I much prefer the website forum vs. the reddit version. The website forum seems to have more knowledgeable users.
Retirement Targets
- Thread starter yowza
- Start date
I much prefer the website forum vs. the reddit version. The website forum seems to have more knowledgeable users.
The fact that it's a message board is going to make it skew older, and having to create an account to post something is going to weed out a lot of the drive-by stuff the subreddit gets by nature. There's a lot of years of valuable info on those forums for sure.
Given labor shortages we have now, don't look for them to look at that any time soon.
Even 10% can be hard if you have kids of age that need childcare.
No doubt. I would say from experience that a smooth 40 year work trajectory is a long shot.
Give early until it hurts. Let that time value of money work its magic. Then when **** happens a catch-up plan is more workable
Just the view from my part of the world.
I have heard in the past you should have 25x your spending level but I have not heard it suggested you should have 25x your income. That seems extremely challenging to achieve.
No idea why you would need 100% income replacement in retirement. If you can do it and still enjoy life while young and able more power to them.
$100,000 salary x 25 = $2.5m
$2.5m x 4% withdrawal = $100,000 yearly retirement income.
You are right, it is 25x your spending need as the usual goal, not 25x your working salary (which is usually higher). But my point is the math shows you can replace your ENTIRE INCOME with those not-unreasonable assumptions.
So the math of it isn't challenging. Being consistent at it in spite of all other life events (job changes, moving, kids, college, divorce, illness, et al) over 40 years IS challenging, however.
I had my kids late in life at 40 and 42 like the previous poster. So I had some breaks to get started. College loans and car loans paid off, $200k in retirement, and half equity in a house came before kids. I would like to semi retire at 57, but oldest will still be in high school. But the trade off is I will be grandpa age when my kids are graduating high school. Might miss out on grandkids if they wait as long as I did. More established career so my wife can stay home when the kids are little.
That will be the case I will make to the wife for early retirement, it is my turn to stay at home with the kids. There may be some tax advantages with that. She is 7 years younger. I have a pension to help make that move.
Be careful with 8%. I know that is the safe number to use, but if you read earlier in this thread, it’s called an unattainable, fantasy number.
Below I have pulled SP500 annual closing data since 1950, and calculated the annualized return for 20, 30, and 40 year timeframes. (see chart)
Note this chart doesn't include dividends (well, 99% sure it doesn't, the returns this calculated on annual basis were consistently ~2% lower than what I found as a reference for annual returns that specifically included dividends) - so reinvest those and add 2% on top of these chart lines.
I will let everyone draw their own conclusions about fantasy and reality.
I didn’t start like that but had the advantage of the 2008 crash to make up a little. I don’t care what generation you come from each one has its challenges and opportunities to succeed. My wife’s family thought long term and she benefited from that, but she was one 1 of 3 grandkids, I was one of 34. I’m trying to set up my kids for success so I put a couple thousand dollars in their name at birth and one day hopefully they can benefit from it because I probably won’t be around when they need it most.
Dividends are not free money. Distribution of dividends cause the share value to drop by the same amount
What is cagr? Compound Annual Growth Rate? So if you invest in S&P 500 exclusively, at the end of 20,30 or 40 yrs you will be around 7.75% to 8.75% return (plus dividends). Am I reading that right?
I don't think that really helps the feasibility of the 8% annual return model. Most people would have a few different investments they are in, an ETF of the SP500 being the BEST performer over that time frame. Other investments probably brining it down some, into the 6% annual return.
I might be reading this chart wrong. I'm here to learn, let me know if I have too low of expectations.
If your employer provided health insurance is the ONLY thing keeping you from retirement, I suggest you look into the cost of an ACA policy. My brother-in-law recently retired at age 61 and his ACA premiums are lower than the health premiums he was paying through his employer.
The problem with getting an ACA policy is based on the amount of money that you show that you make on your tax return, if your involved in a business that looks like on paper that you make little or no money, you can get cheap as hell insurance. It all comes down to how much of your income you can write off or hide, not how much you actually make or your lifestyle.
Yeah, I commonly hear from my friends that they would like to retire but for health care (mostly in their mid 50s). When I ask if they’d even looked at what ACA would cost, they hadn’t. I get a sense that we’ve been programmed to think healthcare is absolutely unaffordable unless we have employer provided or Medicare. With the ACA it’s more affordable than people know, and the availability laws (preexisting conditions, etc.) keep it within reach.
Isn’t that for subsidized insurance? The exchanges are not just for people who qualify for subsidies. They are a competitive market place making health care insurance information, costs, and benefits easily comparable.
Yes, you are correct on both counts. Anyone can get a health insurance policy on the exchange. Further, subsidies are available for individuals wit’s incomes below a certain threshold (400 percent of the poverty level based on your family size and state). The subsidies essentially represent federal income tax credits.
A family of two in Iowa whose modified adjusted gross is less than approximately $78,000 are likely to qualify for a subsidized policy, making the policy more affordable than it would otherwise be. Although a married couple is likely to exceed this amount while working, there is a good chance that they qualify for subsidies if neither is working.
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Explaining Health Care Reform: Questions About Health Insurance Subsidies | KFF
This brief provides an overview of the financial assistance provided under the ACA for people purchasing coverage on their own through health insurance Marketplaces (also called exchanges).
www.kff.org
