The “Water Cooler” is a feature on Claycord.com where we ask you a question or provide a topic, and you talk about it.
The “Water Cooler” will be up Monday-Friday in the noon hour.
QUESTION: Are you saving for retirement? If so, what have you done to make sure you’ll live a comfortable life after you stop working? And if you’re already retired, what advice would you give to others?
Talk about it….
26 comments
We did…..
and told the kids don’t expect an inheritance….
🙂
I’ve been saving for retirement since my first year of marriage, almost 40 years ago. We’ve also paid off two homes we own, so no mortgage when we retire. SS and other retirement income won’t be as high as our pay checks, but I’m glad we started saving early in life. Running out of money in retirement would be scary.
I saved for retirement for 30 years. I retired 2021. I set it up to deduct automatically from my salary. I increased or decreased the amount depending on my circumstances. I bought a house and raised 3 kids as a single parent. Put one through college and one through trade school. I never overstretched my finances and am able to survive comfortably.
My retirement savings were automatic and constant. I never tried timing the market or took flyers on the in thing. S&P 500, S&P 400 and the Russel 2000 for 30 years. I survived 4 major stock market crashes. But you know, it always comes back and climbs up again. Just keep putting it in and it will grow. I probably have 3 times the money that I invested. Be aggressive when your young, then protect it when your old.
I tell every young person I meet to invest. As much or as little as you can. It’s the only way a regular peon worker can get money. It’s the way the rich get rich.
Make your money work for you.
Cash back credit cards that you pay back in full each month are great too. Once a year I used to tell the kids that the credit card company was taking us out to dinner.
Our young need more financial education than they get in schools.
All good advice.
I’d add one more, pay off your credit cards immediately after use.
Do not carry balances.
Do not pay interest on them.
My home is paid for, and I get enough from my pension, and Social Security to live comfortably. I made more money when I was working, but I also had more bills to pay. Today, my home, and all by credit cards are paid off, and I have a little extra change in my pocket.
My advice to younger folks is to buy a house, and pay it off in 15 years, not 30. Can’t afford it? Sure you can, just give up the iPhone, Starbucks, tattoos, video games, and anything else you are wasting money on. Forget buying a new car, and buy an older one, and you don’t need full coverage insurance. Buy a house and rent out a room for a little extra cash if you have to, buy a condo, or even a mobile home, whatever you can get, and have it paid off by the time you retire. My other advice is to get a job that has a good retirement plan. Can’t find such a job? Go to school, apply for an apprenticeship, and learn a trade. Find something that will not be replaced with technology, and robots in the near future. Another option is to enlist into the military. The military offers vocational and technical training, and veterans are eligible for the VA home loan program.
Advice:
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Track, understand, and analyze your spending. There are “cheap” months and months where expenditures are higher. Then….
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Prepare a budget… understand your minimum monthly income required to live (groceries, shelter, insurance & utilities, clothing allowance, gasoline, health insurance, etc.). Include at least 20 percent of your gross monthly income for savings. This is your BASE EXPENDITURE including savings. Anything above and beyond is discretionary dollars.
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Put aside at least 9 months times your base expenditures. This is your rainy day fund. Don’t touch it. Remember what happened during Covid lockdown?
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Participate in your employer’s retirement program.
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Set up a Roth IRA account and contribute at least $100 per month. Invest in an S&P Index fund if you’re not knowledgeable in playing sector ETFs or specific stocks.
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Be patient in fulfilling your personal finance plan. It doesn’t overnight (like having a rainy day fund).
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Be disciplined. I know folks who can wrongly justify a $2,000 purse for the wife or a $800 carburetor for their hot rod but have no savings on-hand when their furnace craps out. Insanity!
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Do not carry credit card debt. Credit cards are for convenience and emergencies, not for daily living beyond your means. Pay it off each month. Some cards provide cash back rewards… One guy I know pays off his card every month but at the end of the year usually has more than $1,000 in rewards that he uses for Christmas shopping.
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Saving is great but not as good as a good retirement benefit.
How about both?
Started saving right outta high school, my Dad insisted on it.
So disappointing when new hires would come into shop, they had no clue about compound interest.
Those that managed to have a 401k would pull money for impulse buys, super bad idea.
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Retired last year and so far four job offers.
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Bottom line, Lotto tickets ain’t retirement planning ! !
Why do you need a 1,4 Million dollar home? You can be 3/2 for mid 800’s. There is a freshly remodeled (flip) in my neighbor hood for 1.2M.
Maybe you have three kids (at 35, you are fast!) but buy a 3/2, share bedrooms for a couple of years and then add an addition.
But let’s say that you want/need a 1.4M house. Okay, buy a smaller unit today, build the equity, and use the equity to buy a bigger house. Yea it will cost more then but your equity goes up, bigger down payment, lower monthly payment:
There are ways if you want to do this …
Stop complaining and move to a more affordable area. Everyone makes sacrifices.
Like most of the comments above and as I have previously mentioned we live way below are means, we don’t buy new cars every 5 years, we don’t buy expensive items or the latest and greatest gadgets, we have two homes paid for, no debt, etc. We contribute the maximum allowed to our 401(k)’s, Roth IRA’s, etc and stash anything left over into savings. We will be financially fine in the future due to our conservative ways.
