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Yes, the ACA subsidies is a good one for me to add. Thanks!
FWIW:
Returning to this discussion of 60/40. This is a very nice article in Morningstar. If you look at the last graph that shows Sharpe ratio over time with all stocks as the baseline.
Congrats!
First thing you need to know is your spend.
In general the highest payoff SS payout in a two player game is to have the lower earner claim at 62 and the high earner at 70. Not to mention the lower earner is usually the female half and she is expected to outlive him - his SS becomes longevity insurance for her.
Along with spend I'll add on taxes - state income taxes and some provision for federal (though Federal is likely to be low). And RE taxes (woe be to living in NJ). Retiring in Connecticut is way different than Tennessee. How long do you and the spouse have until Social Security kicks in? How much do you have in taxable monies per year until Social Security and Medicare?
Seeing as how most retirees count on SS for most of their income, it’s not surprising. The median retirement balances and net worths are pretty shocking.
Not sure it’s going to matter for those under 40ish right now. Think the majority are going to be working until they drop.
This right here
I think it would be really helpful if you began that decumulation or at the very least stop accumulating and start spending instead while you're still working. Like over those last 5 years if not more, instead of contributing more to just a larger retirement, continue to work but start using some of that money you were intending on saving and instead start having some of those experiences while still working. I don't know how many vaca days people get but say you get 20. Use those to go on a couple nice long trips.
yeah... a couple long trips with all this money that's just laying around
Retirement isn't an age, it's a financial condition. Humans tend to be incredibly myopic - spend like drunken sailors, and then are surprised that they have to work to 90.
This is what the FIRE people call “CoastFI“. Get to a savings number that will, hypothetically, grow to your ultimate “number” at the age you want to retire, and stop saving. This lets you divert the money you had been saving to spending on experiences (or whatever).
Oh, cool, so that's an actual thing with a name. I had that thought a few years ago. I work for the gov so I have a pension, SS, and TSP (401K). I feel like my TSP is in a good spot with 10+ years until retirement. I still contribute because I think it would be dumb to not get the match, but I'm definitely not maxing out. I actually have never maxed out. I've worried in the past whether I should have been more aggressive earlier in my career, but fortunately I think my level of contribution has worked out so far and I feel like I'd be ok if, for some reason, I wasn't able to contribute another dollar.
Big benefit of this approach is that it allows you to spend more in earlier years on travel or other activities where you are presumably going to be healthier.
Yeah, Die with Zero is a good book and this concept of dividends on experiences really resonated with me too.
Why? You have 25+ years (on average) to save. Are you saying they won’t save, or won’t live long enough?
I’m guessing the implication is that it’s more difficult to save these days with housing costs, student loans, etc.
I am 51 and my wife has really started to drive this home. We have done a great job saving for retirement (not enough for college though) and she has recently stated how we are "going to make our kids rich" and she's right. She wants to start doing more for us and I can't argue with it.
I made my 20 year old daughter open a Roth IRA. Will do the same when my youngest turns 18.
Better watch your back...lol
It may be harder to do because of those things, but it also doesn’t take as much at those younger ages because of the time value of money. Assuming if you still have student loans you’re ~30. $5 a day invested for 30 years at 9% grows to $280k.
Needs to be a mandatory course in every high school.
Binky, ok if I give you a shout later today? Couple of questions.....
We’ve done same.
Exactly. Compound interest is still going to be a thing for people currently in their 20s and 30s. It's like exercise - there's nothing inherently difficult about any of this; it's just a matter of choosing to do it.
Same. We were able to get both kids through college (well, our youngest has one more year) debt-free. They both have reliable cars and very small Roths. They're well-positioned, and the one that is done with school seems to be making sensible decisions. I'm more worried about the younger one, but all I can do is get her set up for success - it's up to her after that.
We insist the oldest two max their Roth IRA while living in our house. Whether they keep that going when they leave is obviously up to them, but they’ll have a head start. The 21yo has well over double his annual income invested. 19yo has just over $10k. The 19yo is saving for a car and down payment on a house for when he graduates so he isn’t as aggressive outside the IRA. (The 21yo already bought a civic and doesn’t want a house any time soon).
We’re paying for their college other than scholarships and they live at home so their costs are super low. I think they’re off to a good start.
The wife and I will have our monthly (we haven’t been great about it) financial date next weekend. I’ll show her the numbers if we slowed investing, as we’re definitely coast FI. But neither of us want to stop investing.
So many seem to miss this point. But you’re
% correctI need to read this book. I'm a big believer in spending money on family experiences with my wife and child. It's only an 18 year window. Doing that means saving less for retirement. I should be ok with no mortgage, a pension, social security, and modest savings. I am definely not in the camp of working past 62 or waiting for retirement to travel and to complete some life bucket list.
It definitely changes, but hopefully you’ll continue to have great memories with your kin after they have a choice.
I'm actually looking more forward to the grandkid vacation years where I don't have nearly the amount of responsibilities. "I'll meet you guys at the resort. Good luck with your flight." LOL.It definitely changes, but hopefully you’ll continue to have great memories with your kin after they have a choice.
Exactly. My oldest is 26. We go on a vacation, just her and I, once a year. The week we spent in San Diego might be the most fun I’ve had on a vacation. She just asked me last week where we’re going next year, she’s feeling like a Caribbean island lol.It definitely changes, but hopefully you’ll continue to have great memories with your kin after they have a choice.
Care to introduce her to my 21yo son?Exactly. My oldest is 26. We go on a vacation, just her and I, once a year. The week we spent in San Diego might be the most fun I’ve had on a vacation. She just asked me last week where we’re going next year, she’s feeling like a Caribbean island lol.It definitely changes, but hopefully you’ll continue to have great memories with your kin after they have a choice.
Did you retire in a place where you were already settled, or did you pick up and move? We're leaning toward moving, and we're a little curious about how one meets people in a new community given that we're not working. Church is an option for us for sure, but we can't rely on that. We're actually debating the pros and cons of moving into a 55+ community, and one of the pros is that it should theoretically be easier to get to know our neighbors. (I still don't like that concept, but you get what I'm saying, I'm sure).
Did you retire in a place where you were already settled, or did you pick up and move? We're leaning toward moving, and we're a little curious about how one meets people in a new community given that we're not working. Church is an option for us for sure, but we can't rely on that. We're actually debating the pros and cons of moving into a 55+ community, and one of the pros is that it should theoretically be easier to get to know our neighbors. (I still don't like that concept, but you get what I'm saying, I'm sure).
I hear you and you are probably right. Mine is 14 right now and sometimes I feel like I'm a little panicked as his childhood is picking up steam quickly.Exactly. My oldest is 26. We go on a vacation, just her and I, once a year. The week we spent in San Diego might be the most fun I’ve had on a vacation. She just asked me last week where we’re going next year, she’s feeling like a Caribbean island lol.It definitely changes, but hopefully you’ll continue to have great memories with your kin after they have a choice.
Did you retire in a place where you were already settled, or did you pick up and move? We're leaning toward moving, and we're a little curious about how one meets people in a new community given that we're not working. Church is an option for us for sure, but we can't rely on that. We're actually debating the pros and cons of moving into a 55+ community, and one of the pros is that it should theoretically be easier to get to know our neighbors. (I still don't like that concept, but you get what I'm saying, I'm sure).
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