SFR Two years out....Retirement

Sorta fishing-related
Almost forgot re: 401k employer matching;

Many large employers USED to match contributions up to allowable limits for them. That in the past 3 years or so, does not seem to be the case anymore. Many are now, post COVID, are only contributing a lump sum at the beginning of the new year and that's it. And depending on employer, the amount varies.

To offset that, try, if possible to contribute at least 12% per period. Or whatever is closest to your allowable max that you can afford.

I played around far too long and didn't pay attention to details until almost too late. A little advice from financially astute inlaws and things started getting better within 2 years.

Don't make that mistake.
 
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wanderingrichard said:
Almost forgot re: 401k employer matching;

Many large employers USED to match contributions up to allowable limits for them. That in the past 3 years or so, does not seem to be the case anymore. Many are now, post COVID, are only contributing a lump sum at the beginning of the new year and that's it. And depending on employer, the amount varies.

To offset that, try, if possible to contribute at least 12% per period. Or whatever is closest to your allowable max that you can afford.

I played around far too long and didn't pay attention to details until almost too late. A little advice from financially astute inlaws and things started getting better within 2 years.

Don't make that mistake.
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Many of us, me included, started older than we should of. One can not make up that time lost and associated impact of lost compounding. If it was not for my wife demanding I start, I would not have started when I did. God bless her! Made a huge difference where we are now...

One of the good things about 401k's is if/when you change jobs/companies/careers you can move to an investment business and have more control of what it is invested in.
 
RCF said:
Many of us, me included, started older than we should of. One can not make up that time lost and associated impact of lost compounding. If it was not for my wife demanding I start, I would not have started when I did. God bless her! Made a huge difference where we are now...

One of the good things about 401k's is if/when you change jobs/companies/careers you can move to an investment business and have more control of what it is invested in.
Click to expand...

Some companies like mine for example let you set up your own PCRA account, so you can have control over what you invest in.
SF
 
Stonedfish said:
Some companies like mine for example let you set up your own PCRA account, so you can have control over what you invest in.
SF
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Never heard of a PCRA before you brought it up. Had to look it up. Thank you very much!

Now understanding what it does I wish more companies did that. One of my major gripes I had with my 401k and the limited investment choices I had.
 
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RCF said:
For the younger folks reading this:

If you are going to have kids know that they are expensive to raise - about $17k/year on average (seems low to me). That does not include college expenses either. In today's society college education is almost mandatory. It is also expensive - $20k/year or easily higher for room, board, tuition, books, etc….

As others have said, start saving early. Take full advantage for 401Ks, IRA/Roth IRAs. Compounding is a wonderful thing. Really understand why it is so important.

One does not need to live life to a the fullest but you can live it well. Make sure you have enough to take you and your kids on some great vacations/trips/experiences. It is a part of an education/experience that one carries in their memories for life and may affect life/career choices in years to come.
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Good advice but I’ll disagree that college is ”almost mandatory”. I feel the educational system that has pushed that theory since I was in school 50 years ago is doing the kids a disservice. More so now, the skilled trades are open to women and minorities and need apprentices. My oldest grandson is in first year as an apprentice diesel mechanic and will make about $70K in his first year. Journeymen in this area make $120K+ and more in a market where $400K will buy a nice 1800 s.f. home. Retired union Operating Engineers I know are taking $100K pensions AND Social Security.
Union HVAC in PDX make $80/hr. in California firefighters and cops and other civil servants can retire with $100K+ defined benefit pensions and lifetime health insurance, spouses included. I worked with a couple pipe fitters who retired in early forties by working lots of overtime, then went into civil service and would collect a second pension.
College is great if a person is focused and has self motivation but not the only path.
 
Robert Engleheart said:
Good advice but I’ll disagree that college is ”almost mandatory”. I feel the educational system that has pushed that theory since I was in school 50 years ago is doing the kids a disservice. More so now, the skilled trades are open to women and minorities and need apprentices. My oldest grandson is in first year as an apprentice diesel mechanic and will make about $70K in his first year. Journeymen in this area make $120K+ and more in a market where $400K will buy a nice 1800 s.f. home. Retired union Operating Engineers I know are taking $100K pensions AND Social Security.
Union HVAC in PDX make $80/hr. in California firefighters and cops and other civil servants can retire with $100K+ defined benefit pensions and lifetime health insurance, spouses included. I worked with a couple pipe fitters who retired in early forties by working lots of overtime, then went into civil service and would collect a second pension.
College is great if a person is focused and has self motivation but not the only path.
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Very good advice!

One of my engineering associates (who founded and continued to manage a large civil engineering firm for decades) frequently stated that he went to engineering school so he could afford a plumber.

