Stock Market & Retirement Planning

[CTRosarian]

I paid off the house before I was fifty and retired before I was sixty.
My parents paid for a superb education and with $3000 I moved across the country to start my career.
The very next year I put a bunch of money in IRA. Certificate of Deposit. Made that all important first step into investing into something.

Now I get to make that transition into spending some of the money I've invested! I've barely spent anything since retiring.

 

[jonnys009]

Not saying bs but kind of I have a high school diploma and make 112k a year bought a house at age 24 and no student loan debit. A high school diploma can make you money just need to not do drugs do what your told and not be afraid to work hard.
Plumbing , electrical,HVAC, fire sprinkler fitters, pipe fitters all have apprentice programs all you need is diploma or GED and pass drug tests. That is the hard part pass drug test and be willing to work

Facts. Work with high net worth and ultra high net worth individuals and families. Plenty without a 4 year degree. Know how to work hard, scale, and prioritize saving.

 

[Iceman!]

I paid off the house before I was fifty and retired before I was sixty.
My parents paid for a superb education and with $3000 I moved across the country to start my career.
The very next year I put a bunch of money in IRA. Certificate of Deposit. Made that all important first step into investing into something.

Now I get to make that transition into spending some of the money I've invested! I've barely spent anything since retiring.

Let me ask you in roundabout percentages how much less you spend in retirement vs. when you were working?

I'm getting close at 64 and always have this "Vision" that I'd spent close to what I earned before retiring in my first years of retirement and then just scale back the spending because, I'll just simply won't need to spent money other than the "Basics" (Food, Fuel, Home Upkeep and Insurance).
Does that seem "Logical"?

 

[CTRosarian]

Before I retired I got a colonoscopy and fixed my teeth. I got dental implants which cost a lot but are worth it!
I bought a half set of clubs for $3000 before retirement and spent another $1000 filling out the set after retirement.
Which is hardly anything compared to my net worth.

The major expense right now is medical insurance as I knew it would be.
I like to fix things so it took $30 of parts and some time learning how snow blowers really work to get it running the way it should after 20+ years of use!
When I was working I didn't have time to learn about carbs and transmissions.

I have yard filled with mature flowering shrubs. The ones I planted have been in the ground for ten or twenty years. Some of them likely date back to the 50s.
They look amazing now that I have time to take care of more of them. Sort of like sports team in which the coach only has time to help the first stringers. Imagine if he had the time to coach the entire team and help everyone! I don't have time to take care of every plant but I'm taking care of a lot more than before retirement.

I took my cooking to another level, making more complex dishes like shrimp scampi over pasta for lunch out of basic ingredients.
Which isn't any more expensive than using ready to cook options if you have the time and skills. I'm really good at cherry picking steak and cutting it up when I get home.

 

[tahoebum]

Facts. Work with high net worth and ultra high net worth individuals and families. Plenty without a 4 year degree. Know how to work hard, scale, and prioritize saving.

I called on body shop owners for the last 21 years of my 3M career, and many of the owners didn't have a college degree, and many made over $500k each year. The good painters working in some of these shops made $160k plus a year, and many didn't have a high school diploma. They are hard workers and developed business smarts by making mistakes and adapting. One of the owners at age 48 would come in one or two days a week at 3am and paint a dozen cars by 9am because he was faster and better at it than anyone he could hire. Another one of the owners is a buddy that I still go on ski trips with, and he now owns six body shops with $41 million in annual revenue, and a net income of 16-17% after taxes and all other expenses. He has both of his twenty-something sons working for him and started them at $60k a year. He says they aren't worth that much yet, lol.

 

[G-Man]

Looking at rates. Worth playing the CD game 1 year or less hopping from one to another (currently in a no penalty CD) or just stash in a money market?

 

[Reframmellator]

Time for my annual points:

1. If you’re maxing out your 401(k) AND your employer matches, be sure you understand how that match works. In most cases, the employer matches a certain percentage of your contribution on a pay period basis. Maybe you get paid biweekly and you max out your contributions early. Say you got a large bonus and max out your 401(k) after 20 pay periods. You’ve missed out in six pay periods of employer match. Know your plan’s rules and adjust accordingly.

