Retirement planning

[encorehunter]

Going along with Irving's financial tracking, I thought it would be interesting to see people's thought on retirement.

What percentage of your current salary do you think you would need to live comfortably once you retire?

How much to have in savings when you retire compared to your salary?

Would you prefer a lump sum of money to live off of, or a monthly check until the end?

I'm work I towards having 100% salary when I retire, along with having at least 2x my salary in savings. I don't think I would mind having a part time job, but I would rather not be forced too.

I still have 19 years to go to retire at 55, but I have been saving and work in towards it for the last 14 years. I know life throws curve balls pretty often, and now with three kids under 4, I probably will have some coming.

[StagLefty]

It's like having insurance-it's a crap shoot. I never planned on living this long haha. I'm living on my SS retirement alone. It's a strech but can be done by living within your means. Problem I'm running into is the ever growing cost of living. I may be forced into PT work.

[CS1983]

Not often discussed - I strongly suggest properly setting up irrevocable trusts and doing so early - like when you are in your 40's. Imagine a situation where you are living in an owned home, but get to deduct "rent" to yourself, are immune from loss of assets in the event of any creditor, lawsuit, or government issue, medicaid cannot touch your assets, and likely qualify for things like Colorado Indigent Care Program, and your kids are guaranteed to inherit it all without the government's involvement (no probate!) This is an irrevocable trust; but it cannot be setup days before you *really* have a need for it. If you guys want further discussion, I can elaborate.

*This post does not constitute legal advice - hire an attorney for legal advice*

I'm interested in your ideas and would like to subscribe to your newsletter. Please elaborate!

[Madeinhb]

I'm 36. I put 20% into my 401k. Have been for 6 years now.

[20X11]

My FIL took a lump sum when he retired. Now he regrets it. Market collapses in 2001 and 2008-9 hurt. He wishes he would have taken the "annuity" (monthly payments for life).

[crays]

I have always advocated taking advantage of "employer match" programs. My employer matches $ for $ up to 6% of pre-tax. I have always contributed the max allowable, which is currently 18% + 6% match.
I can't understand why people wouldn't at least go for the 6% to get the full match. Too many people focused on pennies, pushing dollars out of the way to see them.

How much will I, or anyone else need? You can drive yourself crazy trying to weigh all the factors, but my goal is to minimize/eliminate all debt, and have as much cash reserve as I can accumulate.

Foxtrot, any further info you care to contribute on irrevocable trusts would likely be appreciated by most of us here.

sent from me

[Great-Kazoo]

I'm interested in your ideas and would like to subscribe to your newsletter. Please elaborate!

As am i. perhaps a new thread for this discussion. With the understanding ANYTHING you post DOES NOT CONSTITUTE LEGAL ADVICE ;)

[BushMasterBoy]

Buy some silver dollars when you can find them at a decent price. Make them the last thing you sell. SHTF money.

[Gman]

It used to be having 1 million dollars put away at retirement would get you through to the end. I heard recently that the bar has moved to $2MM due to inflation. It's tough saving enough when you're paying for SS that likely won't be much help when you retire and putting enough away to be comfortable on your own. I did setup a trust in my 40s to make sure my wife is taken care of, but I'll likely be working until the day I die.

[Irving]

Anyone who can't live on 1 million dollars after retirement is just bad at money, especially if they retire after 40.

[CS1983]

It used to be having 1 million dollars put away at retirement would get you through to the end. I heard recently that the bar has moved to $2MM due to inflation. It's tough saving enough when you're paying for SS that likely won't be much help when you retire and putting enough away to be comfortable on your own. I did setup a trust in my 40s to make sure my wife is taken care of, but I'll likely be working until the day I die.

It's ironic, isn't it, that the folks who seem to be utterly deficient with savings skills force you to give them money to "save", because they don't trust you with it. Gotta love statist Ponzi schemes.

[theGinsue]

To tag onto Foxtrots irrevocable trusts post, I strongly urge everyone to consider it, and to do it early.

