I don't know what your debt status is. But without family
responsibilities, you could probably easily put 25% of your income
into index funds. At 10% per year, you could retire by 55.
http://kabatxinio.blogspot.com

On Mar 24, 5:50 am, "ChampDog" <Champ...[at]gmail.com> wrote:
- quote -

Cite source?

Life expectancy estimations are an essential part of distribution
phase planning.

http://www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf

or

http://www.cdc.gov/nchs/data/hus/hus06.pdf#027

On Mar 21, 11:13 pm, "Vernon27" <verno...[at]gmail.com> wrote:
- quote -

My 2 cents, if I were you I would most likely to invest in mutual
funds. They are many types of unit trust as can you see it from here:
http://financialindependent.blogspot...l/Unit%20Trust It
just describes in general, but you still need to do some background
research on the mutual fund's company before you really make your
investment. The reason is because mutual funds are generally in low
risk. We don't want to too aggressive while we're approaching the
retirement age. We can't take excitement as not like our young
time.

Another approach that I will do is to look at alternatives to extent
my retirement age either with the current employer or the different
employee who still wants to employ me or maybe consider to employ
myself by doing some small business. I don't know, I'm 30 years old
now and I start looking for alternatives what I can be done or how I
can be useful even after my retirement just in case, I do not achieve
financially independent by my retirement age.

Having said so, this is all assumed that your saving is not enough to
cover or sustain your life till you say good bye to all of us. If
your savings is already enough cater for that, you would probably no
need to invest at all and look for opportunities to extent your
retirement age. This is also subjective as it depends how long you're
still with us in this world . Average male die in 70 years old, how
long we can survive? Also not to forget the inflation factor.

jIM wrote:
- quote -

jIM, you're right. And you can agree and disagree, this is America.
There are so many variables, income (current), annual increases, amount
saved, rate of return, current spending, spending at retirement, etc.
The Barron's article highlighted reduced spending at retirement. My post
agrees with the intent of the article, that there are some things that
go away toward retirement. I understand your point about transfer of
spending, and for some that may be so. People who loved their two to
four week vacations may decide that their retirement will be spent half
time away from home, on round the world trips. Others will stay home and
garden.
Where I disagree with Barron's is that so many people are 'oversaving'.
I'd think the oversavers are in the minority. I've oversaved, and
decided that once the 4% will cover my projected expenses plus 10% or
so, it's time to check out. Clearly, as one is within a stone's throw
from retiring, the numbers are less fuzzy and some of the expenses have
already shifted. I don't believe all the expenses just flip a switch.
JOE

More people may save more if you make a goal sound more acheivable.
Instead of saying you need to save 33 times your full income as some
doom-and-gloom financial columnists claim,
its much more realistic to point out a $140K annuity will
give you $1000 a month on top of social security?
Thats sounds more acheiveable than saving five million
which sounds impossible to many people.

- quote -

I agree and disagree at the same time (is this allowed).

Expenses give the measure of what a person needs.

For planning purposes, one should not retire until they known they
have the income to meet their spending needs.

For planning purposes, at same time, 30 years out, I don't know what
I'll spend next year, much less 30 or 40 years away. Therefore I
think current income needs to be the variable for long range planning.

I think the buffers built in to "100% of current income" meet some of
the assumptions you referenced from Barrons article. Current income
has the following buffers if 25+ years out:

1) A person will get raises over 25 years. In effect a person is
saving now for a higher income they will get, the target of "current
income" is therefore a low target if raises are considered (raises
which have not been received/earned yet)
2) A person may "transfer" spending from one area to another. No
mortgage might mean more healthcare or travel spending. No SS might
transfer to more travel or social spending. I know people which eat
out more in retirement because it's too much work to only feed two
people. Spending can get transferred as much as expenses could get
eliminated. A person's income is the equalizer in this situation.
3) Income, in general, establishes the spending habits. Spending does
not drive income, income drives spending.

jIM wrote:

- quote -

This week's Barron's had a story on this, talking about a point which
comes up here often - that, to Rick's point, the percent target of
income (a 'top down' number) is the wrong direction, one needs to look
at 'bottom up', actual expenses. Many expenses evaporate, SS is nearly
7% (the payroll deduction I mean), savings for retirement, 15%, mortgage
payment, say even a conservative 15% for that (assuming one times
retirement as is recommended for the majority). This is already 37% that
doesn't need to be replaced. The Barron's story goes on about lower
'eating out' expense, lower clothing costs, etc.
This is where I recommend that one track their expenses to the dollar
for some time period, 3 months min, a year is ideal. That exercise
provides a clear picture of one's expenses, a snapshot, of course. A
good way to understand where one can cut, if that's needed, and also
what expenses are not likely to continue. One year showed me that
between saving for retirement, kid's college, and mortgage, that my
replacement number would likely be closer to 50% at retirement.