2. It’s great to live below your means, but don’t forget to live. Life and health are not guaranteed. I had friends who scrimped and saved their entire career and died before retirement. Or developed a debilitating disease. There’s a balance to be had.

All done.

 

[Reframmellator]

Looking at rates. Worth playing the CD game 1 year or less hopping from one to another (currently in a no penalty CD) or just stash in a money market?

If you need those funds soon you could ladder Treasuries, which are exempt from state income taxes. I think we’re looking at declining short-term rates for now.

 

[jbb2388]

Switched to a more stock driven portfolio after 4 years in mostly bonds, which held it's principal. As a senior, I would like to perserve the principal. My new advisor recommended we get more aggressive with stocks. In one week, I lost 7K. Did everyone take a hit this week? It makes me nervous.

Yes, market was down this week so far. If you are nervous after one week's market performance, you may need to reevaluate your choice of "advisor"

 

[jbb2388]

Looking at rates. Worth playing the CD game 1 year or less hopping from one to another (currently in a no penalty CD) or just stash in a money market?

There are SO many better places to put your money than in banks. Stay away from banks they are not your friend. Open a brokerage account and use it for your banking needs

 

[Par5zN2]

The only thing we use our banks for are checking accounts and our emergency fund. My wife comes from a family of savers (the good) who believe the safest place for your money is in a savings account in a bank (the bad). We've setup all of our retirement accounts well but having a sizable emergency fund in a bank really bothers me! I've been trying to change that mold for a very long time.

 

[TLuke]

You can investigate Warren Buffets “Two fund portfolio” (treasuries plus either an S&P 500 index or ETF fund) and Ray Dalio’s “All Weather Portfolio.”

 

[jonnys009]

There are SO many better places to put your money than in banks. Stay away from banks they are not your friend. Open a brokerage account and use it for your banking needs

The only thing we use our banks for are checking accounts and our emergency fund. My wife comes from a family of savers (the good) who believe the safest place for your money is in a savings account in a bank (the bad). We've setup all of our retirement accounts well but having a sizable emergency fund in a bank really bothers me! I've been trying to change that mold for a very long time.

You can skip the banks altogether. Fidelity accounts will let you add checks / debit card. Get all of your checking account / autopay needs right out of there and keep earning 5% with SPAXX as your core cash position in the meantime.

 

[jbb2388]

You can skip the banks altogether. Fidelity accounts will let you add checks / debit card. Get all of your checking account / autopay needs right out of there and keep earning 5% with SPAXX as your core cash position in the meantime.

Exactly. You can have checks made for literally any account with an aba routing and account number. Not that anyone needs checks at all anymore.

 

[tahoebum]

Exactly. You can have checks made for literally any account with an aba routing and account number. Not that anyone needs checks at all anymore.

You would think that checks are almost obsolete but about half of the small service industry businesses in the rural MN county(29,000 total population of the county) where we live in the summer don’t accept anything except checks or cash. Even at the grocery or liquor store I’m often waiting for someone to fill out their check as payment in front of me. They are slowly starting to take Venmo or Zelle but the few who do take credit cards often charge an extra 2-3% for using a card. Even in a place like the Twin Cities with over 3.6 million residents, the tree service guy I just paid last month gave me a 15% discount for cash, obviously to hide their income from the tax man. I was the same with the painter that did the exterior of our house in October.

 

[fuffle master]

So, we were talking in the office tonight about how much you expect to spend after retiring.

I don't know truly how much people would spend, but my thought is much more then I am spending now. I would want to travel more, play golf more, do a lot of things I can't do because of work. So, I would need more disposable income than I have today. Saying that my bills would be the same, except mortgage possibly, I am not sure how you don't need to have invested enough to have more money per year than you had while working.

 

[Acesteve]

the biggest mistake somene might make imo is assuming it drops alot. It is very hard to reduce the spend and in retirement we want to do things. Can't always be travel but can't be sitting at home either.

 

[tahoebum]

the biggest mistake somene might make imo is assuming it drops alot. It is very hard to reduce the spend and in retirement we want to do things. Can't always be travel but can't be sitting at home either.

