For all you older guys/gals close to retirement: Any advice?

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BHawks87
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For all you older guys/gals close to retirement: Any advice?

Post by BHawks87 »

Any advice for us younger investors? Anything you wish you knew years ago? Any mistakes you made that were easily avoidable? Anything you would have done differently if you were given the chance?


Thanks in advance for responses.
floatingdoc
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Re: For all you older guys/gals close to retirement: Any adv

Post by floatingdoc »

Buy less house, save more, retire early.
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FelixTheCat
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Re: For all you older guys/gals close to retirement: Any adv

Post by FelixTheCat »

If I had to do it over again....
  • Save a minimum of 20% of my income from day 1. More if you could afford.
  • Live within my means (no credit card)
  • Make sure about the one you marry because divorce is a wealth killer.
  • Never fry bacon naked. :D
Felix is a wonderful, wonderful cat.
btenny
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Re: For all you older guys/gals close to retirement: Any adv

Post by btenny »

Invest in real estate and put sweat equity into improving and managing the properties while you are young and have the energy to do the work. The returns from doing this are giant compared to passive returns in the stock market. Yes there are risks but the returns are just much better if you work hard and smart. The key to making money this way is to buy the properties at LOW prices and then hold them long term, at least 10 years or more and forever if you can keep up the management. A huge percentage of the older rich people I know are rich through real estate and most still collect rents once a month......

But do keep investing and saving in Boglehead fashion as a backup to your real estate stuff as a additional leg of your retirement stool.. This means also putting money into an IRA or 401K and a good amount into taxable savings.

Good Luck
Bill
reggiesimpson
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Re: For all you older guys/gals close to retirement: Any adv

Post by reggiesimpson »

Be frugal as a way of life.
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HardKnocker
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Re: For all you older guys/gals close to retirement: Any adv

Post by HardKnocker »

No matter what you're occupation or profession, whether a business owner or employee, approached your financial life as though you are in business for yourself.

Invest a goodly amount of your earnings in a profitable manner with the target of financial freedom so that someday you can get off the treadmill.

Work together as a team with mutual goals.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett
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Random Musings
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Re: For all you older guys/gals close to retirement: Any adv

Post by Random Musings »

jenny345 wrote:Look at your expenses over the rest of your life and see how small cuts or increases can add up. Just getting in the habit of using cloth instead of paper towels and napkins may only save $10 a month but over 50 years there is $6K.
Reminds me of a time when I went to a house where they used cloth - there was the "family towel" in the kitchen.

Heaven knows how long they used that thing (plus all the things it was used for) before throwing it into the washer. Yuck !!

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
Grt2bOutdoors
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Re: For all you older guys/gals close to retirement: Any adv

Post by Grt2bOutdoors »

BHawks87 wrote:Any advice for us younger investors? Anything you wish you knew years ago? Any mistakes you made that were easily avoidable? Anything you would have done differently if you were given the chance?


Thanks in advance for responses.
Choose your spouse/significant other wisely. Avoid spendaholics at all costs!!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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CaliJim
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Re: For all you older guys/gals close to retirement: Any adv

Post by CaliJim »

BHawks87 wrote:Any advice for us younger investors? Anything you wish you knew years ago? Any mistakes you made that were easily avoidable? Anything you would have done differently if you were given the chance?

Wish I'd read these books sooner: http://www.bogleheads.org/wiki/Books:_R ... t-up_Books
-calijim- | | For more info, click this Wiki
Badinvestor
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Re: For all you older guys/gals close to retirement: Any adv

Post by Badinvestor »

My #1 piece of advice is get a government job. You get health benefits in retirement which in America is priceless. You also get tenure, early retirement, and other benefits.
Muchtolearn
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Re: For all you older guys/gals close to retirement: Any adv

Post by Muchtolearn »

Not get married the first time without a prenup. And not get married the second time even though I had one. People say the cost of divorce is high. That may be true. But to somebody who is not a big spender and doesn't have large material needs or travel needs, the cost of marriage is high in dollar terms. I don't even want to go into the emotional terms :oops:
hsv_climber
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Re: For all you older guys/gals close to retirement: Any adv

Post by hsv_climber »

imgritz wrote:If I had to do it over again....
  • Never fry bacon naked. :D
Any specific story to share with this advice? 8-)
Fallible
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Re: For all you older guys/gals close to retirement: Any adv

Post by Fallible »

BHawks87 wrote:Any advice for us younger investors? Anything you wish you knew years ago? Any mistakes you made that were easily avoidable? Anything you would have done differently if you were given the chance? ...
My advice re the first question is to save regularly to take advantage of the power and the glory of compounding; to the second and third questions, not saving early enough; to the last question, saved earlier and more.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Wannaretireearly
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Re: For all you older guys/gals close to retirement: Any adv

Post by Wannaretireearly »

frose2 wrote:My #1 piece of advice is get a government job. You get health benefits in retirement which in America is priceless. You also get tenure, early retirement, and other benefits.
I am very tempted to apply for a govt job. I am looking at openings on usajobs.com presently.
Any words of advice? I would be applying for IT management/ leadership roles.

