25 years to retirement, advice on speeding up growth?

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vel
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25 years to retirement, advice on speeding up growth?

Post by vel »

Hi, I just started reading finance books a month ago and luckily found my way to the Bogle realm and this great community/resource!

I'm about to turn 40 and at a good place in my career. That said, since I feel that I am getting a late start, I would like to ramp up the risk/return to try to speed up the growth of my investments. I live in NYC and it's tough to save as you know. Also I only work 30hrs/wk, so it's a tough squeeze balancing this lifestyle choice with longer term investment planning.

Vital Attributes(tm):
==================
age: 40
situation: single, renting
occupation: software dev
education: MS comp sci
salary: ~133K (~170K if I ever decide to go back to full-time)
investments:
1) 401K FXAIX s&p index fund: ~$125K (contributing $1K/mo.)
2) Taxable acct: VTMFX tax adv. bal ~$18K (my "2nd-tier" emergency fund)
3) Cash: ~$5K

I have no dependents and a good career to fall back on, advice on some next steps to get things on a faster track?
RadAudit
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Re: 25 years to retirement, advice on speeding up growth?

Post by RadAudit »

Welcome to the forum.

Keep reading. In the mean time, don't take on any more risk than you can handle. There aren't too many ways (that I'd suggest) to get more than market returns with acceptable (to me) risk long term.

Total (US) market return is most closely achieved by VG's Total Stock Market fund - or its clone. S&P 500 is a close enough approximation of the US market. A 100% equity portfolio would be a little too risky for me at 40 years of age. 80% stocks / 20% bonds in the 401k would provide additional rebalancing opportunities in a down turn.

Look up "need, ability and willingness to accept risk." Without taking on unacceptable levels of risk there aren't too many options other than work longer, save more, keep costs low, reduce expenses and stay the course.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
quantAndHold
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Re: 25 years to retirement, advice on speeding up growth?

Post by quantAndHold »

It appears that you’re contributing about 9% to retirement savings?

Increasing your savings rate is the thing that’s most likely to get you over the line by age 65.
Yes, I’m really that pedantic.
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JoeRetire
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Re: 25 years to retirement, advice on speeding up growth?

Post by JoeRetire »

vel wrote: Sat Jul 06, 2019 5:30 pmI would like to ramp up the risk/return to try to speed up the growth of my investments. I live in NYC and it's tough to save as you know. Also I only work 30hrs/wk, so it's a tough squeeze balancing this lifestyle choice with longer term investment planning.
The way to speed things up is to save more. But it can be tough to try to have it all.

The obvious solution is to prioritize. Decide what is most important. Perhaps your locale and lifestyle choices are more important than having enough to retire at 65, but maybe if you think it over you'll come to a different conclusion.

IMHO, you don't have enough in your emergency funds (1st and 2nd tier).
Last edited by JoeRetire on Sat Jul 06, 2019 6:07 pm, edited 2 times in total.
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Wiggums
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Re: 25 years to retirement, advice on speeding up growth?

Post by Wiggums »

Are you making out all your 401k, Roth, etc? That would build up your accounts as well.

How do you think your expenses will be when you retire?

I agree that your emergency fund is quite small. Is working full time an option? A smaller paycheck affects SS and your ability to save more?
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David Jay
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Re: 25 years to retirement, advice on speeding up growth?

Post by David Jay »

I suspect that, living in New York: (Part time at 40) != (Nice retirement lifestyle at 62)

As QuantAndHold said, you probably need to bump your savings up. I would say at least 15%, perhaps 20%.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: 25 years to retirement, advice on speeding up growth?

Post by Dottie57 »

quantAndHold wrote: Sat Jul 06, 2019 6:01 pm It appears that you’re contributing about 9% to retirement savings?

Increasing your savings rate is the thing that’s most likely to get you over the line by age 65.
+1. Try to max out retirement options. I contributed 15-20% on average and retired at 61.
Topic Author
vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Getting up to 15% savings - that is definitely something I will try harder to work out.

Regarding my part-time work lifestyle, I saw an opportunity and I decided to grab it and hold on. In some sense it's like borrowing 1/4 of my future retirement. A lot could be said about having that time now.

