Retirement Planning - Lessons Learned

[Hay Dude]

Is anyone moving money lately? Like from cash to bonds or gold or something else?
I have probably more than I should in past years in bonds and gold. Now I feel kind of happy with accounts because I think the bubble is going to burst like in 99.
Still have way too much cash in my money market. Still think gold has a $3000 peak coming.
Wonder if paying down some debt is in order here.

 

[fried1765]

Is anyone moving money lately? Like from cash to bonds or gold or something else?
I have probably more than I should in past years in bonds and gold. Now I feel kind of happy with accounts, but still have way too much in my money market. Still think gold has a $3000 peak coming.

I have under 5% in gold, and know I should have more.

 

[HawkinsHollow]

Do you teach in TN or GA?

If you teach in TN, you are in "TCRS" which is the TN Consolidated Retirement System. As such, you are then either a "Legacy" or "Hybrid" teacher.... if Legacy you are accruing your pension at roughly 1.5% per year and if you are Hybrid you are accruing at 1%/year. So after 30 years, as a Legacy, you'd have 47.25% of your "AFC" (your highest 5 consecutive years) or if Hybrid, 30% of your AFC.

You can't control either.....but you can INFLUENCE your pension a bit.... you can coach something.... you can drive the bus.....both get you paid and both would serve to RAISE your AFC which in turn would raise your pension.

Realistically the place where YOU can control things is in your 401K.... so that is where you'd have to focus your efforts.


If you are a teacher in Georgia, then I have no idea.

As it happens.... I'm one of about 15 people in the entire State of TN.....that happen to be one of your TCRS reps and my job is to help anyone in the State system.

If you have any questions you are free and invited to reach out to me personally.

I teach in Georgia. But thank you for all of that knowledge. I worked in TN for a few years but I took that money out a while back. Thanks for reaching out and offering to help.

 

[Bearsixty7]

To clarify.... you can take withdrawals of your taxable 401K funds after TERMINATING from your job at age 55. (can't do this if the funds are Roth contributions, those are stuck until age 59 1/2 along with the five year hold)

So, if you quit your job and have attained the age 55 and leave your 401K in place, you can withdrawal any amount of the taxable portion and simply pay any applicable tax.....there is no 10% penalty. Now, if you move those funds from a 401K into an IRA that your college buddy can manage for you.....you've just screwed yourself because the rules of the IRA are age 59 1/2....whereas the rules on the 401K are age 55.

What if you continue to work and are age (anything over 59 1/2)?.you can do an "in service withdrawal" and pull some funds out for whatever reason even though you are still employed and putting funds into it. Since you are of retirement age, the 10% penalty is gone.

So you have a window from age 55 to 59 1/2 that "if your plan" is to roll from your 401K into an IRA.....you might want to reconsider that move until you hit age 59 1/2 OR, only move a portion.....leaving behind in the 401K an amount that you feel would hold you over to age 59 1/2....

THEN AGAIN.....you want to make sure that your 401K allows partial distributions after you separate from service. Some 401K's do NOT which means if you're age (enter any age) and you want to simply take $1,000 out of your $900,000 401K.... you can't. You have to take it all or none. This is your 401K's polite way of saying "you've terminated.....please move your account somewhere else"

Don't wait until needing that money is critical before you discover your 401K doesn't allow partial distributions.

I guess what I called penalty is the higher tax I'd pay retiring before 59-1/2, if I understand you correctly.
I was not aware once I retire I'd have to move my retirement funds. Our company 401K is with Fidelity and I suspect I can stay with them but may just need to move into a different account. I plan to sit down with a financial/retirement specialist in a couple years to learn what I need to learn and start making preparations.
Fidelity has offered many different webinars on retirement and other subjects. I have been able to attend a couple but not any have discussed the moving of funds or minimum withdrawls, etc.

As is often the case, sometimes you don't know what you don't know. I appreciate everyone's contributions to this thread.

Our plan is once I can retire, is to move to a more retirement friendly state, OK, MO, AR, TN, KY but still keeps us somewhat centered around family in OK and MO and maybe TX if my Son stays here after college. the rest of my Family is in NC and FL.

We hope to homestead and grow as much of our own food as we can, I want to hunt for everything I can (I have a lot to learn there), we already have 4 chickens, we have even considered bee keeping. Forgot to mention a few cows, I grew up raising beef cattle and miss being around some.

