How seriously do you guys take saving for retirement?

[zx10guy]

Originally Posted by burro_blasta

Love this thread!

If I could humbly make a couple book recommendations that I loved and fit the convo:

The Psychology of Money is maybe my favorite on compounding, staying invested, staying simple, etc. Just Keep Buying was also great on these concepts.

Die with Zero was great and sort of the opposite, about enjoying life along the way and not torturing yourself by sacrificing too many life experiences just to max out savings because some people aren’t even able to spend it all in retirement. In short, your three profound life resources are time, money, and health: when you’re young you have time and health, when retired you have time and money, but in your late 30s-early 50s you might have the best reasonable combo of all three so live it up

You are absolutely correct about the three pillars: time, money, and health. But I would make an adjustment about the youth and health part. You never know how your health will be at any age. Yes, the chances of things happening when you're young is much lower than when you're older. But not at zero. And if you do have a health issue that impacts your life significantly, it's many times at the worst end of the spectrum. An example is if you get hit by cancer even though you've done everything right in living a healthy life style.

Again, it's about finding the balance of saving with the anticipation of living many years but also not to lose sight of the fact tomorrow is not promised to any of us. Outside of health and things we have an influence on, you never know if you get hit by the proverbial bus one day.

[dradernh]

Originally Posted by zx10guy

I got a rough estimate for the replacement of my roof and it came in at around $17k for just architectural shingles.

This reminds me that it's wise to get a roofer to inspect the roof of a home on which you've made an offer. We had the "home inspector" do it on one home, and the only issue was that the roof had snow on it until the closing date and so it remained uninspected.

We ended up replacing that roof a decade later and came to grips with the issue of roofing square footage vs. living space square footage. That home – along with its attached breezeway, large garage, and kennel – had a massive amount of roof for 2,100' of living space. We paid accordingly at re-roofing time.

Here's the kicker regarding expensive home maintenance items: when you put your home on the market, maintenance items like roofs and windows that haven't been replaced very recently aren't going to make your home more valuable. The buyers of the home noted above got 50-year architectural roofing shingles with five years on them along with 37 double pane windows that were two years old.

[zx10guy]

Originally Posted by dradernh

This reminds me that it's wise to get a roofer to inspect the roof of a home on which you've made an offer. We had the "home inspector" do it on one home, and the only issue was that the roof had snow on it until the closing date and so it remained uninspected.

We ended up replacing that roof a decade later and came to grips with the issue of roofing square footage vs. living space square footage. That home – along with its attached breezeway, large garage, and kennel – had a massive amount of roof for 2,100' of living space. We paid accordingly at re-roofing time.

Here's the kicker regarding expensive home maintenance items: when you put your home on the market, maintenance items like roofs and windows that haven't been replaced very recently aren't going to make your home more valuable. The buyers of the home noted above got 50-year architectural roofing shingles with five years on them along with 37 double pane windows that were two years old.

It won't make your house more valuable with those large ticket items being done recently, but depending on how long it's been, it most likely will lower what you can ask for your home in relation to what current market is. I know a good realtor will either deduct from the listing price the cost of replacing major old items with the house or ask for a certain amount of money from the sale of the home to be put into an escrow account to be used to update those old items. This is assuming a standard market. Of course in a seller's market, all sensibility goes out the window.

The other variable is I've been hearing in some circumstances insurance companies are not writing policies on homes with very old roofs until they're replaced. So a finalizing a sale on a home can be put into jeopardy if this circumstance comes up.

[mc-m3]

I agree with all the above. Note that it is much easier to save/invest for your future if you don't buy $hit that you can't afford. i.e. NEVER carry over a credit card balance. Pay it off every month. The only thing we ever paid for over time was cars and houses. Retired last year after being laid off for the second time in 10 years, this time I was ~63. It was hard enough finding a job in high-tech at 53 so this time I called it quits. We paid cash for our most recent car without even denting retirement savings.

[Esteban]

^ This! I use a credit card almost daily (don’t even carry cash anymore) but always pay it off every month.

[UncleWede]

If your employer is matching, you better be maxing out that FREE MONEY!!!!

My employer at the time (US Navy) had free classes on retirement. I went around age 28, and brought down the room average significantly. One exercise was to calculate how much you would need to retire. My number (from '94) was $4mil, so I'm still working.

[floridaorange]

Plan to live off the interest from my money market acct. Assuming most luxury car owners intend on doing something similar. Or else you should be driving something much more modest.

[zx10guy]

Originally Posted by mc-m3

I agree with all the above. Note that it is much easier to save/invest for your future if you don't buy $hit that you can't afford. i.e. NEVER carry over a credit card balance. Pay it off every month. The only thing we ever paid for over time was cars and houses. Retired last year after being laid off for the second time in 10 years, this time I was ~63. It was hard enough finding a job in high-tech at 53 so this time I called it quits. We paid cash for our most recent car without even denting retirement savings.

