Are you comfortable with where you are financially? This site shows you where you are relative to peers (90th percentile, median, etc.).

[EdwardoCarrachio]

Nearly half of American households have no retirement savings

How do your savings compare?

usafacts.org

Whether you are or are not where you would like to be right now, do you have a viable plan/strategy? Are there things that you are looking to change/improve? What goals have you have set and what steps are you taking to achieve them?

I wish you all great success, even those of you who like to argue with or attack me personally. My personal view is that it is great to learn from others no matter who they might be. IMO you have to be humble enough to listen to everyone's views even if you disagree with them. Sometimes those that you don't expect offer thoughts that you have never considered that may just change your outlook. Thank you to those who are willing to share their personal experiences (successes and mistakes), expertise, and strategies.

 

[bdroc]

Nearly half of American households have no retirement savings

How do your savings compare?

usafacts.org

Whether you are or are not where you would like to be right now, do you have a viable plan/strategy? Are there things that you are looking to change/improve? What goals have you have set and what steps are you taking to achieve them?

I wish you all great success, even those of you who like to argue with or attack me personally. My personal view is that it is great to learn from others no matter who they might be. IMO you have to be humble enough to listen to everyone's views even if you disagree with them. Sometimes those that you don't expect offer thoughts that you have never considered that may just change your outlook. Thank you to those who are willing to share their personal experiences (successes and mistakes), expertise, and strategies.

Fortunately I am not in the half that has nothing saved for retirement.

 

[ForesterGump]

We never started saving much money until we got the banks out of our lives. No debt means we could put that money into savings. We also live below our means. We live in a low tax area, so that also goes into savings. We didn't keep on swapping houses, which meant more savings. Being brought up around people who lived during the Depression helped mold our thoughts on debt.

I also didn't buy heavily into the insurance business. I had disability insurance, skipped the life insurance, and no long term care insurance.

We are now both retired, no debt, large accounts and living below our SS levels. We take multiple vacations each year. I'm now at the point of thinking about hiring my repairs out instead of doing them myself.

They really should teach kids about savings and debt when they are in school. It yields large societal gains.

 

[EdwardoCarrachio]

We never started saving much money until we got the banks out of our lives. No debt means we could put that money into savings. We also live below our means. We live in a low tax area, so that also goes into savings. We didn't keep on swapping houses, which meant more savings. Being brought up around people who lived during the Depression helped mold our thoughts on debt.

I also didn't buy heavily into the insurance business. I had disability insurance, skipped the life insurance, and no long term care insurance.

We are now both retired, no debt, large accounts and living below our SS levels. We take multiple vacations each year. I'm now at the point of thinking about hiring my repairs out instead of doing them myself.

They really should teach kids about savings and debt when they are in school. It yields large societal gains.

You hit on perhaps the most foundational part of building wealth, living below your means. The majority of people seem to want it all and want it now or at least operate on a deficit. In part, I blame the constant bombardment of advertising. Get this now for just X easy payments. But people have to make their own decisions and think beyond 2 inches in front of their faces.

A critical piece of my personal finance philosophy is that if you cannot buy it in cash, it will have to wait (save real estate and other investments where I do like to leverage because I've easily beaten the interest payments on my returns). Otherwise, I never really needed tons of toys and have been willing to sacrifice for our future through additional effort, taking on reasonable investment risk, and spending much less than I bring in.

So I pay off my credit card bill in full every month since I've had a credit card. Immediately following undergrad, I was investing about 50% of my pay (the rule of thumb for financial advisers is 10%-13% just for retirement savings and add more for each additional financial goal that you have). When I need a new vehicle, buy in cash, and run it until it has 300k miles or so (vehicles are one of the most rapidly depreciating but necessary assets that you own).

In my view, the foundation for personal finance should be:

1) Invest in yourself (education, skills, networking, health, etc.) to increase your earnings potential and opportunities. Do this early and don't stop.
2) Spend less than you bring in and wait on personal use asset purchases that you cannot buy in cash.
3) Invest as high of a percentage of your income as you can afford and as early in life as possible. This is more fuel and time for compounding interest to work in your favor.
4) Maintain a reasonable liquid emergency fund (3 to 6 months' pay is recommended by financial advisors) so that you aren't caught having to take out harmful loans to cover unexpected expenses.
5) Cover catastrophic risks with insurance but don't over-insure. You have to make sure that major events can't derail you and your loved ones, but you can't be eating into your investment money with too many coverages and too low of deductibles.
6) Diversify your investments to spread investment risk but be aggressive, especially early in life. Prudent aggressive growth investments when your investment time horizon is long will likely yield the most growth but analyze the risk/return of those choices.
7) Continue to assess your strategy and results along the way. Modify as needed or as your needs and circumstances change.

And thank you Forrest for bringing up the need to educate kids on personal finance. It is 1000X easier if the foundation for personal finance success is established early. It's never too late to make changes if it wasn't, but it is so much easier if it is in place early.

