Retirement thread

[Thefullmonte]

I'd say start a side hustle that interests you over going to work for the man for 10 hours per week for $10 per hour. Do something you enjoy. And if you aren't worried about living off it, anything you do make is gravy. Plus you'll actually enjoy the work!

I've been listening to financial independence/early retirement (FIRE) podcasts and reading some and I think retiring in 5-10 years (I'm 35) is definitely within reach assuming I can knock back my expenses to $35-$40k per year (not sure that's something I want to do) but outside of continuing to focus on our real estate portfolio - I have no idea what I'd do with myself.

Are you single? I'm not much to look at but I keep a clean house and make some mean baby-back ribs (6 hrs on smoke, 3 hours wrapped, rest 1 hour...fanfreakingtastic!).

Seriously, that would be great if you could retire at 40. Can you give me a ballpark of how much you have saved so far? If you're trying to get your expenses to $35k, does that mean that you have $400k saved already??? Wow, that would be a ton. I'm assuming you're using the 11% mentioned earlier in the thread for what you'd make on your $$$.

Am I thinking of this right?

 

[ImJustKCClone]

Trollfest down to 33% strength.
Sad.

 

[Trice]

Interesting thread. For the personal finance geeks here, I'd be curious about your favorite books, blogs, social media follows, and other resources you use to gather info.

Among mine, in no particular order:

• New York Times has some pretty solid personal finance stuff (Ron Lieber)
• Mr. Money Mustache (although this is as much a lifestyle blog as it is about the specifics of personal finance, and I'm not nearly as "all in" as he)
• Lifehacker/Two Cents blogs
• White Coat Investor (a personal finance blog for doctors and other high-income professionals, but appropriate for anyone with a fairly sophisticated understanding of personal finance issues)
• Bogleheads message boards
• At one point I followed a few financial advisors or researchers (Wade Pfau, Michael Kitces), sometimes they get a little into the weeds for me

For people out there who want to learn about financial issues, my advice would be to focus on learning about personal finance and money management rather than investing. This will sound like heresy to some people, but mountains of evidence points to the fact that even professionals are rarely able to beat the market at all, let alone consistently. So it's not reasonable to think you're going to be able to do it yourself. Master the personal finance side (budgeting, borrowing, living within your means) and learn enough about investing to do so competently. Then move on and live your life.

A huge portion of being successful financially involves understanding psychology and being disciplined in managing money. If I had to distill all the financial wisdom out there into one sentence, it would be this:

If you can invest a healthy portion of your income in sound, age-appropriate investments consistently starting in your 20s and throughout your career, and avoid pitfalls like trying to time the market or chasing the latest fad, you have an excellent chance to retire with enough income to last your remaining lifetime.

EDIT: Perhaps above all else you should marry well. No joke. Money issues are one of, if not the single biggest, issues that couples fight about. Find a spouse who is financially compatible with you and have honest discussions about money early and throughout your relationship. Do that and you will take one of the biggest stressors in a marriage off the table. Imagine how that will improve your quality of life. It will also help you avoid divorce, which is among the most devastating financial events you can experience. Marry well.

 

[cycloneworld]

Are you single? I'm not much to look at but I keep a clean house and make some mean baby-back ribs (6 hrs on smoke, 3 hours wrapped, rest 1 hour...fanfreakingtastic!).

Seriously, that would be great if you could retire at 40. Can you give me a ballpark of how much you have saved so far? If you're trying to get your expenses to $35k, does that mean that you have $400k saved already??? Wow, that would be a ton. I'm assuming you're using the 11% mentioned earlier in the thread for what you'd make on your $$$.

Am I thinking of this right?

Ha, not single but its just my wife and I and no kids so that definitely helps. We have a good household income together but live WELL below what we make.

Between savings, 401k, and previous company ESOP - we are well on our way. But the nice extra kicker is our 20 rental units. We cash flow about $25k annually (split two ways) that we are using to acquire new properties or pay down debt (100% in acquisition mode because of the price of real estate - but with prices skyrocketing over the past year we are considering moving off that strategy soon). So that could cover almost 40% of our expenses, again if we choose to reduce to $35k which I'm not sold we want to. Plus we'll have the debt retirement on our loans and any appreciation of the units.

I'm not sure I'd recommend jumping into the market now unless you really do your due diligence on purchase price related to rents but I'm a HUGE real estate fan and would recommend adding it to anyone's retirement portfolio.

 

[Thefullmonte]

Interesting thread. For the personal finance geeks here, I'd be curious about your favorite books, blogs, social media follows, and other resources you use to gather info.

Among mine, in no particular order:

• New York Times has some pretty solid personal finance stuff (Ron Lieber)
• Mr. Money Mustache (although this is as much a lifestyle blog as it is about the specifics of personal finance, and I'm not nearly as "all in" as he)
• Lifehacker/Two Cents blogs
• White Coat Investor (a personal finance blog for doctors and other high-income professionals, but appropriate for anyone with a fairly sophisticated understanding of personal finance issues)
• Bogleheads message boards
• At one point I followed a few financial advisors or researchers (Wade Pfau, Michael Kitces), sometimes they get a little into the weeds for me

For people out there who want to learn about financial issues, my advice would be to focus on learning about personal finance and money management rather than investing. This will sound like heresy to some people, but mountains of evidence points to the fact that even professionals are rarely able to beat the market at all, let alone consistently. So it's not reasonable to think you're going to be able to do it yourself. Master the personal finance side (budgeting, borrowing, living within your means) and learn enough about investing to do so competently. Then move on and live your life.