I also hope to keep Jeeping and ATVing as much as I can, many of our friends older than us still jeep. We may even keep boating in the summer although I may see if my son will buy the boat from me if he wants, if not, I'll sell it, just don't use it as much as we did the first 20 years.
So we will have plenty to keep us busy and hopefully healthy.

 

[MossRoad]

I like Dave Ramsey's thought on gold investing...

"If your investments are advertised right after a Snuggie ad, you are probably not in a good category of investments.

If Snuggie is on, and then right after that, catheters and then gold coins, something is wrong. '


From here:
Down on gold - Ask Dave | DaveRamsey.com

 

[Oaktree]

That's what my dad did for years. He once told me his will was simple, just divide everything among us 4 kids. And you are the Executor. Uh oh. :shocked:.

It took me 20 years to convince him to be more specific and keep me out of what would have been a very hot seat. Even then there were some rough spots with a couple of family members who thought they were "entitled" to certain items. A tractor being one.

That's essentially what my mother's will states (father's been gone almost 20 yr. now)...divide everything 4 ways (well, probably 3 now given that my brother is no longer with us), if anyone wants anything specific they have to pay 3/4's of the value to the estate. I don't know who the executor is, if it's me she never said anything.

That doesn't apply until you turn 70 1/2 though, which is about when I hope to start. For the first 5 years I won't be able to completely stop working, but do hope to give up showing up for work 5 days out of the week.
I always wonder about percent of income vs pre retirement... if living expenses don't include rent or mortgage, it seems like that would be a big difference.

I think the age is 72 now, changed a couple years ago. I found that living expenses don't really go down all that much after you retire. You're not buying as many clothes, and commuting expenses go away (assuming you don't have a company vehicle like I did), but that's about it. Other things like heating costs, electric bill, etc. could likely go up since you're home all day.

Taxes/maintenance/insurance/increased utilities will take the place of a mortgage very quickly.

I pay those now, why will they be that much more when my mortgage is paid off?

I think what he meant was that none of those will be going down as time passes, and in all likelihood will be going up. Obviously, paying off a mortgage is one less cash drain each month.

 

[Oaktree]

I did not adequately anticipate the rapid rise in health insurance. If you retire before reaching Medicare age and have to purchase your own health insurance, be aware of this high (and rapidly rising) cost. At age 62, I now pay $812/month (yea, it sucks big time) for a high deductible (~$7700) plan. Hoping it doesn't go over $1000/month before I get to 65, but I suspect that is just a dream. I could go with the ACA (Obama Care) but prefer not to.

Yeah, health insurance is hideously expensive. I retired at 62 and just did without until I was eligible for Medicare (and paid the &%$# Obamacare penalty). Was in good health and the cheapest plan available was over $700/Mo. with high deductables and copays. Not quite sure how that qualifies as "affordable".

 

[fried1765]

I like Dave Ramsey's thought on gold investing...

"If your investments are advertised right after a Snuggie ad, you are probably not in a good category of investments.

If Snuggie is on, and then right after that, catheters and then gold coins, something is wrong. '


From here:
Down on gold - Ask Dave | DaveRamsey.com

Good point !!!

 

[KennyG]

Yeah, health insurance is hideously expensive. I retired at 62 and just did without until I was eligible for Medicare (and paid the &%$# Obamacare penalty). Was in good health and the cheapest plan available was over $700/Mo. with high deductables and copays. Not quite sure how that qualifies as "affordable".

It's all a matter of perspective. The health industry now amounts to between 15% and 20% of our economy. As medical technology advances I would anticipate it to become a bigger portion. Think about it - it's great to have big screen TVs, new cars and hot tubs, but at the end of the day none of that is very important compared with good health. If you aren't paying 20% of your income, year in and out, for insurance and health care, you are just fooling yourself. It's being paid somehow.

I'm on Medicare but my wife isn't. We had some health issues last year, but not catastrophic. I just put the numbers together for taxes and we spent $25,000 last year on insurance and healthcare. Something to expect after you retire.

 

[fried1765]

It's all a matter of perspective. The health industry now amounts to between 15% and 20% of our economy. As medical technology advances I would anticipate it to become a bigger portion. Think about it - it's great to have big screen TVs, new cars and hot tubs, but at the end of the day none of that is very important compared with good health. If you aren't paying 20% of your income, year in and out, for insurance and health care, you are just fooling yourself. It's being paid somehow.

I'm on Medicare but my wife isn't. We had some health issues last year, but not catastrophic. I just put the numbers together for taxes and we spent $25,000 last year on insurance and healthcare. Something to expect after you retire.