 

[LMTLION]

Now entering our late 40s I am comfortable with where my wife and I are with retirement. We will keep our standard of living in retirement and have no worries. I really have done things well starting in my 30s and especially in my 40s by putting financial decisions into auto drive so i do not think about these things. I auto withdrawal from checking to savings to keep a good emergency fund available and cash for things like my HVAC a few years ago and other necessary home improvement projects and such. I contribute 13% to my retirement account, have my kids 529 contributions on automatic, and I even have a separate mutual fund that I auto-contribute a little each for my children future weddings so I pay these things now rather than in retirement (I feel strongly about this because I paid for my damn wedding because my wife’s family was relatively poor.) You would think I would be happy with myself, but I do have a few big regrets from my 20s. I only put 5% in my 401k back in my 20s. I could have purchased used cars back then and we could have then put a lot more into our retirement to take more advantage of the magic of compound interest. We also had a fancier wedding than we should - my wife’s family was lower middle income and could not contribute to the wedding so we paid for it all. My other regret was moving one too many times and incurring all of those moving and transactional costs. I should’ve gone into the level of house I am in now much earlier in life, but I was too cheap and it cost me. With that previous house I had the mistaken notion that we could take that 1100 square-foot ranch house and renovate it into something that would work for a growing family. Boy was I wrong. The cost to renovate a room and add a bedroom onto the back of the rancher was ridiculous from the three quotes I received. It was much more cost-effective to simply sell that house and buy a larger one, which is what we did.

 

[Obliviax]

An epiphany for me was when I learned income is the most expensive money in the nation. The fact is, for every dollar you earn you lose ~ $.50 in taxes. I read "Rich Dad, Poor Dad" and worked for a guy that showed me his "secrets". He started a company and paid himself just enough to live off of. He often told me that I made more than he did. One day, he bought a twin turbo Porche 911 Targa. In today's dollars that would be north of $200k. I asked him how he could afford it since I couldn't and "made more than him." He laughed and said he convinced the board to pay him a $200k bonus. I realized he had a company that was worth more than $10m if he sold it. At that point, I started buying houses. I have a handful of upper middle class homes that my wife manages. I maintain the yards. Basically, the renter pays the mortgage, taxes, and cost to upkeep. I manage it to break even; no loss, no income. After 15 years, I own the house outright and didn't pay a penny of out of pocket money for it aside from the downpayment.

At retirement, I can liquidate them and live off the cash with only capital gains taxes (paid one time instead of every pay cycle, which is a huge benefit). Or, once paid off, the monthly rent goes into my income as retirement income which goes up with inflation (not a fixed income).

My wife's family has done this for a couple of generations. One is a woman who is ~ 90 who's income is well north of $100k per year.

 

[87 Penn St8]

I'm a career switcher who landed in public education at 42. My wife and I both used to work for large advertising agencies in the NYC area.

Post 9/11 we decided to "cut and run" back to my hometown in SEPA. The housing exchange was great- and I took 3 years off to get a Masters and pass the needed tests/student teach/and most importantly raise my kids while my bride worked at a financial firm.

I had always had education as my #2 career goal- but the pension also played a major factor. Summers have never been "off" as I've cobbled together a string of side hustles- but the change of season and routine were good. No commute and no travel allowed us time to really be present for kids activities. She then went to work for 2 universities so we could get their tuition benefits.

The combination has allowed us to remain in our home and raise our family. After 17 years my salary is still below the poverty line in our region. My wife's is considerably lower- but benefit laden.

What we've learned is that we will need to work as long as we can. I can see myself going to 70. I enjoy my work and the kids, have a 2 mile commute and teach in my town- so I'm literally educating our future. This isn't just a job.

We met with our financial planner the evening after the last day of school. Although we are both passed the retirement age in our plan- the volatility means we aren't quitting anytime soon- we are fiscally conservative- and couldn't enjoy spending money now if it means we'll be living in our son's basement one day. Healthcare alone is worth working for.

We aren't "rich" but are far from poor. We don't travel much and rarely fly. "Vacations" have mostly been at friends mountain, lake or beach homes with an occasional cruise or football trip.

In retirement we don't envision grandeur- but just an extension if our lifestyle with more time. We are in that sweet spot where neither parties' policies have really helped us- so we helped ourselves. After the ups and downs we are content.

Doing some home repair projects this Summer that will last longer than we will. We don't much care where we stack up...our goals should be achievable. As our planner said : Given where you are and what you want "it would be hard to screw this up."

 

[Obliviax]

I'm a career switcher who landed in public education at 42. My wife and I both used to work for large advertising agencies in the NYC area.

Post 9/11 we decided to "cut and run" back to my hometown in SEPA. The housing exchange was great- and I took 3 years off to get a Masters and pass the needed tests/student teach/and most importantly raise my kids while my bride worked at a financial firm.

