Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Rain Man]

Originally Posted by Sassy Squatch

Thankfully I learned from my dad completely ****ing his retirement so I've been relatively responsible and have a pretty decent amount in my 401k. For those of you much smarter than I, am I on track to be in a decent place come retirement age if I just let it be in a passive fund or should I be more aggressive and invest myself?

32 years old.
Current balance in 401k bit over 100k.
Current contributions are roughly 9%, matched by employer, averages out to about 250 per week.

Give me a bit and I can run some basic numbers.

[Buehler445]

Originally Posted by Sassy Squatch

Thankfully I learned from my dad completely ****ing his retirement so I've been relatively responsible and have a pretty decent amount in my 401k. For those of you much smarter than I, am I on track to be in a decent place come retirement age if I just let it be in a passive fund or should I be more aggressive and invest myself?

32 years old.
Current balance in 401k bit over 100k.
Current contributions are roughly 9%, matched by employer, averages out to about 250 per week.

An awful lot depends on your funds in your 401K.

Get your statement and look up what their performance has been compared to the others OVER TIME. Most of them have a 5 and 10 year performance. Check that and the fees. Make sure you're not getting your ass beat on those.

This year I set up a qualified plan for my business despite the relatively few employees. In the process, I pushed out A LOT of numbers. Blah blah blah, long story short, when I backtested some of these funds they were SHIT compared to common index fund portfolios (Mine is 37.5 VOO 37.5 VUG 25% SCHD - You'd do better historically leaving out SCHD - but I wanted exposure to those stocks I wasn't getting in the other 2).

Prudence dictates that you pay attention to the assets you're putting 9% of gross in.

Gut feel is you're probably ahead of most guys your age. I'd up it as much as you can muster. Obviously you don't want to be cash poor because you can't get it back out but much like myselff77 said, if you up the percentage a little at a time, it doesn't hurt less.

One thing I've implemented that definitely helps is I have a fair wad of cash in an "emergency fund" role to go with my set asides for taxes, and mortgage and whatnot. Psychologically that has helped me be OK with taking more risk in the market. The other thing I've done is started a taxable brokerage account (schwab RobinHood whatever) and then if I have any extra cash ahead of payroll hitting, stick it in there. Just getting it the hell out of my checking account adds up a bit, rather than seeing it in there and subconsciously making different decisions that ultimately end up with it being blown on dumb shit. That gives me more savings in the market and if shit gets REALLY hairy I can liquidate it without the penalty of a 401K.

[Rain Man]

I agree with Buehler's 1st, 3rd, and 6th posts. I disagree a little with his 5th and 2nd post, and I strongly disagree with his 4th post.

[Sassy Squatch]

As far as I know all fees for the 401k are paid by the company, unless I'm reading this wrong.

[Sassy Squatch]

Ah, I found it. It's 0.070% for the expense ratio.

[Rain Man]

Originally Posted by Sassy Squatch

Thankfully I learned from my dad completely ****ing his retirement so I've been relatively responsible and have a pretty decent amount in my 401k. For those of you much smarter than I, am I on track to be in a decent place come retirement age if I just let it be in a passive fund or should I be more aggressive and invest myself?

32 years old.
Current balance in 401k bit over 100k.
Current contributions are roughly 9%, matched by employer, averages out to about 250 per week.

I ran the numbers in a simple manner, assuming a $250 per week contribution that increases by the long-term inflation rate of 2.9 percent each year. Then I took your starting balance and assumed a 9 percent return, which is the long-term average if you're 100 percent into stocks.

With those assumptions, you'd end up with about 14 times your salary at the age of 65, which is good but less than optimum. To get it up to 20 times your salary, you'd need to up your contribution to $405 per week. I'm using a ratio of 20 because you'll also probably get Social Security, which will help.

A 9 percent return seems a bit aggressive to me if you're always keeping a little cash or other things, so you might need to go a little higher on the contributions.

Oh, and you're contributing 9 percent, but do you get any matching? That would make a big difference.

Edit: I see now that you already mentioned matching. Is that a 100% match? So you're contributing about $125 per week? Hang on. Let me rerun.

If the $250 per week is a 100% match, that would put you at 28 times your salary at Age 65, which would be great.

[Sassy Squatch]

My current contributions are 9% of 40 hours, which is roughly 126 per week. We don't actually have matching contributions, our employer puts in roughly 10% of our gross per week regardless of what you contribute.

[Rain Man]

Originally Posted by Sassy Squatch

My current contributions are 9% of 40 hours, which is roughly 126 per week. We don't actually have matching contributions, our employer puts in roughly 10% of our gross per week regardless of what you contribute.

Ah, okay. I think that matches (roughly) my edit.

[Sassy Squatch]

Yeah. Unfortunately that 10% contribution just took effect last year or I'd be way better off.

[Buehler445]

Originally Posted by Sassy Squatch

Yeah. Unfortunately that 10% contribution just took effect last year or I'd be way better off.

Take what you can get brolihulihan. 10% is damn generous.

[lewdog]

Originally Posted by Sassy Squatch

My current contributions are 9% of 40 hours, which is roughly 126 per week. We don't actually have matching contributions, our employer puts in roughly 10% of our gross per week regardless of what you contribute.

Just some general ballpark numbers people use to measure retirement savings by age. I strive to be at the top numbers for each age bracket.

Investor's Age Savings Benchmarks
30 0.5x of salary saved today
35 1x to 1.5x salary saved today
40 1.5x to 2.5x salary saved today
45 2.5x to 4x salary saved today
50 3.5x to 6x salary saved today
55 4.5x to 8x salary saved today
60 6x to 11x salary saved today
65 7.5x to 13.5x salary saved today


I always recommend people try saving between 10-15% of your income to get these numbers. You obviously have to live too but this becomes easier as you earn more through age, as long as your raises don't turn into lifestyle creep. Every raise you get requires a bump in your contribution of at least 1%.

Kudos to you thinking about it at your age. That's how you make sure you aren't working until you die.

[lewdog]

Originally Posted by Sassy Squatch

Rainman isn't kidding about the variance in those calculators. One give me 600,000 and the other gave me 6,000,000 at 67. What the ****

Use this one and put in 6-8% growth. I use 6% and try to hit my total marker that I want by age 60. If I get 8-10%, I'll be more loaded than I'd know what to do with for my lifestyle (I'm pretty simple).

https://www.nerdwallet.com/calculato...ent-calculator

[lewdog]

Originally Posted by Sassy Squatch

My current contributions are 9% of 40 hours, which is roughly 126 per week. We don't actually have matching contributions, our employer puts in roughly 10% of our gross per week regardless of what you contribute.

10% is ****ing insane! That's going to make you rich and could be a huge retention thing for you to consider is staying with your company.

I get a whopping 1% working for a small company.

[Sassy Squatch]

Yeah, they pretty much had to bump up the contribution to 10% in lieu of giving us pensions to match the legacy employees.

[Buehler445]

Originally Posted by Sassy Squatch

Yeah, they pretty much had to bump up the contribution to 10% in lieu of giving us pensions to match the legacy employees.

Niiiiice.

Probably still cheaper for them but that’s a damn fine return.

Mine is a safe harbor qualified plan which means I have to offer better programs to make sure I’m not abusing my employees so I can contribute to it.

My match is 100% of the first 3% 50% of the next 2 so the employee has to contribute 5 to get 4.

Yours kicks the shit out of mine.