With those constraints in place, assuming I can't save much more, I'm trying to figure out the best way to make my current investments work harder for me by taking on some more risk.
Last edited by vel on Sat Jul 06, 2019 7:19 pm, edited 1 time in total.
Flyer24
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Re: 25 years to retirement, advice on speeding up growth?

Post by Flyer24 »

How much are your expenses? It seems that being single and renting on your salary should leave more than enough room to max out a 401K and IRA. I would do some cutting on lifestyle expenses.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Expenses are ~6K/mo.
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Re: 25 years to retirement, advice on speeding up growth?

Post by willthrill81 »

If you're not pleased with growth in your portfolio, then you should probably contribute more to it.
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Re: 25 years to retirement, advice on speeding up growth?

Post by Flyer24 »

vel wrote: Sat Jul 06, 2019 7:20 pm Expenses are ~6K/mo.
That is as much as my family of 4 and home ownership. I would make a strict budget and see what you can cut.
sketchy9
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Re: 25 years to retirement, advice on speeding up growth?

Post by sketchy9 »

vel wrote: Sat Jul 06, 2019 7:13 pm Getting up to 15% savings - that is definitely something I will try harder to work out.

Regarding my part-time work lifestyle, I saw an opportunity and I decided to grab it and hold on. In some sense it's like borrowing 1/4 of my future retirement. A lot could be said about having that time now.

With those constraints in place, assuming I can't save much more, I'm trying to figure out the best way to make my current investments work harder for me by taking on some more risk.
Keep in mind that reason it's called "risk" is because you can lose your money as easily as you gain it. Yes, over long time horizons, the trend of the market is up, but there have been plenty of losses along the way, for uncomfortably long amounts of time. Other posters here can provide you with the hard data to support that assertion, but suffice it to say that, as in all of life, there is no free lunch. The market can be down when you least want it to be (at the start of your retirement) or for longer than you planned on.

I, too, work part time and am the same age as you. I fully understand the desire to enjoy your life now, and not wait and hope that you'll be able to do so 20-25 years from now. However, as you've noted, you give something up for that lifestyle (see lunch, free). I decided that I cared more about my time now and was willing to sacrifice a high savings rate. I would argue that if you're concerned about your retirement, the solution isn't to take on more risk but to work more and save more. It's a very personal decision about what your priorities are.
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teen persuasion
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Re: 25 years to retirement, advice on speeding up growth?

Post by teen persuasion »

http://www.mrmoneymustache.com/2012/0 ... irement/
To speed it up, save at a higher rate. The more you save in tax deferred retirement accounts, the less tax you pay now, giving you more to save.
Charon
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Re: 25 years to retirement, advice on speeding up growth?

Post by Charon »

vel wrote: Sat Jul 06, 2019 7:20 pm Expenses are ~6K/mo.
[Edit (corrected tax amounts)]:
There's a mismatch here. $133k gross, $12k to 401k, total state and federal income taxes + FICA about $41k in NYC, leaves you with $80k/year take home after retirement contributions. If your expenses are $6k/month, then there's $8k/year unaccounted for.

On the working part-time, I definitely think that's a good idea. Enjoy life. Working part time, you make more than twice as much as the median NYC household income, so you have the financial room to enjoy time now and still plan for a reasonable retirement. You just need to boost your savings rate.
Last edited by Charon on Mon Jul 08, 2019 2:36 pm, edited 1 time in total.
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Re: 25 years to retirement, advice on speeding up growth?

Post by KlangFool »

vel wrote: Sat Jul 06, 2019 7:13 pm Getting up to 15% savings - that is definitely something I will try harder to work out.

Regarding my part-time work lifestyle, I saw an opportunity and I decided to grab it and hold on. In some sense it's like borrowing 1/4 of my future retirement. A lot could be said about having that time now.

With those constraints in place, assuming I can't save much more, I'm trying to figure out the best way to make my current investments work harder for me by taking on some more risk.
vel,

That assumption is wrong. You could save a lot more. Most of the contribution will end up as tax saving anyhow with the amount of taxes that you are paying. Your additional contribution will not reduce your net take-home pay by much.

You should do your own calculation and verify.

KlangFool
Topic Author
vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

A lot of sound advice here - thanks.