If you own your home and require nursing home care, it gets very expensive. If you have to rely on Medicare/Medicaid to supplement the costs, they can and will take your home. Last I heard, the property has to have been in a Trust for 7 years prior to using those programs. Talk was that it was going up to 10 years. This also applies if you sell the home. Only by planning early can you protect your assets. My wifes parents put their home in a Living Trust before they passed. At the time the law said 3 years. Before that period passed it went to 5 years and the Trust was not grandfathered. Before the 5 year period passed it went to 7 years. My MIL passed during this time and my FIL needed to go into a nursing home. His car was already also in my wifes name too. Their home just made the grandfathering of the 7 year requirement by 1 month. The only way his bank assets were protected is that all money in the account was used to purchase items for my FIL's care. His life insurance was protected because my wife went to a family friend/funeral home owner and locked his life insurance in to cover his eventual funeral/burial costs (essentially making the funeral home the beneficiary of the insurance).

Additionally, each state and the feds love to take a huge inheritance tax cut of your assets/net worth. This can serverely reduce anything you hope to pass down to your kids. If a Trust owns those assets, and your kids are secondaries on the Trust until your death, inheritance tax doesn't apply as the Trust owns the items.

As Foxtrot always adds, this is just my personal advice and should not be construed as legal advice. Seek competent legal counselling for advice that will hold up in the courts.

[Great-Kazoo]

To tag onto Foxtrots irrevocable trusts post, I strongly urge everyone to consider it, and to do it early.

If you own your home and require nursing home care, it gets very expensive. If you have to rely on Medicare/Medicaid to supplement the costs, they can and will take your home. Last I heard, the property has to have been in a Trust for 7 years prior to using those programs. Talk was that it was going up to 10 years. This also applies if you sell the home. Only by planning early can you protect your assets. My wifes parents put their home in a Living Trust before they passed. At the time the law said 3 years. Before that period passed it went to 5 years and the Trust was not grandfathered. Before the 5 year period passed it went to 7 years. My MIL passed during this time and my FIL needed to go into a nursing home. His car was already also in my wifes name too. Their home just made the grandfathering of the 7 year requirement by 1 month. The only way his bank assets were protected is that all money in the account was used to purchase items for my FIL's care. His life insurance was protected because my wife went to a family friend/funeral home owner and locked his life insurance in to cover his eventual funeral/burial costs (essentially making the funeral home the beneficiary of the insurance).

Additionally, each state and the feds love to take a huge inheritance tax cut of your assets/net worth. This can serverely reduce anything you hope to pass down to your kids. If a Trust owns those assets, and your kids are secondaries on the Trust until your death, inheritance tax doesn't apply as the Trust owns the items.

As Foxtrot always adds, this is just my personal advice and should not be construed as legal advice. Seek competent legal counselling for advice that will hold up in the courts.


Start a thread specifically with this in mind, to avoid it getting lost in the shuffle.

[Fentonite]

Do you have to own your home outright before making a trust, or can it be in a trust before it's paid off?

[kidicarus13]

As Foxtrot always adds, this is just my personal advice and should not be construed as legal advice. Seek competent legal counselling for advice that will hold up in the courts.






*This post does not constitute legal advice - hire an attorney for legal advice*

Can't be stressed enough after reading some of the advice posted with what I know about trusts.

No I will not be offering additional financial protection strategies on an internet forum.

[BushMasterBoy]

There always the third world countries. A lot of Americans move to places south. I can see me dying with a drink in my hand, on a warm beach. Beats a cold Colorado winter in a nursing home any day.

[Madeinhb]

There always the third world countries. A lot of Americans move to places south. I can see me dying with a drink in my hand, on a warm beach. Beats a cold Colorado winter in a nursing home any day.

This is true. I'm already planning and I have 30 years until retirement age. I'm looking into Ireland. Buy a house there. Have a management company manage it and rent it out while I'm not visiting. Help pay off the mortgage. Then sell my house here and love there.

[Gman]

Do you have to own your home outright before making a trust, or can it be in a trust before it's paid off?
Your home doesn't need to be paid off.

