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What's your age and the value of your 401k?

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Just passed 800k.  I'm sure a recession pushes me back before I get there but I can see the finish line to becoming a 401k millionaire

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On 12/21/2019 at 7:39 AM, -OZ- said:

It's used most places because far more people know their salary than know their expenses. 

I'd bet, of everyone in the shark pool and FFA today, 90% know their salary within 10%. Most will know exactly what they earned in 2019. Maybe half, likely far less, know what they spent. 

But if you do know your expenses, use that. 

That’s true but think that’s part of problem. Not enough focus on expenses from both general populace and these articles/ books that are written.

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2 hours ago, Dentist said:

Just passed 800k.  I'm sure a recession pushes me back before I get there but I can see the finish line to becoming a 401k millionaire

A true cinderella story.  

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2 hours ago, Dentist said:

Just passed 800k.  I'm sure a recession pushes me back before I get there but I can see the finish line to becoming a 401k millionaire

One million isn't a finish line. 

We need another 8% gain this year (not including contributions) to the 2 coma club. But we'll be looking to double that before I'm even considering retirement. 

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7 minutes ago, -OZ- said:

One million isn't a finish line. 

We need another 8% gain this year (not including contributions) to the 2 coma club. But we'll be looking to double that before I'm even considering retirement. 

Sorry I meant the finish line to 1mill.  And this isn't my only account.  But I figure I need to triple that to be truly finished

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19 minutes ago, Dentist said:

Sorry I meant the finish line to 1mill.  And this isn't my only account.  But I figure I need to triple that to be truly finished

Ah, misunderstood, it's a good benchmark.  We're unlikely to make it to a million in any one account any time soon, I'd need our largest to triple, which I guess could happen in 12-15 years but I can no longer add to it.  Im hoping by the time we fully retire, we have 2 TSPs worth roughly the same, and our Roth IRAs together will be roughly equal, so essentially 3 "equal" buckets. 

Eta: had anyone heard of the rule of 115?  (Time to triple, like the rule of 72)

Edited by -OZ-

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Not a bad year (<---ridiculous understatement).  Investment return 22.5%, the same as total NW increase.  Not including RE my liquid NW up 27.5%.    Considering the low variance portfolio I'm aiming for this kind of return is pretty awesome.

Another of these and I'm a vapor trail from my place of work.

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On 12/25/2019 at 10:13 AM, -OZ- said:

One million isn't a finish line. 

We need another 8% gain this year (not including contributions) to the 2 coma club. But we'll be looking to double that before I'm even considering retirement. 

Hopefully you get to retirement before you enter the 2 coma club.  And that you have your healthcare all squared away.

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44 minutes ago, Sand said:

Not a bad year (<---ridiculous understatement).  Investment return 22.5%, the same as total NW increase.  Not including RE my liquid NW up 27.5%.    Considering the low variance portfolio I'm aiming for this kind of return is pretty awesome.

Another of these and I'm a vapor trail from my place of work.

/music plays 

 🎶 it was a very good year 🎶 

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Just looked at my decade in review:

Started the decade with $99k in 401k, still digging out from 2008/09.

Ended it with $720k 401k + $52k roth + $110k wife’s IRAs + $107k 529.  Compounding....it’s a thing.

only regret is not starting a Roth earlier.  Just didn’t know enough about it.  Going to be hard to catch that up to a comfortable level but will keep on grinding.

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2 hours ago, Sand said:

Not a bad year (<---ridiculous understatement).  Investment return 22.5%, the same as total NW increase.  Not including RE my liquid NW up 27.5%.    Considering the low variance portfolio I'm aiming for this kind of return is pretty awesome.

Another of these and I'm a vapor trail from my place of work.

More on this low variance portfolio please 

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42 years old, finished the year with about $420K in my 401K. Obviously, 2019 was a great year for 401K. I started the year with $305K so over $100K in this past year.

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Posted (edited)

At age 40, my ear ended up great for me as I just crossed the $1mm mark when you combine all our various retirement accounts - my 401k (416k), my work Koegh plan (136K), my wife's 401k (435K) and other various IRAs (~33k).  I really want to retire early (around 55) so need to keep pushing and my focus now will be to try to grow significant wealth outside retirement plans as I have been hitting the max on all of them for last several years and will keep that up.  I think I need to set it up that I can survive for several years in retirement before I need to tap any of these funds as would like them to continue to grow tax deferred as long as possible. 

Edited by Redwes25
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11 hours ago, Judge Smails said:

More on this low variance portfolio please 

In general I'm 65% stocks with about 15% of that international (and most of that is low variance ETFs, like EEMV), 25% bonds, with some individual issues (preferreds that tend to be stable in price), and 10% REITs.  The diversification here, along with tamping down some of the high variance items (international), keeps my blood pressure down and in 2019 let me capture 78% of the S&P at a much lower variance.  