Now, if I were to decide that I didn't want to work more, can't reduce livings expenses and therefore can't save more... given that I have ~143K invested, advice on reallocating or best to stay put?
Topic Author
vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Charon/KlangFool, I'll run through the numbers in more detail. -thanks!
quantAndHold
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Re: 25 years to retirement, advice on speeding up growth?

Post by quantAndHold »

I think what people are telling you is that at a 9% savings rate, there’s no path to retirement at age 65, unless you cut spending significantly, or have a pension that we don’t know about.
Yes, I’m really that pedantic.
Topic Author
vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Fair enough, I'll put my focus there.
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Re: 25 years to retirement, advice on speeding up growth?

Post by Grt2bOutdoors »

Charon wrote: Sat Jul 06, 2019 7:39 pm
vel wrote: Sat Jul 06, 2019 7:20 pm Expenses are ~6K/mo.
There's a mismatch here. $133k gross, $12k to 401k, total state and federal income taxes + FICA about $21k in NYC, leaves you with $100k/year take home after retirement contributions. If your expenses are $6k/month, then there's $28k/year unaccounted for.

If that $28k/year could go into retirement savings, that would definitely boost your position.

On the working part-time, I definitely think that's a good idea. Enjoy life. Working part time, you make more than twice as much as the median NYC household income, so you have the financial room to enjoy time now and still plan for a reasonable retirement. You just need to boost your savings rate - which should be very easy, if you account for that missing $28k/year.
Your tax calculations are way off: OP is single, living in NYC.
Income is $133K
401K is $12K
Taxable income is $121K.
Federal withholding calculator indicates a tax liability of $20450.
State income tax includes NYC income taxes, the combined tax rates are 9.9% or $12,000
FICA + Medicare: $10,174
Miscellaneous NYS Medical Leave tax: $158

There is only roughly $6,500 unaccounted for. I would bet not included in OP's expenses are things like medical insurance benefits, commuting expense and any flex spending accounts.

I ran my tax calculations through TurboTax Tax Caster and by viewing and using the tax schedules found at www.tax.ny.gov Form IT-201 2018 Instructions.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Thanks Grt2bOutdoors, that would have taken me a while to figure out.
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Re: 25 years to retirement, advice on speeding up growth?

Post by Grt2bOutdoors »

vel wrote: Sat Jul 06, 2019 8:17 pm Thanks Grt2bOutdoors, that would have taken me a while to figure out.
Unfortunately, NYC is prohibitively expensive, but even moreso as a single individual. You pay the highest tax rates with little in the way of a tax shelter. NYS follows the federal government tax forms in terms of what you can deduct on your state returns. The only tax shelter you have is your 401K. The rent though depending on where you are residing can be very high if you are carrying the load by yourself.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Yes, my rent is high and NYC is a $ vacuum. A few years ago, my rationale was that eventually I'll have had my fill, move on, and make up for it later. However now I realize that I am depriving myself of valuable compounding time that can't so easily be made up for later.
02nz
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Re: 25 years to retirement, advice on speeding up growth?

Post by 02nz »

According to Fidelity, you should have about 3x your salary saved by age 40: https://www.fidelity.com/viewpoints/ret ... -to-retire.

That's a very, very rough rule of thumb. But you're at less than a third of where you should be, by that measure.

You can catch up quickly, but you'll need to get your personal finance act together. I know NYC costs are high, but there's just no way that a single person makes 133K there and can't save much more than 12K/year for retirement.

List your expenses here for a start.
cacophony
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Re: 25 years to retirement, advice on speeding up growth?

Post by cacophony »

How much do you pay in rent and what are your other big expenses? It's possible to live relatively cheaply in NYC but it requires some flexibility with where you're living.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

I enjoy my apartment and neighborhood despite the high cost. Not looking to scale that down in the near future.
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Re: 25 years to retirement, advice on speeding up growth?

Post by Grt2bOutdoors »

02nz wrote: Sat Jul 06, 2019 8:30 pm According to Fidelity, you should have about 3x your salary saved by age 40: https://www.fidelity.com/viewpoints/ret ... -to-retire.

That's a very, very rough rule of thumb. But you're at less than a third of where you should be, by that measure.

You can catch up quickly, but you'll need to get your personal finance act together. I know NYC costs are high, but there's just no way that a single person makes 133K there and can't save much more than 12K/year for retirement.

