Random
Footballguy
Just remember to go back and read this thread when you start feeling beat down by the deadbeat, liar, impossible to contact, people you call tenants. (proud landlord here.)
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PBS Frontline : The Retirement Gamble, sorta Must See (4 Viewers)
- Thread starter Smack Tripper
- Start date
Just remember to go back and read this thread when you start feeling beat down by the deadbeat, liar, impossible to contact, people you call tenants. (proud landlord here.)
NewlyRetired
Footballguy
When I retired, our portfolio was broken up into a 1/3 1/3 1/3 ratio1/3 in growth (all in IRA) 1/3 in balanced1/3 in safe bondsPart of the balance and all of the safe bonds are outside of retirement umbrella's and are used to help generate the income we live off of. It is a strategy that helps protect a bit against downturns in stocks, but also gives some exposure in case stocks go up.
(HULK)
(Smash)
Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
NewlyRetired
Footballguy
I don't own any rental property but my Aunt who does goes put of her way to give good deals to good tenants in the hopes they stay longer. Do you take that approach or is it not worth it?Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
Random
Footballguy
Sounds like we started about the same time. I've had plenty of deadbeats. One place with same tenant for about 4 years, a few places with tenants a little over a year. Most bail or fall behind before the lease is up.Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
Random
Footballguy
I sort of do. I have never raised rent on those who stay. I'm more willing to work with those who have been with me longer. My 4+ year guy is a tattoo artist who does very little business in the winter months, so he falls behind and catches up with his tax refund. I could easily rent his place for $50-$100 more per month.I don't own any rental property but my Aunt who does goes put of her way to give good deals to good tenants in the hopes they stay longer. Do you take that approach or is it not worth it?Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
Bull Dozier
Footballguy
That is what my dentist does. His practice is only open three days a week, and I think one of those days only office staff is working to schedule appointment, work on bills, etc. He's only there two days a week and vacations a heck of a lot. I don't know how old he is, he seems ageless, but I'm 39, and he stitched me up when I was 5 and had a tooth knocked out. He's been doing it forever.
(HULK)
(Smash)
I only raise rent between tenants. I guess I might if the tenant was troublesome. But good tenants, they're still renting at 2008 rates.I also confirm employment and pretend to run a credit check on them.I sort of do. I have never raised rent on those who stay. I'm more willing to work with those who have been with me longer. My 4+ year guy is a tattoo artist who does very little business in the winter months, so he falls behind and catches up with his tax refund. I could easily rent his place for $50-$100 more per month.I don't own any rental property but my Aunt who does goes put of her way to give good deals to good tenants in the hopes they stay longer. Do you take that approach or is it not worth it?Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
Random
Footballguy
I only raise rent between tenants. I guess I might if the tenant was troublesome. But good tenants, they're still renting at 2008 rates.I also confirm employment and pretend to run a credit check on them.I sort of do. I have never raised rent on those who stay. I'm more willing to work with those who have been with me longer. My 4+ year guy is a tattoo artist who does very little business in the winter months, so he falls behind and catches up with his tax refund. I could easily rent his place for $50-$100 more per month.I don't own any rental property but my Aunt who does goes put of her way to give good deals to good tenants in the hopes they stay longer. Do you take that approach or is it not worth it?Lol. I've had the same tenants for 5 years in one place, and the other place I've had 2 over that same strech. Haven't had any deadbeats yet thankfully.
Me too!
BeTheMatch
Footballguy
My wife is a teacher with a defined-benefit pension. So we haven't been as worried about retirement as we otherwise would have. Of course, now with the way school districts, cities and states are trying to abolish these plans or change the rules on how you contribute in the middle of the game, I'm worried that we're not going to end up getting what she was promised.
That has put a little more focus on our other retirement savings and trying to beef that up. We're 40, so we've got some time. But if they end up screwing us on her pension someday, we're... well... screwed.
That has put a little more focus on our other retirement savings and trying to beef that up. We're 40, so we've got some time. But if they end up screwing us on her pension someday, we're... well... screwed.
This should be a very real concern. Pension funds are severely underfunded and Wall Street is extracting enormous fees from them to deliver below market returns.
What state are you in?
.
mquinnjr
Footballguy
I have a defined benefit pension, but the people in charge of our company complain about how expensive it is (well, they're right it is). The rumor mill always churns about how it will be frozen at some point/shifted to the 401k plan (e.g., double the match, but put the burden on the employee to "earn it" and minimize the pension obligation on the balance sheet).
