How the hell are we supposed to retire?

Fire Lord Jim

Well-Known Member
I think that many people have been leveraging themselves up to their eyeballs forever, but since 2008 we are tracking it and raising awareness of it more. I think it happens whether the economy is good or bad, its just the awareness and impact is higher during a down turn. Its a behavior thing, if you're the type of person who likes to run up debt, you're going to do it whether your current situation provides you with the means to pay it off or not.
I'm old enough to know this has not been forever. I can recall when someone having debt was a sign of weakness; or debt being acceptable only as a way to finance a business. Credit cards were scarce in the early '70s. People did save for a rainy day. Now, people borrow in good times and are F'd when things turn bad.
 

Monkey Soup

Angry Wanker
I'm old enough to know this has not been forever. I can recall when someone having debt was a sign of weakness; or debt being acceptable only as a way to finance a business. Credit cards were scarce in the early '70s. People did save for a rainy day. Now, people borrow in good times and are F'd when things turn bad.

You're absolutely right, let me qualify with forever with the last 30 or so years. Even in the 80's, our parents managed their debt very wisely. Things changed around the time of Gen-X though. I don't know if it was because of the rise of getting easy cash from ATM's, more credit products being available, some other type of societal change, but it became common practice to max out your credit card, then transfer debt to new card, or to a line of credit. This same mindset later translated to low down payments, high interest rates, and long terms on car loans. That behavior then led to taking mortgages and buying houses that were way beyond your means, and so on, and so on, and here we are today.
 

pooriggy

Well-Known Member
Team MTBNJ Halter's
Credit cards were scarce in the early '70s.

True dat. Even in the 80s, I worked at Exxon pumping gas while attending Rutgers. Most people paid with cash, every so often someone would come in with a cc or Exxon gas card, we'd have to get out this bulky, mechanical machine the size of a toaster to process the card and give the card holder a carbon copy after they signed it.

In the 70s if you didn't have money you bought stuff on lay-away, you'd make payments toward a purchase, when paid in full you took item home. Or, u did without.

Now people take shit home and rack up big debt on cc.

Back in the day, if someone drove a Cadillac they where rich. These days people who drive luxury cars ain't necessarily rich;)
 

Monkey Soup

Angry Wanker
True dat. Even in the 80s, I worked at Exxon pumping gas while attending Rutgers. Most people paid with cash, every so often someone would come in with a cc or Exxon gas card, we'd have to get out this bulky, mechanical machine the size of a toaster to process the card and give the card holder a carbon copy after they signed it.

In the 70s if you didn't have money you bought stuff on lay-away, you'd make payments toward a purchase, when paid in full you took item home. Or, u did without.

Now people take shit home and rack up big debt on cc.

Back in the day, if someone drove a Cadillac they where rich. These days people who drive luxury cars ain't necessarily rich;)


Before ATM's you had to be a little more fiscally responsible and set a budget, since you had to physically go to the bank with your little book, fill out a withdraw slip, and someone then handed you the cash and a updated your book. Now, there are ATM's everywhere, and we have debit cards. Go on a 3-day bender somewhere and you can drain your checking account pretty quickly. Then go onto your smart phone, move some more money over from your savings and repeat (unless you have over-draft protection, in which case keep on spending!).
 

Monkey Soup

Angry Wanker
blah blah blah... everything was so great back in the day.

Things weren’t always better back in the day, but it was a little harder to fuck up with your money. There was less opportunity to be impulsive, you had time to think before you acted. Now, you just press a button. Wanna buy something on eBay or Amazon? Boom, done. Wanna buy $20k worth of stock because someone gave you a “hot tip”? Takes 30 sec.
 

Monkey Soup

Angry Wanker
im just annoyed I cant find a practical way to pay my mortgage with my credit card.

But there is, there is! Ask and you shall receive! There is a way to pay your mortgage, car payments, and any other capital expenses that you have with your card, but its for the fiscally responsible. The primary benefit of doing this is that you can really wack-up your rewards points, I know several people who do this now. Talk to your financial adviser or credit card provider. You can do this and have the payments auto-deducted through your account.
 
Last edited:

UtahJoe

Team Workhorse
Team MTBNJ Halter's
But there is, there is! Ask and you shall receive! There is a way to pay your mortgage, car payments, and any other capital expenses that you have with your card, but its for the fiscally responsible. The primary benefit of doing this is that you can really wack-up your rewards points, I know several people who do this now. Talk to your financial advisor or credit card provider. You can do this and have the payments auto-deducted through your account.
ya I have tried with my current mortgage, but its not doable, but when I refi I might make this a priority. I mean its doable now with a 3rd party that takes 2.5%, but im not doing that.

Well, not really. In fact it sucked by today's standard, however if you grew up back then, you're certainly tougher then the generation after you, just like the generation before me is tougher.

Imagine dealing with this every time you used a cc. Yeah, you kids are soft;)

View attachment 87741
god i remember using these pieces of shit when I used to pump gas for my dad...thanks for the flashback. Of course walking around with like $1000 in cash in my pocket making change for everyone wasnt too fun either.
 

