Saving for retirement

Pablos Tunnel

Well-Known Member
Lifetime Member
Sep 23, 2017
2,689
4,130
Call it paranoia, but I have always been slightly nervous of Roth IRAs. (in the interest of full disclosure, it has not prevented Mrs. G and I from both having one, i'm just nervous about it.) My nervousness comes from the difficulty of trying to predict what a future Congress might do. WIth a regular IRA, i get my tax savings now, so, naturally, I am sure I am getting them. What's to stop a future Congress from deciding there's "too much" non-taxable money sitting in Roths and deciding they need put some sort of "withdrawal fee" (or whatever they'll call it) in place? Wouldn't be the first time a Congress changed the rules of the game halfway through the game. Please opine with how I am crazy, so I can stop worrying about it.
Excellent point.
 

divits

Founding Member
A Muffin of the Studly Variety
Lifetime Member
Jun 13, 2014
12,702
22,997
Founding Member
Anyone still have a pension? I work in pension consulting so I see them every day, but I know on the whole they are becoming less and less common.

I actually have a small pension from a company I worked for for only about 4 years. I knew the company had a pension but I didn't think I qualified for it after I left. I had forgotten all about it until I got a letter from the company offering to buy me out of my pension. I was kind of shocked but it was a pleasant surprise. I chose to not take the lump sum buyout since I didn't need the money at the time and figured the yearly annuity would be nice since I plan on living a long time.
 
Last edited:

Gator By Marriage

A convert to Gatorism
Lifetime Member
Dec 31, 2018
14,784
27,959
I actually have a small pension from a company I worked for for only about 4 years. I knew the company had a pension but I didn't think I qualified for it after I left. I had forgotten all about it until I got a letter from the company offering to buy me out of my pension. I was kind of shocked but it was a pleasant surprise. I choose to not take the lump sum buyout since I didn't need the money at the time and figured the yearly annuity would be nice since I plan on living a long time.
Good plan!
 

TLB

Just chillin'
Lifetime Member
Jan 6, 2015
13,740
25,359
Word to the young, echoing what was said in this thread already:

Coming out of college, you're used to living on Ramen noodles and mustard sammiches. Once you get a job, keep those sparse living habits as best you can. No, I'm not saying to kill yourself for a paycheck and not enjoy it, but recognize your income is going way up and your lifestyle doesn't HAVE to. One of the smartest things I did was, coming out of college, living single, and working a salary position was to not increase my spending to match my income. I kept the college room-mate (best friend, luckily) for a few years after graduating, and kept the same car until I killed it. But most importantly, I maxed out contributions to 401k = got every cent of matching donations from the employer, build a great base to grow with compound interest, and never missed the money because I was already used to living without it. If I had known about Roth's then, I'd have maxed that too, but I didn't know. Bottom line, your income is going up, and you will never miss the money being thrown into saving for your future. You'll find a way to live within what's left of the paycheck, and still be happy.

Since getting married and having kids my 401k contributions have NEVER dropped below getting full company match, ever. I may only do 1-2% above the company match, but never, ever, leave their money in their pockets when YOU can have it in your retirement fund.

= = = = =

Second biggest point I'd make is a slight deviation from the thread title of 'savings' but makes the biggest impact, IMO. Don't go into (credit card) debt. It's easy to tell yourself you have a nice paycheck coming in, you can afford to charge something and pay it off in the next month or two. But creating the mindset for yourself that 'you will pay it off soon' can be quicksand you feel like you'll never escape from. If you want something, SAVE up and pay for it as opposed to charging it. Anything you carry over on a charge is costing you their interest rate = money you are paying to others simply for the convenience of having something NOW as opposed to in a few weeks, you know, when you could pay for it in full.

Don't say "for today we have to have debt to have a good credit rating yada yada". Buying a new car (2-5y loan) or a home (15-30y loan) WILL be a longer term debt that WILL establish your credit rating just fine. You DO.NOT.NEED credit card debt at all. Yes, there are the common excuses of being able to pay on credit when travelling and such. But, today, debit cards or whatever your bank issues will work just fine AND work within your current funds. If, for some reason you do charge something, make sure to pay it off immediately. As I said, any charges carried over a billing period cost you interest = money out of your pocket for being impatient. Don't do it, as it is way too easy to let it build up and feel insurmountable.
 

