quote:

Originally posted by MNSIG:
I don't know if anyone else shares this, but I have a lingering concern that some future liberal like AOC will decide that it's "unfair" that some of us have large personal retirement accounts, pensions, etc while Social Security is going insolvent.

Perhaps initially it would be a "voluntary" conversion into the program, then some tax incentive, then a tax penalty for keeping your private funds instead of putting them into the pool.

Wouldn't it suck to have that happen?

Start a separate thread if you like. Politics and sky-is-falling speculation is not something I'm interested in entertaining in this one.

I have a public pension, but on top of that I put 10% of every paycheck into a managed deferred compensation account that's mine and mine alone to access once I retire. I also plan on dumping my old 401K from my last job in there.

What distinguishes retirement "savings" from just "savings"?

If I set aside money, then buy an asset like a house with it, I still have the asset at retirement, no?

In any case, my strategy is as follows:

Contribute the minimum to 401k to get the entirety of company match, if any.

Contribute to IRA until you reach the annual cap, provided you qualify for the deduction.

Fill out the rest of the 401k until you reach the annual cap.

Auto-Invest 20% of my post-tax income into a low cost managed fund, on a recurring basis to spread the cost over time.

Keep about 5% of my post-tax income as immediately accessible checking.

Overflow everything else into a high-yield savings.

When my asset mix becomes too conservative (more in savings that I feel I'm missing out on opportunities), I split the savings and invest half into stocks--buying companies that I know are doing good business.

My wife and I are constantly fighting lifestyle creep. It's our number one enemy. As our incomes rise, we try to make sure our recurring expenses don't creep up as well--we taking advantage of tax planning, buy used where it makes be sense, spend money up front to keep things in working order, fix before replacing, and sell old items to avoid collecting things. We entertain guests at home, rather than spend money going out with friends.

My Ace in the hole is that my wife and I currently ignore each other's income for planning purposes. Either one of us could support our expenses and savings independently of the other, and we go through a expense reporting meeting monthly (manually reviewing accounts together to look for unusual spending and accuracy).

I subscribe to Dave Ramsey's debt elimination strategies, and have dug myself out of $300k of school debt, and credit card debt approaching 30% of my post tax income. I encourage others to read Suze Orman and have convinced more than one person to "stand in their truth" and realize that they really can't afford to overspend on a wedding or car. I like the Happy Money book for causing me to think more carefully about what I spend my money on, not just how much I should spend in a budgeting context.

Lastly, always be hustling. While it's not impossible to save yourself into wealth if gven a long enough timeline, making more money today (as opposed to "someday") works the same as compound interest. Start today, not tomorrow.

This message has been edited. Last edited by: Aeteocles,

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Originally posted by chellim1:

quote:

Originally posted by FenderBender:
I'm a millennial, we don't have money to put away.

That may (or may not) be true... but it's the wrong attitude.
The key to beginning to save for retirement is having the discipline to learn to live within your means. Too many millennials use credit cards as if they have the cash, when they don't. They become debt slaves.
If you can avoid debt you are living within your means. From that point forward, you can take it a step further, and live a little below your means. That gives you a cushion. From there you begin to save, slowly at first, but if you start young the magic of compounding can really help you.

Yes, we're living the dream
https://www.forbes.com/sites/l...ycheck/#2c9ef9813e06

I'm lucky enough to have an excellent pension when I retire. 62.5% at 25 years with health benefits and 2.5% for every year after with a max of 80%. I also put into a 457 deferred compensation plan
on my own but I don't max out. Too many expenses right now... I'm sure I'll put more into it once I get closer to retirement and also figure out if I'll do more than 25 years.

quote:

Lastly, always be hustling. While it's not impossible to save yourself into wealth if gven a long enough timeline, making more money today (as opposed to "someday") works the same as compound interest. Start today, not tomorrow.

Great advice for many reasons.

I'm always thinking about the next side hustle or something I could be doing to expand the income potential of a tool or resource. Property sitting vacant is like tools rusting in a tool box. If I have to buy something to make a job work, I'm looking to maximize that investment into new markets. If I have to make an expensive trip somewhere, I'm looking for a way to either use the travel for expansion marketing or add another job while there. If I've got a spare 3-4 hours in a day, I'm either training, expanding, or doing something to diversify the income stream. It's an attitude that has helped us survive some seriously bad whacks in the financial markets. For the save, save, save guys out there, you aren't wrong...it just isn't always right for everyone. Until you've seen how fast money in a market account or bank account can disappear or be stolen/frozen, etc...you'll be looking at other ways to invest also.

A number of years ago we moved to accept a position and take over a company. We did all the homework, set the contracts, and moved as cautiously as anyone could. We came with savings and a healthy retirement account. We were on track to retire at 40 if we could live off $55K a year (assuming death at 90). The '08 crash happened, and we were fine to ride that because we were young enough. What we didn't anticipate was that the seller would back out of the deal because HIS 401K tanked and he could no longer afford to retire. We learned some lessons on that one. If he had been better diversified his poor planning wouldn't have affected us as badly. If I hadn't of been so invested in savings and retirement accounts, we wouldn't had made it through.

