Are you ready for retirement?

EANx

scaredoftests wrote: »

We are not even factoring in SS in our equation in our retirement. IMHO, it is best NOT to.

It really depends on your age. Someone who is 20 might best consider SS as paying out 25% while someone at 50 might plan for 75%. It's always better to save more and not need it than need it and not have it. "Can I pay you with the memory of a trip to Hawaii from 2002?"

cbdudek

I am just saying that if you don't factor in any raises, 7% return, and no employer match, you are still looking at 1.4 million. Now if you factor in raises and an employer match, the amount goes up. I know the amount I could save went up later in life. In short, 1 million is IMHO easily obtainable with that 10k investment every year.

The objective isn't to be "rich a heck". It is to be able to live comfortably in retirement while spending modestly. If you want to live exceptionally in retirement, you need to have the employer match and save the maximum today and after you reach 50 with the catchup provisions. To be rich as heck, you need to start a business and sell it for a few million or live off the residuals.

None of this takes into account SS which I am not counting on paying out 100%. Maybe 60% of the benefits by the time I retire.

gkca

NavyMooseCCNA wrote: »

My wife wants us to move to Vietnam (where she is from) when we retire. I don't mind wintering there, but I don't know about being there in the Summer...

Mine suggests the same... She's from the North though and it doesn't get hotter than low 90's in the summertime.

hurricane1091

cbdudek wrote: »

I am just saying that if you don't factor in any raises, 7% return, and no employer match, you are still looking at 1.4 million. Now if you factor in raises and an employer match, the amount goes up. I know the amount I could save went up later in life. In short, 1 million is IMHO easily obtainable with that 10k investment every year.

The objective isn't to be "rich a heck". It is to be able to live comfortably in retirement while spending modestly. If you want to live exceptionally in retirement, you need to have the employer match and save the maximum today and after you reach 50 with the catchup provisions. To be rich as heck, you need to start a business and sell it for a few million or live off the residuals.

None of this takes into account SS which I am not counting on paying out 100%. Maybe 60% of the benefits by the time I retire.

I understand. I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out. I'm obviously invested and obviously hoping for it to work out. I'm not too worried about myself. I am worried about the population at large. If SS ever comes to an end, I hate to see what is going to happen to millions of Americans. I have no data at the moment, but I am sure the majority of this country will not have enough in their retirement accounts to live comfortably or retire at all. I saw recently a percentage of people who cannot handle a $500 emergency, and it was alarming. I may have given up my dream major for IT, but personally the financial benefit of going into the IT world outweighed $100k in student loans with a degree for a job sector that is hard to break into and not exactly lucrative unless you've got a pretty face or know someone in the government. That's the kind of world we live in though I suppose.

EANx

hurricane1091 wrote: »

I understand. I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out.

You've already had them.

MadPhone

I'm still young for retirement, but I will create some passive income for sure. Who knows is it going to be a pension fund when I get older.

dave330i

I can retire now, but I wouldn't enjoy the lifestyle I'd have to live. Will be waiting 10-12 more years then retire.

NuclearBeavis

hurricane1091 wrote: »

i doubt most people get to retire going forward in the general population. Young kids take out massive amounts of loans and it's forever before they even get a real start. Wages are poor in many sectors as it is and jobs will continue to be phased out across the board. If SS runs dry, things will be pretty ugly. Even if you put $10k a year into a 401k for 35 years, that alone won't be enough to survive off of without SS.

I agree. The general population is likely screwed, and I'm including myself in that. The way the medical system is going, a serious illness could bankrupt someone rapidly. Insurance companies are charging more now, and denying a lot more as well. Even if you have insurance, there's no guarantee they'll pay, even if what you have in writing says they're supposed to. It's not about what's right or legal, but about what they can get away with. And I feel that's not limited to just the health insurance industry.

Life will get harder. Things people take for granted, like what's "fair and right", will go down the drain. For a lot of people who are well-prepared for retirement, their entire plan is an electronic blip in a bank's computer system.

stlsmoore

hurricane1091 wrote: »

I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out.

A few more examples below from tons of people who are having great success maxing 401k and other retirement accounts:

https://www.bogleheads.org/
https://www.reddit.com/r/financialindependence/


I don't think we should be relying on just 401K's and SS but every tax advantaged account we can and then some. Rather it's investing in taxable index funds, rental props, crypto, etc. I personally shoot for investing 30%-40% of our income month after month. Not gonna lie it does hurt and we have to sacrifice the latest gadgets and toys but we're a lot more stress free than we've ever been.

Dojiscalper

My wife and I have about 20-30 years till retirement, but have never been in a position where being "retired" will happen. We did what everyone else does, got married young, got reasonable jobs, bought a house, got better jobs, bought a much bigger house. Great recession hit, wife was in a great position in banking, but lost the job. We eventually had to leave our huge house.

We learned a lot and a lot of things have happened since we got married. Wife lost both her parents way to early, we have a couple of daughters now and we have decided to view the "american dream" as defined by owning a big suburban house as a trap for most. The trap is not many realize the true cost of owning such a beast and the banker won't give you any hints.

