Post: #126

(05-19-2013 02:19 PM)Brodiaga Wrote:  I am a middle class person. I'd rather think like one than be delusional.

WestCost grew up very tough. I was poor as a fuck as a kid.

We have talked about this stuff in real life.

Neither of us ever thought of ourselves as poor, even though we were. We always knew we'd make it.

You have to change your mindset to change your life.

Post: #127

has anyone ever retired on a 401k? Their widespread implementation only began with this generation that is now reaching retirement age.

I've got a 401k but I am not counting on a single penny of it for retirement. Thats what real estate is for.

Post: #128

I have to be honest, I think a lot of these answers on this post have been from out of space.

I like the real estate ideas, and I like west coast's posts on Reits, but lets cut the bullshit and do the math.

How much do we need?
And how will we generate it?

I would like $75-100K a year in today's dollars at retirement:

$3.5 milllion 401k X 2% CD= $75K

$2 million 401K X 3-4% dividends= $60-80K

Real estate= 6-8K rental income a month


and Social security only averages 12-15K a year....


Those numbers are NOT easy to obtain. You would need 2 FULLY paid off brownstown's in Brooklyn to get that type of rent after expenses, and 2-3 million in cash is not easy either....

The only other option is minimalist living, but I like to ski, I like to drive, I like to travel, and by age 70 I expect to still be doing these activities. (my father still is at age 66)

Post: #129

Decide you'll draw down your capital once you've stopped working. Then do those sums again.

Post: #130

Don't out live your draw, but yes you can take out 6-7% if you want and start drawing down principal.....

That's a reasonable plan....That would especially work if you retire later, cuts down the chances of you running out of $$

Post: #131

The key to the real estate is to start early and let the tenants pay the amortization so that is twenty years it is all free and clear. I have a building worth about 3mm and right now it earns 21k a month in rent. By the time the mortgage is paid off it will be more like 40k per month free and clear.

Post: #132

Captain here is the thing.

1. Re read how you are losing money by having 3% debt on loans while having 3% CD's

2. When you plan to retire, let's say $1M... Well just buy a nice 1 bedroom in a cheap country what $100K max? So now you got 900K at 4% = 36K

36K is not bad when you realize that is all for food, partying and transportation right?

3. Really need to start thinking bigger, instead of protecting all your assets think about what you knownthat can generate more income. You work out. Why not be a trainer and just workout at the same time? You've now substantially increased your income

Become efficient, your time should be expensive, you don't hang out with ugly bitches, so why should your time be spent losing money when you could be making money doing what you love?

Stop asking how to scrimp and save money, ask how you can get money right now with your current skillset.

Post: #133

Guys, here is an idea I'd like to run by you. First of all, English is my second language, so apologies for any errors.

I am in my early 30s, live and work in the NY area. I have an ok job, salary just over $100k/yr, likely to grow in line with inflation going forward with no guarantee of job security. Not married, no kids, very unlikely to ever get married or have kids. I am debt free, don't own any real estate. All my assets are in 401K, roth IRA, cash, and some non-tax exempt investments in the stock market. I've been too conservative by keeping too much and cash, right now looking at investing more aggressively.

I grew up very poor in a poor country and know how to save money and live frugally. My goal is to retire or semi-retire as early as possible. A more specific goal is to spend some living in a country like Thailand - or whatever will be the best place for me at that time - earning passive income from my investments. Also, I'd like retire many years before I become impotent and senile. To me, the concept of Net Present Value applies to free time and retirement, not only money: the younger I am the more valuable the time I spend retired and/or semi-retired is.

I am very conservative and skeptical about get rich quick schemes, risky business ventures, etc. Realistically, If I aimed to earn enough to retire permanently I would not likely be able to do it until late 50s at best, or probably not even until early 60s, which would suck, because my dick might stop working by the time I reach that age, not to mention all other health problems, lower energy level, etc.