I was lucky my GI Bill helped get me through college, but the over-emphasis on a college education has resulted in truly extraordinary increases in tuition fees and astronomical student debt for so many degrees that will never pay any sort of return on investment.

Furthermore, shortages of job applicants with four year (and even graduate school) degrees in many technical fields (like IT) has caused employers to open up those jobs to young people with two year vocational school training...and demographics will continue to push that trend as us cranky old boomers are extruded from the far end of the employment intestine.

Now retired I pretty much just 'loaf' around. 🤣
 
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If you're self employed (or become self employed) and have employees working for you, you can also open a SEP IRA.

It's one of the best things going for the employer, as well as for your employees.
 
RCF said:
Never heard of a PCRA before you brought it up. Had to look it up. Thank you very much!

Now understanding what it does I wish more companies did that. One of my major gripes I had with my 401k and the limited investment choices I had.
Click to expand...

With my PCRA account, my contributions go into a bank swap, which pays diddly. If there isn’t anything attractive, I move it to something like Schwab Value Advantage Money Fund (SWVXX). That had a yield of 4.93% the last time I looked. I can then make some interest and sell it for no fee once I’m ready to buy something. I’ve come to enjoy the freedom the PCRA account gives me.
SF
 
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The truly sad thing is that deferred compensation vehicles (like 401 k's) were never created to facilitate retirement or replace defined benefit pensions; their origin was related to tax avoidance for highly paid executives. We've not yet had a retired generation actually rely upon such a retirement vehicle...the success of which is highly dependent upon the general population's dismal understanding of complex investment instruments, as well as an ability to delay immediate gratification. It won't be pretty.
 
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The demise of defined benefit pensions for the middle/working class was one of the first key steps in the long term dismantling of middle America, and watching it play out has not been pretty.
 
My PayPal account has a PayPal Savings option that is currently giving an interest rate of 4.30%. I'm putting a bit in there every paycheck in addition to my 401k.
 
Mossback said:
The demise of defined benefit pensions for the middle/working class was one of the first key steps in the long term dismantling of middle America, and watching it play out has not been pretty.
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And throw in proposals to raise Social Security retirement age in the future for young workers are tantamount to kicking the second leg out from under the classic 'three legged stool' of retirement financial basics (pensions, Social Security, and savings).
 
krusty said:
And throw in proposals to raise Social Security retirement age in the future for young workers are tantamount to kicking the second leg out from under the classic 'three legged stool' of retirement financial basics (pensions, Social Security, and savings).
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Aaand, Social Security is projected to have to cut benefit by 20% beginning in 10 years unless revenues increase. If you think you won’t need it, consider this: $1 million in an IRA will give one $30-$40K/year at recommended 3 or 4% drawdown rates; average American has $150K in a 401 or similar. Elections have consequences.
 
Useless eaters have no place in a society run by those who prize quarterly returns above all else...
If you're not involved in producing the profit, you're reducing the profit, and that aggression shall not stand, according to some.
;)
 
For those just entering the work force - one might consider a government job with a pension. I made that decision after college in 1981 and had a resource management career that I loved and now a pension I can easily live off of. The downside was being under paid for much of my career but when you love what you’re doing, it really didn’t matter. We lived in rural areas where housing and living expenses were affordable and the quality of life - excellent.

Times have changed - working for the government isn’t as much fun as it used to be and pensions not as generous. With social security and 457’s, the stress of having enough in retirement can be mitigated. Nothing is guaranteed but…
 
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RRSmith said:
For those just entering the work force - one might consider a government job with a pension. I made that decision back in 1981 after college and had resource management career that I loved and now a pension I can easily live off of. The downside was being under paid for much of my career but when you love what you’re doing, it really didn’t matter. We lived in rural areas where housing and living expenses were affordable and the quality of life - excellent.

Times have changed - working for the government isn’t as much fun as it used to be and pensions not as generous. With social security and 457’s, the stress of having enough in retirement can be mitigated. Nothing is guaranteed but…
Click to expand...
Government employment is pretty much the only place with defined benefit pensions these days. I enjoyed 45 years of service to society that didn't involve enriching a string of musical chair 'plug & play' CEO's.
 
Here's my best bit of retirement advice. If you are going to marry, marry the right person for the right reasons. There's a ton of resources out there now regarding relationships that weren't available when I was young. Read them, take them to heart, and use them in your relationship. It's the most important decision you'll ever make, and sets the tone for much of your life, both personally and financially. If you have any little voice in the back of your head suggesting that it's not the right move, listen to the voice, not to the list of reasons why it will all work out. Having the right partner can make your life amazing, or amazingly bad.

Lol. Not something I expected to write in a fly fishing forum! Better get back to the tying bench now....
 
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