How to retire properly?

[SwisSeV]

I have a question about retirement planning. As copy techs, we don't make a ton of money. We have to plan ahead.

My main employer doesn't offer a 401k plan so I decided to open a rothIRA with WealthFront. According to everything I read online I should be contributing the maximum allowed deposit of $5500 a year to this account. This seams like too much to contribute to a fund I wont see for 42 years.

I also have a brokerage account for the stock trading I do. I fund an investment account that consists mostly of the S&P 500 that is half my net-worth now. I also have an REIF with Fundrise.com that is about 10% my net-worth. I put about 10% of what I make into these investment accounts already. It's nice to know I can access the money in my stock investment account if I need to, unlike the rothIRA.

I know most of you are closer to retirement, how did you do it? What would you have done differently? Any advice?

[blackcat4866]

I know there are rules that change with your age. I'm contributing $6,500 for myself and $6,500 for my wife to Roth IRA's. Both of our employers offer 401K plans, and we contribute the amount to match, which isn't very much.

Here's the part where you have to make decisions: When you're younger you'll probably have more payments like mortgage, car payments, etc., so you'll have less free cash to contribute. As you progress, you'll start paying things off, and consequently have more free cash to contribute. I'm getting within sight of the finish line, so I have no payments, and am socking away the max on all fronts. Here are some of the decisions to make:

1) The sooner that you get a meaningful amount of money saved, the sooner the interest and dividends will accumulate. That being said, you shouldn't let anybody pressure you into saving more than you are comfortable with.
2) I'm a little unusual in that I have a very strong aversion to debt. My financial advisor suggested that having mortgage interest to write off is a benefit (but never as beneficial as not paying into a mortgage at all).
3) How much do you like new cars, new furniture, new clothes, etc.? Personally I decided that I could forego most of those things, knowing that I could retire sooner.

One of the best things that you can do is start and maintain a person finance ledger. It does take a lot of discipline, but can provide you considerable peace of mind, as you are constantly monitoring how well you're doing, and compare back to last year (or 1992). =^..^=

[SwisSeV]

I feel the same way about debt. I have a CC and a car payment to build credit but, if it was up to me I would pay cash for everything right now. But I need credit to buy a house down the line, so I have to play the game.

I'm not a big spender, I get no joy from new clothes and shoes like other people do. I used to have a girlfriend who was a "shopper" and that really annoyed me.

I could pay 5500 into the rothIRA now but that would mean quite a large cut back in lifestyle. No traveling multiple times a year. Is that what you did when you were younger or, did you just wait so that you didn't have to make sacrifices?

Non of my friends even think about this stuff, out here most people are carefree/irresponsible.

[blackcat4866]

Like most college graduates, I started out with 4 years worth of student loans, but only 3/4ths of BS in electrical engineering (which is almost exactly the same as a high school diploma). Then some well known Illinois politician let it slip that he had never paid off his college loans. So what happens? The state of Illinois scrounges through it's records and starts collecting on every student loan outstanding. Rather than taking payments like they would ordinarily do, it went right to collections.

So there I was, with a little education, no job, and a lot of debt. That is what got me started down this road and I can't say it's a totally bad thing. I dug my way out of that hole in ~6 years working part time jobs, and it has only got better.

I know it's hard to see that far into the future. But when you're further down that road you might be thinking (like me) "I hope my knees can hold out just a little longer." =^..^=

[ZOOTECH]

Noel, thinking about retirement now is probably the best move you can make. It's someone that waits until they are close (10 to 20 years) that may have problems makings ends meet. The Roth IRAs is a great idea - pay taxes upfront and not when retired. Diversifying your accounts now, will help you in the long run; but, with a long time frame, you may want to go with the growth stocks now, and ease up when you are closer to retirement.
I am not a financial adviser, so take this with a grain of salt- but in retirement, we are doing quite comfortably.

[SwisSeV]

sounds like you have a good plan in place... I will never be able to retire.. I will just die in front of a machine

Hope that's not true. Did you not have a retirement plan or did you lose it somehow?

[harleyrider]

best plan- rule#1 marry a good woman. Rule 2 buy a house at a early age and get it paid for. Rule 3 invest as much as you can in 401k,cd's, mutual funds etc. If all else fails you still have rule 1 and 2. My 2 cents worth.

[richs]

I just buy lotto tickets and hope for the best.

[VENRISO]

best plan- rule#1 marry a good woman. Rule 2 buy a house at a early age and get it paid for. Rule 3 invest as much as you can in 401k,cd's, mutual funds etc. If all else fails you still have rule 1 and 2. My 2 cents worth.

jajajajjaja this is the best I've read in this forum

[subaro]

Originally Posted by harleyrider
best plan- rule#1 marry a good woman. Rule 2 buy a house at a early age and get it paid for. Rule 3 invest as much as you can in 401k,cd's, mutual funds etc. If all else fails you still have rule 1 and 2. My 2 cents worth.




jajajajjaja this is the best I've read in this forum


Some good advice in there, but sometimes the best laid plans can be upsetted by circumstances that you just can't see or foretell. Nevertheless you have to have or should have a plan at least as a guide to where you want to be. Along the way a wise man once said, Don't put your hat where you cannot reach it and Don't bite more than you can chew. There you go