So, here comes the idea: let's say by the time i reach 45 I accumulate enough assets to generate a big enough passive income to live comfortably for about 20 years in a "playground country" like Thailand or the Philippines, and deplete my assets by the time i reach 65. Let's not get into exact numbers right now, but i think we can all agree that the amount i need in this case will be much less than what i would need if i was aiming to retire permanently. What happens when the money runs out, you ask? Here is the idea: I return to the US with a little "safety net" money enough to last for a few months. Then I can live of off Social Security, Medicare, Medicaid, and all kinds of benefits that poor senior citizens get. The idea is to get into a senior care home paid for by Medicaid: http://www.medicare.gov/nursing/payment.asp That way, shelter, food and health care will be taken care of, and I'll have my social security pension for any other expenses. As I mentioned, i grew up poor and lived in tough conditions, so I don't mind sharing a room with another old fart and eating mush when I'm 65+.

Some current retirees are doing something similar to my idea: not necessarily moving abroad and coming back, but depleting their assets strategically and moving to nursing homes by the time they are eligible. Google "medicaid planning", here is one link as an example: http://www.centerltc.com/BriefingPapers/3.htm

I know that some of you have already started writing replies about the US economy going downhill, Soc Sec, Medicare, Medicaid and such going bankrupt by the time most of us retire, etc.. Yes, I'm pessimistic too, but I don't think things will get bad enough for the US to become a country where poor seniors live on the street and dumpster dive for food. Medicaid or not, there will likely be a Government scheme paying for senior housing, food and health care even 30-40 years from now. Basically, it's a bet on the US not becoming a third world country by that time. Worst case scenario, even if I end up living on the street and looking for food in dumpsters at 65, I will only have myself to blame and deal with it like a man.

Questions:
- What are the weaknesses of this plan? What are the risks? If you think I'm fucking crazy, say so, but back it up with facts and logic.
- If I'm going to follow the plan, what is the best investment strategy? For example, is it worth maxing out on 401K like i do now? What about Roth IRA?

PS. Let's not get into an ethical debate for now. As far as I'm concerned, I am paying more than my fair share of taxes that pay for other people's retirement (think government employees, for example). As long as I stay within the limits of the law, I have no problem claiming all the benefits i can get at an old age.

Post: #134

You can still get SS while living abroad I believe so why come back to live at 65+?

Post: #135

(05-19-2013 06:39 PM)Jaydublin Wrote:  You can still get SS while living abroad I believe so why come back to live at 65+?

I could get by in Thailand if I retired today on SS, e.g. about $1500 in current dollars at the current exchange rate, but I think it will be much, much harder to do by the time I am eligible. Also, what if need regular medical care? Even today, health insurance in Thailand and such costs a lot when you are 65. Again, it's not likely to get cheaper in the future.

But yes, if things go better than expected there will be an option to stay overseas on Social Security after running out of other funds except for a small safety net.

Post: #136

you're putting way too much thought into how and where to live as a broke 65 year old. This is like a 6th grader weighing the pros and cons of each gas station he could work after graduating high school.

Post: #137

(05-19-2013 04:46 PM)Brodiaga Wrote:  Guys, here is an idea I'd like to run by you. First of all, English is my second language, so apologies for any errors.

I am in my early 30s, live and work in the NY area. I have an ok job, salary just over $100k/yr, likely to grow in line with inflation going forward with no guarantee of job security. Not married, no kids, very unlikely to ever get married or have kids. I am debt free, don't own any real estate. All my assets are in 401K, roth IRA, cash, and some non-tax exempt investments in the stock market. I've been too conservative by keeping too much and cash, right now looking at investing more aggressively.

I grew up very poor in a poor country and know how to save money and live frugally. My goal is to retire or semi-retire as early as possible. A more specific goal is to spend some living in a country like Thailand - or whatever will be the best place for me at that time - earning passive income from my investments. Also, I'd like retire many years before I become impotent and senile. To me, the concept of Net Present Value applies to free time and retirement, not only money: the younger I am the more valuable the time I spend retired and/or semi-retired is.

I am very conservative and skeptical about get rich quick schemes, risky business ventures, etc. Realistically, If I aimed to earn enough to retire permanently I would not likely be able to do it until late 50s at best, or probably not even until early 60s, which would suck, because my dick might stop working by the time I reach that age, not to mention all other health problems, lower energy level, etc.

