retiring

[ovrszd]

Rich is relative. Many of us here have lived within our means, worked hard, and saved / invested well. I also consider my quality of life to be first and foremost when considering if I am rich or not; I grew up in a trailer till I went to college at 18, and never thought we were poor or not living as well as any other kid I knew. The first few apartments then houses my wife and I rented when we first married sure weren't what most people would chose to live in, but we were happy. Money is only part of that. I think it's our attitude that determines if we are rich or not.

Warren was talking about dollars in his hands and he is right.

 

[Travelover]

Warren Buffet once said,

"Take all the money in the world and divide it equally among all the people in the world and in five years I'll be rich and you won't."

Smart guy. He also said that the stock market is a tool which takes money from the impatient and gives it to the patient. Buffett's recommendation for the average person is - surprise! - to invest in stock index mutual funds.

 

[goeduck]

Buffett's recommendation for the average person is - surprise! - to invest in stock index mutual funds.

Yes. I have a good chunk of money invested exactly that that way.

 

[KennyG]

I found it interesting about the self insured companies that pay back the health insurance company, basically using them for administration.

I think most companies with more than a few hundred employees do this but then add a "catastrophic insurance" to take care of the rare instance of a million dollar medical event. That's how I always had coverage. Because almost all the employees were college educated office workers we had relatively low rates. The company required employees to contribute to the premiums but based it on income so the lower paid people paid almost nothing. Because of the concern about increasing insurance cost, the last five years or so that I worked, the company kept the employee premium level and absorbed the increases. It was a really good company to work for.

 

[drssg]

On a somewhat more technical basis, we often talk about the annual rate of return (such as 4% or 7%) to use for future planning. I found it surprisingly difficult to get this value for the overall history of my portfolio. This is useful as a sanity check for estimates on future returns or to see how well I'm tracking to plan. The more technical name for this value is IRR (internal rate of return). Other values sound useful, but they are different measures.

The % Gain is a measure of how much the price of the investment has increased. It it paid dividends that were reinvested, those dividends do not increase the % Gain. This is useful when figuring taxable income, but not the practical money-making performance of the fund.

The % ROI (return on investment) does better for an individual investment, except it's an overall value, not an average annual return. At the portfolio level it starts getting funky if you move money from one investment to another.

Any good financial software should include an option to calculate the IRR, but it might be buried in a report that is not immediately obvious.

 

[buckeyefarmer]

I have to admit I just threw money into my 401k and forgot about it. Probably went too conservative on the fund I used.

 

[goeduck]

I have to admit I just threw money into my 401k and forgot about it. Probably went too conservative on the fund I used.

Nothing wrong with a good fund that does not have big setbacks that need years to catch back up from.

 

[Travelover]

I have to admit I just threw money into my 401k and forgot about it. Probably went too conservative on the fund I used.

It all depends on how far you are from retirement. If you are young and invest only in a money market fund for example, you'll never make it. By the same token, as you near retirement, it makes sense to shift into more bonds and fewer stocks. I'm comfortable in retirement with 60% stocks and 40% bonds. I can live off bonds for an extended downturn, like 2009 -2010 while I wait for stocks to rebound.

 

[RickB]

It all depends on how far you are from retirement. If you are young and invest only in a money market fund for example, you'll never make it. By the same token, as you near retirement, it makes sense to shift into more bonds and fewer stocks. I'm comfortable in retirement with 60% stocks and 40% bonds. I can live off bonds for an extended downturn, like 2009 -2010 while I wait for stocks to rebound.

As I get very near to retirement I quickly learned the accumulation phase is far easier to manage than the retention/distribution phase that lies immediately before us.

 

[bird dogger]

As I get very near to retirement I quickly learned the accumulation phase is far easier to manage than the retention/distribution phase that lies immediately before us.

How true!!! While a youngster, I've always had my funds (both 401k and IRA's) in the most aggressive funds that we were offered. I also did the same in a personal brokerage account with small amounts contributed over the years. Some years were extremely good, others were brutal, but over the long haul it sure paid off. Fellow co-workers couldn't understand how I could sleep at night even though my funds were overall increasing much faster than the so called safer funds. Retired at age 62 it's still hard to throttle back and invest in bonds and money market funds. I've become used to the wild ride and kinda enjoy it while watching the market closely. But I have converted a major portion into different ETF funds in a few different sectors. Keeping some of my favorite individual stocks keeps it interesting while I'm being weened off of the high flyers and roll them over into more stable ETF funds. Might have to even consider a bond fund in the next few years but so far that's been like trying to get interested in golf.

 

[goeduck]

How true!!! While a youngster, I've always had my funds (both 401k and IRA's) in the most aggressive funds that we were offered. I also did the same in a personal brokerage account with small amounts contributed over the years. Some years were extremely good, others were brutal, but over the long haul it sure paid off. Fellow co-workers couldn't understand how I could sleep at night even though my funds were overall increasing much faster than the so called safer funds. Retired at age 62 it's still hard to throttle back and invest in bonds and money market funds. I've become used to the wild ride and kinda enjoy it while watching the market closely. But I have converted a major portion into different ETF funds in a few different sectors. Keeping some of my favorite individual stocks keeps it interesting while I'm being weened off of the high flyers and roll them over into more stable ETF funds. Might have to even consider a bond fund in the next few years but so far that's been like trying to get interested in golf.

Are you working with a retirement professional? Independent?

