Retirement Planning - Lessons Learned

[MoKelly]

I just pulled my info from SS.GOV; started paying taxes when I was 15, been paying for the last 48 years. I will still be paying when I turn 66.8 months old for "full" retirement payments. If I live for 20 years past that, maybe get new gubment knee replacements, I should come out even...

Does that include what the employer put into FICA on your behalf - or only what you paid?

MoKelly

 

[dirttoys]

Right after being debt free, that was our next goal.
After that, the next goal is finding affordable health insurance after retirement.

I didn't know it was still legal to say affordable and health care in the same sentence Please kick it out to the team if you find any!! I budget $500 per month per person, and may be optimistic.............

Best,

ed

 

[Steppenwolfe]

Does that include what the employer put into FICA on your behalf - or only what you paid?

MoKelly

Sir... I am self employed; have been since I was 23. I get to pay double SS. And yes, the 7 years between 15 and 23 I assume my employer paid the other half... REAL BIG MONEY back then. I get reamed on SS... I sure hope I live long enough to get it back.

 

[dirttoys]

Why stop buying on credit? I think this is horrible advice.

the stock market has averaged 10% returns for the last 140 years.

why would I pay cash for a tractor, when the bank is willing to give me a loan for say 6%. By taking out a loan and making monthly payments, my say 40K is still invested and making money, and all I have to do is make a monthly payment.

i Will only pay cash if the interest on a loan is over 10%, which is never.

The market averages ~10% a year (7% after inflation). I am guilty of letting banks carry paper so I can hold cash. But couple of things; money you might need in the next five years shouldn't be in the market, average person, average market, anything other than a house, it is hard to go wrong just paying for it.

Best,

ed

 

[dirttoys]

So you are happy for the taxpayers to make up the difference?

Excellent point. I hate the free money, but, we print money for every other damn thing, making everything so expensive, I hate it a little less when it ends up in someones pocket that might be able to use it.

 

[Torvy]

Don't spend what you can't already have the money for. If you have the money and have a good interest rate to boot, use someone elses money.

Is that wrong?

I'm in my 50's, the only thing we both owe on is our house and land.

You are absolutely right. The biggest problem I have with Dave Ramsey. Credit can be used wisely. If you don't have the restraint to use credit wisely, you will not likely be able to follow his advice. If you can follow his advice, you can handle using credit wisely.

 

[Torvy]

Please... enlighten us. What are we missing?

Brother, from what I can tell from your posts, you get it. I quit a high paying job to teach HS Economics in a school with 3/4 of families living below the poverty line. Today I showed them how to use a spreadsheet to put together a personal budget. You would think I invented fire.

 

[dirttoys]

In my experience... many who are poor, perhaps even the majority, have put themselves there through poor choices, drugs, alcohol, quitting school, or just old fashioned, I ain't going to work today. I have seen thousands like this.

There are certainly those, no argument.

But there are a pile that have been dorked by the unions, the government, and crappy employers, and just ****ty luck.

Every time I get to feeling cocky I try to look back at some pivotal breaks I have gotten. I have not been poor since my early 20's, and not saying I would have been destitute, but man, missing a couple of 20% gains would have meant working for several more years.

Best,

ed

 

[dirttoys]

One lesson is if you don't work, you can get free government paid medical insurance.

I don't know if I wish that were true or not But, it isn't, the litmus test for subsidized health care goes beyond earned income.

Best,

ed

 

[ultrarunner]

As a young property manager I was surprised at just how much debt people that apply to rent carried...

My Grandparents and Parents instilled debt avoidance at an early age... pointing out the houses in the neighborhood where people were ruined in the Great Depression...

Each market day with Grandmother started at the bank to withdraw cash... her advice was simple... unless you have the cash in hand... you can't afford it...

When I got my first credit card which was Sears... had to promise to pay off every month and that is what I do...

On the other hand... I broke the rules buying Real Estate...

I would find run down and even boarded up homes where no lender would venture and cut a deal where debt income ratio was totally out of whack... but made the difference with my free labor renovating...

Had I followed Dave Ramsey I would have rented into my 30's instead of owning at 22.

Being single and single minded at a young age is one way to increase discretionary income...

Only investment where I have lost is individual stocks and I quickly realized I would always be behind the curve.

I don't see a negative being debt free in retirement...

 

[Steppenwolfe]

There are certainly those, no argument.

But there are a pile that have been dorked by the unions, the government, and crappy employers, and just ****ty luck.

Every time I get to feeling cocky I try to look back at some pivotal breaks I have gotten. I have not been poor since my early 20's, and not saying I would have been destitute, but man, missing a couple of 20% gains would have meant working for several more years.

Best,

ed

Understood. My wife and I started out with less than zero... literally.

