Retirement Planning - Lessons Learned

[MoKelly]

I just pulled my info from SS.GOV; started paying taxes when I was 15, been paying for the last 48 years. I will still be paying when I turn 66.8 months old for "full" retirement payments. If I live for 20 years past that, maybe get new gubment knee replacements, I should come out even...

Does that include what the employer put into FICA on your behalf - or only what you paid?

MoKelly

 

[dirttoys]

Right after being debt free, that was our next goal.
After that, the next goal is finding affordable health insurance after retirement.

I didn't know it was still legal to say affordable and health care in the same sentence Please kick it out to the team if you find any!! I budget $500 per month per person, and may be optimistic.............

Best,

ed

 

[Steppenwolfe]

Does that include what the employer put into FICA on your behalf - or only what you paid?

MoKelly

Sir... I am self employed; have been since I was 23. I get to pay double SS. And yes, the 7 years between 15 and 23 I assume my employer paid the other half... REAL BIG MONEY back then. I get reamed on SS... I sure hope I live long enough to get it back.

 

[dirttoys]

Why stop buying on credit? I think this is horrible advice.

the stock market has averaged 10% returns for the last 140 years.

why would I pay cash for a tractor, when the bank is willing to give me a loan for say 6%. By taking out a loan and making monthly payments, my say 40K is still invested and making money, and all I have to do is make a monthly payment.

i Will only pay cash if the interest on a loan is over 10%, which is never.

The market averages ~10% a year (7% after inflation). I am guilty of letting banks carry paper so I can hold cash. But couple of things; money you might need in the next five years shouldn't be in the market, average person, average market, anything other than a house, it is hard to go wrong just paying for it.

Best,

ed

 

[dirttoys]

So you are happy for the taxpayers to make up the difference?

Excellent point. I hate the free money, but, we print money for every other damn thing, making everything so expensive, I hate it a little less when it ends up in someones pocket that might be able to use it.

 

[Torvy]

Don't spend what you can't already have the money for. If you have the money and have a good interest rate to boot, use someone elses money.

Is that wrong?

I'm in my 50's, the only thing we both owe on is our house and land.

You are absolutely right. The biggest problem I have with Dave Ramsey. Credit can be used wisely. If you don't have the restraint to use credit wisely, you will not likely be able to follow his advice. If you can follow his advice, you can handle using credit wisely.

 

[Torvy]

Please... enlighten us. What are we missing?

Brother, from what I can tell from your posts, you get it. I quit a high paying job to teach HS Economics in a school with 3/4 of families living below the poverty line. Today I showed them how to use a spreadsheet to put together a personal budget. You would think I invented fire.

 

[dirttoys]

In my experience... many who are poor, perhaps even the majority, have put themselves there through poor choices, drugs, alcohol, quitting school, or just old fashioned, I ain't going to work today. I have seen thousands like this.

There are certainly those, no argument.

But there are a pile that have been dorked by the unions, the government, and crappy employers, and just shitty luck.

Every time I get to feeling cocky I try to look back at some pivotal breaks I have gotten. I have not been poor since my early 20's, and not saying I would have been destitute, but man, missing a couple of 20% gains would have meant working for several more years.

Best,

ed

 

[dirttoys]

One lesson is if you don't work, you can get free government paid medical insurance.

I don't know if I wish that were true or not But, it isn't, the litmus test for subsidized health care goes beyond earned income.

Best,

ed

 

[ultrarunner]

As a young property manager I was surprised at just how much debt people that apply to rent carried...

My Grandparents and Parents instilled debt avoidance at an early age... pointing out the houses in the neighborhood where people were ruined in the Great Depression...

Each market day with Grandmother started at the bank to withdraw cash... her advice was simple... unless you have the cash in hand... you can't afford it...

When I got my first credit card which was Sears... had to promise to pay off every month and that is what I do...

On the other hand... I broke the rules buying Real Estate...

I would find run down and even boarded up homes where no lender would venture and cut a deal where debt income ratio was totally out of whack... but made the difference with my free labor renovating...

Had I followed Dave Ramsey I would have rented into my 30's instead of owning at 22.

Being single and single minded at a young age is one way to increase discretionary income...

Only investment where I have lost is individual stocks and I quickly realized I would always be behind the curve.

I don't see a negative being debt free in retirement...