Hopefully, @rick81721 will spend his retirement on upgrading his bikes and @jdog will be able to retire.
How the hell are we supposed to retire?
- Thread starter Red Mosquito
- Start date
rick81721
Lothar
Haha I think I'm set for awhile. The horse is dialed in, I still have the fish as backup and i love the road bike (but wait no carbon wheels!). The only other bike I might consider is an ultralight hardtail for the flatlands.
thegock
Well-Known Member
This thread is especially interesting if you are 62 years old, like me, and rapidly approaching full retirement. The post that I most agree with in the last nine pages is by @jackx regarding using Vanguard.
Over the last 20 years in my role as CFO, I have been the employer’s administrator for their 401(k) plan. Based on a decision that I initiated of three separate employers’ executives, I have moved the assets of three of these plans from higher cost alternatives to Vanguard index mutual funds, which have low expense ratios (management fees plus 12b-1 fees). The executives in these plans continue, over 20 years later, to enjoy the higher returns that Vanguard’s model earn. If the “Fiduciary rule” had been in place, this change would be within its intent to protect the more junior, less affluent plan participants, who may not have much financial knowledge.
The best book that I can recommend that you read regarding this tactic is “A Random Walk Down Wall Street” by Burton G. Malkiel, who has been a board member at Vanguard.
https://www.amazon.com/Random-Walk-...coding=UTF8&psc=1&refRID=E68YPYKVVBGZMHAB4CWQ
For a book about investments and finance, it is far less opaque than most, though not an easy read. If an entire book is too difficult, @rottin’ suggested above bogleheads.org as a good resource that is philosophically aligned with Malkiel.
In brief, if your 401(k) assets have an expense ratio of more than 50 basis points (a basis point is one hundredth of one per cent or .0001), then someone other than you is getting rich from your retirement assets. You can learn about your plan’s expense ratio from your employer’s plan administrator. I prefer my portfolio expense ratio to be less than 10 basis points.
Annually, my portfolio is reviewed by my brother, who has a Harvard MBA and is trained as a CFP. I hesitate to recommend using a financial planner, because there are quite a few people out there who, it seems, operate in violation of the spirit of the fiduciary rule, by placing the advisor’s financial interests before the client’s. Trust and ethical practice are difficult things to measure. If I were to use a financial planner and I had substantial assets, my choice would be one who is compensated for his time, not out of charges based on assets under management.
Over the last 20 years in my role as CFO, I have been the employer’s administrator for their 401(k) plan. Based on a decision that I initiated of three separate employers’ executives, I have moved the assets of three of these plans from higher cost alternatives to Vanguard index mutual funds, which have low expense ratios (management fees plus 12b-1 fees). The executives in these plans continue, over 20 years later, to enjoy the higher returns that Vanguard’s model earn. If the “Fiduciary rule” had been in place, this change would be within its intent to protect the more junior, less affluent plan participants, who may not have much financial knowledge.
The best book that I can recommend that you read regarding this tactic is “A Random Walk Down Wall Street” by Burton G. Malkiel, who has been a board member at Vanguard.
https://www.amazon.com/Random-Walk-...coding=UTF8&psc=1&refRID=E68YPYKVVBGZMHAB4CWQ
For a book about investments and finance, it is far less opaque than most, though not an easy read. If an entire book is too difficult, @rottin’ suggested above bogleheads.org as a good resource that is philosophically aligned with Malkiel.
In brief, if your 401(k) assets have an expense ratio of more than 50 basis points (a basis point is one hundredth of one per cent or .0001), then someone other than you is getting rich from your retirement assets. You can learn about your plan’s expense ratio from your employer’s plan administrator. I prefer my portfolio expense ratio to be less than 10 basis points.
Annually, my portfolio is reviewed by my brother, who has a Harvard MBA and is trained as a CFP. I hesitate to recommend using a financial planner, because there are quite a few people out there who, it seems, operate in violation of the spirit of the fiduciary rule, by placing the advisor’s financial interests before the client’s. Trust and ethical practice are difficult things to measure. If I were to use a financial planner and I had substantial assets, my choice would be one who is compensated for his time, not out of charges based on assets under management.
