In typical politician fashion, the income tax cuts are subject to meeting certain financial targets in the future after Tate is out of office. So he gets credit for "eliminating the state income tax" even though it's questionable it will ever really be eliminated.
OT - Retirement discussion - what is the least amount of $$ needed to retire?
- Thread starter dawgstudent
- Start date
I don't necessarily endorse primary home as the primary investment, but that's been the national model of wealth-building (and overall economic engine) since the GI Bill. I think the studies show that lower middle class to middle class families benefit the most from attaining home ownership, since building home equity is a form of forced investment that might not be made through regular savings.
Anecdotally, about half the families that we know in our age cohort (late 40s) own a rental/investment property. Generally not great for income, but overall equity appreciation and depreciation benefits are a big plus.
I don't either, but it's worked out great for my brother in law. Or at least it would if he could get my sister to agree to sell it and move into something smaller so they could convert the equity to cash.
Ah…
So there is a Kansas clause?
Good.
They’ve done a good job of hiding the details so far which has made me wonder why Tate & Delbert were promoting it so much…
The South has a lot of these types of non-normative families who couldn't survive without govt support. Well these are the new normal in much of America and I have my share of relatives with 3rd marriages, child support, step kids etc. Figuring it out the first time tends to be best for happiness and retirement.
THIS time is the most valuable asset we all have and we can’t buy anymore of it. Work work work if that’s way you want to spend it but I personally just want to be able to enjoy some of it without having to answer to a corporation till I fall over dead.
You also have to protect against loss of purchasing power caused by an inflating money supply.
I guess that works better in some places than others, but the people I know that look into this never seem to be able to pull the trigger. They have a 3500 sq ft house they can sell for $650k, and a new build 2200 sq ft in a comparable area is selling for $550k. Surely there is housing out there that is comparable quality and 2000 to 2200 sq feet, but there is still enough of a differential in price per sq ft to make moving seem like not worth the effort, especially if it's not the neighborhood they really want to move to. And doing the real downsizing into a 1,500 sq ft patio home just seems to be off the table. Might be because of concern that getting into 1500 sq ft housing is likely to come with neighbors you might not prefer, and if it's expensive enough to eliminate that concern, they're not putting enough into investments to justify the move. Pretty much has to be a lifestyle decision to reduce maintenance and headaches.
Yep, that trap is real. It's been aggravated further by the mortgage rates normalizing again and lots of people being locked into a home by too good of a rate to let go of.
We bought a property as our primary home in 2019 at 3.125% (lucky timing before COVID). We've moved since then and it's a rental now. I wanted to sell it a while back, but it's so cheap relative to anything that I could buy that I just can't do it. And RE is one of my diversification tools.
In their case, he's renovated his parents old house 15 miles away and it's beautiful and in a nice neighborhood, so they've got a place to move to without buying. So, sell for $700,000 Would be a slam dunk to me. But it's a hard sell with my sister.
This thread has taught me you 17ers are a lot richer than me and I’m never going to retire.
Seriously though I hope to retire by 62-63. I’ve seen too many people retire at 65+ and die before they hit 70. Don’t want that to be me
Seriously though I hope to retire by 62-63. I’ve seen too many people retire at 65+ and die before they hit 70. Don’t want that to be me
My biggest fear around retirement and my 401k when this younger generation gets in charge with their romanticism of what they think socialism is. Worried about a wealth tax that would redistribute wealth.
Nearly 100% agree with your outlook, but question......how is a rental/investment property not great for income? Are you not renting it?
ETA: I saw your comment about a previous house being a rental.....I don't particularly like that strategy. My thought is sort of like Ramsey....if you didn't own it previously, would you pick that house for an investment property? If not, sell it. See a lot of military folks do this, and none of them have really benefitted hugely from it.
It cash flows fine, but I don't count that as income because I hold it back for the inevitable repairs and maintenance which always seems to eat up most of that. Plumbing, HVAC, irrigation, tree maintenance, fence, etc. I stay ahead of most of the issues so that they don't get more expensive, but I'm not exactly breaking news to anyone here when I say "sh*t's gotten real expensive out here!". I'm planning on replacing the AC unit next spring, and it's only going to cost me $9,000. Again, the large tax benefits and his appreciation are the biggest benefits for me.
