Can we talk about retirement?

[Papa Charlie]

My retirement had to be all on me. I was always self employed. I purchased real estate as I went as a retirement plan. There are risks in that! But it has the effect of compounding. Easiest to manage is farm land. Next is commercial property but the risks are higher. Worst are apartments or single family houses. Too many turnover costs. Rather late in life I started buying dividend paying stocks as I got tired of dealing with renters. Someone on here said they lost their retirement in the 2008 crash. How? You don't loose if you don't sell at the low point! Don't go into equities if you are someone that runs from fear. Markets go up & down. Ride the waves. The very best time to buy is when the market crashes. The only purchases I've made this year were in March, have done nicely. On average the S&P has grown about 10%/year for a long time. But it has fallen some years. Still way better than any savings acct, CD, or bonds. If you don't want to manage your account just buy ETFs. I wouldn't let a broker manage my account because their fees eat a big hole in the compounding. Above all, diversify. BTW I'm 78 took SS @ 70 because I didn't need the $ to live on. I made sure everything was paid for before retirement. I won't live forever so I give my kids and G-kids $ every year. I have Schwab accounts for the G-kids. There should be enough $ by the time they reach college age to do whatever education they want. Or to save it for the future. Or buy fast cars and women.

I won't go into it, but I am saddened that someone would have such a shallow view as to make this statement. I lost my business, which lead to loosing our home. I lost the majority of my savings trying to keep my business going and my employees working as they had no place to go in California as there were no jobs.

 

[matthewsx]

I lost a home in the 2008 crash, took 4 years to play out but at the end we couldn't justify paying a mortgage to subsidize the really bad renters living there. Also gone was the business we had finally built to profitability in 2007.

Not all the losses were in the stock market, and as someone else said "man plans and god laughs". Fortunately my wife's job kept going strong and consolidating to one house Michigan from two Arizona allowed us to stay on track. My wife is a saver, not sure where I'd be without her .

As it stands right now I plan on working 10 or 15 more years but only time will tell, my old line of work gave plenty of freedom to travel which I don't have now and she's a few years ahead of me. Health insurance and aging parents play into the equation as well, the only thing I know for sure is you can't buy more time....

John

 

[Larry$]

Sorry Papa Charlie. I took what you said wrong. I thought you meant you had lost it in the stock market. Many people did. I went through the same thing in my business. It almost broke me. I was lucky in that I had rental income to survive on. I had very little $ in the market at that time. I sold some things and when the market was at the bottom I bought shares. Lucky, but I was feeling the need to gamble or loose it. Historically every time there has been a crash the market has bounced back. Often quickly.

pdentrem said " Dividend growth is something that many people don’t understand. Companies would prefer to not lose the money that investors have put in, therefore they maintain the yield percentage as the share price moves higher because there are other companies that have similar yields and people can move, thus causing a share price drop." What ever their motivation the math works out the same. Compounding keeps working, the more years you've got 'til retirement the faster your investment grows.

Just investing what people spend on Tabaco can compound into over $200,000 at retirement! And be healthy enough to enjoy it.

 

[pdentrem]

It is not always a bed of roses! I have had a 5 lemons in the 30+ years, all in the last 20 years. Since no company is more than 5% of the account the hits have not been insurmountable. It is the risk, but staying with blue chip helps.
Compound interest.
I tell the younger guys to tell their kids or do it for their kids, put $80 a month for 10 years and even if one does nothing more than that, watch it grow. Just about every financial institution has calculators to play with. I really wish that we had been taught financial stuff instead of having to figure it out on our own. I could have done the $80 a month starting at 18 instead of 30 and been in better shape all around. Earlier to loans and mortgages for example.
Pierre

 

[Janderso]

Great timing on this thread Jeff . I'm following along as I'm in the same predicament as to thinking retiring early .

Dave, reading through your posts over the last year or so, I hope the management team where you work appreciates the long hours of skilled mechanical work you perform.
Sounds like you are becoming more valuable by the day.

 

[Janderso]

I retired a 59. As soon as eligible I took my social security, not because I needed the money, but because I paid in and wanted to get some return. The true difference in the money is not that great. You still can't live on the full amount. You had better have something already in the piggy bank. As someone else stated, I calculate my break-even point was 85. I am still a long way from 85
The system is not sustainable, but if the money runs out I don't want to depend on Washington to make things right.

No, the system is not sustainable, but if you promise people for decades there will be this much, every month then they pull the plug? I think we would have a 10,000,000 man March on Washington.
I worry about my wife’s State Teachers Retirement System too.
One of the employees at work asked me if 2 million was adequate for a retirement nest egg. I said, if you are careful, absolutely.
My mother lives on $2,000 a month social security and dividends from a half a million at Edward Jones. Her rent is $2,000 a month. The investment is growing.
We have a rather large nest egg with no debt. Although I have pondered financing a new 16x40 with DRO...... nah.
My goal is to make it to Medicare, then I can go out anytime.

