Does everyone on DCUM max out retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t max out. Retirement is for blue collar workers. I don’t plan to retire. Rich people don’t retire, they continue work.
I save money for things that I need but not for retirement.

This is interesting. I'm not a blue collar worker and I can't wait until I have enough money to retire. I'm 47 and hoping to be done by 57. But you point made me think of a few people. So there are financial advisors on TV like Suzy Orman or more locally Ric Edelman on WMAL on the weekends...why the hell don't they retire. Same with Mike Collins who is a estate planning attorney on WMAL on the weekends that does free seminars. He's older than dirt and probably have more money that all of us. Why doesn't he retire. I see all sort of old ass people in my office building, etc. I don't understand why they are still working. Why don't rich people retire?

I think it's three reasons

1. Rich people who worked hard for it have found success or a spot that fits them so they like it and want to continue to do it. It may be the thing that they like most and you like things you are good at

2. They sometimes realize that they are lucky and their kids might not be as lucky so they are thinking a few more years could make a huge difference for their family down the line somewhere

3. If you are good at something your company will likely pay you to be around and you are likely not grinding away as hard at 65 as you were at 45 AND you are making more money on top of it, it's a lot to walk away from.

Not to mention rich people aren't grinding away producing TPS reports like many of the rest of are. Their work is probably much more interesting than what us schmoes are doing.

You’re delusional. Work is pretty much a joke for everyone.

[Anonymous]

OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

[Anonymous]

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

No traveling in retirement?

[Anonymous]

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

You are 15 years away from retirement with around 50% of you current HHI covered by pension and SS. You are currently saving 15% of your HHI into your 401k, so you at most need 85% of your HHI to maintain the same lifestyle. To cover the remaining 35%, you need about 1.5M in retirement savings (not including your house if you plan to live there). Unless all your net worth is tied up in your house, you are in very good shape.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

No traveling in retirement?

Very little unless DD moves away. DH and I hate to travel.

[Anonymous]

Two feds, including matching we put 55K into TSP annually between us on a 360K annual HHI. We are about 14 years out from retirement and each have about 1M in the TSP and also expect about 70-80K pensions plus SS. I am not doing catch up contributions and we do not do IRAs, we are putting more towards 529 college savings.

I am really glad we focused contributing as much as we could when we were younger so we are not worried about not maxing and can feel comfortable spending on travel with our kids when they are still at home.

OP it sounds like you are doing well. Your rental investment was also a significant investment for retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

You are 15 years away from retirement with around 50% of you current HHI covered by pension and SS. You are currently saving 15% of your HHI into your 401k, so you at most need 85% of your HHI to maintain the same lifestyle. To cover the remaining 35%, you need about 1.5M in retirement savings (not including your house if you plan to live there). Unless all your net worth is tied up in your house, you are in very good shape.

Can you show the math please on how 1.5M covers the remaining 35%. Very appreciated.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

You are 15 years away from retirement with around 50% of you current HHI covered by pension and SS. You are currently saving 15% of your HHI into your 401k, so you at most need 85% of your HHI to maintain the same lifestyle. To cover the remaining 35%, you need about 1.5M in retirement savings (not including your house if you plan to live there). Unless all your net worth is tied up in your house, you are in very good shape.

Thank you, this makes me feel much better! I also didn't count the employer match of around $10,000/year on top of the $28,000/year we are contributing. Whew!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. This thread has been very interesting. It's helpful to hear other perspectives on savings. To clarify, by maxing out, I mean contributing to the IRS limit, not the employer match. DH and I have always met the employer match, but have not yet met the IRS limit.

We started late because we both had student loans, low paying non-profit and govt. jobs, high housing costs, childcare, etc. We stretched to buy our house, then we stretched to keep that house when we bought a second house in a good school district and turned our first house into an investment property. During that time we weren't contributing much to our retirement accounts, investing in real estate that hopefully would help support us in retirement.

We are 50 years old now with one kid to put through college. According to Mint, our current net worth is around $1.4M if you count real estate (including our current home) and retirement accounts. DH will get a pension of around $50K/year. Both houses will be paid off when we are 75.

