$3.5M in investment assets (excluding home) is about my number. 2055 is about when I project that to happen... The world won't be around then, but I might as well try
When will you be able to retire?
- Thread starter SEIOWA CLONE
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Retiring wealthy is super simple. Invest as much as you can as early as you can - rinse and repeat.
Super simple but not easy.
The best times in your life to make bad financial decisions is as early as possible so you can learn from your mistakes. You can recover from buying/leasing new cars, huge houses, etc... if you understand the time value of money and set to putting money away.
My only advice to youngins, put SOMETHING away each month. Don't fret about the right or wrong investment vehicle at first - just get into the habit of paying yourself first even if it's a pittance.
I'll echo that... I pay $200/month for wife and I with the company picking up the biggest share. When I retire (eligible in a matter of DAYS!!!) I'll pay closer to $2,000/month as I will have switched to the retiree medical plan at my company.
Different risk pools, different company contributions, could (will in my case) significantly increase your burden.
A lot of people just don't understand the time value of money. I was helping a 20-something in our office setup her 401k. She just wanted to put in 1%. I said at least take all the free money (50% match up to 6%).
I said,"Based on your current salary, growth rate of 8%, what do you think that will be worth in 30 years?"
"I don't know. 30 grand?"
"About 500 grand. And that's assuming you never get a raise."
(Eyes pop out of head.)
I’m 38 and that’s what I do now. My most annoying moments are when I have to get up and do something. I can’t focus on playing Cookie Jam when I’m driving or at a restaurant or at some other thing like an event.
These are the parts where I try to explain a worst case scenario. Drop 6% in, they match 50% for 3 %. Now quarterly or whenever take out 5 of the 6% you put in. You get a 10% penalty so you lose 1/2% of the money but that 1/2% got you 2 1/2% in your retirement fund. You are way ahead.
As long as you are vested.
that's a really good way to frame it if it's someone who really can't afford to put that much in. Do it short term and take the penalty. I wouldn't have thought of doing that. Still may not be feasible for those on a really tight budget but an option on the table. Always try to encourage people to at least put in up to the match. Free money. Well, not actually. It's factored in as part of your benefits package.
Do you drop the "that 500k is only going to be worth about 250k due to inflation" after that?
I'd quibble that one shouldn't look to their retirement assets as short-term loan options but the math seems to work.
I think we are mostly on the same page. If you stick to your plan, it can work. Any diversion can diminish savings opportunities.
Undervalued, in my opinion, is coming from a small school and the transition to college. Class sizes are smaller at CC for most electives and freshman/soph level courses and can make leaving the security of home less intimidating.
The whole car and savings question should always be answered it depends. Anyone that claims to have the single answer is full of ****. For example I bought my new car for $17k. A comparable vehicle with significant mileage and age was around $12k. Now if you are buying a $40k car that a couple year old version has a steeper drop then maybe used is worth it.
Question - How did you lose your retirement? Did you have a pension, if so no other investments? S&P 500 and DOW are both roughly double their peak in 2007 and 4x their lows in 2009. I often hear this said and don't understand the logistics.
How do people figure out their retirement numbers? I have used a couple of different online tools, but they provide me with vastly different answers.
I agree. I was putting forward for someone who says, I need that money and can’t afford to do it. It becomes a lot easier if they also tell you they get a tax refund and especially if it’s similar is size. Pay less in for taxes than you do and put it in retirement. Then at end of the year, you take out the extra funds that you put in but you have the match.
I would double check on it on a case by case basis. Some may have odd vesting. I was always 100% vested on the contribution.