I'm riding the wave until it crashes and beefing up my other accounts where I can, as very few companies even have a pension anymore. I'll be happy getting anything really out of it, and I view social security as a tax I'll never see a benefit from (I'm 29) to remain conservative/focused on saving aggressively.
culdeus
Footballguy
Defined pension plans are going to get raped in the next 20 years. What's the best case for bond yields? 5%? Take the AUM fees out of that and you can't even dream of seeing 2.5% return on fixed.
Then you can envision people taking more risk, plowing into equities and emerging and BOOM. Chickens, roost, etc.
Then you can envision people taking more risk, plowing into equities and emerging and BOOM. Chickens, roost, etc.
KCitons
Footballguy
The loss of pension is a concern for a lot of people. My wife's situation is unique. She's been with the Post Office for 30 years. (6 years as a part time sub, 24 years as a Rural Carrier) She's still 10 years away from minimum retirement age. So, she will have 40 years of service in with the USPS and we worry about the changes that could happen in the next decade.
Luckily, her retirement benefits are comprised of 3 different things. Social Security (maybe), TSP (gov't run 401k), FERS retirement benefit (pension)
I would hope that any changes that could be made won't effect her. Or at least she would be grandfathered in due to her tenure. But, who knows if the Post Office will still be operating much longer.
Luckily, her retirement benefits are comprised of 3 different things. Social Security (maybe), TSP (gov't run 401k), FERS retirement benefit (pension)
I would hope that any changes that could be made won't effect her. Or at least she would be grandfathered in due to her tenure. But, who knows if the Post Office will still be operating much longer.
Thing is, a lot of these pension plans have gone the alternative investment route to make their statutory returns. It isn't helping them though, they are being eaten alive by really high fees while getting stuck in investment vehicles that they don't understand and still underperform the market. There seem to be a lot of kickbacks in that industry to convince pension managers to take giant risks they can't evaluate and nobody does due dilligence on...
Buck Bradcanon
Footballguy
You posted this twice.
A 401k is your money. Why wouldn't you plan to have your own money in retirement?
Nice. I have the same amount in my 401k.I just bought a shortsale (about $50K instant equity), but would like to get a rental in a a couple of years as I agree with you. First plan is to pay off student loans....
ETA: Currently 33Can't believe that some people are paying 2% fees....that is ridiculous.
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BeTheMatch
Footballguy
We're in Minnesota. They, like everywhere, have to provide the sustainability reports or whatever every year and it's still in good shape. But what I see happening is the district or the state basically saying they're going to cut money to schools, and then the domino effect will lead to teachers having to take significantly more out of their checks to make up the difference or agree to take less at the end.
I think that is just morally wrong. My wife and all teachers went into this profession at least in part because of the benefits that being a teacher provides. The pay itself might not be that great, but when you factored in job security, health benefits and the retirement pension, there is a real value on those things. And now they're being taken away more and every year. Just found out our healthcare costs are going up 50 percent next year. Even with small "raises," she's taking home less and less.
If they start going for the pensions, it will be bloody.
I think the only thing these states and districts should be able to do is change the rules for those just about to enter the profession. You can't take away all the money now that we've been counting on for 20 years. That's different than the market crashing or something. There's not supposed to be risk here - that's why they call it a defined benefit.
NewlyRetired
Footballguy
I agree. I am not sure I understand his thought process. Maybe he feels the market is such a crap shoot that there is a likelihood that there will be nothing left when he retires?
If one wants to consider something like Social Security a bonus at retirement and not factor that in when planning, then that makes some sense to me.
Pick
Footballguy
Sorry for posting twice. I lose track.What I mean by 401K is plans in general where the gov is setting up your retirement for you.
17seconds
root of all aliai
Exactly.
That said... maybe I'm naive but I can't imagine completely losing social security. If SS "dies", there will be some kind of payout. Just the way this country works. Nothing completely disappears.
Spin
Footballguy
Alright so help educate the ignorant. I recently graduated and started working in November. My fiancee doesn't work, just stays home with the kid. I have a decent income, started out at 50k, living in a relatively cheap location. Still have school debt, but that's it. No car payments etc.
I currently contribute 5% to my 401k, and company matches 4% on that. They match the full 3%, then 1/2 a % on the next 2. If that makes sense. From my understanding, and I could be completely wrong, but it's how it was described to me, is that they started matching from the day I began contributing, but I only keep it if I stay with the company for 3 years.
(On a side note, what happens to the $ if I leave after 2 years? I know I keep what I put in, but what about what they matched? Back into a pool to match on others?)
We also are putting $50 from each check, which works out to be 1300, into a savings account to pay for kids school. Which probably isn't enough to cover it all, but coming from someone who had to pay entirely for school myself, 24k would have been a huge help. Any better options for this? Or just keep the direct deposit going into a savings account?