That ship has sailed, but if we had waited until we could actually afford to retire, we would have missed the all adventures we’ve had during the past decade.
I didn’t bother. I let all you guys pay for my benefits.
(just kidding)
Seriously that is some people’s retirement plan. I worked at the county for a while and just could not anymore. The patients I saw made good money (some of them) during their careers. Bought houses, cars, vacations, substances, all the stuff. And then something happened and they had never saved a dime. In one case, he worked for himself and never incorporated and never paid into the system, let alone set anything aside. At 60+ he had NO Social Security and NO savings. Then he got sick and we all had to pay for everything for him. He got to spend all of that having a good time and the taxpayers now must pay out for him.
Follow Dawg’s advice
I couldn’t have said it better
If you young kids insist on remaining in the Bay Area stop blowing your money on things you can do without (like Dawg said)
If you think rents are high? Try paying them with little or no pension(you won’t survive)
If you don’t make 150k a year do what all the Asians and Latinos and middle eastern do, pool your money and live together,build equity and move on
Lots of good advice here. I hope people take advantage of this. I always took maximum amount of my company’s savings and stock sharing. I also took care of my car and kept it for a long time. I knew a guy who would trade his car in before it was paid off and just pile up the amount of financing he had to pay on.
All that being said, one of my retirement accounts lost 50% of its value and another one 20% during 2022 thanks to Sleepy Joe. Thought I would never see another Jimi Carter!
A lot of good advice above. I have been saving since I was 21-ish, and am finally at the point where I am no longer stressing if I will have enough. Started my children on their IRAs as soon as I could (meaning they had income). Can never start too early. Sacrifice is a significant part of building up retirement (as Dawg stated, no starbucks, etc., nothing that is not necessary-water from the tap is just as wet as more expensive bottled, or water brewed with yeast and hops). I personally have tracked my retirement on a monthly basis, and evaluate each fund I am in on a semi-annually (or shorter) basis. I do this for a few reasons, such as, I had stressed for many years that I would not have enough to retire/leave my kids, and I could track the growth. The desire to grow your retirement has to be partnered; if you are adamant about saving, but your spouse likes to spend and spend, building a nice egg will be that much more challenging. And remember, this is usually a long haul game, there will be many ups, but a few downs (2008 was a stressful period, to be sure).
As a single parent I was late getting started on savings. One of the best boss I ever had started me on investments when she advised me to get into the corporate stock plan. When I could I bought stock on my own depending on if I could afford a few shares. Dividend reinvestment is the way to go for the long run. While I retired over 20 years ago I am only now starting to get into those savings. Own my home, no mortgage. Car paid for. Revocable trust set up so my kids get what I have at some point in time.
Everyone who is not retired should be saving for retirement.
Deciding when to pull the switch is a more difficult question. If you are at a point where you could live on 4% of your current invested assets (Not including your residence) there is a very reasonable chance you may retire and not outlive your money.
That said, once you turn 73 taxes on RMDs are going to kill you. What, you thought you’d be in a lower tax bracket by then? Sorry Charlie, think again.
Between retirement and 73 create laddered annual Roth conversions. Enough to keep you in a reasonable bracket now but enough to create tax free income streams once you draw down non-qualified assets.
Judging by all the great comments above I think we can all agree on one thing: If they had made finance and economics more interesting in school we all would likely be in even better financial condition now.
Not everyone is a “money person”. In fact I would say that only about 20% can come out ahead investing, etc. The stock market is like a gambling den. Invest in something you thought would be sure fire then it collapses. It’s all karma and luck. I recall at work the expression on our employees faces when they got stock options and didn’t know what to do with them.
True, not everyone is a money person; however, it doesn’t take any financial knowledge to save, save, and save. Don’t invest in individual stocks but in mutual funds, reinvest the dividends, and don’t sell – just let the money grow – overtime there will be a nice little nest egg.
After working for a military contractor during the base closures in the 90s with no retirement or bennies but making good money, I got laid off. Took an office job as a public employee, and now have 17 years worth of contributions to my retirement pension. Working for half the pay, but the security of a pension and great benefits is worth it. I don’t live beyond my means and feel fortunate to have a pension and social security to look forward to…assuming they will still be there.
Trying to exist in the Bay Area, I figure I’ll have to work for about ten years after I die to cover my expenses.
Well let’s hope that’s not the case. Keep trying and set money aside when you can.
On a peculiar note, in California, you will likely continue to vote ten years after your death.
Unfortunately your votes will likely be cast for Socialist candidates.
They claim it’s for the greater good. They are incorrect.
Retired a few years ago, and relatively comfortably.
Advice:
1. Work enough life-time hours to get decent Social Security payments.
2. Start saving as soon as possible.
3. Diversify your investments (cash, stocks, bonds, REITs, international stocks, other).
4. Buy index funds to minimize costs and risk.
5. Put money into your company’s 401k, if offered, and into a Roth IRA if not.
6. Buy when the market is down, sell when the market is up.
7. Don’t panic and don’t get greedy.
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