So, here comes the idea: let's say by the time i reach 45 I accumulate enough assets to generate a big enough passive income to live comfortably for about 20 years in a "playground country" like Thailand or the Philippines, and deplete my assets by the time i reach 65. Let's not get into exact numbers right now, but i think we can all agree that the amount i need in this case will be much less than what i would need if i was aiming to retire permanently. What happens when the money runs out, you ask? Here is the idea: I return to the US with a little "safety net" money enough to last for a few months. Then I can live of off Social Security, Medicare, Medicaid, and all kinds of benefits that poor senior citizens get. The idea is to get into a senior care home paid for by Medicaid: http://www.medicare.gov/nursing/payment.asp That way, shelter, food and health care will be taken care of, and I'll have my social security pension for any other expenses. As I mentioned, i grew up poor and lived in tough conditions, so I don't mind sharing a room with another old fart and eating mush when I'm 65+.

Some current retirees are doing something similar to my idea: not necessarily moving abroad and coming back, but depleting their assets strategically and moving to nursing homes by the time they are eligible. Google "medicaid planning", here is one link as an example: http://www.centerltc.com/BriefingPapers/3.htm

I know that some of you have already started writing replies about the US economy going downhill, Soc Sec, Medicare, Medicaid and such going bankrupt by the time most of us retire, etc.. Yes, I'm pessimistic too, but I don't think things will get bad enough for the US to become a country where poor seniors live on the street and dumpster dive for food. Medicaid or not, there will likely be a Government scheme paying for senior housing, food and health care even 30-40 years from now. Basically, it's a bet on the US not becoming a third world country by that time. Worst case scenario, even if I end up living on the street and looking for food in dumpsters at 65, I will only have myself to blame and deal with it like a man.

Questions:
- What are the weaknesses of this plan? What are the risks? If you think I'm fucking crazy, say so, but back it up with facts and logic.
- If I'm going to follow the plan, what is the best investment strategy? For example, is it worth maxing out on 401K like i do now? What about Roth IRA?

PS. Let's not get into an ethical debate for now. As far as I'm concerned, I am paying more than my fair share of taxes that pay for other people's retirement (think government employees, for example). As long as I stay within the limits of the law, I have no problem claiming all the benefits i can get at an old age.

If that is your plan..I'd stop putting money into 401k because you will get penalty.
Question...you are making over 100k so you are in the top % of us earners. Why would you give it up to move and get cheap hoes??
I am sure you can find a partner to share expenses and live pretty well here.What is your job btw?

Post: #138

(05-19-2013 07:27 PM)Jaydublin Wrote:  you're putting way too much thought into how and where to live as a broke 65 year old. This is like a 6th grader weighing the pros and cons of each gas station he could work after graduating high school.

But the whole idea is to be able to go broke and still have basic necessities when I am 65+. If I operate on this assumption, I can enjoy my life in a country in SEA from 45 to 65. My dick will still work (hopefully), but as a single guy it will be difficult for me to get laid in the US or get a job if I am laid off at that age. So, it really is a good age for a guy to move to Asia. Everything adds up very nicely if I am taken care of later on, in case I run out of money.

Post: #139

(05-19-2013 07:30 PM)jimukr104 Wrote:  Question...you are making over 100k so you are in the top % of us earners. Why would you give it up to move and get cheap hoes??
I am sure you can find a partner to share expenses and live pretty well here.What is your job btw?

I work in IT. It is not the kind of job that I can do from anywhere. I mean, technically yes, but practically no. This salary is not much for NY. By partner, do you mean a girl? I tried that and prefer to live alone. Same thing when it comes to roommates.

Right now, my life is better over here than if I was in SEA getting cheap hoes. Which is exactly why I am here. However, at age 45+ I will basically not exist as a guy for most if not all females in the US. Also, i've seen too many older people being laid off and not being able to find a decent job to have any illusions about being able to keep a high paying job until retirement. Which is why I am considering moving to Asia at that point. It doesn't necessarily have to be Thailand, but you get the idea.

Post: #140

So you're planning on moving into a nursing home at 65? Sounds like a plan.

