schmellba99 said:

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torrid said:

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infinity ag said:

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torrid said:

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AW 1880 said:

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For that $1 million, are we talking liquid funds or net worth, and does home equity count towards the million?

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A financial planner may say no, but personally I do. Two reasons behind that.

One, by not having a mortgage that means I will not have a monthly note to pay in retirement. Also, it is equity I can tap into if I really need it.

I will say this. If your net worth is entirely wrapped up in your home's equity, you will probably have an unhappy retirement. I money in several areas, my home being just one of them.

One other comment. I've had my house paid off for years. In retrospect, I would have been better off putting some of that money in the stock market instead. However, I'm not going back on that decision.

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I bought my house in 2010 and paid it off in 2018. Best decision I made. It's not just the financial part, it is the mental peace part of it. When my job got unsteady (which it did many times), I never had to worry about a mortgage payment. Mental peace does not have a price, it is invaluable.

So I think you did the right thing.

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I've discussed this with other people. Paying off your mortgage early is not a financial decision, it's an emotional one. And one I'm glad I made.

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I've got a couple 2 or 3 freinds that are finance guys. Every single one of them has said that they have yet to have a client that regretted paying their house off early.

Sure, you might be able to make a little extra money in the markets over the years, but not enough to offset the fact that not having a mortgage is worth a lot more on the other side of the equation than it is on the financial one most of the time.

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Ive made a conscious decision to not pay mine off. My interest rate is 2.45% and I have it timed where it will be paid off 1 year before my target retirement age. I am putting that money in the market.

All other debt is gone though.

Pools, trucks, and Magnolia-esque renos are more important than financial independence. Good work, gen X.

BigN--00 said:

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torrid said:

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Any Gen X'er that started saving for retirement as soon as they got their first job out of school, and I mean putting enough into their 401k to get the full match, should be sitting on a nice little nest egg at this point.

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I doubt there was much information was out there about 401K's and getting the full match starting in 1983 when Gen X joined the workforce. For that matter, how many companies had them back then?

I would argue that for the vast majority of American's with retirement on there mind, 401K's did not become important until the early 2000's. This would clearly put (elder) Gen X at a disadvantage, as many of them hey joined a workforce without pensions or any other alternative.

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And neither did generations previous to Gen X including the maligned Boomers.

Tom Fox said:

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schmellba99 said:

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torrid said:

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infinity ag said:

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torrid said:

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AW 1880 said:

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For that $1 million, are we talking liquid funds or net worth, and does home equity count towards the million?

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A financial planner may say no, but personally I do. Two reasons behind that.

One, by not having a mortgage that means I will not have a monthly note to pay in retirement. Also, it is equity I can tap into if I really need it.

I will say this. If your net worth is entirely wrapped up in your home's equity, you will probably have an unhappy retirement. I money in several areas, my home being just one of them.

One other comment. I've had my house paid off for years. In retrospect, I would have been better off putting some of that money in the stock market instead. However, I'm not going back on that decision.

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I bought my house in 2010 and paid it off in 2018. Best decision I made. It's not just the financial part, it is the mental peace part of it. When my job got unsteady (which it did many times), I never had to worry about a mortgage payment. Mental peace does not have a price, it is invaluable.

So I think you did the right thing.

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I've discussed this with other people. Paying off your mortgage early is not a financial decision, it's an emotional one. And one I'm glad I made.

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I've got a couple 2 or 3 freinds that are finance guys. Every single one of them has said that they have yet to have a client that regretted paying their house off early.

Sure, you might be able to make a little extra money in the markets over the years, but not enough to offset the fact that not having a mortgage is worth a lot more on the other side of the equation than it is on the financial one most of the time.

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Ive made a conscious decision to not pay mine off. My interest rate is 2.45% and I have it timed where it will be paid off 1 year before my target retirement age. I am putting that money in the market.

All other debt is gone though.

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I never had a mortage rate like that. I was elated when I re-fi'd to 4.5% fixed.

Logos Stick said:

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Quote:

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but expect to accumulate just $603,000

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The vast majority won't have near that much in the end, even including the equity in their home.

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Saw a video the other day
Nationwide ~3% are in the 2 comma club, but that includes home equity. Its WAY smaller when you exclude the house.