That $25,000 number certainly does not apply to most over 65, and/or on Medicare!
I am 80, and figure I spend under $5,000 per year, on a medicare supplement, deductibles, and drugs.
My drugs come through the VA, with an $8 co-pay per prescription per month.
I use Medicare for most everything, with the VA as a backup.

 

[JethroB]

Is anyone moving money lately? Like from cash to bonds or gold or something else?
I have probably more than I should in past years in bonds and gold. Now I feel kind of happy with accounts because I think the bubble is going to burst like in 99.
Still have way too much cash in my money market. Still think gold has a $3000 peak coming.
Wonder if paying down some debt is in order here.

I suspect too that the bubble is about to burst as the markets are at all time highs in spite of this past year with COVID. And we are overdue a major correction history wise. But I'll stick with my long game plan of diversification and low cost mutual funds. My attempts of timing the market have bit me on the azz more often than not, including precious metal fund plays.
Whoever is in power tends to get the blame or credit for market swings but history says the markets don't care that much who the bobble heads are.

:2cents:

 

[riptides]

...

Realistically the place where YOU can control things is in your 401K.... so that is where you'd have to focus your efforts.


If you are a teacher in Georgia, then I have no idea.

As it happens.... I'm one of about 15 people in the entire State of TN.....that happen to be one of your TCRS reps and my job is to help anyone in the State system.

If you have any questions you are free and invited to reach out to me personally.

Awesome for you to reach out and help!

 

[dmccarty]

Funny how this topic comes up today. Last week I had a meeting with the boss and HR where I was told my position was terminated and I am welcomed to apply for another job within the company. There are none that I qualify for, I am in my 50s and deaf. After 23 years...just like that your done.

I am in a state where IT jobs are scarce and pay little....no one will come close to paying the salary I made...so what do I do? Retire early? File for Social Security Disability?

Move to a third world country?

I remember hearing companies like to get rid of the older folks and now I believe them(age discriminations). Keep in mind yes IT jobs are plenty in place like Maryland...but I would have to move. Also I cannot work with customers or venders and I have other complications I will not mention here.

I do have a lot of anxiety and I am a little worried....will try and retire now if I can and get over having to deal with working for others for good.

Age discrimination is very real and even more so in the IT business.

A good thing with the pandemic, is that companies, especially IT ones, can no longer say we have to be in the office to be productive. Not sure I believe all of the business leaders who say that work from home is the future. It may be since it lowers expenses but time will tell. But at this point in time YOU may not have to move to find another IT job. This could be an opportunity, though a painful one.

All of the people I know who have been laid off seem to be doing at least as good as they were before the layoff, and some are much better off. BUT, being laid off was very stressful. Especially, when one is just picked because someone has to be kicked out the door and the lay off had nothing to do with the quality of work being done by the person being forced to leave.

One reason we are thinking of selling everything and buying a boat to see the world is expenses. Boat are expensive to maintain, no doubt, but our land expenses are high and compensate. Health care costs in other countries are cheap compared to the US. Living expenses can be cheaper too if one is careful.

Good Luck,
Dan

 

[Hay Dude]

I like Dave Ramsey's thought on gold investing...

"If your investments are advertised right after a Snuggie ad, you are probably not in a good category of investments.

If Snuggie is on, and then right after that, catheters and then gold coins, something is wrong. '


From here:
Down on gold - Ask Dave | DaveRamsey.com

Dave Ramsey is pretty good, but as a self employed corporation owner and farmer, his advice is impractical and unusable to me. I have to borrow money and do things he advises against to make a living.
If I followed his advice to the letter, I couldnt do what I do.
I also find him a bit annoying personality-wise.

 

[Hay Dude]

I suspect too that the bubble is about to burst as the markets are at all time highs in spite of this past year with COVID. And we are overdue a major correction history wise. But I'll stick with my long game plan of diversification and low cost mutual funds. My attempts of timing the market have bit me on the azz more often than not, including precious metal fund plays.
Whoever is in power tends to get the blame or credit for market swings but history says the markets don't care that much who the bobble heads are.

:2cents:

Dont do the precious metal funds, do the actual precious metals.

 

[fried1765]

Dont do the precious metal funds, do the actual precious metals.

Agreed!
The gold that I have is in a safety deposit box.
Got a nice size diamond in there too. I actually thought I might need it some day for a second go-around.
Ain't gonna happen at 80!
I think my daughter will enjoy that.
Will be a nice surprise for her!