THATmanMANNY
Well-Known Member
likewise my boss just lent me this book and I immediately changed all my retirement portfolios to Vanguards bread and butter low cost funds. I'm young so I can let it ride. As much as my boss irritates me sometimes I hate to admit that we are much alike with financial responsibility (frugal, below means etc) and he owns several properties. So life ain't bad for him.
https://www.amazon.com/Little-Book-...pell&keywords=bogle+common+senst+of+investing
https://www.amazon.com/Little-Book-...pell&keywords=bogle+common+senst+of+investing
thegock
Well-Known Member
Regarding Social Security benefits and when to begin collecting them, a certified financial planner might ask a client several questions. One set of questions might be whether your and your spouse’s parents are still alive, how old they are and/or their age when they passed. What is your family’s history of cancer or heart disease? Another set of questions might be about your general health. Are you diabetic or have you smoked two packs a day for the last three decades? These are facts that are useful in gauging your life expectancy.
In general, if you are eligible to collect SS benefits at the early age of 62 and do not, those benefits that you will collect increase by about 8% per year through age 70. An important factor is that 8% is a pretty good guaranteed rate of return.
My bias is to defer collecting SS benefits as long as possible if you can afford to do so. So, do you feel lucky?
In general, if you are eligible to collect SS benefits at the early age of 62 and do not, those benefits that you will collect increase by about 8% per year through age 70. An important factor is that 8% is a pretty good guaranteed rate of return.
My bias is to defer collecting SS benefits as long as possible if you can afford to do so. So, do you feel lucky?
Blair
Well-Known Member
so in your example if you could collect $100 a month at age 62, deferring 1 year would be $108 at age 63?
thegock
Well-Known Member
Ballpark
Blair
Well-Known Member
If you could start collecting at age 67 how long would you wait?
The benefit does not increase after 70.
I'd play the penalty of reduced benefit because of work, against the gain.
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1speed
Incredibly profound yet fantastically flawed
I don't think most financial planners believe they are operating in violation of the spirit of the fiduciary rule - I don't think most of them think about it at all. Like most other people working, they are doing it to earn income themselves, and the reality is their best options for that come from market fulfillment and the fee structure on portfolio maintenance, both of which are simple realities of the way our markets work. Unethical? Hard to say given the structure of compensation in that career path. Personally, I look at it from a more libertarian POV: be an educated consumer and be awre of their motivations and decided if those align with your own. But unless you have substantial wealth or a high tolerance for risk, there really isn't much need for a financial planner beyond the set-up. Index funds are typically boring and fairly stable, which sounds like what most people would want in their retirement. It's not a coincidence that after '08, most larger companies remodeled their savings plans into age-group specific index-based offerings. Unless I want to do it all myself without engaging in our savings plan (which would be stupid since my employer does offer matching), I actually don't have a ton of control over what I am invested in from a risk profile POV there. And I'm good with that for a number of reasons (not the least of which is that it's just one of several components of my retirement plan.) If you want to dream of instant wealth and are willing to take the gamble on chasing homeruns in the market, do it with non-retirement money (and if you do, do yourself a favor and think of those investments as products you bought rather than investments that will pay off because that's what many of them will be.) Whatever your risk profile, just take control of it now because if you are currently under 50 (and especially if you are under 40) and assuming that your SS is going to be anything other than pocket money when you no longer work (whether by choice or by being pushed out of the workplace) then you are setting yourself up for a pretty meager retirement.
THATmanMANNY
Well-Known Member
Roth IRAs are investments made after tax is taken out and earnings and withdrawals are tax free. SO when I am of age can I just withdraw EVERYTHING and not get taxed. That's the concept right?
thegock
Well-Known Member
correct
Yes -
and if you have both a roth and traditional retirement account, take the traditional first (or take the hit and convert to roth.)
THATmanMANNY
Well-Known Member
do you mean now or at the time of retirement or near retirement? (if my plan is to take lump sum)
Read up on the right time to do it. I haven't looked at it because I don't qualify.
Yeah I have both. Haven't contributed to the traditional in years though so only changes are market changes. I figure having a hedge between both types isn't bad as I don't know what tax structures will be like at retirement.
I make the assumption I can do the conversion if need be during any non-income years if there are any before retirement for a lower tax benefit, but not sure if that's how it actually works....
But your keeping your house here?
rick81721
Lothar
For another 12 months max
Thought you were moving north in the summer?