Even still a 1,000,000 portfolio with generally accepted safe withdrawal rates will only yield ~40-50k a year.
If the house is paid off that along with SS (yeah i know) will yield a comfortable retirement but you're not really taking any big or extravagant vacations or trips.

oh no said:

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you can't draw from your 401k without penalty until you're 60. you can't get any social security until you're 71 (if there's anything left at that point). the value of our currency only goes down with our bloated socialist government growth and spending. if anyone wants to have any sort of retirement before then, like at 55, you have to not only put enough away in 401k/IRA your whole adult life, but also save and invest a lot more outside of that. why don't they teach this stuff in school?

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Same reason they don't teach actual civics or what the Constitution actually says or how to calculate taxes in a convoluted and stupid tax system in school - because a dumbed down populace that has no money and is dependent on the government is a much easier populace to control, which those that wish to remain in power generally like.

Yeah, yeah, conspiracy theorist and all that jazz. But the bottom line is that instead of continually lowering the bar in education and wasting time on a lot of the things in junior high and high school that aren't necessary or even practical in the post basic education world, we should be teaching things like personal finance, how investing works, actual civics, etc.

Queso1 said:

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They will confiscate 401ks and IRAs. Thats damned near guaranteed. Who is going to vote for that? These folks: the millions of 3rd world immigrants and those that think you wrongfully acquired your wealth. Either that or they will wipe it out through inflation/devaluation of the dollar.

Hate to be so negative, but it's gonna happen.

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The opening, incrementalist salvos were fired during the Biden administration:

- Ron Wyden has been on the taxing unrealized gains bandwagon for several years even before Biden was in office. Once that gets in place for one income group then it will naturally trickle down to others.
- Biden proposed the following during his administration: (1) changing the tax treatment of 401k contributions which would have punished higher earners (2) remove backdoor Roths and mega-backdoor Roths (3) require RMDs on larger 401k balances

In addition, in last week's negotiations to reform ACA the Republicans proposed making HSA's more flexible and with greater contributions to help with healthcare costs, but the Democrats shot it down.

The Democrats do not want people to be able to stand on their own two feet. They want you dependent on the government.

Kenneth_2003 said:

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Logos Stick said:

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Quote:

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but expect to accumulate just $603,000

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The vast majority won't have near that much in the end, even including the equity in their home.

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Saw a video the other day
Nationwide ~3% are in the 2 comma club, but that includes home equity. Its WAY smaller when you exclude the house.

Even still a 1,000,000 portfolio with generally accepted safe withdrawal rates will only yield ~40-50k a year.
If the house is paid off that along with SS (yeah i know) will yield a comfortable retirement but you're not really taking any big or extravagant vacations or trips.

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That tells me though the gray area of people who fall out of 2 commas into 1 comma still likely have a networth in the $7-9M range unless they are living in extremely extravagant mansions of $5M or more.

Gen X here. Saving for retirement but not enough. I joke that I'll be able to retire at about noon on the day of my funeral. Realistically, I'll probably keep a corporate job until 75 and continue side hustles of one kind or another as long as I am physically and mentally able. I'll be 60 next year and still have a pre-teen child. I'm not where I want to be financially, but I am moving in the right direction.

Dad-O-Lot said:

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Gen X here. Saving for retirement but not enough. I joke that I'll be able to retire at about noon on the day of my funeral. Realistically, I'll probably keep a corporate job until 75 and continue side hustles of one kind or another as long as I am physically and mentally able. I'll be 60 next year and still have a pre-teen child. I'm not where I want to be financially, but I am moving in the right direction.

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Notes user name and this.

I found the problem.

YouBet said:

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Queso1 said:

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They will confiscate 401ks and IRAs. Thats damned near guaranteed. Who is going to vote for that? These folks: the millions of 3rd world immigrants and those that think you wrongfully acquired your wealth. Either that or they will wipe it out through inflation/devaluation of the dollar.

Hate to be so negative, but it's gonna happen.

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The opening, incrementalist salvos were fired during the Biden administration:

- Ron Wyden has been on the taxing unrealized gains bandwagon for several years even before Biden was in office. Once that gets in place for one income group then it will naturally trickle down to others.
- Biden proposed the following during his administration: (1) changing the tax treatment of 401k contributions which would have punished higher earners (2) remove backdoor Roths and mega-backdoor Roths (3) require RMDs on larger 401k balances

In addition, in last week's negotiations to reform ACA the Republicans proposed making HSA's more flexible and with greater contributions to help with healthcare costs, but the Democrats shot it down.