 

[cdaigle430]

I hope things work out for you.

Thank you for the kind words.

Back in 2008 the same company terminated my position. They did offer a severance package then but I had retired from the National Guard earlier so I had no income to back into. I applied for almost a thousand jobs, had 200 interviews and every single one I left feeling humiliated. Was always one person I couldnt hear. I had no money, was living paycheck to paycheck, 401k was less than 20k and no medical to fall back on. That was the first time I cried as an adult.

When they rehired me a day before the severance package took affect I was so relieved but...I had to settle for what they gave me. I hated my new job for 12 years but did it with pride anyway. I didnt like it but I stood by it for the next 12 years. The year after that the VA increased my disability rating so I could get medical. I also saved and saved wanting to never be that vulnerable to clock counters again as long as I could help it. I got to the point where no matter what I was ok in retirement even if I was fired....I now have a military pension which means I have full medical and dental after age 60 at a decent cost. I have an old pension plan from another company, I have VA compensation and I have 37 years of social security work history-I will start withdrawing at age 62.

I have a 401k I saved aggressively too, it will just be used until I can start collecting social security and my other pensions. Starting next year I will withdraw once a year from it. This will make up for 80% of what I was making in my last jobs take home.

I am getting a good severance package in April and I will also collect unemployment for as long as possible. My house is almost completely remodeled and modernized, including a 7kw solar system to help in electricity costs. I may pay off the mortgage next January...not 100% sure. As for debt I only have a loan for the vinyl siding on my home and I will pay that off in April.

I do have a few more options like VA retraining, and some other things I am going to work on later but I am done the workforce for good (or rather it is done with me). The other item is I will be living in Brazil for half a year-much cheaper cost of living.....enough to where I can afford a maid three times a week and live on a beach.

For now-I am free in my early 50s...now I need to get into shape and get healthy. I can also finish up many of the projects on my home I started and never finished over the years.

I am disappointed in how the workforce in USA is so inhuman. I strongly suggest no matter how much you like to work or love your job is to plan for a plan A. and B in the very least my friends. You\we are just another number., so dont just plan for money and finances...plan for the most important things people forget or dont think of...goals and ambitions after retirement, medical coverage, and strive to be as healthy as you can. You dont have those and it wont matter how much money you got saved.

The other thing to consider is inflation...our Government is spending and printing money into oblivion and soon we will need a wheel barrel full of money just to buy a loaf of bread. Consider moving to another country to retire where the dollar is valued-like Costa Rica, Thailand, Philippines etc..

Sorry this is so long but please start planning now...your future self will thank your present self.

I have come to terms I will never be rich in the USA but thats ok, I will be rich in Brazil and I hope to be rich in life.

 

[MossRoad]

Dave Ramsey is pretty good, but as a self employed corporation owner and farmer, his advice is impractical and unusable to me. I have to borrow money and do things he advises against to make a living.
If I followed his advice to the letter, I couldnt do what I do.
I also find him a bit annoying personality-wise.

I don't care for him all that much, either, however, he has very good advice for people that have had problems managing their money in the past.

Gold is a very speculative commodity to invest in. You're betting that no one wants it when you buy it and that everyone wants it when you sell it. There are much safer investments with more predictable returns. Slow and steady winds the race.

 

[Jstpssng]

Agreed!
The gold that I have is in a safety deposit box.
Got a nice size diamond in there too. I actually thought I might need it some day for a second go-around.
Ain't gonna happen at 80!
I think my daughter will enjoy that.
Will be a nice surprise for her!

Safe Deposit Boxes Aren’t Safe - The New York Times
You might find that your safe deposit box isn't as safe as you think.

 

[cdaigle430]

Dave Ramsey is pretty good, but as a self employed corporation owner and farmer, his advice is impractical and unusable to me. I have to borrow money and do things he advises against to make a living.
If I followed his advice to the letter, I couldnt do what I do.
I also find him a bit annoying personality-wise.

Dave Ramsey is as useless to me as a comb is to a bald man. Proof-One caller last year called and was concerned about the stock market when Biden gets into office. When Dave laughed at her and told her it doesn't matter who is in the white house I about fell off my chair. Lost allllll respect for his so called expertise. Yes it DOES matter who is in office and we will sadly see definite proof in the next couple of years of that. I dont want anyone's opinion on this either...just let time speak for itself ok.