Retirement Targets

[Cytasticlone]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

 

[KnappShack]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

Roast? Congratulations on thinking about your financial situation.

Results don't just happen. But I will say (as just a guy off the street) the best day to invest was yesterday. The next best day is today.

The Rule of 72 is a simple concept to understand the time value of money and how it could impact your returns.

Don't be afraid of stocks. Go with a diversified ETF if that's what your risk tolerance is. Investing is not gambling.

 

[Stormin]

Your IRA isn't "disposable"? I plan on selling off mine in pieces regularly, and taking the cash to fund my retirement. What are you going to do with yours?

IRA’s will accumulate. My retirement is not funded by them.

Not collecting SS yet either. Probably bank that as well. Own property that provides funds for my retirement without touching other sources. Biggest wild card in my future is possible nursing home. Maybe afford one of us. Two of us in we will go backwards. That is when the IRA’s and savings will go. Depending length of stay, some property will likely be liquidated.

 

[Cyclones_R_GR8]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

200k at 40 is a good start and you're already ahead of a lot of people. If you're feeling comfortable bump up your 401k contribution by 1% a year. If you get a decent pay raise bump it up another % or 2.

 

[SayMyName]

I had never heard of "two comma" before and was a little confused at first. I thought you meant 10 million or more

 

[BCClone]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

Start funding a HSA (if you are eligible) next step then would be a roth IRA, just do basic mutual funds for those. If you want to get into stocks slowly, start with something like AT&T since it usually has a nice dividend and if the price falls, you get a quarterly dividend that eases the pain.

I normally would say Roth first but with what you mention, I would consider a HSA first

 

[SayMyName]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

 

[iahawkhunter]

Does the decimal point count as a comma???

Not on this side of the pond

 

[CascadeClone]

IRA’s will accumulate. My retirement is not funded by them.

Not collecting SS yet either. Probably bank that as well. Own property that provides funds for my retirement without touching other sources. Biggest wild card in my future is possible nursing home. Maybe afford one of us. Two of us in we will go backwards. That is when the IRA’s and savings will go. Depending length of stay, some property will likely be liquidated.

Gotcha. It's not that an IRA isn't disposable, its that you don't plan to use yours unless necessary because of the property income. That's certainly a great way to do it, if you can.

I own part of a commercial building; it cash flows now, but that will double once it's paid off in about 10 years. That would cover a lot of my retirement income needs.

 

[CycloneSpinning]

For a minute I was like what are you talking about? But I see your point - there IS a difference between net worth and funding your retirement.

But all else equal, owning your home should reduce your income requirement (taxes & insurance are less than taxes & insurance & mortgage -- or rent), so it lowers the amount of retirement savings you need. You could also downsize your home, and use that incremental cash to fund retirement. I think it is safe to say there is probably a strong correlation between net worth and ability to fund retirement income needs.

Correct. It’s not that owning your home is worthless…it’s just not worth anything from a cash flow perspective unless you leave it.

Owning outright reduces your expenses for sure, but owning a $1 million home vs. $300k home doesn’t do anything for you…unless again you move from a $1 million home you owned outright into a $300k home.

 

[nhclone]

Gotcha. It's not that an IRA isn't disposable, its that you don't plan to use yours unless necessary because of the property income. That's certainly a great way to do it, if you can.

I own part of a commercial building; it cash flows now, but that will double once it's paid off in about 10 years. That would cover a lot of my retirement income needs.

Out of curiosity, and if you’re willing to share, is your investment group purely business partners or friends/family? Long term i would like to explore commercial real estate but I’ve heard a lot of horror stories about investing with friends and family. Any advice you are able and willing to share would be great.

 

[Stormin]

Gotcha. It's not that an IRA isn't disposable, its that you don't plan to use yours unless necessary because of the property income. That's certainly a great way to do it, if you can.

I own part of a commercial building; it cash flows now, but that will double once it's paid off in about 10 years. That would cover a lot of my retirement income needs.

Traditional IRA has penalties for early withdrawal. Plus taxable income now. Later I could withdraw slowly when I reach full retirement age. Roth IRA is foolish to withdraw as the earnings accumulate tax free. And is in a stock mutual fund.

While an IRA is an asset that can be used for spending, I would be slow to divest those assets early in retirement.

Amount needed for individual retirements is highly variable. I have “enough” for my retirement wants and needs. Some people will never have enough.

 

[CycloneSpinning]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

200k at 40 is pretty good. I wouldn’t feel like you’re behind with that. The HSA is a good suggestion if you’re in a high deductible health plan, but noting your health concerns (and sorry about those), I wouldn’t be surprised if you’ve opted for a more traditional option. I assume you might qualify for some disability income at some point based off what you’re projecting. You might just talk to the financial advisor as to how covered you will be in that regard (assuming some sort of employer plan and possibly social security). Otherwise sounds again like you’re off to a good start.

 

[Stormin]

Correct. It’s not that owning your home is worthless…it’s just not worth anything from a cash flow perspective unless you leave it.

