How seriously do you guys take saving for retirement?

[tracknut]

Originally Posted by JMcLellan

We'll see what the next couple quarters bring before I look at other options.

Sounds like a plan. It's very easy to compare to a market index fund, for example. You could pick a random start and end date, and look at how QQQ (or other index funds) has done over those quarters, then look at your own portfolio as a whole.

My own attempts at playing the market always seemed to net me some leaders and some losers, with the average being lower than an index fund (your FA is going to be different, and probably better than my own skills). But it's the overall totals that really count for me, and not the bragging rights of getting lucky with one stock. If I want to "be more safe" then I put more of my money into money funds (I'm retired, I do need to get cash out once in a while), but I don't adjust the rest of my assets.

[David70]

Originally Posted by vreihen16

It was purely a recruiting thing, since I worked in a non-profit that couldn't compete against the corporate world on salary.



I'm using it for planning purposes, since my account will also need to take care of a younger wife after I'm gone. My personal rate of return has never been below 7% per year.

My now-former employer has a third-party financial/retirement consulting company on retainer for free consultations, in addition to the retirement fund's agents. When I met with the consultant in June and asked what I should do differently, he advised me to leave everything as-is because my return is on par with their canned recommendations.....

You need returns far greater than 4% to take out 4% as inflation will eat part of it so you need your balance to grow quick enough to cover inflation.

If you had $1 million, got 10% returns each year (taking out $100k a year), each year your balance and what you took out would effectively be smaller. It's why the 4% rule has you taking out $40k and adjusting for inflation each year (if $40k this year and inflation is 3%, you can take out $41,200 next year).

My goal is to retire before I take Social Security (plan to wait until 70 to take it), when I retire early take out 5%, possibly aggressive but I will have the added paycheck of SSI coming in the future so I don't need to take out 5% the rest of my life.

Many say the 4% is conservative but hard for an expert to tell you to go aggressive and hope for the best.

[RockCrusher]

Originally Posted by tracknut

I bought a new Ferrari 360 in 2001, and sold it in 2007 for the same amount I paid. It was the cheapest car I ever owned, aside from Ferrari holding my money for six years. I don't know if that's common among Ferraris, but I can't imagine a Ferrari not coming out cheaper than a M8 in the same situation.

Believe it or not but in August of 2020 I bought a new M-B cargo van (Metris). Was stickered for $29K but dealer dropped the price to $27K.

Bought the van for my daily driver. My other car was a 2018 Hellcat.

Drove the van a couple of years and put 20K miles on it. But M-B dealer service went terrible and I decided to get rid of the van. I traded it in for a 2022 MINI S and got $27,000 trade in allowance for the van. (The van was in excellent condition, not even scratched on the painted steel cargo floor.) $27K! Just what I paid for it two years prior. And in Arkansas the $27K trade in value lowered the amount of sales tax I would pay for the new MINI.

[RockCrusher]

Originally Posted by JMcLellan

Thank you for the perspective. I know that things can't go up unless they also go down but really struggling with a 13k gain over nearly 3 years on a nearly 200k basis. My 401k account thru fidelity has produced at a higher level with the limited investing options they provide. My capital one savings account provides 4% (maybe even a little more) annual return. Makes me question why I'm paying my FA.

Best advice I can offer is you need to become your own FA.

A family member retired. Had a 401(k). Rolled it over into an IRA at Schwab. She chose a managed fund.

The returns were ok. About equal to my self managed fund invested in an S&P 500 index fun.

But for $1000 month in her pocket she was paying a management fee of around $600 a month.

Then COVID hit and my fund value dropped. No surprise. But so to did her managed fund.

We talked. I pointed out both her managed fund and mine did about the same when the market was good. A rising tide raises all boats.

But in a down turn her managed fund did no better. What exactly was she getting for her $600/month?

After some thinking the family member switched from the managed fund to a self managed fund in an S&P 500 index fund. She's earning about the same but she is able to get more money in her pocket because she's not paying that $600/month management fee.

[dradernh]

Originally Posted by RockCrusher

Believe it or not but in August of 2020 I bought a new M-B cargo van (Metris). Was stickered for $29K but dealer dropped the price to $27K.

Bought the van for my daily driver. My other car was a 2018 Hellcat.

Drove the van a couple of years and put 20K miles on it. But M-B dealer service went terrible and I decided to get rid of the van. I traded it in for a 2022 MINI S and got $27,000 trade in allowance for the van. (The van was in excellent condition, not even scratched on the painted steel cargo floor.) $27K! Just what I paid for it two years prior. And in Arkansas the $27K trade in value lowered the amount of sales tax I would pay for the new MINI.

Same for me with pickups.

Vehicles that can and are used by people for their work hold their value extremely well.

[vreihen16]

Originally Posted by dradernh

Same for me with pickups.