List your expenses here for a start.
I don't like the Fidelity placeholder, it places too much emphasis on current income when we don't know what the OP's income trajectory has been for the past 18 years. We don't know what debts the OP has possibly incurred and paid off. We don't know if the OP will retire in NYC or in a relatively low/medium cost locale in the future. BUT, I do agree something needs to change and within the next 5 years if the OP want's a real shot at a reasonable retirement.

OP - is there a reason why you can not work a 40 hour a week job, especially if your craft is actually in-demand?
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Re: 25 years to retirement, advice on speeding up growth?

Post by Grt2bOutdoors »

vel wrote: Sat Jul 06, 2019 8:41 pm I enjoy my apartment and neighborhood despite the high cost. Not looking to scale that down in the near future.
At some point, you are going to either scale it down or earn alot more and save it. You asked us on what can speed up growth, here it is and there are no shortcuts: save more, pay less, stay the course. If you deviate from that, you will find that the train has left the station without you and you can not run any faster to catch it. Read some of John Bogle's writings - the tyranny of expenses not only sinks your investments, it can sink you too.
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Topic Author
vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

I too agree that something needs to change in the next 5 years, but I'm quite happy working 30hrs and living in NYC for now. Once I go back to full-time, my employer will almost certainly not let me switch back to part-time again.

The fact that I could go back to full-time, and could leave NYC is the reason that I was trying to see what I could do to increase risk/return given my current situation. While all of the advice here is sound and appreciated, rather than addressing that question, it seems to be aimed at knocking out my question by suggesting changes to my current situation.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Grt2bOutdoors, I posted before I read your last comment. I take your point.
cacophony
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Re: 25 years to retirement, advice on speeding up growth?

Post by cacophony »

The main lever for risk vs reward is percentage of equities but you're already 100% equities
quantAndHold
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Re: 25 years to retirement, advice on speeding up growth?

Post by quantAndHold »

I did some math. If you increase your monthly 401k contribution from $1000 (9%) to $1800 (16%), you would have a reasonable probability of getting the $1M or so that you need to retire at your current spending rate (assuming you’re getting a normal amount of Social Security).

That reduces your taxable income by $6k, down to $115k. My attempt at running a tax calculator shows that your take home pay after taxes would be about $4k/year lower, or about $350/month.
Yes, I’m really that pedantic.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

quantAndHold this is awesome - thanks for taking the time to work that out! I currently pay my own health ins $420/mo, but I am negotiating with my employer to see if they could provide the insurance - if so, that frees up the $350/mo.

I am trying to understand how contributing $800/mo to the 401K only costs $350/mo. Could you send me a link to the tax calculator (or explain your calculation in a little more detail)?
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Re: 25 years to retirement, advice on speeding up growth?

Post by Stinky »

Grt2bOutdoors wrote: Sat Jul 06, 2019 8:49 pm
At some point, you are going to either scale it down or earn alot more and save it.
OP, I just don’t know that you can afford the luxury of part time work. You live in one of the most expensive cities in the US, you’re being taxed out the wazoo, and you’re behind the curve on retirement savings.

Something has got to give.
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Re: 25 years to retirement, advice on speeding up growth?

Post by skinsfan »

If you don't change anything with your current situation, your options for increasing risk are very speculative. You can speculate on individual stocks or buy some crypto-currency for example. But there is a very real chance that your returns would be worse than your current investments. Also much greater risk of losing it all. Some people take a small percentage of their portfolio for speculation. Overall it looks like your current investments have the right level of risk for you.
02nz
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Re: 25 years to retirement, advice on speeding up growth?

Post by 02nz »

OP, not only are you way behind on retirement savings, you appear to have nothing saved toward a house/condo. Nothing says that you have to own your housing, but if you plan to rent forever, you'll need significantly more retirement savings than those who have a house paid off by the time they retire, which both reduces their expenses and can be turned into cash flow (reverse mortgage).

The thing is, getting back on track at this point doesn't require all that much sacrifice. Yours is far from the most dire financial situation we've seen on this board. Some pretty minor cuts can get you to maxing a 401k and a Roth IRA, and you'll be catching up pretty quickly. You seem to understand that in investing there's a trade-off between risk and reward (although as others have pointed out, you're already taking as much risk as feasible - many on this board would actually say you're taking too much risk with a 100% stock allocation at age 40). What you don't seem to want to accept is that there's a similar trade-off between current and future consumption, and between amount of work and amount of compensation. Until you wrap your ahead around those, there's not much more we can advise.
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Re: 25 years to retirement, advice on speeding up growth?

