|
08-12-2024, 06:47 AM | #13996 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $-88100
|
Quote:
I save planning for 6% return. If we get another lost decade for stocks, 6-8% return is much more likely. If I get 10% return over next 2 decades, I’ll be so set, but I don’t plan on that.
__________________
2024 Royals game thread record 3-0 |
|
Posts: 46,157
|
08-12-2024, 06:48 AM | #13997 | |
Supporter
Join Date: Apr 2007
Location: Scott City KS
Casino cash: $294734
|
Quote:
He reasonably has a 30 year time horizon. He's at the age where you typically start ratcheting down risk a bit, but 10+ years out from retirement isn't unreasonable to keep risk in the market. |
|
Posts: 58,248
|
08-12-2024, 06:53 AM | #13998 | |
Grand champ
Join Date: Sep 2007
Casino cash: $62369
|
Quote:
He also did say that he’s contributing $30k per year to his 401k so I’d imagine that will do a lot of heavy lifting in the effort to double the investment. |
|
Posts: 45,676
|
2 0 |
08-12-2024, 07:47 AM |
Hog's Gone Fishin |
This message has been deleted by Hog's Gone Fishin.
Reason: Doesn't matter
|
08-12-2024, 07:50 AM | #13999 | |
(Sir/Yes Sir/Aye Aye Sir)
Join Date: Oct 2009
Location: Diving
Casino cash: $2115380
|
Quote:
We all had out formula, mine was to go all out (putting everything I could into the high risk/high-reward retirement options) until ~45, cool it from 45 to 50, even cooler from 50 to 55. It worked very well for me, I was able to retire a couple months after my younger son graduated high school and now I'm traveling the world every other month before I turned 60, and will do it for as long as I can still dive. I've been blessed with good genes, the Mrs. and I stay and live a pretty healthy life, so life is good. But you're right, this advise is for our younger readers. I was blessed to have a pretty financially savvy father and early on after I got out of the military I had a boss who sat me down and talked retirement with me - I was in my mid 20s - and it paid off. Later in my career I did the same for my subordinate staff and encouraged the leadership structure under me to do the same. I'd hold a high level "Think about YOUR financial future", and I encouraged the department heads and supervisors under them to incorporate a "YOUR financial future" segment into annual reviews. Over time they became shorter, but new hires, especially younger hires, need to hear what the employer offers in terms of matching, take advantage of it, and the basics of how retirement works. I'm shocked how many kids fresh out of college have little clue about 401Ks and other investment options. Anyway, I was blessed to make what I made and was able to largely avoid huge damage during times like 2008, so life is good.
__________________
. #Like 45, 47 Is Going To Be AWESOME! #I still don't have COVID |
|
Posts: 119,875
|
1 0 |
08-12-2024, 07:54 AM | #14000 | |
(Sir/Yes Sir/Aye Aye Sir)
Join Date: Oct 2009
Location: Diving
Casino cash: $2115380
|
Quote:
It's just me, I wasn't going to work into my 60s, there's too much life to live, so I planned accordingly and wasn't going to let a squirrelly market change those plans. Again, that's just me.
__________________
. #Like 45, 47 Is Going To Be AWESOME! #I still don't have COVID |
|
Posts: 119,875
|
08-12-2024, 08:02 AM | #14001 | |
Supporter
Join Date: Apr 2007
Location: Scott City KS
Casino cash: $294734
|
Quote:
|
|
Posts: 58,248
|
08-12-2024, 08:13 AM | #14002 |
Starter
Join Date: Aug 2019
Casino cash: $2397000
|
Depends a little what the OP includes in doubling his money. He did say he will continue contributing to the fund over this time. So if doubling the money includes the additional dollars being contributed on a regular basis, it would be much easier to double the value of the account at a lower rate of return. Big question is, how much is he continuing to add? Best plan regardless of investment choice would be to continue to contribute as much as you can as soon as you can to give that money time to grow.
|
Posts: 559
|
08-12-2024, 08:24 AM | #14003 | |
Starter
Join Date: Mar 2021
Casino cash: $9550400
|
Quote:
If I'm going to retire at 65, I think I need to take the risk of no bonds. At least for the next 5-8 years. Hope isn't a great plan, but I see no other way to get where we need to be to take care of my wife after I'm gone. |
|
Posts: 167
|
08-12-2024, 08:32 AM | #14004 |
Starter
Join Date: Aug 2019
Casino cash: $2397000
|
For those retired, I'd be interested to hear how and when you came to the realization you could comfortably retire? I'm still about 20 years out, and always fearful I won't have enough money. That being said, the 401k is really starting to grow from the 20+ years of contributions and the online calculators make it appear I'm in good shape. I still don't know how much I trust them. Is the pessimism normal, or did you feel you were in good shape financially years before you actually retired?
