Milstones on saving for retirement

Discussion in 'Business, Investing & Finance' started by divits, Jun 16, 2019.

  1. divits

    divits A Muffin of the Studly Variety
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    These articles are a decent guidepost for where you should be in your retirement savings at different ages. I'm afraid that most people are not anywhere near where they probably should be. Of course it goes without saying that one size does not fit all.

    Read: This is how your finances should look in your 20s

    Read: This is how your finances should look in your 30s

    Read: This is how your finances should look in your 40s

    Read: This is how your finances should look in your 50s

    Read: This is how your finances should look in your 60s


    Apparently many Millennials were angry and pushing back at the article about where they should be in their 30s. Do they have a legitimate beef or are they just whining?

    Want to make millennials mad? Talk about saving for retirement
     
    • ChiefGator

      ChiefGator A Chief and a Gator, Master of the Ignore list!!!!

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      The most important milestone for anybody with an employer plan is to get the maximum match very early in your career. Time can be your best asset (if you use it) or your worst enemy if you save nothing early.
       
      • BMF

        BMF Bad Mother....
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        I only read the 40 article (because that's me).

        I've always tried to break down my life in 5 year increments. I think somebody who is 41 will likely be in a different place financially than somebody 48 or 49.

        Also, I think a lot of these articles clump people into generalities - what "most" people in that age bracket "should" be doing.

        I'm not sure about millenials. I'm almost 49 (August) and my wife just turned 39. She is considered a millenial because she was born in 1980...but she ain't no millenial! I have a 26 year old son.....and three nieces 22 to 27 years old. Now THEY are millenials!
         
      • bradgator2

        bradgator2 Internet Bully
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        Millennials are mad about an article suggesting personal (financial) responsibility? Shocker.
         
        • divits

          divits A Muffin of the Studly Variety
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        • ChiefGator

          ChiefGator A Chief and a Gator, Master of the Ignore list!!!!

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          I noted he has a "partner" and of course supports the idiotic idea that the government paying off his debt would be good. What would be good is if the government stopped lending any money for college education. I bet he really did not need a Masters, and could have worked to pay for his Bachelor's degree. Might have gone to community college for two years as well.

          His parents were stupid to sign off on backing his loans, and of course those that "suffer" the most are those that studied worthless things and borrowed without using their brains if they actually have any.

          Here tuition is free for those with ability, any state could do the same.
           
        • CGgater

          CGgater Gainesville Native

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          A few thoughts...

          -I think many generations (during their 20s) tended to live up to their income with no savings built in. While some may have large student loans, many could probably budget better. “Having it all now” is not an entitlement.

          -Universities are getting insanely expensive and there’s no justification for it. They’re outpacing inflation and their product is getting watered down. Their attempts to improve their model as a self-licking ice cream cone will only make it worse.

          -It’s been mentioned multiple times before, but college students need to pick a major based on a combination of interest AND employability. Interest in a degree that produces no marketable skills is a self-inflicted wound... and probably a lack of mentoring and/or willingness to receive it.

          -Side note - saving was tough early in my military career. Thankfully, the pension will make up for my late start on saving and investing.
           
          • no1g8r

            no1g8r Bringing Reason to the Masses
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            My 19-year old daughter, a college student who started her first job early this year making $80 gross/week,asked me "what percentage should I start saving for retirement, and how much toward an emergency fund?" just after her first paycheck. You couldn't have knocked the smile off of my face with a baseball bat.
             
            • bradgator2

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            • BMF

              BMF Bad Mother....
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              I transferred to UF from a JUCO....I was debt free at the time. I decided I'd only work part-time at UF so I applied for financial aid. Being prior military I was eligible for a lot of money; I got the Pell Grant, Florida Lottery Grant and a few other grants (free money)...but I also qualified for student loans to cover the "difference".

              So, this is where it's head scratching. They have this formula for how much it will cost....and if you follow the formula you would be living pretty damn fat (for a college student). The first semester I was at UF I took the full amount (according to their formula)....and I was living high on the hog (for a college student) - this was the fall of 1993. The next semester I went into the financial aid office and asked, "Do I have to take all this money? I don't need it." They said I could take a smaller amount, so I did....I did this every semester, and by my last semester I didn't take anything. I owed about $10K when I graduated. I should have owed about $5k. They are basically loaning kids thousands of dollars that they don't need! Leaving them in debt for years after college.... It's f*cked up!
               