I want to be able to retire early, but also want a fulfilling career over the next 15-20 years. Any pitfalls to be aware of?

Feel free to PM me directly. Thanks!
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Muchtolearn
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Re: For all you older guys/gals close to retirement: Any adv

Post by Muchtolearn »

[off topic comment deleted by admin alex]
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VictoriaF
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Re: For all you older guys/gals close to retirement: Any adv

Post by VictoriaF »

1. Save a lot, build your asset base for financial independence. You may become independent in various ways, including:
- your own timing, i.e., early retirement,
- your employer's timing, i.e., an early retirement offer,
- your decision if the working conditions become unsatisfactory,
- not your choice, e.g., due to a layoff.
Whatever the circumstances are and whoever is making the initial decision, the more money you have at any point of time the better you will be able to take advantage of the circumstances. (As you bring home bacon -- based on imgritz » 16 May 2012, 14:54 -- avoid frying it naked.)

2. Do not buy a house that is too expensive, do not carry a large mortgage. You may be able to pay large mortgage out of your salary, but not if you take an early retirement. Many people, especially real estate agents, will tell you to buy the most expensive house you can afford. Challenge this "rule." Think what is more important to you, a better house or the freedom to work or not work on your own terms.

3. As you build your asset base, and particularly as you are approaching the time when you are ready to jump into early retirement, make your asset allocation ever more conservative. On one hand, 'if you have won the game, there is no need to keep playing.' On the other hand, you may get laid off or get a retirement offer at the time when the markets are experiencing a sharp decline. Assume that you could lose a half (50%) of your equity holdings, and reduce your equity allocation to the level at which a loss of 50% would not qualitatively change your life.

4. Cultivate a variety of interests outside work. Do not be defined by your job. Condition yourself to be hardly waiting for retirement rather than worrying what you would do all day long or whether people would respect you once you vacate your position of authority. Travel, learn languages, dream of new hobbies.

5. Keep yourself in a good physical condition. This could be the most important thing you could do for yourself.

6. Consider your long-term plans when making decisions to marry, divorce, or live in sin.

7. Be nice.

Good luck,

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Fallible
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Re: For all you older guys/gals close to retirement: Any adv

Post by Fallible »

VictoriaF wrote:1. Save a lot, build your asset base for financial independence. You may become independent in various ways, including:
- your own timing, i.e., early retirement,
- your employer's timing, i.e., an early retirement offer,
- your decision if the working conditions become unsatisfactory,
- not your choice, e.g., due to a layoff.
Whatever the circumstances are and whoever is making the initial decision, the more money you have at any point of time the better you will be able to take advantage of the circumstances.

2. Do not buy a house that is too expensive, do not carry a large mortgage. You may be able to pay large mortgage out of your salary, but not if you take an early retirement. Most people, especially real estate agents, will tell you to buy the most expensive house you can afford. Challenge this "rule." Think what is more important to you, a better house or the freedom to work or not work on your own terms.

3. As you build your asset base, and particularly as you are approaching the time when you are ready to jump into early retirement, make your asset allocation ever more conservative. From one hand, 'if you have won the game, there is no need to keep playing.' From the other hand, you may get laid off or get a retirement offer at the time when the markets are experiencing a sharp decline. Assume that you could lose a half (50%) of your equity holdings, and reduce your equity allocation to the level at which a loss of 50% would not qualitatively change your life.

4. Cultivate a variety of interests outside work. Do not be defined by your job. Condition yourself to be hardly waiting for retirement rather than worrying what you would do all day long or whether people would respect you once you vacate your position of authority. Travel, learn languages, dream of new hobbies.

5. Keep yourself in a good physical condition. This could be the most important thing you could do for yourself.

6. Consider your long-term plans when making decisions to marry, divorce, or live in sin.
...
Being retired already, I thought I knew all that you were going to say here. Then I got to the end... :shock:

Excellent advice all the way through. Especially liked the part re the financial freedom and options saving can bring. One of my favorite financial columnists, Jonathan Clements, wrote about this, too, in one of his WSJ columns some years ago. An example he gave was having cash to buy a car, major appliances, etc., and avoid debt.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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VictoriaF
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Re: For all you older guys/gals close to retirement: Any adv

Post by VictoriaF »

Fallible wrote:
VictoriaF wrote:...
6. Consider your long-term plans when making decisions to marry, divorce, or live in sin.
Being retired already, I thought I knew all that you were going to say here. Then I got to the end... :shock:
I was trying to offer young posters some alternatives that they may have not thought about themselves. :sharebeer

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
stan1
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Re: For all you older guys/gals close to retirement: Any adv

Post by stan1 »

Wannaretireearly wrote:
frose2 wrote:My #1 piece of advice is get a government job. You get health benefits in retirement which in America is priceless. You also get tenure, early retirement, and other benefits.
I am very tempted to apply for a govt job. I am looking at openings on usajobs.com presently.
Any words of advice? I would be applying for IT management/ leadership roles.