Captain Brainstorm

Well-Known Member
Well, not really. In fact it sucked by today's standard, however if you grew up back then, you're certainly tougher then the generation after you, just like the generation before me is tougher.

Imagine dealing with this every time you used a cc. Yeah, you kids are soft;)

View attachment 87741

Man, the previous generations are tougher though. My dad passed a kidney stone the size of his nail over the course of a year. I tapped out after 12 hours.
 

Fire Lord Jim

Well-Known Member
But there is, there is! Ask and you shall receive! There is a way to pay your mortgage, car payments, and any other capital expenses that you have with your card, but its for the fiscally responsible. The primary benefit of doing this is that you can really wack-up your rewards points, I know several people who do this now. Talk to your financial adviser or credit card provider. You can do this and have the payments auto-deducted through your account.
I can pay anything on my credit card! I asked my banker why he gives 0.14% on savings, but 1.5% cash back on spending using the credit card. His answer? "One day you will forget to pay the bill on time." The bank doesn't make any money when we forget to save, but it makes lots when we forget to pay a bill.
 

Patrick

Overthinking the draft from the basement already
Staff member
ya I have tried with my current mortgage, but its not doable, but when I refi I might make this a priority. I mean its doable now with a 3rd party that takes 2.5%, but im not doing that.


god i remember using these pieces of shit when I used to pump gas for my dad...thanks for the flashback. Of course walking around with like $1000 in cash in my pocket making change for everyone wasnt too fun either.

i couldn't get the money into the floor safe fast enough - worked at the exxon at the corner of 202 and 46 in parsippany. had a fuel delivery every day (7000ish gallons.)
never pull out a wad of cash. $100 max in the make-change pocket.

i remember the credit card slips being numbered, so when the machine ate one, ya had to keep it as a void, to prove you didn't lose one.
we also kept the carbons as back-up documentation.....and the person working the shift before always forgot to change the date.
 

Patrick

Overthinking the draft from the basement already
Staff member
We are now 3.5 years out from the start of this thread.
Time flies! But what have YOU done to make progress for retirement?

Say you started with $25,000 in the retirement fund way back then.
And added $100/month (about $5 each working day) - you don't play individual
stocks, cause who has time for that? So you put it in a Vanguard total market fund - VTSAX
In that time - the annualized rate of return has been ~11% - you now have a little more than $41,000 in
the account. But you only contributed $4,200 in that time period.

while you aren't going to retire on $40k, it is a good example of relatively painless growth.

what if you started with $0 10 years ago?
The 10yr rate of return is a huge 14%
The account would have a little more than $24,650 -
Contributing $100/mo it would be generating more than twice that in returns now.
Money making money.

So once again, you can't retire on $25,000 - but in general, your money is going to double every 7-10 years.
so the earlier you start, the better off you'll be.

OK - 1 more scenario - you have a work 401K, and they provide a match of 1/2 of what you contribute up to some point.
the $100/mo only reduces your monthly paycheck by $75 cause pretax, but contributes $150 to your plan. Starting with the $25k again,
over the last 3.5 years. $43,600 in the retirement account. mo money! - and how much belt tightening did you do for $20/week?

If your employer has a match - i suggest that whatever their max match is, that this would be the minimum contribution to your 401k...

---

Let's look at the other end - you need to have some sort of LT goal - and it should be difficult, but achievable.
Like finishing a 100mi mtb race w/o dying.

$50,000 will produce $250/month in dividends without touching the principal. Dividends are taxed at a very favorable rate.
Some people like this approach - it is an annuity (stream of income) without giving up the principal - if you buy an annuity, you give up the
principal. Others will play the market, and take LT capital gains (also favorable tax treatment) - but taking money out on a down year has a bad effect on future performance.

problem is that if you put this in a retirement fund (traditional IRA or 401k) to avoid income tax then, it now comes due upon w/d.
If you did a roth ira, you are going to owe no taxes - so choose now! maybe do both? i dunno.

anyway, here is the calculator which takes a starting amount, contribution, and an average
rate of return to provides the future value.

---

as an aside - if you could do the 401k thing for 25 years at the $100/month level, and a more reasonable rate of 8%, the balance would be over $300,000,
more than 75% of that would be earnings, not contributions. think about that.
 
Last edited:

Santapez

Well-Known Member
Team MTBNJ Halter's
While I'm a firm believer in your posting, that 10-year return is a tiny bit skewed since we're currently in a 10 year bull market after a *huge* drop. That being said, even if someone started investing just before that drop they'd be doing great.

The non-numbers method:
1) Put any extra money away in a low-cost fund, preferably pre-tax.
2) Ignore it. Act like you never had it.
3) Find more (raises, bonuses etc) and do the same.
 

THATmanMANNY

Well-Known Member
@Patrick A+ post

Also, a scenario if you dont have any retirement plans and dont trust Jack with your momey but socked away $100 a month into your savings account with 2% APY over 3.5 years. You got ~$4,500 in the bank. The hardest part is SAVINGS!
 
Top Bottom