Congrats! I bet that feels nice.
How much money to retire ???
- Thread starter Kevin
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For those who worry about SS being reduced for retirees, I don't think that there is even a chance that this will happen. Politically it would be suicide for whichever party sought such a reduction, and both parties know that seniors are the most reliable group to actually vote. What well might happen is that the age for full SS benefits might be changed from the current 67 to 68,69 or even 70, but with those changes not happening for several years so as to blunt the negative political consequences. Benefits for future retirees might well be a bit different by reducing the COLA adjustments in the future. And very likely we will see increases in the premiums for Medicare Part B and D. But the program itself cannot be eliminated or massively decreased because of the negative political reaction that would occur. Personally I am not worried one iota that my current monthly check will be reduced in the future, only that increases will be less than adequate to address ongoing inflation.
When I was 17 and fresh out of high school, I quit my part-time job in the men's clothing department at Sears and took a full-time 3rd shift computer operator job in downtown Denver that was "no experience necessary". It was at a credit bureau, and they gave all the applicants a spelling test. After I was hired, my boss told me that I got the job because I was the only one who spelled "bureau" correctly, and I was the only one who wore a suit (from Sears) to the interview!
Anyway, I had one week of overlap with the outgoing operator. The job wasn't too hard and after picking up the basics, we had some free time to shoot the breeze his last few nights. He was going to college for accounting, and he started talking retirement planning. He must have been 20 and I was 17, still living at home and mostly concerned about making money to chase girls and put gas in my tank. But he managed to get the concept and benefits of investing in an IRA, getting the initial tax breaks and tax-deferred growth to sink into my skull. So when I turned 18 that summer, I opened my first IRA and started saving. I give that guy, whose name I forgot decades ago, a whole lot of credit for drilling that lesson into me. It is something I likely would have ignored if it had been coming from my father.
Over the years, I went to school and changed jobs a lot, but always funded either that IRA or anther IRA that I opened along the way, and later company 401K plans that allowed you to save a lot more, especially with company match, if offered. It all grew to a substantial amount.
One thing I didn't learn until it felt too late, was the benefit of a Roth plan. I went to a retirement planning seminar a few years before I retired and that lesson finally got hammered home when the instructor said, "Would you rather pay taxes on the seed (making a small circle with his fingers) or the harvest (with both arms outstretched)?". So taxes on withdrawals cause me a lot of angst that would be avoided with a Roth. But my wife was smart enough to set up her 457B savings plan as 50% Roth.
We both have traditional pensions and social security, plus a couple other income sources. We are very lucky that way, and jobs with pensions are no longer easy to find. My advice would be to start saving as early as possible and don't ignore the benefits of a Roth like I did! If you started saving for retirement at when you were young, then congratulations! But if not, you can still get it done. Hopefully you are already saving, but if not, start now!
Save until it hurts, and if your employer offers a matching aspect to your savings plan, figure out how to live on less money to the extent that you at least maximize the match, since that is free money that you can't afford to ignore. My company 401K matched 60% of your contribution up to 6% of your salary, so even when I was paying alimony in the Dark Days, I at least contributed 6%, so it actually meant saving 9.6% with the match. Then they had a feature that allowed you to program in automatic increases and so I set mine up to increase my contribution by 1% per year around the time when the annual raises came out, so I'd save more without noticing since I was still taking home a little more after a raise. I had to turn off that automatic bump part after a number of years when I got close to the IRS maximum allowable contribution. The other part of that is that when you get used to living on less money due to saving so much, you have that much less to make up for in retirement income to maintain the same standard of living. My wife and I make 85-90% of what we made while working, but because we were saving 15-20% of our income while working, it actually seems like we make a little more.
Anyway, I had one week of overlap with the outgoing operator. The job wasn't too hard and after picking up the basics, we had some free time to shoot the breeze his last few nights. He was going to college for accounting, and he started talking retirement planning. He must have been 20 and I was 17, still living at home and mostly concerned about making money to chase girls and put gas in my tank. But he managed to get the concept and benefits of investing in an IRA, getting the initial tax breaks and tax-deferred growth to sink into my skull. So when I turned 18 that summer, I opened my first IRA and started saving. I give that guy, whose name I forgot decades ago, a whole lot of credit for drilling that lesson into me. It is something I likely would have ignored if it had been coming from my father.
Over the years, I went to school and changed jobs a lot, but always funded either that IRA or anther IRA that I opened along the way, and later company 401K plans that allowed you to save a lot more, especially with company match, if offered. It all grew to a substantial amount.
One thing I didn't learn until it felt too late, was the benefit of a Roth plan. I went to a retirement planning seminar a few years before I retired and that lesson finally got hammered home when the instructor said, "Would you rather pay taxes on the seed (making a small circle with his fingers) or the harvest (with both arms outstretched)?". So taxes on withdrawals cause me a lot of angst that would be avoided with a Roth. But my wife was smart enough to set up her 457B savings plan as 50% Roth.
