Retirement Targets

[KnappShack]

Sorry to derail the latest conversation, and perhaps this was already discussed somewhere in a previous page, but it just hit me the other day that though I am doing well with all of the targets by age, #x income, etc, we are a single income family with my wife who will be at home full time with the kids for a while. Should that be a factor into retirement targets, or since all income/expenses are combined into one I am "on track" with my nest egg target that I was already shooting for?

Not a professional

But maybe you should work backward a little. Think of the number at retirement and apply the 4% rule or a guardrail distribution strategy and see what you get.

Factor in social security (I'm still factoring about 2/3 of what the estimate on the ss page)

If that works then you're on your way.

The ficalc.app is something I stumbled on when I was looking for distribution strategies

https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

FI Calc

ficalc.app

 

[OscarBerkshire]

Lol social security is a terrible retirement system. I think repealing and replacing it would be way more trouble than it is worth but for the birthrate (and immigration) world we live in today it is a terrible system. As a 27 year old, I still think SS will be around when I retire in (hopefully) 40 years but its value will be inflated away and it will basically just get me something off the value menu at McDonald's once a month, if that.

Pensions have their own issues but aren't as bad but there are legitimate reasons we moved away from them

 

[bozclone]

Lol social security is a terrible retirement system. I think repealing and replacing it would be way more trouble than it is worth but for the birthrate (and immigration) world we live in today it is a terrible system. As a 27 year old, I still think SS will be around when I retire in (hopefully) 40 years but its value will be inflated away and it will basically just get me something off the value menu at McDonald's once a month, if that.

Pensions have their own issues but aren't as bad but there are legitimate reasons we moved away from them

The elimination of pensions was a huge cost savings for companies.

 

[BCClone]

Sorry to derail the latest conversation, and perhaps this was already discussed somewhere in a previous page, but it just hit me the other day that though I am doing well with all of the targets by age, #x income, etc, we are a single income family with my wife who will be at home full time with the kids for a while. Should that be a factor into retirement targets, or since all income/expenses are combined into one I am "on track" with my nest egg target that I was already shooting for?

IMO, whether one works or both, you work as a team towards retirement. You figure out what you need for both of you. In my situation, my wife won’t look at any financial stuff, so I make sure things are covered for us. There is no magic number, just best guesses.

 

[BCClone]

The elimination of pensions was a huge cost savings for companies.

A couple other situations were: 1) they were a liability on the books and really made expansions or getting loans much more difficult. 2) what happens when a company goes BK, those pensions are destroyed basically.

Having a wife as a teacher, I’ve learned that many of them just say they have IPERS when retirement comes up. They really aren’t sure how it works. Several get to their rule of 88, or near it, and pull up the website and read that it says it’s a supplement to SS and then start asking questions. That is just one pension, several work the same way. If you retire right away and live 20 more years on your own, the value gets eroded hard.

I wish IPERS (can’t speak for other pensions with this) would have better education on it for beginning educators.

 

[CHim]

A couple other situations were: 1) they were a liability on the books and really made expansions or getting loans much more difficult. 2) what happens when a company goes BK, those pensions are destroyed basically.

Having a wife as a teacher, I’ve learned that many of them just say they have IPERS when retirement comes up. They really aren’t sure how it works. Several get to their rule of 88, or near it, and pull up the website and read that it says it’s a supplement to SS and then start asking questions. That is just one pension, several work the same way. If you retire right away and live 20 more years on your own, the value gets eroded hard.

I wish IPERS (can’t speak for other pensions with this) would have better education on it for beginning educators.

Here is a resource for people with IPERS: (Edit) The Amazon link doesn't seem to be working, here is the title of the book

​

TL;DR: Financial Literacy for Employees of Iowa Public Schools: Optimizing Financial Decisions Based On Your IPERS Benefits (TL;DR Financial Literacy Series)​

Amazon product ASIN B098W8TBCB

 

[dmclone]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

 

[KnappShack]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

Always.

Seems built into the system a bit.

 

[SayMyName]

I saw what the financial planning kids were doing in college.

I plan to get a bit of help for tax purposes, but I don't need to pay someone to tell me the obvious right now

Agree with this - tax planning could be worthwhile as it potentially represents one of the greatest expenses over the course of retirement, but can be optimized with the right strategies

 

[brokenloginagain]

Don't use a financial advisor/professional who's answered/experienced these same questions 100x.

Instead ask an anonymous message board your serious/important questions with major long term implications. Who wouldn't want the sage advice from a random selection of DINKs, singles, wealthy city folk, and small town farmers.

What could go wrong??

Love this thread, really fascinating to read everyone's insights!

 

[FriendlySpartan]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

List out the “bad” things that could happen and plan around them. Only real thing that can help with that mindset

 

[SayMyName]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

Monte Carlo simulations against your plan can give peace of mind around probability of success while also illuminating extreme worst case (and best case) scenarios

 

[Marcelason78]

Don't use a financial advisor/professional who's answered/experienced these same questions 100x.

Instead ask an anonymous message board your serious/important questions with major long term implications. Who wouldn't want the sage advice from a random selection of DINKs, singles, wealthy city folk, and small town farmers.