Gator By Marriage

A convert to Gatorism
Lifetime Member
Dec 31, 2018
14,784
27,959
Word to the young, echoing what was said in this thread already:

Coming out of college, you're used to living on Ramen noodles and mustard sammiches. Once you get a job, keep those sparse living habits as best you can. No, I'm not saying to kill yourself for a paycheck and not enjoy it, but recognize your income is going way up and your lifestyle doesn't HAVE to. One of the smartest things I did was, coming out of college, living single, and working a salary position was to not increase my spending to match my income. I kept the college room-mate (best friend, luckily) for a few years after graduating, and kept the same car until I killed it. But most importantly, I maxed out contributions to 401k = got every cent of matching donations from the employer, build a great base to grow with compound interest, and never missed the money because I was already used to living without it. If I had known about Roth's then, I'd have maxed that too, but I didn't know. Bottom line, your income is going up, and you will never miss the money being thrown into saving for your future. You'll find a way to live within what's left of the paycheck, and still be happy.

Since getting married and having kids my 401k contributions have NEVER dropped below getting full company match, ever. I may only do 1-2% above the company match, but never, ever, leave their money in their pockets when YOU can have it in your retirement fund.

= = = = =

Second biggest point I'd make is a slight deviation from the thread title of 'savings' but makes the biggest impact, IMO. Don't go into (credit card) debt. It's easy to tell yourself you have a nice paycheck coming in, you can afford to charge something and pay it off in the next month or two. But creating the mindset for yourself that 'you will pay it off soon' can be quicksand you feel like you'll never escape from. If you want something, SAVE up and pay for it as opposed to charging it. Anything you carry over on a charge is costing you their interest rate = money you are paying to others simply for the convenience of having something NOW as opposed to in a few weeks, you know, when you could pay for it in full.

Don't say "for today we have to have debt to have a good credit rating yada yada". Buying a new car (2-5y loan) or a home (15-30y loan) WILL be a longer term debt that WILL establish your credit rating just fine. You DO.NOT.NEED credit card debt at all. Yes, there are the common excuses of being able to pay on credit when travelling and such. But, today, debit cards or whatever your bank issues will work just fine AND work within your current funds. If, for some reason you do charge something, make sure to pay it off immediately. As I said, any charges carried over a billing period cost you interest = money out of your pocket for being impatient. Don't do it, as it is way too easy to let it build up and feel insurmountable.
Some great advice here TLB. My only addition for young folks starting out is don't buy a new car if you can avoid it and pay cash if you can. We are in good financial shape, but haven't bought a new car in 15 years and haven't had a car payment in over 25. It makes a biiiig difference.
Oh and don't beat yourself up on being late to the Roth party. Pretty sure they have only been around for about 20 years (financial experts please weigh in), so you can't be too late.
 

BMF

Bad Mother....
Lifetime Member
Sep 8, 2014
25,399
59,221
Anyone still have a pension? I work in pension consulting so I see them every day, but I know on the whole they are becoming less and less common.

When I turn 60 I'll be collecting 3 pensions (totaling, in today's dollars, around $10K/month). I'm currently collecting one pension (approximately $40k/year) and will start collecting my military pension in Sept 2020.

One of my biggest regrets financially is not aggressively putting money into the TSP/401K/457 plans I was eligible for. I'm maxing out now, but wish I had started younger - my thinking was "well, my pension will be plenty. I don't need to put much into the deferred comp plan". That was stupid and I will always regret it.

One big benefit to the military is the VA. Although I feel like I'm in pretty good shape, especially for my age, I have a few chronic health issues (sleep apnea, back issues/pain, allergies, etc - basically getting old!). But the VA rates you and gives you a disability rating. If you get 50% you automatically get a month disability check from the VA. I'm not going to turn that down. I estimate I'll get at least 50%, which will be about another $1,000/month.
 

BMF

Bad Mother....
Lifetime Member
Sep 8, 2014
25,399
59,221
Some great advice here TLB. My only addition for young folks starting out is don't buy a new car if you can avoid it and pay cash if you can. We are in good financial shape, but haven't bought a new car in 15 years and haven't had a car payment in over 25. It makes a biiiig difference.
Oh and don't beat yourself up on being late to the Roth party. Pretty sure they have only been around for about 20 years (financial experts please weigh in), so you can't be too late.

I haven't had a car payment since the year 2000. It's one of Dave Ramsey's big recommendations (I was listening to him a lot back then). I've saved a ton of money not having a car payment. Now, I will admit I'm currently driving the biggest POS I've ever driven (I was a geo-bachelor for 2 years, driving 200 miles each way from DC to Va Beach). So I sold my truck and bought a little Honda that gets 33 mpg. When I was transferred back to DC I decided to keep it because cars get beat the hell up around here.
 

g8r.tom

Well-Known Member
Lifetime Member
Nov 17, 2017
3,375
4,291
Anyone still have a pension? I work in pension consulting so I see them every day, but I know on the whole they are becoming less and less common.

