#31
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I also had a policy of saving 10% of my income on a continuing basis over the years so we always had a decent amount of money in our savings account. Any bonuses I received went right in the bank. We did spend money in our savings for upgrading our house a few times, but by the time we retired, we had significant liquid funds in our savings account. I also worked full time until age 68 and held off on tapping into Social Security funds until then. I still work part time to make sure that money is not a problem. We are continuing to put money in the bank even in retirement. - Glenn
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#32
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#33
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Of course a previous generation had ‘muscle cars’, stereos and lots of albums!
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”Lorem ipsum dolor sit amet” |
#34
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My wife and I ran our own company so we were able to make retirement contributions from both our company (as our employer) and ourselves and we started to do this more aggressively as the company became more profitable. Our house also increased in value quite a bit and our debt was reasonably low so when we decided to retire at 68 and sell the house, we used the house money to live on until we were 70 to maximize SS income. The big deal for us was a complete change of life style, moving from a 7 bedroom house with a swimming pool in a major city to a small 3 bedroom house (purchased with cash) in a small village in Vermont. This meant giving away literally tons of stuff, and just changing and simplifying the way we lived. We traveled very extensively for our business and I hope I never see another hotel or airport again. Life in a rural village encourages simplicity in living. I used to regularly spend $60 to get my haircut, for instance. That seems totally nuts to me now, but that is just how we lived. I am keenly aware of how a health crisis or another financial collapse (as we saw in 2008) could knock the legs out from under our life, but but in balance things have turned out well. A lot of this, I would have to say, is luck though.
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2003 Martin OM-42, K&K's 1932 National Style O, K&K's 1930 National Style 1 tricone Square-neck 1951 Rickenbacker Panda lap steel 2014 Gibson Roy Smeck Stage Deluxe Ltd, Custom Shop, K&K's 1957 Kay K-27 X-braced jumbo, K&K's 1967 Gretsch 6120 Chet Atkins Nashville 2014 Gold Tone WL-250, Whyte Lade banjo 2024 Mahogany Weissenborn, Jack Stepick Ear Trumpet Labs Edwina Tonedexter |
#35
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Good point but a lot of them also had jobs that paid pensions.
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#36
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I have to believe that the majority of people who own several very nice acoustic instruments have the financial acumen to allocate their resources wisely. So most of us on the board have been contributing to retirement plans, savings accounts etc. I contrast this behavior to a friend who has two employees in their mid-twenties. One has several thousand dollars in his savings account, has an IRA, drives a used car, and no debt. The other doesn't even have a savings account, spends half his paycheck on pot, cigarettes and alcohol (and doesn't believe he has a potentially serious substance abuse issue) and uses the rest pay off the minimum payment due on his credit cards and other loans. It isn't hard to see who is going to have problems forty years down the road. As for retirement, there are a variety of financial programs already out there that some people use, and others do not. 401k. 403b, SEP, IRA, HSA etc etc. Either people save or they don't. The savings rate is so bad that now and then proposals pop up for a new government sponsored savings program, but the fact is that if your employer doesn't have a 401k or pension, then you can already contribute to an IRA. Many of the companies have very modest minimums if a person sets up an automatic purchase plan (One prominent mutual fund company's minimum is $25 a month.) The problem is basic financial literacy. Students in high school and college are taught very little about financial instruments, and are often resistant to learning about stocks, bonds, and real estate because the subjects seem so complex and the hot news of the day may be that the market is down again, which frightens them away from learning. Back to the original question, when someone is within a year (or even five years) of retirement, you are essentially past the prime "accumulation" years and are preparing for the "distribution" years. So the retirement plan is really a roadmap to how you intend to deploy your accumulated assets over the final twenty to thirty years of your remaining life. Of course, the larger issue is that none of us knows how much longer we will live. If we knew the answer to that question, the ability to plan would be so much easier. CK
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----------------------------- Jim Adams Collings OM Guild 12 String Mark V Classical Martin Dreadnaught Weber Mandolin |
#37
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Keep beating the drum, Kerbie. I beat that same drum with friends and relatives but don't believe any progress was made. There are so many with an "I can't" attitude, it's really sad.
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#38
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Let me point out the numerous people I know having retirement issues. Several guys I know have million dollar businesses that no one wants to purchase. After trying to do work to own plans with people that they feel are running their companies into the ground they discover they can never retire. The director and a bureaucrat that remarried to younger woman years ago and can't retire because of heath insurance for the spouse and the youngest child's collage bills. They are working into their 70s. Or a smart hard working guy that was unlucky enough to get great jobs in companies that got sold, merged or moved leaving him to find another job numerous times throughout his life. Add to that the many, many people that have had their 401Ks gutted because of divorces. Benefits like health insurance until you reach 65 years old after you've reached the rule of 85, 88 or whatever are gone. They've changed the rules so union pension payments are no longer handled through payroll deductions. So people have to write out a check each month on their own to pay into them. You know many won't keep up with that, especially when times get tough. My point being that there are honest hard working Americans taking care of business and ending up sucking wind. They are not all "losers". Except they have lost out when it comes to retirement.
