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Retirement Savings?


Tiger MT's Carter

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bennelli-banger
A long time ago I came to the realization that planning and saving were not my strong suits so I took an average paying job with a company that put an amount equal to 10% of my gross pay into a retirement account. As soon as I was able to supplement that amount I did so. Then, when annual pay increases came about, I let them roll into the supplemental account. Thirty three years later I scheduled an interview with an investment counselor and asked when I would be able to retire. She looked at my file and said, "Whenever you feel like it."

I'm sure there are plans that may be more profitable but the tortoise and hare method worked pretty well for me.

I think you are selling yourself short...you planned and saved well.

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Most comments here are about private insurance, for thos not yet eligible for Medicare.... Medicare is underwritten and subsidized by the US govt as well as the privaye insurance.  Reimbursement rat

Health insurance is an important factor regarding retirement.  I do not understand all of the various factors that go into determining premiums.

Using my example; one person, 75 year old me, I have medicare plus I pay 180.00 per month for my aux policy, no deductible, no copay.  I pay nothing toward medical bills which amount to thousands of dollars each year.  I pay 22.00 per month for my Rx insurance and go in the donut hole every year, this year I made it to the donut hole before the end of March.

My health is in the tank with a myriad of ailments. I don't know where I would be if not fortunate enough to have this policy.  This is not a company provided policy.  My company cast all medicare retirees off several years ago but continues to pay 1400.00 per year towards whatever medical policy we opted for and they helped us find what was the best policy for us.

My pollicy seems super cheap compared to what I hear folks telling what they have to pay.  It is a puzzle to me?

Most comments here are about private insurance, for thos not yet eligible for Medicare....

Medicare is underwritten and subsidized by the US govt as well as the privaye insurance.  Reimbursement rates from MEdicare are about 85% of cost, so the delta is covered by the cash payor and private insurers. Alot of doctors are NO LONGER taking new Medicare patients since it does not cover their costs.

Its a problem conveniently glossed over by the ACA

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Health insurance is an important factor regarding retirement.  I do not understand all of the various factors that go into determining premiums.

Using my example; one person, 75 year old me, I have medicare plus I pay 180.00 per month for my aux policy, no deductible, no copay.  I pay nothing toward medical bills which amount to thousands of dollars each year.  I pay 22.00 per month for my Rx insurance and go in the donut hole every year, this year I made it to the donut hole before the end of March.

My health is in the tank with a myriad of ailments. I don't know where I would be if not fortunate enough to have this policy.  This is not a company provided policy.  My company cast all medicare retirees off several years ago but continues to pay 1400.00 per year towards whatever medical policy we opted for and they helped us find what was the best policy for us.

My pollicy seems super cheap compared to what I hear folks telling what they have to pay.  It is a puzzle to me?

Most comments here are about private insurance, for thos not yet eligible for Medicare....

Medicare is underwritten and subsidized by the US govt as well as the privaye insurance.  Reimbursement rates from MEdicare are about 85% of cost, so the delta is covered by the cash payor and private insurers. Alot of doctors are NO LONGER taking new Medicare patients since it does not cover their costs.

Its a problem conveniently glossed over by the ACA

I believe the latest adjustment to the Medicare rates passed by the congress and signed by the President has gone a long ways towards fixing medicare reimbursement rates, at least they are no longer being fought over every year.

My Tricare reimbursement rates are tied directly to the medicare rates, there were some doctors that were no longer accepting tricare payment either.

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Health insurance is an important factor regarding retirement.  I do not understand all of the various factors that go into determining premiums.

Using my example; one person, 75 year old me, I have medicare plus I pay 180.00 per month for my aux policy, no deductible, no copay.  I pay nothing toward medical bills which amount to thousands of dollars each year.  I pay 22.00 per month for my Rx insurance and go in the donut hole every year, this year I made it to the donut hole before the end of March.

My health is in the tank with a myriad of ailments. I don't know where I would be if not fortunate enough to have this policy.  This is not a company provided policy.  My company cast all medicare retirees off several years ago but continues to pay 1400.00 per year towards whatever medical policy we opted for and they helped us find what was the best policy for us.

My pollicy seems super cheap compared to what I hear folks telling what they have to pay.  It is a puzzle to me?

Most comments here are about private insurance, for thos not yet eligible for Medicare....

Medicare is underwritten and subsidized by the US govt as well as the privaye insurance.  Reimbursement rates from MEdicare are about 85% of cost, so the delta is covered by the cash payor and private insurers. Alot of doctors are NO LONGER taking new Medicare patients since it does not cover their costs.

Its a problem conveniently glossed over by the ACA

I believe the latest adjustment to the Medicare rates passed by the congress and signed by the President has gone a long ways towards fixing medicare reimbursement rates, at least they are no longer being fought over every year.

