Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Here's some advice: join the VFW or whatever vets group is appropriate to your service. Then talk to the folks at the VA. You may be surprised at the benefits you are entitled to, fair and square.
I never even thought of the VA until I retired, but some fellow vets talked me into applying for a VA card. Best decision I ever made. For all the bureaucratic rigamarole you have to go through (and the VFW will help you navigate that), the benefits available to vets -- especially combat vets like you and me -- are substantial.
I did Paid for most of my grad school and got a VA loan on my current house.
Maybe I'm missing out on some taco Wednesday discounts or something but I think I'm making good use of my veteran's bennies. Not much of it geared for retirement that I know of.
That's why I plan to live it up until my mid 60's then when its time to kick the bucket I'm ready!
I know countless amounts of people who live in fear about not having enough to retire with and as a result lose out on living life only to grow old, get sick, then eventually die with all that money saved.
Finding this balance is really, REALLY hard.
My dad was kind of the opposite. Never worried about money all that much.. didn't waste money but didn't take care of it either. Then he had a health crisis in that awful age range where you're vulnerable if you get sick and lose your job but just a bit too far away from medicare. He lost most everything he had and basically had to beg the entire family to help him. Died with $4000 in his bank account, at least 30% of that was money I had given him.
for those living off their investments and delaying ss while retiring you generally do not wait until 70 to spend more . you take whatever draw you planned on taking through retirement inflation adjusted day 1 .
so you need enough assets to safely live off of without running to low or you need enough income sources to sustain you .
not everyone has that choice and it is really reserved for those who do have enough to delay .
so in our case we have a draw rate of about 3.50% now and that will drop at 70 to 2.50% and the difference refills what we laid out and then some .
also in our case owning something out right will be more expensive then renting .
while the costs of buying an equivalent co-op to our apartment are less , the fact is the money we buy it with will cut our income by 12k a year making buying initially at least 6k a year higher .
But then you give up the appreciation by not owning.
Well, of course there can be a significant increase in lifestyle from $125k to $175k, but there doesn't have to be any sort of feeling like one is missing out on $125k. An extra $50k (about 40k net) means that instead of flying Business class to Europe and staying at a nice VRBO, one can fly First Class and stay at a more luxurious VRBO. Or fund a grandchilds education. Or whatever. True luxuries for 95%. But one is not buying a Ferrari, or an extra beach house. And certainly not the magnitude of say no foreign or limit domestic travel on $30k/yr vs a nice vacation each year on $60k/yr.
And whenever I talk about an income level, I'm referring to that level adjusted for 3.5% inflation for 35 years. So one is still saving and growing the first 10 years from 62-72, so that when RMDs and max SS are part of the equation, the supplement from savings beyond RMDs is entirely discretionary. $125k/yr today will be roughly $185k/yr in 35 years. Pensions are typically not COLA, and SS will always lag behind. So real generated income has to rise every year, plus late in life healthcare. I agree with other posters that the current retirees that say they are doing fine on $25k-30k/yr after being retired for 5-10 years, and they know lots of other retirees that are in similar situations will be in for a rude awakening if they live until their 90s. I'd rather die with too much because I was right, than suffer the last 5-10 years of my life because I was wrong.
Some thoughts on the 125K v 175k comparison and my intended thoughts. If you start out at 125k and stay at that equivalent with inflation adjustment you will be more than happy. If you start out at 150K and stay there adjusting for inflation likewise as with 175K. My experience is that when you have income streams kicking in and raising your inflation adjusted income you will notice the difference in life styles, comfort and security. The annual peaks in spending become less necessary to plan out and more easy to manage. The wife shops and when she gives me the receipts when she gets home I just send the credit card the money and don't bat an eyelash. Wasn't always like that especially this time of the year and the increase income is evident. Give it a 1 1/2 years for my SS at 70 and we will have a real shift in overall life choices/options.
As has been noted we adjust to our income level and the options it provides us. That could be 30k 50k 100k etc. When we get a appreciable bump in income it usually results in improved life choices, comfort and practices. It was like that when we were working and if the increases are there in retirement it probably will for most.
I did Paid for most of my grad school and got a VA loan on my current house.
