Retirement planning

[Parkanzky]

The only thing I'd disagree with you on is taking college credit classes in high school. When in high school, those classes are generally Advanced Placement classes. My oldest had to take classes anyway, she couldn't take any more or any less. It was no different than taking honors classes, just more in-depth discussions and projects than standard classes. And it was excellent college prep. She said college is a cake-walk compared to the high school she attended. The credits counted in college. She started college as a second semester freshman, meaning she was already half way through her freshman year before she started. That freed up a lot of time and allowed her to get a double major and double minor in 4 years. She also spent 6 weeks in Spain studying abroad. She would have had to take a 5th year to get all that in.

I'm not talking about AP classes (Which I took). Nowadays, lots of high school students spend part of their day at a local college taking classes. I have at least a couple high schoolers in every section I teach at a local university. Some of my nieces and nephews are/have done it, and I personally don't like it.

What your daughter did was to get as much as she could out of her four years of undergraduate time, which is exactly what I recommend.

 

[MossRoad]

Wish I knew what the future held...

Always been a saver, never carried debt except first mortgage and never bought new cars... that being plural.

Saved about 8x my annual wage and no pension kicking in other than Social Security.

On the other hand... Mom is 80 and retired at 62 with no pension... she has always lived frugally and only spends about half her social security... had enough for some nice trips and very generous with my nephew and nieces...

When I hear of people needing 50 to 100k per year in retirement it is difficult for me to comprehend...

Mom spends about $1,000 per month, has a nice home in the Bay Area... some land, pays all her bills, taxes, medical supplements and tithes to her church...

One more thing... isn't the whole premise of Affordable Health Care to give people options???

I know I could do much better taking the dollars my company spends and buying my own coverage... company says it averages $800 per employee monthly and this is for a 70/30 plan...

For $650 a month and can get much better coverage at less out of pocket...

If someone is used to living at that level of comfort (50-100k/year) they'd like to have a similar annual income to maintain that comfort level when they retire. Its kind of a neat feeling once your money starts working for you instead of you working for your money.... or so they tell me. :laughing:

How long has your mom had that house and land? Could she purchase it from scratch today on that income level? Probably not. My parents made about $5k per year when I was born(early 60's). I was the last of 5 kids. We had a nice warm house and good food. Decent cars. Good schools. According to this inflation calculator, something that cost $5k back then would cost over $39,400 today. Inflation Calculator | Find US Dollar's Value from 1913-2014

 

[MossRoad]

I'm not talking about AP classes (Which I took). Nowadays, lots of high school students spend part of their day at a local college taking classes. I have at least a couple high schoolers in every section I teach at a local university. Some of my nieces and nephews are/have done it, and I personally don't like it.

What your daughter did was to get as much as she could out of her four years of undergraduate time, which is exactly what I recommend.

OK. I read what you're talking about. They are offering that to local public school kids here, now. Our local public high schools stink! I think they want to offer ambitious kids that don't want to waste their time there a way to get out of them ASAP.

 

[ultrarunner]

ABSOLUTELY NOT!!!!

But .. getting in to this would close the thread.

Suffice it to say, the ACA is about power & control. Any lies about reducing costs have already been proven wrong by several hundred percent for most.

Only mention it because I know several that would have loved to retired... the only thing was they had pre-existing conditions which meant they were basically uninsurable if they left before age 65.

So the ONLY reason they felt they could not retire was not having Health Insurance.

When Mom retired at age 62 she was attacked by a stray dog while she walked on a hiking trail... her COBRA from work covered her and then she found she was unable to buy any insurance because of a shoulder injury from the dog attack or it would be a total exclusion... she went almost 2 years with no insurance.

Correct me if I'm wrong... Doesn't the Affordable Health Care prohibit denial of coverage for pre-existing condition?

