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  1. Senior Member Queue's Avatar
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    #26
    I'm on a State pension so I would technically be able to retire at 53. A good bit of my "paycheck" goes towards this. I'm 28 now.

    My goal is to have a lot of savings very accessible (cash account) not exceeding or going below ~50,000 (been saving ~7-10 grand a year so far).

    I own a home for going on 5 years now so that would be paid off by "retirement" with the current terms. However, I would like to upgrade eventually.

    After my highly accessible savings account is complete I will then begin to invest in an IRA or 401, etc.

    At the end though if I keep this in track and hopefully have a good nest egg and income, I'd probably still work for as long as possible so I can go out to eat every night and make car payments on nice cars or something. For me right now retirement is about establishing the base.
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    #27
    Yup plan on being able to retire in my early 50's and having at least FU money by 40. I'm in my early 30's so planning aggressively to reach this goal.
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    #28
    i doubt most people get to retire going forward in the general population. Young kids take out massive amounts of loans and it's forever before they even get a real start. Wages are poor in many sectors as it is and jobs will continue to be phased out across the board. If SS runs dry, things will be pretty ugly. Even if you put $10k a year into a 401k for 35 years, that alone won't be enough to survive off of without SS. You figure the life expectancy will be so high by that time (I figure general health will go down as the population continues to eat poorly though but modern medicine will keep folks going long past their shelf life). I don't care about what the theoretical Forbes articles say, everyone here with a 401k knows 8% returns year in and year out does not happen. Just a couple of years ago many folks were actually losing money on their 401k, but fortunately the economy has been on the upswing it would seem.

    A lot of folks here get paid well and are smart enough to have a 401k, and probably will have their debts squared away by the time they retire and be just fine. No one really ever knows though. My Aunt is retired and is paying such high rates for insurance that it's incredible to see what that will add up to over the course of 10 years if things do not change. We'll see though. For real though - bitcoin.
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  5. Senior Member scaredoftests's Avatar
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    #29
    We are not even factoring in SS in our equation in our retirement. IMHO, it is best NOT to.
    Never let your fear decide your fate....
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    #30
    Quote Originally Posted by hurricane1091 View Post
    i doubt most people get to retire going forward in the general population. Young kids take out massive amounts of loans and it's forever before they even get a real start. Wages are poor in many sectors as it is and jobs will continue to be phased out across the board. If SS runs dry, things will be pretty ugly. Even if you put $10k a year into a 401k for 35 years, that alone won't be enough to survive off of without SS. You figure the life expectancy will be so high by that time (I figure general health will go down as the population continues to eat poorly though but modern medicine will keep folks going long past their shelf life). I don't care about what the theoretical Forbes articles say, everyone here with a 401k knows 8% returns year in and year out does not happen. Just a couple of years ago many folks were actually losing money on their 401k, but fortunately the economy has been on the upswing it would seem.
    I don't know about this. If you put in 10k a year for 35 years with the annual rate of return of 7%, you are going to earn 1.4 million. If you factor in a 50% employer match up to 6% of salary, then you are going to make 1.8 million. Thats taking into account you start at 30 and end at 65. Now, if you factor in salary increases and you adjust your savings rate in accordance, you are going to be saving more to the tune of 1.8 million without employer match.

    Not factoring in social security, thats a pretty good chunk of change.
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    #31
    Quote Originally Posted by cbdudek View Post
    I don't know about this. If you put in 10k a year for 35 years with the annual rate of return of 7%, you are going to earn 1.4 million. If you factor in a 50% employer match up to 6% of salary, then you are going to make 1.8 million. Thats taking into account you start at 30 and end at 65. Now, if you factor in salary increases and you adjust your savings rate in accordance, you are going to be saving more to the tune of 1.8 million without employer match.

    Not factoring in social security, thats a pretty good chunk of change.
    A lot of hypothetical here I feel like. 7% return every year will never happen, and you are assuming an employer match which isn't the case for many people. I understand where the 7% came from but personally I haven't seen that since I started. My last job it was 25% of the first 4% you put in, that's it. Put in $10,000 a year, and you'd only see $1000 from them. Who exactly is putting in $10,000 a year? Most people aren't ever going to sniff $100,000 a year salary any time soon, and 10% is a lot to put in regardless (to me it is the minimum but I digress). Here on TE things are a little bit different and many of us are seeing 10k go into our 401k a year, but I'm talking about the population at large.

