Editor’s note: Annoyed Nomad is generously sharing his process and insights with the community. This is in no way meant to be financial advice. As with all things, educate yourself before undertaking any action.
Introduction
A bit about me: I’m 58 years old and married (my wife is 57). I met my wife about 13 years ago. This is a second marriage for both of us and we have three adult daughters between us (mine is 32, hers are 28 and 26). My wife trusts me to be the lead on financial planning.
We retired recently – our last day of work was March 27, 2020. The retirement date was selected and announced well before the coronavirus panic started in the US. And yes, it was during one of the biggest drops in the stock market.
Our retirement goal was to get there as early as possible without having to give up quality of life along the way. And to have enough retirement funds to continue living a high quality of life. A main component of “quality” for us is travel. We’ve traveled various places over the past 13 years and want to kick it up a notch in retirement.
Many of our friends and coworkers have commented that we’re retiring “early” since we’re still in our 50s. But I wouldn’t consider it an extremely early retirement, not like the FIRE movement (I have read some of the FIRE examples). Also, as the stock market took a plunge, people asked us if we needed to reconsider our plans and continue to work for a while longer – maybe even another year. A month ahead of our retirement date I responded confidently that the stock market drop wasn’t a concern. As we got closer to the date and the stock market went further down; we saw the way the government was hurting the economy with their pandemic response; and it all appeared as an unprecedented situation, we definitely had some trepidation. I rechecked the numbers and my estimation spreadsheet a number of times in the final weeks before the date. In the end, we held to plan. At the peak of the stock market we had about $2.3 million in retirement savings. On our retirement date it had dropped below $2 million, which was scary. Thankfully, the market has rebounded somewhat and we’re back above $2 million.
Why did we hold to plan? Well, psychologically we had been counting down to that retirement date for months. We had each done what we could to prepare our employers and our customers for our departure – giving two months advance notice to allow for a smooth transition. When we gave that notice, something was triggered in our brains that made it painful to think it might not happen. We didn’t want to “not retire.” But more importantly, I had a plan for market downturns. I just didn’t expect to need to use it at the beginning.
Our Retirement Plans
Our Retirement Approach
Pensions
Pensions are NOT a significant portion of our plans. My wife has a modest $10,000/year pension from a previous employer that will start at age 60. I have an even more modest $741/year pension from a brief time with one employer that will start at age 62. I often refer to my pension as “beer money.” We expect to rely mainly on our investments for retirement income.
Low Cost Index Funds
We only own about $5,000 in individual stock shares. I was given some company stock by my father as a gift in the 1990s and my wife bought about $200 of shares at a discount price when her employer was spun off from the parent company. We don’t even count it towards our retirement goal-planning. It’s “extra.”
I don’t feel confident enough to know which stocks are the “right” ones. Who wants to experience an Enron situation? Before I met her, my wife actually lost some significant savings when her company’s stock became worthless when the company went bankrupt due to CEO corruption. So, mutual funds are a good way to spread our money across many companies. We’re basically invested in capitalism.
Index funds vs. actively managed funds. Since actively managed funds have higher management fees than index funds, they have to be able to out-perform the index funds to be worth the extra cost. While there are managed funds that can do exceptionally well (at times), like the ones who shorted the mortgage-backed securities ahead of the 2007-2008 financial crisis, I’m not confident in knowing which ones will do well. Warren Buffett’s famous $1 million bet that an S&P 500 index fund would out-perform a firm’s actively managed funds helped convince me that index funds were the way to go.
Total Stock Market Index Fund. I also don’t have any confidence in which sectors (e.g., Energy, Financial, Utilities, IT, etc. or large, medium or small businesses) of the stock market will do well. In fact, some sectors do well one year and then have a large drop in value the following year. So I invest in “Total Market” index funds. If a total market fund wasn’t available in our 401K, I’d pick a combination of an S&P 500index fund and Mid-cap and Small-cap index fund(s).
Bond Index Fund. When I chose to invest in bonds, I took a similar approach, picking a total bond market index fund or something as close to it.
ETFs. I started with low-cost index mutual funds and they’ve done well for me. I understand there are equivalent ETFs (exchange-traded funds) that might even have lower costs. I intend to check into these as I go forward.
Dollar Cost Averaging
The market has ups and downs and dollar cost averaging takes advantage of those ups and downs.
For our 401K and IRA contributions, we would determine the amount our annual budget will allow us to contribute. For our 401Ks we divided the annual total by the number of pay periods and set up a payroll deduction for that amount. For our IRAs we divided the annual amount by 12 and then contributed that amount every month.
I also took a dollar cost averaging approach when reinvesting cash during a transfer. I’ve worked for a variety of companies and when I left a company, I would do a direct transfer of my 401K money to my Vanguard IRAs. When doing so, it’s converted to cash within the 401K before transfer and is put into a cash fund/account within the IRA (usually a money market account/fund) and you have to direct that cash into your investments. I’ve learned to use the Dollar Cost Averaging approach when doing so – invest that cash in equal amounts over 6 to 12 months.
Budgeting
Back in 2009 I started tracking where every dollar has been spent. That has helped me to create a realistic budget from year to year, refining the numbers based on actual experience. Having a realistic budget for our retirement years was a critical step to being ready for retirement. Our retirement annual budget is about $94,000 before income taxes (which will vary based on the income source). That includes the $30,000 for travel mentioned above.
The budgeting work was a precedent to the creation of the “big-ass spreadsheet.” I created a spreadsheet to forecast how our money would last in retirement. The goal was to have enough to cover our desired budget until age 100. I built the spreadsheet using conservative numbers. I assumed the following:
We hired a fee-only financial advisor we found via the Garrett Network last year to cross-check if the conclusions from my spreadsheet held up. She ran multiple monte carlo simulations which showed an 85-86% likelihood of still having retirement capital remaining at age 96. That was reassuring.
Get the Big Costs Done Before Retirement
Mortgage: I refinanced my mortgage in 2012 to a 10-year loan at a rate under 3%. Back when I did that I thought I’d retire in 2022, about when the loan was paid off. Even though we retired ahead of that plan, there’s no need to pay off the loan early since the interest rate is so low. I feel that my money is better invested in retirement funds. But having less than two years of mortgage payments left helps ensure our expenses in retirement are low.
Home Improvement: We’ve done a lot to improve our house, including: remodeled master bath, remodeled kitchen, refinished hardwood floors, new furnace & AC, new 30-year roof, new driveway, upgraded electric panel, new water heater (tankless!), finished basement, a new deck and some landscaping work. We plan to be in this house for at least the next ten years, so it was worth making the improvements. We also have confidence that no really major home expenses should surprise us.
Car payments: My car (a 2013 Kia) was paid off a year ago and my wife’s (a 2015 Subaru) will be paid off in a few months. We bought both our cars used in 2016 and 2017, and we tend to keep our cars for about 10-12 years (our previous cars were a 2003 and 2004). The intent was to have reliable paid-off cars for the first 8-10 years of retirement.
