ADVERTISEMENT

OT: Seeking good books on how best to plan for retirement.

Jim I assume your school is a TIAA/CREF school, and if it is they have pretty good councilers you can see, free of charge. That said (and I am a TIAA member as well) the biggest problem with TIAA is you can't get your TIAA balance as a lump sum. You see the part that is in TIAA, and while it looks nice, you can't call them up and say, send me my money. The CREF part you can. So now TIAA will allow you to take your money out in payments. The most aggressive is over 10 payments. You can annunitize and take it out over you life expectancy. The problem I had, is, I wanted to control my money not TIAA, as mentioned the best I could do was take it out over 10 years which I started 5 yrs ago. They send me a check to another IRA so its not a taxable event, and from there I do what I choose with my money.
But if you have access to their people, meeting with them will not hurt.
 
  • Like
Reactions: LionJim
LionJim said:
I think I'll go for at least another five years but lately Jane has been talking about calling it quits in a couple of years. (Teaching math is easier and much more gratifying than teaching just about any other subject.) Thanks in advance. Edit: I will turn sixty next week, Jane is 58.
Click to expand...

You are sixty? Wow-you post at a much younger age. :rolleyes:
 
  • Like
Reactions: 91Joe95 and FHSPSU67
A good book about investing for retirement is "The Only Guide to a Winning Investment Strategy You'll Ever Need" by Larry Swedroe. It gives one a pretty simple strategy for utilizing the modern portfolio theory to invest your assets. I will be helping my daughter invest her 401k using this method, and my own retirement assets have been managed using MPT.

I will be retiring later this year around my 60th birthday so I am in the same boat. Years of high stress 55-60 hour work weeks have made me realize it's time to retire. The Monte Carlo method currently gives me a 99% chance of success of making it to age 95 before there is any significant decline in assets and when yearly withdrawals from my investments is actually more than I am currently earning per year from my job.
 
I would assume by age 60 you have already been saving for retirement. If not, I don't think there is a book in the world that can help you at this point. If your interest in investing is purely for the sake of learning and taking a few shekels to see how you do against the pros? I'd tell you to start with Ben Graham's the intelligent investor. It is pretty much the foundation of all books on Value Investing. And as a side note, you do not have the resources a large investment firm has at it's disposal. It will be difficult and time consuming to beat their results.
 
  • Like
Reactions: JSeaman and Mixolydian
Eurotrash1 said:
I would assume by age 60 you have already been saving for retirement. If not, I don't think there is a book in the world that can help you at this point. If your interest in investing is purely for the sake of learning and taking a few shekels to see how you do against the pros? I'd tell you to start with Ben Graham's the intelligent investor. It is pretty much the foundation of all books on Value Investing. And as a side note, you do not have the resources a large investment firm has at it's disposal. It will be difficult and time consuming to beat their results.
Click to expand...
No, I have the sort of pension you rarely see nowadays. It's more that our investments are all over the place. We also want to start planning for fifteen and twenty years down the road.
 
Jim, I'm sure you have the basics down. But just some goalposts.

1- Most people will tell you to defer receipt of Social Security as long as you can to enhance the benefit payout. You can do the numbers to see impact on total payout you will receive based on life expectancy if you trigger payments at an earlier age versus waiting until the max age.

2- One thing that I can't stress enough is the ordering of distributions. If you have say a 401k that will be taxed on distribution, you lose the compounding impact by having a distribution from the account. It's better to maintain the full nest egg and let the performance continue to accrue on the full amount versus having a distribution, paying tax on it, and then having the residual amount have investment performance on it. So, people will advise on drawing down taxed amounts first before accessing tax deferred amounts.

3- Your biggest unknown is certainly the cost of medical going forward. Talk to an advisor on the merits or disadvantages of securing a long term care policy. You are still young enough to not make the premiums cost prohibitive if you are in relatively good health. There are pros and cons versus simply earmarking funds and not touching those funds. But there is some benefits in having the security of a policy and knowing that your kids won't have additional burden at some point in the future.

