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Retirement Savings?


Tiger MT's Carter

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My number one choice for wealth creation is real estate.

Care to be more specific?

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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

bennelli-banger
back to an earlier portion of this  thread; I just went to the CNN/MONEY website, found the retirement calculator section, and found that I will need about 22x my current salary.  They assume you want 85% of that when you first retire, that you live to be 92, and that your $ earns 6% along the way.  They list all of their assumptions down below, which is a good thing to read.  If I was handy, and inclined, I would buy a few duplexes as a source of income and a part-time job in retirement....who knows???  But I am not handy, and am kind of a perfectionist, and would not allow the properties to be subject to the "wear and tear" of renters without wanting to get things back to 100% asap and I doubt it would "pencil out" financially...who knows?
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My number one choice for wealth creation is real estate.

Care to be more specific?

Because of the number of different real estate options it is difficult to make specific suggestions on a forum like this.

A couple of things though if I were young.  Buy a commercial lot on the outskirts of the growth area but where growth was moving out to.  Ten to twenty years later, possible good capital gain.

Buy a duplex, live in one side and rent out the other. Use this as a way to accumulate capital.

As you get older and have a more secure income, leverage the gains in your current holdings to acquire larger holdings.

When time is your friend there are a myriad different ways to invest in real estate.  Most of my major real estate investments were made when I was in my late 30's and 40's. I still own them today.

The key to long term success is denying one's self the toys while young. Use that money instead to build a financial foundation.  Play later. Later doesn't have to be the 60's-70's.

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Tiger MT's Carter

bennelli-banger,

I’m just finishing my first year of retirement and I required 61.5% of my salary, 68.75% of that was generated by our current income stream and I’m not drawing S.S. due to my age. I plan to take my S.S. at 62 (58 at this time). I can honestly say we have not changed our style of living one bit. I had 8X my salary at retirement. We had stacked a good sized amount of cash and have not tapped any of our investments.

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bennelli-banger
congrats!!!!  that is awesome....you done well...wow, 57?  Nice work!
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I've done well with investments (I should, it's my career) and saving and clearing debt, but as I get more cash accumulated I'm thinking of buying a house on the coast and renting it, and buying a house near a ski resort and renting it as well.  

The plan is to occupy both houses in retirement in their respective off season, rent the beach house in the summer and rent the ski house in the winter.  Rents right now look to be about break even for 70% LTV mortgage and taxes after netting average repair costs and the costs of a rental program and insurance, but while I'm still earning and have the income to make the debt to income work it sounds like a winner, to have both paid for at retiremnt and have income producing properties.

Plus we would be able to sell the current home at retirment and buy a hunting property (with a house on it to avoid the potential tax liability) close to the retirement home.

I hate summer at the beach, too hot, but would like to winter there, and I hate freezing in the mountains, but like the cool summers and the artsy mountain life. Perfect for a rental schedule.

Plus each house would be a magnet for the relatives that want to come and mooch, so an opportunity to see family for a select week or two in season.

My problem is that when I was a kid my dad had grand rental dreams and I worked hard keeping the places in shape as each deadbeat renter left in turn with unpaid bills and a torn up place.  I learned a lot about home repair, but the thing I learned most was that it consumed all my time.  One renter finally did us a favor and burnt one of the duplexes down by putting gas in a kerosene heater, and after that dad sold off the others.

Has anyone made this work?

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WI Outdoor Nut
Relatively speaking, I am young at 40 years of age.  Live for my family, fishing and hunting.  I hope to enjoy all three as I age, and life is great.  Made a couple of very smart moves when I was young, saved heavily, and work(ed) for companies that have pensions.  In my retirement, I will be making more than I am right now, and my house will be paid off in about 10 years, and that is my only debt.  Shooting for retirement at age 55, but it might be pushed out to 58 or so.  Plan on suplimenting my retirement as a fishing guide and should be able to clear between $20-40K, which will pay for a lot of my hobby expenses when I retire as well.  I also am in a specialized field and consult on the side which I should be able to do in retirement as well – and pay is great at $300/hr, but work is spotty.  And of course, who knows what can change between now and then, but have a plan, sticking to it and have enough cash on hand for setbacks along the way.
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For those not-yet-retired, a pretty good money management website geared to eventual retirement and investing  is bogleheads.com.

They lean toward "live-below-your-means" , long term investing in a few broad , low expense ratio index funds, regular contributions, smart buying, using a fee only financial advisor and other mantras many here agree with. There are a few stuffy people there, but most are really friendly to newcomers.

My own bias: CHOOSE YOUR SIGNIFICANT OTHER/DOMESTIC PARTNER/  WIFE WELL. That's as important to retirement sucess as saving, investing, living frugally, and spending smart. It took me two tries, but I got it right the second time.

For single guys, this is absolutely true. The money management patterns of both people should align. My wife is true to her church and taught at their school for almost 40 years. At 1/3 the salary of public school. I shudder when I compound that loss. Yet in other ways she is so frugal and helpful that we probably came out ahead. Your spouse can make or break retirement planning.

The number of children can do the same. Once the expense is seen they can't be put back.

Years ago we were waiting in the mall for an event and we commented on the number of people who were carrying a potential health problem. We invested in a no-load health care fund that preformed well and might continue to do so. A huge segment of society has made a life style choice that is going to cause them to spend enormous funds on health care.

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I'm 63 years old this Sunday, and have fully funded my pension plan for 37 years. Needless to say, it's in darn good shape.

I also have some real estate holdings (other than my house) outside of the pension plan, as well  as some tax free bonds that provide tax free earnings, as well as a hedge against  the stock market in case it gets too froggie.  

The reality is quite simple. For every 1 million you have tucked away in stocks or other types of funds, it should  provide you with $4000 a month (or 50K a year) income without bleeding away any of  the capital over a 10 year average of highs and lows. Paid for income producing real estate with do even  better than that if it's all rented/leased out at triple net.

The key for me was to start early, fund fully, and make (sometimes hard) decisions about who is managing your assets. If you think something isn't right, it probably isn't, and you need to make a move.

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Kansas Big Dog
You folks that have significant assets saved for retirement better hope Bernie Sanders does not get elected, he will redistribute some of that to Brad.   :D
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bennelli-banger
could that satisfy the requirement to be a contributing member?  That is, for those who have accumulated significant retirement assets...
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Tiger MT's Carter
I’m wondering at what point your assets are considered significant? I know mine are not significant, but at this stage are adequate.
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I’m wondering at what point your assets are considered significant? I know mine are not significant, but at this stage are adequate.

When your unearned income meets or exceeds your earned income!

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Tiger MT's Carter
I’m wondering at what point your assets are considered significant? I know mine are not significant, but at this stage are adequate.

When your unearned income meets or exceeds your earned income!

That makes sense, thank you.

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