 

[Steppenwolfe]

Brother, from what I can tell from your posts, you get it. I quit a high paying job to teach HS Economics in a school with 3/4 of families living below the poverty line. Today I showed them how to use a spreadsheet to put together a personal budget. You would think I invented fire.

I applaud your altruism; but try not to be let down by the "long row to hoe" these kids are up against. Been there, done that...

 

[Torvy]

As long as I get through to a few of them, I will have done more good than a bunch of well-meaning people giving them 'free money.

 

[MoKelly]

Sir... I am self employed; have been since I was 23. I get to pay double SS. And yes, the 7 years between 15 and 23 I assume my employer paid the other half... REAL BIG MONEY back then. I get reamed on SS... I sure hope I live long enough to get it back.

Fantastic.

The cap on FICA is much higher now than back then. When I started paying double it was 7.65% (x2) on the first $51300. Now I’m paying 6.2% (x2) on the first $142800.

Been doing that since 1990. Can’t believe it but that’s been 30+ years.

Time flies.

MoKelly

 

[Frankenkubota]

I have no idea why you people are so obsessed with politics. I know a guy who runs a water delivery service. His wife has cancer, and has a medical marijuana card. Her pot is way cheaper than recreational pot, because it's not taxed. What part of that do you not like?

for me it's not politics, it's principle. i quit voting when they said that corporations are people. if it was up to me i'd blow it up and start over with a king that had a good attitude.

as far as your buddy......best wishes there. i was caretaker for 3 older guys, all who had cancer, while i was living in oregon.

i object to the govt causing so many more problems than they fix and the sheep that follow blindly, just as long as the bennies are rollin and the money printing presses are oiled.

When i lived in portland and frequented the dog parks one of the most common statements i heard, over and over was....the city should do something about that...whatever.

again, tell me anything the govt does well.

that's what i object to.

again, good luck to your pal.

 

[Frankenkubota]

As long as I get through to a few of them, I will have done more good than a bunch of well-meaning people giving them 'free money.

the most valuable thing on this planet is a good teacher...imho

 

[newbury]

<snip>

Only investment where I have lost is individual stocks and I quickly realized I would always be behind the curve.
<snip>

Same here, must be timing or luck of the draw.
Just before the 2008 crash I and most of my cohort at work had been heavily investing in the market. But I was suffering from a pinched sciatic nerve and the drugs were starting to affect my judgement.
I pulled all my retirement funds out of the market.
All my cohort at work lost 30% or more.
DEFINITELY changed a lot of retirements.

 

[Paddy]

Retirement planning is well documented. Sure, save early. Easier said than done for some.

I grew up in a nice neighborhood in the 60's and 70's. Dad was an engineer, so I became one too. Go figure. Life has been great, big house and bigger 401K

As I skated through life, doing somethings right, some things wrong, I always had parents, grand parents, MIL/FIL and spouses grand parents to fall back on. I/we never did need much of any help. But it was there! So buying my first pc of land at 21 years old on contract, was a huge privilege.

I'm a very lucky person. I have always recognized much of my opportunity was due to my placement on this planet. Thanks Giving has always been a special day for me.

For many people, USA and the globe, their birth locations and economic position, make change very difficult. I really hate it when people say, " just pick yourself up by your boot straps". Easier said than done for some.

 

[cqaigy2]

That's admirable. I got a free high school education and heavily subsidized college education courtesy of the taxpayer. It helped a lot. Washington's minimum wage is $13.69, but I doubt many people are looking to work for that. Around here, Taco Bell starts employees at $14.20. Maybe it's different in the South. Do Walmart and grocery stores only charge 50% of PNW prices there?

The $300 unemployment boost expires in September, and 26 states have already cancelled it without seeing an uptick in hiring. It looks like the "nobody wants to work" rant was just BS. People aren't willing to sit still and be screwed any more. The handwriting on the wall is, if you have employees you better keep them happy. Half of them would like to work elsewhere, and 44% already have one foot out the door.

Is now a good time to change careers? More workers are feeling good about it

In an exclusive ‘Fast Company’-Harris Poll, 59% of middle-income workers said they’re thinking about changing jobs. Remote work continues to be a draw.

www.fastcompany.com

See that's where you have to get people upside down on their homes. That way they are stuck there and can't go somewhere else to get better pay.

 

[RickB]

Same here, must be timing or luck of the draw.
Just before the 2008 crash I and most of my cohort at work had been heavily investing in the market. But I was suffering from a pinched sciatic nerve and the drugs were starting to affect my judgement.
I pulled all my retirement funds out of the market.
All my cohort at work lost 30% or more.
DEFINITELY changed a lot of retirements.

I didn't lose a cent in 2008 because I didn't sell a single share of anything I owned. Only those that choose to sell low lose in a down market.