I want to be able to retire early, but also want a fulfilling career over the next 15-20 years. Any pitfalls to be aware of?
Federal employment (usajobs) isn't the way to go if this is your goal -- especially if you are already mid-career. Federal employees hired after 1984 are in FERS. CSRS was a good deal, and there are plenty of CSRS retirees out there (including some on this board I'm sure) with CSRS pensions well over $100K/yr. Make that a good deal for the employees -- not a good deal for taxpayers.

David Stockman saw this coming in 1984, and its different for FERS employees. Using your scenario of retiring in 15-20 years at minimum retirement age:

After 15 years of service your pension will be 15% (1%/yr) of your high 3 salary at age 57. If you stay until 62 (5 years longer) it will be 22% (1.1%/year of high 3). It's better than just social security, but for most its not enough to retire early on. I know many 20+ year FERS employees over the age of 57 who are still working -- and many expect to work until they are close to 70.

I think the best way to retire early is to do something entrepreneurial while living below your means. It's definitely not getting a federal job.
Last edited by stan1 on Wed May 16, 2012 8:39 pm, edited 3 times in total.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
Stonebr
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Re: For all you older guys/gals close to retirement: Any adv

Post by Stonebr »

Treasure your health: eat your veggies, run, bike, swim.
"have more than thou showest, | speak less than thou knowest" -- The Fool in King Lear
stan1
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Re: For all you older guys/gals close to retirement: Any adv

Post by stan1 »

Stonebr wrote:Treasure your health: eat your veggies, run, bike, swim.
Definitely this is most important, and often not appreciated until its too late.
We all can be one fall, heart attack, stroke, or tumor from a very different lifestyle.
Enjoy life now -- don't wait for later.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
Muchtolearn
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Re: For all you older guys/gals close to retirement: Any adv

Post by Muchtolearn »

6. Consider your long-term plans when making decisions to marry, divorce, or live in sin.

Above from Victoria. Where were you when I needed you. I messed up on all.
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LH
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Re: For all you older guys/gals close to retirement: Any adv

Post by LH »

one of many descriptions of the same approache. classic but free

http://www.ccsales.com/the_richest_man_in_babylon.pdf
(Somewhat idiosyncratic)

Read the millionaire mind by stanley as well.

also, your money or your life.

good luck,

LH
: )

PS not close to retirement per se, but way closer than most of my collegues : )
43, and light at the end of the tunnel
Wannaretireearly
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Re: For all you older guys/gals close to retirement: Any adv

Post by Wannaretireearly »

stan1 wrote:
Wannaretireearly wrote:
frose2 wrote:My #1 piece of advice is get a government job. You get health benefits in retirement which in America is priceless. You also get tenure, early retirement, and other benefits.
I am very tempted to apply for a govt job. I am looking at openings on usajobs.com presently.
Any words of advice? I would be applying for IT management/ leadership roles.

I want to be able to retire early, but also want a fulfilling career over the next 15-20 years. Any pitfalls to be aware of?
Federal employment (usajobs) isn't the way to go if this is your goal -- especially if you are already mid-career. Federal employees hired after 1984 are in FERS. CSRS was a good deal, and there are plenty of CSRS retirees out there (including some on this board I'm sure) with CSRS pensions well over $100K/yr. Make that a good deal for the employees -- not a good deal for taxpayers.

David Stockman saw this coming in 1984, and its different for FERS employees. Using your scenario of retiring in 15-20 years at minimum retirement age:

After 15 years of service your pension will be 15% (1%/yr) of your high 3 salary at age 57. If you stay until 62 (5 years longer) it will be 22% (1.1%/year of high 3). It's better than just social security, but for most its not enough to retire early on. I know many 20+ year FERS employees over the age of 57 who are still working -- and many expect to work until they are close to 70.

I think the best way to retire early is to do something entrepreneurial while living below your means. It's definitely not getting a federal job.
Thanks for the reality check Stan! Appreciate the info
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
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burt
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Re: For all you older guys/gals close to retirement: Any adv

Post by burt »

floatingdoc wrote:Buy less house, save more, retire early.
Very good.