Do people not have contact with parents, grandparents and other older people? There seem to be a lot of young guys posting bizarre questions assuming their life is over at 50+.

Post: #141

(05-19-2013 08:19 PM)Lemmo Wrote:  So you're planning on moving into a nursing home at 65? Sounds like a plan.

Do people not have contact with parents, grandparents and other older people? There seem to be a lot of young guys posting bizarre questions assuming their life is over at 50+.

I am not going to marry or have children, so I see 2 options by the time i reach 45:

- Live in the US, play the dating game and try to keep the job competing against younger people. Then retire at a normal retirement age and enjoy life (or what's left of it).

- Follow my plan as described: leave for Thailand or something similar at about 45, spend the money, then come back if/when broke and end up in a nursing home. BTW, doesn't have to happen exactly at 45. For example, a layoff around age 45 with a decent layoff payment can trigger it.

I have traveled to Asia and South America before, have a number of "target" countries in mind and know people who live there and travel there frequently, so moving there is not just a fantasy. If I do it, I know the exact steps I will take in terms of finding a place to live, relocating, arranging bank accounts, etc.

I see your point, though. A nursing home may be a very depressing place, so perhaps i should visit and/or volunteer at a couple of them before considering spending the last years of my life there. However, if i dont marry and stay child free, my last years will be spent either at a nursing home or an empty house/apartment regardless, so again, my plan makes sense.

Post: #142

A couple of points:

I like to think of living in the moment in your younger years is frontloading your retirement. Why wait to do these things that your body might not be able to handle at 65? Also, travel is a tremendous intangible investment in yourself. The experiences I've had away from home have shaped who I am as a person. I do not have to run 'game' anymore, my life is interesting enough that people are naturally drawn to me.

Also, along the lines of what Mike said: Mike says turn your time into value. I say also turn your social network into value. There is cheap rent to be paid, free places to travel, discounts on services, etc. if you look through the lens of your social network as a financial asset. It's not unethical in the least because these same friends obviously are friends with you because you provide something of value to their lives.

Post: #143

I'm not moving oversea's unless the shit really hits the fan. And if it does, I'm sure Europe will be worse...

But back to the original post: How is the Joe Shmoe average American going to retire with his 401k??? The national average balance is really low...

I'm assuming when the baby boomers die, the next generation of retiree's are going to be retiring on much less. Of my 15 close friends from College, only two have any type of pension. Everyone else is just 401K's....

Post: #144

(05-19-2013 09:05 PM)TheCaptainPower Wrote:  I'm not moving oversea's unless the shit really hits the fan. And if it does, I'm sure Europe will be worse...

But back to the original post: How is the Joe Shmoe average American going to retire with his 401k??? The national average balance is really low...

I'm assuming when the baby boomers die, the next generation of retiree's are going to be retiring on much less. Of my 15 close friends from College, only two have any type of pension. Everyone else is just 401K's....

I'd argue that the average Joe Shmoe has no clue about how to handle money. This goes so far beyond just the 401k that you bring up.

You've got a decent head on you Captain, I can almost guarantee that you are way ahead of most people in at your age in terms of collecting assets.

There are people working similar jobs to you in the city, at a similar age who haven't saved a penny because they've been paying $2500/month rent the last 10 years, going out 4 nights a week.

Post: #145

(05-19-2013 09:05 PM)TheCaptainPower Wrote:  I'm not moving oversea's unless the shit really hits the fan. And if it does, I'm sure Europe will be worse...

But back to the original post: How is the Joe Shmoe average American going to retire with his 401k??? The national average balance is really low...

I'm assuming when the baby boomers die, the next generation of retiree's are going to be retiring on much less. Of my 15 close friends from College, only two have any type of pension. Everyone else is just 401K's....

You know how 2/3 adults in America are overweight or obese(1/3rd). If the average American is not accountable for their individual health why would you think they will take care of their finances especially having a well funded retirement? As you probably know the Americans with the lowest rates of BMI are wealthier Americans. I really believe most Americans think that the government will finance their health and retirement even though me, you and most of the posters here believe that it is impossible for the US to continue as it has been into the future. Most Americans dont think things will change but that is unwise because if there is one thing you can count on it is change.