The Democrats do not want people to be able to stand on their own two feet. They want you dependent on the government.

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I'm actually not concerned about this possibility. I do not know about then rest of you, but I'll spend my last moments on this earth taking in a congressional baseball game if this happens.

Not only are my retirement accounts overflowing, but I've also fully funded 401(k)s for all my house staff, including my driver, who I don't really like.

YouBet said:

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Dad-O-Lot said:

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Gen X here. Saving for retirement but not enough. I joke that I'll be able to retire at about noon on the day of my funeral. Realistically, I'll probably keep a corporate job until 75 and continue side hustles of one kind or another as long as I am physically and mentally able. I'll be 60 next year and still have a pre-teen child. I'm not where I want to be financially, but I am moving in the right direction.

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Notes user name and this.

I found the problem.

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Not a problem. It's a feature, not a bug; but yes, having 10 children did reduce what I could set aside for retirement. I don't regret any of it.

EclipseAg said:

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Not only are my retirement accounts overflowing, but I've also fully funded 401(k)s for all my house staff, including my driver, who I don't really like.

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I used to buy our maid lunch every time she was over cleaning because I worked from home.

I think you have one upped me here though.

Rich.

Been planning and saving since my late 20s. I'm 49 now and am ~57% of where I want to be, based on models. Plan is to retire from corporate world at 62 and consult or do something part time and fun until 67.

I wouldn't say I'm a far along as I want to be, but certainly okay for my age. My wife working basically just covers our kids college and vacation spending. I cover everything else.

Tom Fox said:

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BQ2001 said:

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figure out how much you spend in a year, multiply by 25 and you can get a ballpark retirement number that will be pretty comfortable. If you want to retire early, be sure to add the ACA or Healthcare needs into that yearly number (at least for the amount of years you need it) unless you go without insurance or get it from another source. Saving in a HSA for years is a great way to pay for that if you retire early.

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This interesting. Where did you come up with the 25 number?

My target has always been $15 million liquid. Your formula says that I need $12.5. So it is definitely in the ballpark.

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Look up FIRE and rule of 25. Basically the plan is to pull out 4% yearly for expenses, allow for 3% inflation and count on the market to average up 7% so you stay level. Obviously some years will be up more or down more but 7% on average growth. I personally feel better with doing x33 but it's fairly safe, check out some of the simulators out there like https://www.firecalc.com .

This is so weird to me. I am a horrible saver but still have a 30 year old Roth plus TRS from a career in state agencies. Barring being born into horrible circumstances where bad parents dont teach you, it doesn't compute for me that regular people dont plan even if it is pennies a month at the beginning. I will inherit my mother's whole estate but she comes from a very long-lived family so I dont plan on it funding our retirement, it is a safety net for any old age care she will need.

Detmersdislocatedshoulder said:

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gen x here

both wife and i have saved via 401k and additional precious metals etc so we have put ourselves in a decent position however personally i can not ever see myself retiring. not fully. i will do what i want but to me sitting around looking for something to do is cool for a while but would get old soon.

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Yep, same here.

I'll either go nuts with nothing to do or I'll turn into the fat slob that sits on the couch and dies about a year after I retire. And I know this.

My buddy and I joke that we'll be the guys that go work for the county and drive tractors all day mowing the highways or something like that. Basically I'll want something, but the caveat will be that I'll want something where I have zero real responsibility and more or less no stress. A type of job where I walk in and say "yess, boss" and go about my business until it's time to go home.

Emotional Support Cobra said:

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This is so weird to me. I am a horrible saver but still have a 30 year old Roth plus TRS from a career in state agencies. Barring being born into horrible circumstances where bad parents dont teach you, it doesn't compute for me that regular people dont plan even if it is pennies a month at the beginning.

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Most people can't/won't think long-term. When I started out in my career, I would beg my co-workers to at least get the 401k match and many just flat out refused. They wanted their paychecks to be bigger so they could go out more or would say they couldn't afford to not have that money.

Meanwhile, my wife at the time are doing our laundry at a local laundromat and hand washing dishes because we had no washer/dryer nor a dishwasher living in a 700 sq ft duplex. Yet, we were still at least getting the match for the free money. You can do it if you want to.

I think you also have to factor divorce rates. Divorce makes you poor. Don't do it unless you have to but many, many people get divorced during peak earning years and it permanently f*s them.