4- People will tell you the benefits of how you should allocate your portfolio between stocks and fixed income. Lots of people stick to the equation of saying 1-your age as the amount to be in equities. This is a tough one when you have to consider the possibility of living much longer than you expect. So, talk this through to see what the pros say on your split for your age.

5- Probably the best advice is to assemble an amount of cash that will be available for x years to start your retirement. Some will say three years, I made sure I had five years at the ready so I don't have to touch anything for the first five years other than the funds I established. It's an adjustment when you see amounts declining and not having a regular paycheck. So, build up a fund to use for 3-5 years before you need to access your "retirement" funds like 401k, pension, IRA, other investments, etc,

The other thing is to have a plan for the beginning of your retirement. It's an adjustment so whether it be a trip that you always wanted to take, a course of some kind, learning to play the guitar, speak another language. Have some plans rather than just waking up that first day.

Congrats though in approaching the end of the work road!!
 
  • Like
Reactions: LionJim
mrtailgate said:
Jim, I'm sure you have the basics down. But just some goalposts.

1- Most people will tell you to defer receipt of Social Security as long as you can to enhance the benefit payout. You can do the numbers to see impact on total payout you will receive based on life expectancy if you trigger payments at an earlier age versus waiting until the max age.

2- One thing that I can't stress enough is the ordering of distributions. If you have say a 401k that will be taxed on distribution, you lose the compounding impact by having a distribution from the account. It's better to maintain the full nest egg and let the performance continue to accrue on the full amount versus having a distribution, paying tax on it, and then having the residual amount have investment performance on it. So, people will advise on drawing down taxed amounts first before accessing tax deferred amounts.

3- Your biggest unknown is certainly the cost of medical going forward. Talk to an advisor on the merits or disadvantages of securing a long term care policy. You are still young enough to not make the premiums cost prohibitive if you are in relatively good health. There are pros and cons versus simply earmarking funds and not touching those funds. But there is some benefits in having the security of a policy and knowing that your kids won't have additional burden at some point in the future.

4- People will tell you the benefits of how you should allocate your portfolio between stocks and fixed income. Lots of people stick to the equation of saying 1-your age as the amount to be in equities. This is a tough one when you have to consider the possibility of living much longer than you expect. So, talk this through to see what the pros say on your split for your age.

5- Probably the best advice is to assemble an amount of cash that will be available for x years to start your retirement. Some will say three years, I made sure I had five years at the ready so I don't have to touch anything for the first five years other than the funds I established. It's an adjustment when you see amounts declining and not having a regular paycheck. So, build up a fund to use for 3-5 years before you need to access your "retirement" funds like 401k, pension, IRA, other investments, etc,

The other thing is to have a plan for the beginning of your retirement. It's an adjustment so whether it be a trip that you always wanted to take, a course of some kind, learning to play the guitar, speak another language. Have some plans rather than just waking up that first day.

Congrats though in approaching the end of the work road!!
Click to expand...
Good advice above. The biggest uncertainty is how long you might live. Thats the toughest call. Also I think the stock/bond ratio needs to be much heavier in Stocks. As bond returns for the foreseeable future will be piss poor. But you need to base the ratio, in part, on your own risk tolerance.
 
LJ, mrtailgate had some good advice (as have others), but don't underestimate the importance of "just waking up that first day"! Other plans are good, but this would be THE PLAN!

On a serious note, while retiring from your chosen profession, you can always pick up a part-time job! I have retired friends that work as a substitute teacher, a starter / ranger at a golf course, in the garden center at a Home Depot, even as a dog walker / house sitter.

I retired at age 48 and after a year off worked about eight years at a Trader Joe's. Usually Sun - Tues mornings, about 20+ hours a week, which meant I got their Med/Dental/Vision/Drug package for $50, then $60 a month (single coverage). They also make a 15% (of your W-2 earning) contribution to a retirement plan on a 4-5 year vesting schedule. Nice bonus, so from a part-time job I have a nice $50k slush fund that I'll "have to" start taking in another 3-4 years.

The only other advice as you get to "that age" is to get organized. Wills, POAs, all that stuff up to date. Make sure that if something happens to you, your wife and your kids have a comprehensive list "what and where" everything is.

