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Old 02-05-2017, 08:28 AM
Status: "Gaining Stability." (set 10 days ago)
 
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I took a look at the 2015 Target fund and the stock percentage is 45. Will I have to choose my own funds at that point? I know this is a long way off. I am just curious.
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Old 02-05-2017, 08:34 AM
Status: "Gaining Stability." (set 10 days ago)
 
5,684 posts, read 5,933,771 times
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Also think on this your take home pay in retirement will be more of a percentage of your gross pay than it was while working. Just about 30% more. That is an important number to remember when planning.[/quote]



I am unclear on the statement above. Let's say, my gross is $4000 per month and it drops to $2000 when I reach retirement age. How will the statement above impact this?
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Old 02-05-2017, 08:35 AM
 
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take home pay is a poor way to judge things . you need to work off expenses , wants and needs and see the ratio of discretionary to non discretionary as well .

our early years are running us more than we even made since we have the time do do so many more things that we wanted to . retirement can be so much more than just paying bills if that is what you want out of it .
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Old 02-05-2017, 08:37 AM
 
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Just one other situation to further confuse you....

I have close to the amount you are talking about in a ROTH Ira and brokerage account. My Ira and brokerage is 100% stocks, all are blue chip dividend payers. Right now I am getting nearly $10,000 a year in dividends between the 2 accounts, which is all getting reinvested. So when I finally do retire, I will be able to withdraw 3% a year from my stocks, plus I will be able to use the dividends, instead of reinvest. The stocks I invest in raise their dividends each year, so the withdrawals wont cut into the dividends that much. So that, plus Social Security, will give me a comfortable retirement.
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Old 02-05-2017, 08:49 AM
Status: "Gaining Stability." (set 10 days ago)
 
5,684 posts, read 5,933,771 times
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Quote:
Originally Posted by mathjak107 View Post
take home pay is a poor way to judge things . you need to work off expenses , wants and needs and see the ratio of discretionary to non discretionary as well .

our early years are running us more than we even made since we have the time do do so many more things that we wanted to . retirement can be so much more than just paying bills if that is what you want out of it .
I really have no desire to retire. I hope I can find a job close to home. I currently travel once a year to visit my friend on the west coast. She will be 90 when I reach retirement age. How is that going to work? I do not know.
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Old 02-05-2017, 08:58 AM
 
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Quote:
Originally Posted by carnivalday View Post
Just one other situation to further confuse you....

I have close to the amount you are talking about in a ROTH Ira and brokerage account. My Ira and brokerage is 100% stocks, all are blue chip dividend payers. Right now I am getting nearly $10,000 a year in dividends between the 2 accounts, which is all getting reinvested. So when I finally do retire, I will be able to withdraw 3% a year from my stocks, plus I will be able to use the dividends, instead of reinvest. The stocks I invest in raise their dividends each year, so the withdrawals wont cut into the dividends that much. So that, plus Social Security, will give me a comfortable retirement.
we find our dividends and distributions can vary from 29k to as much as 69k in some years .

it is easier for us to plan and spend by reinvesting the dividends and letting them grow , while spending down lower yielding cash and bonds first and refilling from stocks down the road when needed .

dividends get cut ,suspended or altered just at the worst of times . not only that but dividend growth rarely follows your personal cost of living so planning around a drip of dividends gets tricky .

much easier to just keep the constant flow of money coming from cash and bond buckets as a buffer and then refill as needed from equity's .

there are lots of ways to set up your withdrawals . .

keep in mind though that spending dividends count as part of a withdrawal to . you never want to spend the dividends then pull more than a total including dividends out of the balance that is higher than 4% in total . you may have a problem with your success rate at that level.

right off the top 2% in dividends being pulled out is already counted as a 2% draw by itself . you can safely pull 2% more from the balance .

Last edited by mathjak107; 02-05-2017 at 09:10 AM..
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Old 02-05-2017, 09:09 AM
Status: "Gaining Stability." (set 10 days ago)
 
5,684 posts, read 5,933,771 times
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Quote:
Originally Posted by carnivalday View Post
Just one other situation to further confuse you....

I have close to the amount you are talking about in a ROTH Ira and brokerage account. My Ira and brokerage is 100% stocks, all are blue chip dividend payers. Right now I am getting nearly $10,000 a year in dividends between the 2 accounts, which is all getting reinvested. So when I finally do retire, I will be able to withdraw 3% a year from my stocks, plus I will be able to use the dividends, instead of reinvest. The stocks I invest in raise their dividends each year, so the withdrawals wont cut into the dividends that much. So that, plus Social Security, will give me a comfortable retirement.
That is cool. So there are funds that will pay dividends and you can take a monthly draw on. I am going to ask the financial rep at Vanguard about this. How did you do when the recession hit? Investing in all stocks seems so risky to me.

What made you choose a Roth as opposed to a traditional IRA? From your post, it looks like this is your only retirement fund in addition to Social Security.
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Old 02-05-2017, 09:11 AM
 
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read my warning above about drawing dividends .
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Old 02-05-2017, 09:19 AM
Status: "Gaining Stability." (set 10 days ago)
 
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I just did.
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Old 02-05-2017, 09:29 AM
 
Location: Omaha, Nebraska
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Quote:
Originally Posted by goodlife36 View Post
I took a look at the 2015 Target fund and the stock percentage is 45. Will I have to choose my own funds at that point? I know this is a long way off. I am just curious.
Not if you keep the target fund. It's an all-in-one fund. All the stocks and bonds, as well as the stock:bond ratio, are chosen by the firm offering the fund.

Now if you want a different percentage of stocks than the target fund is offering, you'll need to sell the fund and buy a different one that offers the percentage of stocks you want. But that's easy to do as long as the funds are being held inside a retirement account. (There can be significant tax consequences to such a sale outside a retirement account, though.)
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