What you wish you would have done differently before retirement?

[powerboatr]

I do most/all of this..... but honestly, I wish someone told me when I was in my 20s. Then again I keep telling my daughter and son-in-law they need to start, but as young people often do, they don't listen. I'm trying to instill savings into my younger children's lives, but it's hard.

I'm on path to hopefully retire in 10 years (55), but that is only a "goal". I fully plan to work past that either in a full time or part time capacity in some capacity. I just want the freedom to know I don't "have" to work past that date.


What I can tell you to plan for in retirement is activity. An old couple used to work at publix (husband/wife combo). I once asked them why they still work and they said because it keeps them moving. They said they see so many of their friends retire and slowly fade away, but working, even part time, has helped keep them "young". They got to work on their terms and because it wasn't really for the money, they would just pack up and move around when they wanted to (mainly to follow children around the country as they moved). It was a really eye opening conversation. Prior to it I would have told you my goal was to never work again after retirement, now I plan on working in some fashion*.

*note, work could be for money or just something to keep you active. My mom at 71 works in her yard multiple hours a day on gardens and the like. It keeps her moving and "keeps her young" so to speak.

yes agree starting to put money away at an early age is the way forward, but its hard when your just getting started in life with a family and all,
even 50 a month adds up fast .
we started in 92 still young and listened to my Commanding Officer during an unscheduled plane delay and he felt like talking

IRA both of us plus 2 NON tax deferred accounts. after the 9 11 shutdown it took almost 5 years to recover the losses,
we stopped moving to be near the kids about 14 years ago. built a house and did stuff we wanted to do.

using my military retirement and VA to build up savings in highest yield savings we can

i worked after retirement from navy for 3 years, sank my entire paycheck into the company IRA and non deferred accounts because they matched my contributions up to maximum . my boss kept threatening to lower my pay.

i like being able now to go pick something up and not worry about paying for it. within reason

we are also very very frugal, shop on tues and thursday because we get 5% off at brookshires

i would also recommend folks having at least 4 months of exspenses in a savings account for those OMG things that come at you out of the blue

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[PatchManager]

Get a subscription to Maxifiplanner.com. You might not need it past the first year but it's an excellent approach to retirement income forecasting. It will take you a couple of months of fiddling to understand the options and what it's telling you. I have no association with the company other than being a satisfied customer.

It doesn't give investment advice. Rather, it forecasts the result of what you do or could do. It does involve drinking a bit of Kool-Aid because, unlike most retirement planners, you don't tell it how much you need to live on. Rather, you tell it your savings, expected retirement income and fixed costs are (primarily, housing) and it tells you how much discretionary income you'll have to spend on things after paying housing, Medicare, income taxes and (suggested) life insurance. It also recommends the optimal Social Security filing strategy, given the circumstances (age, marital/partner status and life expectancy) you enter.

Note that their assumptions about earnings on retirement savings are EXTREMELY conservative because they assume the safest possible way to invest your savings. That's basically bank interest which, after accounting for current inflation, produces negative real income. You can adjust your assumed average returns to something more optimistic (and, in my view, realistic) without being foolishly aggressive with savings your life depends on.

Aside from that, plan to travel early, while you can. Sh** happens, then you can't.

Although I use a spreadsheet, something like the software you referenced could be a very good idea for us since I see there are a lot of features that my spreadsheet doesn't have and easier to update. My wife has little interest in our financials, but maybe something like this would be better for her to follow.

 

[SomebodyInGNV]

Although I use a spreadsheet, something like the software you referenced could be a very good idea for us since I see there are a lot of features that my spreadsheet doesn't have and easier to update. My wife has little interest in our financials, but maybe something like this would be better for her to follow.

While they don't have an official trial period, they're very accommodating. They may allow you to cancel within a week or two if you inquire.

 

[Longdeck]

Advising the following actions before retirement. I get these questions from previous coworkers calling me up that are looking into retirement ever since I retired 6-1/2 years ago.

Listen to different Podcast about retirement and working with a Certified Fiduciary because they work and get paid by you, not the fund managing companies. One can find them in your local area of decent size cities.

It takes some research to find the better ones. I had interviewed three before settling on one. I was little uncomfortable with the larger firms because it seem more show. I settle on smaller firm and dealt directly with firm owner over several meetings. Also know the percentage management fee charge because bare bones minimum investment is $1/4M. Higher the investment, lower the percentage management fee.

Retirement is about safe investment, meaning guarantee growth but not as high of return on the investment as with the stock & mutual funds your use to pre-retirement. When the economy goes into the tank like this year, your sitting pretty because you are guaranteed a bottom limit, not to go less than. I’m mostly into contract mutual funds that reset that bottom limit upward ever two years in case the market performs badly. I’m liking this setup just in case each fund didn’t performed as well as I liked. Then the Fiduciary & I would review results and change to different performing fund if necessary.