Maybe I'm missing out on some taco Wednesday discounts or something but I think I'm making good use of my veteran's bennies. Not much of it geared for retirement that I know of.
Don't know about tacos. I was thinking more of medical care, prescriptions, eyeglasses, etc. The VA has been a godsend for me. It came to me late in life that reducing expenses was the equivalent to increasing income, and the VA has been part of the solution.
One hears such statements incessantly, and technically they're true. But there are two crucial caveats. First, that $1M at age 65 – 45 years in the future, for today's 20-year-old – will be worth parlously less, than presently. Even at 2.5% inflation, $1M falls to $330K. Second, those eye-watering investment accumulations assume a steady and substantial allocation to stocks. Even if the stock market of the 21st century maintains the growth in which it basked in the 20th, most people attenuate their stock-allocation later in life. This buys safety, in exchange for lower returns – precisely when returns matter most.
It is simply not true, that small but consistent savings are a surefire path to accumulation of substantial wealth.
And that's the most insightful observation in this entire thread!
Assets/portfolios matter, in so much as they generate income. Persons adept at saving money, are NOT necessarily skillful at turning accumulated money into income. Consider: Person A has $500K, but perennially manages 10% annual return. The resulting $50K isn't luxurious, but it accords a modicum of comfort in most parts of the US. Person B is blessed with a whopping $5M, but keeps all of that money in a savings account generating 0.5%/year - for an income of $25K. Who has the more comfortable lifestyle?
I reiterate, that while good habits (advancing one's career to increase one's salary, curtailing expenses, systematically saving money) are essential, they are NOT sufficient - even if one does succeed in amassing a sizeable wad of cash. It is necessary to excel as an investor - especially once we do have a substantial portfolio with which to work.
I completely agree with you and mathjak on this, I think the argument discounts the educational value of saving early. I started watching stocks as a kid back in 1989 after reading on the news that IBM had lost billions one quarter in a surprise. Secretly, I'd hoped the PC would go bankrupt so more games would be made for my Apple IIC. Later, I kept watching as seemingly large companies like Pan Am went bankrupt while IBM kept going up. I saw tech companies, once traded at a discount due to the limited life of their product offerings go up like mad. I saw metals find action in chaos. I saw good economic news make the market go down in the early 90's. I saw acquisitions and IPOs. Each time I thought I knew it, I learned something more. I was rather surprised when interest rates were lowered in the wake of 9/11 and kept low. I saw ongoing trend of interest rates coming down, and began to wonder about bonds. I saw the expansion of markets and credit to Eastern Europe, Asia and several starts and stops in Africa and South America. I saw the tech bubble and the housing bubble. I started to distinguish between spoken headlines and know where to look for reality.
Thankfully, some of my early mistakes were cheap. By building knowledge, I may not know what the future lies, but I can better understand when I want to liquidate positions, and when I want to buy in, and what I want to buy into. I start to see which companies just always seem to have smooth results, and which ones jump around. Figure out what leverage levels I'm ok with. What risks I'm ok with and what's a realistic reward to assign an opportunity. Derivatives have their tramp stamp along my bottom line as well.
YTD I've got 16 wins and 2 losses. Last year I had 17 wins and 1 loss. Year before was 11-1-1. Of course, adding to it that they are all dividend producing stocks I start to get comfortable that I'll be able to continue to trade even after I've stopped working. My slowest periods are right when I get new money. Yet even then, when coming to retirement or wanting new money, learning the value of real liquidity... If the market takes a dive for no reason, you don't want to be in a forced sell situation.
All of which sends me to the last piece. The bond market. It should be easy. Pick a company that you know won't go bust, buy and hold and you don't even have to care about interest rates. Yet the Fed is signaling a rate raise and a grand reversal of a 40 year trend. Gold should be the deadest asset in the world, but it isn't. So I rethink the Fed. Interest rates raise with growth. Where's the growth? Where's the peace dividend? Where's the globalization? Where's the securitization? Do we really think we can poke back into domestic success only at this point? Is that success still juiced with fiscal stimulus?