Ratio of Stocks to Bonds to Cash
More than 10 years ahead of retirement: Over 10 years ago, I was probably about 85% invested in stock funds and was told by a financial advisor I was a very aggressive investor. If I could go back and give my younger self advice, it would be to use the remaining 15% to buy stock funds when the market dipped. To anyone who has over 10 years before retirement, I would recommend putting your retirement money into stock index funds. Maybe keep some of it, say 10-20%, in bond index funds (or maybe a cash-equivalent fund) if you think you’ll try to take advantage of market dips to buy some more stock funds when stocks are cheap. If you don’t feel like you’ll have the time or desire to buy during the dips, then I’d recommend 100% into stock index funds.
I remember a conversation with a work colleague back when we were both in our 30’s. He was putting a large chunk of his 401k money into a Treasury fund. He was worried about the stock market’s volatility. Back then I didn’t think he was smart; today I know he wasn’t smart. Here’s an article about the ten years from one of the “worst” times to have invested, August 2007. It shows that even though it took over 4 years to recover the losses from the Financial Crisis of 2007-2008, after 10 years your investment would be back on track. And if you were dollar-cost averaging your additional contributions during the down years (and/or using your bond money to buy cheap stocks), you’d be in a good position.
10 to 5 years ahead of retirement: During this period we had our retirement funds invested in about 75-80% stock funds and the remainder in bond funds. I would recommend that same range, with the goal of being about 75% at the tail end of this 5-year period.
Within 5 years of retirement: During this period I started adjusting our ratio to about 60% stocks and 40% bonds shortly before our retirement date. When there were new highs in the stock market (thank you, Trump?) I converted some of the stock money to bonds until I had attained the ratio. What if someone is in that period now, with a down market? The down market may make that adjustment for you; I’ve seen our ratios change as a result of the stock market dip (further addressed below).
In retirement: Okay, so frankly, I’m still figuring out some of the details. The goal is to have 60% in stock funds, 35% in bond funds and 5% in cash-equivalent funds. It’s kind of a “bucket” approach to retirement, but I haven’t created separate accounts for each bucket. The 60/35/5 distribution is preparation for a down market. The 5% cash is expected to cover about a year’s worth of expenses during a highly volatile market in stocks and bonds. The 35% bonds are expected to cover 4-6 years of a down stock market. Yes, the bond market can also go down, but the worst one-year performance of the Vanguard Total Bond Market fund was -2.15%, which is a lot smaller loss than the stock market can experience; and the worst 3-year return was +1.33%. I plan to rebalance over time to attain the 60/35/5 balance. As I said above, I aimed for a 60/40 stock/bond ratio shortly before our retirement date. I achieved that. I’m planning to roll over my 401k to my IRAs and when doing so, use enough of that money to achieve the 5% cash in the accounts. This made sense since the money is converted to cash before the transfer.
We had saved enough cash in a bank money market account (outside of retirement accounts) to cover expenses for 2020, so we’re fine for this year and it gives me time to figure out some details. I mentioned above about the down market adjusting the stock-to-bond ratio of our investments. Since the stock funds went down in value and the bond funds didn’t drop much, our ratio actually changed to about 58% stocks vs. 42% bonds. So in early April and again in early May I converted $10,000 of bond funds to stock funds. I figure I’m getting the stocks at a low price and it’ll pay off in the long run. Even after the $20,000 conversion I still have enough in the bond funds to cover 4-6 years.
Tax-deferred vs. Roth Accounts
I’m a huge fan of the Roth option. If you’re young, I believe you should be putting your money into a Roth account. Many companies offer a Roth option in their 401k plans. Roth accounts became an option in 1998, so it wasn’t available to me at my youngest investment years. I’ve tried to maximize my Roth accounts over the last 20 years (my wife has also for about the last 12 years), but they still only represent about 23% of our retirement funds. The head start in compounding years favored our “traditional” retirement investments and they’ve grown so much larger.
The trade-off between a traditional account vs. a Roth account is basically reduced taxes of today vs. tax-free in retirement. The money you put into a traditional account reduces your taxable income this year. The money you put into a Roth account is taxed this year, but tax-free in retirement. There can be good reason to still do traditional investments:
You can use a Roth IRA as an emergency fund. Many financial advisors recommend you maintain an emergency fund of readily available money – usually to cover 3-6 months of expenses. I agree with having an emergency fund and you can find multiple articles online advising on how to calculate the correct amount. But having money in a savings account, even a money market account, isn’t going to be growing very fast. Once I had a Roth IRA for five years, I treated it as my emergency fund. That’s because after you’ve had a Roth account for 5 years, you’re allowed to access the contributions penalty-free (even before age 59.5). The contributions are what you put into the account. You can’t access the growth without a penalty before age 59.5. That allowed me to always maximize my retirement contributions in my 401k and IRAs and still feel confident I had emergency money available. I was lucky that I never had to tap into it.
A Roth account provides flexibility in retirement. Having tax-free retirement funds is going to help with our expenses. Because we’re retiring prior to Medicare age (65) and we don’t have health insurance available via a former employer, we’re going to get our health insurance via HealthCare.gov (yes, Obamacare). There’s an income“cliff” where the government tax credits go to zero and the insurance premium increases about $1000 per month. We intend to draw from our traditional accounts to an amount below the subsidy income limit ($68,960 for a family of 2 in 2020) and then use Roth funds to cover the rest of the year’s expenses.
One more thing: Health Savings Accounts (HSAs)
Most of my employers didn’t offer an HSA-eligible health insurance plan, but my wife’s did. Between the two of us, we have about $25,000 in HSA accounts. HSA money has to be used for qualified health expenses, but health costs are expected to be significant in retirement years, so I have no doubt that we’ll be able to use those funds. The beauty of these accounts are that they are tax-free when you contribute to them and tax-free when you withdraw from them (for qualified expenses). If you’re healthy and selecting an HSA-eligible health insurance plan won’t negatively impact your current budget, I’d highly recommend selecting it and contributing as much as you can.
Thanks!
I have a HSA at my current employer. I like it.
I had one at a previous employer but had to close it after I left that employer. As long as you were employed at that employer, the HSA company waived monthly low balance charges. When I left, I was beneath the minimum balance. So, monthly charges. The health insurance through my new employer was not a high-deductible plan. Waiving insurance through my new employer and getting my own high deductible plan wasn’t worth it. I closed the HSA. I hated paying those penalties.
I went a bit overboard on my emergency fund. I have more than six months. I also keep in cash. I don’t mind it not growing that fast as long as it is there when I need it.
I understand what you mean about the HSA monthly charges. I’m transferring an HSA from the original HSA company that was selected by a previous employer to Fidelity to save those costs. And the original HSA company is charging me $25 to close the account.
If you prevent them from robbing you every year, they will hit you with that closure fee to make sure they still get you coming or going. The fact many employers pick companies with these sorts of practices suck.
I gave you this first and you went and spent it on an on topic post that doesn’t even reference the fact that you’re first or shame those who aren’t.
OT:
JFC
I paid a small bonus to three employees who were pulling extra hours in the office because I had put other employees on work outside of the office during all this bullshit.
Dumbasses talked about their extra pay and now I’m dealing with the people who were put outside of the office.
This is one of the things I hate about being an employer, employees who can’t keep their mouths shut about their compensation.
As an Employee, i can confirm that a large amount of us are stupid.
