Retirement Savings

[H165]

Of course a previous generation had ‘muscle cars’, stereos and lots of albums!

That's my generation. I was about 19 when I bought all that stuff.

My (not so muscle) car was a $100 1952 MGTD. It's worth about $15k
right now.

My stereo was a used pair of McIntosh Mc40s, an old C11 preamp, an old Thorens TT, and some used Bozak speakers. The entire pile cost me about $600. Just the amps are now worth about $1600, the preamp about $1300, the speakers about $300, TT maybe $300.

I sold my vinyl collection long ago, for about 5 times what I paid for it.

When I was 35 I paid $1700 for my '41 Martin 000-42. Everyone here can do the math on that one.

I wonder what will be a rising-value item out of all the stuff available today. I don't think it will be cell phones and tablets.

[islandguitar]

Both my wife and I were fortunate to have TIAA-CREF in working in education )403b). She is 9 years younger than I, so interestingly, that's provided a kind of "staggered" approach to our retirement plan landing nicely.
Incredibly, the college I worked for had an excellent matching percent. Though I was paid VERY low salary, but, that match...and the ability to catch the benefit of my daughters' tuition was loomed large in the big picture. The college contributed 9% along with my 5%.........14% saved each year for 24 years.......a very good base.
The combination of both our retirement and part-time jobs into retirement helps to keep things in order...........we purchased a home that we knew we could afford in retirement.......a small home.....we don't have to downsize...... All this adds up........grateful for thinking this through and having good health these days. It's all working quite well........but as with others, took time.......thought and planning in a very intentional way for lots of years.
Great thread!!

[Kerbie]

Glad you mentioned TIAA (formerly TIAA-CREF). They've done a marvelous job of enhancing the retirements of an incredible number of educators. I remember when I ran into them as a broker, I just complimented my client for choosing so well, even though it wasn't paying me a penny. Good company.

Sometimes when I've helped friends, I wished they were a little more flexible and accommodating. But it's hard to argue with 100 years of success.

[David Eastwood]

I'm within 12 months of pulling the plug - I'll be 64 in November. I've been in software sales for well over 20 years, and have been aware for quite a while that I don't actually give a crap about it any more.

Married for 32 years - my wife and I made a lot of mistakes in the early years when we were both working, but we've been a SITKOM (single income, two kids, outrageous mortgage ) for the last quarter century, and have our collective act together now. We've been very fortunate in the companies I've worked for - two IPOs, two acquisitions - and have managed to parlay much of that (along with 401k maxes along the way) into a sum that our financial advisor (and his magic Monte Carlo simulations) assures us will meet our modest retirement needs.

Healthcare remains a challenge - I won't qualify for Medicare until November next year, and my wife is a couple of years behind me - but we've factored that in. Another challenge is that we still have a mortgage - but, again, the plans accommodate that, and moving somewhere much friendlier to retirees than Minnesota is very much on the cards. The equity we have in the home here will cover a very nice place in many other parts of the country.

For me, the biggest obstacle is in having the confidence that we can actually do this. Making the transition from watching assets accumulate, to watching them provide income is going to be interesting.

All my planning documents live in a folder on my computer named "One Day Closer..."

[Kerbie]

Originally Posted by eatswodo

Making the transition from watching assets accumulate, to watching them provide income is going to be interesting.

That is SO true! Couldn't agree more... I've thought about this one. And what will really be different is when watching assets grow turns into watching assets shrink.

[1neeto]

I’m a firm believer that saving for retirement is a fallacy. To truly retire, not work again for the rest of your life, you need a savings account that will support you with the same cash flow you had when you were working. So if you lived at let’s say $5000 a month, then you need a savings account that will support that $5000 a month for the next 10-15-20-30 years you plan to stick around after retirement. If you plan to stick around for an extra 25 years, then you’ll need to save up $1,500,000. This may seem like an extreme example but even if you live a rather frugal life at $1500 a month, you still need to put away $450,000 just to live at $1500 a month for the next 25 years. Anyone here has anywhere near that saved? I would guess most likely not.

Always best to have investments, whether it’s stocks or real estate, the best way to retire comfortable is with “mailbox” money or better known as passive income.

[TomB'sox]

I am getting close to trying to quit working...I am going to cut back to about 1/2 time in a couple of months.

I am not going to be mortgage free which seems to be a somewhat consistent finding among those responding and I wish I were, but I also look at it a little differently.

We spent our lives working to be able to build our dream house only a few years ago, hence the mortgage, however, we currently have 6 figures of equity in this house. I am not locked into living in it until I die. The way I am rationalizing it is if times get tight and the payment is burdening our savings, we can always sell, get a nice infusion of cash and downsize to a smaller house that we may be able to get without a mortgage. I guess I am still looking at this new house as in investment in the future rather than just a drain on our savings. Perhaps my thinking is flawed, but I think it will work.

[Kerbie]

Originally Posted by 1neeto

I’m a firm believer that saving for retirement is a fallacy.

Really?

Originally Posted by 1neeto

even if you live a rather frugal life at $1500 a month, you still need to put away $450,000 just to live at $1500 a month for the next 25 years.