              • BMF

                BMF Bad Mother....
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                Remember when the TSP first came out? They only let us put in like 3%. I didn't even bother. I kick myself in the ass for it now. They eventually kept raising it and I waited until about 12 years ago to start putting in more than 5%. I max it out now, but still kick myself for being an idiot back then.
                 
              • Gator By Marriage

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                I can't tell you how many times in my years of government service I had to lecture new employees on the importance of the TSP. As new employees they were pretty low on the pay scale and felt somehow it was a luxury they couldn't afford. I could usually convince them to do 5% as, since the G matched that amount, they were automatically doubling their money. Once I got them to do this, I'd work them to bump their contribution a point or two with every grade or step raise. Once they started seeing it grow, they usually maxed out, but sometimes it was like pulling teeth. Here's a couple of interesting stats from the TSP: As of December 31, 2018, there were 21,432 millionaires in the TSP; the largest single account has $6,086,238!
                 
                • BMF

                  BMF Bad Mother....
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                  How is it even possible for someone to have $6 million? The TSP hasn't been around that long.
                   
                  • Gator By Marriage

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                  • BMF

                    BMF Bad Mother....
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                    It looks like people transferred money from other retirement accounts into the TSP.

                    On that note, I've heard that is a common thing because the TSP fees are so low. Many people will keep their money in the TSP after retirement (vs. moving it or consolidating w/ another brokerage). I'm not sure what I'll do, but I will combine my military account into my civilian account after I retire from the military next year.
                     
                  • Gator By Marriage

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                    Guess I should have read the article more closely.....
                    To leave or not to leave the TSP is a great question for retiring feds. On the one hand the fees are ridiculously low and there are no fees for moving the money around. On the down side, the investment options are not very broad and there is always the danger some politician will try to find a way to "borrow" from the TSP the way they did from Social Security. (Nancy Pelosi once made a comment about making that money "work for America.") Should you decide to pull out, be sure to leave some behind. If you have an active account you can always get back in.
                     
                  • BMF

                    BMF Bad Mother....
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                    Sage advice!

                    Nancy needs to keep her grubby fingers off that money! In fact, she needs to sober up and get herself into an alcohol rehab program rather than worrying about TSP money!
                     
                    • CGgater

                      CGgater Gainesville Native

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                      Been contributing 5% since around 2003 and it’s grown pretty well. Nobody will accuse me of being the next Warren Buffett, though.

                      Don’t feel bad. If I’d listened to my wife when she suggested we invest 1-2k in Amazon when it was ~$2.50 per share, I’d be using the TSP for pocket money. Ugh... How’s THAT for kickin yourself???
                       
                      • Bushmaster

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                        Yeah, I jumped in at the start and have put the max in. Not sure that is possible with the options and the time its been available.

                        I agree with the overall point though. Put in as much as can while young and you can really stop contributing in our late 40s early 50s.

                        I just turned 50 and now only put in enough to get my 3% match. I have put enough in and estimate, based on the 72 formula, that it will quadruple over the next 18 years assuming an 8% return. That presents an estate problem for me that hit me in my dreams one night and woke me up from a dead sleep.

                        When I die, my kids will pay tax on that money as they draw it out, but if I shift gears and just start putting into the stock market, they can inherit that stock account at fair market value and not pay tax on that gain. At the estimated amount, I won't be able to spend the earnings on the account with my other sources of income and other retirement and social security.

                        I can also put more money into income producing property that passes thru inheritance the same way, step up in basis and no tax paid on the appreciation.
                         
                        • Politigator

                          Politigator L-boy's Cousin
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                          I would say 8% over next 20 years is highly unlikely. Especially if you are ramping down your equity allocation as you get older. In my modeling I usually use about 3% real (5-6% nominal) but that may even be too high.

                          If we got 8% over next 20 years we could live a very comfortable retirement.
                           

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