Retirement thread

[SCNCY]

I will be turning 30 next month and have about 35 k saved up. I have about 20k in an IRA and 15k in a 401K. One thing I have been doing to my IRA is moving my money in to more dividend paying stocks, specifically, aristocrat dividend stocks. You can read more about the strategy here (http://www.suredividend.com/).

My 401K I have company stock and the rest is in a S&P 500 index fund

 

[SCNCY]

I'm 24. Started a Roth IRA on TD Ameritrade about 4 months ago and put in $1000 to get it started. I haven't contributed since then. I'm still trying to figure out what percentage of my income (if any at all) I should invest in retirement. I have a considerable amount of student loan debt, and 4 years left on a car loan.

I have seen that a person should save 15% of their income for retirement. This would include any employer match and anything you put in. The sooner you do it, the better. I have yet to achieve a 15% savings in to my retirement, so I know I have some catching up to do.

 

[VeloClone]

I will be turning 30 next month and have about 35 k saved up. I have about 20k in an IRA and 15k in a 401K. One thing I have been doing to my IRA is moving my money in to more dividend paying stocks, specifically, aristocrat dividend stocks. You can read more about the strategy here (http://www.suredividend.com/).

My 401K I have company stock and the rest is in a S&P 500 index fund

As soon as you can divest yourself of the company stock, DO IT! If your company goes belly up you are out your job and a good portion of your retirement all in one fell swoop. Even if you just look at big losses in your company's stock with your job still secure is the amount of stock you have in your company an amount you would be comfortable having in any other single stock? It isn't a lack of loyalty to dump company stock, it is just good financial sense. Holding a lot of any one stock violates one of the safety nets of investing - protection through diversity.

 

[cy4life94]

I myself am a young and boring investor. Take it as you want, but my recommendation is to read "The Bogleheads Guide to Investing" and then stay the course from there on out. The general idea is to invest in low cost index funds that capture the entire market and then to not think about it very often. It might not be the strategy for everyone but to each his own.

Other input to this thread, when figuring investment returns, you probably do not want to just use stock market returns to determine what your gains will be. As you come closer to retirement, you will most likely want to start shifting money to bonds to minimize the volatility of your account which will also decrease your returns.

 

[crawfy54]

I have seen that a person should save 15% of their income for retirement. This would include any employer match and anything you put in. The sooner you do it, the better. I have yet to achieve a 15% savings in to my retirement, so I know I have some catching up to do.

I'm kind of in a "wait and see" position right now. My employer does not match 401k contributions, so I am not currently enrolled. However I am enrolled in the employee stock ownership program, but I am not yet sure how much (free) stock I am accumulating. I should be getting an annual report soon. They explicitly warn us not to treat the ESOP as a retirement fund.

 

[bozclone]

My advise is to make sure you take advantage of the good times. Things can change. I think it is really important to start saving for retirement as early as possible. I started contributing to a 401k when I was 25 and increased my contribution percentage every time I received a raise until I reached the max contribution limit. This was an awesome way to increase my contributions without seeing it impact my paycheck. I had a great plan that included my 401K, company subsidized healthcare, and a company pension. But after 17 years of contributing, the plant I worked at closed. I had to switch employers and my plan had to change. Now I am looking at working a few years longer and no company subsidized healthcare and no pension. I'm thankful that I invested early in my 401k and was very dedicated to increasing my contributions. There are many things you can't control, but how much money you contribute is something you do control.

 

[bringmagicback]

My retirement plan is hoping my farm sale goes well and that farming is still a thing so I can rent my land out. If not, I have a retirement bullet saved up

 

[CloneGuy8]

I have seen that a person should save 15% of their income for retirement. This would include any employer match and anything you put in. The sooner you do it, the better. I have yet to achieve a 15% savings in to my retirement, so I know I have some catching up to do.

One good way to get to this goal is every year when you get a raise, up your contribution 1% so you won't notice it coming out of your paycheck. I've been doing this the past few years; up to 10% contributions on my own and company matches 6%. I'm thinking I might start doing this twice a year now to get more contributions.

 

[clonebb]

I use 6 percent return in my calculations. Over 50, no debt, $600k in 401k, $90k in IRAs, $90k in mutual fund investments and $200k in company stock.

Dumping the max in to 401k to reduce taxes since kids are gone. Also, have a company pension plan. I think I am on track.

 

[cy4life94]

In general, here is the order that I would go about investing in retirement accounts:
1. Invest in 401k up to the company match
2. Invest in IRA until max
3. Max out 401k
4. Taxable account

Of course there are a lot of variables that come into play. Saving for college, HSA account will all change things.

 

[DurangoCy]

I'm kind of in a "wait and see" position right now. My employer does not match 401k contributions, so I am not currently enrolled. However I am enrolled in the employee stock ownership program, but I am not yet sure how much (free) stock I am accumulating. I should be getting an annual report soon. They explicitly warn us not to treat the ESOP as a retirement fund.