I had always had education as my #2 career goal- but the pension also played a major factor. Summers have never been "off" as I've cobbled together a string of side hustles- but the change of season and routine were good. No commute and no travel allowed us time to really be present for kids activities. She then went to work for 2 universities so we could get their tuition benefits.

The combination has allowed us to remain in our home and raise our family. After 17 years my salary is still below the poverty line in our region. My wife's is considerably lower- but benefit laden.

What we've learned is that we will need to work as long as we can. I can see myself going to 70. I enjoy my work and the kids, have a 2 mile commute and teach in my town- so I'm literally educating our future. This isn't just a job.

We met with our financial planner the evening after the last day of school. Although we are both passed the retirement age in our plan- the volatility means we aren't quitting anytime soon- we are fiscally conservative- and couldn't enjoy spending money now if it means we'll be living in our son's basement one day. Healthcare alone is worth working for.

We aren't "rich" but are far from poor. We don't travel much and rarely fly. "Vacations" have mostly been at friends mountain, lake or beach homes with an occasional cruise or football trip.

In retirement we don't envision grandeur- but just an extension if our lifestyle with more time. We are in that sweet spot where neither parties' policies have really helped us- so we helped ourselves. After the ups and downs we are content.

Doing some home repair projects this Summer that will last longer than we will. We don't much care where we stack up...our goals should be achievable. As our planner said : Given where you are and what you want "it would be hard to screw this up."

"if you love what you do you'll never work a day in your life."

I've got a nephew that I tried to talk out of his college major choice. He grew up watching Indiana Jones movies and wanted to be, for lack of a better term, a paleontologist. He got his BS, then his Masters. All the time having married the love of his life and having children. He then got his PhD while going to school, raising his kids and waiting tables at night. Today, he travels around the world speaking, writing, doing research and digging. He just got back from several months in Chile. He sure made me look stupid!

 

[EdwardoCarrachio]

Now entering our late 40s I am comfortable with where my wife and I are with retirement. We will keep our standard of living in retirement and have no worries. I really have done things well starting in my 30s and especially in my 40s by putting financial decisions into auto drive so i do not think about these things. I auto withdrawal from checking to savings to keep a good emergency fund available and cash for things like my HVAC a few years ago and other necessary home improvement projects and such. I contribute 13% to my retirement account, have my kids 529 contributions on automatic, and I even have a separate mutual fund that I auto-contribute a little each for my children future weddings so I pay these things now rather than in retirement (I feel strongly about this because I paid for my damn wedding because my wife’s family was relatively poor.) You would think I would be happy with myself, but I do have a few big regrets from my 20s. I only put 5% in my 401k back in my 20s. I could have purchased used cars back then and we could have then put a lot more into our retirement to take more advantage of the magic of compound interest. We also had a fancier wedding than we should - my wife’s family was lower middle income and could not contribute to the wedding so we paid for it all. My other regret was moving one too many times and incurring all of those moving and transactional costs. I should’ve gone into the level of house I am in now much earlier in life, but I was too cheap and it cost me. With that previous house I had the mistaken notion that we could take that 1100 square-foot ranch house and renovate it into something that would work for a growing family. Boy was I wrong. The cost to renovate a room and add a bedroom onto the back of the rancher was ridiculous from the three quotes I received. It was much more cost-effective to simply sell that house and buy a larger one, which is what we did.

I love that you learned from and corrected things from your 20s. So many don't make the adjustments or don't until 10 years out from retirement. You did it early enough to make a huge difference.

The other thing I love that you wrote was about making the investment automatic. You don't even miss it if you do. That comes out first and consistently every month/pay check. This makes so much sense and dollars!

 

[EdwardoCarrachio]

An epiphany for me was when I learned income is the most expensive money in the nation. The fact is, for every dollar you earn you lose ~ $.50 in taxes. I read "Rich Dad, Poor Dad" and worked for a guy that showed me his "secrets". He started a company and paid himself just enough to live off of. He often told me that I made more than he did. One day, he bought a twin turbo Porche 911 Targa. In today's dollars that would be north of $200k. I asked him how he could afford it since I couldn't and "made more than him." He laughed and said he convinced the board to pay him a $200k bonus. I realized he had a company that was worth more than $10m if he sold it. At that point, I started buying houses. I have a handful of upper middle class homes that my wife manages. I maintain the yards. Basically, the renter pays the mortgage, taxes, and cost to upkeep. I manage it to break even; no loss, in income. After 15 years, I own the house outright and didn't pay a penny of out of pocket money for it aside from the downpayment.

At retirement, I can liquidate them and live off the cash with only capital gains taxes (paid one time instead of every pay cycle, which is a huge benefit). Or, once paid off, the monthly rent goes into my income as retirement income which goes up with inflation (not a fixed income).

My wife's family has done this for a couple of generations. One is a woman who is ~ 90 who's income is well north of $100k per year.

