Safe Haven, if possible without...

[Gem99ultra]

...making a political statement, tell me were you would put your money in my scenario.

~4-5 years from retiring. Can take what I have saved now and what I can add to it between now and retirement and be okay. Won't be okay if my current savings take a hit. I imagine the advice of those already retired and funding it themselves are in a similar situation.

Everybody's situation is a bit different. What I've learned is that my expenses have not gone down much with retirement, even having my real property all paid for as well as cars/trucks/tractors, etc.. Insurance and taxes amount to about half of my previous monthly mortgage payments.

Expenses have changed, but not reduced. Average cost of living doubles every 10 years. Interest on savings has proven disappointing with the lower interest rates. Medical expense can also be a potential bomb to anyone's retirement fund; anything can happen, so whatever you decide, don't hedge on health insurance. A 'minor' health issue can grenade your retirement funds into non-existence overnight.

I try to get by on social security, a few very small stock dividends, and a couple of pensions. Federal required minimum distribution, in my case, amounts to more than interest increases, so slowly but surely, my savings are diminishing, although not before I'm long gone I hope. What it all means is that, yes you can retire with a moderate amount of savings... say equivalent to 4 or 5 years average current wages. But in my case, I can't go out and buy a new $50K truck every two years, nor can I take world-tour vacations every summer.

If you can, I recommend developing some income producing hobby that will supplement your income for later years. That will let you quit your 9 - 5 job and do something enjoyable on a schedule that meets your desire. But I would expect that getting a new job now even as young as 50 years old is getting very difficult. Getting even a part-time job at age 65 or over is... well, not likely. And at age 75 as I am, hehe - most employers just hope that when you walk in to apply, that you won't die on them before they can get you out the door.

 

[NorTracNY]

Whatever you do, don't let investment advisors get you into annuities or insurance products.
.

Yes! KennyG makes an excellent point. Most of these products are very high cost. Remember that someone needs to make money on every product that exists. Most annuities mean your money is gone forever. If you have some major event where you need some of your principal you can't get it. The only insurance someone should ever get (with only one exception that I know of) would be term life insurance. Insurance is NEVER an investment. It's a protection on your other investments. The actual insurance is often higher priced. So they take your money and invest it for you. They then use the money to buy expensive insurance.

If you talk with a financial adviser, be sure that they are a fiduciary. They must guide you with your best interest. Others only need to advise you with products that are appropriate for you. They often would be higher cost/ more profit for them. Also, if you EVER talk with someone that wants to sell you something that is "no risk", RUN!

It can be scary with there being so many products, philosophies, risk tolerances, and ethics. I have spoken with people that were trained to sell insurance products. They were good people, but they weren't smart enough to realize what they were selling weren't good. They believed the training and couldn't do the math to understand it. One was a family member that just didn't get that what they offered in life insurance was more expensive that a separate term life policy and a typical investment portfolio. They just kept saying, "But the term life policy doesn't have a cash surrender value." Neither does your auto insurance....

 

[adventure bob]

Best retirement plan ever: Pay off your house.

 

[nybirdman]

Waiting to draw SSI at 70 years old is a scam(IMHO),start at 62.5 and you draw a check for 7.5 years,yes reduced but for me the break-even point was 73 years old.

 

[KennyG]

What is wrong with an indexed annuity? There is absolute zero risk, And many companies do not charge any fees or loads. The money either stays the same if the market performs poorly, or it goes up if the market performs well. He has about a 5 year lag before he needs the money, and a 5 year indexed annuity would be perfect for him so he will not have to pay surrender charges. It is a safe vehicle and an order of magnitude better than a CD.

There are annuities offered by companies like Vanguard that have limited costs and might be appropriate for some people. However, most sold by advisors are insurance products which have fees and costs that eat up the return. I speak from my experience. I bought an annuity many years ago when my tax rate was very high as a tax dodge. It's supposedly a market indexed fund but has consistently underperformed the market and my other investments because of the management and insurance fees. I'm cashing it in as soon as I retire and have low income and am back in a low tax bracket.