One can lock up plans for different set of years like 2, 5, 7, 10, 12, 15, and onward for your lifetime. I‘m leave these type accounts alone and do not pull money from them unless dire emergency. I have additional riskier accounts setup to pull out funds monthly or when I need extra income like buying that new truck. What is very important to note, it’s all taxable since in my case, it’s all 401K accounts.

So plan accordingly and for those living in income tax states…so sorry, the state probably counts it as taxable income too. If living in a city that collects on this retirement income, move away right before the year of retirement.

Main thing my Fiduciary takes care and manages this for me while I relax in retirement. I personally don’t advise Financial Advisors for retirement needs. They don’t work for you but the funds they represent.

 

[Cobra427]

Take Dave Ramsey's Financial Peace University course. Covers everything. Plus great tools, which are free.

 

[FrankThompson]

Got a question for you all, not that the F150 forums is the best place to ask for financial advice, but a lot of you might have fallen into this situation or just might have experience that I'm lacking

I just found out for the 2022 year, I am being limited by my company to only contribute $9300 to my 401k. I'm losing about $11k of tax deferred savings due to this new classification and how my company is handling the situation based on the IRS' rules and I'm looking at the privilege of paying over $2k more in taxes this year due to it.

I currently max out my 401k (as much as I can now, which around $9300 instead of the 20,500 cap), I max out my HSA, and I max out 2 Roth IRAs for myself and my wife (we luckily still fall under the income limits for Roth IRAs for now, but that will likely change in the next year or 2)

I do some swing trading on the side, but not often, though with pretty good success. I don't consider this "retirement" funds and I only swing trade with funds I already set aside for it (I only use "profits" to increase this fund)

My question is, Does anyone know a good place "to put" the $11k that I would have put in my 401k (plus any other I can stash away). Tax deferred is preferred, but my searches so far have turned up little. I could put the money into Traditional IRAs, but we make too much to benefit from the tax deductions on those. AT this point, I don't see the benefit of a Traditional IRA at our income level (until we max out of the Roth IRA income limits and we can start doing Roth Conversions)

Is just a brokerage account really the best option? Any suggestions?

I'm stressing out a bit over this as I've really focused hard saving for our retirement over the past 5 years. Even during Covid and my wife not working for a large part of the past 2 years, we managed to never stop fully contributing to my 401k and our IRAs (HSA was new this year). My goal was to be close to financially independent by 55, even though I have no plan on retiring then (just want to have the comfort of knowing I can and that I'm not dependent on any given employer). Losing the ability to save the $2k that has to now go into taxes I feel is going to have a big impact since I'm still 10+ years away from my goal.


*Note: My company did not let me know about this until last Friday, 8 months into the year where I've already contributed well over my limit for the year. They say it was a "mistake" and I should have been notified earlier, but there is nothing they can do

 

[YzermanTopShelf]

Got a question for you all, not that the F150 forums is the best place to ask for financial advice, but a lot of you might have fallen into this situation or just might have experience that I'm lacking

I just found out for the 2022 year, I am being limited by my company to only contribute $9300 to my 401k. I'm losing about $11k of tax deferred savings due to this new classification and how my company is handling the situation based on the IRS' rules and I'm looking at the privilege of paying over $2k more in taxes this year due to it.

I currently max out my 401k (as much as I can now, which around $9300 instead of the 20,500 cap), I max out my HSA, and I max out 2 Roth IRAs for myself and my wife (we luckily still fall under the income limits for Roth IRAs for now, but that will likely change in the next year or 2)

I do some swing trading on the side, but not often, though with pretty good success. I don't consider this "retirement" funds and I only swing trade with funds I already set aside for it (I only use "profits" to increase this fund)

My question is, Does anyone know a good place "to put" the $11k that I would have put in my 401k (plus any other I can stash away). Tax deferred is preferred, but my searches so far have turned up little. I could put the money into Traditional IRAs, but we make too much to benefit from the tax deductions on those. AT this point, I don't see the benefit of a Traditional IRA at our income level (until we max out of the Roth IRA income limits and we can start doing Roth Conversions)

Is just a brokerage account really the best option? Any suggestions?

I'm stressing out a bit over this as I've really focused hard saving for our retirement over the past 5 years. Even during Covid and my wife not working for a large part of the past 2 years, we managed to never stop fully contributing to my 401k and our IRAs (HSA was new this year). My goal was to be close to financially independent by 55, even though I have no plan on retiring then (just want to have the comfort of knowing I can and that I'm not dependent on any given employer). Losing the ability to save the $2k that has to now go into taxes I feel is going to have a big impact since I'm still 10+ years away from my goal.


*Note: My company did not let me know about this until last Friday, 8 months into the year where I've already contributed well over my limit for the year. They say it was a "mistake" and I should have been notified earlier, but there is nothing they can do

You can buy $10K worth of I-Bonds every year from the Treasury. Pays a base rate plus inflation. Last I checked I’m getting 9% annually right now. I’ve been buying them for almost 20 years. You can open an account at treasurydirect.gov.