The answer is I don't know, but I know I don't know, but if I buy one bond just to hold it and understand what makes it go up and down, I'll start to learn. I'll start exploring ways to, not just make money, and understand how much, but try and determine how I can start to smooth a path of payments for myself.
I truly feel bad for those who got their savings war-chests without any action on their own besides saving in one swoop. They knew how to save, but never learned how to invest. They can only hope to trust someone else. It would make anyone risk adverse, which is too bad. Retirees really could make more money from their investments than they do from their wages.
So anyway, my summary is that, by starting early, most people will gain enough confidence in themselves to find something to invest in better than CD's. It's a great lesson to learn.
i disagree about the buy and hold on bonds . higher rates and higher inflation are bed fellows . getting your 1k back in many years is a loss in purchasing power which is the same as selling earlier and getting out and taking a principal hit but not a purchasing power hit ..there is little difference between the two .
a rise in rates and the inflation pressures that go with those rise in rates do the same damage . just think about a 30 year bond . getting your 1k back even in 3% inflation buys less than 500 bucks worth of stuff
...So anyway, my summary is that, by starting early, most people will gain enough confidence in themselves to find something to invest in better than CD's. It's a great lesson to learn.
I agree with just about everything you said except this.
For many years - longer term brokered CDs were a great deal. Yielding more than comparable treasuries and even many high quality corporate bonds. Today - because of low rates - they're a better deal than treasuries and perhaps some high quality corporates. But not a good deal IMO.
Note that high quality tax-free munis have been another great area for taxable accounts. Sporting absolute yields that are often higher than you'll find in CDs - treasuries - and corporates of comparable quality. Another great deal (while it lasted) was taxable municipal Build America Bonds.
Then there are other "odds and ends" areas. Like I-Bonds when they first came out. And had returns which consisted of fixed coupons of 3%+ plus the CPI. Today - the yields on new I-Bonds are pretty much garbage. And then there were long term zero coupon bonds in the 80's. Which had better returns than just about everything else - including equities.
I don't know what the future holds for fixed income. But it's always a good idea to keep your eyes open and to investigate new things (although I will in general reject 4 out of 5 new things).
BTW - I agree with you a lot about starting when you're young. So you're making whatever mistakes you make (and you will make some) with a relatively small amount of money. I started in my late 20's in the 70's (I'm 69 now). And another suggestion is maxing out on retirement account options (if you have decent ones - I was putting 25% of my income into qualified pension and profit sharing plans in my late 20's). One unfortunate thing for younger people these days is the investing environment is lousy compared to what people my age had decades ago (the 70's weren't swell but I doubt we'll see anything like the 80's or 90's again - at least in my lifetime). Robyn
But then you give up the appreciation by not owning.
Couldn't care less about appreciation since we will die there. It is about cash flow . We are not thrilled with taking a 6k pay cut. It will take quite a few years before our rent goes up by 6k. There are so many co-ops for sale appreciation has been sluggish for years. Homes have done better since our area is mostly high rise buildings
i disagree about the buy and hold on bonds . higher rates and higher inflation are bed fellows . getting your 1k back in many years is a loss in purchasing power which is the same as selling earlier and getting out and taking a principal hit but not a purchasing power hit ..there is little difference between the two .
a rise in rates and the inflation pressures that go with those rise in rates do the same damage . just think about a 30 year bond . getting your 1k back even in 3% inflation buys less than 500 bucks worth of stuff
We don't have 3% inflation. We have 1.46% CPI YOY. Personal rates of inflation may be higher - or lower.
You've been saying the same thing for years now. And - for years now - you've been wrong (we haven't had CPI at more than 3% since 2011). Now you will probably be right some day. But being wrong for 5 years is a bit much.
Also - while your approach is to figure out how much you can spend out of principal - I have always been saving some of my income - and reinvesting it. I'm not sure how necessary that is now that I'm near 70 - but I'll probably keep doing it. It's not like I'm lacking for anything...
Robyn
P.S. Might be tough to save some this year - but we probably will. Between our $12.4 windstorm deductible - storm clean up - my husband's zippy cataract surgery lenses - and the like. Then again - the $20k settlement on my lawsuit will cover those things.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Paid for most of my grad school and got a VA loan on my current house. 