Owning outright reduces your expenses for sure, but owning a $1 million home vs. $300k home doesn’t do anything for you…unless again you move from a $1 million home you owned outright into a $300k home.

Costs of owning a $1 million home are likely higher than the $300k home. Insurance, taxes, maintenance, etc. Another good reason to downsize.

 

[yowza]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

Do you know the average and median retirement savings for a 40 year old in the US of A? Way less than what you have saved. You aren't sitting bad at all, other than your potential health issue, which I am sorry about.

 

[BACyclone]

Can't speak for Vanguard, but on Fidelity you are able to choose from several options for your core position or settlement account. My brokerage is set to SPAXX, which is a government MM with a 7-day yield of 4.48%. I'm surprised Schwab wouldn't have a similar option.

I didn't even realize the yield, but mine was set to FDRXX which is very similar to yours, but has a slightly lower expense ratio.

 

[qwerty]

I think I know the basics of retirement savings but I've recently become more interested in figuring out what my goals should be. More aware might be a better term instead of interested as I'm turning 40 next year. I guess milestone bdays can get you thinking about stuff like this... Anyway, I stumbled on this thread a few weeks ago and have read some of it. The gist I get from what I've read is that I'm probably not doing nearly enough currently. I haven't dug deep enough to understand things like the 4% rule I saw mentioned somewhere in here, but I do plan to do more research and reading.

The basics are: I do the max 6% into 401K that my company matches but that's it. I think it's set to whatever the default investment settings are as I haven't adjusted it one way or the other. It's currently at 200K+and lost like 15k in the last year. I don't have any IRAs or stock portfolios. Stocks scare me and seem like a good way for me to gamble and lose. My wife has TIAA through ISU, but I'll be honest and say I haven't looked at that in a long time.

I'll probably get an advisor to help me at some point and I know more info would be needed to give any real, specific advice, but what are a couple things/steps that people think I should do now at the bare minimum to get started? One other caveat I'll mention is that I have some issues that are already affecting my mobility and it will continue to progress. I'll probably have trouble walking in my 50s and definitely by 60. So, I might be in an "the earlier the better" type of situation. Lastly, I bought that "We're Talking Millions" book and plan to read it soon. Anyway, try not to roast me too bad but... fire away.

Good start on buying that book (I was the one to recommend). It will get you thinking correctly.

 

[qwerty]

Start funding a HSA (if you are eligible) next step then would be a roth IRA, just do basic mutual funds for those. If you want to get into stocks slowly, start with something like AT&T since it usually has a nice dividend and if the price falls, you get a quarterly dividend that eases the pain.

I normally would say Roth first but with what you mention, I would consider a HSA first

EXCELLENT advice. In my mind, HSA has probably moved into #1 best investment vehicle (as long as you utilize the investment option inside the HSA). Roth is a must also as I am certain that pre-tax retirement savings will be hit even harder by taxes in the coming decades. The government will be coming hard for those within 10 years is my prediction (and I am screwed as I am heavy on that).

 

[Cyclones_R_GR8]

EXCELLENT advice. In my mind, HSA has probably moved into #1 best investment vehicle (as long as you utilize the investment option inside the HSA). Roth is a must also as I am certain that pre-tax retirement savings will be hit even harder by taxes in the coming decades. The government will be coming hard for those within 10 years is my prediction (and I am screwed as I am heavy on that).

I started an HSA the first time it was offered. I have about $57k in it. I figure I'll just let that sit and use it for medical stuff until it runs out once I retire. Or I could roll it into my IRA

 

[Cytasticlone]

Start funding a HSA (if you are eligible) next step then would be a roth IRA, just do basic mutual funds for those. If you want to get into stocks slowly, start with something like AT&T since it usually has a nice dividend and if the price falls, you get a quarterly dividend that eases the pain.

I normally would say Roth first but with what you mention, I would consider a HSA first

200k at 40 is pretty good. I wouldn’t feel like you’re behind with that. The HSA is a good suggestion if you’re in a high deductible health plan, but noting your health concerns (and sorry about those), I wouldn’t be surprised if you’ve opted for a more traditional option. I assume you might qualify for some disability income at some point based off what you’re projecting. You might just talk to the financial advisor as to how covered you will be in that regard (assuming some sort of employer plan and possibly social security). Otherwise sounds again like you’re off to a good start.

EXCELLENT advice. In my mind, HSA has probably moved into #1 best investment vehicle (as long as you utilize the investment option inside the HSA). Roth is a must also as I am certain that pre-tax retirement savings will be hit even harder by taxes in the coming decades. The government will be coming hard for those within 10 years is my prediction (and I am screwed as I am heavy on that).

Well my post is already paying dividends...heyo! I'm not going to lie, I thought an HSA was just very similar to an FSA and another way to pay for current year expenses. Googled it after the first reply about it and had no idea I could use it to save for future expenses as well. I'll look into what's out there, but I'm not sure I have a high deductible plan though. I'll have to research more into how the HSA rules work. Thanks for all of the replies.