How the hell are we supposed to retire?

stb222

Love Drunk
Jerk Squad
You need to pull that 401k take the tax hit and buy vacation rental/ possible retirement place. Your best equity you own now is the house your living in.

Real estate on the grand scheme of things is a steady pattern of up and down with gains over the long haul.
I know 12 years is relatively short, but how do you explain that my housing value is the same as of when I purchased the house, maybe lower?
 

Mountain Bike Mike

Well-Known Member
You need to pull that 401k take the tax hit and buy vacation rental/ possible retirement place. Your best equity you own now is the house your living in.

Real estate on the grand scheme of things is a steady pattern of up and down with gains over the long haul.

Buy a house on the highest ground you can find, own a sail boat and stock it with years of food and supplies and learn some survival skills and how to be completely self sufficient

Aenema

Some deep shit...
 

mattybfat

The Opinion Police
Team MTBNJ Halter's
I know 12 years is relatively short, but how do you explain that my housing value is the same as of when I purchased the house, maybe lower?
You bought high. Market now is a buyers market.
Still even so when retirement comes you will gain more in your house. Invest in your home or homes and return should be over 100% over a thirty year period.
Case an point
My dad bought his first house 12,000
Now at retirement house worth 300,000.
I bought my first house at 145,000 since I have built that into upgrades to a 365,000 of house in 15 yrs.
add additional income houses over 15 yrs and you got a nice nest egg for you and close extended family.
 

ChrisRU

Well-Known Member
@mattybfat, there has been a lot of new math going around suggesting real estate is no longer a great investment for individuals. You're ignoring the time value of money. Let's be real, if you're worried about your 401k balance your not going around and scooping up properties like you're playing monopoly. A single property "investment", or even a second vacation/rental property comes with similar return risks as stock market investment with arguably whole other sets of headaches. You can't set and forget a house.

The attitudes in this thread are pretty sad :( Conceptually retirement is math and discipline. Target an income replacement ratio, live within your means, and hope life doesn't throw you too many big curve balls. Invest long term and low fee.
 
Last edited:

stb222

Love Drunk
Jerk Squad
You bought high. Market now is a buyers market.
Still even so when retirement comes you will gain more in your house. Invest in your home or homes and return should be over 100% over a thirty year period.
Case an point
My dad bought his first house 12,000
Now at retirement house worth 300,000.
I bought my first house at 145,000 since I have built that into upgrades to a 365,000 of house in 15 yrs.
add additional income houses over 15 yrs and you got a nice nest egg for you and close extended family.
Yeah, but a crap ton of people are in my position of buying during the last bubble. the idea of a "starter home" is dead and a lot of people were sold shit mortgages. I am not making an excuse, it is just the situation I am in.
 

mattybfat

The Opinion Police
Team MTBNJ Halter's
I will take my chances at something I can see and touch over legalized capitalistic gamblers.

The sad is boomers will bankrupt SS which the next 2 generations will be left to deal with.

Yes @ChrisRU i should add not a wise investment if you have no mechanical skills. I have not seen or worked for one property investor who loses money. Most started with very little capital
Yeah, but a crap ton of people are in my position of buying during the last bubble. the idea of a "starter home" is dead and a lot of people were sold shit mortgages. I am not making an excuse, it is just the situation I am in.
buy the lot next to @pearl then you'll be back in the drivers seat.
 

Patrick

Overthinking the draft from the basement already
Staff member
Thanks for the straight talk @clarkenstein When are the fees taken out? I've moved my $$ around a ton of times over the years and have never seen a fee from leaving any funds.

@mattybfat I like the ideas but those are $2k+ a month commitments, ain't gonna happen.