I spent a long long time tracking down everything my Dad had done as I took over the responsibilities of taking care of him and my Mom. It seemed at one point he opened an account with every bank in Austin, as well as several different brokerage firms. He also had individual policies from payroll deductions in Life Insurance as well as all his corporate benefit plans. You don't want to have a scavenger hunt to track everything down.

I've rambled. You'll do fine!
 
  • Like
Reactions: PSU Soupy and LionJim
ILLINOISLION said:
LJ, mrtailgate had some good advice (as have others), but don't underestimate the importance of "just waking up that first day"! Other plans are good, but this would be THE PLAN!

On a serious note, while retiring from your chosen profession, you can always pick up a part-time job! I have retired friends that work as a substitute teacher, a starter / ranger at a golf course, in the garden center at a Home Depot, even as a dog walker / house sitter.

I retired at age 48 and after a year off worked about eight years at a Trader Joe's. Usually Sun - Tues mornings, about 20+ hours a week, which meant I got their Med/Dental/Vision/Drug package for $50, then $60 a month (single coverage). They also make a 15% (of your W-2 earning) contribution to a retirement plan on a 4-5 year vesting schedule. Nice bonus, so from a part-time job I have a nice $50k slush fund that I'll "have to" start taking in another 3-4 years.

The only other advice as you get to "that age" is to get organized. Wills, POAs, all that stuff up to date. Make sure that if something happens to you, your wife and your kids have a comprehensive list "what and where" everything is.

I spent a long long time tracking down everything my Dad had done as I took over the responsibilities of taking care of him and my Mom. It seemed at one point he opened an account with every bank in Austin, as well as several different brokerage firms. He also had individual policies from payroll deductions in Life Insurance as well as all his corporate benefit plans. You don't want to have a scavenger hunt to track everything down.

I've rambled. You'll do fine!
Click to expand...

Great advice. I finally gave the roadmap to my oldest with account balances, passwords, where statements are located, etc. That's really important to do.
 
  • Like
Reactions: ILLINOISLION and LionJim
katchthis said:
Good advice above. The biggest uncertainty is how long you might live. Thats the toughest call. Also I think the stock/bond ratio needs to be much heavier in Stocks. As bond returns for the foreseeable future will be piss poor. But you need to base the ratio, in part, on your own risk tolerance.
Click to expand...

I agree 100%, the weighting should be more. But risk tolerance weighs heavily on a lot of people.
 
mrtailgate said:
Jim, I'm sure you have the basics down. But just some goalposts.

1- Most people will tell you to defer receipt of Social Security as long as you can to enhance the benefit payout. You can do the numbers to see impact on total payout you will receive based on life expectancy if you trigger payments at an earlier age versus waiting until the max age.

2- One thing that I can't stress enough is the ordering of distributions. If you have say a 401k that will be taxed on distribution, you lose the compounding impact by having a distribution from the account. It's better to maintain the full nest egg and let the performance continue to accrue on the full amount versus having a distribution, paying tax on it, and then having the residual amount have investment performance on it. So, people will advise on drawing down taxed amounts first before accessing tax deferred amounts.

3- Your biggest unknown is certainly the cost of medical going forward. Talk to an advisor on the merits or disadvantages of securing a long term care policy. You are still young enough to not make the premiums cost prohibitive if you are in relatively good health. There are pros and cons versus simply earmarking funds and not touching those funds. But there is some benefits in having the security of a policy and knowing that your kids won't have additional burden at some point in the future.

4- People will tell you the benefits of how you should allocate your portfolio between stocks and fixed income. Lots of people stick to the equation of saying 1-your age as the amount to be in equities. This is a tough one when you have to consider the possibility of living much longer than you expect. So, talk this through to see what the pros say on your split for your age.

5- Probably the best advice is to assemble an amount of cash that will be available for x years to start your retirement. Some will say three years, I made sure I had five years at the ready so I don't have to touch anything for the first five years other than the funds I established. It's an adjustment when you see amounts declining and not having a regular paycheck. So, build up a fund to use for 3-5 years before you need to access your "retirement" funds like 401k, pension, IRA, other investments, etc,

The other thing is to have a plan for the beginning of your retirement. It's an adjustment so whether it be a trip that you always wanted to take, a course of some kind, learning to play the guitar, speak another language. Have some plans rather than just waking up that first day.