[Fentonite]

Thanks for the reply. I'll be looking into this.

[brutal]

Buy some silver dollars when you can find them at a decent price. Make them the last thing you sell. SHTF money.

If I would have put the money I spent on silver and into my 401k into Bitcoin the last few years, I could probably retire by now. But that's a real crap shoot isn't it?

[brutal]

To tag onto Foxtrots irrevocable trusts post, I strongly urge everyone to consider it, and to do it early.

If you own your home and require nursing home care, it gets very expensive. If you have to rely on Medicare/Medicaid to supplement the costs, they can and will take your home. Last I heard, the property has to have been in a Trust for 7 years prior to using those programs. Talk was that it was going up to 10 years. This also applies if you sell the home. Only by planning early can you protect your assets. My wifes parents put their home in a Living Trust before they passed. At the time the law said 3 years. Before that period passed it went to 5 years and the Trust was not grandfathered. Before the 5 year period passed it went to 7 years. My MIL passed during this time and my FIL needed to go into a nursing home. His car was already also in my wifes name too. Their home just made the grandfathering of the 7 year requirement by 1 month. The only way his bank assets were protected is that all money in the account was used to purchase items for my FIL's care. His life insurance was protected because my wife went to a family friend/funeral home owner and locked his life insurance in to cover his eventual funeral/burial costs (essentially making the funeral home the beneficiary of the insurance).

Additionally, each state and the feds love to take a huge inheritance tax cut of your assets/net worth. This can serverely reduce anything you hope to pass down to your kids. If a Trust owns those assets, and your kids are secondaries on the Trust until your death, inheritance tax doesn't apply as the Trust owns the items.

As Foxtrot always adds, this is just my personal advice and should not be construed as legal advice. Seek competent legal counselling for advice that will hold up in the courts.

My understanding is that Fed Inheritance tax kicks in at $5M and CO doesn't tax. Who here has those kinds of assets? Not me.

The advice I generally see does not recommend living trusts for those without dynasty assets, but I was not aware of the medicare thing.

[kidicarus13]

If I would have put the money I spent on silver and into my 401k into Bitcoin the last few years, I could probably retire by now. But that's a real crap shoot isn't it?
Hindsight is always 20/20...
https://www.google.com/amp/www.latimes.com/business/hiltzik/la-fi-mh-the-bitcoin-crash-20131207-story,amp.html?client=ms-android-verizon

[Irving]

I find that article funny, because I bought all my Bitcoins when they were $11 a piece, and started selling them when they were around $124 a piece. Mt.Gox got hacked (robbed) and then went bankrupt without paying out the money that people (me) had in their "bank." I would have loved to have held on to them all, even at the bottom price mentioned in the article of only $600 a piece.

[encorehunter]

My understanding is that Fed Inheritance tax kicks in at $5M and CO doesn't tax. Who here has those kinds of assets? Not me.

The advice I generally see does not recommend living trusts for those without dynasty assets, but I was not aware of the medicare thing.

Have you ever heard of the saying "Land rich, money poor." I have several ranching friends who almost lost their ranches or did loos a big part of them because of the inheritance tax. The properties had been in their family for generations, with a lot bb's of the land being purchased at $.10-.25 an acre. The drought made them sell off the cattle, then when their parents passed, there was little money to pay the taxes. The government taxes the land at current value. 10,000 acres to them could be worth $7.5 to $10 million easily.

[CS1983]

Inheritance tax is utterly immoral. Then again, so is the income tax.

[Madeinhb]

I added this to funny pictures on accident. Fits here.

http://uploads.tapatalk-cdn.com/20170108/ccbe41ebe3a1cf24b015206f8d78dcd5.jpg

[Irving]

Inheritance tax is utterly immoral. Then again, so is the income tax.

In my heart I agree, but without it, all the private land would have been bought up and passed down to families that aren't mine our yours by the time you and I were born.

[CS1983]

In my heart I agree, but without it, all the private land would have been bought up and passed down to families that aren't mine our yours by the time you and I were born.

