Retirement Q&A

[Go aeiou]

I don’t need an app to index investment. I’m sure mojo and Thunder will debate the allocations but in my early 50’s and conservative, I use the following for my retirement investments:

75% stocks
25% bonds/fixed income

It was weighted more on stocks in my earlier years. The 100 minus my age rule is too conservative, imo.

25% bonds/fixed at age 50 seems very conservative. I'm at 23% fixed at age 73. That's because I have to make RMDs. About 4%.

 

[Thunder Good-Oil]

25% bonds/fixed at age 50 seems very conservative. I'm at 23% fixed at age 73. That's because I have to make RMDs. About 4%.

It’s not a bad strategy to go heavy into bonds when interest rates are high. There’s the good yield plus when interest rates eventually fall, the value of the bonds increase.

Not really buy and forget about them though. The opposite holds true. When interest rates are rising bond valuations are falling.

 

[Firebirdparts]

I saved and saved and saved for 40 years. That's the short answer. I worked for Eastman Chemical Company, and our retirement has a chunk that the native form of payout is 5 annual lump sumps. So it looks like that bridges me to SS and so the whole thing just became totally uninteresting.

As far as investing, history has shown that a stock index fund and some treasuries will carry you through just fine. You certainly don't need to come to volnation for that info. If you want to get a job or own real estate or whatever, lots of things to earn more money if you want. It's hard to win at another man's game, I think. All my money is at fidelity investing in super boring stuff.

If you really want to understand investing you should seek non-stupid information far far away from this forum.

 

[OldandStillaVol]

My retirement is funded by 4 sources:

1. Small pension from pharma company I worked for 28 years. That company pretty much closed their pension benefit unless you are extremely fortunate.

2. Muni bond fund that I started 30 years ago and automatically reinvested interest until I retired last year.

3. Social security. Started taking at 69.

4. IRA from university job I had for 13 years. Haven't needed to tap this yet.

Worst financial mistake was a bad marriage that ended when I was 43, ex got 50% of all assets. Best move was that I consistently saved, and never felt the need to overspend.

I do think that some real estate is a good thing and similarly investments with precious metals. Defer to others for advice with those things.

 

[Thunder Good-Oil]

For those with a defined benefits plan type of pension, if the employer offers a buyout it’s well worth considering their offer. Just be sure to get those funds rolled over directly into an IRA and avoid the taxes. With most defined benefits plans, if you die before monthly payments commence you’ll get nothing. Also, the buyout amount will go up in value when interest rates fall. An exception could be if benefits are guaranteed for a number of years and/or if they can be assigned to a beneficiary.

 

[walkenvol]

44

I have 401k but I know it's not enough less than 100k

Pay depends on business but 80k or more

House is not paid for (went through a divorce five years ago and had to refinance to get her name off)

Two kids 16 and 12

House and truck are only debt right now. No credit card debt

I would say health wise I am on the better side of health for someone my age (workout six to seven days a week and eating properly 80% of the time) I have health insurance through work but its not the best

Employer does have 401k that's where it started from.

What is your interest rates and years left to pay on your house and truck loans? I wouldn’t pay off a 3% mortgage personally unless you don’t think you can beat a 3% return on your investments.

401K’s vary wildly on company matching, administration fees, and investment options. It would take a deep dive into your plan for anyone to give you an educated opinion. As a general rule though, invest up to the company match amount, fund a ROTH separate from your 401K, and if you have a high deductible health plan, fund an HSA if your funds allow.

Best advice has been given already - start investing now and don’t stop if things appear to go south for a bit.

 

[Tin Man]

The Social Security Web page has a calculator that you can use to estimate your future benefit based upon several factors. Use it, changing inputs for various scenarios.

The 8% per year metric for extending to age 70 is based upon you earning at least as much as you are at full retirement age for the years that you delay claiming your benefit. If you aren’t paying into Social Security at the same rate during those years between your full benefit age and 70, the increase in your eventual benefit will not be as great.

Hopefully, today, you’re young enough to factor in the future viability of Social Security and plan accordingly. The system is forecast to be unable to meet its obligations by 2034. This could be remedied, but for as long as it’s been known, Congress after Congress has failed to act.