And yes, it's a great property in a great location in CO that only became a rental because we had to add space for a relative who lives with us. I'm fortunate to have gotten it when I did and with that rate. If it were on the market today for current prices and rates, I would not consider it. I also have good long term tenants. If they decide to move on, I will probably fix and flip it.
I don't know how old you are, but if you're referring to people as "this younger generation", you're likely not in danger of being around for a wealth tax considering we have the best tax scheme since Reagan.
Definitely. At the very least, it gives you more options during retirement, and of course one of the biggest benefits in terms of monthly expenditures is when a home owner reaches the point of no longer having a mortgage payment or rent.
Well if it's any consolation, I'm right there with you. $3-5M, lol.
I'm happy for those that have accumulated that kinda cash, but I'm convinced that it's only possible with some combination of the following factors
1. No kids and/or divorces
2. A financial windfall (inheritance, winning the lottery, etc)
3. Extreme, and I mean EXTREME focus on saving from a very early age
Wasn‘t there a typo in the Senate bill that basically guarantees the growth triggers will be met? Did that ever get corrected?
You're right - and you nor anybody else should get down on themselves if they're not on pace today to be a multi-cozillionaire. A) like you say, luck is absolutely a factor 2) this is still Sixpackspeak; there's probably a healthy amount of bullshiit in this thread C) Selection bias -the folks most likely to reply to this thread are or claim to be doing ok; plenty folks are 38 or whatever and have not huge retirement savings.
The best time to start saving was 20 years ago, the next best time is today. Here's a simple but realistic scenario in which a 38 year old with $1 in savings can get to $1,000,000 by age 65:
It makes it much more likely. The senate intended to make it pretty unlikely for the triggers to ever be met. With the current language, they will have to make an effort to avoid the triggers being met some, as the surplus required isn't that big now.
Agreed that most people who have that type of accumulation began with a head start or help; that's what good planning can do. Many of my clients are involved in a family business, so they've either been exposed to finance concepts from a younger age or they have been the beneficiaries of that business earlier than what individuals might earn at their peak earning capacity in their 50's/60's.
Not directly on point, but most of my clients who have higher wealth are unsuspecting. The ones who are more "aspirational" tend to have more flash. It's interesting psychology.
Roughly a third in cash (mostly C.D. ‘S) a third in bond funds and a third in stocks. The stocks are a wide mix but several are pretty stable types that pay a nice dividend.
I plan on moving somewhere a little north of Port st Joes and teaching myself to bay fish until I get really good at finding them. Im then gonna side hustle a fishing guide business until I reach retirement age and then I will quit my day job and only have the guide business.
Got me a bachelor's lol...
I was an idiot and got married after my sophomore year. Making rent, paying bills, spending time with the wife and getting high with friends became more important than going to class. After the divorce I finished 2 years of college in a year and a half.
And, there is the question, “lump sum or annuity”?
(A question only for anyone still lucky enough to have an employer with a DB Plan)
Everyone remembers those, right!!??
(A question only for anyone still lucky enough to have an employer with a DB Plan)
Everyone remembers those, right!!??
1,400 hrs per year now?
If you have 8 weeks vacation / holidays, that’s only like 6.3 hrs per day. I think I’d like to have an off-ramp to your off-ramp.
Definitely have to be fortunate, and no divorce is a big one that probably one of your conditions that you almost have to meet, but you can get there with kids and without a financial windfall or extreme savings. You do have to have a pretty good income and probably much more importantly, ramp up savings instead of lifestyle as your earnings grow.
If you do $18,200 a year in investments into the S&P, historically you will get to $3,000,000 in 30 years. So basically an engineer and CPA or engineer and lawyer or whatever combination of professions can let you start off making $61k each or $122k combined, you can get there just investing 15% of their starting salaries.
