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At what age do you hope to retire/Personal Finance and Investing Thread

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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 01, 2018, 10:54 AM Post
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This is one of the more rational rebuttals I have read to his strategy. I first found it years ago, but I think it's a decent argument that rises above the usual slop.

https://www.whitecoatinvestor.com/what- ... and-wrong/


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 02, 2018, 5:21 PM Post
Posts: 793
This is sort of in the realm of personal finance:

Target has gift cards 10% off today only. You can order them online. They only run this deal once per year. I buy the maximum allowed ($300) every time. $30 savings right there.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 02, 2018, 5:35 PM Post
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They used to let you turn around and buy their other gift cards with the Target cards. That made it really nice. So that $270 could be used to buy $300 on Amazon or Disney or something. Shut that down this year.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 03, 2018, 9:45 AM Post
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I don't think my significant other needs 300 more reasons to go spend money at Target.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 03, 2018, 6:54 PM Post
Posts: 793
I use the $300 Target gift card (that I buy for $270) to buy paper products at Target whenever they have their ‘free gift card with purchase’ deals. For example, I can usually get a $5 Target gift card when I buy two $10 packs of paper towels (if I wait for the sale). That adds up to about $75 worth of extra gift cards by the end of the year, which I usually spend on fun stuff like movies and books on Black Friday or other Christmas presents.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 8:25 AM Post
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My dad just retired and his retirement account is quite underwhelming, IMO. He isn't a financial schmuck, though, and he doesn't seem to worry about it. When I think about it, though, he has a nice home that is paid off. My mother is still working and has quality insurance. She is an educator and will have a pension upon retirement in a year or two. He has SS income that probably allows him to dip into his very modest retirement savings very little. If/when they choose to downsize, that's another $160k or more in their pockets (they'd have a rent payment each month, obviously).

I often read that you should have $500k or $1million dollars put away for retirement and that seems like it'd be great, but depending on how you want to live, you can probably get by on a fraction of that (again, assuming SS and other income is still available).


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 9:26 AM Post
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Right, depends on how you want to retire. $1mil is a pretty solid benchmark for the typical American who wants a solid retirement. If you want that vacation condo and many trips you will need more. On the flip side if you are just going to stay locally all the time and not spend much money on activities you should need a lot less.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 10:48 AM Post
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To me, living off $1 million in retirement is very doable. It's the unforeseen stuff that would cause issues. So if you get in an accident or get sick that can drain savings very quickly even if you have insurance.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 10:55 AM Post
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$1,000,000 in savings seems unreal to me. Maybe I'm underestimating the power of compound interest, but how the hell does an average American making ~$50k a year ever get there?

Luckily I will have a pension to rely on. I forget to factor that in, so that allows for my 403(b) total to be a fraction of what I actually need. That is if the WRS can be relied on (so far, it is in GREAT shape).


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:08 AM Post
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Much of it is due to timing.

Say you had $333,000 in an index fund in 2008. That’s a reasonable amount to have saved by 50, right? You’d probably have $1 million today at age 60 because the S&P has effectively tripled in 10 years. However, if you turned 50 in 1998 and had that same $333,000 in an index fund, you wound up with $300,000 in 2008 when you wanted to retire.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:18 AM Post
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Is $333,000 by age 50 a reasonable amount for most Americans? I don't know.

My wife and I are meeting with a financial planner for the first time next Thursday. I am building up all sorts of questions about her 401(K), my 403(B), my pension, SS, kids' 529 accounts, etc... I'll be 34 at the end of the month. Should have started this 10 years ago, but its better late than never, I guess.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:33 AM Post
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PlayerHader said:
Is $333,000 by age 50 a reasonable amount for most Americans?

It sounds less daunting than $1 million, right?

And you can see how, under the right circumstances, it’s possible for the average person to be a millionaire. If you’re getting serious about retirement in your mid-30s, you’re still well ahead of the curve.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:42 AM Post
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Power of compounding. A couple making ~90k together that saves 1/5 of their income yearly is within reason to expect a ~$4 million nest egg at 65.

You could go less than 1/5 and still have a lot of money.

Time is your best friend. You start early and grow accustomed to setting it aside, but it also has time to grow.

$1 million by retirement age is a fairly easy sum to reach for somebody on $50k income. You could do that with very little relative sacrifice.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:42 AM Post
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It sounds much less daunting. My old man has significantly less than that put away. Maybe he is delusional and I should be more worried about his financial well-being.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:46 AM Post
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The other issue with shutting it down early, which is moot if you have "enough," is that a ton of growth occurs once the balance is large. It's exponential. That stops when you start taking it out. If you stop at 55 rather than 60 you are giving up a ton of growth; it's much more substantial than the period from 30 to 35, for example.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 11:59 AM Post
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Start early...that’s a pretty big key. Pretty basic scenario:

-Start saving at 22
-5,000 a year
-8% return
-Retire at 62

$1,300,000mil at retirement. Which should end up at about $1mil if you saved tax free and gotta pay on it at retirement.

So the average American should have no problem saving for retirement. IF you are proactive and start early! That is probably why it seems more unbelievable to older generations. There was less focus on starting early 20+ years ago. If you wait till 27 years old that pile of cash is suddenly $850,000. It is that important to start early.

Of course all that is very generic estimites. Other things will effect it, but in general if you start early it doesn’t take too much effort to hit $1mil. Especially if you are making $50k at 22 and that slowly grows much higher as you gain experience.

The growth at the end can be crazy though. Once I checked the difference of retiring at 62 vs. 64 and I nearly fell out of my chair. Of course you’d be crazy to have your savings all in high return places at that point. A few years can really make a difference.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 12:10 PM Post
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I'd be interested in going back to the origin of the thread (At what age do you hope to retire) and adding ?How much do you plan on having saved away at that point?"

I should go back and look. Maybe many included that already.


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Online  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 12:22 PM Post
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$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 12:29 PM Post
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nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


Where do you live? What does retirement look like in your mind?


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Offline  Re: At what age do you hope to retire/Personal Finance and Investing Thread
Posted: December 05, 2018, 12:35 PM Post
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nodakfan17 said:
$2 million is our magic number, but since my wife and I are both in our 30s, I fear we’ll need to save $4 or $5 million by the time we retire just to have the same purchasing power as $2 million has today.


I doubt it would be that drastic. Your salaries would likely increase along the way assuming you are in professional careers which would help negate some of that inflation and make that $4mm a lot less daunting.


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