Vehicles that can and are used by people for their work hold their value extremely well.

I bought my 2006 Ram/Cummins 6MT/4x4 for $19.5K in 2008, and sold it in 2022 for $19K after putting another 103K miles on the odometer.....

[shawnhayes]

Investing for a lot of us is, as above, pretty serious business.

However, I spend too luxuriantly on vehicles. But, I love what I love.

Shawn

[dreamingat30fps]

My situation is kind of weird because I don't know when I'm going to retire. Could be in 20 years or could be tomorrow. Since I became self-employed around 2016, I decided I will never go back to a regular job. Luckly the business has done well, and I have been saving most of the money. If/when this business is no longer viable, I need to be ready to retire. Until then I have no issue doing this indefinitely.

However, because I don't know when that day will come, I feel like I have way too much cash. Then when I finally decide to move some more into my investment account I feel the market is crazy and going to crash any minute.

I do have it set to move a certain amount automatically every week or so, but still would take a looong time to move a significant amount. If this crazy market ever goes down I plan to up that significantly.

[tracknut]

Originally Posted by dreamingat30fps

I do have it set to move a certain amount automatically every week or so, but still would take a looong time to move a significant amount. If this crazy market ever goes down I plan to up that significantly.

It's like the #1 warning you should have: "You can't time the market".

If you want to be in the market, just increase those weekly withdrawals so that you're in the market, say in a year. Imagine all the money you haven't made while waiting for the market to go down (which by the way it did a couple weeks ago).

[zx10guy]

Originally Posted by tracknut

It's like the #1 warning you should have: "You can't time the market".

If you want to be in the market, just increase those weekly withdrawals so that you're in the market, say in a year. Imagine all the money you haven't made while waiting for the market to go down (which by the way it did a couple weeks ago).

I think it's the guys over at The Money Guy Show that did an analysis on a fictional investor that just had the worst timing. What they did was having this fictional investor buy at the peak of the market over a period of years and sell at the bottom. Don't remember the duration they did. What they found was this fictional investor still made money. What they emphasized was you can be the worst investor in the world, but if you stay in the market, chances are high that you'll still make out.

[M-technik-3]

I have 5% with a matching 5% from my company, I have an existing pension and I might receive SS benefits as I will retire just before all the money is depleted. I'd rather not get into how much I despise our gov't sometimes.

[vreihen16]

Originally Posted by tracknut

Imagine all the money you haven't made while waiting for the market to go down (which by the way it did a couple weeks ago).

I'm old enough to remember the stock market crash of 8/5/2024.....

[dreamingat30fps]

Originally Posted by tracknut

It's like the #1 warning you should have: "You can't time the market".

If you want to be in the market, just increase those weekly withdrawals so that you're in the market, say in a year. Imagine all the money you haven't made while waiting for the market to go down (which by the way it did a couple weeks ago).

Oh don’t get me wrong I understand this intellectually. It’s another thing to get my hand to click on that transfer button.

I’m definitely not someone to take out my money when the market goes down or anything like that. I usually buy more, which I did increase my transfer when it crashed a little bit a couple weeks ago. I was hoping it would continue.

I think I need to have a written plan like have this much cash, this much stock etc and just stick to that… add it to the list of things I need to do.

[2000cs]

Originally Posted by M-technik-3

I have 5% with a matching 5% from my company...

That’s 100% return on the day the match goes in, tax deferred, plus future growth/income depending on how it is invested. Probably the best investment most of us ever make.

[dradernh]

Originally Posted by 2000cs

That’s 100% return on the day the match goes in, tax deferred, plus future growth/income depending on how it is invested. Probably the best investment most of us ever make.

I don't know if they still do it or not, but some of the oil majors used to match 2:1 or 3:1.

[floridaorange]

Market should keep going up leading up to red election landslide

[David70]

Originally Posted by dreamingat30fps

However, because I don't know when that day will come, I feel like I have way too much cash. Then when I finally decide to move some more into my investment account I feel the market is crazy and going to crash any minute.

I do have it set to move a certain amount automatically every week or so, but still would take a looong time to move a significant amount. If this crazy market ever goes down I plan to up that significantly.

Unless you suddenly came into a huge amount of cash you have missed out on large returns over the last couple of years.

The "if it ever goes down I plan to...." ---unlikely to be a good strategy as when it drops some you will still be waiting for a further drop or you jump in mid drop, or it takes a significant amount of time for the drop to happen and the drop puts us where we are now, or.....

The possibilities are endless with the end result - swings will happen, unlikely to guess correctly and the market will continue on with long term gains.