    Under my current financials, I'm apparently going to have 4 million dollars in my 401k by the time I retire. I sincerely doubt that. Will I always get at least 7% return every year? No. Will my 401k employer match always be the same? No. Will I hopefully put the same amount in each year if not more? I hope. This calculator assumes I will get a 3% raise each year, every year too. I have no idea what would happen if I stayed at my job for the next 40 years, I guess maybe it is possible? I have no idea. Maybe I'm being negative when I should be sitting here assuming I'm going to be rich as heck from 401k once I retire.

    Still though, the population at large is doomed. Information is available these days and if you seek it, you will find it. We all know the hypothetical 401k scenarios and we're all here to try to advance ourselves and our paychecks, so if any community is going to be fine - it is the TE community. What folks in retail jobs, blue collar work like truck drivers, customer service folks, etc all plan to do is beyond me. This is probably not the best example. but the average salary for folks through all age brackets seems to be just 45k. Those people aren't putting in $10k a year, if anything at all. They can still end up with a good chunk through the hypotheticals but after taxes it's still less than a million bucks probably. Will that be enough in 40 years? I don't know that it is, I don't know that any of us really know for sure. The best plan is still to save as much as you can though, I think we all agree. Hope for the best but never assume it will happen for sure. Any one of us could wake up ailing tomorrow, find out we have cancer, and derail the entire plan. Live your life to the fullest every day, but do try to prepare yourselves for the future as best as you can. Don't work yourself to death and don't plan on working until death either.
    Last edited by hurricane1091; 12-08-2017 at 07:00 PM.
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    #32
    Quote Originally Posted by scaredoftests View Post
    We are not even factoring in SS in our equation in our retirement. IMHO, it is best NOT to.
    It really depends on your age. Someone who is 20 might best consider SS as paying out 25% while someone at 50 might plan for 75%. It's always better to save more and not need it than need it and not have it. "Can I pay you with the memory of a trip to Hawaii from 2002?"
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    #33
    I am just saying that if you don't factor in any raises, 7% return, and no employer match, you are still looking at 1.4 million. Now if you factor in raises and an employer match, the amount goes up. I know the amount I could save went up later in life. In short, 1 million is IMHO easily obtainable with that 10k investment every year.

    The objective isn't to be "rich a heck". It is to be able to live comfortably in retirement while spending modestly. If you want to live exceptionally in retirement, you need to have the employer match and save the maximum today and after you reach 50 with the catchup provisions. To be rich as heck, you need to start a business and sell it for a few million or live off the residuals.

    None of this takes into account SS which I am not counting on paying out 100%. Maybe 60% of the benefits by the time I retire.
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    #34
    Quote Originally Posted by NavyMooseCCNA View Post
    My wife wants us to move to Vietnam (where she is from) when we retire. I don't mind wintering there, but I don't know about being there in the Summer...
    Mine suggests the same... She's from the North though and it doesn't get hotter than low 90's in the summertime.
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    #35
    Quote Originally Posted by cbdudek View Post
    I am just saying that if you don't factor in any raises, 7% return, and no employer match, you are still looking at 1.4 million. Now if you factor in raises and an employer match, the amount goes up. I know the amount I could save went up later in life. In short, 1 million is IMHO easily obtainable with that 10k investment every year.

    The objective isn't to be "rich a heck". It is to be able to live comfortably in retirement while spending modestly. If you want to live exceptionally in retirement, you need to have the employer match and save the maximum today and after you reach 50 with the catchup provisions. To be rich as heck, you need to start a business and sell it for a few million or live off the residuals.

