All good advice. Thanks for everyone's input, it is all much appreciated!
Buck
Buck
I'm going to throw in my 2 cents.
Having been retired for almost exactly one year now, I reflect back on what got me where I'm at and the advice it took to get me here.
#1, talk to retired folks. See what they did right and what they wish they didn't do. Ask them if they used a financial planner or not.
On your own, go visit some financial planners, get a list of how they would invest your money if you retired today, no matter what your age.
Ask them how they get their money from you, and how much. Shoot them a hypothetical retirement figure of $500,000.00 dollars and ask them to tell you how they would invest that in todays market, and how that would work out for you in the 20-40 years you might live after retirement. Ask them to put that on paper, and then compile all of the responses and watch how they perform in the market. I did it all by using Morning Star and other stock market trending websites.
The market trends are certainly not the same now as they were when I was in my 50's and started this search, but it gave me a feel of how the agency I finally chose worked.
Co-workers that retired before me were a wealth of information.
My planner has been spot on with what he got me started in. With one year of disbursements, my account has only gone down $1600. Returns from investments have made up the difference. I make more in retirement Monthly than I did working, but you can't start saving when your 50 to get to that point.
Having been retired for almost exactly one year now, I reflect back on what got me where I'm at and the advice it took to get me here.
#1, talk to retired folks. See what they did right and what they wish they didn't do. Ask them if they used a financial planner or not.
On your own, go visit some financial planners, get a list of how they would invest your money if you retired today, no matter what your age.
Ask them how they get their money from you, and how much. Shoot them a hypothetical retirement figure of $500,000.00 dollars and ask them to tell you how they would invest that in todays market, and how that would work out for you in the 20-40 years you might live after retirement. Ask them to put that on paper, and then compile all of the responses and watch how they perform in the market. I did it all by using Morning Star and other stock market trending websites.
The market trends are certainly not the same now as they were when I was in my 50's and started this search, but it gave me a feel of how the agency I finally chose worked.
Co-workers that retired before me were a wealth of information.
My planner has been spot on with what he got me started in. With one year of disbursements, my account has only gone down $1600. Returns from investments have made up the difference. I make more in retirement Monthly than I did working, but you can't start saving when your 50 to get to that point.
Thanks for your input too Dennis. A lot of what you say is what we are in the process of doing. Gathering info to help us make a educated decision.
I am plowing through some of the same issues. A few additional things you might consider...
What will your income needs be? How much do you need for essentials, and how much would you like to have for comfort and enjoyment? I would recommend collecting annual costs, so you remember auto and home and health insurance, car tabs, etc.
Then, check to see what income sources you have to draw on. Check to see what social security benefits you can expect, and test the different options available. Easy things like when you start to draw benefits (waiting increases the monthly pay out) to fancier dances which may apply if you have a spouse (spousal benefits, start and suspend, etc.) You can get the plain vanilla estimate based on start date from the SSA.gov web page.
If you also have pension or annuities, add those to the income side.
Now, anything that is not Roth-based, you need to subtract state and local income taxes to estimate your net income.
So now you have expenses (essential and discretionary) and net income ("secure" social security and pension).
If annual expenses exceed annual income, the difference must come from investment income (including 401k and/or IRA) or reduced expenses. Again, if it is not Roth, the investment income will be taxed as income or maybe capital gains. A rule of thumb (not a guarantee) is that drawing 4% of your assets per year will last about 30 years.
Good luck !
What will your income needs be? How much do you need for essentials, and how much would you like to have for comfort and enjoyment? I would recommend collecting annual costs, so you remember auto and home and health insurance, car tabs, etc.
Then, check to see what income sources you have to draw on. Check to see what social security benefits you can expect, and test the different options available. Easy things like when you start to draw benefits (waiting increases the monthly pay out) to fancier dances which may apply if you have a spouse (spousal benefits, start and suspend, etc.) You can get the plain vanilla estimate based on start date from the SSA.gov web page.
If you also have pension or annuities, add those to the income side.
Now, anything that is not Roth-based, you need to subtract state and local income taxes to estimate your net income.
So now you have expenses (essential and discretionary) and net income ("secure" social security and pension).
If annual expenses exceed annual income, the difference must come from investment income (including 401k and/or IRA) or reduced expenses. Again, if it is not Roth, the investment income will be taxed as income or maybe capital gains. A rule of thumb (not a guarantee) is that drawing 4% of your assets per year will last about 30 years.
Good luck !
$500,000 at retirement invested and drawing 10% (not hard to find that) will produce $50,000 a year in interest alone. Can you live on that when everything is paid for? I can. But maybe you want to live on $60k instead, only reducing your principle amount by $10k a year.
And dont plan on SS. If its still there fine but it may not be.
And dont plan on SS. If its still there fine but it may not be.
10% on $500K with little to no risk on the principle, these days? You sure about that?
Like you said though, I'm not planning on social security. If it's there, it'll be gravy.
Like you said though, I'm not planning on social security. If it's there, it'll be gravy.
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Please let us know where to find that 10% in a safe investment.
^^what he said^^
I'm retired and sure can't find that 10% return in a safe place. Younger folks can take a little more risk because they have some time to catch back up on some losses. When near or at retirement, conservatism becomes much more important.
Yes, I used and still use a professional advisor - Ameriprise (formerly American Express)
By this logic, you apparently don't need doctors, lawyers, dentists, or mechanics...
My example of 500K was an example. If you have taken the route of preparing for retirement since you started in the workforce, it should be more than that at retirement.
I know there are craphole 401K programs that some companies have used, along with some that will contribute with you but some will not.
Had one company I worked for got into a program that was dismal to say the least. I worked for them 5 years and put in the max. 30 years later when I left that money in that 401K it drew a couple of hundred bucks, after tanking. I wasn't very smart leaving it there. lesson learned.
Move those 401K's into something that will make some money or at least hold their own.
So here is the deal. I visited several financial planners like I said before and got their plan of action before finally taking the advice of one that said he would give me tips on where he thought I should be putting my 401K into vs where it was at.
My bottom line blossomed more than where I thought it would. He did this for free and told me to check back with him every 6 months or so to see where the investments were at.
He wanted my business and went out of his way to get it. That is why I went with him. It wasn't an overnight decision.
Retirement should be a well planned event. Planned by doing your homework.
I know there are craphole 401K programs that some companies have used, along with some that will contribute with you but some will not.
Had one company I worked for got into a program that was dismal to say the least. I worked for them 5 years and put in the max. 30 years later when I left that money in that 401K it drew a couple of hundred bucks, after tanking. I wasn't very smart leaving it there. lesson learned.
Move those 401K's into something that will make some money or at least hold their own.
So here is the deal. I visited several financial planners like I said before and got their plan of action before finally taking the advice of one that said he would give me tips on where he thought I should be putting my 401K into vs where it was at.
My bottom line blossomed more than where I thought it would. He did this for free and told me to check back with him every 6 months or so to see where the investments were at.
He wanted my business and went out of his way to get it. That is why I went with him. It wasn't an overnight decision.
Retirement should be a well planned event. Planned by doing your homework.
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