say the same thing or suggest a very similar plan. At that point you could just stay with your guy. Just a thought.

He’s not a planner, he just manages our Roths. I’m stumped how to find someone who does retirement planning. Phonebook? We’ve come across “planners” but they either want to manage your assets ie take investment control, or sell you a product (Roth, 401, etc) for commission. I want to pay someone for their retirement planning only.

 

[gjs4]

It is crazy on how hard it is to find good help, in any category, even something like a financial planner/advisor. I have a tax guy and 401k guy.....both are concerned about their self/role performance interests. Nether could answer a thing about building an AirBnB or buying a farm....

 

[Buckmaster]

My Fidelity profile says I will need $3.3M to maintain my current lifestyle from age 67-95. That’s my current savings goal though I’ll probably need less.

 

[hickslawns]

My joke reply: My Fidelity profile says if I collected cans along the road I could maintain my present life style.

My serious reply: you hit the nail on the head @Buckmaster. "To maintain my current lifestyle." Can you make retirement goals if you don't know what level of lifestyle you anticipate retiring in? Want to live the same life as when you were working? Want to travel and spend more? I'm far from an investment advisor but you don't need to be an investor to know this. Better decide what lifestyle you plan to live in order to know how much you should save.

 

[Iowa_Buckeye]

I’m 3.5 years away. We need a financial planner. We have a very close relationship with our investment guy but I feel it’s a conflict of interest. I don’t want a planner who also wants to sell us a product or manage our money in any way. So how do you find one?

Instead of using a person who will just ask you a bunch of questions and then feed it into their software program, just look into some retirement planning software programs yourself. I personally use 'Boldin' as we get use of the full software suite for free through my place of employment. Boldin does have a 'free' version, but it is limited on features. I do think you can try their 'full version' for free for a week or two. There is also a Boldin Facebook group to ask questions. They also have 'live sessions/training' on a wide variety of topics you can log into.

The program has lots of features. Has a Roth Conversion explorer, takes into consideration state tax rates, impacts to IRMAA, etc. Shows lifetime taxes per data entered, account balances, RMDs, etc. Anything you can image and more. You can 'plan' to retire to another state, enter expected house purchase price, other big purchases, expected inheritances. Can set up scenarios. Helps plan for ACA subsidies if retiring before 65. I can get lost messing with it for hours and can set up things I wouldn't want to pay someone to look at for me....

It has also made me understand what all the tax advantage strategies are you can prepare for that will help you over the long term (again, such as ACA, IRMAA, RMDs, capital gains, others). It is best to understand these AT LEAST a few years before retirement so you can be best prepared to take advantage of them.

Give the free version go and see if you like it. Then try the full version for free free to see if you would want to subscribe? I think it is about $120/year for the full version. It is easy to use.

Financial and Retirement Planning Software | Boldin

The #1 retirement planning tool online. Go beyond savings and investments with the best and most comprehensive financial planning software.

www.boldin.com

 

[Hedgelj]

It is crazy on how hard it is to find good help, in any category, even something like a financial planner/advisor. I have a tax guy and 401k guy.....both are concerned about their self/role performance interests. Nether could answer a thing about building an AirBnB or buying a farm....

That's not their area of expertise. That would be like asking a dentist about your shoulder pain.