Guess I should start stuffing my mattress?

there are no fees for funds in a 401k (they are taken as mgmt fees from the fund) - they usually limit the number of moves you can make in a year. (i see the answer was posted while i was typing)

---IMPORTANT---
so use a couple conservative numbers. lets say put away, with co match, $7,000 year - that is 100/wk with a 35% match.
and compound at 5% over 35 years - i found a monthly calculator here https://www.calculator.net/investment-calculator.html
600/month at 5% for 35 years, 240k invested, turns into $665k. Hopefully you are a couple, and can multiply this by
something approaching 2. and avg historical return for the last 50 years is 10%, you'd have $2.3 million.

--not so much--

so the house should be paid off, and worth something. if you are renting, then ya gotta save a bit more $$ -
you are now 65->70 years old. you've stayed in good shape from #BIYF2030. You've got no debt. Along the way,
the kids are out on their own. and you were able to save a few more $$ somewhere. you go into income investing,
and you move the money to MHCAX - which is a fantastic buy right now, with a 6.7% yield. or BHYIX (i'd spread it around
over high income funds) the value of the fund fluctuates, but the dividend is stable (meaning the yield changes, the
equity changes, but the monthly payment is the same.)

you can not make money in the rental business if you don't start out with cash. the interest on the mortgage will kill you.
and if you aren't handy, the repairs will kill you. and if you get really unlucky, the tenant will stiff you, and carson will write a story about it.
Have an extra bedroom/bath, and no kids? Rent it out, get cash, put it into the plan. renter is local, young, working during the day, skilled (ie trade or office worker.)
preferably female.

so what is retirement at this point? you still feel good. could still work. part time? do your own thing? consult? screen new people? teach?
point is your income doesn't need to go to $0.

it looks so difficult when at a young age - that cash that you don't get cause you are saving. those things that you want so bad.
ya gotta live below your means until the money making years. ya gotta drive the crap out of that shitbox, so you can get the badass
car when you are older. insurance will be cheaper, and you can talk your way out of a ticket.

---IMPORTANT AGAIN---

things that blow this up...
addictions, be it chemical or other - if it is sucking the money out, and then creates the inability to make more...problem
bad divorce - hell, it happens. don't make it worse. no sense spending more on lawyer fees than your net worth.
unmanageable debt load - make a plan, get out of debt. you might have to hibernate from the world for a year - think of it as investing
unproductive job changes - its the same shit everywhere, deal with it. don't call people out in public if you have a problem with them,
esp the boss. just tell them. with change comes risk. make sure the risk is worth it. on the flip side, you may have gained some skills
and the current employer thinks you "owe them" - you don't, find someone to pay you for them, keep adding onto your skills.

---REALLY IMPORTANT---
Things that help...
you and spouse on same page with $$
budget
self control
budget
plan for larger items
budget
friend network to get stuff done, at least at a reduced rate.
budget
If you inherit any $$ - pay off some debt, and put the rest of it away. Even if it is a small amount. Roth IRA.
Don't stop saving!

---meh--

i still bring my lunch to work, some leftovers, and water - not the bottled type. this allows the cash to be unwisely spent elsewhere. ;)

do you need a paid financial planner? probably not. the fidelity stuff is fine. once you have something significant, ie over the inheritance
limit - ya need a lawyer.

couple other benefits of this - as Dave states - alot of people have very low 6 figure retirement accounts.
but banks see this as collateral when lending you $$ (even if there are rules about them getting to it) - you'll get better rates on stuff like a car loan.
 
Last edited:

Patrick

Overthinking the draft from the basement already
Staff member
You bought high. Market now is a buyers market.
Still even so when retirement comes you will gain more in your house. Invest in your home or homes and return should be over 100% over a thirty year period.
Case an point
My dad bought his first house 12,000
Now at retirement house worth 300,000.
I bought my first house at 145,000 since I have built that into upgrades to a 365,000 of house in 15 yrs.
add additional income houses over 15 yrs and you got a nice nest egg for you and close extended family.

