How much money is needed in your retirement account to actually retire?
- Thread starter Oldblueone
- Start date
Ideal time frame for travel, get you a good plan yet be flexible, we tended to linger in places we unexpectedly loved, saved other destinations for another trip.
Younger folks should be going the complete opposite of conservative with what they put their money towards in their 401k and other similar types of retirement accounts. I'm 34 and got my 401K and Rothe IRA invested entirely in stocks.
Don't waste your money on an advisor, but if you're more comfortable with one, get one. Warren Buffet says to invest in low cost S&P 500 index funds. I got tired of paying Edward Jones 1.35% of our investments per year, and funds with high expense ratios.
I switched to Fidelity. No management fees and and they just started a fund with a zero % ER, and they have more with only a .015% ER. Lots of people use Vanguard also. Fidelity does have options if you want an advisor. Don't give your money away.
I switched to Fidelity. No management fees and and they just started a fund with a zero % ER, and they have more with only a .015% ER. Lots of people use Vanguard also. Fidelity does have options if you want an advisor. Don't give your money away.
I second the low cost S&P 500 funds recommendation. Why pay higher expense ratios for a fund that is trying to mirror the returns of the S&P 500 when you can just buy the S&P 500?
Last edited:
Yep, that's the smart play when you have 20+ years to retirement. I'm 39, and i'm 90% invested in stocks, mostly domestic but some international funds mixed in. Large cap, mid cap, small cap...gotta diversify.
I like to also mix in about 10% conservative investments like fixed income and bonds. As i get older and closer to retirement, bump up the conservative investments, but still always have 50%-60% at least in stocks.
This is exactly what those managed target date funds are doing. The only difference is that they have much higher expense ratios than if you pick the funds yourself. Watch your returns periodically, re-balance annually, and reevaluate your portfolio as you age. It's really not that hard.
If he keeps growing it & works till 70, probably enough at a moderate standard of living.
The people who stayed in the stock market are much better off today than those who lived with Obama's near zero percent interest rates.
Because they retired w/o enough assets to do so & so shouldn't have retired.
Last edited:
SS retirement benefits are set actuarially to be neutral to retirement age. If you plan to die before 82, take it early, otherwise late. Only other impacts are if you retire with minor kids, that could cause you to take early for their benefits, OR if you have a spouse, the higher income person should take late to provide higher survivor benefits.
Why do you think there are so many gray hairs working bagging groceries?
I agree that many will not retire comfortably...many won't be able to retire until they are forced to do so by health reasons...or will retire but have to continue to work part time to make ends meet.
A lot depends on what you have been used to making and need to be "comfortable". Is your home paid for and in good repair? Will you require nursing care at some point?
For a couple with a $100K combined income a million at a 4% withdrawal rate is only going to produce $40K/yr...maybe their Soc Security provides another $25-35K/yr depending on when they start taking it. That's a 30% cut in income.
My opinion is an advisor group that wants 1-2% of your assets per year is BS. I'd talk to the group you have most of your assets with like Vanguard/Schwab/Fidelity/etc. They offer guidance counselors at pretty reasonable costs.
Last edited:
Some great sites for help:
https://www.bogleheads.org/forum/index.php
http://www.early-retirement.org/
https://www.evansonasset.com/
https://www.bogleheads.org/forum/index.php
http://www.early-retirement.org/
https://www.evansonasset.com/
That's all dependent. My current plan is to wait until 70 to claim it...my break even is 79.
My dad has a pension through GM. He’s in constant worry that they’ll cut his check.....or pull it completely. After ~45 yrs working for the same company, he’s in constant worry they’ll screw him on his already limited budget. He has a few friends that retired about the same time.....but they were younger and exercised the 401k option. They have way more $ to draw upon in retirement than my dad does.
If you’re smart, a 401k or like vessel will yield far more wealth and security than a pension ever could.
Now, that being said, I think if you ask the average 18-45 yr old if they want to contribute 10-15% of their check to their retirement funds they’d likely say no. A fraction will say yes. A fraction will say, here’s 5%. I’m afraid most will say no. This is the area where pensions hold worth.
My solid pension with inflation factor as a former community college teacher is beating my wife’s 401K at a higher salary in industry, but she switched jobs a few times. What we all need is a BIG salary to take a 401K % out of for 25-30 years.
Well, my math says I got an 8 bagger on TLRY last month, thank you. Just because I got a pension didn’t keep me from setting up my own funded 403B plan, Roth IRA, and separate taxable brokerage account. BTW, I taught accounting and got a CPA, had decent math skills. Got anymore assumptions?
Most of us are here to give different paths to retirement, and I’ve seen some excellent ideas. My wife and I are 11 years into retirement, we both worked 40 years at average salaries, aren’t millionaires and just finished paying for our dream home we built 15 years ago, but we lack for nothing, travel when in the mood. By continuing to invest in stocks in our IRAs (anywhere from 40-80% of our monies), we’re in good shape, will take the minimum IRA withdrawals. Ignore those coming here with arrogance and not truly trying to help anybody.