Is it stupid, though? I mean, it’s in the employer’s best interest not to pay more so he doesn’t want word getting around about disparities. But for the employee it can only increase leverage.
Maybe. Keeping your cards to your chest is important too though. Its one thing to try to sus out what your fellow employees are getting in compensation. Another to blab about your bonus that you can be fairly confident the others didn’t get. Just makes future bonuses less likely.
At least my service line, the ability to keep your trap shut is essential. Those three would now be under a cloud with me for that reason alone.
At my employer, there are exactly three people who know how much every employee makes – the CEO, the CFO (my immediate supervisor,) and me, because I process payroll. The ability to keep my mouth shut is probably my most important job qualification. (As a perk, I also sometimes get to hear about other stuff because my boss trusts me not to tell anyone else.)
I pay 25% of my income in pension taxes to the Romanian government and I will be totes taken care of, no need for all that mucking about with indexes.
we have three adult daughters between us – single?
We have a condo reserved in Venice, FL for Jan-Mar 2021. – why not some cheaper non American warm place?
I mean, the first and most important question is would? All that text, and he leaves out the important stuff.
oh Also I contribute to the office pool to buy weekly lottery tickets as a retirement backup.
One daughter is married; the second is not officially married, but is in a committed relationship; the youngest is living with her boyfriend. It looks like all three have found good guys. We’ve dealt with each of them moving back in with us in the past, but they all seem to have stable situations now.
Venice is where my in-laws own a condo to spend their winters. We also have some friends who are renting a condo there year-round and live there during the cold months (their jobs allowed them to work from home, even before the coronavirus stuff). We’re definitely open to alternative locations for future winters. We went with Venice for the first year because of the familiarity.
You realize that as a snow bird that you are despised by everyone everywhere you go in Florida, right?
do they point and throw things?
No. You have to smile at them through gritted teeth and pretend that they aren’t insufferable cunts who think the world revolves around them.
No. They do what we do in AZ: bitch for 6 months and sell them things.
My parents did some winters in FL. I suppose some there despise the hand that feeds them.
Not just in Florida, they used to muck up my drive from Atlanta to Louisville every spring. Snowbirds, especially the Ohio ones, choked up I-65.
I have literally developed a rule that if a car with an Ohio plate is driving slow in the left lane, I wont even give them a chance to get over, I just make a right side pass (which I hate doing).
Just because Ohio cops enforce the speed limit, doesn’t mean you can hang out in the fast lane poking around at 65 mph in other states.
Ohio people sound just awful
If I were ranking snow birds based on awfulness, based on home locale:
1. Massachusetts/New England
2. New York
3. Ohio
4. Michigan
I agree with #1. When I was in the Air Force I lived at Hanscom AFB near Boston for a few years. Was glad to see Massachusetts in the rear view mirror.
It’s a fair cop.
I’m not originally from Ohio. I grew up in the Chicago suburbs. Ohio drivers regularly annoy me.
I actually enjoyed my drive through Ohio recently. Here in NoVa, you have just the right mix of aggressive assholes, clueless foreigner, and distracted ditzes that driving around here is a stress inducing event. It was such a relaxing drive through southeast OH to C’Bus.
Ohio may have left lane laggards, but I feel like I know whats gonna happen well before it happens. I’ll take annoying and predictable over annoyed and chaotic.
Nice, I grew up in that area (Venice HS was my high school’s chief rival). That’s my retirement goal as well. Actually a bit south of there, Charlotte/Lee Counties.
why not some cheaper non American warm place?
I would say language/culture. In my experience a lot of places outside the US which are theoretically less expensive can cost more than expected to make up some of the difference in the quality of life. And if you constantly pop up as “the outsider” those costs can accumulate. It can be fun for a week or two but if you have scheduled a significant length of time living in that situation the monetary and psychological costs can mount quickly.
Oh, and any medical emergency throws a spanner into the works real fast.
We looked at Panama (Boquete, specifically). A lot to like there, a whole lot, but the absolute gating issue for us is the language. Neither of us speaks Spanish (I have a very little). It can be learned, of course, but its still something in the to-do column.
If I had had more money at the time (this was around 2009ish), I probably would have bought a lot to build on. We saw one former coffee farm just outside of Boquete that I just can’t shake. The obvious building site had good views of both the Atlantic and Pacific oceans, an extraordinary rarity, as in you could stand in one place, turn your head to the left and see the Atlantic, and turn your head to the right and see the Pacific. Not just a little sliver of either ocean, either. It was literally unbelievable.
The people were wonderful, the town was nice, and the countryside was drop dead gorgeous. Lack of money at the time, and lack of Spanish were the only things that kept us from planning to retire there.
I get that new languages are a HUGE obstacle. By chance I grew up with Spanish as the primary social language with English as the standard for education and a lot of broadcast media. That programed me for picking up other languages as they became available. But I know this isn’t normal, particularly for most Americans. I was just lucky.
And I know how difficult it is to learn a new language even if you have done it before. You really need a strong motivator – this isn’t a trivial point. Without a real need it’s almost a fool’s errand.
I’m concerned about property rights in foreign countries. You never know when they kick the foreigners out and keep the land and bank accounts.
I was thinking renting not buying. I have friends who every winter for like 4 years rented a place in the safe part of South Africa.
Your friends are trading on the “low cost/high risk” curve. Hard to estimate when that might end for the location they spend their time. And I assume they are not getting by in Romanian so they are already at least bilingual.
I work with a number of South Africans and have heard enough about the possible/probable down sides there.
I wouldn’t be so concerned about the big issues like property rights (if you’ve done your research beforehand) but little things you might not consider.
Like a guy living in Vietnam who’s shoes blew out – but there’s nowhere to get a size 12 off the rack (even though there are 5 factories pumping them out in his city – every last one going to a foreign market). So he pays half of what his rent costs him to import a pair of Nikes.
Factor something like that in happening every month.
I know it’s just paranoia about a system I’m not familiar with, but at least I know the scams in America.
Thank you, Annoyed Nomad.
One question about budgeting: I’m learning how to do that now and I have 3 months’ in the books and NONE of our expenses above living expenses are consistent (e.g., food). How long does it take to really figure out where your money is going and how to plan for the next month’s? How specific do you get (e.g., “3 bottles of Panda Express orange sauce in March, 0 bottles in April, 1 bottle in May, no idea how many bottles in June”)?
I think it depends on how detailed you need to be. But for me what was easiest (and therefore what we have been able to keep to) was to look back 6 months in the account and see how much on average we spent on groceries to give a ballpark range of what we had spent and what we could achievably limit ourselves to. But that doesn’t work for everything.
I thought that would be the case, but right now, my grocery budget (on paper) is borked because we bought a freezer and almost 300 pounds of meat. I may want to buy a side of beef come August, but I can’t make a plan for that because I don’t know how much space we’ll have or how fast we’ll go through that much meat.
My main question is, am I getting too impatient about needing to know and how long can I expect to keep records before I can forecast effectively?
Mojo, all your talk of bulk meat always makes me think of this: https://ultimateilovelucy.fandom.com/wiki/The_Freezer
/unhelpful
LOL
I don’t think I saw that one. I don’t much care for Lucy, but the Italian one where they’re stomping grapes is loads of fun.
I would call the freezer a housing expense.
