retirement, good or sucks

[BrokenBackJack]

Keeping up with the Joneses. You want to go broke fast or be in debt for many many years just try to keep up with them! :;:exactly

 

[Ristorapper]

Well I live in Webster and like you said how people keep popping up...well happens here too. All you MN guys decide to retire and move here. We don't love it either but what do you do? That's not a knock on you personally but we see thousands of blue platers all yr long. Then they move here. UHHGGG! I think when people get older they may need to think about an area where you have good health care available. These small towns have decent clinics but not hospitals.

Retirement: Great! I recently retired a little over a year ago. Everything I ever read about WHERE to retire to in several forums, AARP and Money Talk News says South Dakota is the #! place to retire to. Of course many of the people in the south aren't going to move up into SD. Florida is much more attractive weather wise. So, yea!! Blue platers and probably others from the central Great lakes areas that are not TAX friendly will infiltrate into SD. You have been warned !! I live in ND and don't feel I need to relocate to SD for any reasons that those readings had stated. ND came one step closer to being close with SD in that they are no longer taxing Social Security, like SD.

My sister is retiring soon from St. Paul and had planned on moving to Morehead in retirement. I told her to get off her butt and check out ND and SD for obvious tax savings. Yea!! MN is no longer on her radar. Look out SD!!

 

[riverview]

wife retired this spring from the fed govt after 34 years at 56 years old. I am 55 and self employed mechanic. we don't owe any money and have no kids. I took the fall off and plan on slowing my business down to enjoy more time off.

 

[Maddog]

this thread is good

but the age of retirement mentioned by some makes me want to cry (40?!!!!!)

and I regret not getting a gov’t job with lifetime health benefits after retirement

We would have voted for you!!! It isn't too late.

 

[wslayer]

Here is a question I just asked my self today....

I am mid 30s and have had a 401k going for over a decade. It's doing Ok, and I have stepped up my contributions this last year to 15%. I also hate debt and want to get a vehicle and tractor paid off ASAP. It's feasible to have them both done by Dec 2020, if both the wife and I make significant reductions to 401k for a year. We would still be around 6% each and getting max employer match......Is this advisable? I think I know what Dave Ramsey would say..and I'm leaning that way.

The only kicker is not going back into debt after all that BS..AND immediately increasing 401 contributions when the goal is met.

Have you checked into seeing if you can take a loan out on your 401K ? I did that back in 2001 when I bought my boat. You pay yourself back the interest. Have to balance rate of return to see if feasable. Back then it was a no question with interest rates where they were at.

 

[Sluggo]

0% and 3.15%

I wouldn't be in a hurry to pay off a 0% interest loan nor a 3.15%. I would sock away as much as possible in the 401K and then payoff debt with any excess. You should always contribute enough to the 401K to get the max matching available from your employer, assuming they match. And since you are not paying income taxes on the contributions now, you are gaining probably anywhere from 10-15% as soon as you drop it in depending on what your tax situation is. I agree with Bfishn too, responsible people can manage some debt.

 

[Up Y'oars]

And, I'd agree with Sluggo (above) somewhat, but I'd factor in the ROTH IRA rather than an Individual 401k. Yes, if work is contributing a match, then you'd be participating in a 401k. There are so many different variables to invest in (e.g. 427, 401k, Individual 401k, Roth IRA, etc.) The advantage of the ROTH is you're taxed now and NOT when you retire and begin withdrawing money. For younger guys this is a huge important factor.

 

[bigv]

Retirement: Great! I recently retired a little over a year ago. Everything I ever read about WHERE to retire to in several forums, AARP and Money Talk News says South Dakota is the #! place to retire to. Of course many of the people in the south aren't going to move up into SD. Florida is much more attractive weather wise. So, yea!! Blue platers and probably others from the central Great lakes areas that are not TAX friendly will infiltrate into SD. You have been warned !! I live in ND and don't feel I need to relocate to SD for any reasons that those readings had stated. ND came one step closer to being close with SD in that they are no longer taxing Social Security, like SD.

My sister is retiring soon from St. Paul and had planned on moving to Morehead in retirement. I told her to get off her butt and check out ND and SD for obvious tax savings. Yea!! MN is no longer on her radar. Look out SD!!

What we need is young people coming to SD not the retirees. We get a lot here that plan to hunt and fish all day long. Doesn't happen. They move here in their 60s and find out it's not only cold here but windy. They also just don't have the gusto that they once did and find out they hardly hunt and fish at all. My plan is the opposite. I live where I live to hunt and fish. I've done well for outdoors for many years now. Have caught a ton of fish, shot tons of birds, deer etc. When I retire and hunting and fishing becomes harder I may move on to the bigger towns and go to movies and games.

 

[Bfishn]

And, I'd agree with Sluggo (above) somewhat, but I'd factor in the ROTH IRA rather than an Individual 401k. Yes, if work is contributing a match, then you'd be participating in a 401k. There are so many different variables to invest in (e.g. 427, 401k, Individual 401k, Roth IRA, etc.) The advantage of the ROTH is you're taxed now and NOT when you retire and begin withdrawing money. For younger guys this is a huge important factor.