So now here we are mostly starting over, we've moved to the Myrtle Beach area of south carolina, we do live out in the country about 10 minutes from the beach, but we've bought a much smaller and very affordable home, my wife has gotten herself into a job at a bank with some great benefits, I've been looking for jobs and interviewing, but at the same time I've started my own IT business and I'm learning to make money so I'm starting to not really care if I find an employer or not. Either way once I start making a reasonable living we'll be able to pay off our debts in around 5 years. We might even take it easy after that. We have everything that makes us happy, it would just be nice to not have to work much.

TheFORCE

Dojiscalper wrote: »

My wife and I have about 20-30 years till retirement, but have never been in a position where being "retired" will happen. We did what everyone else does, got married young, got reasonable jobs, bought a house, got better jobs, bought a much bigger house. Great recession hit, wife was in a great position in banking, but lost the job. We eventually had to leave our huge house.

We learned a lot and a lot of things have happened since we got married. Wife lost both her parents way to early, we have a couple of daughters now and we have decided to view the "american dream" as defined by owning a big suburban house as a trap for most. The trap is not many realize the true cost of owning such a beast and the banker won't give you any hints.

So now here we are mostly starting over, we've moved to the Myrtle Beach area of south carolina, we do live out in the country about 10 minutes from the beach, but we've bought a much smaller and very affordable home, my wife has gotten herself into a job at a bank with some great benefits, I've been looking for jobs and interviewing, but at the same time I've started my own IT business and I'm learning to make money so I'm starting to not really care if I find an employer or not. Either way once I start making a reasonable living we'll be able to pay off our debts in around 5 years. We might even take it easy after that. We have everything that makes us happy, it would just be nice to not have to work much.

That's a good point. Many people fall into the trap of "I'm making more, I can spend more" the future is uncertain though and you need to be ready for the unforeseen events. It's very hard to start changing that mentality though but its possible.

Dojiscalper

I've watched most of my friends and family that are younger fall into the same trap and you can't really warn to many people either because our society kinda pushes us all in the same direction. For the most part income level doesn't have much to do with it either because you can always find ways to spend it all. Its sad, my wife has spent most of her career as either a bank manager or personal banker and sees people of all incomes in the same boat until you get to the "actually" rich and most of the either inherited it or penny pinched their whole life and are now living in retirement. This still didn't warn her not to do the same thing.

I know there's been a "minimalist" movement at some level spreading around and thats a good direction. To us its just not buying new cars and taking the huge loss associated with it and not buying a house thats completely out of scale with our lives. We do alot outside of our home traveling and exploring things around us, we never entertain guests, no family near us to visit so for us a house is a place we keep warm or cool in, sleep there, and keep our stuff there. We've reduced the amount of junk we keep around and TBH even our 1900 sq ft house is bigger than we need, but I couldn't get the wife to go smaller. Our big house was 3500 sq ft and I didn't even go in half the rooms the whole time we lived there. She used to think she had to have new furniture and now she's found joy in working with me to restore old used things into furniture we can customize to fit our style and say "we made that". I come from a family of people who think this way, but as the man its her house so I had to wait until she came around.

NuclearBeavis

Dojiscalper wrote: »

I've watched most of my friends and family that are younger fall into the same trap and you can't really warn to many people either because our society kinda pushes us all in the same direction. For the most part income level doesn't have much to do with it either because you can always find ways to spend it all. Its sad, my wife has spent most of her career as either a bank manager or personal banker and sees people of all incomes in the same boat until you get to the "actually" rich and most of the either inherited it or penny pinched their whole life and are now living in retirement. This still didn't warn her not to do the same thing.

I know there's been a "minimalist" movement at some level spreading around and thats a good direction. To us its just not buying new cars and taking the huge loss associated with it and not buying a house thats completely out of scale with our lives. We do alot outside of our home traveling and exploring things around us, we never entertain guests, no family near us to visit so for us a house is a place we keep warm or cool in, sleep there, and keep our stuff there. We've reduced the amount of junk we keep around and TBH even our 1900 sq ft house is bigger than we need, but I couldn't get the wife to go smaller. Our big house was 3500 sq ft and I didn't even go in half the rooms the whole time we lived there. She used to think she had to have new furniture and now she's found joy in working with me to restore old used things into furniture we can customize to fit our style and say "we made that". I come from a family of people who think this way, but as the man its her house so I had to wait until she came around.

Lots of good points here. I've always aimed to keep my bills and financial commitments to a minimum so I'd have the freedom to do things, move if necessary, or start a new hobby, etc. I have not planned for retirement really, which may be a mistake, but I kind of think of the dream of retirement as Barton Fink on the beach...just a pipe dream society tries to sell us.

I see people in my industry start making good money, and then they up and move somewhere like San Francisco, where rent is $3000-$5000/month. And they perceive their income as so sturdy that tossing all that money away on rent seems like no big deal. I just can't fathom inviting the stress of a lifestyle that's only sustainable if everything keeps going perfect.