The meat is definitely food expense, but the question is how long to expect to go through an inventory turn of your frozen meat. If you are buying, say, six months of meat, you need to look at six months of a household budget, not three. So yes, you are getting impatient. You probably need a minimum of three periods before you can forecast effectively.
That is what I needed to know, so thank you. I thought I was doing something wrong.
I was very glad you said “forecast effectively” rather than “forecast accurately”.
For example, if you are over budget 10% one month and under budget 10% another, you are being somewhat effective. If you are consistently under by 3% every month, you are more “accurate” than “effective”.
I learned this mostly from inventory planning, not financial planning. But it’s all capital, really.
I’ll second the “impatient”.
I’ll also suggest something a friend of mine did.
He, like you, has a chest freezer. When he first bought it, he used a monitor similar to this one to see how much electricity the chest freezer used. He wanted to see if he was actually saving money.
What he found was he a) had to keep the chest freezer full or mostly full and b) had to pick up meats when they were on special. If he did both, he saved money.
Your mileage may vary based on your electricity prices and local food prices.
Generally speaking, if we have a chunk of money, we like to get a side of beef. We haven’t had chunks of money like that in many years because it all went into our plumbing (not kidding).
In this case, we had some change, but the ranchers aren’t ready until August. I was anticipating a spike in meat prices, which was why we did this lickety split. I do not know how much of what we have will be used by August. I don’t expect a small locker to have the same problems a large plant would have.
Block ice is a cheap freezer filler.
Brilliant! Thank you!
Average the food cost for the year. Sure your buying meat now, but you won’t be in August.
One aspect to keep in mind is how tight the finances are in the moment. 6 months of beef makes sense when you have the extra cash to pay. It doesn’t make sense when it goes on a credit card carrying a balance.
We only got to having enough spare money in the budget to buy bulk items last year… 3 years into our financial Renaissance.
was to look back 6 months in the account and see how much on average we spent on groceries to give a ballpark range of what we had spent and what we could achievably limit ourselves to.
That is roughly what I did.
I increased the monthly amount a bit to build up a surplus to handle things like splurges/increases in price.
Although I don’t do it, I know people who use one credit card for EVERYTHING so that they have a record of what they’ve spent over a period of time. (Discover offers a report of your date-range spending by category on-line, I’ve probably looked at it twice.)
I don’t particularly agree with with the assigned categories, though. For example, I consider most dining-out to be food expenses. But I consider alcohol to be an entertainment expense, so it also skews any grocery shopping where I buy alcohol. I consider things like having family and friends over for a cookout or going to an expensive restaurant to be more akin to gifts than anything else.
I think you can pick your own categories and where to track which expenses. I have a line for Groceries and a line for “Local Entertainment & Dining”. If we go to dinner and a movie, or attend a local festival, etc., it falls under the latter category. If we take out a relative for a birthday dinner, I’ve included it in that category as well. If we host a birthday celebration, the food costs will be absorbed in the Groceries costs. In our case I think it has worked because we tend to do those things fairly evenly year-to-year. So, while there might be a spike in one month, it evens out by the end of the year.
I do that with my Amex. The painful part is seeing how much I spend in a year. I keep telling myself as soon as all the home repairs and upgrades are done it’ll stop, but I know I’m lying to myself.
Yeah, home improvement stuff can vary widely. Some is planned, and some is emergency, some is in between.
The emergencies we have had to cover in cash immediately–almost all plumbing– I don’t even want to try to suss that out. It’s too depressing.
Amex is very good for this, and it’s a charge card so there’s no temptation to not pay the full amount and roll a balance into next month.
Amex does have credit cards as well as the charge cards. I also build my budget on the higher costs expected (and already have savings budgeted as well), so if I come in under budget (electricity/heat being the ones that usually happens on), I have some more to add into savings.
I think it took a year before I had good “average” monthly costs. I took a look at my budget spreadsheet and the “Groceries” line definitely has big months and small months. In 2009 I had months as small as $85 and as large as $821. And I don’t have an extra freezer to fill. I charged the majority of my groceries to a credit card and accounted for the cost when I paid the credit card bill, so there was always a lag and would depend on the closing date of the credit card statement.
My spreadsheet had cumulative cost columns and an average per month after the Dec cum column. I’d use the average for estimating the next year’s budget.
We’ve started tracking our expenses in an organized way to prep for retirement. I think broadish categories are fine – we track what we spend at the grocery store(s), but not line by line what we bought there. I don’t have it with me, but our categories are along these lines:
Utilities (the usual bills, including internet etc.)
Insurance (car and house)
Property taxes
Groceries (really, grocery store, as noted)
Booze
Entertainment (eating out, etc.)
Clothes
General merchandise
Extraordinary (home repair, furniture, etc.)
And so forth. I want to say there’s around a dozen. If you try to slice it too thin, you’ll get frustrated and stop doing it.
Which reminds me – I need to catch up. I am not planning to rely on this for a year to reflect our actual spending, and then I will try to maintain the discipline. We put a lot on credit cards (paid off twice a month, thanks for asking), and USAA lets you categorize online, which helps.
That may be where some of my frustration is coming from.
Yes, that is very good advice.
I wish there was a Total Index Sans Retail fund.
I made the mistake of looking at my retirement account balances yesterday. We (my wife and I) lost over $60,000 since November (last time I checked).
THAT WAS SUPPOSED TO BE MY SAILBOAT!
Fucking Chinese and their stupid virus.
Together my wife and I saw $200k disappear in a puff.
The nicer thing is, assuming you don’t do anything dumb, it’ll be back soon.
*looks back at four and a half decades of poor decision-making. sighs*
at least you’re consistent.
My plan, since the late 90s, is inspired by the book Die Broke.
1) Quit today — you work for yourself and no one else
2) Pay cash — no debt (my single biggest weakness
3) Don’t retire — put in the papers, collect SS and/or pension, but never stop working if you can make money
4) Die broke — spend it all
^This works,
I had a similar idea – not exactly a plan – but continued working for corporations while pilling up real estate investments. My idea was to keep some, and sell some in retirement.
My wife, who had proved infertile for 10+ years changed her mind on IVF at the last minute and pumped out two (wonderful) kids.
She somehow believes we are going to be able to leave the property to our offspring. I’m pretty sure they’re going to have to get ahead like I did (or some similar plan) – pay your own way with GI Bill, academic scholarships, and savings while working your ass off. At least I will start them off fully bilingual.
Wife and I are in that same boat. Our kids will have to figure out how to pay their own way through college should they choose to go.
We have an elaborate tax-minimization scheme for the bulk of our retirement that I have described before. It only really works for a pretty small niche, which we happen to be squarely in. I had been planning to retire in a couple of years, but with Great Depression II – COVID Boogaloo upon us, we’ll see.
Our target number is $10K/month. We actually have a call with our retirement guy tomorrow to tune up the final approach. I have a bad feeling – we were on track, but now . . . .
I have unformed plans to work part-time after retiring from full-time work. I’d like to do consulting on corporate governance, with an emphasis on non-profits – one, maybe two engagements a month would be fine. I need to start building a brand for it real soon now, but just haven’t gotten traction.
I thought about doing part time IT work in retirement, but everyone I know who tried to do part-time IT work got slowly roped into full time and either un-retired or stopped doing the work.