Originally Posted by Esteban

^ This! I use a credit card almost daily (don’t even carry cash anymore) but always pay it off every month.

Yep. I use credit cards for most of my purchases. Barely use cash. As you both said, I pay off the balance each month so no interest being paid. Very un Dave Ramsey like.

I do so because of all the benefits of using my credit cards. Cash back is chief amont the benefits. I figure if I'm going to be paying for an expense anyways cash or credit, might as well get a little of a discount where as paying cash I get zero discount. Also, my AMEX has buyers protection with extending warranties on certain items up to an additional year and 90 days of lost/stolen/accidental damage protection. Both benefits I've used with no gotchas.

Credit cards are a tool and with anything it requires a thorough understanding of how to use it and what the pitfalls are if used improperly.

[dradernh]

Originally Posted by zx10guy

It won't make your house more valuable with those large ticket items being done recently, but depending on how long it's been, it most likely will lower what you can ask for your home in relation to what current market is. I know a good realtor will either deduct from the listing price the cost of replacing major old items with the house or ask for a certain amount of money from the sale of the home to be put into an escrow account to be used to update those old items. This is assuming a standard market. Of course in a seller's market, all sensibility goes out the window.

The other variable is I've been hearing in some circumstances insurance companies are not writing policies on homes with very old roofs until they're replaced. So a finalizing a sale on a home can be put into jeopardy if this circumstance comes up.

Excellent insights - thanks!

[Lady Jane]

Originally Posted by floridaorange

Plan to live off the interest from my money market acct. Assuming most luxury car owners intend on doing something similar. Or else you should be driving something much more modest.

[Pauly Wauly]

Originally Posted by Esteban

^ This! I use a credit card almost daily (don’t even carry cash anymore) but always pay it off every month.

I do the same thing. I pay for everything (that I can) with a credit card and I pay it off every month before the due date.

I've gone on vacation quite a few times with just the points that I accumulated with my credit card.

[FrankMstein]

I had to google "retirement". I also googled "warranty".

[tracknut]

As many others, I started saving when I was in high school. I retired when I was 49yo. Looking back, the only thing I'd do different, saving-wise, is to put every bit of that (aside from the usual expenses and emergency fund stuff) into stock market index fund rather than diddling around with individual stocks or *gasp* putting it in a savings account at a bank.

[DrVenture]

Originally Posted by floridaorange

Plan to live off the interest from my money market acct. Assuming most luxury car owners intend on doing something similar. Or else you should be driving something much more modest.

I am sure that you know that prior to the last couple years, MMF were paying essentially zero for a decade.

[DrVenture]

Originally Posted by tracknut

As many others, I started saving when I was in high school. I retired when I was 49yo. Looking back, the only thing I'd do different, saving-wise, is to put every bit of that (aside from the usual expenses and emergency fund stuff) into stock market index fund rather than diddling around with individual stocks or *gasp* putting it in a savings account at a bank.

I do both individual stocks and mutual funds. Individual stocks are much more work. Buying and selling at the appropriate time is sorta the point. You gain the granularity of making a purchase at the right time and selling at a big profit. I picked up some AMZN at $85 in Dec 2022. More than doubled in about 6 months. But, you have to buy and sell, to make that work. And let go of losers. And pull the trigger on potential winners. Not necessarily keeping them for ever.

Then one should compare their individual stock results with a simple index fund to see if it is working over the long haul. If not, you are wasting time, and maybe money. Unlike most people that I know, I have no problem buying into weakness (corrections, dips, even recessions). Many won't even look at their statements during such times.

Long story, shortened - Most should stick with mutual funds, and index funds specifically. I do extended market index and complement that with growth and sector funds. Balancing it all with fixed income to reduce risk as required. If you do not know what you are doing and stay on top of it, it may end badly.

[nerdogray]

This is all great, but life does end... and quality of life generally drops precipitously prior to that point. If you have the disposable income to actually save and keep saving year after year without "living for the future," that's great. In the case of family, there is no question my method is a non-starter. But it's all about me. I live for the day. I did not have the opportunities for stability and ever-increasing income that many (most) seem to have experienced. I was never able to save for very long, often having to deplete any savings to last until able to secure another job. So after a few decades of that, it's what you learn to do... make do with what you have and enjoy the "now." I have $400 in the bank and an M5 in the garage. I live in a good place, though I pay a stupid amount of rent for what I get. My life is sustainable and predictable, however, and next payday will arrive before anything hits that account. Sounds completely fucked based on all the wisdom presented, but not everyone has a story of financial profundity.

[DrVenture]

Without reading every post in all three pages, I may be repeating what has been said already. Getting that money in there early is the best thing you can do. Most people will never miss 6% tax-deferred into a TIRA or 401K. I really started ramping up my tax-deferred contributions as I got older, but mainly for the tax advantages.

For younger folks, the Roth may be the way to go. Don't need workplace savings for that or a TIRA, of course. You never pay a penalty on withdrawals of basis and can earn a lot of return and never pay taxes on it. Pay no attention to the folks who say that "the government is coming for your retirement fund".