What could go wrong??

Love this thread, really fascinating to read everyone's insights!

Yup, if only one my professional financial advisors would have told me 40 years ago— “Just invest in an index 500 fund and forget about it. I’ll never be able to outperform it and you’ll save a ton in my management fees.”

 

[1SEIACLONE]

Lol social security is a terrible retirement system. I think repealing and replacing it would be way more trouble than it is worth but for the birthrate (and immigration) world we live in today it is a terrible system. As a 27 year old, I still think SS will be around when I retire in (hopefully) 40 years but its value will be inflated away and it will basically just get me something off the value menu at McDonald's once a month, if that.

Pensions have their own issues but aren't as bad but there are legitimate reasons we moved away from them

We move away from them because many companies were underfunding their programs, and when laws were passed to shore those up. Companies moved away from pensions to 401K programs because they cost the company less money.

SS is not a terrible program, and it's not an investment program, like so many on here think. It is old age insurance, nothing more, and nothing less. Way too many on here are thinking it as a ME program, I can make more money in the market than I will get out of SS. It's not a ME program but a WE program. It's a program for keeping people off the streets or living with their children in their old age.

All we hear its either "its not going to be there for me, so why should I be forced to pay into it" and "I could make more money in the market than what I will ever get from SS."

Ok. the how do we pay for the people under the following scenario.

30 year old hit by a drunk driver on his way to work and is now mentally handicapped and can no longer work. Only had 10 years in the 401K privatized SS program, that money is not going to last him long.

2nd one, the same guy has two small children and is killed in the wreck, they would receive SS benefits till age of 18 under the current program, who covers them once its a 401K program?

It's not a ME program folks, it's a WE program.

 

[EnkAMania]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

I came back from a miserable 2022 to be back on track. Cost me 9 months more working, but I'm back. I do have to get health care for a year and a half, that's the only thing that scares me.

 

[CycloneDaddy]

Wife started a new job last week after being under employed for the last 18 months and not contributing to a 401. She doesnt seem happy with me that she has to put 50% in for the rest of the year.

 

[Bestaluckcy]

My wife and I are 5 years away from early retirement, we've saved our whole working career, we have a good nest egg, we have a new house that will be paid off by the time we retire, no debt, emergency funds, I've met with financial planners, I use software, I subscribe to youtube channels, invest pretty conservatively now, etc. I'm always in constant fear that something bad will happen, preventing us from retiring.

Does anyone else feel the same way?

Some take a more conservative approach at the beginning to cover sequence of returns risk, then increase their exposure after a few years of positive returns. Others cover risk with insurance products. The third category of course are those that have gamblers risk appetite and can go 100% risk all the way (take what comes hell or high water).

I have been retired since 2017. Always need to take a conservative path for myself to sleep well at night.

 

[1SEIACLONE]

A couple other situations were: 1) they were a liability on the books and really made expansions or getting loans much more difficult. 2) what happens when a company goes BK, those pensions are destroyed basically.

Having a wife as a teacher, I’ve learned that many of them just say they have IPERS when retirement comes up. They really aren’t sure how it works. Several get to their rule of 88, or near it, and pull up the website and read that it says it’s a supplement to SS and then start asking questions. That is just one pension, several work the same way. If you retire right away and live 20 more years on your own, the value gets eroded hard.

I wish IPERS (can’t speak for other pensions with this) would have better education on it for beginning educators.

IPERS does a great job of keeping the people informed, but you actually have to do a little work and reach out to them or attend one of their Q and A sessions they have. Really important as you are getting close to your rule of 88 and thinking about retirement. Basic financial questions are things many people, just have not learned about or really just do not care to learn. It's not that the info is not available, it's your retirement, you need to invest some time to figure out what is best for YOU.

When my wife and I filed ours, we set up an appointment in Des Moines at the IPERS office, call came in and we sat down and filled out all the forms that day, she walked us through each of the seven different options and the good and bad of each. Every year every IPERS covered employee gets a print out of the expected retirement dollar figure at a given age, and anyone can request a packet or go online to get more information.

 

[KnappShack]

Wife started a new job last week after being under employed for the last 18 months and not contributing to a 401. She doesnt seem happy with me that she has to put 50% in for the rest of the year.

Use that future value calculator to show her what the real amount is.

And then make her fully fund the IRA to assert your dominance

 

[BCClone]

IPERS does a great job of keeping the people informed, but you actually have to do a little work and reach out to them or attend one of their Q and A sessions they have. Really important as you are getting close to your rule of 88 and thinking about retirement. Basic financial questions are things many people, just have not learned about or really just do not care to learn. It's not that the info is not available, it's your retirement, you need to invest some time to figure out what is best for YOU.

When my wife and I filed ours, we set up an appointment in Des Moines at the IPERS office, call came in and we sat down and filled out all the forms that day, she walked us through each of the seven different options and the good and bad of each. Every year every IPERS covered employee gets a print out of the expected retirement dollar figure at a given age, and anyone can request a packet or go online to get more information.

The stopped the annual printouts 1-2 years ago.