Post by ThisJustIn »

Use 3-fund portfolio with Small-cap-value tilt: Two funds for life: https://paulmerriman.com/2-funds-for-life/ (Note: Replace target-date-fund here with your own 3-fund portfolio.). Read more details on how you can device 3-fund portfolio + SCV fund here: www.firetobiz.com/investing-basics .
quantAndHold
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Re: 25 years to retirement, advice on speeding up growth?

Post by quantAndHold »

vel wrote: Sat Jul 06, 2019 9:28 pm quantAndHold this is awesome - thanks for taking the time to work that out! I currently pay my own health ins $420/mo, but I am negotiating with my employer to see if they could provide the insurance - if so, that frees up the $350/mo.

I am trying to understand how contributing $800/mo to the 401K only costs $350/mo. Could you send me a link to the tax calculator (or explain your calculation in a little more detail)?
Well, for one thing, I goofed, and got the math wrong. I thought it was $1800/month vs $1200/month, not $1000. My apologies. The extra $800 per month in the 401k would reduce your taxable income by $9600. Your marginal tax rate is about 41% between federal, state, and city, so your take home pay would be reduced by about $9600 * 59% = $5700, or $480/month.

If you changed your 401k contribution to 15%, that would be a contribution of $1661/month. You would probably still be okay at 15%, just with less margin for error. You might end up working an extra year or two. Your take home pay would be reduced by just under $400. One option would be to go to 15%, then each time you get a raise, bump up the contribution by a percent.
Yes, I’m really that pedantic.
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Re: 25 years to retirement, advice on speeding up growth?

Post by ruralavalon »

vel wrote: Sat Jul 06, 2019 5:30 pm Hi, I just started reading finance books a month ago and luckily found my way to the Bogle realm and this great community/resource!

I'm about to turn 40 and at a good place in my career. That said, since I feel that I am getting a late start, I would like to ramp up the risk/return to try to speed up the growth of my investments. I live in NYC and it's tough to save as you know. Also I only work 30hrs/wk, so it's a tough squeeze balancing this lifestyle choice with longer term investment planning.

Vital Attributes(tm):
==================
age: 40
situation: single, renting
occupation: software dev
education: MS comp sci
salary: ~133K (~170K if I ever decide to go back to full-time)
investments:
1) 401K FXAIX s&p index fund: ~$125K (contributing $1K/mo.)
2) Taxable acct: VTMFX tax adv. bal ~$18K (my "2nd-tier" emergency fund)
3) Cash: ~$5K

I have no dependents and a good career to fall back on, advice on some next steps to get things on a faster track?
You are already around 95% in equities, more risk can not help.

You are contributing just $12k/yr (9% of income) to your 401k.

The obvious solution is higher contributions to your retirement account.
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JoeRetire
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Re: 25 years to retirement, advice on speeding up growth?

Post by JoeRetire »

vel wrote: Sat Jul 06, 2019 7:13 pm Getting up to 15% savings - that is definitely something I will try harder to work out.

Regarding my part-time work lifestyle, I saw an opportunity and I decided to grab it and hold on. In some sense it's like borrowing 1/4 of my future retirement. A lot could be said about having that time now.

With those constraints in place, assuming I can't save much more, I'm trying to figure out the best way to make my current investments work harder for me by taking on some more risk.
If absolutely everything else is held constant and the only variable you are willing to change is risk, then simply take on as much risk as you are comfortable taking. Don't expect that to speed up retirement by much. And be prepared in case the increased risk backfires.

There are no free lunches.
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Re: 25 years to retirement, advice on speeding up growth?

Post by drgenefish »

Great thread and question.

Sorry if this is too personal but i’m Asking more for myself as I am in a similar spot as you financially but am a workaholic and have zero hobbies. I’ve had 3 days off and have NO idea what to do with myself lol. I can’t wait til Monday morning. What are you doing for the rest of the week?

Is there room in your life for a “hobby” that earns money rather than something that loses money? (Just a complete random example, woodworking then selling on etsy vs exotic wine tasting). Not even so much that you make more money but spend less on hobbies and get similar satisfaction out of it and are able to save at a higher rate while still not working full time.