Post: #146

@MaleDefined It's crazy. I meet clients at work all the time who have 3 kids, 48 years old, and $65K in their 401k. I do the math in my head, ok $65K X .04%= $260 a month pension not including social security. And that is about half of the United States...

This is my family:

Grandparents mother: Paid off house, small pension, social security X 2, $250k in savings bonds
Grandparents father: Paid off house, small pension, social security x 2, $85k in savings bonds

Mother: Retired NYC school teacher $40K in defined benefit. social security, house paid off, 401K $150K
Father: Semi-Retired teacher/accountant: $950k 401k, social security, house paid off, working part time (taxes)

Post: #147

Last thing I can really add is this. If you are relying on your 401K for retirement that's a bad idea. Also captain you don't have to retire in NYC, Florida/Texas are cheap and you like those states.

Try to think of ways to make money so you never have to touch your 401K.

If you want to do the 401K route, maxing it out every year, you'll be fine by 55

Post: #148

(05-19-2013 04:46 PM)Brodiaga Wrote:  Guys, here is an idea I'd like to run by you. First of all, English is my second language, so apologies for any errors.

I am in my early 30s, live and work in the NY area. I have an ok job, salary just over $100k/yr, likely to grow in line with inflation going forward with no guarantee of job security. Not married, no kids, very unlikely to ever get married or have kids. I am debt free, don't own any real estate. All my assets are in 401K, roth IRA, cash, and some non-tax exempt investments in the stock market. I've been too conservative by keeping too much and cash, right now looking at investing more aggressively.

I grew up very poor in a poor country and know how to save money and live frugally. My goal is to retire or semi-retire as early as possible. A more specific goal is to spend some living in a country like Thailand - or whatever will be the best place for me at that time - earning passive income from my investments. Also, I'd like retire many years before I become impotent and senile. To me, the concept of Net Present Value applies to free time and retirement, not only money: the younger I am the more valuable the time I spend retired and/or semi-retired is.

So you're working your ass off right now only to enjoy it in your 50's? Seems a little counter intuitive. To each their own.

I am very conservative and skeptical about get rich quick schemes, risky business ventures, etc. Realistically, If I aimed to earn enough to retire permanently I would not likely be able to do it until late 50s at best, or probably not even until early 60s, which would suck, because my dick might stop working by the time I reach that age, not to mention all other health problems, lower energy level, etc.

Looks like you just answered your first question. Don't be afraid to spend some money while your dick actually DOES work.

So, here comes the idea: let's say by the time i reach 45 I accumulate enough assets to generate a big enough passive income to live comfortably for about 20 years in a "playground country" like Thailand or the Philippines, and deplete my assets by the time i reach 65. Let's not get into exact numbers right now, but i think we can all agree that the amount i need in this case will be much less than what i would need if i was aiming to retire permanently. What happens when the money runs out, you ask? Here is the idea: I return to the US with a little "safety net" money enough to last for a few months. Then I can live of off Social Security, Medicare, Medicaid, and all kinds of benefits that poor senior citizens get. The idea is to get into a senior care home paid for by Medicaid: http://www.medicare.gov/nursing/payment.asp That way, shelter, food and health care will be taken care of, and I'll have my social security pension for any other expenses. As I mentioned, i grew up poor and lived in tough conditions, so I don't mind sharing a room with another old fart and eating mush when I'm 65+.

When I hear passive income I think rental properties. You should look into this idea and put a manager in charge of a couple properties while messing around overseas. This will indeed be passive income not subject to self-employment tax.

Some current retirees are doing something similar to my idea: not necessarily moving abroad and coming back, but depleting their assets strategically and moving to nursing homes by the time they are eligible. Google "medicaid planning", here is one link as an example: http://www.centerltc.com/BriefingPapers/3.htm

I know that some of you have already started writing replies about the US economy going downhill, Soc Sec, Medicare, Medicaid and such going bankrupt by the time most of us retire, etc.. Yes, I'm pessimistic too, but I don't think things will get bad enough for the US to become a country where poor seniors live on the street and dumpster dive for food. Medicaid or not, there will likely be a Government scheme paying for senior housing, food and health care even 30-40 years from now. Basically, it's a bet on the US not becoming a third world country by that time. Worst case scenario, even if I end up living on the street and looking for food in dumpsters at 65, I will only have myself to blame and deal with it like a man.