|
Posts: 559
|
08-12-2024, 01:58 PM | #14005 | |
(Sir/Yes Sir/Aye Aye Sir)
Join Date: Oct 2009
Location: Diving
Casino cash: $2115380
|
Quote:
__________________
. #Like 45, 47 Is Going To Be AWESOME! #I still don't have COVID |
|
Posts: 119,875
|
08-12-2024, 02:13 PM | #14006 | |
(Sir/Yes Sir/Aye Aye Sir)
Join Date: Oct 2009
Location: Diving
Casino cash: $2115380
|
Quote:
I certainly did exactly that didn't really allow myself to need "great gains" in the retirement account to keep my travel life going for a couple of decades. After that, when I can't dive, they can put me in a nice retirement community and let me eat pudding.. ANd last, be weary of the hordes of "retirement planners" who want to work with you, I found that most of them just want your nest-egg to invest. While that's not bad, I found it rather annoying that I could Google and learn about as much as any of them could offer in terms of ideas and concepts. Once you've studied-up on retirement concepts I suspect you'll find the meetings boring. Start with Googling the "4% rule, that might start some poop around here, and it should give you an idea to start with, then it can branch into a lot of other areas to learn. But start with a number you'll need to be able to live, then a number for what you'll need to live well, doing the stuff you're passionate about.
__________________
. #Like 45, 47 Is Going To Be AWESOME! #I still don't have COVID |
|
Posts: 119,875
|
1 0 |
08-12-2024, 04:48 PM | #14007 | |
Seize life. Be an ermine.
Join Date: Jul 2001
Location: My house
Casino cash: $1298491
VARSITY
|
Quote:
For my entire career, I put money into retirement accounts every year. I never did the math on whether it was enough. I just put in the minimum amounts to get benefits in my younger years (e.g., matching, tax breaks), and then once I got to a measure of financial security I started putting more in, again never calculating whether it was enough. As I got older, I always had a little rule of thumb in my mind that I needed 25 times my (and my wife's) annual salary in savings to afford retirement. That was a really simple formula that I'd read in a few places, and it seemed kind of reasonable. But I always wondered how good an estimate it was. The Covid shutdown was a pivotal point for me. My work slowed down dramatically and we weren't going out, so I suddenly had some free time. I was binge-watching King of Queens and suddenly thought, "Maybe I should do a little work to get a better retirement number." I went out and looked at some retirement planning calculators, and I didn't like how they worked. They seemed too simplistic, and the results were all over the place. So I decided to build a custom calculator for myself. I got into Excel and thought I'd take 15 minutes to come up with an estimate. I realized that there were a few key variables: my savings, how long I would work, my investment return rates, inflation, and my spending. Then I realized that another key factor was how long I was planning for - age 85, age 90, age 100? Social Security was also an issue. I ended up building a pretty complex financial model where I could change these assumptions and play around with them and see how my savings would change over time. I learned a whole bunch of things in the process. 1. Savings is obviously important, but the more important thing is how long it'll last. Years of funding are the measure to keep in mind more than just money. 2. Some things are under my control (savings, career length, spending), and some aren't (inflation and rate of return). 3. Taxes make a big difference, and there are some things like Roth Conversions that really help. 4. I've got a lot of home equity. Initially, I concluded that I might be better off moving to a cheaper market, but since my house produces income (it has an attached apartment), I'm better off staying put. But for most people, it might make sense to move if you have a ton of home equity. You want your money to be producing income, not just non-liquid wealth accumulation. After putting all of this together, I concluded that it was pretty safe for me to retire. There are some scenarios where I won't have enough money at some point, but those are mostly due to improbable events outside my control. While I'll always worry a bit about those scenarios, there's nothing I can do about them so they don't affect my thinking. My wife and I talked it over and decided we could retire as soon as we could figure out an endgame for our company (which we ended up transferring to an employee group). But in the meantime the stock market tanked badly (was that 2022?). I kept updating the model regularly and saw that we could survive that, though it wasn't fun to worry about it. We worked another year, which saw the stock market skyrocket, and all of a sudden we'd overshot our needs by a large margin. I learned from this that I can't fret about stock market moves because we're in good shape in all probable scenarios. Therefore, we're retiring.
__________________
Active fan of the greatest team in NFL history. Last edited by Rain Man; 08-14-2024 at 09:18 AM.. |
|
Posts: 143,251
|
4 0 |
08-12-2024, 10:07 PM | #14008 | |
Starter
Join Date: Aug 2019
Casino cash: $2397000
|
Quote:
I had never heard the 25x salary rule of thumb though it does seem right around the minimum target I kind of have in the back of my mind. Out of curiosity, how close was that estimate to the detailed spreadsheet you worked out? Seems like 25x salary saved should allow one to live pretty comfortably on interest/growth alone without ever touching much of the principal? |
|
Posts: 559
|
08-12-2024, 10:53 PM | #14009 | |
Seize life. Be an ermine.
Join Date: Jul 2001
Location: My house
Casino cash: $1298491
VARSITY
|
Quote:
__________________
Active fan of the greatest team in NFL history. |
|
Posts: 143,251
|
1 0 |
08-14-2024, 05:48 AM | #14010 |
Supporter
Join Date: Apr 2007
Location: Scott City KS
Casino cash: $294734
|
Schwab has a podcast, which is usually 1. profoundly boring and 2. not particularly useful. But there is typically a tidbit in each one that I pick up so I listen if I'm not tired.
The tidbit I got from the last one (and I had to rewind it and make sure I caught it). The maximum YTD drawdown for the NASDAQ was 7% The Average Drawdown from a NASDAQ member was 40% Woah. WOAH. Reminder # 3 trilliion or so that diversification is important. |
Posts: 58,248
|
1 0 |
|
|