Hold off retiring until 80? Wow!!

[fred cook]

When I was about 30 (I'm 63 now) I had the opportunity to buy a piece of commercial property. The rent from the property almost but not quite covered the bank note, taxes, insurance and repairs. So, for about 20 years I had to "kick in" some extra cash each month. However, once the bank note was paid off, the rent from the building paid for my son's college and left a little more to boot. The property that appraised at $75k in 1978 is now worth about $600k and is paid for! The purpose of this story is not to say "look what I did", but rather to encourage the younger folks out there to look for opportunities for long term investments. It might seem to be a drag, but the movie or beer money that you are giving up at the moment can/will be a lifesaver later on in your life. Also, the one investment that you should never pass up is if your employer offers 401k matching or the opportunity to buy company stock at an employee discount. I have heard people that I worked with say that they could not afford to put 4% or 6% of their salary into a 401k and/or that they did not know anything about the stock market and would not even consider buying the company stock even though they would be making an instant 10% or so profit! Of course, today, it might make more sense to invest in hard currency like gold or silver than in paper stocks.

[Hugh R]

Depends on how the money is compounded. The calculator I used assumed you put $30/day away on a monthly basis. If the interest was compounded daily and you deposited daily it would be more.

[Tervuren]

Originally Posted by fred cook

Also, the one investment that you should never pass up is if your employer offers 401k matching.

Dumb stupid co-worker thought it was some way for the company to steal his money, messed up in the head a lot of guys are thinking companies are just trying to screw them. My company is trying to take care of its employees. Oh well, some just don't get it.

[recycled sixtie]

Sounds good on paper but in reality it has not worked for me and a friend of mine. One company I worked for, I had to have a certain portion of my salary put into co. stock. It eventually became worthless as the co. did not make any money.The co. was taken over for next to nothing hence the shares were virtually worthless. The friend of mine bought shares in his company. The company went broke and his shares became worthless. The president of the company started up another company under another name and the same line of business. I am sure this happens a lot. If you work for a company and buy shares in it, you are putting all your eggs in one basket. It might work for some but not everybody because not all businesses survive.

[widgeon13]

The only way company stock is attractive is if you get options, otherwise stay clear of that IMO.

[masraum]

If you get say a 10% or 15% discount off of the current price of company stock, and you work for a good company (good numbers, longevity, etc) and you keep your ear to the ground, you can do OK, as long as you aren't putting too many of your eggs in that basket. For me, it would be a small percent.

Even then, there's some amount of crap shoot luck involved. I'm sure the Enron folks thought that they worked for a good company.

Something else to remember that lots of folks seem to forget about. I believe it's recommended for folks to alter their investment strategy as they age and get closer or into retirement. Assuming you actually have some money put away, as you age, shouldn't you be moving that money from more volatile investments to more stable investments? IE, shouldn't you be converting money in stocks to something else if you're retired. It's not like the last 10-15 years has the market cornered on volatility. The market has gone up and down before.

[Aurel]

Originally Posted by Embraer

i just turned 30 last week, and i've been maxing out my 401k for years. i will retire at age 53 (have to be retired by 56 by law). my retirement system is a 3 part system, with my annuity, 401k and SS. i'm not counting on anything, but on paper, i should be around 4 mil when i decide to quit. in addition to maxing out the 401k, i still only live on 40% of my net paycheck. 60% of my net pay is diverted into a separate account that i don't touch. it's extreme, but i'm still able to live comfortably on the 40%. i'm very lucky.

Do you support a family? I too could live on 40% of my income and retire at 55 if I did not have two dependants...

[azasadny]

I will never be able to retire.....

[Aurel]

I think that investing in retirement involves a lot more than investing money. It involves investing in ones own health, as well as investing in spiritual enlightenment, so that that one can be at peace in the present, not ruining it by worrying about the future. Happiness is somewhat dependent on material conditions, but peace is not. It is all about getting free from your ego that tells you what material things you need to have to be happy. As far as health is concerned, most illnesses originate from energy imbalances, inner conflicts, weakened immune systems, etc...not something that the health industry likes to hear or advertise.

[imcarthur]

Despite a complete financial wipe out in my late-30s (aka a divorce), we have no mortgage, no car payments, some bank stock (CDN ) some bullion & a decent nest egg of cash (not earning enough). Still not comfy retirement level, though.

My body is starting to slowly retire & I really wonder if I can keep up my pace much longer. We are starting to talk about semi-retirement in 5 + years. We will probably end up as snowbirds because of the health care costs associated with a move to Warm, USA.