Our long-term goals: 1) Retire from our jobs by 65; 2) stay in our house as long as we want; 3) remain healthy and active; 4) never burden our kid financially; and 5) help our kid as we are able (down payment on a house, emergency cushion).

You are 15 years away from retirement with around 50% of you current HHI covered by pension and SS. You are currently saving 15% of your HHI into your 401k, so you at most need 85% of your HHI to maintain the same lifestyle. To cover the remaining 35%, you need about 1.5M in retirement savings (not including your house if you plan to live there). Unless all your net worth is tied up in your house, you are in very good shape.

Can you show the math please on how 1.5M covers the remaining 35%. Very appreciated.

I assumed during retirement that the 1.5M would be invested conservatively, but not hyper conservatively, such that the OP could withdraw at +4% while still allowing the principal to grow at the same rate as inflation. This 4% draw down rate is on the conservative side of what many retirement planers think will result in a consistent, inflation adjusted, retirement income in perpetuity. The math then becomes $1,500,000 x 0.04 = $60,000 meaning that 1.5M will produce 60k a year in income. Given the OP's HHI of 180k HHI we get $180,000/$60,000 = 1/3 = 33.3% of the OP's HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t max out. Retirement is for blue collar workers. I don’t plan to retire. Rich people don’t retire, they continue work.
I save money for things that I need but not for retirement.

This is interesting. I'm not a blue collar worker and I can't wait until I have enough money to retire. I'm 47 and hoping to be done by 57. But you point made me think of a few people. So there are financial advisors on TV like Suzy Orman or more locally Ric Edelman on WMAL on the weekends...why the hell don't they retire. Same with Mike Collins who is a estate planning attorney on WMAL on the weekends that does free seminars. He's older than dirt and probably have more money that all of us. Why doesn't he retire. I see all sort of old ass people in my office building, etc. I don't understand why they are still working. Why don't rich people retire?

I think it's three reasons

1. Rich people who worked hard for it have found success or a spot that fits them so they like it and want to continue to do it. It may be the thing that they like most and you like things you are good at

2. They sometimes realize that they are lucky and their kids might not be as lucky so they are thinking a few more years could make a huge difference for their family down the line somewhere

3. If you are good at something your company will likely pay you to be around and you are likely not grinding away as hard at 65 as you were at 45 AND you are making more money on top of it, it's a lot to walk away from.

I heard Suzy say that 70 is the new 65 for retirement because people are living longer. In case you are an Orman acolyte.

I am still working post 65 mostly for reasons 1 and 2. Am definitely grinding away harder than at 45.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

No but I think a good UMC lawyer should have built enough wealth and an ability to continue to generate income when he/she is old.
If they are worrying about maxing out retirement, then they are just simple worker bees like most poor and middle class folks.

LOL. You’re funny. Unless you make partner at a big name firm, most dual income attorney families are making 500-700k which goes almost entirely to a mortgage on a nice but nothing crazy house, private schools, nanny, UMC lifestyle etc. They are rarely creating such significant wealth that they don’t have to concern themselves with a 401k!

There are different categories of people:
1- The good employees: They go to college. They graduate and find a good 9 to 5 job. They are happy to be employed and earn a paycheck. They work and save some money from their paycheck for retirement. When they retire, they start withdrawing money from their retirement savings to cover their living expenses.

2- The entrepreneurs: They don't go to college or they drop out of college. They hate working for someone else. They start a business and build wealth and a fortune.

3- The hybrids: They go to college. They graduate and get a job. They work regular jobs but start a business on the side or other activities that generate passive income. This allows them to build true wealth. They may eventually transition to full time entrepreneur (category 2)

Most people on DCUM fit into category 1. They are good workers. hey worry about retirement a lot because they don't have anything that can generate income outside of their savings.
People in category 2 and 3 don't worry about 401k and such. While they still save, they are more worried about creating sources of income.