We both have traditional pensions and social security, plus a couple other income sources. We are very lucky that way, and jobs with pensions are no longer easy to find. My advice would be to start saving as early as possible and don't ignore the benefits of a Roth like I did! If you started saving for retirement at when you were young, then congratulations! But if not, you can still get it done. Hopefully you are already saving, but if not, start now!
Save until it hurts, and if your employer offers a matching aspect to your savings plan, figure out how to live on less money to the extent that you at least maximize the match, since that is free money that you can't afford to ignore. My company 401K matched 60% of your contribution up to 6% of your salary, so even when I was paying alimony in the Dark Days, I at least contributed 6%, so it actually meant saving 9.6% with the match. Then they had a feature that allowed you to program in automatic increases and so I set mine up to increase my contribution by 1% per year around the time when the annual raises came out, so I'd save more without noticing since I was still taking home a little more after a raise. I had to turn off that automatic bump part after a number of years when I got close to the IRS maximum allowable contribution. The other part of that is that when you get used to living on less money due to saving so much, you have that much less to make up for in retirement income to maintain the same standard of living. My wife and I make 85-90% of what we made while working, but because we were saving 15-20% of our income while working, it actually seems like we make a little more.
Not sure I understand. If you mean employers...it is rare now days.
If you mean individuals, several have mentioned that they do have a pension. I have one from my time at a large company. It pays $1100 a month, every month.
eveled
Hawkeye
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I was referring to an actual pension. Not an investment account.
I know pensions aren't common anymore. That is why I asked.
We call our pension the Golden Handcuffs. Nobody ever quits, when you have Golden Handcuffs. But you put up with a lot of crap because the company knows you won't quit.
I know pensions aren't common anymore. That is why I asked.
We call our pension the Golden Handcuffs. Nobody ever quits, when you have Golden Handcuffs. But you put up with a lot of crap because the company knows you won't quit.
That's a fact. After so many years the thought of giving it up makes a difference.
Sling Shot
Bearcat
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GypsmJim
Single-Sixer
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It all depends how old you are. Back in the 1970's when you looked for a "position" (not a job) the common questions were about how good your pension was, what the medical plan was, plus what was the stock purchase plan. I had all 3.
Finally when I left the company my pension went with me. Close to $2,000 a month. At the end my company stock match was up to 30% (15 to start and .5% added for each year of service.) I sold it all and bought an Annuity that now pays a monthly check for life.
No golden handcuffs and no crap. I got frequent promotions and left with a salary to die for. I only quit because my facility moved to freaking ** and I would not relocate. I had many opportunities to change jobs but the one I was in was a dream.
Naturally along the way they started charging US for part of the medical coverage, but that was the norm.
My last position was also hand picked. As is common these days the pension plan was only valid for employees that had started with the company 15 years before me. For newbys they offered a 401K that paid a match of 150%. Also at my age then I put in a ton of extra money. When I did retire the entire amount bought another Annuity which also pays a monthly stipend for life.
But I can't say that I made all the right decisions. Back in the early '80's when IRAs first came out I jumped on the bandwagon. (bad move) Now, I have to do RMDs. With my SS, annuities and other income due to planning ahead, my current tax rate is higher than when I first put the money in the IRA.
Looking back, knowing what I know now, back in 1980 I would have spent money on a Registered Magnum. No tax now, and I would be shooting the crap out of it.
Golden Handcuffs is a good word for it. One of the companies I worked for the longest held a lot of people in place thru a lot of crap that was not in the favor of the long term employment of very skilled people. A very well matched 401K, great medical insurance and a great pension plan.
One terrible rule instituted late in the game was forced ranking. All managers were required to rank 10% of their staff down to a zero increase via an unsatisfactory performance appraisal. Of course this required some sort of disciplinary action throughout the performance appraisal period.
So you could have a stellar crew of 50 but five of them will have to be downgraded to unsatisfactory performance which would result in a PIP performance improvement plan). To my knowledge they are still doing this.
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This.
I was laid off at 55 after 35 years with the company. Now I work for myself. I might end up getting a part-time job also. But I've lost two good friends suddenly, one of whom never got to retire and the other who never got to see his second grandchild. I am only 57. I would not have chosen how the last couple years have been for me but at the same time I could not have had it any better. Right now I'm going to enjoy time with my grandson, enjoy time with my family, so what if I don't get a new truck?
RMW001
Bearcat
Try to be out of debt as much as possible - especially high interest plastic/personal loans etc. You probably won't drive as much as you did so need for a couple of shiny new cars with payments not necessary. Since retirement I find there are weeks my truck, 2005 and still running good, doesn't move except to take trash to dump. Best of luck.