No, because someone would decide they didn't want it and sell it just like my wife's grandmother did with their family ranch off of Henry Lynch rd in Santa Fe.. the street named after her grandmother's father.

[encorehunter]

A couple years ago I changed my from my money market account and used it to purchase years of service credits. I feel this protects me better in case of another major market fluctuation. For the new year, I decided to start putting away another $50 per check into a 457. It is only $1300 per year, but over 19 years it should add up to a nice little bonus for retirement. Hopefully I will be able to increase the monthly contribution yearly.
Living within your means is a big step in retirment to me. It is very difficult when you have gun and ammo addictions. Having all bills paid off well before retirement is another major step. I am working on having at least 10 years of out of debt before I retire. I don't look at all guns as costs. There are a lot I look at as investments.

[Irving]

This is where my studies for self-employed retirement planning have led me, so far.


I've spent a few hours looking into this, and this was the best explanation of the main self-employment retirement accounts I could find.

Solo 401(k) vs SIMPLE IRA vs SEP IRA
http://www.obliviousinvestor.com/sep-vs-simple-vs-solo-401k/

You can even do a Solo Roth 401(k) which will allow you to have both pre-tax, and post-tax funds, for those of you who aren't sure if you'll be in a higher, or lower tax bracket when you retire. Best of both worlds? Worst of both worlds? I don't know, I haven't researched that position yet.

Anyway, with a possible max annual contribution of $54,000 for a both a Solo 401(k) and a SEP IRA, (but easier to do with Solo 401(k)), those both look way more useful than the standard IRA or Roth IRA with a max annual contribution of $5,500. I think for me, the above two mentioned are the way I'll go.

[SamuraiCO]

Going along with Irving's financial tracking, I thought it would be interesting to see people's thought on retirement.

What percentage of your current salary do you think you would need to live comfortably once you retire?

How much to have in savings when you retire compared to your salary?

Would you prefer a lump sum of money to live off of, or a monthly check until the end?

I'm work I towards having 100% salary when I retire, along with having at least 2x my salary in savings. I don't think I would mind having a part time job, but I would rather not be forced too.

I still have 19 years to go to retire at 55, but I have been saving and work in towards it for the last 14 years. I know life throws curve balls pretty often, and now with three kids under 4, I probably will have some coming.



I have the same numbers in mind but may continue to work but not in pharmacy. Would love to be a teacher and hope to be able to make a transition from pharmacist to something else in a few years. Tired of evenings until 10pm and every other weekend work.

Home will easily be paid off by 65 if not sooner with some additional principle payments. But Murphy has a way to screw things up.

[RCCrawler]

I put 22% into a 401a and have for the last 20 years, I also started a Roth IRA a few years ago and everytime I get a raise I bump that up a bit working towards maxing that out each year. Of note I do not pay into social security, and have not paid into it long enough to ever receive the benefits should they suprise everyone and still be there when I'm ready to retire.

Crazy I've been at this job for 20 years, half my life, and I've still got another 25 years to go...

[Irving]

Post-tax is never profitable in the long run, if the money you pay on taxes would have otherwise been invested. It's far, far more economical to invest into a 401k and invest the money you would have spent in taxes in the same. Of course, a lot of people don't do that, they do fixed percentages.

If the money a person pays on the taxes for a Roth account would have otherwise been spent on hookers and blow or something equally frivolous, then the Roth is more effective down the road.

Do you have examples that support this? I mostly feel the same way, but I'd like to see the numbers comparing post tax contributions when one is younger and in a lower tax bracket, compared to the tax rate of one's withdrawls 40 years from now when they will likely be in a higher tax bracket and taxes have (likely) gone up.

[20X11]

This is true. I'm already planning and I have 30 years until retirement age. I'm looking into Ireland. Buy a house there. Have a management company manage it and rent it out while I'm not visiting. Help pay off the mortgage. Then sell my house here and love there.

Ireland is great as long as you want to give up your firearm rights.

[Madeinhb]

Ireland is great as long as you want to give up your firearm rights.

Well moving outside of US, kind of expecting it. It had it's pluses and minuses when moving away.

