Do you believe in saving for the future?

[CRUZer]

I'm the most frugal mother fucker you'll ever meet. Haven't eaten out in a year but I splurge on nice toys that I actually use on a daily basis. I'll be retiring in 3 years at the age of 41. Yeah it was worth it not to pay other people to make me food and do all the other shit people over pay others to do out of pure laziness. Small sacrifices pay off in the end... especially in the early 20s when the time value of money works on your side. As Budman demonstrated in his post, it's a bitch to catch up on retirement when you're starting out or over a couple decades late even if you're making good money by that point. Build that nest egg early in your career and sit back and let the market do its thing and just coast.

 

[Eldritch]

My employer doesn’t offer a 401k even though I tried to get them to start one so we could make tax advantages contributions. A company I work for on the side solved that problem and put me on payroll once I helped them set up a 401k. 100% of my pay from that company goes to a 401k. I max out my Roth IRA each year.

I have been paying off student loans, old tax debt (gone!), credit cards (gone) and still managed to save. Dave Ramsey says to pay off ALL debt before saving for retirement but I simply cannot agree.

One of my goals is to pick up some rental properties for cash flow in retirement, too.

I worry when people say they are planning on getting rental income to supplement their retirement, because it's a dangerous game. Rental property can be a lot of risk and a lot of work, you can hire an outside company to do it, but the smaller your unit portfolio, there bigger piece of your cash flow it can eat. A single eviction will typically cost $3-$10k in legal fees and most small fry property management agreements won't cover that cost.

I just started picking up rental property myself, but I am structuring deals to be paid off by the time I retire. If you have zero debt service on the property you can pretty easily liquidate the whole investment for retirement funds if that better suits your needs.

 

[Killroy1999]

I'll probably retire a little early with the investments I have made.

Use your money smartly and get it working for you. I dont feel like I have made any sacrifices. My car is not new and my house is not big, but I'm on the way to paying it off.

I'm a fan of rental properties. In the long run, my rental property ROI is better than the stock market.

 

[two wheel tramp]

I worry when people say they are planning on getting rental income to supplement their retirement, because it's a dangerous game. Rental property can be a lot of risk and a lot of work, you can hire an outside company to do it, but the smaller your unit portfolio, there bigger piece of your cash flow it can eat. A single eviction will typically cost $3-$10k in legal fees and most small fry property management agreements won't cover that cost.

I just started picking up rental property myself, but I am structuring deals to be paid off by the time I retire. If you have zero debt service on the property you can pretty easily liquidate the whole investment for retirement funds if that better suits your needs.

I am no longer in California. It's a different world up here, still very low vacancy rates but with a more balanced view of the landlord-tenant relationship. The plan would absolutely be to have the houses paid off in time for retirement. One already is paid off and I am working to buy the one next to it. I think real estate is a solid choice but should not be the only source of income in retirement.

 

[Killroy1999]

My employer doesn’t offer a 401k even though I tried to get them to start one so we could make tax advantages contributions. A company I work for on the side solved that problem and put me on payroll once I helped them set up a 401k. 100% of my pay from that company goes to a 401k. I max out my Roth IRA each year.

I have been paying off student loans, old tax debt (gone!), credit cards (gone) and still managed to save. Dave Ramsey says to pay off ALL debt before saving for retirement but I simply cannot agree.

One of my goals is to pick up some rental properties for cash flow in retirement, too.

Note that if your employer offers a 401K plan, you only get the full IRA tax deduction if you have income below ~$76,000 per year ( single, MAGI, for 2021) YRMV.

I would call rental properties debt, good debt when you cash flow and get a lot of other benefits. :teeth. Good ROI when you borrow.

 

[JesasaurusRex]

How much money do you guys have put away to retire at 40? I think i'm doing pretty decent for someone my age (mid 30s) and to retire at 40 just seems completely unrealistic. Maybe i just have too expensive of a life style, i don't even need to run any numbers to know i don't have enough to put me through another say 30-40 years. Maybe if the only hobby i had was couponing it'd work but what kind of a life is that?

 

[two wheel tramp]

Note that if your employer offers a 401K plan, you only get the full IRA tax deduction if you have income below ~$76,000 per year ( single, MAGI, for 2021) YRMV.

I would call rental properties debt, good debt when you cash flow and get a lot of other benefits. :teeth. Good ROI when you borrow.

I won't get a deduction. But it's a Roth so when I withdraw it won't be taxed and that seems fair to me. I'm happy to have the 401k as another way to save. Plus i have extra taxes withheld that will cover the remainder of my self employment income.

 

[CRUZer]

How much money do you guys have put away to retire at 40? I think i'm doing pretty decent for someone my age (mid 30s) and to retire at 40 just seems completely unrealistic. Maybe i just have too expensive of a life style, i don't even need to run any numbers to know i don't have enough to put me through another say 30-40 years. Maybe if the only hobby i had was couponing it'd work but what kind of a life is that?

As a rough estimate, you can use the 4% rule. If you need $80k per year in retirement, then you should save $2M.

 

[JesasaurusRex]

As a rough estimate, you can use the 4% rule. If you need $80k per year in retirement, then you should save $2M.

Okay, so retire at 40 and die at 65? Or have 4m put away to get you to 90 assuming a dollar will go as far down the road (it won't).