Valid point on the earned income. Taxes don't even stop at income tax. It's taxed when you earn it, when you spend it, again depending on what you spend it on, etc. This is why people have to take full advantage of tax advantaged investments. Always do the full amount to max the matching of a 401k and go higher if you can. Open the Roth IRA and max those contributions every year. You'll be loving taking that money out tax free at retirement.

I do rental properties as well. I like to keep at least some positive cash flow in the event of unanticipated costs or unexpected vacancy. In reality, I am in nice homes in desirable neighborhoods and that attracts great tenants that pay on time and take care of the place. There may be a higher profit margin on lower end properties but there is also a good bit of risk and hassle.

Part of my philosophy is not to nickel and dime people. I generally like all my tenants, they are good people, and I want them to make the place home, be happy, and stay. Turnover has costs (time, financial, etc.). So I guarantee no raise in rent for tenants in good standing the 1st 5 years because I'd rather eat small rising costs than deal with and pay for a bunch of turnover. I think particularly with the way inflation has been the last few years that they appreciate this. I also think they realize that after 5 years, it's reasonable to increase rent because costs have been going up.

I don't plan to liquidate them because I really don't need the money but also, unless you roll it into a 1031 exchange, there are significant tax implications such as depreciation recapture. I also like the idea of growing more revenue streams that as you aptly point out are generally inflation resistant.

 

[Obliviax]

Valid point on the earned income. Taxes don't even stop at income tax. It's taxed when you earn it, when you spend it, again depending on what you spend it on, etc. This is why people have to take full advantage of tax advantaged investments. Always do the full amount to max the matching of a 401k and go higher if you can. Open the Roth IRA and max those contributions every year. You'll be loving taking that money out tax free at retirement.

I do rental properties as well. I like to keep at least some positive cash flow in the event of unanticipated costs or unexpected vacancy. In reality, I am in nice homes in desirable neighborhoods and that attracts great tenants that pay on time and take care of the place. There may be a higher profit margin on lower end properties but there is also a good bit of risk and hassle.

Part of my philosophy is not to nickel and dime people. I generally like all my tenants, they are good people, and I want them to make the place home, be happy, and stay. Turnover has costs (time, financial, etc.). So I guarantee no raise in rent for tenants in good standing the 1st 5 years because I'd rather eat small rising costs than deal with and pay for a bunch of turnover. I think particularly with the way inflation has been the last few years that they appreciate this. I also think they realize that after 5 years, it's reasonable to increase rent because costs have been going up.

I don't plan to liquidate them because I really don't need the money but also, unless you roll it into a 1031 exchange, there are significant tax implications such as depreciation recapture. I also like the idea of growing more revenue streams that as you aptly point out are generally inflation resistant.

Agreed but there are exceptions. I know a guy who buys autographed guitars. He's got several Beatles, Stones, Clapton, Pink Floyd,etc. His thinking is that they'll go way up when the artist dies. He's bought them for four figures ($1000 to $9999) and pays ZERO in taxes as they go up in value.

So he's got this awesome house with these guitars sitting everywhere. Looks to me like he's got two dozen of them (although his wife said his best ones are stored). He feels like it is more fun to live with these guitars, and pay zero as they increase in value, than getting his monthly bank statement with 40% taken off of his interest income.

The downside is you have to know what you are doing. He started at least 25 years ago. My now deceased father in law used to get up at 6am and go through aroud want ads (paper, Craig's list, ebay) and buy anything that was undervalued. One of my favorite stories is that he called me to ask for help getting a big cement mixer off of his pickup truck. He was in his late 70s. I asked what the hell a cement mixer was doing in his pickup truck and he said "I bought it for $100. It is worth at least $1000). He sold it the next week for a $1k profit.

 

[Chickenman Testa]

"if you love what you do you'll never work a day in your life."

I've got a nephew that I tried to talk out of his college major choice. He grew up watching Indiana Jones movies and wanted to be, for lack of a better term, a paleontologist. He got his BS, then his Masters. All the time having married the love of his life and having children. He then got his PhD while going to school, raising his kids and waiting tables at night. Today, he travels around the world speaking, writing, doing research and digging. He just got back from several months in Chile. He sure made me look stupid!

Tell him a board member (me) was on a dig in Montana one college summer and met (and partied with) some of Jack Horner’s crew. He’ll definitely know who Jack Horner is

 

[Obliviax]

Tell him a board member (me) was on a dig in Montana one college summer and met (and partied with) some of Jack Horner’s crew. He’ll definitely know who Jack Horner is

he sat in the corner?

 

[psu00]

Nearly half of American households have no retirement savings

How do your savings compare?

usafacts.org

Whether you are or are not where you would like to be right now, do you have a viable plan/strategy? Are there things that you are looking to change/improve? What goals have you have set and what steps are you taking to achieve them?

I wish you all great success, even those of you who like to argue with or attack me personally. My personal view is that it is great to learn from others no matter who they might be. IMO you have to be humble enough to listen to everyone's views even if you disagree with them. Sometimes those that you don't expect offer thoughts that you have never considered that may just change your outlook. Thank you to those who are willing to share their personal experiences (successes and mistakes), expertise, and strategies.

