Retirement Planning - Lessons Learned

[Bocephous]

We've been doubling a little better than every 7 years.

Anyone else here a federal employee with a TSP retirement account? I started in 2005, got more serious about putting a higher percentage in around 2010 or so (I have 17% going in now), and it has doubled since August of 2017. I'm curious to see how it keeps going in the future, as I plan to retire in October of 2025.

 

[KennyG]

I've taken a little different approach to establishing an investment mix in retirement. I have made some assumptions for basic cost of living for the rest of my life. I've established relatively safe resources for that (social security, a pension, and fixed return investments). The rest goes into stock market index funds. Because I've been fortunate so far, "experts" would say my investment portfolio is way overbalanced to stocks for my age. But I don't "need" all that money, it's for vacations, toys, charity and inheritances.

Don't blindly follow rules of thumb. Look at your own situation.

 

[MoKelly]

I've taken a little different approach to establishing an investment mix in retirement. I have made some assumptions for basic cost of living for the rest of my life. I've established relatively safe resources for that (social security, a pension, and fixed return investments). The rest goes into stock market index funds. Because I've been fortunate so far, "experts" would say my investment portfolio is way overbalanced to stocks for my age. But I don't "need" all that money, it's for vacations, toys, charity and inheritances.

Don't blindly follow rules of thumb. Look at your own situation.

I think this is very smart. If you can fund your best estimate of expenses with fixed sources of cash flow, you are in great shape.

You absolutely can be more aggressive with anything extra.

Congrats!

MoKelly

 

[MossRoad]

I understand what you're saying. However, as you get close to retiring you don't want to take that big hit just before getting done. I didn't start planning when I should have, and at 45 changed jobs with a pretty good pay hit which took me longer than I expected. I was hoping to get done working full time in about 3 years, but it looks like the federal government might push that date up by putting a large portion of the work force in the unemployment line with their plan of a "Park" where thousands have lived and recreated for centuries.

Yes. As you get nearer to retirement age, you should consider moving things towards less risky investments.

 

[Hay Dude]

Yes. As you get nearer to retirement age, you should consider moving things towards less risky investments.

Yep! Gold is a great for that, but Dave Ramsey doesnt like gold :laughing:

 

[MoKelly]

Yep! Gold is a great for that, but Dave Ramsey doesnt like gold :laughing:

Gold does not pay dividends. I won’t buy any investment that doesn’t pay dividends.

It’s been a good strategy to me - except for Amazon stock! I should have bought Amazon when I wanted years ago - but - they didn’t pay a dividend.

Oh well.

MoKelly

 

[fruitcakesa]

Gold does not pay dividends. I won’t buy any investment that doesn’t pay dividends.

It’s been a good strategy to me - except for Amazon stock! I should have bought Amazon when I wanted years ago - but - they didn’t pay a dividend.

Oh well.

MoKelly

I have split my portfolio between dividend stocks and growth funds.
Even with a roller coaster market, the dividends keep coming in and those companies that cut or drop their dividend get sold and then reinvested.

 

[MossRoad]

Yep! Gold is a great for that, but Dave Ramsey doesnt like gold :laughing:

If you bought gold in 2011 hoping to be safe, and wanting to retire in 5 years, you'd have lost 45% of it's value. It's still not back to 2011 level today.

 

[Snobdds]

My best investments the last 15 years, when I hit the workforce, has been real estate. Rentals.

The capital appreciation and ability to use refinancing to pay down the principle faster has really provided a real cash flow that is not tied to anything. Free cash flows.

Real estate has some great tax hedges and overall it's a hedge on the stock market assets.

My parents have around 20 rentals that allow them a great retirement now. I now pay my father and his company to remodel the houses I buy. He is a retired contractor, but he can't stop working. He has a few older guys that work a few days a week and they go in and fix stuff. It's a win for everyone. It keeps him out of my moms hair and her out of his.

 

[jjp8182]

While not yet retired (won't until I hit my min retirement age in 2039), I'd definitely echo the statement of having something to retire to -- have seen/heard of many friend/former coworkers who retired with no hobbies/plans and died within a few years. Also, have a friend/former coworker (now working elsewhere) who may very well be on his way to that end as he always had a hard time using his vacation time as he said he never had anything to use it for unless his wife and kids were also free.... bit sad to see, as he also had/has some workaholic tendencies.

So from what I've seen not having something to do with your time (beyond working for an employer) isn't a good thing when it comes to retiring - the more you have to do the better it would seem (as long as it stays within the budget).

Granted the "work until dead" retirement plan is also a viable option (much of my life that has been my expectation) ... though even now I figure after I "retire" I'll probably keep "working" but for myself on my own projects.