[DrVenture]

Originally Posted by nerdogray

This is all great, but life does end... and quality of life generally drops precipitously prior to that point. If you have the disposable income to actually save and keep saving year after year without "living for the future," that's great. In the case of family, there is no question my method is a non-starter. But it's all about me. I live for the day. I did not have the opportunities for stability and ever-increasing income that many (most) seem to have experienced. I was never able to save for very long, often having to deplete any savings to last until able to secure another job. So after a few decades of that, it's what you learn to do... make do with what you have and enjoy the "now." I have $400 in the bank and an M5 in the garage. I live in a good place, though I pay a stupid amount of rent for what I get. My life is sustainable and predictable, however, and next payday will arrive before anything hits that account. Sounds completely fucked based on all the wisdom presented, but not everyone has a story of financial profundity.

I don't think anyone here is looking to criticize or shame anyone. Just offer sound advice for those who are in a position to work with it.

I might add that the notion people are unable to enjoy life after 50 has not been my observation. Most my friends are 60 and older and still living well physically. My parents did not begin any real decline until well into their 80's. Same for my wife's. My dad made 96 and was pretty happy right up until the end. He stopped driving in his late 80's.

[DrVenture]

Originally Posted by zx10guy

It won't make your house more valuable with those large ticket items being done recently, but depending on how long it's been, it most likely will lower what you can ask for your home in relation to what current market is. I know a good realtor will either deduct from the listing price the cost of replacing major old items with the house or ask for a certain amount of money from the sale of the home to be put into an escrow account to be used to update those old items. This is assuming a standard market. Of course in a seller's market, all sensibility goes out the window.

The other variable is I've been hearing in some circumstances insurance companies are not writing policies on homes with very old roofs until they're replaced. So a finalizing a sale on a home can be put into jeopardy if this circumstance comes up.

Good points. I am not planning on moving in retirement, as I like my home, neighbors and neighborhood. Several of my neighbors (and i) have been doing a lot of upgrades and maintenance to our 25 year old homes. They will definitely sell for more than the ones that have done nothing. But, if I were to move, I would be looking for that house that a retiree bought and sunk $200k into, that would be the deal! Basically, what my new neighbor just did. I'd buy his house without a second thought.

[XutvJet]

Originally Posted by Pauly Wauly

I do the same thing. I pay for everything (that I can) with a credit card and I pay it off every month before the due date.

I've gone on vacation quite a few times with just the points that I accumulated with my credit card.

^This. Pay off your CCs every month and take advantage of the travel points and/or cash back. Free money! We routinely get a number of free flights each year which usually amount to $2K-3K.

Same with 401Ks. ALWAYS put in up to the employer match at a minimum. That is free money. If the 401K investment options are good, consider doing more. For me, I only do up to the match as my investment options aren't great. I do my own investing with Vanguard.

[XutvJet]

Originally Posted by tracknut

As many others, I started saving when I was in high school. I retired when I was 49yo. Looking back, the only thing I'd do different, saving-wise, is to put every bit of that (aside from the usual expenses and emergency fund stuff) into stock market index fund rather than diddling around with individual stocks or *gasp* putting it in a savings account at a bank.

Pretty much agree. My S&P500 index funds have largely out paced the stocks I've had. Now I'm largely in S&P500 index funds and about 20% in Berkshire Class B. Occasionally, I'll take $10K-20K from our (collects around 5%) once it gets really large and use that money to invest in a "what the hell" stock every few years. My prior one was Activison Blizzard which I made about $50K on when they got bought by MS. My most recent one is Rivian. I'm doubtful it will turn into an Activision Blizzard, but what the hell

[XutvJet]

Originally Posted by nerdogray

This is all great, but life does end... and quality of life generally drops precipitously prior to that point. If you have the disposable income to actually save and keep saving year after year without "living for the future," that's great. In the case of family, there is no question my method is a non-starter. But it's all about me. I live for the day. I did not have the opportunities for stability and ever-increasing income that many (most) seem to have experienced. I was never able to save for very long, often having to deplete any savings to last until able to secure another job. So after a few decades of that, it's what you learn to do... make do with what you have and enjoy the "now." I have $400 in the bank and an M5 in the garage. I live in a good place, though I pay a stupid amount of rent for what I get. My life is sustainable and predictable, however, and next payday will arrive before anything hits that account. Sounds completely fucked based on all the wisdom presented, but not everyone has a story of financial profundity.

Don't you have sleepless nights knowing you're one fairly minor health situation away from potential bankruptcy?

It does not compute with me that someone with a newer $100K+ M5, pays high rent, and has $400 in the bank and says they can't invest. A pretty minor change in lifestyle would change that. The reality is most of us living into their 70s. Retirement life on social security only is pretty dismal unless you're in stellar shape, live a small cabin, and you forage for all your food