If we die broke, we’re okay with that. We’ve made no promises of an inheritance to our kids.
My father told me 30 years ago that his will reads “Being of sound mind and body, I spent it all.”
I expect nothing from my parents when they pass.
I don’t expect to receive anything from my parents when their time comes.
If she were older and had kids of her own, I will tell my daughter that she shouldn’t plan on receiving anything, I plan to leave it all to the grandkids.
But I am going to have to live a long time to make that reasonable. Having a kid at 46 makes it tough to see adult and stable grandkids.
Congratulations Annoyed Nomad! My good work friend just pulled the plug on his career. He’s been reorganizing his life over the last several to get ready, so while he had some trepidation about doing it now, he looked back at his numbers and plan and feels he’s still set. And the mindset change is real. Once he was on that glide path, there really wasn’t pulling out of it.
Contrast that with some I’ve know who basically announce their retirement, then talk to a financial advisor. It usually doesn’t end well. Cancelled retirement plans and bitter unhappy person. Well, more bitter. That sort of person wasn’t pleasant to be around before.
Thank you!
I’m surprised by the people who don’t have their plan figured out ahead of time. But then, I’m a planner – have been all my life.
And yes, the mindset we had once we picked a date – it would have been extremely painful to cancel the retirement.
Company I work for has done a couple rounds of buyouts. In the last round, there were several people who put in for the buyout and were denied. That led to some… interesting… work dynamics.
I know that the thread is dead, but I have a buyout offer dangling in front of me until next Monday. I’m pretty sure that my “application” will be accepted, but I do worry a bit about the “work dynamics” if I apply and it’s denied. Oh well, time for another beer while I stew about it.
“My application for the buyout is attached. Pls. understand that if I am denied, I will take that as in indication that I am too valuable to the company to be allowed to leave, and will adjust my salary requirements accordingly.”
“THAT WAS SUPPOSED TO BE MY SAILBOAT!”
You misspelled Money Pit,
I’ve got a chunk of savings and I’m thinking about buying a house. Dad owns a very cheap, very small piece of land in town, and I’ve been mulling over designs for a tiny house—little more than a garage apartment. He runs a small-time construction company, so I’d take a sabbatical from work and spend at least a couple months putting it up. I haven’t priced it yet, but I’m hoping I can save enough in labor to come in under eighty thousand. (I’d draft the plans, too.) I can’t buy it outright, but I could mortgage with 20% down.
Problem is, I don’t know if I want to continue living in a blue state, especially after seeing our disaster response. There wasn’t a disaster, so we responded by making one.
You can buy small prefabricated houses. It’s cheap and faster than building. Some are basically steel garages with lofts.
Can they price in a change of governor? ?
That does get pricey, but for the right amount, having your guy elected can be arranged.
Wait, tiny house or small house?
Not the Reason sort, but fairly small. Something on the order of a two story, 24’x28′ box with modest one-bedroom built over a garage.
Look into the RV lifestyle.
I never knew it existed as a niche way of life but after almost 2 years now I wouldn’t want to leave it.
If you still have HSA funds remaining when you hit 65, my understanding (based on the sources i’ve checked) is that you can withdraw it for any reason, just like any other retirement savings like an IRA – but without required distributions. My employer has been generously making contributions to employees’ HSAs, so I’ve foregone putting in my own contributions in favor of putting more into my 401(k), but I may rethink that, depending on how volatile the market is in coming months. My current health care expenses are low, so my main concern has been keeping enough in the account to cover the high deductible in an emergency.
I’m not sure you can withdraw it for “any” reason at age 65, but I believe you can use it to pay Medicare premiums. Also, keep the receipts for any qualified medical expense even if you don’t submit it for HSA reimbursement in the near-term. There’s no deadline in when you can submit those for reimbursement. So, you can let the HSA grow and then when you have need for some of that money, use the accumulated receipts to make a qualified withdrawal.
If you’re over 65 and withdraw from an HSA for medical reasons, still tax free. If you withdraw for non-medical reasons after 65 it is taxed but not subject to a penalty.
“If you withdraw for non-medical reasons after 65 it is taxed but not subject to a penalty.”
Huh. That I did not know. Thanks!
It’s my intention to only withdraw from our HSAs in a qualified manner to avoid the tax, but you never know how things will play out.
Congratulations on your retirement, Annoyed Nomad.
Thank you!
Sounds about what my situation is, and investments were, plus ten years on you. One thing I forgot to factor in, and you may have missed it too, is that we are Shitlords and means testing under the next Democratic administration will have our assets drained to take care of all the layabouts, student borrowers, poor folks, shiftless immigrants, people who continually make poor decisions and tell us to mind our own business until they need our cash, pension screwed government employees, and everyone else who thinks our lives are to be lived for the sake of them.
Our assets are buried deep in nested LLCs and trusts that are ultimately/technically charities, for exactly that reason. The bulk of our income will technically be loans, so it won’t even show up as “income”.
Its basically the same scheme the Kennedies, Rothschilds, etc. use, writ very small. The feds can’t come after us without also coming after some very heavy hitters. Nothing is perfectly guaranteed, but I think we’ve done what we can to protect our assets and income from a predatory government.
Yes they can.
The precedent is pretty well established, thanks to the heavy hitters. And if they come after me, they will also be undermining the heavy hitters’ arrangements, which are not easily undone or altered. And you better believe they keep a close eye on the IRS. Nothing’s perfect, but I think I have some big friends on this front.
The manager for my deal had a visit from the IRS a couple of months ago. I purposely picked a pretty conservative one, and the IRS went away without causing any problems.
It definitely has crossed my mind. But everything I’ve seen where the Democrats want to take money from the “wealthy” has been for people who have a great deal more wealth than we do. Even if we were to double our wealth to over $4 million, it looks like we wouldn’t be a target.
The Democrats are about as precise with their targeting as Imperial Stormtroopers – I would almost rather BE the target because they aren’t likely to hit it.
The other thing to consider is that they always, always, always sell new taxes as something just for the super-duper rich. That’s how the federal income tax was described – just a tiny portion of the very highest incomes in the country. I think literally the 1% paid all of it. But they kept moving the brackets, and today, the federal income tax is the biggest one you pay.
OT for Lawyers – It was nice to see the WI lockdown overturned by the court. NJ is governed by stupid people who gave the Governor unrestricted abiity to keep renewing his own emergency powers every 30 days.
But… the 2 acts that give him this power both also specify compensation for taking of privately owned property or services.
http://ready.nj.gov/laws-directives/appendix-a.shtml#9_34
Section 24 of the newer Health Emergency Act lays out a much more bureaucratic compensation scheme.
Is it worth it to small business and lawyers to try to recover their 3+ months of lost revenue the state took?
Under the statute? Maybe, though it’s vague and I don’t know what New Jersey courts would decide.
I really doubt it’s worth the cost. I wouldn’t want to be the test case at least.
New Jersey law doesn’t cancel the 5th amendment and businesses should be recompensed as a government ‘taking’.
Is it a taking if they just don’t renew the business license?
They never took the license – just ordered them to close. There is all kinds of specific stuff in the bill about who can be quarantined, for how long (15 days), and an appeals process in the court. None of that is being followed.