Your math here doesn't seem to take into account that the remainder of the $450,000 is continuing to earn even as you make monthly withdrawals. That sum of money will actually go longer than 25 years.

Originally Posted by 1neeto

Always best to have investments, whether it’s stocks or real estate, the best way to retire comfortable is with “mailbox” money or better known as passive income.

You seem to be advocating saving into investments like stocks and real estate, but saving for retirement is a fallacy? I'm not sure you meant to describe these as passive income. Stocks are usually considered portfolio income. Real estate may provide passive income, but that depends on how it is used. Or are you referring to other investments?

[guitar george]

The best way I know is to buy income property in the form of a rental property, or two or three, in a good area for renters. Apartments are the cheapest and easiest to manage for most people. The renters pay for the majority of the costs and when the properties are paid off, the rent money pays for your retirement. Over time you will likely make a capital gain due to inflation and increased demand, mostly due to immigration, in most good areas. Also, an income property is a hedge against the possibility of the value of the dollar going down. If the dollar became devalued, money would now be worth less, but, residential property would still be a place to live and cost more due to the less buying power of the devalued dollars. As a simplistic example, if the dollar were to go to fifty cents against other major currencies and you have $100,000. dollars in the bank they would be worth the equivalent of $50,000., but, the $100,000. condo would now cost $200,000. to buy.

[srick]

My mom used to have a saying, “Man plans, God laughs.”

There is no ‘winning’ in retirement planning, as you are playing the odds, hoping that your time will run out before your money does. My wife and I have planned as well as we can: we are delaying retirement, we are saving, we are going to be downsizing, and we are going to be careful with our expenses.

But, we are also going to live, and hopefully enjoy the chapters to come. I hope to be playing my guitar for many years and enjoy the many new grandchildren, grand nieces, and grand nephews who are yet to be born.

Our financial planner has us living to 100 and I hope to make it there!

[rokdog49]

Originally Posted by 1neeto

I’m a firm believer that saving for retirement is a fallacy. To truly retire, not work again for the rest of your life, you need a savings account that will support you with the same cash flow you had when you were working. So if you lived at let’s say $5000 a month, then you need a savings account that will support that $5000 a month for the next 10-15-20-30 years you plan to stick around after retirement. If you plan to stick around for an extra 25 years, then you’ll need to save up $1,500,000. This may seem like an extreme example but even if you live a rather frugal life at $1500 a month, you still need to put away $450,000 just to live at $1500 a month for the next 25 years. Anyone here has anywhere near that saved? I would guess most likely not.

Always best to have investments, whether it’s stocks or real estate, the best way to retire comfortable is with “mailbox” money or better known as passive income.

I invite you to read my post on page 2 of this thread.
What about Social Security? We are living on it and one annuity with ease.
I don't understand your premise. Why would you assume you need "X" dollars being the same as when you were working?
If you have no debt as we don't you don't need near as much money to live on. Anyway we are living on basically the same as when I worked. That's how we saved money all those years. It's called living within your means.
We don't even need our 401k, our IRA's, our CD's or our cash to meet our monthly needs. Sorry to disagree, but it is possible to "save for retirement". We did and I'm talking about cash as well as other forms of investments.
I think there are many like us.
As I suggested, read my post if you're interested.

[Kerbie]

Good points, Rok. I think most people can live on less in retirement. We're not traveling to work which for me was a long way. We're not paying a lot of bills we had... professional dues, uniform or clothing expenses, travel, fancy meals, job tools and supplies, etc. We won't be paying into Social Security, 401(k)s and other retirement savings. We sometimes need fewer or smaller cars. In some cases, pensions may be tax-free. Healthcare is generally expected to go up, but lots of expenses will probably go down.

[ahorsewithnonam]

It really is all about basic math.

Just determine your annual expenses. Fidelity’s RIP tool pretty much outlines any expense you could think of. Just fill in the blanks.

Now you know what it will cost you to live.

Now you add up your income. Social security, part time job, dividends, etc

Subtract........now you know your shortfall or overage. So if you will have a shortfall, do you have enough savings to draw from to cover the shortage for the remainder of your expected lifespan?

[6L6]

Retired as a Lt Colonel from USAF with 23 years. Excellent pension.

Moved to private industry, maxed out 401K, picked some good investments. Fully retired at 58. I’m now 73 and living the dream.

My advice: start saving early. Look at jobs with good pensions, not just the salary. AND: Marry a smart woman who can pick good investments.

[Acousticado]

My wife and I are Canadians living in a city where the Federal Government is by far the major employer. After college, we spent our careers in our professions within various major federal departments. We contributed to a fantastic pension plan supplemented by RRSPs (like 401(k)) and other modest investments that allowed us both to retire 8 years ago at age 55 with indexed pensions and with all safeguards in place (e.g. health/dental/eye care, etc.) until death. I built our rural home 35 years ago which also saved us a lot of money. We’ve just sold the property to move back to the city and weve done well financially with the sale. I had a couple of periods of sideline entrepreneurial stints along the way as well. Both of our sons and daughters-in-law are college grads and are also enjoying careers in the federal government. We are all very lucky and do not take it for granted.