    None of this takes into account SS which I am not counting on paying out 100%. Maybe 60% of the benefits by the time I retire.
    I understand. I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out. I'm obviously invested and obviously hoping for it to work out. I'm not too worried about myself. I am worried about the population at large. If SS ever comes to an end, I hate to see what is going to happen to millions of Americans. I have no data at the moment, but I am sure the majority of this country will not have enough in their retirement accounts to live comfortably or retire at all. I saw recently a percentage of people who cannot handle a $500 emergency, and it was alarming. I may have given up my dream major for IT, but personally the financial benefit of going into the IT world outweighed $100k in student loans with a degree for a job sector that is hard to break into and not exactly lucrative unless you've got a pretty face or know someone in the government. That's the kind of world we live in though I suppose.
    Last edited by hurricane1091; 12-08-2017 at 07:48 PM.
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    #36
    Quote Originally Posted by hurricane1091 View Post
    I understand. I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out.
    You've already had them.
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    #37
    I'm still young for retirement, but I will create some passive income for sure. Who knows is it going to be a pension fund when I get older.
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  14. Not IT n00b dave330i's Avatar
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    #38
    I can retire now, but I wouldn't enjoy the lifestyle I'd have to live. Will be waiting 10-12 more years then retire.
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  15. Member NuclearBeavis's Avatar
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    #39
    Quote Originally Posted by hurricane1091 View Post
    i doubt most people get to retire going forward in the general population. Young kids take out massive amounts of loans and it's forever before they even get a real start. Wages are poor in many sectors as it is and jobs will continue to be phased out across the board. If SS runs dry, things will be pretty ugly. Even if you put $10k a year into a 401k for 35 years, that alone won't be enough to survive off of without SS.
    I agree. The general population is likely screwed, and I'm including myself in that. The way the medical system is going, a serious illness could bankrupt someone rapidly. Insurance companies are charging more now, and denying a lot more as well. Even if you have insurance, there's no guarantee they'll pay, even if what you have in writing says they're supposed to. It's not about what's right or legal, but about what they can get away with. And I feel that's not limited to just the health insurance industry.

    Life will get harder. Things people take for granted, like what's "fair and right", will go down the drain. For a lot of people who are well-prepared for retirement, their entire plan is an electronic blip in a bank's computer system.
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    #40
    Quote Originally Posted by hurricane1091 View Post
    I would like input from someone who has been in the 401k game for 20+ years. I'm curious to see how it panned out.
    A few more examples below from tons of people who are having great success maxing 401k and other retirement accounts:

    https://www.bogleheads.org/
    https://www.reddit.com/r/financialindependence/


    I don't think we should be relying on just 401K's and SS but every tax advantaged account we can and then some. Rather it's investing in taxable index funds, rental props, crypto, etc. I personally shoot for investing 30%-40% of our income month after month. Not gonna lie it does hurt and we have to sacrifice the latest gadgets and toys but we're a lot more stress free than we've ever been.
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    #41
    My wife and I have about 20-30 years till retirement, but have never been in a position where being "retired" will happen. We did what everyone else does, got married young, got reasonable jobs, bought a house, got better jobs, bought a much bigger house. Great recession hit, wife was in a great position in banking, but lost the job. We eventually had to leave our huge house.

    We learned a lot and a lot of things have happened since we got married. Wife lost both her parents way to early, we have a couple of daughters now and we have decided to view the "american dream" as defined by owning a big suburban house as a trap for most. The trap is not many realize the true cost of owning such a beast and the banker won't give you any hints.

    So now here we are mostly starting over, we've moved to the Myrtle Beach area of south carolina, we do live out in the country about 10 minutes from the beach, but we've bought a much smaller and very affordable home, my wife has gotten herself into a job at a bank with some great benefits, I've been looking for jobs and interviewing, but at the same time I've started my own IT business and I'm learning to make money so I'm starting to not really care if I find an employer or not. Either way once I start making a reasonable living we'll be able to pay off our debts in around 5 years. We might even take it easy after that. We have everything that makes us happy, it would just be nice to not have to work much.
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    #42
    Quote Originally Posted by Dojiscalper View Post
    My wife and I have about 20-30 years till retirement, but have never been in a position where being "retired" will happen. We did what everyone else does, got married young, got reasonable jobs, bought a house, got better jobs, bought a much bigger house. Great recession hit, wife was in a great position in banking, but lost the job. We eventually had to leave our huge house.

