Where are you hoping to retire to, where do you realistically expect to retire and why??

[MrDragster1970]

I read a few of y'all were planning on real estate for retirement.
For those who are employed (vs self employed) how many of you are in a defined pension plan and plan on retiring off of that.
I ask because a lot of jobs now have 401(k)'s and other plans where the onus is on you to pick the right stocks/funds and to be able to live off of that vs the defined where you work a certain number of years and once you reach a certain age you get a % of your salary until death.

OK, I am no investing expert, and have lost more money than I ever expected to have.

I do know one thing, NEVER NEVER NEVER trust your future to someone else.
Who knows what will happen to social security, who knows what will happen to a company retirement plan, who knows what will happen to the market.

Real Estate can crash, but people will always need a place to live or business' need a place to operate.

As I've admitted many times, in my peak, I was an idiot and lost a huge amount of dough.
My customers begged me to add more men, I rarely worked a full day, I spent money like water on stupid stuff trying to be a big shot.
I have $50-60,000 worth of stupid hockey jersey's/sweaters that I can't give away now.
I had a chance to buy land several times when I had unlimited cash available and I passed because I was worried about being stuck with it.
I had a chance to buy my own shop, same thing, I didn't want to be tied down thinking I was leaving, and I paid rent for over 25 years

Take your skills, find something to invest in that is safe, and you are knowledgeable on.
If you can't turn a screwdriver, having a 3 flat might not be for you.
All your profits will be sucked away by paying people to do every thing.

A buddy did it the right way. He has 3 retirement plans.
He has been maxing out the company matching plan for 30+ years.
He does the max on his private plan, and he pays into social security.


Good luck, hoping for the best and don't count on just one plan to live off of!!!


.

 

[rowekmr]

I agree whole heartily! I not only believe in multiple streams of income I live that way. I also believe in multiple streams in retirement. My career I have had 1-3 jobs and 1-2 business at any given time. The reason I ask here is because I was wondering how to the young generation plan now. I was raised to plan on retirement as a stage of life and that is something that drove my planning. Nowadays I don't hear much spoken about retirement income from the younger generation hence I asked. A few on here spoke of using real estate as a means but I didn't hear much else.

You say don't count on them amen! Pension plans like companies can fail indeed and they do but I know of people that have defined pensions that they can live comfortably off of and tax deferred investment plans that are 6-7 figures working a municipal blue collar job. It more about how do you save/invest vs how much do you make. I like you pointed out reckless spending but the most reckless spending to me is bad marriages. Either a guy is spending too much trying to keep his wife or he loses half his wealth (and retirement) staying with a bad spouse long enough where they are vested in your finances. Next to financial collapses bad divorces take a strong 2nd to destroying wealth. The smart ones marry wisely (spouse making more) and bought in developing/rough areas knowing the property values will increase later and used the money they saved to invest or start that business.

As far as real estate as income I agree that is a great vessel for financial stability. Many of the great pioneers started with real estate (or moonshine lol). I disagree somewhat on your comment on turning screwdrivers. I believe it is best to be able to do your repairs but sometimes its more efficient to pay someone else to do it especially if you make more money doing something else. I had to convince my work partner one day to hire some laborers to do basic work because he is used to doing everything himself. He makes $60 hr doing overtime so I told him he could hire someone to work for 2 hours on what it takes him to do 1 hour at work (easily). It was more time efficient for him to work OT than use up 2x the free time in the building.

I myself didn't have the skills to do the work. I understood the basics and learned a lot but I hired out when I own/managed 2 properties. I did some teardowns, bought materials and definitely oversaw 98% of the work but I didn't perform it. I found the most challenging aspect wasn't getting work done but picking the right tenants. That's where most landlords fall out of grace/money they pick the wrong ones and it becomes a nightmare (like bad marriage). I never had to evict a tenant and rehabbed/upgraded both properties one of them with original tenants paying piss poor rent with no written lease but in the end all had 1 year leases with 2 months security deposit. They invested in me because I invested in the building.

This COVID stuff is going to become the new game changer. Industries are changing and businesses are closing with a massive number of people out of work. It goes back to your original statement do not trust 1 company, 1 skill or 1 investment strategy.

 

[DEEZUZ]

So I guess the stimulus package says no penalties for early retirement cut out..... Follow me...

My company dissolved the pension. We have 3 options.

Pay out
Rollover
Payout/rollover

Payout is 20% federal mandatory. Even after that I can fully pay off car and all my debt except for mortgage.

Would you pull it and wipe your slate clean, saving thousands on interest over the years?

 

[frank]

So I guess the stimulus package says no penalties for early retirement cut out..... Follow me...

My company dissolved the pension. We have 3 options.

Pay out
Rollover
Payout/rollover

Payout is 20% federal mandatory. Even after that I can fully pay off car and all my debt except for mortgage.

Would you pull it and wipe your slate clean, saving thousands on interest over the years?

Double edge here.... nice to be able to pay off cars... other side it’s nice to have something for the future .

if it was me depending on how much, I would cash out pay off debt, and then what money I had left over I would reinvest it in something where if you need to pull the money once agin you can do so with ease.

 

[DEEZUZ]

One thing I was thinking of was putting more towards mortgage and then some in savings. I've never had a savings before

 

[frank]

One thing I was thinking of was putting more towards mortgage and then some in savings. I've never had a savings before

Build your savings before putting more to the mortgage. cash In the bank is better then mortgage, you only see mortgage cash when you sell the house, when You need cash It’s in the savings account.