Thanks for posting this link. It’s pretty interesting to see where we stand and looking at general trends by age.

 

[psu00]

They really should teach kids about savings and debt when they are in school. It yields large societal gains.

Very true. I’m shocked at how little financial education is given especially in high school/ college years. I always thought it should be mandatory in high school to have the basics and general principles showing how X will affect you in 10/20/30 years.

 

[Jerry]

Great stories and advice here.

Work hard. Pray hard. Live within (preferably below) your means. Save and invest as much as you reasonably can. Incur as little debt as possible. Try to pay off credit cards on a monthly basis. Perhaps most importantly: don't confuse what you "want" with what you "need."

The above rules of life have stood the test of time.

I met my wife at the government office where we were both employed, and we came to a fateful crossroads early in our marriage when she left the workplace after the birth of our first (of six) children.

If she had stayed on the job and we had gone the standard 1.5 kids route, we'd be living like kings now...rolling in dough.

As it was, though we could never afford to put large amounts of money away, we were still able to save some, and my very generous old-system (defined-benefit) pension, which is pegged to inflation, has more than sufficed for a comfortable, though not luxurious, retirement.

In fact, years ago we met with a financial planner who was blown away by the terms of the pension and said he'd never seen anything like it before. 40 years ago the government did away with that old system in favor of the 401K-type plans that dominate the marketplace now.

Anyway, instead of the stock market, we invested in the moral and spiritual development of our kids, and decades later the returns are in: 31 happy grandchildren and all the love that goes with them. You can't put a dollar value on that.

There's a passage in Scripture that rings truer than ever to me as I reach a point in life where the finish line is looming much closer than the starting gate: "We brought nothing into this world and it's certain we can take nothing out of it." (1 Timothy 6:7)

The investments, bank accounts, property, titles, vacation trips...not going with us. But the gratitude of our children, the joy in seeing their success, the love of our grandchildren, the strength of the faith and values on which we've built our lives...that we can take.

Which leads to the wisdom of another Scriptural passage: "Do not store up for yourselves treasures on earth where moths and vermin destroy, where thieves break in and steal; rather store up for yourselves treasures in Heaven...for where your treasure is, there will your heart be also." (Matthew 6:19-21)

 

[Obliviax]

We never started saving much money until we got the banks out of our lives. No debt means we could put that money into savings. We also live below our means. We live in a low tax area, so that also goes into savings. We didn't keep on swapping houses, which meant more savings. Being brought up around people who lived during the Depression helped mold our thoughts on debt.

I also didn't buy heavily into the insurance business. I had disability insurance, skipped the life insurance, and no long term care insurance.

We are now both retired, no debt, large accounts and living below our SS levels. We take multiple vacations each year. I'm now at the point of thinking about hiring my repairs out instead of doing them myself.

They really should teach kids about savings and debt when they are in school. It yields large societal gains.

This is the single biggest failure of our education system, IMHO. There should be a class called "Life Mgt. Skillz". Teach taxation, checking accounts, stocks, bonds, and family communications.

 

[EdwardoCarrachio]

Great stories and advice here.

Work hard. Pray hard. Live within (preferably below) your means. Save and invest as much as you reasonably can. Incur as little debt as possible. Try to pay off credit cards on a monthly basis. Perhaps most importantly: don't confuse what you "want" with what you "need."

The above rules of life have stood the test of time.

I met my wife at the government office where we were both employed, and we came to a fateful crossroads early in our marriage when she left the workplace after the birth of our first (of six) children.

If she had stayed on the job and we had gone the standard 1.5 kids route, we'd be living like kings now...rolling in dough.

As it was, though we could never afford to put large amounts of money away, we were still able to save some, and my very generous old-system (defined-benefit) pension, which is pegged to inflation, has more than sufficed for a comfortable, though not luxurious, retirement.

In fact, years ago we met with a financial planner who was blown away by the terms of the pension and said he'd never seen anything like it before. 40 years ago the government did away with that old system in favor of the 401K-type plans that dominate the marketplace now.

Anyway, instead of the stock market, we invested in the moral and spiritual development of our kids, and decades later the returns are in: 31 happy grandchildren and all the love that goes with them. You can't put a dollar value on that.

There's a passage in Scripture that rings truer than ever to me as I reach a point in life where the finish line is looming much closer than the starting gate: "We brought nothing into this world and it's certain we can take nothing out of it." (1 Timothy 6:7)

The investments, bank accounts, property, titles, vacation trips...not going with us. But the gratitude of our children, the joy in seeing their success, the love of our grandchildren, the strength of the faith and values on which we've built our lives...that we can take.

Which leads to the wisdom of another Scriptural passage: "Do not store up for yourselves treasures on earth where moths and vermin destroy, where thieves break in and steal; rather store up for yourselves treasures in Heaven...for where your treasure is, there will your heart be also." (Matthew 6:19-21)

I love the focus on what you've invested in your family. Investments are certainly not just financial. I believe that you have to invest in yourself (health, education, well-being, financial too, but many other facets) as well as those around you (kids, parents, siblings and other family, friends, work relationships, tenants, etc.).