Well, the experts say $1Million aside to retire. Also say you'll spend $200K on health too.
Retired almost 7 months ago. Up to then, I was able to contribute to my 457 at work. In 7 short years, I was able to squirrel away over $250K. With 4 pensions, plus SS each month, we'll be fine.
Retired almost 7 months ago. Up to then, I was able to contribute to my 457 at work. In 7 short years, I was able to squirrel away over $250K. With 4 pensions, plus SS each month, we'll be fine.
This too is true. I kiddingly say that my goal in life is to live to be over a hundred and shot by a jealous husband.
While the base of this is correct - retirement is about cash flow - the main question was, what do you need, and how to get there. What I see here is word salad. Calculate your Income, SS, pensions, etc. - those don't just APPEAR - you need to work on them, make sure you invest properly, know what your risk is - be riskier when you're younger and more conservative in your choices as you get closer.
Unless you've done a LOT of work, research, education, etc. - the comment about "deleting their ideas" is the dumbest thing I've seen. You don't have to DO everything they want, but you should listen to them. They will look at your current income, assets, future assets (SS, what your current 401k/IRA, etc. situation is), talk with you about your risk level, what you want your income to BE at retirement, and when you want to retire. Then try to put a plan together to get you there. If they are a fiduciary, they are legally bound to make sure they are doing right by you, if they are not - then they could be getting money from selling you things. Again, look at what they are presenting, do your own research, and see if it is right for you.
If you don't know where you're going (what your goal retirement base savings, retirement age/date/year), you won't know how to get there. Don't blindly trust everything you see, but also don't just completely ignore what is presented to you either.
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Me. When I was laid off I chose to take it as a lump sum. I also have a 401k. My wife has a pension also from a previous govt job (which we of course have not touched yet).
I have a good pension that pays every month.
How things have changed over the last 56 years.
The Engineering and Construction Company I started with at 25 YO in 1968 had a NON-contributing pension plan and a profit-sharing plan which the employee made a contribution to along with the company. During most of the time I worked there it did very well.
In 1999 I was laid off after 31 years. It was the best thing that could have happened to me. Why you might ask well let me told you. I was 56 at the time and was fully vested in the retirement plan and since I had done work in overseas hardship areas, I was able to start drawing retirement early. I also got a BIG pile of severance money from being laid off. After taking about a year off that allowed me to work on my planes and drawing unemployment money the company wanted me back on contract which was more big bucks. They could not have a direct hire that was receiving retirement, so they had to hire me contract TO BAD.
That allowed me to receive retirement and a paycheck. Since wife was teaching, we didn't need hospitalization, and I didn't want any benefits. I made my own holidays and vacationThis project ended in 2003 which is when BP hired me on contract as a Mechanical Equipment, Design, Construction and Commissioning Consultant on a 11/4 Billion Dollar Offshore Platform (Atlantis). I was on my own contract and the pay was unbelievable, which allowed me to retire for good in Sept. 2005.
Every day is a Saturday except when the fat paper comes. That is Sunday
GypsmJim
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While you need to plan ahead and keep a constant awareness of where you stand, the most important calculations come in the few years just before retirement. By then you probably have become more conservative in your investments, as you should be.
Yes, no kidding, a lot of work, R&D and learning is required....
I knew what my pension was to be because it was fixed. I knew what SS was to be (at minimum), and the couple of years of added working just enhanced it so I actually ended up with a monthly surplus. I am big on annuities and two were converted to the income for life provision. THUS, I knew what my income would be.
Real estate taxes, monthly spending on food, etc., etc. need to be added up and projected ahead with a guess on inflation. Health issues...who knows? Guess based on your family history.
Over the years I worked with 3 different advisors. They all had different ideas. I listened to them and in some cases followed a few of their suggestions, and in other cases did my own thing. Looking back at some of their ideas, and charting what they said, I always did better on my own.
If you retire and can easily buy a brand new car whenever you want to, and take vacations without having to worry about where the money is coming from, then I guess you did alright.
One last idea....
Since life has so many unknowns, setting up a Trust is a smart idea. We have enough cash set aside that would initially get both of us admitted into a nursing home. All the other assets are untouchable, so once we are there our sons won't have to worry about whether they would lose the house or everything else.
If I get so sick that my time is near, my will states that they are to put me on my jetski and point me toward Niagara Falls with the throttle tied open. I want to be able to say "Yee Ha" before I die.
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bobski
Hunter
whatever you planned....itll need more.
Boxhead
Blackhawk
These threads are always fun. Different strokes for different folks given their knowledge of such. No wrong answer I believe.
JackBull
Buckeye
I retired this year. Invested in a low cost stock index funds and bonds. I only buy single stocks with play money. I suggest you follow Bogleheads.org. Its free. The advice will secure your financial future.
