The big plus on 401k's is that the employer has very little control over your 401k once you're vested. My employer has both a pension and a 401k. We've seen the pension cut multiple times and most of us don't even factor it into the equation. The first time they cut it, they grandfathered the people with seniority. The last time they only made cuts to those with seniority.
Retirement Targets
- Thread starter yowza
- Start date
The big plus on 401k's is that the employer has very little control over your 401k once you're vested. My employer has both a pension and a 401k. We've seen the pension cut multiple times and most of us don't even factor it into the equation. The first time they cut it, they grandfathered the people with seniority. The last time they only made cuts to those with seniority.
I am guessing there may be regional differences as well. A lot of time how you grew up is what you know and how a person ends up existing. How to save or spend, etc.
I think health at that point in time determines a lot. I do the annual doc visits, even the embarrassing checks we gotta do when we get old, so as long as those keep coming back A okay and feeling good that would probably be a major factor in the time to tag in.
We probably all know people who complain about others who make more money and if you delve into questioning, you find out they typically don't want added stress or responsibility, etc so they don't push for advancements within their company or move to another.
But its not an investment that I must look over and manage, that is what I am saying. Your donation is taken out of your check, and you do not worry about it the return it is getting, do I have to roll it over if I take a different job and the rest of the financial decisions one must make for the rest of your retirement accounts.
I tend to believe that people prefer whichever plan they have access too, whether that is a pension or a 401K system. I will say I know of no one that has ever stated after retiring on a well financed pension plan like John Deere's, UAW or IPERS that they regret having that type of retirement system.
I guess the benefit of a pension with my employer is that I can also start my 401K type of plan, and while its not being matched, I would have 2 of the 3 legs of retirement covered, with the 3rd being SS.
I know of a few teachers that have opted out of the insurance program offered by the school and they end up getting X amount of dollars put into an annuity program. My oldest daughter currently does that at a school near Ames, and the school is putting $500 a month into the account for her, and has been doing so for 12 years.
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I don't know any schools in North Iowa that will let you take insurance or a portion in cash. I know several that have pushed but the school said it would hurt their pool and raise their rates so they don't give that option.
Also, my wife used to have a 403B, but the problem is, you can only contribute up to a percentage (Ipers gets included) of your income. My wife switched to a Roth very quickly so she didn't have the restraint placed on her, because she was unable to place much in there due to IPERS being a high percentage.
i know of 3 schools that allow the buyout program Ottumwa, Gilbert and Harmony used too when they had a HS. My current HS does not, and I tried like heck to get the program at Eldon when I was there.
We were told the same BS, hurt their pool rates, so I contacted our insurance provider and they said 10% could opt out, I brought it up at negations, use seniority to determine those 10%. Was told maybe, but we can only give you a couple a hundred dollars if we do this. I told the board, you are paying over $900 a month now under the contract, wouldn't you rather give me $500 a month and save $400 so I can go on my wife's plan, because it will cost me more than the $200 you are offering to get on my wife's plan, so I will just stay here. They would not bring up the number, so I stayed on their insurance and my wife was double covered, both the schools and her work insurance. We had others spouse doing the same thing.
How so? You pay money in and that money is then paid out to someone collecting benefits. It isn’t like you get your money back someday along with any investment gains. When you get paid it will be money from people who are still working.
The guy behind the trinity study that made the 4% rule updated it recently to 4.5%, as the 4% rule assumed 1% fees to fund management. Lots of newer funds are extremely low to even zero fees.
Do people pay loads/fees on funds anymore?
https://investor.vanguard.com/mutual-funds/profile/VTSAX
I have lots of money in that, .04% fee.
Get out when you can enjoy life. I retired at 59-1/2. Elderly parents who needed my assistance and births of grandchildren were reasons to hang it up after 37 Deere years. I get a decent pension, own some farm land that we cash rent to my brother-in-law and I do some free-lance writing that brings in some fun money. We inherited some property and we're planners and savers so our 401K, IRAs, savings accounts, and investments are solid. House (built in 2016) and vehicles are paid for, so our monthly expenses are pretty low. My wife collects social security, but I'm holding off to maximize the payout. We do some traveling, and I spend considerable time maintaining and fishing at our farm property. Winters are spent in Florida. My advice: live within your means, pay off your loans asap to minimize interest payments, pay off your credit card debt monthly and start saving and investing early in your career. I guess you could call us Dave Ramsay disciples because we pretty much have done what he recommends (except we use credit cards), even though we've never actually participated in a Financial Peace group.
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To summarize....want to retire early?
1. Marry and make sure both spouses work/have decent paying jobs
2. Don't have kids
3. Don't get divorced
4. Live in a low-cost state like Iowa
5. Be frugal and invest your money for the long term
1. Marry and make sure both spouses work/have decent paying jobs
2. Don't have kids
3. Don't get divorced
4. Live in a low-cost state like Iowa
5. Be frugal and invest your money for the long term
Sure people do.lots of people still go to advisers rather than just buying loads of vtsax. Fildelity now has a zero expense ratio. fund as well.
How many are or plan to reside in different places based on the seasons? Have contemplated where I would want to do that if can swing it when we get there. For work I was able to spend a winter just north of LA and that weather was nice but it is still a pricey place for real estate, taxes and general living. Not sure how far south would be south enough and what direction east or west.
Depends on what you like. I used to spend a couple of work weeks each winter in the Phoenix metro area. There's lots to do there...mountains, desert, scenic drives. Fun places to visit such as Grand Canyon, Sedona, Jerome, Wittenberg are all close. Tons of great restaurants and bars. Two very large shopping malls. Temps range from low 30s to the upper 70s in January/February. Spring training baseball in March. There's also a lot of traffic. And, everything is brown. I could see myself spending a winter there, for a change of pace.
We winter on the east coast of Florida on North Hutchinson Island (a barrier island 1-1/2 hours north of West Palm Beach). We have a condo in-between the Atlantic and the Indian River. I'm a swimmer and fisherman...typical days include the beach and pool. Unlike the gulf side, traffic and congestion are essentially non-existent. Temps range from lows in the upper 40s to the low 80s (in January). 60-mid 80s in Feb/March/April, although we had some 90s in February this year. If you're thinking Florida, suggest you get south of Orlando for warmer winter temps.
I don't mind some "cold", just not the brutal stuff or snow that sticks around for weeks. If I could just get out of January and February in Iowa that'd be great. Have a buddy that lives in Montana though and thought maybe that would be cool for one winter also. I joked with my wife we need to go to northern Alaska for a winter when watching one of those shows on tv, and I got the hell no answer. I could not handle that many hours of darkness day after day.
