At 65: A House Paid for and low bills > 401k Retirement Fund

[winb83]

I still don’t own a house. Home ownership is for wealthy people I’m working class.

 

[Uachet]

Our house will be paid off when I am 60. We'll probably move into one of those senior communities and rent our house out to military officers. Once my wife retires at 62, she wants to do a few years as an administrator before fully retiring. Then we can do a lot of traveling, spoil the grandchildren (I am literally an Uncle/Grandpa through my youngest sister’s child), and just enjoy our winter years as much as possible, considering my health.

 

[Stuntone]

I still don’t own a house. Home ownership is for wealthy people I’m working class.

Many working class people have homes and no mortgages. Inherited or either paid off.


I paid my house of 4 years ago. It's amazing and freeing not having to worry about that mortgage on the 1st. I see so many people struggling and scrambling at the end of the month trying to scrap up money to pay that rent or mortgage. It's another day too me.

 

[Dreamchaser]

My parents are in this situation. The 401k is more important than the house. In retirement you need to have enough for expenses. My parents Social Security is enough to sustain, the 401k is on top of that to maintain whatever lifestyle they want.

 

[JT-Money]

I'm not even factoring in Social Security in my long term financial planning. Because the program is toast it's just a matter of time before it fails.

 

[winb83]

Many working class people have homes and no mortgages. Inherited or either paid off.


I paid my house of 4 years ago. It's amazing and freeing not having to worry about that mortgage on the 1st. I see so many people struggling and scrambling at the end of the month trying to scrap up money to pay that rent or mortgage. It's another day too me.

You likely didn't acquire your home post COVID. The rules are different now. Regular working class people have to financially burden themselves to own a home.

If I went out and bought a home the $670 I pay a month for rent would easily increase to $1200 or more almost doubling my baseline monthly housing cost. Beyond that I would incur maintenance expenses I don't have now. The majority of the money I don't now have to spend on a higher mortgage is invested in the stock market or saved monthly. II could cut into those investments/savings and make mortgage payments with some of the money I'd rather not.

Renting over the long term has allowed me to minimize my living expenses. All my fixed monthly expenses combined don't add up to what I'd have to pay for just a mortgage putting 20% down on the average home where I live. I can save and invest upwards of 60% of my take home pay because I don't own a home.

 

[winb83]

I'm not even factoring in Social Security in my long term financial planning. Because the program is toast it's just a matter of time before it fails.

This is a myth. Social Security won't fail it simply won't cover what it once did. You'll still get it just not at the same rate people get it today with cost of living raises. It'll be in the 80% range vs what it is now.

When wiill Social Security run out? Here's what could happen to your benefits

A report from the Social Security trustee board indicates that full benefits will no longer be available in 2033.

www.cnbc.com

The financial future of the more than 70 million Americans who receive Social Security benefits is slightly more secure than anticipated: The trust fund reserves used to pay beneficiaries are projected to become insolvent in 2035, a year later than previously projected, according to the agency’s annual trustees report, released May 6, 2024.

Social Security will still exist after 2035, according to the report. But without congressional action, retirees will only receive 83% of their full benefits.

 

[JT-Money]

This is a myth. Social Security won't fail it simply won't cover what it once did. You'll still get it just not at the same rate people get it today with cost of living raises. It'll be in the 80% range vs what it is now.

When wiill Social Security run out? Here's what could happen to your benefits

A report from the Social Security trustee board indicates that full benefits will no longer be available in 2033.

www.cnbc.com

Believe a government that ran up 37 Trillion dollars in debt to safeguard your retirement plan if you want. The prudent plan would be to prepare for the Government to eventually default on some or all of its obligations.

 

[winb83]

Believe a government that ran up 37 Trillion dollars in debt to safeguard your retirement plan if you want. The prudent plan would be to prepare for the Government to eventually default on some or all of its obligations.

Social Security will still exist because workers and employers pay Social Security tax. Again they'll have to adjust what's paid out based on what's put in but since something is still put in it won't completely fail.

 

[horizon]

Ideally your 401k, social security, and personal savings are the 3 vehicles you use to retire with dignity.

@Gloxina what about this is funny?

 

[Gloxina]

@Gloxina what about this is funny?

Breh I was probably trying to “like” it and hit the wrong reaction. My goodness

 

[Laidbackman]

As you know, there's a lot of talk about pensions not offered very much anymore, and how generations after the Boomers got stuck with 401Ks. I hear some say they're jobs weren't even offering 401Ks, like jobs do now. That's true as well. For example, most fast food chains didn't offer 401K plans in the 80's.

But at some point, some in the post Boomer generations need to start holding themselves a little more responsible. I'll use myself for example. I talked about how I was once a member of A.L. Williams in '85, now Primerica. They warned us back then about the future retirement crisis. And I warned all my buddies, who looked at me like I was from another planet for talking about this kind of stuff. All they had on their minds was getting girls or getting high, or both. I said hear before, that A.L. Williams had me invested in a mutual fund. But I never told y'all that the mutual fund was held within an IRA. And IRA's were around since I was in junior high school. Anyway, all we had to do was invest at least $25 a month, which I did. But my buddy's, talking about the ones I grew up with, not the ones I met in college, didn't even want to do that. Then I remember getting fired from my private sector security guard job. I knew that White captain had issue with me, but now I know it had more to do with me preaching this kind of financial information to the guards. Wow, racism runs deep. Maybe that trash can 45 year-old captain, or however old he was, saw himself retiring into poverty, and felt I was telling his future. That just dawned on me.