I retired in April of 2018 and spend more than I did before retirement as I have more time. My wife still works but only for another year or or two and when she is done we will need a monthly budget and/or stipend from our retirement account so we don’t overspend. Luckily our tax burden goes way down this year not having to pay the MN state income tax of 9.85%.

 

[Par5zN2]

You can skip the banks altogether. Fidelity accounts will let you add checks / debit card. Get all of your checking account / autopay needs right out of there and keep earning 5% with SPAXX as your core cash position in the meantime.

Yes, I'm aware and I've been very vocal about this. Problem is, she can't drive over to the Fidelity "Bank" and have a conversation with someone face-to-face...

 

[Reframmellator]

So, we were talking in the office tonight about how much you expect to spend after retiring.

I don't know truly how much people would spend, but my thought is much more then I am spending now. I would want to travel more, play golf more, do a lot of things I can't do because of work. So, I would need more disposable income than I have today. Saying that my bills would be the same, except mortgage possibly, I am not sure how you don't need to have invested enough to have more money per year than you had while working.

the biggest mistake somene might make imo is assuming it drops alot. It is very hard to reduce the spend and in retirement we want to do things. Can't always be travel but can't be sitting at home either.

I retired in April of 2018 and spend more than I did before retirement as I have more time. My wife still works but only for another year or or two and when she is done we will need a monthly budget and/or stipend from our retirement account so we don’t overspend. Luckily our tax burden goes way down this year not having to pay the MN state income tax of 9.85%.

Our financial advisors talk about two phases of retirement. Active retirement goes to about 78 for most. It’s period of higher activity - travel, golf, shows, etc - and higher expenses. By 78 or so, most of the bucket list items have been knocked off and people are starting to slow down. This is passive retirement, when they do less and spend less. This continues until the last year or so of life, when medical expenses spike.

They say one of their saddest experiences is sitting across from a couple in their early 80s: “We scrimped once we retired because we feared outliving our money. Now we still have money but can’t do anything with it. I wish we had taken those trips.”

 

[G-Man]

There are SO many better places to put your money than in banks. Stay away from banks they are not your friend. Open a brokerage account and use it for your banking needs

Haha already have two, with 401k, Roth, IRA... This is just looking at the safest place for cash with risk tolerance.

 

[Iceman!]

Our financial advisors talk about two phases of retirement. Active retirement goes to about 78 for most. It’s period of higher activity - travel, golf, shows, etc - and higher expenses. By 78 or so, most of the bucket list items have been knocked off and people are starting to slow down. This is passive retirement, when they do less and spend less. This continues until the last year or so of life, when medical expenses spike.

They say one of their saddest experiences is sitting across from a couple in their early 80s: “We scrimped once we retired because we feared outliving our money. Now we still have money but can’t do anything with it. I wish we had taken those trips.”

That ain't happening with yours truly. I've buried too many people younger than me not to enjoy life.
I'll be smart however I'm not "Skimping" either.

 

[Vortex]

I retired in April of 2018 and spend more than I did before retirement as I have more time. My wife still works but only for another year or or two and when she is done we will need a monthly budget and/or stipend from our retirement account so we don’t overspend. Luckily our tax burden goes way down this year not having to pay the MN state income tax of 9.85%.

It's glorious! I made the switch in '20 and still chuckle every April.

 

[robs1964]

Wife is retired and I will retire in 2026 at the end of the summer before we move. Luckily I have a military retirement and been investing in Roth and Traditional IRA while on active duty and now invest in our companies 401K (for the past 14 years), wife invested in her 401k when she worked. We have to build a house beginning next summer so it is ready at the end of summer 2026. My financial advisor is telling us not to take Social Security until we are 67 (we are both 60 now). What are you thoughts, as she is retired and I will retire in two years?

 

[jbb2388]

My financial advisor is telling us not to take Social Security until we are 67 (we are both 60 now). What are you thoughts, as she is retired and I will retire in two years?

Find a new advisor. Anyone that tells you to hold off taking SS benefits after age 62 has simply not crunched the numbers. Even as your monthly benefit increases each year closer to full retirement age, statistically speaking you are likely to be dead by the time it becomes worthwhile. It will take years to make up those five years of benefits you didn't take. If you don't "need" the money, take it and invest it.