I don't think traditional retirement savings is going to work

Discussion in 'Financial Cents' started by oil pan 4, May 14, 2018.


  1. oil pan 4

    oil pan 4 Monkey+++

    I have been saving for almost 20 years started around the normal time. Between my first exwife and 0bama you could say about half of that time was wasted.
    Between her treating my checking account like an EBT card (you lose what you don't spend at the end of the month, so I hear) and years of "its technically not a recession" Obama economy.

    I run the numbers and it's just not looking good. I move my money (which their money I guess), dodge most of the down turns so I do alright.
    I could probably save another $400 to $500 a month and live like a hermit, not that's a bad thing and then I will have saved and invented enough to probably live like a hermit when I retire.

    Then there's the politics, I don't know if you have filed a tax return lately but now the irs want to know how much is in your retirement accounts. Considering a lot of millennials have not saved anything, seem to hate capitalism and success. Plus a liberal never saw a pile of someone else's money and actually left it alone, are you really going to have control over your retirement plan when the latest crop of broke, envious useful idiots hit the voting booth?

    My plan is run my retirement like a business. Do what works, pull money away from what doesn't.
    Let's say I have 2 business ventures, the larger ones been around for 20 years, it's return on investment is between -2% to 23% per year, with a 20 year average probably around 12 to 14% and the newer 9 to 10 year old business has already more than doubled my money twice.
    Why the hell do I still have most of my capital tied up in the other business?

    I'm thinking draw down my old retirement account, the dot gov thrift savings plan.

    I looked up 2018 tax brackets and we will file in the 77,400 to 165,000 tax bracket for married filing jointly, so I can clean that sucker out, come out with about a 4 inch stack of $100 bills and not go over.

    While waiting for the precious metals market to crater I can finish my well project, which would eliminate our $50 water bill and put up my first small solar array.
     
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  2. HK_User

    HK_User A Productive Monkey is a Happy Monkey Site Supporter

    You do what you can and what works. Nothing more since no matter what we cannot read the whole future.
    I never thought I'd get this old, still, I planned for retirement the best I could.
     
  3. Asia-Off-Grid

    Asia-Off-Grid Frugal Secret Squirrel Site Supporter++

    Many of them are visiting here in Southeast Asia, taking a "gap" year from the "stresses" during their educational years. :rolleyes: :rolleyes:. Aa recent article about the University of Utah's "crying closet", comes to mind :rolleyes: :rolleyes:. What they need is a stern boot up their rears.

    Oil Pan, consider SEA as a possible BOL after you retire. For a budget of $1,500 USD, or less if you have few / no vices, you can live a comfortable retired life. (I have done so, comfortably, in both The Philippines and Cambodia. Not quite as comfortably, in Thailand. Cambodia being the cheaper retirement destination of them all.) And have the warmth of a good woman with you, who can't / won't ever say, "Ya honor, I want half, half his sh*t!" (Stolen from Eddie Murphy's stand up comedy concert "Eddie Murphy: Raw" (1987).)
     