Anyway, I stopped putting away that $25 a month towards my IRA/mutual fund after that happened, but I continued it a month later when I got another security job. Then when I got my security guard job with the FED, I knew I had a pension, plus they were automatically putting 1% into my TSP. So I didn't worry too much about that IRA/mutual fund anymore. At some point, I stopped putting away that $25 a month into it again. I think it was when I found myself unemployed again, when I foolishly left my guard job with the FED, and got my first IT job, then got laid off in three months. When this happened, I also cashed out my TSP for the first time. For somebody who had all this prior financial knowledge about retirement compared to the brothers I grew up with, I still saw myself with no future retirement there for a minute.

The reason I brought up this IRA/mutual fund I had, was because it was always there for all of us, and all you needed to have was a job and a bank account, and be willing to invest at least $25 a month. If that information could get to my homeboys back in '85, then I know it could get out to anybody, who cared enough about their future. But the average person in my age group, wasn't tryna hear that. But I was one of those few who listened because I had a daughter. If I didn't get the job with the FED, where I was guaranteed the pension, and the TSP, then I would have been putting more money in my IRA/mutual fund. With that said, I wish I had continued putting money in that IRA/mutual fund, like I was doing with my TSP. You can't contribute to either one when you're not working...and retirement income isn't allowed.

Anyway, I know there's a lot of gloom and doom videos out there about retirement, but there's a lot of people without pensions, or even 401Ks, who took advantage of the financial knowledge that's always been out their...and they retired early.

As you see, I bolded the sentence above. That statement was kinda wrong in my case. When I had to leave that IT job with the FED, I foolishly closed that IRA/Mutual Fund I had with A.L Williams, which was really under an account with Fidelity. I wound up rolling it, which had only $25 in it, into an IRA with my credit union, just so I could still have an IRA to save on taxes, if I ever decided to add more money to it, which I couldn't unless I was working. The other foolish thing I did was when I first cashed in on it years ago - can't remember if that was when I left the FED the first time, and suddenly found myself laid off three months later, or if it was when I lost that security guard job back in 84'. I think is was the latter. I just know I only left $25 in it when I finally rolled it over to the credit union, the minimum to keep it open. Like I said earlier, when I got my first job with the FED - Special Police Officer, I practically forgot about that mutual fund, when this was the time I should have been increasing it, since I didn't start investing into my TSP until my early 40's, and that was several years after I started the IT job with the FED. Up until then, I was only letting the FED match the 1% they were already putting in. I guess getting that IT job made me put off investing in my TSP even longer. I probably thought I was rich after the salary I was getting at the previous FED position, and the 1% match they were putting in my TSP, and the pension I was getting was going to be enough to retire with. And guess what, I still foolish thought I was going to get an 80% pension. That probably came from being under CSRS for the first year I started with the FED, when I was working around mostly older co-workers, who were well vetted into CSRS. Although I learned more about life from the older brothers there, than I did with those sold-out older brothers working at the IT position, none of these older brothers at either job ever told me that since I was under FERS, I wouldn't be getting 80%. The formula for FERS employees is in the ballpark of 1% for every year of service. So you'd be looking at only around 30% for 30 years of service. And people are jealous because FEDs have pensions . Meanwhile, I was worrying about retiring comfortably with even 80%, knowing at 62, I would still have 5 more years left on my mortgage, even more if I had refinanced, or upgraded to a better house, in a better neighborhood, something I definitely was about to do if I hadn't gotten placed on the PIP.

I know I went off topic here, but I felt that was worth a mention, because many aren't hearing the FERS formula like this. Well, now I'll finish telling y'all about my mistakes. When I was put on that PIP, which eventually led me to cash out my TSP for the second time, unlike that first time when I had only $933 in it while working as a Special Police Officer with the FED, I not only cashed out my TSP, but out of frustration with the system period, I completely closed out that Fidelity Mutual Fund/IRA account when I rolled that $25 over into my credit union IRA.

So like I said, I was kinda wrong about what I said. Although I needed a job to continue putting money in my IRA at the credit union or my TSP if I kept working, I didn't need a job to continue putting money into my old Fidelity Mutual Fund account if I kept it. I would have only had to drop the IRA attached to it...then I would have been able to add money without job income. Therefore, I could have invested some of my retirement income in it. And you know Fidelity and Vanguard are on the same level...smh. All that back pay when I retired could have went to my Fidelity Mutual Fund, not to mention the money I could have been adding to it afterwards. Instead, every little emergency I had a little later after retirement, had me closer and closer to going back into credit card debt. I know I'm no longer living paycheck to paycheck in retirement anymore, but when I think about if I kept that mutual fund Plus if I kept adding to this mutual fund when I first opened it back in 84' . Believe me, a lot of people in my age group made the same kind of mistakes, and this isn't uncommon.

 

[TNC]

I had almost a quarter mill in my 401 k and Roth before all this Trump fukkery. But I’m keep it a buck, if it wasn’t for my company match, wouldn’t fukk with it.

ALWAYS do a company match.

Its not many opportunities in LIFE that will guarantee you a safe 2X on your money

 

[TNC]

You forgot to post a $ amount in the 401k . How much do you really need . Is 1.5 million enough to retire on , house paid for .

1.8 - 2.2 mil, depending on where you live.

 

[Pegasus Jackson]

World War 3 will blanket the world in ash and fire before you get to spend a dime.