I have some ideas for portfolio construction I've been working on that I'll probably put up on Bogleheads in the not too distant future (seems to be the place for that these days).  I'll copy a link here.

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I asked the question in the choose FI Facebook group and I'll ask here - in general which philosophy do you follow:

A - maximize profits, take risk

B - take only the risk necessary to achieve your goals

I've been following A to a large degree. Just a few individual stocks and I'm not borrowing to invest other than keeping the mortgage.  

It seems the low variance portfolio is a good way to follow B

I might transition more to B in the next year

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@Sand I'm not second-guessing you. I'm still learning.  Why are you 25% in bonds?  I'm asking because I was about 25% in bonds when I was in my 30s.  I look back now, and think that was a mistake. Now I', in my 50s, I can retire, and I'm still 100% in stock funds. Free advice encouraged.   

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25 minutes ago, -OZ- said:

I asked the question in the choose FI Facebook group and I'll ask here - in general which philosophy do you follow:

A - maximize profits, take risk

B - take only the risk necessary to achieve your goals

I've been following A to a large degree. Just a few individual stocks and I'm not borrowing to invest other than keeping the mortgage.  

It seems the low variance portfolio is a good way to follow B

I might transition more to B in the next year

A.  Our retirement accounts are 60% domestic stock fund 40% international fund.  But we have no debt and 23 rental properties.

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Posted (edited)
17 minutes ago, Zerp said:

@Sand I'm not second-guessing you. I'm still learning.  Why are you 25% in bonds?  I'm asking because I was about 25% in bonds when I was in my 30s.  I look back now, and think that was a mistake. Now I', in my 50s, I can retire, and I'm still 100% in stock funds. Free advice encouraged.   

I'm 52.  Over the last year, every time the market hit new highs I transferred money into bonds.  As of a month ago I'm 70% in bonds.  I'll risk some upside to protect massive downside potential.  I remember 2008 very well.  This portfolio returned 15% in 2019, 8% less than the DOW.  I don't like losing out on the 8% but like I said I'm a bit risk adverse.

When/If the market retracts below 27,500 I'll start to move money back in. 

Edited by James Daulton
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45 minutes ago, -OZ- said:

I asked the question in the choose FI Facebook group and I'll ask here - in general which philosophy do you follow:

A - maximize profits, take risk

B - take only the risk necessary to achieve your goals

I've been following A to a large degree. Just a few individual stocks and I'm not borrowing to invest other than keeping the mortgage.  

It seems the low variance portfolio is a good way to follow B

I might transition more to B in the next year

Up until a year ago, I was all A. Because I retired in April, I've transitioned more towards B.

I'm now in a weird situation of defining what exactly my goal is. With a sudden change in my Dad's health, our retirement plans may be changing. If I'm staying put, I may decide to go back to work, at least part time, to stave off boredom. 

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Posted (edited)
31 minutes ago, James Daulton said:

I'm 52.  Over the last year, every time the market hit new highs I transferred money into bonds.  As of a month ago I'm 70% in bonds.  I'll risk some upside to protect massive downside potential.  I remember 2008 very well.  This portfolio returned 15% in 2019, 8% less than the DOW.  I don't like losing out on the 8% but like I said I'm a bit risk adverse.

When/If the market retracts below 27,500 I'll start to move money back in. 

Good stuff.

I am not knowledgeable enough to try and do a form of market timing so I am sticking with the same allocation I have had since I retired almost ten years ago (I need a new login name).  Which is roughly this:

1/3 in safe muni tax free bonds

1/3 in a mix of slightly more aggressive bonds, value and growth stocks

1/3 completely in growth stocks (this group is entirely in retirement funds to have some current tax protection)

 

The basic design is to not maximize return, but to play a hedge where in good years, I can realize some profit and in bad years I can have some safety built in.  The bonds are particularly important to me because they provide the cash I live off of for daily needs.

Edited by NewlyRetired
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18 minutes ago, James Daulton said:

I'm 52.  Over the last year, every time the market hit new highs I transferred money into bonds.  As of a month ago I'm 70% in bonds.  I'll risk some upside to protect massive downside potential.  I remember 2008 very well.  This portfolio returned 15% in 2019, 8% less than the DOW.  I don't like losing out on the 8% but like I said I'm a bit risk adverse.

When/If the market retracts below 27,500 I'll start to move money back in. 

Are you buying individual bonds or buying bond funds?  I ask because bond funds move in value as well.  

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6 minutes ago, NewlyRetired said:

Good stuff.