 

[KennyG]

Waiting to draw SSI at 70 years old is a scam(IMHO),start at 62.5 and you draw a check for 7.5 years,yes reduced but for me the break-even point was 73 years old.

The breakeven point is the same for everyone, it's just a statistical calculation. My logic is that, based on my health and family history, my life expectancy is about 88. On top of that, I'm an optimist so I'm looking forward to my upper 90's - way past break even.

My real point is that even if you delay SS and die at 72 so what if you only collected for 2 years? If you have enough assets to get by until 70 without any real discomfort, why not delay. In the unfortunate scenario that you live to 90 you will be much better off.

Again, this doesn't apply to people who will suffer without the SS below 70.

 

[Raspy]

I'll be retiring in six months. I've taken the mutual funds and mostly turned it into cash that is still in the IRA. The little bit of extra I might make in the mean time from investing is not worth the worry of a market downturn. And since it's still in the IRA, there are no taxes due until I begin to draw on it. Meanwhile, I'm paying myself as much as possible with wages to maximize my Social Security calculations and waiting until full retirement age plus one year for the extra amount at 67.

Taking early SS at 62 seems ridiculous to me. I can make way more money from 62 till 67 by working and there is no penalty after 66 for other income. I could not have made it on SS at 62 and needed the extra years to get the house done and paid for, and build up some savings. My father retired at 62 and struggled the rest of his life. I have another friend that did it too. Now he is taking odd jobs and barely getting by. Retirement opens the door for travel and other adventures, be ready the best you can.

After retirement, at full retirement age, you can make all you want without penalty, so I'll be looking for low stress consulting projects that will supplement my income and delay taking from the IRA.

We'll have no debt when I retire, including the house. Just the normal cost of living items.

I do have a rental house though, and I haven't decided what to do with that.

 

[Raspy]

My real point is that even if you delay SS and die at 72 so what if you only collected for 2 years? If you have enough assets to get by until 70 without any real discomfort, why not delay. In the unfortunate scenario that you live to 90 you will be much better off.

Seems to me if you stop working and have to get by until 70 to start SS, you are burning through your savings and may have a problem later. If you are still working and enjoying it, 70 seems like a good idea. Each case is different.

At 66, I'm tired of working and have a lot of things to do, so 67 is the magic number for me. I wish I had more saved up, but since I've always worked for myself, I can supplement as needed as long as I'm healthy. Retiring at 62 would have been a big mistake for me.

 

[Snobdds]

Familiarize yourself with what a "beta" means in Financial terms. Invest in "beta" stocks that are in the .5 range that pay a dividend.

Sleep well at night...

 

[oosik]

I retired early - at age 52 - and am now 74. I've alway had most of my funds in VERY low risk stocks and the remainder in money market accounts at my local bank. The stocks have always done very well. In the beginning the bank's money market accounts did OK but recently they quit accruing anything. I'm thinking of taking this money and putting it into accounts at our local credit union. It won't make much there but its better than the ZERO its earning now.

I learned long ago - if you don't know what your are doing with your money - seek professional help. I was very fortunate to find a financial advisor that made just the right investments with my "stocks money" and for the last 15 years or so this area has performed very well. The makeup of my stock portfolio has not changed in the many years I've been invested. Generally speaking - if you are a good farmer, then farm - if you are a good financial advisor, then do that. Experience shows that the two do not mix and the farmer who thinks he is good in the financial market, without help, will loose it all.

My financial advisor does not work for a "large name" company - he has a small business of his own and caters to the locals.

My best suggestion - talk to people in your community and find out who seems to be the best at giving financial advice. Every person is a seperate and unique situation and can best be served by an advisor whose reputation is built upon service to the community - not the flashiest adds on TV.