Realistically, when do you think you can retire?

I plan to retire when I have enough money. We started investing with our first jobs…number one strategy. By the time we were 40, we had a snowball that was self promulgating. Now in our 50s it’s doubled again twice, not including add ins. The target amount is not to consume principle. But if cash flow allows a taper to death that is sufficient. Planning my death is a bit of a challenge, although I’d imagine my wife could define that more clearly some days! We accept responsibility for our children so after investing in our retirement we fund education accounts, but not to our detriment. We also missed out on losing all our money on bitcoins since we didn’t buy any. We also diversify with real estate, rental property and don’t waste money on useless shit.

That said…we will retire traditionally and happily.

 

My father did something like that, at age 52 he was offered a buyout (phone company) after 30 years. He would have had to work another 12 years there to get what they were offering so he scrammed.

I like the 3 bullet points a lot, bare minimum those should be on everyone's mind.

I used to tell my parents that after I moved out, go do the things you always wanted to. My parents don't spend a dime on anything non essential. Never bought fancy cars or went on trips (except Disney, to bring me and my sister once). They didn't listen and now with my mom on dialysis they can't.

 

I agree….while I have some time left before I retire, more than a few of my friends are retired. We share hobbies (cycling, swimming, brewing beer, camping, fishing) that keep them busy now and will keep me busy when I cross the finish line.

I also have a few friends that are retired, and bored out of their minds. For the most part, they never did much outside of work.

 

the only other thing for me to ad is that i dont have a spare minute.... there is no time to be bored.

got no honey-do lists as those get wiped out as fast as she asks, but my personal "do list" never ends & theres not enough hours, days or weeks to get it done.

busy is good.

 

I mean the stories of guys retiring and just sitting, then dying shortly after have been around since at least the 1960's. People would say get a hobby or activity before you retire! Those "work dedicated" people mentioned earlier will say they don't have time or they love work, etc. Their own choice I suppose. Never too late. I mean I never played pickleball before retiring and I certain never farmed!

Almost threw the campstove in the truck.....oh yeah the trailer will have a stove........hahahahahaha

 

With 3 mid sized bank failures in the past 2 months I’m getting ready for a reset.

I am thinking about pulling my Roth funds out and investing in non stock market things.

 

just for fun & to continue in the conversation with you guys.... back before Y2k = cashed out every stock & investment i had.

while not a prepper or survivalist, did take my money & invest in things that could never go down in value & that you dont want to run out of in retirement or everyday life.

this means things that no one can take away from you or devalue. my investments now days are: (these are investments of money, time, effort)

1. bullets/munitions
2. weapons
3. skillset expansion/self sufficiency
4. location/food sources

this turned out to be more advantageous than you can imagine. in the years after, my ammo value multiplied x10 & more. sold off half & kept the rest for the "rainy day" or EOTW stuff. expanded the weaponry & varied the types to fit within whatever law changes they want to make. learned how to do more things & became better at managing resources. made it to where we could live off the land. paid off everything except the house. pay for everything as i go. if i cant pay for it upfront? it has to wait.

LMAO now if the wife would just get HER spending inline? things would be easy.

cause you just never really know whats gonna happen next.

 

The 1-2 makes a lot of sense, worst case you use it anyway so it doesn't go to waste. Best case, which you did, you funded the habit or another one.

Can never go wrong learning how to DIY. I made the choice long ago to learn about vehicles because I enjoyed them, because I drove older ones that needed more frequent repairs, and at the least wanted to know I wasn't getting ripped off.

I recently told someone about the cleanout I helped my brother in law with at his parents' house. They lived there 50 plus years and were born in the 1930s. We found so many things of different kinds that weren't necessities per se (though most were), but the common thread is they were useful things versus extravagance. There was a lot of spare lumber, pipe, and the like that one would need to fix their own things. Rather than pay others, they did it themselves when at all possible.

 

Never? I dont have any plan for it

 

I wrote a plan in 2021. It is comprehensive and covers everything from assumptions, medical, insurance, pension, social security, rollovers, contingencies, duration, accumulation, decumulation, core principals and strategy, asset allocation, structural diversity, QCD's, IRS limits & regs, capital gains order of operations, tax and estate planning, at 53 pages in length, it is complete with table of contents, appendix of annual reports and references with citations.

 

So sorry to hear about your mum there mate...

 

Been years since I visited this thread and site. Back then I was a trades guy doing some investing and trying to do it right.
The one thing I will now say with good experience is that it is downright criminal that we were not taught more about business growing up. It's so lucrative it's hilarious if you are good at it and to know if you are good at it you need to try.
I am set up to retire in 4-5 years and it's all been based around construction.
Go at it and take a chance.