I will have one when I leave work, if I want it. Or I can convert it to an 401K.
 

Gator By Marriage

A convert to Gatorism
Lifetime Member
Dec 31, 2018
14,784
27,959
I haven't had a car payment since the year 2000. It's one of Dave Ramsey's big recommendations (I was listening to him a lot back then). I've saved a ton of money not having a car payment. Now, I will admit I'm currently driving the biggest POS I've ever driven (I was a geo-bachelor for 2 years, driving 200 miles each way from DC to Va Beach). So I sold my truck and bought a little Honda that gets 33 mpg. When I was transferred back to DC I decided to keep it because cars get beat the hell up around here.
I used to live in NoVa; I bet that Honda is a lot easier to find a parking space for as well!
 

GatorInGeorgia

Senior Member
Lifetime Member
Aug 25, 2014
6,340
7,068
Call it paranoia, but I have always been slightly nervous of Roth IRAs. (in the interest of full disclosure, it has not prevented Mrs. G and I from both having one, i'm just nervous about it.) My nervousness comes from the difficulty of trying to predict what a future Congress might do. WIth a regular IRA, i get my tax savings now, so, naturally, I am sure I am getting them. What's to stop a future Congress from deciding there's "too much" non-taxable money sitting in Roths and deciding they need put some sort of "withdrawal fee" (or whatever they'll call it) in place? Wouldn't be the first time a Congress changed the rules of the game halfway through the game. Please opine with how I am crazy, so I can stop worrying about it.

You’re not crazy. I wouldn’t be surprised if that happens.
 

Bushmaster

Well-Known Member
Lifetime Member
Jul 27, 2018
3,246
6,977
My partner nd I buy low cost rental property that needs rehabbing. We have 12 rentals in the last 3 years. Put very little of our on money in them. Less than 10k. Everyone cash flows about 35% of the rent amount. That's nice and rare. Better return than the market.
 

Detroitgator

Well-Known Member
Lifetime Member
Jul 15, 2014
28,240
46,752
My partner nd I buy low cost rental property that needs rehabbing. We have 12 rentals in the last 3 years. Put very little of our on money in them. Less than 10k. Everyone cash flows about 35% of the rent amount. That's nice and rare. Better return than the market.
I keep pushing the fact that fully 70%+ of the people on this board, including about 85% that bitch in the Politics chatbox every day about the American Dream being dead, could do exactly this. What it comes down to is that they are "too busy" (i.e., posting here all day) and have "low risk tolerance" (i.e., afraid). It's not hard with a methodical approach and a system... both of which have been written about in dozens of books.
 

Concrete Helmet

Hook, Line, and Sinker
Lifetime Member
Jul 29, 2014
22,046
23,181
My partner nd I buy low cost rental property that needs rehabbing. We have 12 rentals in the last 3 years. Put very little of our on money in them. Less than 10k. Everyone cash flows about 35% of the rent amount. That's nice and rare. Better return than the market.
Way better than market and here's why in my humble opinion. This example involves 2 residential rentals we've had for 10 and 15 years now. Both are entry level 3/2 homes which sell or rent within days if not hours. Other people(tenants) have been paying for my equity AND I'm getting the tax write off...Plus I'm using a third party(bank) money to shift the equity and acquire more property or payoff other personal or investment properties ...Now I did luck out 2 years ago when I was able to get 3.875 INVESTMENT 15 year mortgages on the 2 of the properties. I had about 50% equity in one and 30% in the other at the time. I don't take any cash throw off on either, it goes back into the monthly payments to expedite the principal. The extra principal will have both of them paid off in about 10 years or less unless I decide to sell or pay them off with some of my own cash. The monthly rent also covers the property taxes and insurance, which are also a write off. The 2 properties combined have risen in market value roughly 140-150K in the last 2 years.