Congrats though in approaching the end of the work road!!
Click to expand...

All good advice... but saving 3-5 years worth of expenses is an unusual recommendation, not to mention probably unattainable if not impossible for most especially if they're already maximizing their tax deferred savings.
 
I hope what LionJim is looking for is some advise on how to SPEND his investments so he won't die of boredom in his retirement.
 
Tons of good advice/ideas here.

The one thing I would emphasize that hasn't really been mentioned is to really think about the expense side. As someone who retired early a couple of years ago (I still consult part time), what helped my decision was realizing that our expenses were going to be lower than we had planned on years before.

Once you have your kids through college, and cars and house paid off, you may find that your living expenses are surprisingly low even doing the things you want to do as far as travel and entertainment. It simply doesn't cost much to read books and play music and watch movies and enjoy dinner with friends and family.

A lot of retirement planning scenarios just assume you will need 70% of your pre-retirement income, but many people don't need that. We are living well on maybe 30% of what we used to make.

The other great blessing is a relatively absence of inflation the last 20 years ago. When we set up our first IRAs 30 years ago, people were telling us we would need $3 million to retire on because a quart of milk would cost $5 and a gallon of gas would be $15. Instead, cost of many things has gone down. Our generation in particular really benefits from the absence of inflation - may that cheer you up when you see yourself earning 0.7 percent in your money market account.

The other thing I don't like about retirement planning cliches is that they tend to emphasize that you could live to 98. But there is no discussion of the opposite -- which is just as likely. I have had work colleagues who retired at 65 and died of cancer two years later. I think the years between 55 and 70 are really important -- the clock is ticking. Consider that your time -- particularly your healthy time -- may be very short. So if you have things you want to do, find a way to do them sooner rather than later.

The scariest thing about being retired is Washington. In the next 2 years it is likely we'll witness a meltdown of the private health insurance system, so for people in their late 50s and early 60s, premiums are likely to skyrocket to $20,000/year per person even for high-deductible plans.

That may literally prevent lots of people from retiring until they can get Medicare (assuming Medicare even exists, and hasn't been replaced with Paul Ryan's $2,000 voucher). If Medicare goes away, the retirement planning of 50 million people basically goes out the window.

It's all the more reason to live the life you want to lead while you can and enjoy every day. The future is extremely uncertain and some of the possible outcomes are so extreme it's pretty much impossible to plan for them.
 
Last edited:
  • Like
Reactions: NJPSU, aferrelli and LionJim
LionJim said:
I think I'll go for at least another five years but lately Jane has been talking about calling it quits in a couple of years. (Teaching math is easier and much more gratifying than teaching just about any other subject.) Thanks in advance. Edit: I will turn sixty next week, Jane is 58.
Click to expand...

Well, since you're a "math" guy, let's apply Gompertz Law.

A 25 y/o has a 1:3000 chance of dying; a 33 y/o has 1:1500 chance of dying; a 41 y/o has a 1:750 chance of dying; a 49 y/o has a 1:375 chance of dying; a 57 y/o has a 1:188 chance of dying.

So, off the top my head, you have a 1:141 chance of dying THIS year.

5-02d0364b1ebb6848c26c6a7478b06f4f9a9a0bd9-s700-c85.jpg

 
Last edited:
  • Like
Reactions: NJPSU
I never really understood why someone who taught his whole life would devalue the importance of working with an educated professional who is certified with income retirement expertise.
 
dolster24 said:
I am a fan of John Bogle, founder of Vanguard. I'd recommend any book written by him. Check out bogleheads.org. You can learn a lot by reading through the posts and material.
Click to expand...
If you want to go to professional route (which may be a good idea since you will be retiring soon), his company Vanguard is a good place to start as well. You can meet with her advisor for free and if you decide to hire them they are amounts the least expensive in the industry as are their funds.
 