A few years ago, in an interview with mainstream media, Mitch McConnell said that the political will didn’t exist to make good on the promise to boomers. When the trust fund is depleted, benefits will be reduced. The system will only be able to distribute what it has coming in. That situation will be another political hot potato, and whatever is done, some if not all Social Security recipients will be screwed.

Barring an unfortunate and untimely end, I will be among those that will be impacted. I’ve tried to prepare, but we will see what we will see.

 

[walkenvol]

The Social Security Web page has a calculator that you can use to estimate your future benefit based upon several factors. Use it, changing inputs for various scenarios.

The 8% per year metric for extending to age 70 is based upon you earning at least as much as you are at full retirement age for the years that you delay claiming your benefit. If you aren’t paying into Social Security at the same rate during those years between your full benefit age and 70, the increase in your eventual benefit will not be as great.

Hopefully, today, you’re young enough to factor in the future viability of Social Security and plan accordingly. The system is forecast to be unable to meet its obligations by 2034. This could be remedied, but for as long as it’s been known, Congress after Congress has failed to act.

A few years ago, in an interview with mainstream media, Mitch McConnell said that the political will didn’t exist to make good on the promise to boomers. When the trust fund is depleted, benefits will be reduced. The system will only be able to distribute what it has coming in. That situation will be another political hot potato, and whatever is done, some if not all Social Security recipients will be screwed.

Barring an unfortunate and untimely end, I will be among those that will be impacted. I’ve tried to prepare, but we will see what we will see.

SS uses your 35 highest paying years to calculate your benefit. $30K 40 years ago is valued higher than 30K last year. Once you’ve logged 35 “high paying” years, I don’t know how your benefit is improved by logging 40+ years unless you’re replacing lower pay years? Please explain how your benefit won’t be as great if you don’t work at all from 67-70. Again, this is assuming you already have 35 high pay years. I’m always trying to learn more about SS and Medicare. TIA

 

[Orangesmokey]

What is your interest rates and years left to pay on your house and truck loans? I wouldn’t pay off a 3% mortgage personally unless you don’t think you can beat a 3% return on your investments.

401K’s vary wildly on company matching, administration fees, and investment options. It would take a deep dive into your plan for anyone to give you an educated opinion. As a general rule though, invest up to the company match amount, fund a ROTH separate from your 401K, and if you have a high deductible health plan, fund an HSA if your funds allow.

Best advice has been given already - start investing now and don’t stop if things appear to go south for a bit.

The house is at 3.4% and I have a long time to go on it. The truck will be payed for by this time next year barring any financial set backs.

What is your suggestion on funding a ROTH separately? Using extra income?

 

[Go aeiou]

.

 

[Thunder Good-Oil]

SS uses your 35 highest paying years to calculate your benefit. $30K 40 years ago is valued higher than 30K last year. Once you’ve logged 35 “high paying” years, I don’t know how your benefit is improved by logging 40+ years unless you’re replacing lower pay years? Please explain how your benefit how your won’t be as great if you don’t work at all from 67-70. Again, this is assuming you already have 35 high pay years. I’m always trying to learn more about SS and Medicare. TIA

I didn’t follow that either. The calculation is based on the highest earnings per year. The percentage of an additional 8% per year delayed (8% at 68, 16% at 69, and 24% at 70) retirement credits doesn’t change.

 

[Tin Man]

SS uses your 35 highest paying years to calculate your benefit. $30K 40 years ago is valued higher than 30K last year. Once you’ve logged 35 “high paying” years, I don’t know how your benefit is improved by logging 40+ years unless you’re replacing lower pay years? Please explain how your benefit how your won’t be as great if you don’t work at all from 67-70. Again, this is assuming you already have 35 high pay years. I’m always trying to learn more about SS and Medicare. TIA

I didn’t follow that either. The calculation is based on the highest earnings per year. The percentage of an additional 8% per year delayed (8% at 68, 16% at 69, and 24% at 70) retirement credits doesn’t change.