Get rid of your car note asap. Then, if you can do your school loans in a reasonable time look at those. If not, I'd come back to the ROTH and max it out.

 

[norcalcy]

I myself am a young and boring investor. Take it as you want, but my recommendation is to read "The Bogleheads Guide to Investing" and then stay the course from there on out. The general idea is to invest in low cost index funds that capture the entire market and then to not think about it very often. It might not be the strategy for everyone but to each his own.

Other input to this thread, when figuring investment returns, you probably do not want to just use stock market returns to determine what your gains will be. As you come closer to retirement, you will most likely want to start shifting money to bonds to minimize the volatility of your account which will also decrease your returns.

Good advice. I am now an old and boring investor. I stuck with a couple of actively managed funds too long through the early 2000's when owning the S&P 500 index or something similar would have been a better move. Probably cost me about $150,000 in an IRA. I'm not smart enough to pick stocks and funds. I just want to be rewarded for taking some risk and earn what the overall market produces.

With life longer life expectancy, don't be quick to move to bonds.

 

[jmb]

7-8% is the standard for planning the way I understand it.

Net of any loads of management fees?

 

[ISUtopia]

Good advice. I am now an old and boring investor. I stuck with a couple of actively managed funds too long through the early 2000's when owning the S&P 500 index or something similar would have been a better move. Probably cost me about $150,000 in an IRA. I'm not smart enough to pick stocks and funds. I just want to be rewarded for taking some risk and earn what the overall market produces.

With life longer life expectancy, don't be quick to move to bonds.

Yes, active funds are going the way of the dinosaur. These highly paid fund managers have historically only beat their benchmarks < 20% over a long period of time (15 years). For those who think they can beat the market by buying individual stocks, good luck since the overpaid fund managers with a huge amount of resources dedicated to trying to beat the market can't do it.

 

[ImJustKCClone]

My only advice as an old fart who is edging closer to retirement is:
DO NOT WAIT UNTIL YOU "CAN AFFORD IT" TO START PUTTING AWAY MONEY FOR RETIREMENT!!!

Every little bit you sock into an account starts compounding. We are living longer, and trust me - most of us do not want to keep working into our 80s. Build now so that you can enjoy later. Drive your car a year or two longer. Start with a smaller house and build equity. Dinner out as a special occasion, not a nightly routine.

/granny mode

 

[Rabbuk]

Do actively managed funds do better in periods of market volatility? Like do they mitigate loss better than just jamming money into an index fund? Idk the answer.

 

[norcalcy]

Do actively managed funds do better in periods of market volatility? Like do they mitigate loss better than just jamming money into an index fund? Idk the answer.

My answer would be it depends on the fund manager. My experience is once I identify a fund manager with a good track record, he/she seems to start a losing streak just about the time I invest. Sometimes they fall in love with a sector and get their clock cleaned in a downturn. Theoretically, you are spreading your risk over more companies and sectors when you choose the index funds. That's most of the Bogle philosophy in a nutshell.

 

[ISUtopia]

I use 6 percent return in my calculations. Over 50, no debt, $600k in 401k, $90k in IRAs, $90k in mutual fund investments and $200k in company stock.

Dumping the max in to 401k to reduce taxes since kids are gone. Also, have a company pension plan. I think I am on track.

clonebb, appears you are doing pretty well. There's been talk on here about inflation but no one has been talking about taxes which can do more damage to returns than inflation. I would be very careful in taking advice about your personal finance from a chat room. There are a lot of variables such as taxes that people aren't taking into consideration. Would you take the advice on a chat room if you had a serious health issue? Likewise you should consult a fiduciary advisor who must give advice which is in your best interest and not theirs. Beware of anyone who receives a commission by selling you an investment as this is a conflict of interest.

 

[Rabbuk]

clonebb, appears you are doing pretty well. There's been talk on here about inflation but no one has been talking about taxes which can do more damage to returns than inflation. I would be very careful in taking advice about your personal finance from a chat room. There are a lot of variables such as taxes that people aren't taking into consideration. Would you take the advice on a chat room if you had a serious health issue? Likewise you should consult a fiduciary advisor who must give advice which is in your best interest and not theirs. Beware of anyone who receives a commission by selling you an investment as this is a conflict of interest.

I think Fee-based is coming into style in the last few years.

 

[ISUtopia]

My only advice as an old fart who is edging closer to retirement is:
DO NOT WAIT UNTIL YOU "CAN AFFORD IT" TO START PUTTING AWAY MONEY FOR RETIREMENT!!!

Every little bit you sock into an account starts compounding. We are living longer, and trust me - most of us do not want to keep working into our 80s. Build now so that you can enjoy later. Drive your car a year or two longer. Start with a smaller house and build equity. Dinner out as a special occasion, not a nightly routine.

/granny mode

This is some good advice. Control what you can, investing early, not overspending on cars and homes and dining out too frequently.