If you are making that kind of income (500-700k) for a long period of time and you can't leverage it to build true wealth as category 2 and 3, then I'm sorry because you are doing something wrong.
You are just a "poor" good worker.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No but I think a good UMC lawyer should have built enough wealth and an ability to continue to generate income when he/she is old.
If they are worrying about maxing out retirement, then they are just simple worker bees like most poor and middle class folks.

LOL. You’re funny. Unless you make partner at a big name firm, most dual income attorney families are making 500-700k which goes almost entirely to a mortgage on a nice but nothing crazy house, private schools, nanny, UMC lifestyle etc. They are rarely creating such significant wealth that they don’t have to concern themselves with a 401k!

There are different categories of people:
1- The good employees: They go to college. They graduate and find a good 9 to 5 job. They are happy to be employed and earn a paycheck. They work and save some money from their paycheck for retirement. When they retire, they start withdrawing money from their retirement savings to cover their living expenses.

2- The entrepreneurs: They don't go to college or they drop out of college. They hate working for someone else. They start a business and build wealth and a fortune.

3- The hybrids: They go to college. They graduate and get a job. They work regular jobs but start a business on the side or other activities that generate passive income. This allows them to build true wealth. They may eventually transition to full time entrepreneur (category 2)

Most people on DCUM fit into category 1. They are good workers. hey worry about retirement a lot because they don't have anything that can generate income outside of their savings.
People in category 2 and 3 don't worry about 401k and such. While they still save, they are more worried about creating sources of income.

If you are making that kind of income (500-700k) for a long period of time and you can't leverage it to build true wealth as category 2 and 3, then I'm sorry because you are doing something wrong.
You are just a "poor" good worker.

PP again.
I made the switch from category 1 to category 3 a couple of years ago. I'm no longer contributing to a 401k. I took out half of my 401k saving to invest in a commercial and residential real estate business. I have 20 properties in my real estate portfolio and we are entering the real estate developer field. I still have a 9-5 job.
I feel more comfortable with building wealth rather than putting money in 401k.

[Anonymous]

We didn't max 2 roths and 2 401ks until age 44 (made $230k gross and youngest went to kindergarten). One spouse didn't have a 401k until that year so maybe we could have managed it a year or two earlier.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No but I think a good UMC lawyer should have built enough wealth and an ability to continue to generate income when he/she is old.
If they are worrying about maxing out retirement, then they are just simple worker bees like most poor and middle class folks.

LOL. You’re funny. Unless you make partner at a big name firm, most dual income attorney families are making 500-700k which goes almost entirely to a mortgage on a nice but nothing crazy house, private schools, nanny, UMC lifestyle etc. They are rarely creating such significant wealth that they don’t have to concern themselves with a 401k!

There are different categories of people:
1- The good employees: They go to college. They graduate and find a good 9 to 5 job. They are happy to be employed and earn a paycheck. They work and save some money from their paycheck for retirement. When they retire, they start withdrawing money from their retirement savings to cover their living expenses.

2- The entrepreneurs: They don't go to college or they drop out of college. They hate working for someone else. They start a business and build wealth and a fortune.

3- The hybrids: They go to college. They graduate and get a job. They work regular jobs but start a business on the side or other activities that generate passive income. This allows them to build true wealth. They may eventually transition to full time entrepreneur (category 2)

Most people on DCUM fit into category 1. They are good workers. hey worry about retirement a lot because they don't have anything that can generate income outside of their savings.
People in category 2 and 3 don't worry about 401k and such. While they still save, they are more worried about creating sources of income.

If you are making that kind of income (500-700k) for a long period of time and you can't leverage it to build true wealth as category 2 and 3, then I'm sorry because you are doing something wrong.
You are just a "poor" good worker.

What is your definition of "true" wealth as in category 3? What's the difference between receiving rent or investing returns?

[Anonymous]

We were able to start maxing (to the IRS limit) both of our accounts when we hit $200k HHI. We had one child at the time and were 31/33. That was 6 years ago. Prior to that, we started with just enough to reach the employer max when we each started working post college/grad school, and then, whenever we got any kind of raise we would up our contribution until we reached the max. Took 9 years for one of us and 7 for the other. We never missed the money from raises if we just kept our spending as if they never happened.