 

[Janderso]

What's this talk of profit sharing , pensions , vacation time etc everyone is speaking of ?

You mean they work you like a dog with no 401K offerings?

 

[Janderso]

To toss in a different perspective, as I am involved with interviews and hiring.... HR is terrified right now across almost all industries. The silver tsunami (also known as grey tsunami), has many people in HR wondering how they will compensate. When a 60+ year old person walks out the door, a wealth of corporate knowledge and skill sets vanish from the workplace. Most businesses are either changing business processes, or in some cases accepting the business will perform at a lower overall standard. I have already seen departments set on their ear from the loss of a few key people. For years accountants pushed "reduced staffing", this resulted in more unique knowledge being distilled into a shrinking work-pool. This method worked OKay when the loss of employees was at a small trickle. Mentoring programs where a junior employee was "spun up" for a couple years was considered "expensive, and wasted money" by HR. It was like they were unaware of what was about to happen. The remaining employees had the obligation to absorb and distribute the job skills which had been uniquely held by the departing employees. Some of these skills took decades for the retiring employee to master. Now the "boom" in the baby boomers is the sound of the door closing behind them, with the remaining employees wondering who will fill "Bob's" shoes. The accountants are pleased that Bob was replaced by a lower tier and lower paid body. Generally, HR has no skin in the game, so whatever happens is that department's issue. It should be interesting to see how things are in 3-5 years.

Interesting perspective, I think this is happening in many industries. I know I can’t replace skilled workers, we have to grow them. It takes a decade or so with quite an investment in off site training.

 

[Papa Charlie]

Interesting perspective, I think this is happening in many industries. I know I can’t replace skilled workers, we have to grow them. It takes a decade or so with quite an investment in off site training.

We have the same scenario taking place at Boeing. They are getting rid of the skilled workers, many are taking early retirement (VLO) or are being Laid off (ILO). They don't listen to us any more, everything is about the younger people that they pamper for fear of loosing them to Microsoft or Amazon, who pay a lot more, less benefits and also work you long hours. Even have an Alcohol cart that comes around and rooms with beds, so no need to leave.
The problem with the younger workers, most are straight out of collage. Yes they are smart but have no practical experience and most don't want to spend the time to learn a skill, they all have dreams of moving into management and moving up. When you try to teach them, which I do, they often say, "I have to do all that, isn't there a program that does that?". None of them want to work. They all want to be an executive. Many of our execs started in the shops 20-30 plus years ago. They used the money provided by Boeing to get their educations and work their way up. But for the first time they have offered VLO's to the Execs. We are loosing a huge resource of talent.

 

[Janderso]

I'm 61 and plan on working until just past 62. I'm a salaried engineer at General Motors and have the option of a lump sum pension payment or a monthly pension. Most take the lump sum (I will also). My current plan is to wait until 66 yrs. 10 months for my SS, but that's still up in the air. Payments for me are around $2100 per month at 62 or $3200 per month at 66/10.

There's no good "cookie cutter" answer as everyone's age, health, expenses, finances, etc. are different. For us, we're in really good shape. When asked at work when I plan on retiring, I say on 3/1/2022 or tomorrow if they p*ss me off. I enjoy what I do and work with a lot of good people. If work was a drudgery every day, I'd already be gone.

A rough rule of thumb for retirement savings is having 10 years of salary in your 401K. We're thankfully way beyond that. House has been paid off for ~10 years, daughter through law school 3 years ago, son has one semester of college left (only 2 classes) to get a degree in Computer Engineering. My line at work is "one of the few good things about getting old is you get your debt paid off".

Other variables to consider are health and your bucket list. The line we use around work is "you can always make more money, but you can't make more time". My wife is 3+ years younger than me, works as a Unigraphics designer for a defense contractor. She likes what she does and plans on working until 62. I'm encouraging her to go sooner per the line around my work place. She'd like to travel Europe, Australia, New Zealand and see the western USA after she retires. I've learned after ~30 years of marriage that telling her to do something doesn't end well for me. My tact is "Honey, we're a partnership so maybe you should consider my age when you want to retire. When you hit 62, I'm already well into 65 and by that summer when you'd like to start travelling, I'll be close to 66. Sure hope I still feeling like walking around all day at that age."

Bruce

Bruce,
You and your wife are a perfect example of working hard, raising kids and providing for college, investing wisely in the end pays dividends. You can have your cake and eat it too.
I’m finally getting my boys to invest for tomorrow. They have time, I just hope my 32 year old teacher son has retirement income like his mother.