 

Can we have the Roth vs. Traditional 401k discussion?

Who's doing what, why, and if you are older and regret previous allocation choices, why?

 

Roth max for years. Why , withdraws won't count towards my income for Healthcare costs. Another reason is taxes are cheaper now than future.

 

This is a good sub conversation.

 

The 401k discussion is a bit different than the IRA discussion.

Roth IRAs have a number of advantages over Traditional IRAs besides just marginal tax rates differences now and later. Look up Roth Conversion Ladder to understand how to get around the early withdrawal penalties from a Traditional 401k. For these reasons often the Roth IRA is favored over the Traditional IRA even if it might not be a sure thing tax rate wise. With IRAs just saying "Roth, always" isn't horrible advice.

For 401k the individual case matters a fair bit more. Roth 401k do not really have the same additional advantages that the Roth IRA has and so it is mostly down to what you think the difference in your marginal tax rates will be as a worker and a retiree. For those blessed with high incomes and low expenses Traditional is most likely to be the winner over Roth simply because they will be in a lower marginal tax bracket when they are in retirement. One must be careful to account for all factors in retirement tax bills as well as certain marginal expenditures/withdrawals can have outsized effects over narrow income ranges (e.g. when dovetailed with SS or determining Medicare costs). Again, consult the Roth Conversion Ladder as a way to proactively control when you pay taxes with a Traditional 401k to potentially avoid or minimize some of those pitfalls.

Excellent example of what I was referring to above. Tax costs are more than just blindly apply income to the marginal tax charts.

We really don't know what tax rates in the future will be and that they will only go up has been consistently said for decades when in fact the opposite is mostly what happened. Sure, people can make whatever decision they want based on their predictions of future tax law, but it is just a guess. People are often wrong in their guesses. Witness decades of a low interest environment with Chicken Littles constantly forecasting doom just around the corner. When the "doom" finally showed up it has resulted in peak interest rates that are still actually lower than when the Chicken Littles first started shouting their warnings. Which isn't to say there aren't good reasons to suspect tax rates might go up, but just that there is a narrative for everything and they are very often wrong. Long term averages tend to be better predictors which have been relatively flat.

What is far more predictable is what will be your future withdrawals be compared to your current income. That means what marginal tax bands you land in, regardless of what the tax rates for those bands will be, is much more predictable. For high income earners that can save a lot often in retirement they are in a lower marginal tax band and that difference outweighs typical changes in the set tax rates. So such a person would probably tend towards paying taxes now (Traditional) or schedule over time (Traditional with Roth Conversion Ladder) than paying everything now (Roth). On the other hand, someone who is presently in a low tax bracket and expects to retire in the same or higher tax bracket (or who honestly thinks they can predict future tax rates) would chose to pay their current marginal tax rate (Roth).

In the end, for the vast majority of people the Roth vs Traditional 401k choice is not particularly consequential. They will likely have similar marginal tax rates in retirement and when working so no difference. Doing Roth 401k now "locks in" your choice and so that might be a preference for some who fear future tax trends. Doing Traditional 401k but having entirely Roth IRA allows for the Roth Conversion Pipeline which essentially allows one to defer the choice and schedule out the tax burden.

A very long, sourced article on nearly every aspect of Traditional vs Roth here:

https://www.bogleheads.org/wiki/Traditional_versus_Roth

 

Right now thats what we are doing. We want as much tax free money as we can get in the future, especially because we want to significantly upgrade house in retirement. Like 10x more expensive because of location. So we can use Roth money for that.

So many people pound in Traditional it makes me doubt myself but right now we are 100% Roth in the 22% bracket and an effective tax rate of 27%.

i just feel get the tax bill over now.

I don’t want to crush your soul though but healthcare is based on MAGI. So Roth pulls do impact healthcare.

 

Just my 2 cents.
- If you are a government employee find out if you have a 457 Plan. Talk with the representative for this plan and you can set it up as a Traditional IRA or a Roth IRA. Contributions limits ( some are around $20,000 ) are much higher than the typical IRA. Be cautious if they charge unusually high fees.
- If you have a spouse you may also be able to contribute to your own none 457 IRA account along with the 457 plan.
-Between the two I have not been able to personally max out the $27,000 contribution limit,,,lol not even once. But it is nice knowing that I can contribute more than than none 457 IRA.
- Best of luck to everyone !!!

 

Regarding health care, I need it from age 60 or 62(retirement)to 65. In PA it is income based due to the ACA , or I can say subsidized. Then yes 65+ is MAGI.

 

I need it subsidized for 8 more years. When you retire early, health care is a headache. Fortunately, I can pick a high deductible and have reasonable premiums.