I might add: Buy less car, no debt.

burt
Mitchell777
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Re: For all you older guys/gals close to retirement: Any adv

Post by Mitchell777 »

Looking back, I would have had much more of my money in equities (index funds) when I was in my 20's and 30's. I was much too conservative. The problem is that there will be things you did not anticipate that will occur and you need to react. I did not anticipate losing a job just prior to qualifying for a pension and health care. I did not anticipate this very fragile economy just prior to considering retirement. Also did not anticipate the skyrocketing of health care costs or having pre existing conditions. Not saying I did not realize all these things could occur. Just did not anticipate the perfect storm. But, because I saved a considerable amount of my income, I could adjust. Save a considerable amout of your income. Invest wisely and at a low cost.
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Re: For all you older guys/gals close to retirement: Any adv

Post by The Wizard »

Muchtolearn wrote:6. Consider your long-term plans when making decisions to marry, divorce, or live in sin.

Above from Victoria. Where were you when I needed you. I messed up on all.
Similar here, but it's just impossible to figure this out when you're in your 20's.
Fortunately it wasn't a terrible financial hit in my situation. As someone else said, the non-financial aspects of the family breakup were worse...
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Re: For all you older guys/gals close to retirement: Any adv

Post by dickenjb »

I would second the advice about buy less house than you can afford. If I had to do it all over again I would not have bought a 3300 SF home. When we lived in the Netherlands we lived in 130 m2 (about 1300 SF) and there were still rooms we did not use. It is not just the purchase price, it is the property taxes, cost to heat & cool, repairs, cleaning service, lawn service, etc. I still was able to retire at 55 with a paid off mortgage but am not happy with the ongoing costs - but we are happy here so too disruptive to the family to move just to save $$.
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Re: For all you older guys/gals close to retirement: Any adv

Post by The Wizard »

dickenjb wrote:I would second the advice about buy less house than you can afford....
I don't particularly agree with this; it depends on WHEN you buy the house.
I bought mine at age 26 in 1976 when I was married, no kids. The $350 a month mortgage seems like a joke now; had it paid off in my early 40's.
Rather than UPGRADING to a larger house by selling/buying, I added on myself.
It's too big for me now as a single, almost-retired person, but it has a nice market value, so I'm OK with that...
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Re: For all you older guys/gals close to retirement: Any adv

Post by desertbandit442 »

For most of us, income from our job is the biggest/only wealth building asset--so you have to control your income that way:

1.) Save/invest 10% or more of your gross pay, 10% of take-home is the absolute minimum. You gotta do this right from the get go! Pay yourself first. It may be hard at first, but gets easier in time.
2.) Save a minimum of six months living expenses, then invest the rest for retirement.
3.) Mortgage/rent no more than 25% of your pay.
4.) A car is for transportation only. Buy a car 2-3 years old and drive it for at least 10 years. You may need to take a loan out for your first car, but after that pay cash for a car.
5.) Do not live on credit--it'll eat up your income, the money you need to save/invest.
6.) If you want more things, earn more income--do not use credit.
ResNullius
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Re: For all you older guys/gals close to retirement: Any adv

Post by ResNullius »

Do everything you can to take care of your health, because it's far more important than you money.
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cheese_breath
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Post by cheese_breath »

Keep adding to your retirement investments every year. It's easy to suspend investing for 'just one year' because there's something else you really want or think you need. Once you set the precedent it's easier to do it again, and again.
The surest way to know the future is when it becomes the past.
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Re: For all you older guys/gals close to retirement: Any adv

Post by MWCA »

Make more than you spend. Seems obvious but many people have this problem.
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suming
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Re: For all you older guys/gals close to retirement: Any adv

Post by suming »

We had jobs with pensions and 401K matching (not federal jobs) early on in our careers and then built up a couple of businesses later on in life. I know of number of people who started something on the side, saved up the side income, and then quit their day jobs when they had enough savings as a fallback plan and the side income was enough to support them.
Jenny345, what kind of businesses have you and people you know been starting on the side? I think starting businesses is an excellent idea. However, it also comes with high risk.
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VictoriaF
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Re: For all you older guys/gals close to retirement: Any adv

Post by VictoriaF »

MWCA wrote:Make more than you spend. Seems obvious but many people have this problem.
People start by making more than they spend, then they spend more than they make. And so it goes.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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patriciamgr2
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Re: For all you older guys/gals close to retirement: Any adv

Post by patriciamgr2 »

One tip I didn't figure out until my mid 30's: Saving enough to give you financial freedom will be much less stressful if you target your spending almost entirely at what you, personally, value the most. (in my case, i bought a fancier flat than I needed or wanted & I regret that; i spent a lot of $$$ on travel, which I don't regret at all). Think of spending vs. saving as an efficient frontier exercise. Also key: do not marry someone whose values (as defined above) and level of commitment to early retirement vary from yours. Also, my major mistake was paying fees for some investments and not doing analysis on an after-tax basis--before I got Boglehead enlightenment. Best Wishes, Patricia
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