Go to the Web page. Use the calculator. Change your expected income for the years until you’re 70 from your current earnings to zero and observe the changes to your projected benefit.

 

[walkenvol]

Go to the Web page. Use the calculator. Change your expected income for the years until you’re 70 from your current earnings to zero and observe the changes to your projected benefit.

You would have to print out your lifetime work history and apply the time factor to each year to determine your 35 highest paying years. I suspect your proposed earnings from 67-70 are replacing prior years in your 35 year calculation. Unless I’m mistaken, SS only looks at your 35 highest paying years to determine your benefit. $40k in 1980 might be a higher year than $100K in 2025 in the calculation.

 

[walkenvol]

The house is at 3.4% and I have a long time to go on it. The truck will be payed for by this time next year barring any financial set backs.

What is your suggestion on funding a ROTH separately? Using extra income?

To me, 3.4% is cheap money so I wouldn’t pay the mortgage off early.

All savings are extra money and free money from a company 401K match is typically best. Put your first savings there up to the match limit. If you have the time and savings ability to put a bunch into pretax, you will end up paying the IRS more than you’d like. ROTH and HSA programs can help you balance those future tax obligations.

 

[walkenvol]

I retired at 62 but kept working part time until my wife decided to retire at 65. Wasn't really that much of a difference in my SS, a few hundred dollars a month. We both have 401K's so that is what we have to go along with our SS monthly. However we changed a little on what we were spending unnecessarily. Haven't had to touch our 401K so far or our savings account either. We are doing pretty much as good as we were when we were working. No big changes except a lot more free time to do as we want.

Are you saying you’re living on only SS? If so, what are you going to with your accumulated wealth?

I’m pretty financially conservative myself, but I’d like to enjoy my savings before my health starts to fade.

 

[Go aeiou]

Are you saying you’re living on only SS? If so, what are you going to with your accumulated wealth?

I’m pretty financially conservative myself, but I’d like to enjoy my savings before my health starts to fade.

And it is likely that you or your spouse will have setbacks or worse beginning around 65-70.
Medicare + Medigap + Plan D.
If you retire early you need health insurance. Farm Bureau sucks.

We always wanted to travel. When our kids left home we did. 50+ countries.

 

[Tin Man]

Presently, my social security covers our monthly "nut," allowing my wife to save/invest most of her earnings. My savings/investments continue to grow. I dip into my "cash cushion" savings for extraordinary expenditures. We're planning for the potential impact of Social Security insolvency. Yes, I want Congress to do what's necessary to provide for the continuation of my Social Security benefit through the end of my life, but I'm not optimistic. I payed into Social Security for 50+ years, and believe that I deserve the amount that I'm receiving, but while there were surpluses, previous Congresses tinkered with it, creating the impending crisis of the trust fund being depleted. I don't see the political will to fix it, so, tail-end boomers are going to get shafted. Our kids and grandkids seem content to let that happen. Many of them have little hope for the system and matter-of-factly state it's just our bad luck to be old when it fails.

And the bonus kick in the butt? Medicare will become insolvent during our lifetimes. Dying old, sick, and penniless isn't what I planned for, but GenX and beyond shrug and say, oh well, too bad for you. It's a brave new world...

 

[Orangesmokey]

Presently, my social security covers our monthly "nut," allowing my wife to save/invest most of her earnings. My savings/investments continue to grow. I dip into my "cash cushion" savings for extraordinary expenditures. We're planning for the potential impact of Social Security insolvency. Yes, I want Congress to do what's necessary to provide for the continuation of my Social Security benefit through the end of my life, but I'm not optimistic. I payed into Social Security for 50+ years, and believe that I deserve the amount that I'm receiving, but while there were surpluses, previous Congresses tinkered with it, creating the impending crisis of the trust fund being depleted. I don't see the political will to fix it, so, tail-end boomers are going to get shafted. Our kids and grandkids seem content to let that happen. Many of them have little hope for the system and matter-of-factly state it's just our bad luck to be old when it fails.

And the bonus kick in the butt? Medicare will become insolvent during our lifetimes. Dying old, sick, and penniless isn't what I planned for, but GenX and beyond shrug and say, oh well, too bad for you. It's a brave new world...