A huge portion of being successful financially involves understanding psychology and being disciplined in managing money. If I had to distill all the financial wisdom out there into one sentence, it would be this:

If you can invest a healthy portion of your income in sound, age-appropriate investments consistently starting in your 20s and throughout your career, and avoid pitfalls like trying to time the market or chasing the latest fad, you have an excellent chance to retire with enough income to last your remaining lifetime.

Wow. Thanks for all of this info.

Do you use that app that CW recommended where you invest your spare change?

I'm excited to hear more of CW's recommendations as a someone obsessed with finance.

This bedroom furniture is still hanging over my head for 33 more months and I about puke every time I have to write the check.

 

[SCNCY]

The hardest thing, and something I haven't really figured out yet, is how much money do I need in retirement. So far, I have used Fidelitys retirement tool, but I am unsure if that is adequate to determining how much money I am going to need in retirement. Once I know that, I can forecast out to that point to determine what my monthly savings needs to be.

 

[Deleted member 8507]

Generic (but still good) advice for every stage of life:
https://www.scottrade.com/knowledge...d_BRO_AINewsletter_Education&ep_rid=132111581

 

[Cyched]

This thread really deteriorated fast.

 

[ricochet]

I'd like the option of investing my social security, too. Who knows what the government is doing with it, now. I read earlier in this post that 11% is what you should guesstimate for an annual return. Is there a way to see what Uncle Sam is earning with our SS money?

Your social security money is being paid out to people currently receiving benefits. Before 2010 or so incoming money exceeded outgoing and the surplus was invested in government bonds. By law that is the only option for the surplus money. According to Wikipedia the surplus earned 3.6% in 2014.

 

[Deleted member 8507]

Interesting thread. For the personal finance geeks here, I'd be curious about your favorite books, blogs, social media follows, and other resources you use to gather info.

For general economic theory I love Laurence Kotlikoff. He also has proposed several concepts for consideration in https://purpleplans.org/ As for books, here are some of my favorites:

* Get What's Yours: The Secrets to Maxing Out Your Social Security by Laurence Kotlikoff (very detailed/technical info on SSI)
* The Smartest Investment Book You'll Ever Read by Dan Solin (Index investing)
* The Big Retirement Risk by Erin Botsford (biased opinion but good indepth explanations)
* The Truth about Retirement Plans and IRAs by Ric Edelman (biased opinion but good indepth explanations)
* Five Years before You Retire by Emily Birken (written in plain, easy to understand form)
* How to Make Your Money Last by Jane Bryant Quinn (general finance/investment advice)
* How to Retire with enough Money: How to Know What Enough is by Teresa Ghilarducci

 

[Deleted member 8507]

Also, Ben Stein isn't a bad author . . .

 

[CloneGuy8]

Not really related to retirement, but more protecting assets. At what point is it a good idea to get an umbrella policy?

 

[Dopey]

$120k in 6 years is great, but you could be doing more than 6%, I'm guessing. Don't let the very generous 10% from your company make you lazy on your contribution.

No one says don't buy your company's stock.They say don't have it make up an idiotic % of your portfolio. 1% doesn't ring that bell.

I'm still interested in what Chris Williams is into. He said he's obsessed with finances. He gave us that website to invest spare nickels/dimes, but I assume he has more cooking than a virtual coin purse.

If I could get this bedroom furniture paid off early, my wife would be PUMPED!!

I doubt Chris or anyone else has any deep dark secrets to pay for dressers bud. Here's my strategy on consumer debt:

Save and pay it off.

 

[norcalcy]

Not really related to retirement, but more protecting assets. At what point is it a good idea to get an umbrella policy?

When you have enough to become a target for someone else's get rich quick desires. In all seriousness, take a look at the limits in your liability coverages. Your insurance company will defend you up to those limits. After that, if you still have assets to grab, you are on your own. This is a five year old article, but pretty informative. https://www.forbes.com/sites/ashlea...ued-but-shun-umbrella-insurance/#410d96cd6166

 

[BoxsterCy]

Just checking to see if you guys have retired yet.

 

[dmclone]

Not really related to retirement, but more protecting assets. At what point is it a good idea to get an umbrella policy?

The company where I work provides a free financial advisor once a year and he said I was on the right track with the exception of not having an umbrella policy. The financial advisor didn't offer them so that made me feel better. If I remember right, it's just a couple hundred dollars a year for a million dollars in coverage. I've had in for 3 years now and every time I pay it I get a litlle annoyed but insurance in general is supposed to do that.

USLI is the company I went with

 

[HoibergIsMyHero]

I think Buffet said, live cheap in your 20's & 30's. This advice is so simple, but by your 30's you will start to see the compounding interest build up. Push yourself to max out the 401K, you wont regret it.

Okay, I contribute to my company 401K and is split between a traditional and a roth. I'm trying to max out out. Can I only max out to 18,000 in these accounts combined or 18,000 in the traditional and 5,500 in the Roth?

 

[Dopey]

Okay, I contribute to my company 401K and is split between a traditional and a roth. I'm trying to max out out. Can I only max out to 18,000 in these accounts combined or 18,000 in the traditional and 5,500 in the Roth?

$18k in your 401k and $5500 in your IRA combined, regardless of type or split.

 

[HoibergIsMyHero]

$18k in your 401k and $5500 in your IRA combined, regardless of type or split.

And when you say IRA, you mean non-employee sponsored?

 

[Beerbrat]

And when you say IRA, you mean non-employee sponsored?

A traditional 401(k) and a Roth 401(k) is a combined max of 18,000. You can then also have a Roth IRA for an additional 5,500. At least at my company the IRA isn't company sponsored.