(Maybe teaching computers / tutoring might be a better example than woodworking. Or teaching private lessons in something else - whatever martial arts if you’re a black belt or something...just Something you really enjoy and get the same satisfaction as the other hobbies you’re doing).
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

On the savings-side, I didn't understand going into this that the relationship between a monthly increase in my 401K contribution and the monthly cost is non-linear. I mean, on some level I was aware of this, but definitely didn't have a feel for the concrete implications. For example (with the help of a tax calculator):

If I went from 6% 401K contribution to 15%, my 401K would receive an additional $11,441/yr, $953/mo.

But rather than that costing $953 extra/mo, it only costs $593 extra/mo.

So I could increase my yearly 401K contribution by $11,441, but it would only cost me 62.2% of that amount.

I like this.
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Mullins
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Re: 25 years to retirement, advice on speeding up growth?

Post by Mullins »

vel wrote: Sat Jul 06, 2019 7:48 pm if I were to decide that I didn't want to work more, can't reduce livings expenses and therefore can't save more... given that I have ~143K invested, advice on reallocating or best to stay put?
I'd not have bonds. I didn't have bonds. 100% stocks. Because you have a couple of decades for the stock index to (hopefully) grow, which historically that should yield better than mixing in bonds, if you can ride the bumps along the way.

But even better, your future self will thank you if you can simply put away a bit more today.

Of course there's risk but the way I see it, money I earn which gets invested is understood it's being invested into assets for potential growth so it can work for me but that carries a risk.

So I kind of like kiss it goodbye for now with the sentiment of "hope to see more of ya later."
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ruralavalon
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Re: 25 years to retirement, advice on speeding up growth?

Post by ruralavalon »

If I went from 6% 401K contribution to 15%, my 401K would receive an additional $11,441/yr, $953/mo.

But rather than that costing $953 extra/mo, it only costs $593 extra/mo.

So I could increase my yearly 401K contribution by $11,441, but it would only cost me 62.2% of that amount.
In order words for every $2 you can squeeze out of your budget and reduce your spending, you can contribute $3 to your 401k.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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Watty
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Re: 25 years to retirement, advice on speeding up growth?

Post by Watty »

vel wrote: Sat Jul 06, 2019 5:30 pm occupation: software dev
...
Regarding my part-time work lifestyle, I saw an opportunity and I decided to grab it and hold on. In some sense it's like borrowing 1/4 of my future retirement. A lot could be said about having that time now.
I voluntarily retired out of corporate IT as a software developer when I was 58.

A big problem with "borrowing" from your future is that getting and keeping jobs as a software developer gets to be a lot harder as you get older. IT people that are in their 50s or 60s will often also often be the ones that are laid off first when there are layoffs.

You may not have a lot more years of a career to "borrow" from.

Some of this is outright age discrimination but it is more complex than that since many of the latest in demand skills have not really been around for more than five years so a lower paid 28 year old with five years experience can often do a job just as well as a high paid 55 year old with over 30 years of experience.

I worked for a large corporation that has been around in one form or another since at least the 1960s and there were around 100 people in the IT department. What was amazing was that I was the first person to voluntarily retire out of the IT department. A few people had retired after being laid off with a severance package but I was the first one to actually give them notice that I was going to retire.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

Mullins, the bonds are half of my 2nd tier emergency savings (50/50 stocks/bonds balanced fund) which constitutes most of my emergency savings. Out of context, 50/50 balanced is conservative, but as a substitute for what would otherwise be a money market fund, it's aggressive. Going 100% stocks there is about where I draw the bad idea line.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

To clarify an earlier comment, I was surprised to learn that the relationship between 401K contribution and cost was non-linear in the sense that as contribution increases, the corresponding tax deductions cause the effective tax *rates* to decrease. According to the calculator: https://smartasset.com/taxes/income-taxes
Last edited by vel on Sun Jul 07, 2019 5:22 pm, edited 1 time in total.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

...I mistakenly thought that the rates would only change if I was able to deduct myself into a lower bracket.
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vel
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Re: 25 years to retirement, advice on speeding up growth?

Post by vel »

I don't understand how that works, but I'll get there...
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