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Waterloo WL-S, K & K mini Waterloo WL-S Deluxe, K & K mini Iris OG, 12 fret, slot head, K & K mini Follow The Yellow Brick Road Last edited by Kerbie; 04-20-2019 at 03:38 PM. |
#39
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Well said CK |
#40
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The just like people would get a muscle car analogy posted here makes sense, some still do that or get too much phone. It may be unfair to say they don’t teach kids financial literacy. It wasn’t taught in my 1960s-70s growing up. It wasn’t taught outside the business school when I graduated from the top rank university. It’s taught in area schools here in flyover country. Within the past week or two the Wall Street Journal had an article that showed peak middle class was 1985, and an illustration of the small group of top earners and most earners moving away from each other. It left me thinking a whole lot of us seemingly alright could have a lot of trouble in the future. Trouble because of all the costs that will land in the laps of the not so elite. I also feel there’s trouble ahead without change because most for most there’s almost no earning power if you don’t have a skill where the whole world pays a living wage. We already have robots doing more work than most know or think about.
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ƃuoɹʍ llɐ ʇno əɯɐɔ ʇɐɥʇ |
#41
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Flash forward 50 years, and we can still spend our cash on "vinyl", record players, and muscle cars....
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Emerald X20 Emerald X20-12 Fender Robert Cray Stratocaster Martin D18 Ambertone Martin 000-15sm Last edited by RP; 11-20-2021 at 07:08 AM. |
#42
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Credit is easier to get now than it was years ago. Anyone think that helps contribute to people's spending habits? I'm talking about people who don't have the financial means to purchase some non-essentials but put it on credit. That in turn directly influences retirement income.
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#43
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So many awesome responses! I should first say, let's please omit any reference to prohibited topics here. There is no reason we can't avoid those. And I'd really hate to close my own thread... never done that!
Lots of great points. I agree many of us could be one disaster away from trouble... one traffic accident or one major health issue. It's scary how much one serious medical issue can cost these days. It's good to see so many of us have saved and planned for years. I'm not surprised. I had many years in which I was able to save 50% of my income... just a crazy percentage. But I've never lived extravagantly or beyond my means. It's interesting to hear so many speak against debt and in most cases, I would agree. A couple years ago, I faced a situation where I decided to use debt even though it wasn't mandatory. It allowed me to avoid disturbing assets invested elsewhere. And the rate was so low, I knew the odds were that I could earn more than I was paying. Most of the time, debt hinders financial progress, but not always. Thanks for such a fascinating read, guys. Gives me a lot to think about. |
#44
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1. When folks retire, they pretty much disappear, so those working alongside them don't have contact anymore. I have been lucky to live among many retired folks in our condo association over the past 30 years, so I heard much of what they dealt with in the transition to retirement. 2. In our (US) culture, it is more sociably acceptable to talk about who we were intimate with on our last date among our peers than about our personal finances. I wish that were not the case because I truly think the debacle of 2007/2008 could have been avoided had peers been able to talk about the realities of money management (such as is in the book "The Millionaire Next Door") - frugality could have had a cautionary voice instead of folks only getting the media "you deserve it TODAY" messages. This is one aspect of our culture that truly baffles me. It seems backwards from what it should be. Tony
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“The guitar is a wonderful thing which is understood by few.” — Franz Schubert "Alexa, where's my stuff?" - Anxiously waiting... |
#45
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27 years in the Army provides a good retirement foundation. I bought a house inside the Washington DC beltway in a so-so neighbor, betting things would get better. They did. Made $350k on the sale and moved to the country and bought a 1950s ranch on a few acres for $130k (put $150k into it and it's still worth $130k). Worked for 6 1/2 years after leaving the Army. Saved my retired pay and a little more & maxed IRA every year. I quit work at 56+ with about $750k in savings & IRA.
The scary part was walking away from a good six figure job, knowing no one would hire an old fart at that money if I had to go back to work. I think I calculated my retirement expenses and plans every day for six months before I finally bailed. No regrets and enough money to do what I want. Didn't have to change my lifestyle at all because I always lived well within my means. Most of the money I've wasted in retirement has been on guitars and RVs . . . but I guess that's what I saved it for. |