 

[ultrarunner]

If someone is used to living at that level of comfort (50-100k/year) they'd like to have a similar annual income to maintain that comfort level when they retire. Its kind of a neat feeling once your money starts working for you instead of you working for your money.... or so they tell me. :laughing:

How long has your mom had that house and land? Could she purchase it from scratch today on that income level? Probably not. My parents made about $5k per year when I was born(early 60's). I was the last of 5 kids. We had a nice warm house and good food. Decent cars. Good schools. According to this inflation calculator, something that cost $5k back then would cost over $39,400 today. Inflation Calculator | Find US Dollar's Value from 1913-2014

Mom and Dad paid 35k for the house in 1969... it needed work and they were able to get a break buying As-Is.

In 2012 it was worth 350k.... so in 43 years it's value increased 10 fold.

She isn't living the life of a pauper... just she doesn't need much.

Mom bought her only new car at age 68... her old 1974 model was bought used for $800 in 1982... only problem was having no power steering and a manual transmission gave her trouble from that shoulder injury/dog attack... she drove that $800 car for 30 years and sold it for $600... drove it 30 years and lost $200 when she sold it...

Even being on Social Security she was able to spend 6 weeks each year, for many years, in Salzburg Austria... biggest expense was the cost of the ticket... no cost for accommodations and food/fun cost about a $100 a week.

I realize there are people that can easily spend $200 or more for a night out... just not our style.

Other things like buying clothes/shoes really comes down to just how many shoes and clothes can one fit into their closet...

I guess if she had a cell and/or cable that could cost a couple of hundred each month too...

 

[ultrarunner]

According to this inflation calculator, something that cost $5k back then would cost over $39,400 today. Inflation Calculator | Find US Dollar's Value from 1913-2014

Let me see...

My 1913 Model T cost $500 when new... today it is worth about 10k on a good day...

So it is worth about 20x more in today's dollars.... or 2000 percent more?

Looks like my old Model T turned out to be an OK investment.

Now a 1913 $20 gold piece is $1200 +/- today and has my old Model T beat by a longshot...

 

[NY_Yankees_Fan]

Go visit a financial advisor, one that you pay for. If you go to one that does not charge believe me you are paying him via the funds he recommends. Go to this web site for certified financial planer Find a CFP Professional and interview several to see how you like them, they usually do not charge for a meeting. They will come up with a plan based on your risk tolerance and when you plan to retire. Visit them every few years to adjust your funds and make sure you are on track. Max out your 401k in 2015 that will be 24k each for you and your wife if you can. If not do as much as you can. Set up a 529 plan for the kids and contribute as much as you can. Pay yourself first and live below your means. We plan to retire in 6 months at the age of 58, counting the days, it can be done. But like everything in life it takes planning. My dad would always tell me when I told him about my raise and how much I was now making "Son do not tell me how much you make BUT tell me how much you have saved" Words I have always lived by and thankfully I married someone that has the same way of thinking. Good luck sounds like you will make it by what you have done so far AND by just asking and thinking about it.

 

[forgeblast]

Remember too PA is a good state to retire in, Pennsylvania is Better - A Tax-Friendly State for Retirement - Traditions of America
no taxs on pensions, social security, 401ks,
We are around the same age as you and we are doing a lot of retirement planning now. With our daughter, we are also planning for college. Instead of a 529 we are doing a roth 403b which can be use for college, and no big tax hit if I am of a certain age when she is in college which I will be. Since she is in Kindergarten this year I took all the day care money and moved it to the roth, we are not missing anything and shes getting a good start.

 

[wmonroe]

Wow, lots of really good stuff here. As far as college our plan is to pay for the majority but the kids will have some of the responsibility. We both had it that way in college and worked jobs while going, didn't hurt us a bit. My plan however will change based on the kids, some just have to work a lot harder to get the same grades, if one has to put in double the hours per week on school work then I would supplement more of the costs.

Going to a Roth 401k was mentioned and I need to double check but I believe that is what I have. I contribute 17% of my check, auto deducts I never see it except for the pay stub, and my employer matches 3%. My wife is around 15% but with no company match. Social security is not figured into our plan but if by some miracle it is still available it will be extra.

 

[wmonroe]

The main reason we are looking at retiring earlier than normal is we want a chance to enjoy life after work. My job is very high stress for portions of the year and every year it seems a couple people at work pass away much earlier in life than they should. We work hard, try to have fun now, save, and really live a fairly simple life.