I put my total HSA in the market each year in the 1st month or 2, I have the majority of my 401k money put in the beginning of the year, dropping to the match amount after I get to a certain point. My 1st quarter HSA/401k money has my take home not enough to live on. Math shows that on average the faster you invest money the higher the overall returns. Market continues to go up, getting in as quickly as possible normally increases your returns. There's a chance I will front load my HSA/401k and it will be the wrong time to invest. Do the same thing over a decade and chances of coming out behind are tiny.

[Fredcohiba]

I don’t remember who exactly, but some work colleague talked to me about this new savings vehicle called a 401k. He said I should contribute. I guess I thought he was smarter than me and therefore knew what he was talking about so I did as I was told. I’m sure glad I did.
I started saving into a 401k as soon as it was made available. Over the years I contributed more and more until at some point I reached a maximum amount allowed. Luckily, I was able to retire early.
I read statistics that show the average and median savings of 401K by age group and it just does not seem to me to be enough.
If I can give those younger than me some “old man advise”, it would be to talk to a professional financial planner or your HR/Payroll professionals and start a savings vehicle earlier rather that later. Take advantage of the company match if it is offered (its free money) and remember it’s also in pretax dollars. As an example, if you put $100 into a 401K plan, that might only represent a $60-80 reduction in your paycheck. Talk to your Payroll department to find out your actual values. If you do a percentage base deduction, every time you get a raise, so does your 401k.
Save early and often, your older self will thank you.

[David70]

Originally Posted by Fredcohiba

I don’t remember who exactly, but some work colleague talked to me about this new savings vehicle called a 401k. He said I should contribute. I guess I thought he was smarter than me and therefore knew what he was talking about so I did as I was told. I’m sure glad I did.
I started saving into a 401k as soon as it was made available. Over the years I contributed more and more until at some point I reached a maximum amount allowed. Luckily, I was able to retire early.
I read statistics that show the average and median savings of 401K by age group and it just does not seem to me to be enough.
If I can give those younger than me some “old man advise”, it would be to talk to a professional financial planner or your HR/Payroll professionals and start a savings vehicle earlier rather that later. Take advantage of the company match if it is offered (its free money) and remember it’s also in pretax dollars. As an example, if you put $100 into a 401K plan, that might only represent a $60-80 reduction in your paycheck. Talk to your Payroll department to find out your actual values. If you do a percentage base deduction, every time you get a raise, so does your 401k.
Save early and often, your older self will thank you.

I read the stats on average and median savings of 401k by age group and hard to tell what it means.

When I change jobs I move my 401k balance to an IRA so I'm now 54 (6 months into a job) and my 401k balance is roughly $8k. My 401k balance looks like I am in dire straights yet I have been contributing to different 401k accounts for over 30 years.

[DrVenture]

To the above comments I will add that, when the market starts dropping, most people are completely incapable of buying stocks. They become fearful and frozen in place. So they are afraid to add when it is high and going up, and even more afraid when the bottom drops out. They fear there is no bottom to the carnage.

[XutvJet]

Originally Posted by DrVenture

To the above comments I will add that, when the market starts dropping, most people are completely incapable of buying stocks. They become fearful and frozen in place. So they are afraid to add when it is high and going up, and even more afraid when the bottom drops out. They fear there is no bottom to the carnage.

I've weathered all the market collapses since 2000. During the 2008-2009 financial crisis, I lost 40%+ of the value of my portfolio. I kept it all in the same place and kept adding. By late 2010, my portfolio had gained all that loss back plus another 20%.

You can't freak out.

[zx10guy]

Originally Posted by Fredcohiba

I don’t remember who exactly, but some work colleague talked to me about this new savings vehicle called a 401k. He said I should contribute. I guess I thought he was smarter than me and therefore knew what he was talking about so I did as I was told. I’m sure glad I did.
I started saving into a 401k as soon as it was made available. Over the years I contributed more and more until at some point I reached a maximum amount allowed. Luckily, I was able to retire early.
I read statistics that show the average and median savings of 401K by age group and it just does not seem to me to be enough.
If I can give those younger than me some “old man advise”, it would be to talk to a professional financial planner or your HR/Payroll professionals and start a savings vehicle earlier rather that later. Take advantage of the company match if it is offered (its free money) and remember it’s also in pretax dollars. As an example, if you put $100 into a 401K plan, that might only represent a $60-80 reduction in your paycheck. Talk to your Payroll department to find out your actual values. If you do a percentage base deduction, every time you get a raise, so does your 401k.
Save early and often, your older self will thank you.

Doing pre-tax contributions into a 401k has another side benefit depending on how you look at it. It allows you to lower your AGI on income tax filings now with the bet that in the future you'll be in a lower tax bracket when you retire and drawing from your 401k/IRA.

I've been doing the max for years to lower my AGI when filing income taxes as it's one of the few options I have to decrease my tax burden now. I've only shifted my strategy to have my catch up contributions go into the Roth component of my 401k ahead of the impending rule changes where any catch up contributions have to be put into a Roth instrument.