 

[DEEZUZ]

For a limited time, Americans will be able to withdraw money from tax-deferred accounts without penalties under a stimulus package signed into law Friday by President Trump. Rules on 401(k) loans will be relaxed, and some retirees can avoid so-called required minimum distribution, or RMD, rules that might have been onerous

 

[frank]

For a limited time, Americans will be able to withdraw money from tax-deferred accounts without penalties under a stimulus package signed into law Friday by President Trump. Rules on 401(k) loans will be relaxed, and some retirees can avoid so-called required minimum distribution, or RMD, rules that might have been onerous

Yes seen that, wife and I are looking to take out some 401k money for our move shortly to have a More of a bank account cushion until we find jobs etc..

 

[DEEZUZ]

So besides shorting your future retirement, you're not really out that much right? I mean taxes, but you'll be paying those now or later anyway

 

[Flyn]

Florida has just gone to Stage 2. Movie theaters and gyms are opening up again.

 

[FirstWorldProblems]

So besides shorting your future retirement, you're not really out that much right? I mean taxes, but you'll be paying those now or later anyway

From a strictly cash perspective you’re totally fucking yourself because you’re foregoing decades of market gains that you’d earn on the current balance by rolling it in to a 401k. That opportunity cost is in the six figures I’m sure. And you’re gonna give it up for what.. to pay off a loan that costs $1k/year in interest?

don’t be an idiot

 

[FirstWorldProblems]

I have news for all of you: if you pull money from retirement early to pay for ANYTHING, you are an idiot and you’re living well outside of your means. Obviously the exception here would be unplanned severe medical bills or prolonged unemployment

Interest rates are low, if you have an expense that you can’t cover with a home equity loan or HELOC, you have a problem.

 

[sickmint79]

yeah your debt is probably cheap; no reason to pay off your 2% loan if you could be making 5% in the market or something.

401k loans to yourself seem to pretty much always be a bad idea unless you have some kind of extreme case.

by pulling out money now would you squirrel it away for retirement savings later? probably not. the reality is we all find ways to spend dat money burning a while in our pockets or on line items in non-investment accounts. it's how you can go from 50k/year to 150k/year and still have little savings/retirement/investment because of inflating lifestyle each year (bigger house, new car) as the money hits your account. this money has been out of sight and out of your brain and i would keep it that way and just shift it into an investment account that you don't plan to touch. if you lack a retirement one now then definitely putting it over into something like a roth ira/traditional ira. the only real negative at the moment being investment is difficult because the current stock market valuation is just completely fucking illogical, so i wouldn't want to pick up like 30k somewhere and just dump it all in tomorrow.

 

[Flyn]

I had customers pull money from 401Ks back in the recession and buy properties for 1/3 of what they are worth now. $100K then, $300K now. Worth it in their cases.

 

[sickmint79]

that is quite the risk. most property simply tracks inflation and it's a myth perpetuated by the finance and real estate industry that it is some great investment, particularly for your primary residence.

 

[DEEZUZ]

God damnit... I'd love to pull a little bit out to help me knock out at least CC so I can breathe.....

Further thinking is required.

Funny how they took 13 months to do this but they NEED AN ANSWER RIGHT THE FUCK AWAY

 

[FirstWorldProblems]

I had customers pull money from 401Ks back in the recession and buy properties for 1/3 of what they are worth now. $100K then, $300K now. Worth it in their cases.

No it wasn't worth it, not even close. Say they took 145k out of 401k to buy a 100k property in 2009. Right off the top they lost 30% for taxes and penalties, or $43.5k cash gone.

Both the S&P and DJIA have increased about 350% since 2009.

The $145k withdrawal netted them 300k or so in property today based on what you said above
Leaving $145k in the market in a 401k would have netted them $507,500 in their 401k today based on the market gains

It never pays off to pull from retirement and should be done in emergencies only, and in limited amounts just to get by until you get back on your feet

 

[Yaj Yak]

 

[Chet Donnelly]

God damnit... I'd love to pull a little bit out to help me knock out at least CC so I can breathe.....

Further thinking is required.

Funny how they took 13 months to do this but they NEED AN ANSWER RIGHT THE FUCK AWAY

If you have a CC balance thats killing you on interest you'd be better off just getting a personal loan from a bank, and leaving the retirement money alone. Loan rates are pretty low right now, so its a good time to pull something like that if needed.

Also, definitely never pull a retirement to pay car or mortgage loans...interest is way too low to justify it.

 

[DEEZUZ]

 

[FirstWorldProblems]

that is quite the risk. most property simply tracks inflation and it's a myth perpetuated by the finance and real estate industry that it is some great investment, particularly for your primary residence.

Yupyupyupyupyupyupyyupyupyupyup. Thanks to my location and the flight from IL->IN, and little/no needed maintenance or upgrades, I've really made out pretty well on home appreciation compared to most people I know. So let's run the numbers.

My house is worth about $75k more than I paid 7.5 years ago, omai wahoo I'm rich houses are such great investments

......Well that comes out to 4.5% appreciation per year....still not as much as the market....and like I said my situation is better than most. In a less desired area it'd have appreciated just like you said, at the pace of inflation

 

[LikeABauce302]

I agree. Do not cash out your pension. Roll it over into a 401k or IRA

When I changed jobs 3 years ago, I rolled over my old 401k into an IRA with Edward Jones. That money is managed by a financial advisor for a small fee and has made about $20,000+ without me touching it. If I would have cashed out to pay off my car, student loans, etc, the amount I saved on interest wouldn't outweigh the earnings potential of leaving that money in the market.

The most valuable thing when it comes to investing is time. The earlier you have money invested, the greater your returns will be in the long run.