I understand that, but yanking the business license is the option everyone knows they have and is the ultimate threat to force compliance.
So speaking of investing – anyone a client of Fisher Investments? I’ve got a solicitation from them, and I’ve read pretty good stuff about them. Curious if anyone has first hand.
Index funds. No one beats the market for any significant length of time.
I’m currently with Fidelity, two accounts, one a 401k rollover from employer before last and a simple IRA from last employer. The IRA is self managed, the 401k I pay mgmt fees on. Guess which one has performed better over the last year (prior to the recent stupidity); and I attribute that to dumb luck more than astute investing on my part. The ad hook that has my interest is that Fisher fees are structured (vs. Fidelity which is a flat rate) – so the onus is on them to perform (in order to earn a higher fee).
Fee free is the way to go, IMO. Fees are guaranteed, returns are not.
I’m almost 100% in total zero funds at Fidelity.
I do wonder about this. Nothing in my experiences involving predictions/projections suggests this could possibly be true. I could believe that it’s very hard to do and that it’s probably not worth the effort, But I suspect a well thought out conservative algorithm should be able to get it done. There’s enough easily avoidable dumb decisions baked into the market indices that simply avoiding those should put you slightly ahead.
Reading A Random Walk Down Wall Street convinced me to avoid managed funds and go entirely index. The author makes a very compelling case that any managed fund that beats the market only does so through sheer chance and that fund’s winning streak will crash eventually.
I don’t have any experience with Fisher Investments, but I did have a financial advisor managing my IRAs from about 2003-2009. He originally charged a 1% fee (based on the IRAs’ value) and then was increasing his fee to 2%. When I carefully looked at the growth rate of my IRAs (where he had access to an unlimited number of mutual funds) and my 401k (where I had a limited choice), I saw that my 401k was growing at a higher rate. That’s when I fired him and transferred my IRAs to Vanguard. One of the best decisions I ever made.
I do traditional 401k because I earn out of the Roth IRA and I don’t want to pay the taxes to convert. My thoughts are is my income is higher now than in retirement, so I’ll take the tax reduction now and I don’t trust the government to not double tax a Roth in retirement anyways. Bone advisor I talk to said “you can never unpay a tax”.
^This!
You can do backdoor Roth.
I want to flip my IRA to a Roth, but I need to time it as part of my first year of retirement when my income will be much lower.
I would say the main reason we still added to the Roth accounts is because it affords flexibility in retirement. Also, don’t forget about the RMDs hitting you at age 72.
It shouldn’t be a problem because I plan to retire at 59.5, so I will have been drawing for 12 years before RMD.
I always say the disadvantage of a Roth is you lose flexibility because you cannot unpay your tax.
Also, doesn’t apply to you but for people in high tax states that want to move to Florida (or another state with no income tax) you can avoid paying state taxes in your working years on retirement contributions and then withdraw them in your income-tax free state in retirement.
I think it’s very difficult to come out behind on a Roth if you are in the 12% or below tax bracket, especially if MFJ. I think a lot of people forget that the death or divorce of a spouse during retirement can easily cause one to jump from 12% to 22%. Locking in the 12% with a Roth protects you from that jump.
I fill up my 12% with both Roth IRA and Roth 401K with the regular 401k used strategically to drop my AGI to this sweet spot.
Completely separately, I discovered a 529 can be used as a pass-through for tuition in my state. Drop my tuition into the 529 and distribute immediately to the school, netting a deduction on my state income tax. Just can’t double dip with federal education credits. You can even do this with up to 10k in student loans.
Looks like Senator Burr isn’t the only one whose trades are being looked into by the FBI.
Josh Lederman
@JoshNBCNews
JUST IN – Feinstein’s office confirms she answered questions from FBI about her husband’s stock trades, handed over documents – via @kasie
@NBCNews
Are these fools not seeing what just happened to Flynn?
It’s okay, she has D-immunity.
“Mr. Dean, we’re from the FBI and we’d like to ask you a few questions. Not to worry, you’re not the target of our investigation.”
“I’ll be recording it to the cloud.”
“I’m sorry sir, that’s contrary to FBI policy.”
“Its not contrary to my policy. Take it or leave it.”
Sorry Mrs Dean but according to our handwritten notes he threatened to pull a gun from his desk and shoot the agent.
OT
‘No Plan’: Anti-Lockdown Ruling Throws Wisconsin Into COVID Chaos
I kind of agree with the Daily Beast here. To sum up, the governor locked down the state for a month under a ‘state of emergency’, which is the extent of his emergency power under state law. To get around this he had his underling at HHS extend the order (see, HE didn’t do it). The republicans that run the house and the senate wanted to have input on the extension but were denied. So they sued on the grounds that the HHS secretary didn’t have a legal authority to declare or extend a state of emergency.
Yesterday the state supreme court ruled that the HHS didn’t have the authority, so all the order got rescinded. BUT, notice I said nowhere that the republicans wanted to end said state of emergency, they just wanted to get their hands in there to. I foresee them coming to terms with governor on some more bullshit. And the whole while now towns and counties are scrambling to enforce their own set of fuck you rules.
We’re all in this together. We all have a hand in ending American prosperity.
Oh, I meant to say, congrats, Annoyed Nomad. I can’t say “I’m proud of you!” because I don’t know you, and I’ve made a bunch of stupid decisions in my life, but now I’m trying to help my kids get their shit together so this will come in handy.
Thank you!
And good luck trying to assist the next generation. I’ve found them to be a bit resistant to financial advice.
I can only give them (cajole/coerce/force) a much better send-off than I got and hope they do well with it.
Right now my daughter and I are discussing the benefits of hourly versus salary. She wants to advance to team lead because that’s the last stop on the hourly train and she’s just looking at overtime. I’m trying to convince her that with salary, she can’t just be bumped down to 39.5 hours/week and not get health insurance. Also, I believe there are some protections in place to keep salaried employees from being worked to death, but I need to look these up to reassure her.
Also, I believe there are some protections in place to keep salaried employees from being worked to death, but I need to look these up to reassure her.
Salaried employees are paid to get a job done. You work whatever hours are required to get the job done. I’ve lost many weekends over the course of my salaried career.
Yes, that is true BUT…
…there are companies who will ditch hourly employees and work the salary employees >80 hours a week (happened with my husband).
My husband was a convenience store manager for many years and worked 80 hours a week or more many years, and was told to cut payroll. You can’t cut payroll with a salaried employees.
Anyway, during the first years of our marriage, every company he had worked for had to pay out quite a bit of money on class-action lawsuits for the practice.
I don’t know if Walmart has a habit of requiring >50-60 hours per week for salaried employees, but when I told her how much we pay in health insurance per month (with my husband’s company paying even more than that), salaried positions started looking really good to her.
Are you certain she’d be denied health insurance at 39.5 hrs./wk.? I thought Obamacare defined FT as at least 30 hrs./wk. for purposes of employers’ requirements to offer coverage.
No, I don’t. I’ve never worked an hourly-with-benefits job.
She’s working 32 hours a week now, which is the max she can work as a minor. She wouldn’t even be able to do that right now if it weren’t for the Kung Flu and virtual school. I had to go in and sign a waiver for her to work that many hours during a “school year.”