General rule of thumb is to ALWAYS put enough in 401k to get company match because that's a guaranteed return. Then max a Roth IRA - $6,000, then go back to 401k, or possibly other investments depending on what options you have in company 401k. Watch the expense ratios on your 401k choices, fees can eat up a lot of money over time. I generally look for low expense ETF's.

The nice thing about Roth's is that the options are pretty much limitless. If you are going to trade any stocks, do it in a Roth because all gains are tax free. No stupid short term capital gains taxes at normal rates.

 

[guywhofishes]

When I retire and hunting and fishing becomes harder I may move on to the bigger towns and go to movies and games.

yeesh... I suppose it happens to us all

but still... yeesh

 

[BrokenBackJack]

If we were to move to SoDak we would move to the Black Hills. Beautiful country and people are very friendly too. Don't know what the realestate taxes are there.

 

[Muzzytipped]

General rule of thumb is to ALWAYS put enough in 401k to get company match because that's a guaranteed return. Then max a Roth IRA - $6,000, then go back to 401k, or possibly other investments depending on what options you have in company 401k. Watch the expense ratios on your 401k choices, fees can eat up a lot of money over time. I generally look for low expense ETF's.

The nice thing about Roth's is that the options are pretty much limitless. If you are going to trade any stocks, do it in a Roth because all gains are tax free. No stupid short term capital gains taxes at normal rates.

AGREED!
Match 401K then try and max Roth IRA (taxed now) or Traditional IRA (no income tax now). Your 0% and 3.5% isn't even a 1/3 of income tax rate your paying today. Probalby 15-20% gain right there.
Leave the loans and pay them to term. Even conservative IRA and 401k are earning more gains than you are paying in loan interest.

 

[Whisky]

My 401k is 14% return the last 12 months.
Guess I need to get a ROTH going eh?

And Bfishn is exactly right, if I had more monthly disposable income, I would absolutely spend more. Guess the thermal optics are back on hold for a while. I walk a very fine line between being financially responsible, and an idiot.

 

[westwolfone]

And, I'd agree with Sluggo (above) somewhat, but I'd factor in the ROTH IRA rather than an Individual 401k. Yes, if work is contributing a match, then you'd be participating in a 401k. There are so many different variables to invest in (e.g. 427, 401k, Individual 401k, Roth IRA, etc.) The advantage of the ROTH is you're taxed now and NOT when you retire and begin withdrawing money. For younger guys this is a huge important factor.

It depends where your tax rate is now compared where it will be after you're retired.

If you have no income after you retire the Roth may not be the best choice.

 

[Whisky]

It depends where your tax rate is now compared where it will be after you're retired.

If you have no income after you retire the Roth may not be the best choice.

Right, that's why I have not went the Roth route yet. How the hell does one know what tax bracket they will be in in 30 years?
I would love to start building some passive income but have made 0 progress on that front so far..

 

[Allen]

0% and 3.15%

That's almost FREE money with interest rates like that. I'd say pay the minimum on those loans and maximize what you can put into your savings. It doesn't take a very good financial planner to help you top those kinds of returns.

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this thread is good

but the age of retirement mentioned by some makes me want to cry (40?!!!!!)

and I regret not getting a gov’t job with lifetime health benefits after retirement

All employers have a downside.

With regard to benefits, I'd say that Fed/State/Local govt benefits are better than average, but they're not as good as the best private employers. I think there's always greener grass that catches a person's eye, I've been guilty of it myself...several times. Sooner or later though you have to pick a horse and ride it to the finish line of this race called life.

- - - Updated - - -

Right, that's why I have not went the Roth route yet. How the hell does one know what tax bracket they will be in in 30 years?
I would love to start building some passive income but have made 0 progress on that front so far..

I think the biggest benefit of a Roth is the ability to make a large tax free withdrawal to purchase something. Like maybe an RV so you can tour the country, etc. Or you can balance your traditional withdrawals with a Roth to manage your tax bracket. A Roth alone is not a great plan, IMHO. Limits on contributions are too low to put away meaningful amounts of retirement funds, plus the matching monies one receives are generally headed for a traditional IRA or 401k. At least, I know my Roth doesn't get the match.

 

[Bfishn]

By doing the Roth and 401K you are basically hedging your bets on future tax rates. Nobody has a crystal ball so this lets you play both sides of the tax game. Also, you can always withdraw your principle on a Roth without penalty in case of emergency, you just cant touch the earnings.

 

[Whisky]

Gotcha, good info.

 

[BrokenBackJack]

Guessing on income after retirement: Do you have a company retirement account that will pay you X amount of dollars each month or yearly? Do you have rental income such as apartments, houses, farm cash rent and so on? Are you going to work part time?
These are just a few ideas to go on.

 

[bronco]

Thanks again guys this is a great thread. I've been doing the 401K for years its a great deal, I also have been doing a Roth for a few years now both have their place as Allen said the Roth is great for paying down debt or buying that new retirement toy its also the best for passing on to your kids when you pass. Again you young guys put as much as you can away now and let time build your wealth. Time is the only thing you can't get back.