[Irving]

I've read all his blogs so am familiar. I'm find it and review.

[hatidua]

Ireland is great as long as you want to give up your firearm rights.

Different places can change some people's focus a bit. As an example, I used to get paid to spend a whole lot of time on the most perfect beaches in the world (Aitutaki, Seychelles, Maldives, Bora Bora, -the list filled multiple passports) and I can't think of a single one of those destinations where I sat there thinking "boy, I sure wish I could put up some paper plates and back off a thousand yards with a .308". Conversely, I don't think many people that live in Compton worry about tides and how that would affect tomorrows fish harvest. Those are extreme examples, but there are some places in the world I could move and completely forget about what a case of ammo cost. Unfortunately, my wife isn't as keen on living under a palm tree as I am.

As far as retirement planning, I have sadly been witness to people that had great plans and the calendar of their lives didn't last long enough. Some have had the best financial situation imaginable and didn't make it to 45, others had great plans and dreams for what they were going to do in retirement and expired at the dinner table at 50.

If you have a goal to do something, putting it off until "someday" isn't always the best plan.

[Madeinhb]

If you have a goal to do something, putting it off until "someday" isn't always the best plan.

I tell my buddy this all the time. He is one of those work a holics and doesn't take time off. Always says I can do it later in life.

My wife and I took all of July off and went to Europe. 2 week cruise. Few days in some cities and then a week in Ireland. We travel and do what we want. But we are planning for retirement, not to go and do things but to be able to sit around and not work.

[tmckay2]

Retirement planning is tricky. On the one hand you don't want to be working til you die, on the other I don't want to die working constantly because I'm banking every cent instead of enjoying some of it at 30 years old. There needs to be a balance. I expect to WAY downsize my life when I retire. I put in the 6 percent that my company matches and I have a good salary so it's decent, then I am putting a decent amount into the house. The plan is to pay it off and when I retire sell it and way downsize, putting the profit in the bank then living off around the equivalent of 35k in today's dollars. With no housing cost that is more than doable. I'm not extravagant and don't go on crazy trips or burn money on completely idiotic expensive things. I want to enjoy some of the money now so I have a nice house and big property but feel that is still somewhat an investment. Things like fancy cars and stuff I don't get into, they just burn the money.

But I hear some people banking crazy amounts in retirement and you have to verify careful. For one you don't want to be so frugal and never enjoy any money then die at 40. Second, that money still goes into the market. It isn't guaranteed. You could lose a lot though it isn't likely historically. I believe you need to put away a decent amount but also put a little money in some other investments like a bit of precious metals, a bit of common ammo and of course a residence.

[tmckay2]

I tell my buddy this all the time. He is one of those work a holics and doesn't take time off. Always says I can do it later in life.

My wife and I took all of July off and went to Europe. 2 week cruise. Few days in some cities and then a week in Ireland. We travel and do what we want. But we are planning for retirement, not to go and do things but to be able to sit around and not work.

Haha yeah it's funny a financial adviser was like "well when you retire you want the same level of life right"? I was like, are you insane? With a decent roof over my head, a warm bed and not having to work shit let me shoot a few days a week and sit in my rocking chair the others and I'm happy. I think the problem is a lot of people today view retirement is living the life with a boat, vacation homes, travelling the world, etc. And yes, for that you need some serious dough.

[Madeinhb]

Haha yeah it's funny a financial adviser was like "well when you retire you want the same level of life right"? I was like, are you insane? With a decent roof over my head, a warm bed and not having to work shit let me shoot a few days a week and sit in my rocking chair the others and I'm happy. I think the problem is a lot of people today view retirement is living the life with a boat, vacation homes, travelling the world, etc. And yes, for that you need some serious dough.

Yup. I want my house paid off and no debt. And like now - live within means. And possibly downsize.

[brutal]

Yup. I want my house paid off and no debt. And like now - live within means. And possibly downsize.

This is what I'm working on.

Mortgage currently under 100K.

[Irving]

I'm working on killing the mortgage and starting retirement investments, as well as some passive income.