That's understating it some, as that's nominal return, so it's much harder to get to $3M in todays dollars saving 15% of starting salary (you'd need more like $234k total, which half of that is hard to do starting off much less having each person in a couple do it, but if you are in a good career and start off saving 15%, and increase that percentage of 20 or 25% as your income grows, you can get there without anything crazy other than just avoiding significant bad luck.
That said, all that really matters is your nest egg versus your spending needs. If you keep your lifestyle where you spend around $50k a year, you can retire at 55 with $1.1M and not even need social security to do it unless you catch some bad sequence of returns early. If you spend around $200k a year, you can't safely retire at 65 even with $3M and counting social security without significant cuts to your spending.
Yeah, it's not an impossible pipe dream for a lot of people. I agree
But the calculator that I've got open is telling me that it'd take 35 dedicated years of socking away $2500/mo at a 6% return rate in order to hit $3.5M. Not impossible, but I think the "without a lot of pain" part is subjective.
In your 20s, you tend to have more disposable income, but significantly lower take home pay, so $2500/mo can be a lot of cash when you're trying to get on your feet with buying a home, getting married, etc.
In your 30s, ok.. you've doubled or maybe even tripled your salary, but kids eat that "extra" cash up in a hurry. Travel ball and what not...
In your 40s, now you're making pretty good money, but you're saving for college, weddings, kids' insurance, etc.
Then from there, like I said... you just have to hope and pray that a divorce, layoff, major health issue, or something similar hasn't bled you dry, and this all for a couple that I'd consider to be pretty financially responsible. i.e. No $100k cars, extravagant trips, etc
I agree with you. It can be done, but not often without some very strong dedication and good fortune
D) A lot of this is projection without a crystal ball.
4 years ago, I would have told you were on pace to retire in at 52 if we wanted to. Throw in covid inflation and a paycut at one job and the other not keeping pace with inflation, and there was a time where we looked like we wouldn't be able to retire at 65. Find a couple of new jobs to get pay back up and now 56 or 57 looks possible and there are things that could push that forward another 3 or 4 years easily, and of course there are always things that could push it back to never.
It wasn’t painful, but we both started contributing to a 401K when we got our first jobs right out of College. 41 years later ( a combined 82 years of 401K contributions) and we were home free. In the early years when we were raising kids we did 6 percent most of the time and raised it when we could. After the kids graduated College we maxed out contributions and continued to save in other ways as well. We were able to save and still raise kids, put them through State, take vacations, and watch the bulldogs. We made nice, but typical, salaries and no one ever gave us any kind of big windfall or anything like that. Started early and tried to not do anything stupid then just stayed the course.
Yeah. During off peak times I’m down to 4 6.5 hr days per week. Even during peak times only about 36-40. Snd it’s totally up
To me. not bad. I could quit, but I’m enjoying it so why?
That’s the key. Start saving early. At least enough to get the match. If you do that, compounded earnings will do amazing things. Most of the last 10 years, I’ve earned more from my retirement savings than from my job.
1 and 3. Nobody has ever given me anything. Live below your means. It’s a mindset. When most people are shopping for a $50,000 truck they ask themselves three questions. Do I have $50,000 to write a check? Most don’t. Do I have a sizable down payment so that I can easily afford the payments. Some do. Do I have ample income to make payments on a $50,000 truck. When I’m looking at a $50,000 truck I ask myself how much that $50,000 will be worth at the end of the loan, usually 60 months. If I can average 12% returns then that $50,000 should be $75,000 to $85,000. What’s the 5 year old truck going to be worth? $25,000 maybe?
I'm old enough to have a respectable amount of savings in my 401k that we've sacrificed as a family to build.
I'm old enough to recognize this could be tried....just look at the student loan crap they tried to pull. I made sacrifices to pay mine off.
I'm old enough to see the tide shifting towards a romantic view of socialism with younger people and elite over educated white people. See NY mayor race for the latest example.
I'm old enough to acknowledge that the income/wealth gap is real and something will eventually need to be done about it....hence my concern.
I'm old enough to hopefully live another 30-35 years assuming nothing catastrophic.
And I'm definitely old enough to say get off my lawn ***