I think a lot of the younger generation are worried about the here and now and not the future. I am not sure a lot of them think about being older and needing income. Me personally I don't want to work until three days before I die.

 

[Go aeiou]

I think a lot of the younger generation are worried about the here and now and not the future. I am not sure a lot of them think about being older and needing income. Me personally I don't want to work until three days before I die.

I'm not sure things have changed as far as young people. Except many jobs have included a retirement plan in the past. Nowadays, they are being dropped or the employer does not contribute.

 

[95 Vol Alum]

Presently, my social security covers our monthly "nut," allowing my wife to save/invest most of her earnings. My savings/investments continue to grow. I dip into my "cash cushion" savings for extraordinary expenditures. We're planning for the potential impact of Social Security insolvency. Yes, I want Congress to do what's necessary to provide for the continuation of my Social Security benefit through the end of my life, but I'm not optimistic. I payed into Social Security for 50+ years, and believe that I deserve the amount that I'm receiving, but while there were surpluses, previous Congresses tinkered with it, creating the impending crisis of the trust fund being depleted. I don't see the political will to fix it, so, tail-end boomers are going to get shafted. Our kids and grandkids seem content to let that happen. Many of them have little hope for the system and matter-of-factly state it's just our bad luck to be old when it fails.

And the bonus kick in the butt? Medicare will become insolvent during our lifetimes. Dying old, sick, and penniless isn't what I planned for, but GenX and beyond shrug and say, oh well, too bad for you. It's a brave new world...

Yeah, it’s the other generations’ fault and not the elected officials over the past 30 years, mostly Boomers and elected by Boomers.

Gen X and Gen Y will take it more in the teeth than you will. I knew to not consider government funded benefits in 2000.

 

[BigOrangeMojo]

I don’t need an app to index investment. I’m sure mojo and Thunder will debate the allocations but in my early 50’s and conservative, I use the following for my retirement investments:

75% stocks
25% bonds/fixed income

It was weighted more on stocks in my earlier years. The 100 minus my age rule is too conservative, imo.

Its personal finance. You know your situation better than me.

I like 125 - age so you are in line with that.

Im roughly 80-20 in 401k. Self managed accounts are roughly 90-10.

 

[Go aeiou]

Yeah, it’s the other generations’ fault and not the elected officials over the past 30 years, mostly Boomers and elected by Boomers.

Gen X and Gen Y will take it more in the teeth than you will. I knew to not consider government funded benefits in 2000.

Perhaps income tax on SS income should go back into the SS pool. Could use the average income tax rate to determine how much that tax is.

 

[Thunder Good-Oil]

Perhaps income tax on SS income should go back into the SS pool. Could use the average income tax rate to determine how much that tax is.

It probably doesn’t matter. SS payments are mandatory spending in the federal budget. So that amount paid to retirees literally isn’t going to be cut without an act of Congress. If the revenue from payrolls isn’t enough to cover those benefit payments (and the SS fund balance is zero or in a deficit) then the shortage will come out of the general fund/discretionary budgets. Earmarking tax revenues that come from the marginal FIT paid by individuals that are SS recipients is basically just a journal entry on the federal general ledger.

It really doesn’t require huge adjustments to the system to reverse the shrinking SS fund balance. Delay benefits, reduce COLA, raise the 6.2% / 12.4% payroll rates, lift the cap on high earners. The problem is that any politician voting for any of those adjustments will lose re-election so they’re all chicken **** to fix the accounting. They hold on to their seats by continuing to kick the can down the road.

 

[Tin Man]

Yeah, it’s the other generations’ fault and not the elected officials over the past 30 years, mostly Boomers and elected by Boomers.

Gen X and Gen Y will take it more in the teeth than you will. I knew to not consider government funded benefits in 2000.

You could benefit from reading it.

 

[95 Vol Alum]

View attachment 784012
You could benefit from reading it.

Sure. The meaning I couldn’t glean was how Gen X and beyond’s alleged attitude has anything to do with your situation. You brought it up. Why?