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Retirement with 401k

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Firelight

I'm screwed. :down:

You and me both if you follow the cookie cutter paradigm.  If I adhered to standard thinking I couldn't be semi-retired (I now do online work about 10 weeks/year.)  Yet I live a pretty good life, have a nice home and other things, and hunt for 5 months including extended out of state trips.  It's very possible if you think and live outside the box.  I was not willing to just watch dollar signs as I also watched my birthdays add up, too many things can happen to prevent one from ever getting to enjoy that money.  Whatever their path, I hope everyone gets to reap the fruits of their labors.

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sneem
Don't overlook Roth IRA's. Yes, the money you put in is counted as taxable income, but once in it is tax free forever including all growth, interest, dividends and capital gains. Tax rates are going up. You have to consider if it makes sense to put money in avoiding the current taxes, let it sit for years, grow, and then withdraw it and have all of it taxed at a higher rate when you need it. And you can't take it out at the lower capital gains rate. All Regular IRA withdrawls are taxed at your income rate not as capital gains. Even though much of the growth may have come from capital gains distributions.

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Greg Hartman

I’ve been through this fairly recently.  I grew up very poor, so was paranoid about having enough money when I retired, because I never wanted to be dirt poor again, especially not as an elderly person.  So, I bought into those rules of thumb, made sure I had no debt early on, saved and invested for years, waited until I was 65 to retire so I could get Medicare and would not have to pay for private health ins, etc.

It’s a bunch of bull hockey.  As Lynn Dee says, there are so many factors involved that those “rules of thumb” (that are usually touted by someone trying to sell you something) are completely meaningless.

Obviously, being debt-free is critical – not just for retirement but as early in life as possible.  You get there by: (i) treating debt as something to be paid in full ASAP and living like a church mouse until it is paid – NOT treating it as a monthly payment; and (ii) by not borrowing for ANYTHING except land or revenue-producing business (and then paying that off right away).  Once you are and stay debt free, it’s amazing how much “extra” money you have.

In terms of retirement, take a REALISTIC look at both: (i) your expenses; and (ii) at what sort of earrings you can count on from your investments.  Then, it’s easy to back into what you need to live.  If you want to live high, you will need a big pile.  If you are willing/able to live modestly, you don’t need a big pile.  No magic there at all, no “rules of thumb”.  

Another factor, the MOST important factor of all, is that you WILL get older, you WILL die; your time here is LIMITED and your time to do the things you most love is probably even more limited.  Wait until you have met all the “rules of thumb” and you are 100% safe and you may have waited too long – what’s the point, then?

My paranoia made sure I had enough money to never be poor again.  Exactly 30 days before I retired, my wife had a catastrophic stroke that turned me into a house-bound 24/7 nursemaid for a severely brain damaged person, killing all my carefully made retirement plans.  I retired nearly four years ago and, since then, I have yet to draw one penny out of my retirement accounts (we live back in the woods, heat with wood, have a well, eat what I kill, I still do a little work, get SS, etc).  Each time I look at my investments there is yet more money there.  Unless something changes, my older daughter will inherit a good bit (it was never my plan to live my life in order to leave an inheritance).  

Be Lynn Dee, don’t be me.

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Chris Raymond
I'm screwed. :down:

ROTFLMAO!  ;-)

Brad--Oops, I can see where that could be misconstrued.  I thought your comment was meant as a postholer reference to the earlier political comments not your retirement fund state.  Sorry.

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fuess

To be safe, you really need closer to 15 to 20 x income.  This assures no consuption of principle and no worries of outliving income.

Life expectancy, while unknown, is definately a major risk factor in financial success.

LOOK AROUND, HOW MANY PEOPLE DO YOU KNOW WHO ARE 70, 80, AND OR EVEN 90??

You will be surprised how may you know.  It especially challenging when the Fed is fighting against you while artificially keeping the fixed income market deflated.

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fuess
The govt take of your 401K comes up every few years- more political posturing that anything but in a way it has happened in Europe to help pay govt debt ( more taxing it than taking it) but if the laws were changed and that would take all 3 branches and certainly time to do it- it could be done. Just don't see that happening that way directly here since we all are armed. But there are ways of getting it non-directly. Just pass a large a bill and don't read whats in it- certainly a possibility.

You mite see a wealth tax before confiscation of assets.  Being talked about now by he "think tanks".  It would kill family busiess and family farms,

.