  4. BTPost

    BTPost Old Fart Snow Monkey Moderator

    My reTIREDment started in 2003, when the company I worked for, for 30 years, decided to quite Alaska Operations.... I converted My Pension with them, to PaidUp Annuities... and continue with the Outfit that bought this place, from them, as "The Winterman" with a subsistence level Salary, Healthcare, and NO Expenses, except My Internet Costs... Such a deal... They actually PAY Me to live here... Not much, but it adds up... I was 54 Years Old at the time, and Owned a Beach Lot 1.5 miles down the beach, with a cabin, and NO DEBT....
    It is now, 15 years later. We have added a second 5 acre UpLand Lot, a "New to Us" 2006 White Toyota 4X4 Pickup Truck and those Annuities have just been accruing at 3% and doing just fine... I have a Company 401K in 5 figures that they match at 50% each year, and I took Social Security, and Medicare as soon as they were available to me, which with my small Salary, provide Positive CashFlow for ALL the Years of reTIREDment in between... The Beach Lot has increased in value by around 600% since it was purchased from the Borough, and the Upland Lot has doubled in value since I bought it...
    We saved our money from all the years of actual REAL Employment... using a very conservative LifeStyle, and careful managing of finances... Alaskachick put herself thru Nursing School, by working summers as a BullCook at the Cannery, cleaning Bunkhouses, and didn't acquire ANY School Debt.... She then worked in her field, first just during the Winters, in the Seattle Area, and then as the Cannery Nurse, and Hospital Labor & Delivery in the winters, until we moved up here in '91... Then when the two youngest were in High School, she moved into town with the two Kids, and they would come out on weekends and summers... She was Unit Manager for Labor & Delivery, at the local Hospital, in town, and a School Nurse, when our Grandchildren were in Grade School,until the youngest graduated from High School... Then she became a Travel Nurse, taking 2 month contracts, all over the country, for HUGH Bucks for about 8 years, and ended up as a High 'Risk Labor & Delivery Specialist, at Evergreen Hospital in Kirkland, WA... one of the foremost Units of its kind, in the PNW... None of her income went into the Family finances, but she acquired a New TransAm, and a bunch of other stuff... Her income now, comes from Her State of Alaska Retirement Pension, ( from the Hospital in town, and the School Nurse Job) her Social Security Disability Income, which includes Medicare... To keep her Nursing License current, she has working for MDs w/o Boarders for about the last 15 years, and because of her disability, she can NOT deploy "Anywhere that REQUIRES a Passport" but is their Senior Overseas Deployment Team Trainer and Chairs the "Policy Procedure, and Protocol" Committee... Our life, here in Bush Alaska, is comfortable, and allows for her to continue with MDs w/o Boarders, which she enjoys, and on occasion, we take wonderful Road Trips down in the Flat Lands, in April and October each year... Life is Good, and when the NEWS gets to oppressive, We can turn off the SAT Tv, and talk a walk outside, and that all goes away, in about 30 minutes...
     
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  5. oil pan 4

    oil pan 4 Monkey+++

    I am going to keep some in traditional retirement, but betting all or most on it on the traditional system I just don't think it's going to work.
    And by "work" I mean I desire more than living like a poor person or literally working my self to death like my dad did.
    I have gotten a taste of making money with out actually working for it and I kind of like it.
    I guess that can be my new vice.

    I think I'm technically a millennial but since I already had my drivers license, my own car, a job and an "assault rifle" before 2000 and then moved out shortly after, never to return I find it hard to relate to what I consider crying over being offended about everything BS.
     
  6. Idahoser

    Idahoser Monkey+++ Founding Member

    I think the whole idea of all those baby boomers ever retiring is a fantasy. What wealth existed has been stolen by the Soroses of the world with the willing aid of the politicians. If you don't hold it, you don't own it.
     
  7. HK_User

    HK_User A Productive Monkey is a Happy Monkey Site Supporter

    Most Boomers never really tried to look forward. I've no concern for those who purchased a new car every year or two, took lavish vacations using credit cards and spent their funds on drugs and alcohol.
     
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  8. oil pan 4

    oil pan 4 Monkey+++

    Boomers like my dad were setup to retire. He had money saved and a pension from where he worked.
    Most GenX and few later generations of people won't have the chance at a greatest generation or boomer style retirement.
    I have lived below my means since about 2006, never had a new car or tractor or boat or lawn mower or grill, I actually don't like vacations all I do is worry about my house while away, I just paid cash for my newest vehicle ever, a 2011 nissan leaf, which has lost around 80% to 85% of book value since it was new.

    My wife isn't too thrilled about me emptying out my TSP.
     
    Last edited: May 14, 2018
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  9. Airtime

    Airtime Monkey+++

    Follow the Dave Ramsey advice for building wealth and planning for retirement.