Please tell me where in ANY market I can borrow the money to invest, have someone else pay it back, get annual tax writes off from my income, and have either a steady income stream or nice lump sum of money when I decide the time is right...rinse and repeat...
I'm no Brain Surgeon but it sure seems to beat the hell out of trying to figure out the Stock Market..:dunno:
 

78

Founding Member
Dazed and Confused
Lifetime Member
Jun 9, 2014
19,745
27,635
Founding Member
Way better than market and here's why in my humble opinion. This example involves 2 residential rentals we've had for 10 and 15 years now. Both are entry level 3/2 homes which sell or rent within days if not hours. Other people(tenants) have been paying for my equity AND I'm getting the tax write off...Plus I'm using a third party(bank) money to shift the equity and acquire more property or payoff other personal or investment properties ...Now I did luck out 2 years ago when I was able to get 3.875 INVESTMENT 15 year mortgages on the 2 of the properties. I had about 50% equity in one and 30% in the other at the time. I don't take any cash throw off on either, it goes back into the monthly payments to expedite the principal. The extra principal will have both of them paid off in about 10 years or less unless I decide to sell or pay them off with some of my own cash. The monthly rent also covers the property taxes and insurance, which are also a write off. The 2 properties combined have risen in market value roughly 140-150K in the last 2 years.

Please tell me where in ANY market I can borrow the money to invest, have someone else pay it back, get annual tax writes off from my income, and have either a steady income stream or nice lump sum of money when I decide the time is right...rinse and repeat...
I'm no Brain Surgeon but it sure seems to beat the hell out of trying to figure out the Stock Market..:dunno:

TD Ameritrade for one.
 

Concrete Helmet

Hook, Line, and Sinker
Lifetime Member
Jul 29, 2014
22,046
23,181
TD Ameritrade for one.
Yes, I have an account(IRA) with them....It pales in comparison to what I've made in RE over the same time span and I still have to write them checks while in RE tenants write me one....
 

Detroitgator

Well-Known Member
Lifetime Member
Jul 15, 2014
28,240
46,752
Way better than market and here's why in my humble opinion. This example involves 2 residential rentals we've had for 10 and 15 years now. Both are entry level 3/2 homes which sell or rent within days if not hours. Other people(tenants) have been paying for my equity AND I'm getting the tax write off...Plus I'm using a third party(bank) money to shift the equity and acquire more property or payoff other personal or investment properties ...Now I did luck out 2 years ago when I was able to get 3.875 INVESTMENT 15 year mortgages on the 2 of the properties. I had about 50% equity in one and 30% in the other at the time. I don't take any cash throw off on either, it goes back into the monthly payments to expedite the principal. The extra principal will have both of them paid off in about 10 years or less unless I decide to sell or pay them off with some of my own cash. The monthly rent also covers the property taxes and insurance, which are also a write off. The 2 properties combined have risen in market value roughly 140-150K in the last 2 years.

Please tell me where in ANY market I can borrow the money to invest, have someone else pay it back, get annual tax writes off from my income, and have either a steady income stream or nice lump sum of money when I decide the time is right...rinse and repeat...
I'm no Brain Surgeon but it sure seems to beat the hell out of trying to figure out the Stock Market..:dunno:
And when you do sell, if you want to buy another one, you can use a 1031 like kind exchange to push the taxes down the road...
 

78

Founding Member
Dazed and Confused
Lifetime Member
Jun 9, 2014
19,745
27,635
Founding Member
Yes, I have an account(IRA) with them....It pales in comparison to what I've made in RE over the same time span and I still have to write them checks while in RE tenants write me one....
Something's not right, bro.
5ee69877abee002b5b485540a9d79532.jpg
 

78

Founding Member
Dazed and Confused
Lifetime Member
Jun 9, 2014
19,745
27,635
Founding Member
And when you do sell, if you want to buy another one, you can use a 1031 like kind exchange to push the taxes down the road...
Yes and no. The reason most cited amongst older investors is "I dont want the hassle anymore."

There are, of course, Delaware Statutory Trusts.
 

Concrete Helmet

Hook, Line, and Sinker
Lifetime Member
Jul 29, 2014
22,046
23,181
Something's not right, bro.
You can say that again....all this talk about the SM over the last few years and that thing is mostly pissing all over itself.....I call it the wishing well...I just keep tossing pennies in hoping one day dollars come out....:lol:
 

78

Founding Member
Dazed and Confused
Lifetime Member
Jun 9, 2014
19,745
27,635
Founding Member
You can say that again....all this talk about the SM over the last few years and that thing is mostly pissing all over itself.....I call it the wishing well...I just keep tossing pennies in hoping one day dollars come out....
Apparently you're LT in real estate, ST in stocks. The market's delivered 10% historically. I'm sure you've had tenants leave you high and dry or had a roof needing replacing. Shyt happens.

Investment RE is a growth and income play. There are myriad ways to replicate that.
 

Users who are viewing this thread

Help Users

You haven't joined any rooms.