I value cash in the mattress now. I value smart purchases of all kinds which become tools or assets to make money with. One one source of jobs dries out (like lending work for appraisers right now), being equipped and trained to pick up litigation work helps.

My father has a different take on retirement investing. So does my mother-in-law. I think it is generational perhaps. Both of them are heavily committed into their various 401K type retirement savings and investments. Neither are invested in real estate or a business, or even personal property that will last them through to death. My father owes more money on his house today than he purchased it for in 1992. My father just turned 60 and realized he can't retire using his currently methods until at least 70. He's a doctor who used the military so no school debt, he's always made decent ($150-250K) wages and dutifully sent off a percentage to his investors. He's used Edward Jones, and other low-end bottom feeder investment brokers. He's always maximized the allowable contributions. He's lost probably millions at this point by trusting bad brokers and brokerages. He always seems to lose money even in good investment climates. His sole retirement plan is his 401K type savings accounts.

The mother in law was a bit smarter and lived more frugally. She retired last year, she is 66 now. She sold her large house and moved into a paid off small bungalow, and takes a measured draw each month. She's saved sacrificially for her entire working career, driven crappy cars and given up travel and other things in order to maximize her savings. Now she's too afraid to spend anything because cost of living goes up every year. She's missed out of numerous grandchild events over the years through fear.

I'm no investment expert. Well, I am in some ways...but not in regards to retirement accounts or many other common money related things (we value real estate and business for a living). I'm just listening on here for the past 12 years or so, and watching my family and their choices. Routinely I look at my grandfather-in-law. He joined the Navy in WW2 with not a penny to his name. Just like I did, days before his deployment he married the pretties gal he knew and then deployed. Came back from the pacific with the usual very small savings. He invested everything he had into starting a small business. He put some money in the mattress for hard times, but mostly sunk every penny back into the business. At one point in the 60's he was one of the best salesmen for airstream trailers. Airstream flew him and his family to Europe and gave him fancy gold watches. He lived with little to no debt, and put his kids through college with cash from the business. He built his house for cash on land purchased with cash. He took trips and enjoyed his family and community. When he finally retired, he sold his business and inventory and had enough to make it to 90. His kids took over after that, he did after all fund their college and early careers. He is happy and fulfilled. He grew up in the depression and warned me of the stories he heard and lessons he learned. I've seen 2 crashes in markets which have affected me financially.

A bunch of you guys are at or very near retirement and you're probably like my dad...committed to a direction. I've helped and seen several people like my dad start to move their retirement market accounts into real estate that can flow a regular income. You can easily lose money this way, but all investments have risk. Consider finding ways to invest at least a portion of your plan into something like a business partnership or income property that can return an indefinite stream of income.

The millennial generation is looking more like the generation of 100 years prior, they're rightfully less trusting of corporate investing and commodity based investing. I see them investing in small businesses and communities fulfilling not just a future financial need but creating a place and community that they want to be a part of. They distrusting of government programs and tax shelters for investing. I think that is smart for the investor looking at retirement 20+ years out. We've finally convinced a large population that cash flowing income streams are the key to retirement not a large pile to slowly diminish hopefully after death. Back to Arc's point I believe...putting effort, cash, and other resources into these types of investments has to happen over a long span of time. You can't suddenly decide to think about retirement just prior to retirement. For those relying on pensions...even government ones, be careful. I heard a lot of talk from political millennials in Oregon (attended a law school graduation) who intend to dilute those pensions. They don't believe in them, and they don't care about the old people who worked their whole lives on the promise of them. Alaska is killing their state pensions also and diluting them. How many stories have we heard of pension funds being raided and destroyed? A lot. Better have a backup plan. Being a walmart greeter would suck.

Arc I hope you don't find this too much of a thread drift. It wasn't intended to take away from the question, but add to the discussion.

Good post AKSD.

I put a minimal amount, enough to match matching, into a 401K. Other than that, I put away what I'll need to live for a month each month in cash...in a "mattress".

I also have land set up that I can subdivide and am looking at more.

Also, I buy toys that can be liquidated if needed. Tractors, trailer, boats, cars, guns, etc....

As MNSIG mentioned, I don't trust the current government to remain current. I'd much rather have the cash in my mattress than bet on a 401K that could be confiscated as easily as it was paid into.

Thankfully, my profession is something that I can do deep into life if I choose to or if I need to.

No worries here.

Around 30% between my 401k contributions, company 401k match, and company funded retirement plan. The last one goes up 2% next year when I hit 45.

No retirement for me. Will work until I croak.

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Originally posted by 12131:
No retirement for me. Will work until I croak.

You are maxing out the P228 plan and SIG IRA. :-)