    In a nutshell:
    1. Have NO debt, period. If you can’t easily pay for you can’t afford it. Credit card debt and student loans are the worst.
    2. Live well below your means and save. Money saved and invested early really takes off in growth 20 plus years down the road. Most self made millionaires are frugal cheap asses that got that way by working hard and being smart with their money and not spending it on luxury crap.
    3. Stock index funds for retirement investments. Managed funds over the long haul perform no better, often worse and the fees are higher cutting into your return. The stock market has a 100% success rate of recovering after big down turns. Certainly various individual stocks will die but a well diversified portfolio won’t loose everything with stocks that tank and there will be good performers that more than recover and balance out with positive growth over the long haul. Precious metals and most unconventional investments such as Bitcoin are too volatile to bank on for wealth growth. (I think some PM might be good for asset protection, as an insurance if you will, but probably wise to not count on it too much to grow your retirement.)
    4. Only buy term life insurance. Never buy whole life or the annuities and other schemes.
    5. Until you are rolling in the dough, don’t buy new cars. Always pay cash. Never lease a car, unless you enjoy giving away thousands to car dealers and manufacturers.
    6. Have a rainy day fund that can cover at least 6 months, preferably 12, of all your bills. People loose a job, get hurt, etc. and then if they can’t pay the bills just next week or month, then they are on a path to loosing the car, house, etc. (this is also why number 1. have no debt is very important.)
    7. If you have debt, sell stuff and work your ass off to get rid of it. If you listen to Dave’s radio show you will hear countless stores of people of all ages (mid 20s to 60s) paying off 10s of thousands in a year or less and often people paying off well over 100 grand in just 1-2 years. It can be done.

    The other thing to note is if a couple can pay off 50-100 grand in debt in just 2 years, you can also save 50-100 grand in two years as well. With a 10% return, that money doubles in about 7 years. It quadruples in about 14 years plus during those years you can be saving more. It is critical to start saving early in life so you can reap the reward down the road of compounding interest.

    Obviously, a spouse that breaks the bank is a major problem. Be wary in selecting one but also you may have to hide and/or legally protect money if they won’t get on board. If they go the spend it all route, consult a lawyer/finacisl planner and figure out how to keep legally separated finances.
     
    Last edited: May 14, 2018
  10. Tully Mars

    Tully Mars Metal weldin' monkey

    Retirement? Who am I kidding, I've got three daughters what retirement?:D
     
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  11. Bandit99

    Bandit99 Monkey+++ Site Supporter+

    I don't know all the details of your situation but know you well enough that you will think it through very well before you implement your plan... Generally, emptying your IRA is setting yourself up for a huge tax penalty (unless you are older than I think), plus, given you and your wife are already making good money, it will greatly raise your taxes. I am sure you realize this but I am just stating the obvious...

    I also have thought of emptying my IRA and I can do it without penalties as I am old enough. But, why would I want to empty it?
    1. Because I'm a finished with investing and the most I will do with it will be purchase 1-year CDs (every year) or Gold (when the time is right). I can't do physical Gold in my IRA...yes, they have special IRAs that can but...not worth the trouble in my opinion.
    2. The wife would have to jump thru some hoops to get that money if I were to die suddenly, unlike a joint Brokerage account or joint Bank account.
    3. Finally, I would prefer to have all the money out, all the taxes paid on it, so it is clean and clear and I don't have to muck around with their stupid rules anymore. I consider the entire IRA crap a total scam to use your money and control how you use it. I could rant for hours but what's the point...

    So, why don't I do it? Well...... long story and I have already got long winded...I was going to do it in 2017, it was the perfect time; however, I had to sell some stock which rocketed my income into the clouds but I'm considering doing it this year; however, there are other reasons not to do so... next year will be too late as got two pensions kicking in....so, dunno...I got burned badly with taxes for 2017 and backside is still sore...

    Currently, we are living totally off my IRA money, we immediately pay 10% in taxes whenever I draw some out just to be safe and to ensure we don't get a IRS penalty for not paying enough tax during the year.
     
  12. ghrit

    ghrit Bad company Administrator Founding Member

    Brokerage accounts, IRAs, and the like can be passed to heirs with no penalty if they are flagged by the brokerage house to the IRS as inherited. (That works whether transfer to an existing account, or establishing a new one.) If that is done, the IRS won't tax the rather sudden gains to the heir. (Don't ask.) Other assets are going to have various and sundry taxes applied as you know. With the pensions kicking in, there isn't, as you note, a lot of incentive to get a ready cash infusion without a serious cause.
     
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  13. Tevin

    Tevin Monkey++

    I've been doing my own taxes my entire adult life and have never been asked about what is in my 401k or any other accounts. If you get a 1099 form you have to report that, but they don't care about what is actually in the account. I would be considered a Gen X-er.

    I personally am in very good shape financially and might even retire early, but I have family, friends, and co workers who are in a similar situation as you...divorces, debt, bad luck, bad decisions, etc. When someone takes off with half of everything you've got, it's very difficult to bounce back from that.

    I went to see a financial counselor about a year ago and it was the best two hours I've spent in a very long time. He went through every aspect of my money and I walked out of there with a very clear picture of what was possible.