LionJim said:
I think I'll go for at least another five years but lately Jane has been talking about calling it quits in a couple of years. (Teaching math is easier and much more gratifying than teaching just about any other subject.) Thanks in advance. Edit: I will turn sixty next week, Jane is 58.
Click to expand...
Jim, my wife and I also have pensions. We both retired early (me at 54 her at 50). It was +20 years of planning. We live comfortably off our pensions. We have insurance out the wazoo so our Defined Contribution savings is mad money. Some free advice. People who write investment books make the majority of their money off book sales and not by investing. Perhaps the one exception is Warren Buffet. So beware. If you want to flirt with the market then setup a separate account and cap the amount you put into it. Keep repeating to yourself, "Don't do anything stupid." Focus on limiting your tax exposure. Do this and you'll be fine.
 
Cosmos said:
Jim, my wife and I also have pensions. We both retired early (me at 54 her at 50). It was +20 years of planning. We live comfortably off our pensions. We have insurance out the wazoo so our Defined Contribution savings is mad money. Some free advice. People who write investment books make the majority of their money off book sales and not by investing. Perhaps the one exception is Warren Buffet. So beware. If you want to flirt with the market then setup a separate account and cap the amount you put into it. Keep repeating to yourself, "Don't do anything stupid." Focus on limiting your tax exposure. Do this and you'll be fine.
Click to expand...

Yes! Great advice on determining tax liability. I went through it and did pro forma tax returns for 20 years. It's a somewhat flawed exercise given the fact that you have no idea on the outcome of tax reform. So, all you can do is assume current landscape does not change. Who knows rates, AMT in or out, capital versus ordinary rates, rates on divs, etc. But clearly you want to avoid bunching of income which can push you into undesired brackets and doing your best to avoid unwarranted tax bite. Great advice Cosmos.
 
sluggo72 said:
Jim I assume your school is a TIAA/CREF school, and if it is they have pretty good councilers you can see, free of charge. That said (and I am a TIAA member as well) the biggest problem with TIAA is you can't get your TIAA balance as a lump sum. You see the part that is in TIAA, and while it looks nice, you can't call them up and say, send me my money. The CREF part you can. So now TIAA will allow you to take your money out in payments. The most aggressive is over 10 payments. You can annunitize and take it out over you life expectancy. The problem I had, is, I wanted to control my money not TIAA, as mentioned the best I could do was take it out over 10 years which I started 5 yrs ago. They send me a check to another IRA so its not a taxable event, and from there I do what I choose with my money.
But if you have access to their people, meeting with them will not hurt.
Click to expand...
Correct, my wife has this problem now. TIAA is geared towards those who want an annuity payment and not roll the money over in a lump sum to their IRAs and management the investments themselves. We are also taking the funs out at each contract expires over about a 10 year period. It's a real pain and very complicated to tract the dates of each contract.
 
Cosmos said:
Jim, my wife and I also have pensions. We both retired early (me at 54 her at 50). It was +20 years of planning. We live comfortably off our pensions. We have insurance out the wazoo so our Defined Contribution savings is mad money. Some free advice. People who write investment books make the majority of their money off book sales and not by investing. Perhaps the one exception is Warren Buffet. So beware. If you want to flirt with the market then setup a separate account and cap the amount you put into it. Keep repeating to yourself, "Don't do anything stupid." Focus on limiting your tax exposure. Do this and you'll be fine.
Click to expand...
Do you mean like John Bogle, The writer of the book recommended by another poster and the founder of the largest mutual fund firm in America? On the book recommended you can find a great testimonial by, wait for it, Warren Buffett!

Also, if you don't know much about the markets, or even if you do, it is difficult to out perform them. At this stage in your life I am not sure how much you want to "flirt with the market."
 
tmacpolo said:
Do you mean like John Bogle, The writer of the book recommended by another poster and the founder of the largest mutual fund firm in America? On the book recommended you can find a great testimonial by, wait for it, Warren Buffett!