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Tiger MT's Carter
It really depends on how many income streams you have. My wife and I both draw a pension, my wife draws SS and so will I in 4 years. We also both invested the max in our 401K’s for years. Who really knows how much will be needed over the next how many years? We have done the best we could, I hope that works out.

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PaFlyfisher
Aside from families with children, the great recession was probably toughest on those who suffered large financial losses to retirement investments and/or who suffered a job loss close to retirement. On the opposite end of the spectrum, recent college graduates have faced financial setbacks that will be felt throughout the economy for decades. However, for a narrow subset of those early in their working lives who have been stably employed, the great recession has been a boon. Investing pre-tax dollars in a market that had tanked, without having experienced any of the preceeding losses, means that a narrow group of people invested "on-sale" and have experienced large gains since the markets bottomed. Not to mentioned the ability to buy real estate in a buyers market with historic low interest rates and with significant tax credits. How many of those folks who took advantage of these circumstances, I don't know, but it created a nice head start on retirement for some.

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irish Eyes

Before I retired twelve years ago we consulted a financial planner. I was making a good govt. salary and would retire with over 70 percent of that salary. I had money in an IRA and my wife had funds in a profit sharing plan.

The planner warned us that we would be broke in 3 years! Don't know what he was trying to sell us but we just about ran out of the office.

No debt is important as is living within your means. In twelve years the only money we have taken out of the retirement funds was money we transferred from IRA to a Roth Account.....my wife is more concerned with leaving money for our children and grandchildren.

Don't be afraid of retirement, live life sensibly and everything will work out.

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Tim Frazier

At 49 I for some reason have become almost obsessed with this subject.  More so now that the State of Ohio has recaculated what my retirement will be and I lost almost 40% as well as it being delayed two years (60-62)

Still I will have that and my FERS from the Goverment and my retirement savings and maybe...maybe SS.

The way I look at it I will HAVE to be able to be happy living off of $40,000 and anything greater than that will be icing on the cake.  Everything paid off of course, should be doable.  When I look at the amount I'm dumping into my account now and what I pay for the kids college, I pretty much there now anyways!

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Wet Dog
At 49 I for some reason have become almost obsessed with this subject.  More so now that the State of Ohio has recaculated what my retirement will be and I lost almost 40% as well as it being delayed two years (60-62)

Still I will have that and my FERS from the Goverment and my retirement savings and maybe...maybe SS.

The way I look at it I will HAVE to be able to be happy living off of $40,000 and anything greater than that will be icing on the cake.  Everything paid off of course, should be doable.  When I look at the amount I'm dumping into my account now and what I pay for the kids college, I pretty much there now anyways!

Plus is only costs you $0.10/mile to drive!  :D

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Brad Eden
I'm screwed. :down:

ROTFLMAO!  ;-)

Brad--Oops, I can see where that could be misconstrued.  I thought your comment was meant as a postholer reference to the earlier political comments not your retirement fund state.  Sorry.

I am so screwed as far as retirement. So screwed. You can ROTFLYAO, I can take it. :down:

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trust me
Before I retired twelve years ago we consulted a financial planner. I was making a good govt. salary and would retire with over 70 percent of that salary. I had money in an IRA and my wife had funds in a profit sharing plan.

The planner warned us that we would be broke in 3 years! Don't know what he was trying to sell us but we just about ran out of the office.

No debt is important as is living within your means. In twelve years the only money we have taken out of the retirement funds was money we transferred from IRA to a Roth Account.....my wife is more concerned with leaving money for our children and grandchildren.

Don't be afraid of retirement, live life sensibly and everything will work out.

That's interesting.  Either the FP is seriously out of touch and thinks everyone is supposed to be millionaires, or he was just trying to scare you into a lucrative service agreement.  (Lucrative for him.)

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Tim Frazier

I think the biggest falicy is that you have to have money left at the end.  Sure it's important that you have something when your 90, but do you need it to be as much as when you were 70?  Unlikely.

To have a 500,000 nest egg and have any of it left seems like a shame.  

And yes, my kids understand that they are on their own.  They are getting substantial assistance for their college education but I plan to die with only enough to creamate me!

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Chris Raymond
And yes, my kids understand that they are on their own.  They are getting substantial assistance for their college education but I plan to die with only enough to creamate me!

Right, but don't forget to have an animal fund set aside if the unforeseen should happen and you drop over before your last dogs/cats.

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