So she is thinking 2-4 years ahead right now, which is more than I thought ahead at her age. My big goal was getting into BYU and I did that and…then what? I had no idea.
There are jobs that give benefits to hourly employees?
Yes. My husband’s job does.
Mine does to FT employees. And a few years back, I believe the DOL tightened up the requirements for employees to be declared “Exempt” from overtime pay requirements. (I tend to perceive hourly as “Non-exempt” and salaried as “Exempt,” though someone here may be aware of exceptions I don’t know about.)
We do, though I am salaried.
I have full benefits (Healthcare, hsa, 401k, dental, PTO, LTD) and am paid hourly.
Me too.
I’ve never worked for an employer that didn’t.
Aside from the requirement to provide health insurance to all employees clocking 30 hours a week, not including hourly employees in your retirement plan will lead to all kinds of problems under the 401(k) regs, including having to return contributions to highly-paid employees.
My supermarket does, even for part time employees. Health, dental, and eye coverage, + a 401K with matching contributions up to 6% of one’s weekly pay.
Star MLB pitcher is a little bitch, refuses to “risk life” for reduced pay to play a child’s game.
Cashiers and store clerks can risk their life. I think you can manage with your massive wealth and access to top of the line healthcare (and likely routine testing) to go play baseball. Not to mention the fact that as a healthy 27 year old their is almost no real risk, you giant fucking pussy.
But later he says it isn’t about the money. But he’ll play if the money is right.
Yup, it’s all just union negotiation. The players don’t want to take a pay cut even if fans aren’t allowed to attend the games.
The player’s want to overstate the health risks to counter the financial hit if fans aren’t allowed to attend. I won’t be surprised if the season gets canceled because the players refuse to take any financial risk with a negotiated revenue split. The ones going though injury rehab and getting paid – Blake Snell for example – are OK sacrificing a season since they were anyway.
Yeah, with no fans in attendance, some of the clubs would be losing money (no piece of the gate or concessions).
He can get 50% of his outlandish pay or 0% of his pay. His choice.
Err, doing the math, $2.3mm before taxes? Which is still probably a quarter million every time you get on the mound, given the shortened season?
What a clueless tool.
There’s a five year wait on withdrawing contributions to a Roth? Why? Is this a new policy?
This is the policy – a five year wait to avoid any penalties. Even into retirement. But it’s from the first day of the first Roth account you opened. Another reason to just open a Roth and put some money into it as soon as you can. I wasn’t even aware of the policy until I had already passed the five year point.
That is only on earnings. Contributions can be withdrawn tax and penalty free at any time.
Good point – you’re right. Like I said, I wasn’t even aware of the policy until I already passed the five-year point.
I’m confused, my assumption was that contributions could be removed at will, as you say. But the above and what I have subsequently read suggests otherwise. Anyhow, my Roth was opened a while ago so it doesn’t affect me so I suppose I shouldn’t care.
Wait until our government decides that the way to solve the problems they created by overspending, printing money, and in general making poor decisions that would be considered criminal if done by any other entity or person, is to go after people like me that have basically put a ton of money in my 401(k) plans (expecting nothing from SS) to make sure I can pay for anything I need, and confiscate their savings to redistribute. In the name of social justice, of course. Before you say never ask the people of Iceland how well that worked for them. Team blue pols have told us repeatedly that it is THEIR money and they can decide how much we will get to keep, because they are the arbiters of who wins and who loses.
I have always expected the Feds to raid “overfunded” 401Ks.
I expect the Roth IRAs may not get to grow tax free.
It’s not theft, we owe it to ourselves.
My prediction – in order to keep your tax advantaged status, you will have to invest X% (which will inevitably escalate) in “safe” Treasuries, possibly other government-issued bonds. Its a slow-motion confiscation.
After the Big Dump of ’08, schemes like this were proposed but didn’t go anywhere. We’ll be hearing about them again during the ‘Rona Recession.
I agree but it may be an even harder sell if rates are negative.
“Sell”? Who’s selling anything? They are in the “telling” business, not the “selling” business.
Well, they do need to get re-elected. Hmm, who are their more of in the voting population? Savers or parasites?
I expect the same.
Outright confiscation won’t go anywhere. There are too many people with too much to lose.
Outright confiscation won’t go anywhere.
It doesn’t matter whether they steal it or just devalue it. They are going to take it from you.
I view it as the difference between driving the speed limit vs. PUTTING THE PETAL TO THE METAL as we go down the highway to Socialism.
You’re blossoming into quite a wordsmith, there.
I thought it was a nice verbal flourish.
“It doesn’t matter whether they steal it or just devalue it. They are going to take it from you.”
^^^THIS^^^
HOW they do it will not matter. The plan is to do this because our credentialed elite oligarchy wants to keep & make their power hereditary, and to do so they HAVE to control all wealth.
I wonder how your “big-ass spreadsheet” compares to mine?
Mine has slowly built up as I combined different financial tracking spreadsheets into one.
The most recent page addition was due to my current employer granting me both stock options and restricted stock units. The latter is going to be used to pay off the house faster, the former is going to our dream vacation I promised my wife. I just need the stock price to double in the next 4 years!
That dream vacation is also step 7 in my Dave Ramsey style page in the spreadsheet.
My spreadsheet has a number of different projected retirement date options, but the primary one right now says 10/16/2037, which would be just after my 68th birthday. The no mortgage one is 12/31/2032. That is age 63, I am okay with that.
I will be surprised if I am not “retired” at 62. I probably will still be working, but doing something just for me.
It sounds like your spreadsheet might make mine look pretty simple. I did create different versions (or sheets within a workbook) to test out some different scenarios (one of us taking SS at 62, different options for my wife’s pension, etc.) before deciding on a base plan.
Most of it is brutally simple. The only complex bit is the one sheet with the projected retirement dates (or, for some fixed dates, how much short of what is needed for that date).
I noticed two things different in your article — one, you project to age 100, mine runs out of money at 120. Two…I may change my mind, but right now I plan on staying 100% stock. I also like low cost total market index funds. But, since I plan on needing the money for the long term in retirement, I almost willing to ride the down markets then too. I might start shifting towards bonds a bit at retirement, but not before.
We’re planning out to 100, and I still want a cushion of assets in the bank even at that age. At age (counts on fingers, takes off shoes) 57 with a planned retirement in a couple of years, I am diversified across stocks and bonds, either in diversified funds or through managed investments – I tried managing my own investments and sucked donkey balls at it, so I pay the fund and management fee and have been pretty happy with both the results and the whole sleeping-at-night thing. I think we’re down around 8% from the pre-‘Rona peak.
Its not a sheet of big spread asses? I’m confused.
We do not expect to retire ever, thanks to bad planning.
However, I do hope we can get in a couple of really awesome vacations before we die.
My wife wants to retire from her job in few years. Too young to touch the IRAs and 401ks we hope recover from the current debacle, but she would get $2k + a month from a pension. By then I plan to have this house sold and be positioned for a speedy escape to relative freedom.
OT: Fight breaks out at Lansing, MI protest.
A fight broke out on the steps of the Michigan Capitol Thursday morning during a protest aimed at Gov. Gretchen Whitmer and the ongoing state of emergency and stay-at-home orders.