While there are bits and pieces that are helpful, there really is some mind numbingly stupid advice in this thread.
If you put every single dollar you earn into the stock market and leave it all there as you near retirement and retire, you are an idiot. That is fact, not opinion.
If you read anything the posters advocating that position posted, and thought, "hmm, that makes sense", you definitely are the type of person that needs to hire a financial advisor so they can stop you from doing stupid things like putting all of your money into the stock market when you are preparing to retire.
If you put every single dollar you earn into the stock market and leave it all there as you near retirement and retire, you are an idiot. That is fact, not opinion.
If you read anything the posters advocating that position posted, and thought, "hmm, that makes sense", you definitely are the type of person that needs to hire a financial advisor so they can stop you from doing stupid things like putting all of your money into the stock market when you are preparing to retire.
Agree, readers are certainly on their own on specific investing advice here, and being diversified is not necessarily much help as retirement nears! We have another thread at Paddock about picking stocks, but being successful at it is not easy, better for most people to use money they can afford to lose. Heck, my brother’s return in retirement using Edward Jones totally has at least met my self stock picking return despite his fees.
Advisor fees are dependent upon your account balance. With Edward Jones once you are over $250K they go away unless you are using their advisory account management.
The question becomes can your advisor get you a greater return than you can do on your own. If they get you 1.5% more then they have paid for themselves. That's a question I struggled with for years. For years I had money with both Fidelity and Edward Jones with pretty similar returns. One year I would do better, the next they did better. As I've gotten close to retirement I've chosen to move everything to Edward Jones for the same reasons a lawyer hires another lawyer when they need legal advice. The need to remove emotion from the process of what to do.
Key words there BlueRaider..."If you're smart"...I might add...and disciplined. I know too many 18-45 yr olds...many of which are otherwise smart people that can't bring themselves to save for retirement. One particular couple, both in their early 40's who have a combined income of $250K and next to zero in their 401Ks.
My two younger kids (28 & 32) asked me to help them setup their 401Ks when they took new jobs a few years ago. The youngest is a saver and I'm not so worried about her but the other...not so much. Both employer's match the first 6% so I started them out there but set them up so the percentage bumps 1% every year.
I've got serious concerns about how our society will deal with large numbers of seniors highly dependent upon social security and inadequate savings in the coming years. We are just now starting to see the first wave of people retiring who are more dependent on 401K savings than pensions. The other concerns are for people like myself and 5 or so years away from retirement. We've had a bull market for 10 years now and a correction is overdue. A loss of 25-30% of your portfolio at an inopportune time could be devastating to one's retirement plans.
Blue, highly respect you, but our TCRS pension in Tn has been a good one, a pal of mine (good, but conservative investor) switched from industry to teaching, chose to put his state portion elsewhere for mutual fund growth, but after a few stock hits, converted after about ten years, so he could get a pension. Each pension is different.
I'm in a similar boat, same age, with a bit less in VFIAX and other index funds, more individual stocks picks and <10% in a couple bond funds. I think you have good stock diversification already and just based on your last comment, should do just fine.
True, but I didn't see that specified so didn't assume so. That said, outside our IRA's we have munis & KY ones only. We use the Dupree KY specific funds to some degree & in both cases avoid KY income taxes too.
Last edited:
I think that if you can, invest in stocks outside IRA's & bonds inside (assuming regular IRA, not Roth) since the dividends on stocks are taxed at a lower rate than income taxes of bonds. When you have to sell stocks inside IRA & then withdraw, that withdraw is taxed as income vs. selling stocks outside IRA it's taxed at LTCG rates - lower.
There are flat fee advisors out there whose charges are independent of asset level. Most/all of them focus on mutual funds & ETFs vs. individual stocks & don't trade much.
Fuzz, well spoken. One question, maybe I misunderstood, are you having your kids bump their 401K contribution 1% above their company match each year in the future? My brother got into a cash flow problem and had to back off putting too much into his 401K and disability insurance. Instead of putting money above my wife’s % 401K match, I set up Roth accounts for both of us, tapped that early in retirement because of it being pretaxed, wish we had put much more in Roth accounts.
I built a taxable brokers’ account to $100,000, which gave me fun/anger and skill development for retirement investing in stocks, so yes, I divested it first because of cap gains’ tax benefits, then divested our much smaller Roth accounts, finally about 7 years into retirement had to dip into our IRAs, where I buy and sell stocks. I’ve never been a huge fan of bonds (a vet friend did pretty good with “layered” bonds) and mostly prefer growth stocks mixed with a few value stocks with average dividend percentages.
90% in VFIAX has been great, but being 7 years from retirement, I'm thinking I should pull about 30% out of VFIAX and move it to something safer. Just not sure what that is yet. I admit, I'm a dumbass when it comes to investing.
James Lee a very good, reliable guy to discuss these things, particularly since you have similar situations. Heck, just move the 30% to your broker’s Money market account if in doubt, that’s where I have 50% currently at least until the elections end, then toe in the water for investing going forward.