I am not knowledgeable enough to try and do a form of market timing so I am sticking with the same allocation I have had since I retired almost ten years ago (I need a new login name).  Which is roughly this:

1/3 in safe muni tax free stocks

1/3 in a mix of slightly more aggressive bonds, value and growth stocks

1/3 completely in growth stocks (this group is entirely in retirement funds to have some current tax protection)

 

The basic design is to not maximize return, but to play a hedge where in good years, I can realize some profit and in bad years I can have some safety built in.  The bonds are particularly important to me because they provide the cash I live off of for daily needs.

Do you mean bonds?  

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30 minutes ago, Random said:

A.  Our retirement accounts are 60% domestic stock fund 40% international fund.  But we have no debt and 23 rental properties.

Mortgage free? That's darn impressive. I'll guess you're doing just fine

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40 minutes ago, Zerp said:

@Sand I'm not second-guessing you. I'm still learning.  Why are you 25% in bonds?  I'm asking because I was about 25% in bonds when I was in my 30s.  I look back now, and think that was a mistake. Now I', in my 50s, I can retire, and I'm still 100% in stock funds. Free advice encouraged.   

What do you do when the market drops 10 - 40%?  

 

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1 hour ago, Redwes25 said:

At age 40, my ear ended up great for me as I just crossed the $1mm mark when you combine all our various retirement accounts - my 401k (416k), my work Koegh plan (136K), my wife's 401k (435K) and other various IRAs (~33k).  I really want to retire early (around 55) so need to keep pushing and my focus now will be to try to grow significant wealth outside retirement plans as I have been hitting the max on all of them for last several years and will keep that up.  I think I need to set it up that I can survive for several years in retirement before I need to tap any of these funds as would like them to continue to grow tax deferred as long as possible. 

Permanent (whole) life insurance isn't a bad place to do that.  Hit 55 or 60 and you can live off of them for a few years before tapping into other sources.

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11 minutes ago, Redwes25 said:

Do you mean bonds?  

 Thanks for the catch, I have fixed the bad mistake.

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What's your magic number where you'd think you could live off of interest/dividends/cap appreciation forever?  $2,000,000 seems totally safe to me.

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36 minutes ago, Leeroy Jenkins said:

You guys make me feel wholly inadequate 

This thread has been helpful for me not necessarily in terms of financial strategy insights, but because it scares me into periodically upping my savings rates. 

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30 minutes ago, Redwes25 said:

Are you buying individual bonds or buying bond funds?  I ask because bond funds move in value as well.  

Sorry, bond funds.

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23 minutes ago, Juxtatarot said:

What's your magic number where you'd think you could live off of interest/dividends/cap appreciation forever?  $2,000,000 seems totally safe to me.

2020 dollars? Is that money pre-tax or post-tax?

 

I am looking ahead maybe 15 years for retirement, so would need more than $2MM at that point

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51 minutes ago, Leeroy Jenkins said:

You guys make me feel wholly inadequate 

Yep. 

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Posted (edited)
1 hour ago, Zerp said:

@Sand I'm not second-guessing you. I'm still learning.  Why are you 25% in bonds?  I'm asking because I was about 25% in bonds when I was in my 30s.  I look back now, and think that was a mistake. Now I', in my 50s, I can retire, and I'm still 100% in stock funds. Free advice encouraged.   

No problem.  All this has more to do with my personal risk tolerance than anything else.  When I look at what I have and how it's allocated I think about whether I could hold this risk profile through 2008.  Right now the answer is yes.  100% stocks?  For me, no way - a 50+% drop would devastate me.

Also, the fact is I'm about 7.5% from where I will call myself FI.  I'm not at a spot to go risk crazy.

Edited by Sand
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4 minutes ago, wilked said:

2020 dollars? Is that money pre-tax or post-tax?

 

I am looking ahead maybe 15 years for retirement, so would need more than $2MM at that point

2020 dollars, pre/post-tax mix.  Of course it depends on spending plans in retirement and other factors.  

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32 minutes ago, Juxtatarot said:

What's your magic number where you'd think you could live off of interest/dividends/cap appreciation forever?  $2,000,000 seems totally safe to me.

It's north of 5MM.  It is probably closer to 10MM.  I live in a high COL area and would like to be able to stay here in case my kids stay here; also would like to have the means to help them out as needed.

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33 minutes ago, Juxtatarot said:

What's your magic number where you'd think you could live off of interest/dividends/cap appreciation forever?  $2,000,000 seems totally safe to me.

No set number, but thinking it through I'd put it at about 31-32x expected expenses.  For a long retirement a withdrawal rate of 3.75% has always worked (26.7x).  Add a 5x buffer to cover the "oh crap" expenses.  This goes down the closer one gets to a SS check.

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11 minutes ago, James Daulton said:

Sorry, bond funds.