Also, if you don't know much about the markets, or even if you do, it is difficult to out perform them. At this stage in your life I am not sure how much you want to "flirt with the market."
Click to expand...
you do know that he out sources a lot of the management of this mutual funds? For instance, the VanGuard Wellington and the VanGuard Windsor funds, long time flagship funds were managed by Wellington Capital Management, you did know that, correct? That Bogle was a marketer of funds more than a manage.
 
sluggo72 said:
you do know that he out sources a lot of the management of this mutual funds? For instance, the VanGuard Wellington and the VanGuard Windsor funds, long time flagship funds were managed by Wellington Capital Management, you did know that, correct? That Bogle was a marketer of funds more than a manage.
Click to expand...
Several of the company's funds are managed by outside firms. not quite sure what your point. No I was not implying that he managed the fans hundred plus find some sel not quite sure what your point. No I was not implying that he managed the firms hundred plus funds. He is a proponent of index funds which are marked to the market, not managed in the way that I think you are implying. Also, he has been retired for years. I guess that I am having trouble seeing your point. Are you an expensive financial advisor? They seem to be the only ones we never have a problem with Vanguard on Bogle.
 
tmacpolo said:
Several of the company's funds are managed by outside firms. not quite sure what your point. No I was not implying that he managed the fans hundred plus find some sel not quite sure what your point. No I was not implying that he managed the firms hundred plus funds. He is a proponent of index funds which are marked to the market, not managed in the way that I think you are implying. Also, he has been retired for years. I guess that I am having trouble seeing your point. Are you an expensive financial advisor? They seem to be the only ones we never have a problem with Vanguard on Bogle.
Click to expand...
Point simply is , he is a marketer, not necessarily a money manager it doesn't take any skill to have S&P manage your money
BTW all funds are marked to the market
 
sluggo72 said:
Point simply is , he is a marketer, not necessarily a money manager it doesn't take any skill to have S&P manage your money
BTW all funds are marked to the market
Click to expand...
sluggo72 said:
Point simply is , he is a marketer, not necessarily a money manager it doesn't take any skill to have S&P manage your money
BTW all funds are marked to the market
Click to expand...
Yes, all funds are marked to an index. I think you know what I meant. Some try to beat the index some try to Mirror it. We can agree that it takes skill to beat the index, especially after management fees or subtracted. I think the terrible track record of funds doing so is a testament to that.
 
If the OP would like more information on the difference between index funds and actively managed funds and the negative impact that high management costs can have a put on a portfol if the OP would like more information on the difference between index funds and actively managed funds as well as the negative impact that high management costs can have on a portfolio (and wants to laugh as well), I would recommend John Oliver's somewhat recent piece about retirement plans. It's pretty easy to find on YouTube.
 
  • Like
Reactions: LionJim
tmacpolo said:
Yes, all funds are marked to an index. I think you know what I meant. Some try to beat the index some try to Mirror it. We can agree that it takes skill to beat the index, especially after management fees or subtracted. I think the terrible track record of funds doing so is a testament to that.
Click to expand...
over the last 30 years, 96% of the time American Funds have out preformed the index, doesn't sound too shabby. Again its all who you want to manage your money, someone like American Funds or do you want S&P with their buy high slow low philosophy.
chart-track-record-708x320.png
 
Most people don't think about this, but having gone through a catestrophic medical issue with my wife, some sort of Long Term Care planning should be part of anyone's retirement strategy. How would you pay for LTC if one of you require it?
 
  • Like
Reactions: tmacpolo
You must log in or register to reply here.

Similar threads

Chickadee34

OT: FSU site on potential realignment

Replies
0
Views
451
The Lions Den
Chickadee34
Chickadee34
J

Brave New Amerika 2021: no historical precedent...therefore no safe prediction on what happens next

Replies
32
Views
2K
Current Events Board
m.knox
M
B

For my friends on the left wondering why everything they were told and believed RE Covid turned out to be wrong....

Replies
84
Views
8K
Current Events Board
interrobang
I
TheGLOV

Penguins Tom McMillan retiring !

Replies
13
Views
2K
Penn State Football
TheGLOV
TheGLOV
TN Lion

Congratulations, Liberals and Conservatives now have common interests. Taibbi

Replies
7
Views
794
Current Events Board
m.knox
M
ADVERTISEMENT

Latest posts

ADVERTISEMENT
Top Bottom
Back