How prepared are you for retirement?

[KC Jones]

So seeing oldandslow has made it to his retirement and having seen a few early retirements at work recently, I'm curious how many planeteers are on track for this? I'd really like to retire a little early or plan for a sabbatical before I fully retire. Not sure I'm on plan for that though...

What about you?

(poll questions coming, and if you've already retired pick the options that most closely follows your retirement planning)

[Chief Henry]

The Mrs and I have our r'ment allocation at 80 % fixed and 20 % market. We will retire very comfortably in 10-15 years. We have been cranking $$$ into retirement for 25 plus years and have not taken too large of hits. Her employer started a ROTH option about 5 years ago and its been great. We choose to pay taxs NOW and utilize the tax free income option at r'ment. ROTH 401ks are greater than cookie jars.

[HemiEd]

Originally Posted by ThaVirus

I've resigned to the fact that ill be middle class my entire life. I'm a pretty good saver but ya just never know.

I fear the day all of our money is worth nothing.

That is the big ugly problem we are facing right now. With the bailouts, our savings is worth about 1/2 what it was.

If failing companies would have failed, order would have eventually reigned.

In order to try and offset some of the loss, we bought a fairly new foreclosure where we want to retire and have done a lot of work to it.

[Nightfyre]

Well, this thread inspired me to chuck another grand into my ROTH today. That makes 3500 since tax day.

[DaKCMan AP]

Originally Posted by Nightfyre

Well, this thread inspired me to chuck another grand into my ROTH today. That makes 3500 since tax day.

If you can, max that out, brah.

[DaKCMan AP]

Originally Posted by alnorth

I'm aiming very high. Right now I save 20%, invested very aggressively (I'll dial it back in a couple decades when I'm closer to retirement), and I hope I can hit the max that you can put into a 401k per year either next year or the year after.

Originally Posted by alnorth

A lot of people had that attitude and sold at the absolute bottom 3 years ago, completely missing the rebound, and again last year at another low.

I do not believe in market timing AT ALL. People who try to get cute with timing buy high because they read the news about how awesome the market is now and they want to get in on that, and sell low because they are depressed and think the dow is going to zero, and they lose money.

Since the great depression, the market (including dividends) has never lost money over any 10-year time span. Since the depression, the market has never made less than inflation in any 15-year time span.

I have roughly 30 years. I'll think about pulling back when I've got less than 10 years left. Buy and hold, diversify, mutual funds, rebalance every once in a while, and laugh at bad news. When the market crashed a few years ago, I doubled my contribution.

I invest similarly to you. I have 40+ years until I will access the money I am stashing away so I am in 100% equities and most of them with high risk ratings. I can afford those risks and because of 2008 and beyond I've bought many of the funds at cheap prices. Of course with regular (every 2-week) investments into the 401k it's all dollar-cost averaged.

I max out my 401k and in November I'll get the full company match ($0.75 on the dollar up to 8%.. currently I get $0.375 on the dollar up to 8%). In 2008 they reduced the company match and have slowly added it back so hopefully in another couple of years it will return to $1 for $1 match up to 8%.

You should look into opening a Roth IRA in addition to your 401k. That way you have both a tax-deferred and tax-free retirement account. I max out my Roth IRA every year but usually in a single transaction so it's not dollar-cost averaged.

The market is volatile, yes, but a loss isn't a loss until you realize it and I have 40 years to wait. On some of my investments I'm up 25% and in others I'm down 35% but overall I'm up about 9%.

My focus the past 2-3 years has been to shift funds from my taxable liquid account (i.e. money market, checking, savings) into retirement accounts. The highest interest rate I can find for cash is around 1% which is a loss against inflation so I'd rather my money be in tax deferred and tax-free retirement accounts earning a higher return.

Now that I'm done with my MBA (and the $20k per year in tuition) I can grow both my retirement and liquid savings.

[HemiEd]

Originally Posted by ChiTown

Within 2 years (47), I will be in full position to retire. That said, I will NEVER retire. I'll just work on projects that interest me and spend more time doing the things I really want to do. But retire? Never. That's for old guys and/or people that want to grow old quick.