My dad retired at 55 and then delivered mail for about 3 years before they fully adjourned to the Texas coast.

Tom Fox said:

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schmellba99 said:

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torrid said:

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infinity ag said:

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torrid said:

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AW 1880 said:

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For that $1 million, are we talking liquid funds or net worth, and does home equity count towards the million?

---

A financial planner may say no, but personally I do. Two reasons behind that.

One, by not having a mortgage that means I will not have a monthly note to pay in retirement. Also, it is equity I can tap into if I really need it.

I will say this. If your net worth is entirely wrapped up in your home's equity, you will probably have an unhappy retirement. I money in several areas, my home being just one of them.

One other comment. I've had my house paid off for years. In retrospect, I would have been better off putting some of that money in the stock market instead. However, I'm not going back on that decision.

---

I bought my house in 2010 and paid it off in 2018. Best decision I made. It's not just the financial part, it is the mental peace part of it. When my job got unsteady (which it did many times), I never had to worry about a mortgage payment. Mental peace does not have a price, it is invaluable.

So I think you did the right thing.

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I've discussed this with other people. Paying off your mortgage early is not a financial decision, it's an emotional one. And one I'm glad I made.

---

I've got a couple 2 or 3 freinds that are finance guys. Every single one of them has said that they have yet to have a client that regretted paying their house off early.

Sure, you might be able to make a little extra money in the markets over the years, but not enough to offset the fact that not having a mortgage is worth a lot more on the other side of the equation than it is on the financial one most of the time.

---

Ive made a conscious decision to not pay mine off. My interest rate is 2.45% and I have it timed where it will be paid off 1 year before my target retirement age. I am putting that money in the market.

All other debt is gone though.

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Mine is a smidge higher than yours, but below 3%. I still want to pay it off early though. I have 2 kids that will be in college soon and my goal is to more or less have all of my toys, etc. before I retire so that when I finally do retire I have a minimal amount of expected expenses.

I'm selling the place I have now, will find me some land and build a barndo on it and that will be where I kick the bucket eventually. My only goal will be to be albe to continue to buy guns here and there. Outside of food, electricity, etc. that's the only bill I want.

I'm Gen X to the core and I retired at 50. No matter what generation you're in if you don't plan when you're young that's on you.

Thank God, I had such an awesome dad that encouraged me to do so at every turn. Glad I listened to him. But then I usually did.

GenX here and just turned 50. I am set to retire at 55 if I choose to.

There's definitely a subset of the population that has been completely lapped/left-behind financially due to not being invested in the market the last decade or so.

But you also see some people (posters) who think they've got the next 20 years figured out because they've been investing successfully during one of the longest and biggest bull runs in the history of the market so they assume that will continue into perpetuity.

I've never really understood the "paying off the mortgage early is an emotional decision so it's OK that I've missed out on higher market gains".

You're still paying property taxes.

Proposition Joe said:

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There's definitely a subset of the population that has been completely lapped/left-behind financially due to not being invested in the market the last decade or so.

But you also see some people (posters) who think they've got the next 20 years figured out because they've been investing successfully during one of the longest and biggest bull runs in the history of the market so they assume that will continue into perpetuity.

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Who on this thread is assuming they will continue into perpetuity? I think the vast majority of us that invested early and are doing well know two things for certain. 1) compounding interest is your friend. 2) the market has been and always will be volatile. No one said the returns the last few years were certain...

let's just hope there isn't something catastrophic like a hot war on the homeland or something crazy that completely crashes our currency and/or the major exchanges causing mass riots, looting, and chaos in the cities. it would be wise to hedge your risk and take some money out of the capital markets and put it in real property out in the country where you can raise some life sustaining crops and animals if needed. also, invest heavily in guns and ammo. teach your late gen z and gen alpha kids skills for building, mechanical repairs, farming, hunting, and self defense. they might need those a lot more than pre-calculus.

Proposition Joe said:

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There's definitely a subset of the population that has been completely lapped/left-behind financially due to not being invested in the market the last decade or so.

But you also see some people (posters) who think they've got the next 20 years figured out because they've been investing successfully during one of the longest and biggest bull runs in the history of the market so they assume that will continue into perpetuity.

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We have the same stunted mentality when thinking about the national debt. Most think it's fine to just let it run up in perpetuity without addressing it. Meanwhile, debt interest payments are now the #2 line item in annual spend by the government.