Investment doesn't always have an immediate payoff in the financial world or in people. Not every investment pays off. But if you do it religiously, daily, it does. Years of compounding those investments leave you full and blessed with more than you ever thought was possible. You seem blessed with family riches. But I'm sure that you sacrificed and invested hard to get there. It was not built in a day.

 

[Chickenman Testa]

This is the single biggest failure of our education system, IMHO. There should be a class called "Life Mgt. Skillz". Teach taxation, checking accounts, stocks, bonds, and family communications.

Extra credit for “skillz” - guaranteed to pique the interest of the cool kids

 

[Chickenman Testa]

he sat in the corner?

Stop it. That was a fun summer for a 17 year old me. Got to drive the dig pickups all over the badlands and into town (40 miles away) for various things, found some cool bones, Montana could not give a shit about 17 year olds drinking beer in cowboy bars, and there were 2 hot female grad students on the dig with us - one of whom was very handsy - and I think you know what I mean. She took advantage of me and made me feel like I was climbing the rope in gym class

 

[Lesgo_Brandon]

The VA offers amazing programs for low income veterans and their surviving spouses. I help families apply for these programs every day. The number of low income individuals in their 70s is staggering. Some are doing fine until the need of in-home care or assisted living hits. They become low income real fast and now the kids are chipping in for medical care.

We have no debt and are still working in our upper 40s. My wife is ready to stop working and travel now (we could make it work) but that fear of putting our kids in that situation scares me. So, I keep working and loading up the IRAs just in case.

 

[IANit]

We never started saving much money until we got the banks out of our lives. No debt means we could put that money into savings. We also live below our means. We live in a low tax area, so that also goes into savings. We didn't keep on swapping houses, which meant more savings. Being brought up around people who lived during the Depression helped mold our thoughts on debt.

I also didn't buy heavily into the insurance business. I had disability insurance, skipped the life insurance, and no long term care insurance.

We are now both retired, no debt, large accounts and living below our SS levels. We take multiple vacations each year. I'm now at the point of thinking about hiring my repairs out instead of doing them myself.

They really should teach kids about savings and debt when they are in school. It yields large societal gains.

Congrats. You've made some good choices. But also have been fortunate. Your gamble on life insurance worked out. The verdict on the long-term care insurance is still out unless you've done appropriate planning to make sure that your assets are protected and can get Medicare to foot the bill should it become necessary for one of you to go to long-term care. Not an insurance salesman by any means, but it has some value,

 

[PSU2UNC]

I am on track to have more take home income in retirement than I do now. So, yeah, I'm good.

 

[bison13]

This is the single biggest failure of our education system, IMHO. There should be a class called "Life Mgt. Skillz". Teach taxation, checking accounts, stocks, bonds, and family communications.

we teach it, but kids are too busy getting text's from their mom to pay attention in class....... Then there is little we can do about it discipline wise

 

[Obliviax]

we teach it, but kids are too busy getting text's from their mom to pay attention in class....... Then there is little we can do about it discipline wise

Sad. I always have said that it makes no difference how much money we throw at a kids education if his/her parents are not similarly dedicated.

 

[bison13]

Wife and I are in early and late 40's, combine to make 200K+/yr but we didnt have kids until mid 30's and 40 so childcare is a HUGE hit. Thankfully we each were fiscally sound before marrying, both paid off all college loans soon after starting work, both bought houses and both had retirement savings in place so we will be fine. How long I choose to continue to work after 55 will depend on my/her parents health and if/where the kids choose to go to college.

 

[Lion84]

My Motto is live every day like its your last because one day you will be right. My parent were very conservative financially due growing up during the depression - had more money - dad retired 62 and lived to 92 - I wish they had traveled and spent more - they had more in life and enjoyed themselves more - we kids always told them we don't need you money spend it and enjoy yourselves - was hard for them to do though - not me.

 

[EdwardoCarrachio]

I am on track to have more take home income in retirement than I do now. So, yeah, I'm good.

That's another benefit of rental properties. They are a relatively small positive cash flow income stream (a few hundred dollars each per month) and a net loss at tax time with depreciation (thus lowering your taxable income) for many years. Then when the property mortgages are paid, they become huge positive income streams (thousands of dollars each per month).

I told my wife the schedule of projected income increases for us and she was floored. The first is in 3 years with the first rental paid off. Then a couple years later the next, etc. Eventually we get to our SS adding in as well. Our current income isn't even half of what it will be in a little over a decade with all of the income stream increases.

I haven't decided 100% if done buying properties. It may be in my best interest to continue to add but slowly. I don't want managing them to ever become too much for me, at least not until I'm ready to pass that task down to those to whom the properties will be left.

