Retirement planning

[300UGUY]

Yea, that may be true for some, but a large percentage of people just can't get it together. And for those people, do you let them starve or reach into your pocket? Better to force them to save up front in my opinion.

The average family income in this country is only 40 or 50K. Chances are, most folks will never earn enough money to save much for retirement. Maybe the top 10 or 15% ? Factory jobs around here are paying up to $20 per hour, or 40k per year. Pay a mortgage, food, utilities, car expenses, and not much is left. If you have kids, forget it.

 

[newbury]

If you want to know how inflation will kill your savings and why you need as much as you can check out this web site. A million bucks is not what it used to be!

Inflation Calculator | Find US Dollar's Value from 1913-2014

If you own a house and land try putting in your numbers and see what they would be worth today.

My houses are double their inflation value.

 

[ultrarunner]

And I've known 2 guys who took the cash option on their pensions, and lost their butts on the market. The cash option on a pension is never enough to generate eqiuvilent income. The cash option is seldom a good idea.

I don't have any plans for stock market income for my retirement.

The retired engineer is my friend and neighbor and he and his wife, both in their 80's have 160k coming in and this is more than they ever made working... and they did take the cash option for his Phone Company pension and her Hospital Pension...

My plan revolves around having zero debt and investment income from rental real estate...

Way back in 1986 my younger brother and I bought a fixer up home for 65k... 5 bedrooms and two baths here in Oakland... the place had been converted into a duplex by adding a second kitchen and utility meters...

Home is now paid for... taxes rund about $1800 annually and rent is $2300 per month which is quite reasonable for a home in the Bay Area...

Three years rent today more than covers the property cost including all the repairs made over the years...

I know many want no part of investment real estate... yet, it is the one bright spot in my planning that has gone better than planned.

 

[MossRoad]

The average family income in this country is only 40 or 50K. Chances are, most folks will never earn enough money to save much for retirement. Maybe the top 10 or 15% ? Factory jobs around here are paying up to $20 per hour, or 40k per year. Pay a mortgage, food, utilities, car expenses, and not much is left. If you have kids, forget it.

If you make $40k per year you'd be bringing home about $33,000 per year. Probably more with the deduction for say, 2 kids. So, family of 4.

If you spent:
200 per month into a ROTH IRA
500 on mortgage
800 on groceries
400 on utilities
200 on used car and insurance
200 in an emergency fund
200 on clothes
You'd spend about $2500 per month, or $30,000 per year.
You'd have $3000 left over per year to spend on health care and since you have a family of 4 you qualify for the affordable care act.
Once you save up your emergency fund after 4-5 years, you get an additional $2400 per year to use, so you now have $5300 per year left over if you'r lucky.

That $200 per month into a ROTH IRA earning 7% per year would yield you $687,764.00 in 45 years for you to retire on.

Now let's say you get a decent job at $20 per hour and your spouse gets a minimum wage job or two for, say another 20 hours per week. That's an additional $7500 per year.

It can be done with a disciplined approach to building wealth over the long term.

 

[ultrarunner]

You left out cable, cell and go out... and therein lies the rub...

*** Edit

You left out cable, cell and go out... and therein lies the rub... for many!

 

[NY_Yankees_Fan]

If you own a house and land try putting in your numbers and see what they would be worth today. My houses are double their inflation value.

New

Not for me we purchased our home in 1987 for $245K based on the inflation calculator it should be $509K. In 2007 the house next door sold for $525k, the same style home on the other side of me sold for $425k in 2013, the same style house around the block sold for $375k in June 2014.

So I guess it depends on the housing market and what the market will bear.....oh well......

I will find out how much I can get for my home in the spring when it goes on the market....

My home is 3k sq. ft. on 2 acres we pay $12k in taxes with a well and septic. My development has 46 homes all with the same layout and land. Now you know why we are moving!

 

[riptides]

And I've known 2 guys who took the cash option on their pensions, and lost their butts on the market. The cash option on a pension is never enough to generate eqiuvilent income. The cash option is seldom a good idea.

I took my pension and closed it out for the cash option. I turned around and handed it to the market. So far, it looks like a winner. Watch this space in 5 years and we will see what it does.

I got really agressive on some parts of my portfolio, while others are grounded, I figure, why not. Time to make up for lost time.

 

[riptides]

If you spent:

500 on mortgage
...

Not happening in my area. You cannot even rent a 1 bedroom in a decent place for that amount. Some parts in this area, that would be 850-1250 just for rent.

But I get your example.

 

[Travelover]

............
It can be done with a disciplined approach to building wealth over the long term.

Some people will always come up with "yea, but" excuses for not saving. Bottom line is if you don't take it from them with SS deductions and give it back when they are old, they will be penniless. Or will demand support from the "rich" people that had fewer toys and saved and invested their money.

 

[Ken]

You left out cable, cell and go out... and therein lies the rub...

Ultrarunner buying house in the area where you live isn't this kind on shaky ground. What the value after a earthquake that is severe and has been forecast going to happen?
After ever a tornado here and things are blown away the herd of helpers soon fade away leaving you to do most of the clean up. Neighbor helping neighbors usually.

I in vested in land lease for grazing . houses take constant repair if rented .

ken