Considering I'm 27 now, just continue putting into the 401k? Is there another option I should be looking into? Should I up the % even though the company isn't matching? Any good and insightful reads on this subject would be greatly appreciated.
I currently contribute 5% to my 401k, and company matches 4% on that. They match the full 3%, then 1/2 a % on the next 2. If that makes sense. From my understanding, and I could be completely wrong, but it's how it was described to me, is that they started matching from the day I began contributing, but I only keep it if I stay with the company for 3 years.
(On a side note, what happens to the $ if I leave after 2 years? I know I keep what I put in, but what about what they matched? Back into a pool to match on others?)
We also are putting $50 from each check, which works out to be 1300, into a savings account to pay for kids school. Which probably isn't enough to cover it all, but coming from someone who had to pay entirely for school myself, 24k would have been a huge help. Any better options for this? Or just keep the direct deposit going into a savings account?
Considering I'm 27 now, just continue putting into the 401k? Is there another option I should be looking into? Should I up the % even though the company isn't matching? Any good and insightful reads on this subject would be greatly appreciated.
Pick
Footballguy
Thank you for putting that better for me. Yes, essentially playing it safe not depending on the stock market or the government for retirement.
NewlyRetired
Footballguy
You should look into a 529 Plan.
http://www.savingforcollege.com/intro_to_529s/what-is-a-529-plan.php
Dentist
***Official FBG Dentist***
Good luck.
Without stock market returns you would either have to hope for zero inflation (lol), or have done some amazing personal investing in other things like land, real estate, etc. to even have a shot of retiring ever unless you can build up enough of a cash supply to live on and don't live too long.
NewlyRetired
Footballguy
yeah, I don't think SS will ever really disappear at least in our lifetime.
The age you can start taking out will likely get older (as it should with people living longer) and the amount you get might be a bit smaller but most people will still receive some sort of SS.
Still probably best considering how small SS is to not bother using it in your retirement calculations and just enjoying it as a bonus when it does come.
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NewlyRetired
Footballguy
The government really isn't setting up your retirement via a 401k. They don't fund a 401k, you fund the 401k and your company (hopefully) funds it.
lumpy19
Footballguy
As painful as it may be I'd save as much as you possibly can in the 401k, you're young, get that thing rolling. I'm 35 and it's crazy how it starts multiplying. I started my 401k when I got out of college at 22 and during my 20's I had a decent job, made ok money but all of a sudden I'm 35 and it's a nice chunk of money.
Sand
Footballguy
They get the money back. As to what they do with it - hookers and blow?
For the 401k question you really need to find out what the fees are. You are already claiming all the free money you can get (which is good!). If the fees are high you can start up an IRA and dump money in there with lower fee ETFs (almost always lower fee than mutual funds, though mutual fund offerings are quite good these days). This requires some management, so if you're not dedicated it may be easier/better to keep it all in the same place.
Pick
Footballguy
We are landlords but aren't banking on that either. The second option you mentioned with cash is our route. We'll be there in five years if I remember the numbers right. No luck needed.
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Pick
Footballguy
NewlyRetired
Footballguy
I don't understand the question.
You don't have to use a 401k if you don't want to. It is there for your benefit, not as a requirement. You would be nuts not to use it if your company has any sort of match because it is free money even if the investment choices are meh.
But if you really hate your 401k and there is no match, you could always open up an IRA.
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NewlyRetired
Footballguy
Pick
Footballguy
Ya, we max that out but I always thought it was required to put money into retirement. Maybe I'm thinking of SS. Sorry, my wife does all the thinking on this stuff.
Steve Tasker
Footballguy
This will depend on your plan's vesting policy. If you're really interested, dig up your 401k plan summary (your HR should've provided you with one when you became eligible) and see what it says about vesting.
NewlyRetired
Footballguy
401k is not required. You make that choice yourself whether to add money or not to the plan.
For Social Security it is required and is automatically taken out of your check.
inca911
Footballguy
My priority list would be as follows:
1. You must keep contributing that 5% to 410(k) to get the free money from your employer. Ask HR what happens if you leave <3 years.
2. Fund Roth IRA as much as you can instead of putting into kids school savings account (maximum is $5.5k for individual in 2013). You can pull the principle without penalty anytime from a Roth, so it is a savings account, but with a huge tax break on earnings (i.e., you can pull your principle contributions for college tuiton expenses, and let your earnings stay in the Roth and continue to grow). As your income rises, you will be costed out of being able to fund the Roth IRA, so now is a good time. 529 plans and other savings vehicles have some limitations that I didn't like. Fidelity and Vanguard are both good options (I went with Fidelity). Takes 15 minutes online to set it up.