Wait 20 years and see how you feel. We just spent the last week down at our retirement place, and it was wonderful.
No cell service there for our AT&T phones, awesome.
I worked sunup to sundown and loved every minute of it. This next 2 years can't go by soon enough for me.

[Graystoke]

I feel sorta prepared. At one time I had life by the balls, but life bust you like that.
Eligible to retire at 55, but I am sure I will work till I am 60 or farther.

[Nightfyre]

Originally Posted by DaKCMan AP

If you can, max that out, brah.

Definitely. I have maxxed it every year since I got out of college. I'm just well on my way this year, which should allow me to cushion my brokerage account a little more.

[Swanman]

Originally Posted by alnorth

If your time horizon is less than 10 years (sounds like it might be, since you are talking about maybe needing money?) then I agree, you should not be in stocks. At least not all in stocks.

If your horizon is longer than 10-15 years (and mine is, I dont care what happens, I'll go BK before I touch my retirement), then you probably should have at least a large chunk of stocks and just ignore the news.

The general rule of thumb these days is to take 110 less your age and that should be your allocation to equity, with the rest to fixed income (bonds). So if you are 50, you should be 60% stock and 40% bonds. You can move that up or down 10% based on your personal risk preference.

I also stay away from "stylized" mutual funds (funds that try to beat a certain benchmark like the S&P 500, DJIA, ec). Stats show that over 80% of those types of mutual funds actually perform worse than the competing benchmark over time. I like index funds that mimic things like the S&P 500, Russell 300, FTSE, etc for that reason and index funds have extremely low expense percetanges (less than 0.25%).

One of the keys, as it has always been, is spread around your money as much as you can. Invest in different types of equity (small cap, mid cap, large cap, income, growth). Invest in international funds if available. If you are lucky and can invest in emerging markets (Brazil, Russia, China, etc), even better. The thought being is that it is rare that everything will go down or up at once so it's good to be all over the board. I still cringe when I hear people that are 100% invested in their company stock for their 401k.

[ChiTown]

Originally Posted by HemiEd

Wait 20 years and see how you feel. We just spent the last week down at our retirement place, and it was wonderful.
No cell service there for our AT&T phones, awesome.
I worked sunup to sundown and loved every minute of it. This next 2 years can't go by soon enough for me.

Sorry, I can't and won't do it. That said, congrats on your just rewards. May time, for you, fly over the next 24 months!

Like I said, I am prepared to minimize, but not retire. I have a great biz format that allows me to pick and chose what and how much I want to work on. I can take off for a month or months and come back full time if I wish.

I should have made it more clear that I was speaking on a personal level, not a blanket statement for everyone. BTW, I have had a job since I was 7 years old doing something or the other. As a matter of fact, my first job at 7 was delivering Avon products door-to-door. By the time I was 16, I owned my own cleaning business - which I sold when I was 21. I love to work, and I love to make money. Barring physical limitations as I get older, I don't see that changing.

[Reerun_KC]

Originally Posted by ChiTown

Sorry, I can't and won't do it. That said, congrats on your just rewards. May time, for you, fly over the next 24 months!

Like I said, I am prepared to minimize, but not retire. I have a great biz format that allows me to pick and chose what and how much I want to work on. I can take off for a month or months and come back full time if I wish.

I should have made it more clear that I was speaking on a personal level, not a blanket statement for everyone. BTW, I have had a job since I was 7 years old doing something or the other. As a matter of fact, my first job at 7 was delivering Avon products door-to-door. By the time I was 16, I owned my own cleaning business - which I sold when I was 21. I love to work, and I love to make money. Barring physical limitations as I get older, I don't see that changing.

I need to get up there and buy you a beer soon.

[Garcia Bronco]

I am super prepared and will probably "retire" early. I bank over 30 percent of each check, when you compaoud that with the 40 percent of state, local, and federal taxes.....I live off 30 percent of my gross income. But I didn't make dumb decisions...or rather too many dumb decisions. And I got lucky too.