My Tricare reimbursement rates are tied directly to the medicare rates, there were some doctors that were no longer accepting tricare payment either.

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Health insurance is an important factor regarding retirement.  I do not understand all of the various factors that go into determining premiums.

Using my example; one person, 75 year old me, I have medicare plus I pay 180.00 per month for my aux policy, no deductible, no copay.  I pay nothing toward medical bills which amount to thousands of dollars each year.  I pay 22.00 per month for my Rx insurance and go in the donut hole every year, this year I made it to the donut hole before the end of March.

My health is in the tank with a myriad of ailments. I don't know where I would be if not fortunate enough to have this policy.  This is not a company provided policy.  My company cast all medicare retirees off several years ago but continues to pay 1400.00 per year towards whatever medical policy we opted for and they helped us find what was the best policy for us.

My pollicy seems super cheap compared to what I hear folks telling what they have to pay.  It is a puzzle to me?

Most comments here are about private insurance, for thos not yet eligible for Medicare....

Medicare is underwritten and subsidized by the US govt as well as the privaye insurance.  Reimbursement rates from MEdicare are about 85% of cost, so the delta is covered by the cash payor and private insurers. Alot of doctors are NO LONGER taking new Medicare patients since it does not cover their costs.

Its a problem conveniently glossed over by the ACA

I believe the latest adjustment to the Medicare rates passed by the congress and signed by the President has gone a long ways towards fixing medicare reimbursement rates, at least they are no longer being fought over every year.

My Tricare reimbursement rates are tied directly to the medicare rates, there were some doctors that were no longer accepting tricare payment either.

The "doc fix" as it is known, is not a real solution, just a patch to a problem, using govt funds.  While it helps the doctors continue to accept medicare....  it never addresses the problem.  

But unfortuantely, thats how the govt works.

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Interesting thread to see the different  takes . I am looking at retirement due to my wife's health and am thinking a lot about this subject though I have been in the finance area most of my career, Here are some random observations:

A lot depends on if you wish to live off of your nest egg w/o depletion of the corpus. Many retirement calculators and rules of thumb  figure  living just off the earnings.

Advice saying it's best to wait and work another 3-5 years usually fails to mention that this is probably 25% of the years you have left and it probably the best 25% your have left.

A lot depends on if you have debt when you retire. I am often surprised  size of the mortgage that some people carry into retirement.

For those that haven't done the math the break-even point on taking SS early or later is between age 78 and 80 until you reach that age you are ahead taking it early if you live past that age  your better off to wait. The question is how much past 79 do you expect to live. Since you pickup $3K-$5K if you live to be 85 you are talking about maybe another $25-$30K If you die 6 years early then you come up short by about $100K.

For you younger guys the secret is to just get started. I hear a lot of people say well what;s a million dollars going to be worth when I retire. The answer is a million dollars more than you're going to have if you don't start.

Just some of my thoughts. Remember we all finish at the same place.

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This retirement stuff is more complicated than it seems. Deciding when to take Social Security, how to get the best deal on health insurance, what and when to consolidate and which funds to draw from in order to keep taxes to a minimum are all issues. The reason I've decided to wait until the next calendar year to retire is that I'm going to receive a substantial severance package and didn't want to lose a large amount of it to taxes. When my consultant pointed out that I could defer taxes up to $23,500 by putting it directly into supplemental retirement, I realized the tax savings were significant enough to work the few extra months. Lots of little things come into play that can result in significant savings.
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The key is to start early in life on putting money away, and then continuing to do so throughout your working life on a regular yearly basis.

My accountant, who I've been with for 37 years now, pushed me into doing just that -- and he wasn't/doesn't  even selling retirement plans. I'm very greatful to him now, even though I could have used that money on other creature comforts earlier in life.  

Waiting to deal with all of this when you are 55 or 60 years old can get very complicated.

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The key is to start early in life on putting money away, and then continuing to do so throughout your working life on a regular yearly basis.

My accountant, who I've been with for 37 years now, pushed me into doing just that -- and he wasn't/doesn't  even selling retirement plans. I'm very greatful to him now, even though I could have used that money on other creature comforts earlier in life.  

Waiting to deal with all of this when you are 55 or 60 years old can get very complicated.

At 55 or 60 you are ducked!