We decided 10 years ago not to leave travel until we retire. I have seen too many old decrepit people on tours tottering slowly around the ruins in Europe that obviously did. No thank you. This certainly bites a bit into our savings potential each year but in a justifiable way imho.

Ian

[McLovin]

Originally Posted by Aurel

I think that investing in retirement involves a lot more than investing money. It involves investing in ones own health, as well as investing in spiritual enlightenment, so that that one can be at peace in the present, not ruining it by worrying about the future.

Umm, did you read the first post?

I think people are doing a pretty good job with not worrying about the future.

93% of people are sure a lot more spiritually enlightened in that way than I am.

Originally Posted by Hugh R

From the LA Times today.
The average person has squirreled away a mere 7% of their hoped-for retirement savings -- a median of just $25,000 versus a desired goal of $350,000, according to the survey. Three in 10 people in their 60s have less than $25,000, suggesting they'll have no choice but to live on Social Security.

The poll found that 37% of people have no retirement savings, and more than half of them have socked away nothing for their children's college educations.


The survey of 1,500 Americans was conducted from early August to late September.[/I]

[flatbutt]

I just hope to retire before the gov't takes control of my private savings.

[KFC911]

Originally Posted by imcarthur

....We decided 10 years ago not to leave travel until we retire. I have seen too many old decrepit people on tours tottering slowly around the ruins in Europe that obviously did. No thank you. This certainly bites a bit into our savings potential each year but in a justifiable way imho.

Ian

I occasionally grab a bite to eat with my dad and one of his ex co-workers. Old guy has over 30 investment properties and he and his wife's goal was to accumulate a millions worth for each of their five kids before they travelled. Dad says the only travelling she ever did was to Duke for chemo treatments before she died ....freakin' sad if ya ask me.

ps: I like these lines from two favorite bands: "Making money you can't spend, ain't what being dead's about", and "Ya can't take it with ya when ya go". Time is finite but one can ALWAYS make more money...

[Aurel]

Originally Posted by McLovin

Umm, did you read the first post?

I think people are doing a pretty good job with not worrying about the future.

93% of people are sure a lot more spiritually enlightened in that way than I am.

Not worrying about the future and not planning for the future are two totally different things.

[McLovin]

Totally different?

I don't think so.

[vas930]

Lifestyle choices are the biggest factor in when you will retire.

[J P Stein]

Originally Posted by vas930

Lifestyle choices are the biggest factor in when you will retire.

That is a big part of it.....but biggest, I think not. Sure, if you're going to have to live without food & shelter, that would make it the biggest....but just think of peaceful you would be after you stopped shivering.

I can only speak for myself but my biggest reason was getting tired (fed up) with going to work 40 hours a week for 40 odd years.....not a bad job at all, just having to be there gets to ya. It's easy to say "I'm gonna work till I'm 80", doing it is another thing. When I got past 65 even I noticed I was slowing down badly & my health wasn't getting any better.....in fact, I was surprised I made it to 65 but worked till I was 66.

After running the river banks for the month of September, I was in better shape (mentally & physically) than I had been for years. I shoud'a retired sooner.

[Aurel]

Originally Posted by McLovin

Totally different?

I don't think so.

That is because the point I was trying to make went way over your head. Nevermind, I have no need to explain.

[johnsjmc]

I retired at 55 in 2006. At the time I was expecting to work until at least 65. I was working as a High School auto shop teacher and enjoyed the work a great deal . I was forced into retirement by a knee injury. I couldn,t stand for long periods for several months. my employer wanted to put me in a regular classroom so I chose to retire. I had about a 40% drop in pay but a coresponding drop in expenses of about 30%. It turns out I was going to work for about $85 per week. I supplement my income with 2 rental properties I bought in the late 80's ( instead of stocks and cash savings).and healthcare isn,t an issue here in Canada. I did tap the rental equity a couple times (new cars etc) but still have some equity.Thank goodness the real estate market never exploded here. I should have saved more but also could have saved less.

[Hugh R]

Plan for the worst, hope for the best.

I looked at the SS model when I was about 17 and just started paying in, and said to myself "Self, this isn't going to be sustainable". That was 40 years ago, and I still haven't changed my opinion.

Live within your means, stick SOMETHING away for a rainy day and retirement. What is the worst that could happen? The gubmit could nationalize your accounts or let inflation make it worthless. They only thing you will have missed out on were that you could have spent it on hookers and blow, and you'd still have nothing to show for it, except maybe an STD and dementia.