Over_ed said:

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MookieBlaylock said:

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wsince everyone is a inancial idiots- please give a detailed plan- genius

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1) Live way below your means
2) Marry, and to someone even cheaper than you are
3) Save, Save, Save
4) Occupation makes a difference, choose wisely
5) Be lucky, or at least not unlucky

I'll give you a quiz on this later, if it will help. Not really much to it, is there?

Edit - sp

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Do you ever get around to enjoying life in this approach?

There is a balance and deferred gratification is what tanks most people. Its not about saving the max, living below your means, and marrying a tight ass.

Develop a plan, remain diligent, plan for rainy days, weeks and months as appropriate.

Hoyt Ag said:

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Proposition Joe said:

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There's definitely a subset of the population that has been completely lapped/left-behind financially due to not being invested in the market the last decade or so.

But you also see some people (posters) who think they've got the next 20 years figured out because they've been investing successfully during one of the longest and biggest bull runs in the history of the market so they assume that will continue into perpetuity.

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Who on this thread is assuming they will continue into perpetuity? I think the vast majority of us that invested early and are doing well know two things for certain. 1) compounding interest is your friend. 2) the market has been and always will be volatile. No one said the returns the last few years were certain...

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infinity ag has a system he developed in 2014, he's basically set for life

Proposition Joe said:

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Hoyt Ag said:

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Proposition Joe said:

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There's definitely a subset of the population that has been completely lapped/left-behind financially due to not being invested in the market the last decade or so.

But you also see some people (posters) who think they've got the next 20 years figured out because they've been investing successfully during one of the longest and biggest bull runs in the history of the market so they assume that will continue into perpetuity.

---

Who on this thread is assuming they will continue into perpetuity? I think the vast majority of us that invested early and are doing well know two things for certain. 1) compounding interest is your friend. 2) the market has been and always will be volatile. No one said the returns the last few years were certain...

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infinity ag has a system he developed in 2014, he's basically set for life

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I do not take anything he says serious.

Proposition Joe said:

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I've never really understood the "paying off the mortgage early is an emotional decision so it's OK that I've missed out on higher market gains".

You're still paying property taxes.

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I think this is a straw man. Property taxes are permanent. Mortgage payments don't have to be. Two different pieces of that puzzle. I never factored opportunity costs of market gains in this decision because it wasn't relevant for our scenario.

It was a cash flow scenario for us.

We sold our highly appreciated house in Dallas and purchased a nicer house in a small town for cheaper. Paid cash and retired the mortgage.

And then I retired early. If we still had the mortgage, I would not have retired because I would need more cash flow to pay the mortgage without dipping into our savings money. We can handle the property taxes and insurance without the job but not the full nut because my wife makes enough with her small business to cover the taxes and insurance.

YouBet said:

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Proposition Joe said:

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I've never really understood the "paying off the mortgage early is an emotional decision so it's OK that I've missed out on higher market gains".

You're still paying property taxes.

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I think this is a straw man. Property taxes are permanent. Mortgage payments don't have to be. Two different pieces of that puzzle. I never factored opportunity costs of market gains in this decision because it wasn't relevant for our scenario.

It was a cash flow scenario for us.

We sold our highly appreciated house in Dallas and purchased a nicer house in a small town for cheaper. Paid cash and retired the mortgage.

And then I retired early. If we still had the mortgage, I would not have retired because I would need more cash flow to pay the mortgage without dipping into our savings money. We can handle the property taxes and insurance without the job but not the full nut because my wife makes enough with her small business to cover the taxes and insurance.

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My comment is about those who frame it as an emotional decision, yours obviously was not.

Decision to pay off your mortgage, or any asset backed debt, should be based on cash flow, interest rate, opportunity cost and level of comfort regarding significant debt.

I have plenty of equity in the house, cash flow is sufficient and my interest rate is below 3%. Being in business for myself over the past 15+ years has transitioned me from being debt averse to highly comfortable with it. So my factors say keep the mortgage.

And I absolutely get YouBet's position on going ahead and paying it off. Its a very individual decision.

TBF, I didn't start real retirement planning until my early 40s, thanks to a coworker who had the benefit of a financial advisor. Woke up really fast and started piling the money into savings and investment. 20 years later and our family is feeling secure with really good advice along the way.