J. Scott Park, an MLive photographer, witnessed the fight break out after a man carrying a garbage can filled with a sign, an ax and an American flag removed the flag from the can. Attached to the bottom of the flag was an unclothed doll with brown hair that was hanging from a noose.
Organizers of the protest called the display “hate speech” and when one protester tried to take the doll off the flag a skirmish broke out. The man who brought the flag fled away from the fight and to the lawn of the Capitol where Michigan State Police surrounded him.
Other protest coverage, includes interviews with some protestors
We are not the “rednecks” the media portray us to be, said an organizer of Lansing protest against Michigan’s coronavirus-prompted stay-home orders told the crowd.
“We’re still showing up, we’re not going away,” said 34-year-old Wendy Darling of Ann Arbor, who identified herself as the founder of Michigan United for Liberty, the group behind the rally. “We won’t be bullied, we won’t be harassed … We’re not going away until Gov. Whitmer resigns from office, gets impeached gets recalled — that’s what we want. We want Michigan open.”
Beneath sloppy raindrops and overcast skies with occasional cracks of thunder, the growing gathering of nearly 200, most without face masks and disobeying social distancing recommendations, stood before the steps of the Michigan Capitol at 9:30 a.m. Thursday and cheered Darling’s words. The Capitol was locked and the Legislature not in session. State police troopers in face masks watched from the perimeter.
Disobeying… recommendations. Sounds legit.
For those looking for something to listen to, Apocalyptica is doing a live show now. Cello players and a drummer, they originally started as a Metallica cover band.
Oh, wow. I haven’t thought of them since high school. The only way I could stand listening to Metallica.
They started doing original music as well, and have recorded some songs with vocals as well. This concert they’re just doing instrumental stuff though.
It’s always entertaining to me to hear them talk, because it undercuts the metal image so much.
Great job Nomad. I quibble a little bit over roth vs. traditional, and I guess I think waiting on SS is a mistake. Are you calculating your breakeven to be 77?
Thank you!
Re: the SS, I’m assuming we’re both going to live into our 80’s. My father made it to 78, but had Diabetes (I don’t) and my wife’s parents are both alive and active into their mid-80’s. Another factor is that my SS will be higher than my wife’s, so if she were to out-live me (the most likely case), I’d like to maximize my SS to benefit her. Like I said in the article, I built my spreadsheet to go out to age 100. When you go out that far, the delayed SS came out the best.
Good job, Mr Nomad. Now that you are retired I’m surprised you had the time to write the article.
Very, very important to have a plan (as you did) early on, never too early. Certainly there may be changes (divorce, loss of job, transfer, more kids, etc) but a plan anyway. My opinion is that a person needs his/her/our house paid for before that last paycheck. Renters will have a tougher situation.
I believe the money lost on the stock market is the day you bought the stock. I don’t even think of making money/losing money if I’m not selling, just as the big run up on the market didn’t make me richer since I didn’t sell.
Any way, you did a great job and by retiring you gave another person an opportunity. Now we can expect you at the Honey Harvest, label it travel. Tundra will keep you posted if Pope Jimbo is attending, gives you a little flexibility in your decision making. Thanks.
I have little to add after this comment. I’ve told our retirement guy that any models he puts together have to have the mortgage paid off before I retire. There was a little “but your rate is so low, why take money out of teh markets and lose the arbitrage?” pushback (which is a valid point), but I said no, if we do not own our house free and clear, I will not stop working full time. Leverage works both ways, and I am not going to get watch the assets to pay the mortgage get vaporized in a market dump if I don’t have a job to backstop the payments.
^^THIS^^
It is why despite the low rate, I am paying a bit extra each month towards the principle. If we keep that up, we have turned our 30 year into a 21 year. My goal is 11-12 years.
I don’t think I’ve ever had a mortgage that wasn’t 15 year fixed rate.
We now have 8 years left, and its getting into that “huh, not much interest, and lots of principal” phase, which is nice. We just do scheduled payments; we could accelerate it, hell, it could be paid off by now, but we wanted that money liquid, invested, and funding our retirement. Its all tradeoffs, but the low rate on our mortgage makes it easier to just let it run.
We’ve done 30 year mortgages in the past, but I’m sick of them. Next house is going to be one we stay in for a while, so we’re doing a full 20%+ down and 15 year fixed. Assuming we buy in the next 2 or 3 years, that puts us in our late 40s with a paid off house.
Probably won’t pay extra for a while because we need to catch up on retirement. I’ve only been contributing the match as we’ve aggressive paid on my student loan debt.
My current refi has the same rate for 30 and 20 year terms. I took the 30 because it lowers the monthly obligation but I’ll be paying so it’s done in 15.
Rates aren’t going to ever be any lower than they are right now.
Well, they might be lower, but getting approved is going to be impossible. It’s a royal PITA in the current environment and I’ve got a credit score in the 800’s.
We are basically paying at the 20 year rate, but there was no point due to no difference in rates, and might as well keep the flexibility.
When other large chunks of cash come our way, we make extra principle payments, so I don’t think we will take anywhere near 20 years. My wife understands I am serious that I won’t retire with a mortgage and she wants me to retire as soon as possible.
Absolutely. I have had this argument a couple of times.
I, and my family, have to live somewhere.
I really like this article, and your philosophy is very similar to mine.
Once we get moved and get financially settled from the move, I’ve been planning on writing an article on our debt free journey. We won’t technically be debt free, but we will effectively be debt free by June 1. (I get a student loan payment from work, so I’m leaving just enough in the loan to take full advantage of the program)
Thanks for the interesting article and congrats Nomad! I wish I was there. We have thought about buying a place in Mexico as we have spent a lot of time there. I’m actually scoping out a visit down there in the coming months with the family. The retired gentlemen and his wife that has the nicest house we have rented is headed on a flight there today so I will hear back what it’s like from him as well as my fisherman contact when I text him next week. I’m itching to get the hell out of the city for a couple weeks and fish hard and enjoy the warm sea with the wife and kiddos.
I thought foreigners couldn’t own property in Mexico. How does it work in practice?
I think it has to be done through a trust.
It used to be that you couldn’t own property within a few miles of the coast if you are a foreigner, but they changed it a while back. You can form a corporation with yourself as the head and buy and own property. Essentially you have 100 year lease on the land that can be renewed. Besides the much lower costs to buy and build, there is the very low property taxes which make it interesting to me. I don’t know if we will do it, or just keep renting different houses, but it is very tempting. I speak Spanish close to fluently so there is not a language issue.
I’m 7 years behind, but I just listened to Adam Carolla’s show when he had Gavin Newsom on. The guy has no answers for anything.
I think he has one answer for everything – LOCKDOWN!
Carolla destroyed him in that interview.
The thread is dead, so let me be the last to echo the retirement congrats. I cannot quibble with any of your “process and insights”, as I am a Bogle/Buffett disciple. Sounds like you have a good handle on sequence of returns risk, so barring many new extreme wealth confiscation programs, you ought to be able to sleep well at night. Thanks for sharing your story!
Follow-up: I recently read this enlightening article and realize that my article above proves that I’m whiter than an albino polar bear.
Sorry everybody.