Retirement Planning - Lessons Learned

MossRoad

Epic Contributor
Joined
Aug 31, 2001
Messages
49,584
Location
South Bend, Indiana (near)
Tractor
Power Trac PT425 2001 Model Year
One thing I have to say is that really, all you need in life is food, water and shelter. Everything else is gravy. We're just used to a lot of gravy. I'm very grateful for what my wife and I have. We are fortunate that we have not had any medical or financial catastrophes, good steady employment, and family to support us.

I tell young people to live below their means. Enjoy life today, but save something for tomorrow in case you live to be 100. Pay yourself first. Set goals and work towards them. I try and show them the power of compound interest and dollar cost averaging. And...

 

California

Super Star Member
Joined
Jan 22, 2004
Messages
12,193
Location
Sonoma County
Tractor
Yanmar YM240, and now just one YM186D
One thing I have to say is that really, all you need in life is food, water and shelter. Everything else is gravy. We're just used to a lot of gravy. ...

I tell young people to live below their means. Enjoy life today, but save something for tomorrow in case you live to be 100. Pay yourself first. Set goals and work towards them. I try and show them the power of compound interest and dollar cost averaging.
Heck yeah. We continued to live like a couple of college students in the first years. Bought a duplex that pencilled out where the tenant paid all our housing expense so we banked 25% of gross income into IRA's and 403b's (the maximum) plus saved more to pay cash for cars etc - used cars at first then new a little later. That is strategy I recommend for anyone if you don't have wealthy parents.

We also were simply lucky to start owning rentals during the massive inflation of the 70's, so that cleaning up and selling them made a double return. The increase in sale price as a multiple of increased rent income, and the dollar increase due to inflation that became real dollars upon selling the properties at inflated prices. I don't know what might be an equivalent strategy in today's economy but somebody out there must have found a similar route to making money.

As you noted, the magic of compound interest, applied to all the savings you can manage, paid off very well later in life.
 

kenmac

Super Member
Joined
Feb 13, 2005
Messages
9,298
Location
The Heart of Dixie
Tractor
McCormick CX105 Kubota MX 5100 HST, Kubota ZD1021, Kawsaki Mule 4010 trans 4x4
With all these people that don't want to work, I thought the Government might come out and say, ''all the old people that want to go to work, go and we won't penalize you''. But it didn't happen. so....
I wouldn't mind going back and work some, but I don't want to take a cut in pay to do so.
 

drssg

Veteran Member
Joined
Dec 12, 2006
Messages
1,605
Tractor
Kubota M5700, BX2350
Yes.

I personally don't own any annuities for reasons similar to what it mentioned in the article, but people have different goals and risk tolerance. @MoKelly indicated that he is a fixed income investor, and I believe they are worth investigating for that goal.

From the article you posted:
So why do people like them?

Fixed annuities prevent losses. You are typically guaranteed that the value of your principal will not go down regardless of what the stock or bond markets do.

Fixed index annuities allow the investor to take part in some upside, though it is usually very limited — about 4% per year in this low interest rate environment. So the investor is trading upside potential for downside protection.

If the market soars 20%, the investor will only make 4%. But if the market falls 20%, the investor won’t lose any money.

That is a tremendous comfort for some people. I have a BIL who lost a bunch of money in 2020 because he just couldn't stand to watch the stock market plummeting and he sold all his stuff. It's not for everyone.
 

kenmac

Super Member
Joined
Feb 13, 2005
Messages
9,298
Location
The Heart of Dixie
Tractor
McCormick CX105 Kubota MX 5100 HST, Kubota ZD1021, Kawsaki Mule 4010 trans 4x4
That is a tremendous comfort for some people. I have a BIL who lost a bunch of money in 2020 because he just couldn't stand to watch the stock market plummeting and he sold all his stuff. It's not for everyone.
yeah, some just don't have much risk tolerance . But if he's still working and investing. When the market is down, he was continuing to buy those stocks /bonds at a reduced price.

All the financial advisors I interviewed seem to ask the same question.
If the market fell xxxx would you hold, sell, or continue to buy ?
 
Last edited:

California

Super Star Member
Joined
Jan 22, 2004
Messages
12,193
Location
Sonoma County
Tractor
Yanmar YM240, and now just one YM186D
I have a BIL who lost a bunch of money in 2020 because he just couldn't stand to watch the stock market plummeting and he sold all his stuff. It's not for everyone.
People need to accept that investing money in the market is a LONG term investment, at least a decade minimum if you hope to match historic averages. Short term the market moves randomly and can chew you up.
 

arizona98tj

Gold Member
Joined
May 25, 2016
Messages
305
Location
Bemidji, MN
Tractor
MF 1529
I have been retired 17 years. I guess I have learned that the amount of money you have monthly during retirement is important, but the amount you spend may be more important. It is important to pay off those bills before you decide to retire.

I grew up as a farm kid with my Dad teaching me the value of a dollar. I made sure I was debt-free when I retried at age 60 upon finishing a 30 year career at a nuclear power plant. We sold the house we'd live in for 30 years and headed back to where I grew up as a kid in northern MN. My folks left me 80 acres, thank you Mom and Dad, quite some years back and we built a new house on it along with a 3 car garage, a 10x30' wood shed on a slab, a 12x40' loafing shed, and a chicken coop. I bought a new tractor and since then, a bunch of stuff to put on the 3 point hitch and the Mrs. got an almost new car. We paid cash for everything.

I'm still debt free thanks to a nice pension that came with a good medical plan and a nice investment portfolio. And to top it off, I just became old enough to file for full Social Security benefits. However, this month, we'll start construction on my wife's studio. Rather than spend savings, we decided to finance the build because rates are still reasonable in my opinion. It will get paid off before the note comes due unless our investment advisor finds a reason not to.

We never lived beyond our means. We never had a flat-screen TV until 6 years ago and my pickup is 19 years old. We raised 4 kids on my salary from the power plant. We never wanted for anything that we needed....but there were plenty of times we wanted something we didn't need. I tried to instill that concept in my kids....there are times I still wonder if I succeed. I've only held three jobs in my life including my military enlistment. In contrast, I do believe one or two of my kids have held three different jobs in a single year. We did the best we could. We hope to leave something for them.....time will tell.
 
 
Top