JOE

On Mar 21, 4:28 pm, "rick++" <rick...[at]hotmail.com> wrote:
- quote -

In 10 years, my salary has nearly doubled from when I started. In the
original post I said "25X current income level", which I think is
still accurate.

This allows for 20% raise over 25 years (because a person should be
able to retire on 80% of what they actually make). SS does change
equation, but without knowing income/ taxbrackets, my comments and
yours are SWAGs at best.

- quote -

Not income but living expenses not covered by SS.
That cuts it to more like 10-14x incomes.
Still hefty, but more achievable in 25 years.

On Mar 21, 11:13 am, "Vernon27" <verno...[at]gmail.com> wrote:
- quote -

The "conventional wisdom" suggests saving 10% of gross income as a
starting point. "conventional wisdom" might also suggest a goal of
25X current income level as the savings goal.

Because of your age, a 15%, 20% or 25% savings rate might be more
appropriate. If you delay retirement age, you could feasibly only
need to save 20X or 22X your salary.

The value of your current 401k will greatly influence the advice
above.

If you are unsure of the "magnitude" of the issue, I suggest doing
some reading. Online sites such as T Rowe Price, Vanguard and smart
money all have resources to help "get you started".

My suggestions would be:

1) send 10% to 401k (make sure this is capturing entire match). This
also lowers your current tax bill.
2) Establish a savings goal, then implement 3-5 as needed
3) Open a Roth IRA
4) Open a taxable brokerage account
5) Research issues such as long term care insurance, SS benefits,
annuities, tax rates, inflation and other retirement factors.

An asset allocation should be developed as part of step 1, but I would
not wait to do step 1 because you don't know your proper allocation.

Save and invest.
You have 27 years until standard SS age.
Religiously saving and investing 15% for 25 years will do it.
Or 20% for 20 years.

Note about half the people between 50 and 65
encounter a "life changing event" that slows down
their savings ability according a recent Boston College
Retirement Center report. These include illness,
career change, and marital change. So "more and
earlier" is better.

On Mar 21, 8:13 am, "Vernon27" <verno...[at]gmail.com> wrote:

- quote -

I have the same problem with cleaning my bathroom. I'm not going to
do it today, but I'll definitely do it next week. Of course, next
week I say the same thing. I at least get points for consistency.
You should set up automatic deductions. Yes, this lowers your
standard of living now, so that you will have more later. Keeping the
same standard of living by blowing up your credit cards gets you
nowhere.

Consider the tax consequences and fees associated with each type of
account. IRAs are taxable as ordinary income. So you don't get the
benefit of long term capital gains rate. So this is fine if you were
going to hold stocks for less than a year anyway. Matching funds make
IRAs quite attractive. Roth IRAs are taxed on the principle you put
in, but not on further income you get. So this is great for just
about any investment. CDs are paying good rates right now. US
Treasury's may be state tax free. A big deal in some states and not
in others. Why not autodeduct all your retirement money into a
retirement account with some safe CD/FDIC type account for a year.
Then take 10% and buy an S&P500 type fund with low costs. Try this
for a year. The big problem is greed and fear. You want to throw
your money into the hot investment of today that is returning 30% a
year (oil, foreign, gold, forex currency trading etc..). By the time
the average investor gets into these things it is usually too late, or
ever worse you get in just as it dumps. The other problem is fear.
You bought your stock after it had gone up and up and up and then when
it came back down you sold. This is buy high, sell low. A very
common technique. So the idea that you just can't predict the future
and just buy a divisified portfolio and forget it has some merit. It
avoids the whole fear and greed cycle. You can be assured that money
will become worth 3% a year less (conservative by my estimate) due to
inflation. As you get experience with index fund investing you can
put more of your money into it.

Your 401K is a great start. See, you can do it. You will be really
happy you saved when you retire!

On Mar 21, 8:13 am, "Vernon27" <verno...[at]gmail.com> wrote:
- quote -


What's in your 401K?

To get started max out the 401K. Start getting educated by reading a
couple of personal financial planning books and investment books.

I am a 40-year-old male with no children and in great health as of my
last physical two weeks ago. For most of my adult working life I have
had steady employment (only been laid off once but got a better job
about a month after my lay off); however, I have no investment (meager
savings and checking accounts) other than my current employer's
401(k) plan. Since I am fast approaching retirement age I will like to
know how and where do I start to invest so that I can have a
comfortable retirement.