 

[PSUSignore]

Very true. I’m shocked at how little financial education is given especially in high school/ college years. I always thought it should be mandatory in high school to have the basics and general principles showing how X will affect you in 10/20/30 years.

In many cases it is taught. My high school taught plenty of basic personal finance information such as the beauty of compounding interest, how stock investing works, balancing checkbooks and bank accounts (not really relevant in the digital age), etc. Turns out that many 16-17 year olds don't really pay attention to it at the time, then question why they weren't taught it later in life.

 

[Jerry]

I love the focus on what you've invested in your family. Investments are certainly not just financial. I believe that you have to invest in yourself (health, education, well-being, financial too, but many other facets) as well as those around you (kids, parents, siblings and other family, friends, work relationships, tenants, etc.).

Investment doesn't always have an immediate payoff in the financial world or in people. Not every investment pays off. But if you do it religiously, daily, it does. Years of compounding those investments leave you full and blessed with more than you ever thought was possible. You seem blessed with family riches. But I'm sure that you sacrificed and invested hard to get there. It was not built in a day.

Thank you. It was indeed not built in a day. Nothing worthwhile ever is. In fact, only by good luck, a good woman, and the saving grace of God was it built at all.

If you make it through the minefields of life in one piece and don't come out a subscriber to the old adage that there-but-for-the-grace-of-God-go-I, then either you haven't been paying attention or you're fooling yourself.

 

[PSU2UNC]

That's another benefit of rental properties. They are a relatively small positive cash flow income stream (a few hundred dollars each per month) and a net loss at tax time with depreciation (thus lowering your taxable income) for many years. Then when the property mortgages are paid, they become huge positive income streams (thousands of dollars each per month).

I told my wife the schedule of projected income increases for us and she was floored. The first is in 3 years with the first rental paid off. Then a couple years later the next, etc. Eventually we get to our SS adding in as well. Our current income isn't even half of what it will be in a little over a decade with all of the income stream increases.

I haven't decided 100% if done buying properties. It may be in my best interest to continue to add but slowly. I don't want managing them to ever become too much for me, at least not until I'm ready to pass that task down to those to whom the properties will be left.

I do not own any rental properties; only my primary residence. That will be paid off in retirement, but I will sell to buy house in a cheaper locality

 

[EdwardoCarrachio]

I do not own any rental properties; only my primary residence. That will be paid off in retirement, but I will sell to buy house in a cheaper locality

That's a very common thing. When the wife and I used to live in the Raleigh area when I first retired, there were tons of NYers and Californians moving into the new neighborhood that went up behind ours. The neighborhood was priced a couple hundred thousand higher than ours for essentially the same houses (beds, baths, sqft, acreage). The new people would tell me they paid half as much as what they sold for and had gotten twice the house.

 

[bdgan]

The VA offers amazing programs for low income veterans and their surviving spouses. I help families apply for these programs every day. The number of low income individuals in their 70s is staggering. Some are doing fine until the need of in-home care or assisted living hits. They become low income real fast and now the kids are chipping in for medical care.

Yes it's discouraging how many seniors are trying to live on SS alone. It's also discouraging that the median household income in the USA is only $74k. Think about that. A high school graduate can easity get a $20/hr factory job with benefits - no experience necessary. That's $41.6k per year for one person or $83.2k per year for a two income household. Yet half the people in this country fall short of that amount.

I don't understand your comment about healthcare for 70 year old people because they should be on Medicare. Medicare advantage plans cost very little and a surgery with a 3 day stay in the hospital will only cost $500 or so out of pocket. Maybe another $250 copay if an ambulance was used.

I remember just a generation ago grandma would move in with her kids. There wasn't much in the way of assisted living. Of course there weren't so many 2 income families back then.

 

[bdgan]

That's another benefit of rental properties. They are a relatively small positive cash flow income stream (a few hundred dollars each per month) and a net loss at tax time with depreciation (thus lowering your taxable income) for many years. Then when the property mortgages are paid, they become huge positive income streams (thousands of dollars each per month).

I told my wife the schedule of projected income increases for us and she was floored. The first is in 3 years with the first rental paid off. Then a couple years later the next, etc. Eventually we get to our SS adding in as well. Our current income isn't even half of what it will be in a little over a decade with all of the income stream increases.

I haven't decided 100% if done buying properties. It may be in my best interest to continue to add but slowly. I don't want managing them to ever become too much for me, at least not until I'm ready to pass that task down to those to whom the properties will be left.

Capital gains are taxable on the sale of rental properties and you'll have a gain even if the property sells for little more than what you paid for it. Reason is depreciation expense reduces your cost basis.

I'm not arguing against rental properties. I'm just pointing our that there's a downside as well as an upside.

 

[EdwardoCarrachio]

Capital gains are taxable on the sale of rental properties and you'll have a gain even if the property sells for little more than what you paid for it. Reason is depreciation expense reduces your cost basis.

I'm not arguing against rental properties. I'm just pointing our that there's a downside as well as an upside.