3. If you still have extra, fund the remainder of the 401(k) up to the max ($17.5k for individual).
4. If you still have extra, then would be the time to look into 529 and other college savings plans. My personal thoughts are towards real estate investment over a 529 plan. Last time I checked, they aren't making more land.
All the savings plans in the world don't help unless your investment choices are appropriate for your situation. Don't just fund these plans and forget about them, learn how to actively manage your investments!
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Balco
Footballguy
It is really scary to me at the amount of people in this country who have not saved a thing. Striving to save 10% of salary should be the bare minimum.
I strongly encourage anyone who has questions about saving for retirement to buy this book.
The Bogleheads' Guide to Investing
This book completely changed the way I looked at investing and saving for retirement.
I am a state employee and have a defined benefit plan, but don't factor that at all in my retirement planning. If I continue working for the state until 62, I would get approximately 35 % of my salary.I don't plan on working until I am 62, and don't plan on being a state employee for more than five more years.
I max my Roth and 457 (deferred comp) plan, Asset Allocation is 75 % stocks and 25% bonds (I am 35 and Jack Bogle suggests holding your age in bonds. I am a little more aggressive). All of my stocks and bonds are low cost index funds.
I cannot stand the argument some people make about spending money while you can enjoy it. Yes, that is true, you should find a balance, but you need to save. Sacrifice in some areas, so that you can have fun as well as save. I have cut my cable and land line phone which saves me about 1500 a year. That is a nice trip to Vegas, for me. I also resist the temptation to upgrade everything, especially my residence. I still live in the same 800 square foot condo I bought when I got my first job out of law school. Mortgage should be paid off within 2 years.
I have made a ton of mistakes (Lexus IS 250 comes to mind), but I have learned a lot from them. I will drive that car until the wheels fall off, for example.
It boggles my mind all high schools do not have a financial lit class.
I strongly encourage anyone who has questions about saving for retirement to buy this book.
The Bogleheads' Guide to Investing
This book completely changed the way I looked at investing and saving for retirement.
I am a state employee and have a defined benefit plan, but don't factor that at all in my retirement planning. If I continue working for the state until 62, I would get approximately 35 % of my salary.I don't plan on working until I am 62, and don't plan on being a state employee for more than five more years.
I max my Roth and 457 (deferred comp) plan, Asset Allocation is 75 % stocks and 25% bonds (I am 35 and Jack Bogle suggests holding your age in bonds. I am a little more aggressive). All of my stocks and bonds are low cost index funds.
I cannot stand the argument some people make about spending money while you can enjoy it. Yes, that is true, you should find a balance, but you need to save. Sacrifice in some areas, so that you can have fun as well as save. I have cut my cable and land line phone which saves me about 1500 a year. That is a nice trip to Vegas, for me. I also resist the temptation to upgrade everything, especially my residence. I still live in the same 800 square foot condo I bought when I got my first job out of law school. Mortgage should be paid off within 2 years.
I have made a ton of mistakes (Lexus IS 250 comes to mind), but I have learned a lot from them. I will drive that car until the wheels fall off, for example.
It boggles my mind all high schools do not have a financial lit class.
Binky The Doormat
Footballguy
Whoa - is it those people's fault that scrimped and saved, invested wisely/conservatively, retire - and then the market goes to sheet again. What is your take on that situation?
Balco
Footballguy
I don't understand how someone who invested conservatively and wisely would be devastated by a market crash if they simply stay the course and don't panic. Withdrawing 4 % of the nest egg per year should ensure the $$$ lasts a long time. People near retirement should be lowering their exposure to equities, to better weather those huge dips when they happen.
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NewlyRetired
Footballguy
Many retirees now consider the old 4% rule to be slightly aggressive as healthy people are living longer and longer now. 3.5% is a more conservative number to use. We are running at ~2.25% right now but expect that to go up in later years a bit.
Dentist
***Official FBG Dentist***
aren't you most likely generating at least 2.25% on your money right now (i hope) so in reality you're not drawing down at all, just living off what the nest egg generates?
Binky The Doormat
Footballguy
wilked
Footballguy
NewlyRetired
Footballguy
He is a landlord. That will be an excellent source of income for his family. He already stated he hopes to retire in 5 years.
NewlyRetired
Footballguy
Yes. With the market doing better, we are actually much better off today than when we retired back in 2010. If we keep our expenses down in our first phase of retirement (until daughter graduates college and is settled on her own), we should enjoy a very nice second phase of retirement in which we intend to travel some.
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