tonyride
Don't piss off the red guy
"Lower your expectations" is my middle name...or at least in my signature. 😎
How the hell are we supposed to retire?
- Thread starter Red Mosquito
- Start date
I'm in my money making years, just not my prime years I suppose. I think that's about 10 years off on average.
For me, it still comes back to the Ramit quote I've probably posted 5x now. Am I going to spend $400 for a hotel I'll just basically sleep in on a trip and nothing else? Nah. Will I spend $6,000 on a bike? No problem at all. We eat well and cook ourselves a nice steak every week...We don't like fancy cars or boats or any of the typical money holes but we don't live like paupers by any means. We're probably dead middle class lifestyle all things considered.
In regard to lifestyle inflation as I get older, any raise I get from this point forward I don't really need to save any more for retirement. Maxing 401k+maxing Roth is all I need to retire in 15 years so I can spend freely. When I'm retired early buying time is not going to be much of a priority so I'll still handle probably similar responsibilities.
We're also not having kids so there's that huge facet as well.
You spelled awesome wrong.
A Potted Plant
Honorary Sod
How to delay retirement by 20 years and die 20 years earlier. Save so much money
People might disagree, but this is the way. If your goal is to maximize your raises, jumping companies is the way to do it, at least in IT. I was with my last company for 11 years knowing I could easily leave and make much more, because I really liked the company and the people that I worked with. Money wasn't really the most important thing to me. I only left because we got acquired by assholes and a killer opportunity fell into my lap.
I've been with a software startup for almost four years now, and I can't imagine ever not working for a startup. Again, I could make more money elsewhere, but it's different when you have equity in the company, especially when the company starts doing really well and enters the crazy growth phase. Anything can happen and there are no guarantees, but it's somewhat possible that I'm going to be set for life in a few years. Unfortunately I wasn't there from the very beginning, so I'm not gonna be crazy rich or anything, but there's a chance I'll be able to retire the way I want to in my 40's.
olegbabich
Well-Known Member
Question for folks that retired or will retire from a private company with a 401k fund.
How, where and how much $$$ do you keep or plan to, in order to protect yourself from recession.
By how much - I want to know for how many years of expenses worth do you have in safe investments.
I only invest in stocks and have no bonds, so I was thinking of just having 2-3 years of expenses in money markets (Cash) when we retire.
How, where and how much $$$ do you keep or plan to, in order to protect yourself from recession.
By how much - I want to know for how many years of expenses worth do you have in safe investments.
I only invest in stocks and have no bonds, so I was thinking of just having 2-3 years of expenses in money markets (Cash) when we retire.
-Also consider dividends of the stocks you own. While they may go down during a recession, they won't completely go away.
-Look into a Bond Ladder. Basically you start adding bonds as you reach retirement age.
Retirement target date funds are fantastic for people that just want to set it and forget it.
It'll reallocate your funds as you approach your retirement date and usually have very low expense fees.
We are close
I’ve moved toward dividend funds and bond funds with a good percentage. They throw off income. But we plan on being retired for a long time, so we also moved towards market funds (sp500) to grow with the economy with the balance.
At 70 or whatever they change it to, they’re required withdrawals of the principal. Combine that with social security and that is a base income number. A few years into the future.
if minimal risk is desired, maybe purchase a lifetime annuity?
market funds are never going to zero. So accepting market risk for the reward is not unreasonable.
maybe @Fire Lord Jim can add here
Last edited:
rick81721
Lothar
Retired for 5 years - our IRAs are about 60% equities/40% bonds. 2 - 3 years in cash sounds very high - we have about 1 year.
PS prior to retirement our 401Ks were pretty much all equities.
Would you say the pension safety net lead to the all equities 401k?
rick81721
Lothar
Good question - not sure, but I knew some guys who (even when in their 30s and 40s) had most of their 401s in bonds/money market and they really missed out. For the first 20+ years I had a very large percentage of my 401 in our company stock - I know this was a financial planner no-no and a significant risk, but our company did very well and it really paid off. YMMV!
Last edited:
We got caught up in the telecom fiasco - ESOP/options/RSUs/401k match - even purchased some real estate with money that hadn't vested (which then tanked.)
ESOPs are ded unless the co is employee owned - mostly. But it was a long time ago now, live-and-learn.
Have either of you started drawing social security?
Are you drawing any of your IRA? or trying to wait unto 70?
^^^ it is really a strategy question - asking your thoughts vs about the actual $$.
I'm going to guess you have some retiree health benefits also? That's a nice bonus.
I'm about 95% stock based currently being I'm 31 and not retiring for 15ish years. I'm positive that outlook of when to change allocations and how much would vary greatly if I knew I had (lets say for shits and giggles) a guaranteed $2,000 coming monthly in retirement from a pension.
Pensions are super confusing to me to figure out and most people in the FIRE community really struggle trying to quantify them usually too.
rick81721
Lothar
Yes we are both taking SS. Years ago I thought I would wait (we really don't need it) but now I'm in the "rather get something back now" vs "more later" camp. Because the "more later" could turn out to be nothing - no fears of SS going under but if you kick the bucket, you get nothing.
We also have very good retirement health insurance + dental. Same plans we had during work (except dental only covers me). And when we turn 65 the Healthcare plan transitions to Medicare supplemental.
Health insurance expense can be huge. When my parents retired it became their largest annual expense by a large amount.
Yeah, my company contributes $1k/month for our health insurance, and then I pay another like $400-500/month pretax on top of that. It's crazy.
Fire Lord Jim
Well-Known Member
Patrick invited this, so here goes...
I keep zero years of expenses in safe investments, within the 401k. I keep the reserve for expenses outside of the 401k, as I never want to have to sell low to meet expenses. I have my reserves for expenses in an after tax ultra-short term bond fund. How much? Depends upon whether one person retires, one keeps working, or you find a second act gig after retirement. One rule of thumb is six months of expenses if your partner still works, or one year of expenses if you are both no longer working. You want 2-3 years, and that is not unreasonable. You can also grow towards that using strategic Roth conversions each year.
I also rolled out of the company 401k into an IRA. The trustee was Fidelity, and they would have charged me a fee as a retiree. I get no fee being my own manager.
So what you're saying is I should go YOLO and 100% stocks in my IRA/401K?
YOLO would be 100% Bitcoin.