did he have 12k or did he have a mortgage?
how long did it take to get to 300?
did you include all the repairs? taxes (those are like mutual fund fees - same for condo fees on rentals and mgmt fees)

here is a trick, 7% return doubles every 10 years, 10% doubles every 7 years. (its the rule of 72, if interested)
a home is basically a forced savings account. that is acceptable. no different than putting money away in an account.
all part of the portfolio.

you are also using your sweat equity - some people don't have the skills or the tools.

here is the present/future value calculator that shows the % return.
http://www.moneychimp.com/calculator/discount_rate_calculator.htm
i plugged in your dad's place 12/300/40 years(?) - it returned 8.4% without taxes and and interest.

the point i'm trying to make is that putting away money consistently builds up over time.
be it a mortgage, or stock/fund account.

then the stupid thing happens like home equity loans to buy a depreciating asset - like a boat. don't do it!
only do it to upgrade the house!
 

rick81721

Lothar
@mattybfat, there has been a lot of new math going around suggesting real estate is no longer a great investment for individuals. You're ignoring the time value of money. Let's be real, if you're worried about your 401k balance your not going around and scooping up properties like you're playing monopoly. A single property "investment", or even a second vacation/rental property comes with similar return risks as stock market investment with arguably whole other sets of headaches. You can't set and forget a house.

The attitudes in this thread are pretty sad :( Conceptually retirement is math and discipline. Target an income replacement ratio, live within your means, and hope life doesn't throw you too many big curve balls. Invest long term and low fee.

I agree with this. Real estate can work as part of a diversification plan but using it as your sole retirement vehicle - I don't see it unless you retirement plan is to be one of those boondocks guys that lives off the grid in the middle of nowhere, totally self-sufficient. Not my cup of tea
 

mattybfat

The Opinion Police
Team MTBNJ Halter's
I agree with this. Real estate can work as part of a diversification plan but using it as your sole retirement vehicle - I don't see it unless you retirement plan is to be one of those boondocks guys that lives off the grid in the middle of nowhere, totally self-sufficient. Not my cup of tea
That would be a dream retirement for me, totally my cup of tea.
 

Patrick

Overthinking the draft from the basement already
Staff member
you know we just might start going a little 'old world' again -
if we can be healthy adults, and not a burden to the children, we might start living as extended family groups.
 

MissJR

not in the mood for your shenanigans
Team MTBNJ Halter's
ok... i've actually been freaking out lately about this whole topic... how much is in my 401k (i actually maxed out my contributions last year), how much i'm saving/spending and re-evaluating my habits, the loss i took on a condo i bought a number of years back (yes.. i bought at the totally wrong time)... etc etc

i heard the 50/30/20 rule of thumb... not sure how good that is...

i'm in decent shape in terms of finances, but i'm still very skiddish with buying real estate and if what i have in the bank is actually enough for the future...

i'm hoping to save more, retire soon, move south and get a job as a barista in church hill so i can ride my bike to work almost every day.... and maybe some great aunt that i never met will die and leave me a small fortune
 

soulchild

Well-Known Member
Retirement.

cast_away.jpg
 

Patrick

Overthinking the draft from the basement already
Staff member
ok... i've actually been freaking out lately about this whole topic... how much is in my 401k (i actually maxed out my contributions last year), how much i'm saving/spending and re-evaluating my habits, the loss i took on a condo i bought a number of years back (yes.. i bought at the totally wrong time)... etc etc

i heard the 50/30/20 rule of thumb... not sure how good that is...

i'm in decent shape in terms of finances, but i'm still very skiddish with buying real estate and if what i have in the bank is actually enough for the future...

i'm hoping to save more, retire soon, move south and get a job as a barista in church hill so i can ride my bike to work almost every day.... and maybe some great aunt that i never met will die and leave me a small fortune

don't freak - leads to "flee to safety" which is totally backwards! buy low, sell high - not the other way around.
anyway, don't try to time the market with your 401k.

i took a beating on a vacation property - bad timing, and i pulled the plug to stop the bleeding.
why buy, unless you were going to live there long term? invest in real estate trusts....
 
Top Bottom