I'm probably never selling. I intend to pass the properties down. That gets a stepped-up basis. If I do sell, I'll do a 1031 exchange and get a different property. I just don't anticipate selling.

I said in a post above that I don't need the money I have in the equity of the properties. I also don't really need the money in the wife's or my 401ks, brokerage accounts, and Roth IRAs. It just keeps building up. We never take any out.

We use our investable assets to grow income streams. We live comfortably off of those income streams. I mentioned in a post above that we have a schedule of projected income stream jumps as mortgages for the properties are paid off and then when the wife and I take SS in a little over a decade. In a little over a decade, we will have more than doubled our income from these scheduled increases in multiple income streams. We have no need to ever cash out.

 

[junior1]

we teach it, but kids are too busy getting text's from their mom to pay attention in class....... Then there is little we can do about it discipline wise

I'm trying to get my grandkids interested in their financial lives. I started them with brokerage accounts ..started with $2000 add the same each year. One has grown his to over $20k in just a few years (invested mainly in tech) the other invested in a lot of retail stocks and she's only at about $10k.
Both started working summer job. So I started them in Roth IRAs. I match their earnings up to $2,000 each year.
So far, I'm losing the financial education battle. But I keep dropping little tidbits of information as we discuss their accounts so that they can think individually about the types of investments...stocks bonds, ETFs, mbs et Al.
It's somewhat of a crime we don't drive financial education in our schools. Although if people have any interest, there are many, many investment "how to's" on the internet.
It's hard getting 20 year olds to look too far into the future!

 

[EdwardoCarrachio]

I'm trying to get my grandkids interested in their financial lives. I started them with brokerage accounts ..started with $2000 add the same each year. One has grown his to over $20k in just a few years (invested mainly in tech) the other invested in a lot of retail stocks and she's only at about $10k.
Both started working summer job. So I started them in Roth IRAs. I match their earnings up to $2,000 each year.
So far, I'm losing the financial education battle. But I keep dropping little tidbits of information as we discuss their accounts so that they can think individually about the types of investments...stocks bonds, ETFs, mbs et Al.
It's somewhat of a crime we don't drive financial education in our schools. Although if people have any interest, there are many, many investment "how to's" on the internet.
It's hard getting 20 year olds to look too far into the future!

I think much of the lesson is seeing the accounts grow over time with recurring investment. If the only real thing that sticks is hey, my money can grow considerably over time if I consistently invest, then you've won.

But I get it. I do UTMA accounts for the kids and all of my nephews and my niece. But frequently the accounts have 2, 3, sometimes 4 months of deposits sitting in their money market before they sit down and select which ETFs they want to put it into. But they understand how to select ETFs for their 10-year performances, risk, and expense ratios. And the best part is that they see how the growth of those accounts has occurred over several years. And let's face it, most of us never had a $25k to $50k start before our 21st birthday. They could at minimum ride that to well over $1 million in retirement funds with their long investment horizons.

 

[Lesgo_Brandon]

Yes it's discouraging how many seniors are trying to live on SS alone. It's also discouraging that the median household income in the USA is only $74k. Think about that. A high school graduate can easity get a $20/hr factory job with benefits - no experience necessary. That's $41.6k per year for one person or $83.2k per year for a two income household. Yet half the people in this country fall short of that amount.

I don't understand your comment about healthcare for 70 year old people because they should be on Medicare. Medicare advantage plans cost very little and a surgery with a 3 day stay in the hospital will only cost $500 or so out of pocket. Maybe another $250 copay if an ambulance was used.

I remember just a generation ago grandma would move in with her kids. There wasn't much in the way of assisted living. Of course there weren't so many 2 income families back then.

Sorry, medical costs in the form of in-home care, assisted living facilities, nursing homes, etc. Many aren't prepared for the cost. It wipes out any savings very quickly.

 

[junior1]

Sorry, medical costs in the form of in-home care, assisted living facilities, nursing homes, etc. Many aren't prepared for the cost. It wipes out any savings very quickly.

I have long term care policy for my wife...pays $1500/month indefinitely...had it for decades. Some one tried to seem me on a converted policy..of course fewer years and higher premiums. His point was that LTC patients usually only need 2 years....

 

[Nbergbuck]

Congrats. You've made some good choices. But also have been fortunate. Your gamble on life insurance worked out. The verdict on the long-term care insurance is still out unless you've done appropriate planning to make sure that your assets are protected and can get Medicare to foot the bill should it become necessary for one of you to go to long-term care. Not an insurance salesman by any means, but it has some value,

We have long-term care insurance. You protect the assets you want to pass on to kids etc. by using a non-revocable trust. Long-term care insurance can get you into a better facility. Hopefully you don't get kicked out once the term on the policy ends. Medicaid covers those unable to pay, not Medicare. Supposedly they don't do much more than park you in a corner of the facility and wait for nature to take its course. Hope I don't have to find out from experience how true that actually is.