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bennelli-banger
I have a tremendous number of clients who are in their 80's, quite a few in their 90's, and one  that is 102.  When to take social security, and also, whether or not to invade your corpus, are best answered once you know when you are gonna die!  As others have pointed out, one can do things in his/her 60's and 70's that probably won't happen in their 80's and beyond, so tapping some amount of your principal for quality of life purposes probably isn't such a big deal, but it is a matter of to what degree, I suppose.  I would not want to be doing that from the get go, you know, at 62, or 65, or 67...maybe 10-15 years into retirement?  As long as one has a plan...of some sort.  Like Mike Tyson said (I believe)..."every boxer has a plan...until they get punched in the face!".
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Start early. Start small but stick with it. You'll be rich when you retire. If you wait until 55 and then decide you don't have any retirement to fall back on, its nobody else's fault. It ain't hard, you just have to do it.
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Greg Hartman

Start early. Start small but stick with it. You'll be rich when you retire. If you wait until 55 and then decide you don't have any retirement to fall back on, its nobody else's fault. It ain't hard, you just have to do it.

I agree with that - and it can be done without any specialized financial or investment skill.  Just find a good mutual fund (I've liked the target date funds), and put the maximum permissible amount of money in with each paycheck.  Once you start doing this, you never see the money and don't miss it at all.  Do that over a working lifetime and you'll be more than fine in terms of retirement funds.

A couple of other critical elements, IMO:

1. Live below your means at all times.  

2.  Never borrow money for anything other than education, business (where it will make money for you) or land.  Never, ever, ever borrow for toys, vehicles or any other consumer goods.  This makes "budgeting" very simple - if you can't pay cash, you can't afford it.

3.  When you must borrow (to go to school, start a business or buy a house), treat that debt as a debt, not as a monthly payment.  Live like a church mouse and put everything you possibly can into paying off that debt as quickly as possible until it's gone.  It's amazing how much "extra" money one has for both retirement savings and quality every day living when you have zero debt.  You may have to do without for a while to defeat the borrowing trap, but once you've done that, paying only cash is easy and everything will cost you half what it would have if you borrowed to acquire it.

Just a financially unsophisticated old man's $0.02.

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Start early. Start small but stick with it. You'll be rich when you retire. If you wait until 55 and then decide you don't have any retirement to fall back on, its nobody else's fault. It ain't hard, you just have to do it.

I agree with that - and it can be done without any specialized financial or investment skill.  Just find a good mutual fund (I've liked the target date funds), and put the maximum permissible amount of money in with each paycheck.  Once you start doing this, you never see the money and don't miss it at all.  Do that over a working lifetime and you'll be more than fine in terms of retirement funds.

A couple of other critical elements, IMO:

1. Live below your means at all times.  

2.  Never borrow money for anything other than education, business (where it will make money for you) or land.  Never, ever, ever borrow for toys, vehicles or any other consumer goods.  This makes "budgeting" very simple - if you can't pay cash, you can't afford it.

3.  When you must borrow (to go to school, start a business or buy a house), treat that debt as a debt, not as a monthly payment.  Live like a church mouse and put everything you possibly can into paying off that debt as quickly as possible until it's gone.  It's amazing how much "extra" money one has for both retirement savings and quality every day living when you have zero debt.  You may have to do without for a while to defeat the borrowing trap, but once you've done that, paying only cash is easy and everything will cost you half what it would have if you borrowed to acquire it.

Just a financially unsophisticated old man's $0.02.

Greg.  Challenge your assertion.  Good advice is cheap compared to the value.  Similar to good legal advice (for which I assume you know something about).

I laugh at people that think they can or try to navigate a financial life without assistance.  But to each his own.

You pay for what you dont know!

But I do agree, treat savings like a bill!

The saying in our world is

"Pay yourself first"

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bennelli-banger

I know lots of pretty sensible, smart, curious people who do quite well navigating without a financial advisor; I also know lots of people who share those attributes who do have financial advisors.  Kind of like working on your car vs. using a mechanic, at least for some things.  Only rocket science is rocket science!  

          Bottom line, the accumulation phase of a financial life is not too tough if you do what Greg said a few posts ago...eschew debt to the degree you can...save, save, save...etc, etc.  The harder part is the income-production stage of life, as a screw-up has pretty dire consequences...hard to tell a 70 year old to go back to work!  To be sure, most people probably benefit from the services of a competent, trustworthy financial advisor, but there are many that do pretty well on their own.  For lots of people, life is pretty simple...contribute to the retirement plan at work, stay out of most debt, keep checking and savings as flush as is possible, save for kids' college, and live life...I guess there are some who do well enough that they have lots of extra $ each month or quarter that they need to do something with, but I am not one of them!  I have been funding the 401k and IRA, put away for college, and from there it is just basic living life.  I guess  I should work harder!  Nah...I want to enjoy the time I have...LOTS of money means having had priorities out of whack!

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Greg Hartman
Greg ...  I laugh at people that think they can or try to navigate a financial life without assistance.  

OK, let's laugh.   :D   My question to anyone who would seek to sell me investments "If you know so much about investments, how come you ain't rich - sitting on your own Caribbean island counting your doubloons instead of sitting here trying to sell this to me?"    :D

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