    We learned a lot and a lot of things have happened since we got married. Wife lost both her parents way to early, we have a couple of daughters now and we have decided to view the "american dream" as defined by owning a big suburban house as a trap for most. The trap is not many realize the true cost of owning such a beast and the banker won't give you any hints.

    So now here we are mostly starting over, we've moved to the Myrtle Beach area of south carolina, we do live out in the country about 10 minutes from the beach, but we've bought a much smaller and very affordable home, my wife has gotten herself into a job at a bank with some great benefits, I've been looking for jobs and interviewing, but at the same time I've started my own IT business and I'm learning to make money so I'm starting to not really care if I find an employer or not. Either way once I start making a reasonable living we'll be able to pay off our debts in around 5 years. We might even take it easy after that. We have everything that makes us happy, it would just be nice to not have to work much.
    That's a good point. Many people fall into the trap of "I'm making more, I can spend more" the future is uncertain though and you need to be ready for the unforeseen events. It's very hard to start changing that mentality though but its possible.
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    #43
    I've watched most of my friends and family that are younger fall into the same trap and you can't really warn to many people either because our society kinda pushes us all in the same direction. For the most part income level doesn't have much to do with it either because you can always find ways to spend it all. Its sad, my wife has spent most of her career as either a bank manager or personal banker and sees people of all incomes in the same boat until you get to the "actually" rich and most of the either inherited it or penny pinched their whole life and are now living in retirement. This still didn't warn her not to do the same thing.

    I know there's been a "minimalist" movement at some level spreading around and thats a good direction. To us its just not buying new cars and taking the huge loss associated with it and not buying a house thats completely out of scale with our lives. We do alot outside of our home traveling and exploring things around us, we never entertain guests, no family near us to visit so for us a house is a place we keep warm or cool in, sleep there, and keep our stuff there. We've reduced the amount of junk we keep around and TBH even our 1900 sq ft house is bigger than we need, but I couldn't get the wife to go smaller. Our big house was 3500 sq ft and I didn't even go in half the rooms the whole time we lived there. She used to think she had to have new furniture and now she's found joy in working with me to restore old used things into furniture we can customize to fit our style and say "we made that". I come from a family of people who think this way, but as the man its her house so I had to wait until she came around.
    Last edited by Dojiscalper; 12-13-2017 at 03:37 PM.
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  20. Member NuclearBeavis's Avatar
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    #44
    Quote Originally Posted by Dojiscalper View Post
    I've watched most of my friends and family that are younger fall into the same trap and you can't really warn to many people either because our society kinda pushes us all in the same direction. For the most part income level doesn't have much to do with it either because you can always find ways to spend it all. Its sad, my wife has spent most of her career as either a bank manager or personal banker and sees people of all incomes in the same boat until you get to the "actually" rich and most of the either inherited it or penny pinched their whole life and are now living in retirement. This still didn't warn her not to do the same thing.

    I know there's been a "minimalist" movement at some level spreading around and thats a good direction. To us its just not buying new cars and taking the huge loss associated with it and not buying a house thats completely out of scale with our lives. We do alot outside of our home traveling and exploring things around us, we never entertain guests, no family near us to visit so for us a house is a place we keep warm or cool in, sleep there, and keep our stuff there. We've reduced the amount of junk we keep around and TBH even our 1900 sq ft house is bigger than we need, but I couldn't get the wife to go smaller. Our big house was 3500 sq ft and I didn't even go in half the rooms the whole time we lived there. She used to think she had to have new furniture and now she's found joy in working with me to restore old used things into furniture we can customize to fit our style and say "we made that". I come from a family of people who think this way, but as the man its her house so I had to wait until she came around.
    Lots of good points here. I've always aimed to keep my bills and financial commitments to a minimum so I'd have the freedom to do things, move if necessary, or start a new hobby, etc. I have not planned for retirement really, which may be a mistake, but I kind of think of the dream of retirement as Barton Fink on the beach...just a pipe dream society tries to sell us.

    I see people in my industry start making good money, and then they up and move somewhere like San Francisco, where rent is $3000-$5000/month. And they perceive their income as so sturdy that tossing all that money away on rent seems like no big deal. I just can't fathom inviting the stress of a lifestyle that's only sustainable if everything keeps going perfect.
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