 

[RickB]

A

How true!!! While a youngster, I've always had my funds (both 401k and IRA's) in the most aggressive funds that we were offered. I also did the same in a personal brokerage account with small amounts contributed over the years. Some years were extremely good, others were brutal, but over the long haul it sure paid off. Fellow co-workers couldn't understand how I could sleep at night even though my funds were overall increasing much faster than the so called safer funds. Retired at age 62 it's still hard to throttle back and invest in bonds and money market funds. I've become used to the wild ride and kinda enjoy it while watching the market closely. But I have converted a major portion into different ETF funds in a few different sectors. Keeping some of my favorite individual stocks keeps it interesting while I'm being weened off of the high flyers and roll them over into more stable ETF funds. Might have to even consider a bond fund in the next few years but so far that's been like trying to get interested in golf.

Exactly.

 

[bird dogger]

Are you working with a retirement professional? Independent?

NO, not really. After retiring my 401k and my IRAs were all rolled over into a Schwab account where I had my small personal brokerage account for many years. Schwab does assign you an advisor to guide you (free) or you can pay for a much more hands on management style. But I've always done things myself. Plus, mutual funds have their own managers that are paid out of those funds themselves and ETFs (Exchange Traded Funds) need no real managers as they are basically a slice of many stocks that make up the type of fund or sector you choose it to be in. Unless you have a really good mutual fund manager it's hard to beat having your funds in different ETFs, whose fees are extremely low. And because of that, very few professional firms recommend them because that's not where they make their money. It's hard to justify paying both a mutual fund manager (included in the fund's fees) along with a professional management firm's fees for their hands on management when you can do as well or most times better by investing in ETF funds with almost no fees comparatively. But I say that because I have an interest in that sort of thing. Many people don't want to or can't handle the thought of managing their own funds and for them having someone actively manage their account is the better choice. I really like the Charles Schwab firm because they'll give you any amount of guidance you want. Even their free services with their assigned manager is great!! And Schwab has been the most up front and honest compared to the former firms I've had accounts with so they earned my business in retirement. I'm sure there's others too, but Schwab has been one of the first to gear itself towards the individual investor and steer them in the right financial direction. Poke around on their website and you'll find tons of all kinds of help, tutorials, info etc.

 

[RickB]

I have also been a Schwab customer for over 20 years, am consolidating various other accounts into our Schwab accounts for simplicity and streamlining. Our portfolio is extremely diverse in holdings, type of investment and sectors. We hold index funds, actively managed funds and some stocks and am beginning to buy ETFs. We recently talked extensively with a financial planner representing another brokerage but decided to stay with Schwab and continue to actively manage our own investments with limited guidance from our rep. I am extremely sensitive to expense ratios but will not reject an attractive actively managed fund with average or moderate expense.

 

[dnw64]

Well, this thread retired rather suddenly.

 

[goeduck]

I have also been a Schwab customer for over 20 years, am consolidating various other accounts into our Schwab accounts for simplicity and streamlining. Our portfolio is extremely diverse in holdings, type of investment and sectors. We hold index funds, actively managed funds and some stocks and am beginning to buy ETFs. We recently talked extensively with a financial planner representing another brokerage but decided to stay with Schwab and continue to actively manage our own investments with limited guidance from our rep. I am extremely sensitive to expense ratios but will not reject an attractive actively managed fund with average or moderate expense.

I have no issues with Schwab or any similar company but I have long worried about how objective their financial advisors are when they invest your funds in all of their own products. On my list of things to do is see an independent advisor (pay them separately) to give me objective advise. How many other have went this route?

 

[goeduck]

Well, this thread retired rather suddenly.

Some probably dropped when it strayed into politics. Lets keep it on the retirement subject. :thumbsup:

 

[RickB]

I have no issues with Schwab or any similar company but I have long worried about how objective their financial advisers are when they invest in all of their own products. On my list of things to do is see an independent advisor (pay them separately) to give me objective advise. How many other have went this route?

I completely agree. I have only sought out specific recommendations in the last few months. While I have given them full consideration and adopted some of the ideas and strategies I have yet to make any investments specifically on the rep’s no cost recommendation. The alternative would be a true fiduciary advisor and I can’t make myself pay the cost of that guidance which does not come cheap. I believe the years ahead will be very challenging in terms of returns and handing over something approaching 1% of the portfolio value every year for “unbiased” recommendations is not something I am prepared to do. I have paddled the canoe this far, I’ll just keep going.
While I do invest in some Schwab products the majority of our portfolio could be obtained through most brokerages. I have American, Janus, Vanguard and Invesco funds among others.

 

[goeduck]

I completely agree. I have only sought out specific recommendations in the last few months. While I have given them full consideration and adopted some of the ideas and strategies I have yet to make any investments specifically on the rep’s no cost recommendation. The alternative would be a true fiduciary advisor and I can’t make myself pay the cost of that guidance which does not come cheap. I believe the years ahead will be very challenging in terms of returns and handing over something approaching 1% of the portfolio value every year for “unbiased” recommendations is not something I am prepared to do. I have paddled the canoe this far, I’ll just keep going.
While I do invest in some Schwab products the majority of our portfolio could be obtained through most brokerages. I have American, Janus, Vanguard and Invesco funds among others.

Have you researched what an independent financial advisor costs? I am sure it varies by quality and I would want references.

 

[RickB]

Have you researched what an independent financial advisor costs? I am sure it varies by quality and I would want references.

Not thoroughly enough to post a number here that I would be confident in. My opinion is the 1% per year figure I mentioned above wouldn’t be far off. Paying 1/4 of that would send me into convulsions. It’s just something I can’t bring myself to sign up for.