 

[Jus Cruisin]

Find a good financial advisor/planner......before you retire.

 

[UGADawg96]

Got a question for you all, not that the F150 forums is the best place to ask for financial advice, but a lot of you might have fallen into this situation or just might have experience that I'm lacking

I just found out for the 2022 year, I am being limited by my company to only contribute $9300 to my 401k. I'm losing about $11k of tax deferred savings due to this new classification and how my company is handling the situation based on the IRS' rules and I'm looking at the privilege of paying over $2k more in taxes this year due to it.

I currently max out my 401k (as much as I can now, which around $9300 instead of the 20,500 cap), I max out my HSA, and I max out 2 Roth IRAs for myself and my wife (we luckily still fall under the income limits for Roth IRAs for now, but that will likely change in the next year or 2)

I do some swing trading on the side, but not often, though with pretty good success. I don't consider this "retirement" funds and I only swing trade with funds I already set aside for it (I only use "profits" to increase this fund)

My question is, Does anyone know a good place "to put" the $11k that I would have put in my 401k (plus any other I can stash away). Tax deferred is preferred, but my searches so far have turned up little. I could put the money into Traditional IRAs, but we make too much to benefit from the tax deductions on those. AT this point, I don't see the benefit of a Traditional IRA at our income level (until we max out of the Roth IRA income limits and we can start doing Roth Conversions)

Is just a brokerage account really the best option? Any suggestions?

I'm stressing out a bit over this as I've really focused hard saving for our retirement over the past 5 years. Even during Covid and my wife not working for a large part of the past 2 years, we managed to never stop fully contributing to my 401k and our IRAs (HSA was new this year). My goal was to be close to financially independent by 55, even though I have no plan on retiring then (just want to have the comfort of knowing I can and that I'm not dependent on any given employer). Losing the ability to save the $2k that has to now go into taxes I feel is going to have a big impact since I'm still 10+ years away from my goal.


*Note: My company did not let me know about this until last Friday, 8 months into the year where I've already contributed well over my limit for the year. They say it was a "mistake" and I should have been notified earlier, but there is nothing they can do

I didn't know an employer could limit you below the IRS threshold of 20,500 if under 50 years old and 27,000 if over 50 years old.

 

[FrankThompson]

I didn't know an employer could limit you below the IRS threshold of 20,500 if under 50 years old and 27,000 if over 50 years old.

I am now considered a "highly compensated employee" (HCE) and due to anti-discrimination laws, they can't discriminate against non-HCEs by letting HCEs contribute more than 2% more on average than non-HCEs contribute to their 401k.

There are ways around this, like employer matching to get non-HCEs to contribute at a higher rate, but my company is a staffing company (I'm a core employee of the staffing company in their IT dep) so my guess is that we have really low participation in our consultant population.

It sucks and it is not necessarily my company, but the IRS doing the limiting. My company just isn't doing enough to get more non-HCEs to contribute to their 401ks

 

[UGADawg96]

I am now considered a "highly compensated employee" (HCE) and due to anti-discrimination laws, they can't discriminate against non-HCEs by letting HCEs contribute more than 2% more on average than non-HCEs contribute to their 401k.

There are ways around this, like employer matching to get non-HCEs to contribute at a higher rate, but my company is a staffing company (I'm a core employee of the staffing company in their IT dep) so my guess is that we have really low participation in our consultant population.

It sucks and it is not necessarily my company, but the IRS doing the limiting. My company just isn't doing enough to get more non-HCEs to contribute to their 401ks

ah, yeah, that one. doh!

 

[bgalakazam]

All sound advice. It is CRAZY how 680million Europeans rely on the government to make these decisions for themselves. They I constantly see pensioners here complaining how their government retirement (think social security) and government provided healthcare is not enough. Many of these people worked all their lives and get stuck living a miserable life in a tiny apartment for the rest of their lives.
I love America and everything America has to offer and am glad it empowers people to make choices for themselves. Unfortunately, being a first generation immigrant I had to start late with everything (credit score, retirement, education). Great to see threads like these where people know how to take care of themselves and share the advice instead of expecting big gov to just take care.

 

[Oxford_Powerboost]

I have no advice, given I’m only 24 and thus have quite a few years left!

But I did want to say thanks to everyone for sharing their advice. It’s great to hear real stories and real advice from people that are already retired or are about to be. Sometimes articles and podcasts just feel a bit too disconnected

 

[FrankThompson]

ah, yeah, that one. doh!

Yeah, It's really quite messed up how everything else at the IRS is a gradual fall off, but this is like a hard stop. Last year I could max out my contributions. This year, my contributions are cut in half all due to a half way decent bonus last year (which put me over the top)

Literally a person could get a $1 raise and be screwed by this.

 

[Ed21]

Well, at least the silver lining in all of this is there are 90,000 new IRS agents on the way. So be sure to cross your T's and dot your I's

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