    I would encourage you to save as much as you can and keep debt under control, and also get some financial counseling. You might have options that you don't even know about. You may never get to where you could be, but that's not a good reason not to even try.

    I feel for ya, bro. Good luck.
     
  14. oil pan 4

    oil pan 4 Monkey+++

    For PM I'm not talking about gold or silver. I was talking about the money makers, rhodium, palladium, ruthenium, iridium and maybe platinum.
     
    Bandit99 likes this.
  15. HK_User

    HK_User A Productive Monkey is a Happy Monkey Site Supporter

    Yup, just what I told our kids.
     
  16. Ganado

    Ganado Monkey+++

    I'm ok with all Dave Ramsey says except #3... index funds are for fools or lazy investors. Buy stock that produces something people use or need. invest in what you know. I have only ever invested in 2 tech stocks because I understood where they were going. Everything else is something that I understand the market. And @oil pan 4 is right traditional retirement does not work. Self directed IRA's aren't bad but I don't have everything in them and I only invest in stocks I understand.

    @Cruisin Sloth posted a video a while back where the gal showed u how the banks and investment funds can steal your life savings at the flip of a switch in the contract you sign when you get a bank account or a retirement fund. If you did not watch that video you missed alot
     
  17. Ganado

    Ganado Monkey+++

    Many young people today are dropping off the retirement grid of saving every penny. It flat out doesn't work under the current money structure. They see how easily their parents retirement disappeared in every recession.

    You can call them lazy or snowflake or any other childish name you want but the truth is most 20 and 30 something are smart and they don't see the future as financially viable the way it's set up at present. There needs to be major financial reform and we have a reset coming.

    Every person has to follow what they think is right for them and their family. I've done alot of what oil pan is doing and move money into safer investment plans.
     
    Last edited: Jun 4, 2018
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  18. oil pan 4

    oil pan 4 Monkey+++

    Traditional retirement accounts works for some people and it's better than nothing, it may or may not be better than having just blown the money on cocane, hookers and booze but that remains to be seen.
    If your employer matches contributions, you're vested you need to be using it.
    Because you are increasing your investment to 150% to 200% of what you started with over night.
    Beyond that I don't think it's going to work as well as advertised.
     
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  19. Bandit99

    Bandit99 Monkey+++ Site Supporter+

    @Ganado "...index funds are for fools or lazy investors."
    I am with you on this. I learned early that the ONLY person that can manage your money is yourself. High paid, high educated, high class brokers - I don't care. It really isn't that difficult and requires nothing but brow sweat. I am not saying I have not made bad investments, I have, but I am 100% sure that I have done far, far better than any mutual fund or even a Broker could do for me. Believe me - I tried both when I first started out. Hell, my Broker was an old climbing buddy, Ex Special Forces, a Captain who got out and went to Merrill Lynch, that lasted about a year then I realized nothing was happening and he even told me they were directed to push specific stocks. Never again.

    I did stocks (only stocks), specifically technology stocks because it is what I know. I always, and quickly, rolled any 401K I had throughout my career into my IRA (self-directed) as soon as possible because, generally, (in my case, always) the IRA allowed much more control and more buying options. A self-directed IRA is much like a Brokerage account, not much difference when it comes to buying and selling.

    I have never done precious metals but wish I could turn all my IRA into hard metal, for me, gold. I would then bury it and forget about it. And, I might just do that yet...because I am becoming more and more nervous. Current gold price:$1314

    @ghrit "IRAs, and the like can be passed to heirs with no penalty if they are flagged by the brokerage house to the IRS as inherited."
    I will check into this. Does one have to give the Brokerage house specific instructions to handle it this way? I already got her marked as the beneficiary, of course. All my other accounts are squared away (joint) but the IRA is specific to the individual... I have used Fidelity for years and they are pretty good...
     
    Ganado likes this.
  20. ghrit

    ghrit Bad company Administrator Founding Member

    Probably state law dependent. In the case I'm familiar with, the executor should have handled it, but dropped the ball. That case was under Florida laws, and was not a spousal distribution. Very well could be you will be in a different situation. However, the IRS watches sudden increases of income which that sort of transfer could represent. The distribution shows up to the IRS as (I think) a 1099 report that will jump on that if the heir doesn't report it.
     
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