Ok, I personally don't love bond funds for government holdings since they move in value with interest rates.  Last year was a good year for interest rates and the value of those funds.  They are counter cycle but being in a fund can take a value hit just like a stock fund can.  I am not saying you shouldn't hold them as I do have them but I keep them all in tax deferred accounts and small part of portfolio.  If folks are going very heavy bonds with a big chunk in US government securities I would consider setting up a bond ladder that you continually roll-over for at least a portion of government holdings especially if you don't intend to touch the principal.  

If you are holding corporate bonds I would probably keep them in a fund as I would not recommend folks getting involved in making credit investments.    

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So weird how we throw around $1M or $2M here like it's nothing.  The median 401k balance of folks in my age group (50-59) is $62k.  The average is $175k.  There will be a whole lot of folks relying on SS to get by. 

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Posted (edited)
42 minutes ago, Juxtatarot said:

What's your magic number where you'd think you could live off of interest/dividends/cap appreciation forever?  $2,000,000 seems totally safe to me.

A net worth of probably $10mm (this includes real estate) given my location and lifestyle.  

Edited by Redwes25
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1 minute ago, Redwes25 said:

Ok, I personally don't love bond funds for government holdings since they move in value with interest rates.  Last year was a good year for interest rates and the value of those funds.  They are counter cycle but being in a fund can take a value hit just like a stock fund can.  I am not saying you shouldn't hold them as I do have them but I keep them all in tax deferred accounts and small part of portfolio.  If folks are going very heavy bonds with a big chunk in US government securities I would consider setting up a bond ladder that you continually roll-over for at least a portion of government holdings especially if you don't intend to touch the principal.  

If you are holding corporate bonds I would probably keep them in a fund as I would not recommend folks getting involved in making credit investments.    

Thanks for the info.  I'm limited to my 403b options but I'll see if anything fits the bill. 

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2 minutes ago, James Daulton said:

So weird how we throw around $1M or $2M here like it's nothing.  The median 401k balance of folks in my age group (50-59) is $62k.  The average is $175k.  There will be a whole lot of folks relying on SS to get by. 

We are FGB's, dammit!!

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Just now, James Daulton said:

So weird how we throw around $1M or $2M here like it's nothing.  The median 401k balance of folks in my age group (50-59) is $62k.  The average is $175k.  There will be a whole lot of folks relying on SS to get by. 

I know these numbers are taken from national averages but they are unimaginable to me. 

Maybe it is because I worked with engineers all my life before I retired and everyone in my expanded family and friends set has a decent job but these numbers are so extremely low to me I find them really hard to believe (and yet I know they are true).

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4 minutes ago, James Daulton said:

Thanks for the info.  I'm limited to my 403b options but I'll see if anything fits the bill. 

You won't get any appreciation in value (you will just get coupon payments) but won't have any downside risk unless the US govt goes belly up if that is what you are focused on.  

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9 minutes ago, Redwes25 said:

Ok, I personally don't love bond funds for government holdings since they move in value with interest rates. 

You'd love watching my TMF allocation bounce around...

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Posted (edited)
3 minutes ago, Sand said:

You'd love watching my TMF allocation bounce around...

yeah, I wouldn't call that a nice safe bond investment.  

ETA - What was that up last year?  Probably a great return. 

Edited by Redwes25

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11 minutes ago, James Daulton said:

So weird how we throw around $1M or $2M here like it's nothing.  

I'm in AL, so my idea of FI numbers is way different than Otis and Redwes.  Anything with 2 commas is a staggering sum of money.

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Posted (edited)
9 minutes ago, NewlyRetired said:

I know these numbers are taken from national averages but they are unimaginable to me. 

Maybe it is because I worked with engineers all my life before I retired and everyone in my expanded family and friends set has a decent job but these numbers are so extremely low to me I find them really hard to believe (and yet I know they are true).

My parents are in their 70s and have exactly 0 dollars in any kind of savings or investment account. My sister and I have to pay a large chunk of the bills for my mom. It’s more common than you would think. MIL in a similar position. 

Edited by Capella

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1 minute ago, Redwes25 said:

yeah, I wouldn't call that a nice safe bond investment.  

ETA - What was that up last year?  Probably a great return. 

Bought late June and it's up 10%.  There is a big thread at Bogleheads on a TMF/UPRO combo.  I bought in a bit (not big, fun money size) to see how it would do.  Over the last six months those two are at 15% up.  I was interested in the inner workings of these leveraged items - easiest way to stay interested is have some skin in the game.

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8 minutes ago, Sand said:

You'd love watching my TMF allocation bounce around...

:reported:

Let's keep it PG in here, guys.

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21 minutes ago, James Daulton said:

So weird how we throw around $1M or $2M here like it's nothing.  The median 401k balance of folks in my age group (50-59) is $62k.  The average is $175k.  There will be a whole lot of folks relying on SS to get by. 

These are the only types of posts that make me feel good in this thread.

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