There's a lot of variables but most of them add up to many millions of dollars to retire at 40 and be comfortable. At least in my eyes. Guess I'm in the wrong line of work

 

[CRUZer]

Okay, so retire at 40 and die at 65? Or have 4m put away to get you to 90 assuming a dollar will go as far down the road (it won't).

There's a lot of variables but most of them add up to many millions of dollars to retire at 40 and be comfortable. At least in my eyes. Guess I'm in the wrong line of work

The rationale behind the 4% "rule" is that you can live off the annual 4% without touching the principal. So if it holds true, then you could live off of the original principal in perpetuity. I've got an old fashion pension to pad the difference otherwise it would be a bit nerve racking.

 

[JesasaurusRex]

The rationale behind the 4% "rule" is that you can live off the annual 4% without touching the principal. So if it holds true, then you could live off of the original principal in perpetuity. I've got an old fashion pension to pad the difference otherwise it would be a bit nerve racking.

Thanks for the clarification

 

[ScottRNelson]

I talked to my older sister who is also retired and we've both determined that we have more than a million $$ in investments but less than two. With social security and a small monthly pension payment, plus zero debts, we can live comfortably without touching the investments. But we pull money from our investment accounts for the expensive vacations. We try to travel now while we're healthy, before we get too old to do it.

I believe that you need more than two million put away to retire early. Social security definitely helps, but I'm in a position where if the politicians take it away I'm still okay.

Owning a rental property in retirement sounds way too much like work to me. I want nothing to do with that. :x

 

[CABilly]

I'm the most frugal mother fucker you'll ever meet. Haven't eaten out in a year but I splurge on nice toys that I actually use on a daily basis. I'll be retiring in 3 years at the age of 41. Yeah it was worth it not to pay other people to make me food and do all the other shit people over pay others to do out of pure laziness. Small sacrifices pay off in the end... especially in the early 20s when the time value of money works on your side. As Budman demonstrated in his post, it's a bitch to catch up on retirement when you're starting out or over a couple decades late even if you're making good money by that point. Build that nest egg early in your career and sit back and let the market do its thing and just coast.

I've got an old fashion pension to pad the difference otherwise it would be a bit nerve racking.

That tidbit makes a huge difference.

 

[cheez]

How much money do you guys have put away to retire at 40? I think i'm doing pretty decent for someone my age (mid 30s) and to retire at 40 just seems completely unrealistic. Maybe i just have too expensive of a life style, i don't even need to run any numbers to know i don't have enough to put me through another say 30-40 years. Maybe if the only hobby i had was couponing it'd work but what kind of a life is that?

$8.9 million is my target. When I reach that number, I can retire forever.

That'll give me $250k a year in SWR while still allowing the principal to grow. Works out to a SWR of 2.8%.

 

[afm199]

I started saving in my early thirties, right around when IRA's were started. My mom told me that it was a once in a lifetime opportunity, and she was right.

 

[CRUZer]

$8.9 million is my target. When I reach that number, I can retire forever.

That'll give me $250k a year in SWR while still allowing the principal to grow. Works out to a SWR of 2.8%.

Seems a bit excessive if you're only shooting for $250k per year and have a low life expectancy in your family. Hell, you could earn 0% interest and live off that sum for 30 years.

I'm just as concerned about dying with too much money as with not enough. That means you effed up and could've retired much sooner during your prime years of good health. I'd rather err on the side of retiring too soon and adjust lifestyle later on in retirement to accommodate. I'm fine with retiring 25 years early even if that means there's a 15% chance I'd have get a part time job at the local golf course for supplemental income (and free golf privileges). It would be my life's biggest regret to die with $8.9M in my portfolio.

Not saying your approach is wrong. The OP obviously knew this topic elicits vastly different perspectives. It fascinating to see the approach that others take when trying to maximize the work-life equation in life. The real winners in my book are those who actually enjoy their careers and would feel a personal sense of loss if they were to retire early.

 

[CABilly]

I’m telling my wife and kid that if my storage fees become too great when I’m older to just turn me loose in grizzly country or shoot me out of a cannon.

 

[CRUZer]

I’m telling my wife and kid that if my storage fees become too great when I’m older to just turn me loose in grizzly country or shoot me out of a cannon.

Exactly! Why work an extra 10-15 years in the prime years of your life to cover the "what if" scenarios in the terminal stages of life? Your plan solves that.

 

[cheez]

Seems a bit excessive if you're only shooting for $250k per year and have a low life expectancy in your family. Hell, you could earn 0% interest and live off that sum for 30 years.

I'm just as concerned about dying with too much money as with not enough. That means you effed up and could've retired much sooner during your prime years of good health. I'd rather err on the side of retiring too soon and adjust lifestyle later on in retirement to accommodate. I'm fine with retiring 25 years early even if that means there's a 15% chance I'd have get a part time job at the local golf course for supplemental income (and free golf privileges). It would be my life's biggest regret to die with $8.9M in my portfolio.

Not saying your approach is wrong. The OP obviously knew this topic elicits vastly different perspectives. It fascinating to see the approach that others take when trying to maximize the work-life equation in life. The real winners in my book are those who actually enjoy their careers and would feel a personal sense of loss if they were to retire early.

I'm not single, and my goal is to leave that money to others.

There's also a strong chance I'll burn out before hitting that target number.

 

[Maddevill]

An old roommate of mine said it best, " Pay yourself First"

Mad