I don't know about this- if you're not a woman or someone taking advantage of the welfare system, the US might just let ya die. You're a grown white man and had all of the privelages handed to you on a platter. Because you are now insolvent; your fault.

Questions:
- What are the weaknesses of this plan? What are the risks? If you think I'm fucking crazy, say so, but back it up with facts and logic.

You are not diversified enough- If you are making decent money now- look into pensions, annuities, and some tax exempt bonds (double tax exempt would be preferable). For your initial plan; make sure to strategically max out both IRS contributions each year. The Roth IRA would be preferable as it will grow tax free and can be withdrawn a little over 4 years later (will post more on this).

- If I'm going to follow the plan, what is the best investment strategy? For example, is it worth maxing out on 401K like i do now? What about Roth IRA?

Yes and yes. Also start looking at some companies that pay quarterly dividends and have been good at doing so for quite some time. This will be huge for you as well.

PS. Let's not get into an ethical debate for now. As far as I'm concerned, I am paying more than my fair share of taxes that pay for other people's retirement (think government employees, for example). As long as I stay within the limits of the law, I have no problem claiming all the benefits i can get at an old age.

Post: #149

(05-20-2013 08:50 AM)Cruisen_Chubby Wrote:  So you're working your ass off right now only to enjoy it in your 50's? Seems a little counter intuitive. To each their own.

Yeah, he should be a broke ass 40 year old who lives in hostels. Sounds like a great plan for getting laid when he gets older.

Quote:When I hear passive income I think rental properties. You should look into this idea and put a manager in charge of a couple properties while messing around overseas. This will indeed be passive income not subject to self-employment tax.

Have you done this yourself or just regurgitating what you read on the internet? Management companies can rob you blind. You really think they will worry about your vacancies when they have other properties to manage?

Quote:I don't know about this- if you're not a woman or someone taking advantage of the welfare system, the US might just let ya die. You're a grown white man and had all of the privelages handed to you on a platter. Because you are now insolvent; your fault.

English is his second language. Love the white privilege bullshit. Someone sounds bitter.

Post: #150

If you must for the 401(k) route- I would max it out every year up until you plan to make your getaway to SEA. It is a no-brainer to meet your employer’s match on your 401(k)- but if this is the way you’d like to plan this “investment” a maximum annual contribution is needed. For theory’s sake, let’s say in 15 years you have $100,000 in your 401(k) and you’re ready to pack up and hit SEA. I would advise you to keep working through the year in its entirety and pack up and move at the beginning of the next year in January (so you won’t have any earned income that year; this is important).

You will now have $100,000 in your 401(k) and should have a savings account that will get you by for at least a year in SEA (keep in mind currency valuation and how far a certain amount will get you). When you need money- this is where your deferred retirement plan kicks in:

Right now you are deferring income at what most likely is about 35% (Fed, State, etc.)- When you withdraw in SEA, you will be doing so at 20% for a tax savings of at least 15%. The 20% comes from the 10% penalty on the early withdrawal plus 10% income tax (it’s treated as income when you withdraw it). You WILL be in the 10% tax bracket if you take out around 15k each year. Your taxable income will be around $5,000 (15k withdrawal - $6k standard deduction - $4k personal exemption).

The above is a way to get $15,000 a year in a tax efficient manner- but if you need more income, this is where the dividend paying stocks come in. Because you will be in the 10% tax bracket, the dividends paid to you will be taxed at 0%. As I said before, your double tax exempt bonds will be as their name implies- tax exempt. Here are two more revenue streams coming to you while living abroad (your passive income, if you will).

Your original plan lacks depth. The bread and butter of this escape route is the tax deferred IRA; but do not rely solely on this. Max out that puppy every year until you leave and when you have excess cash start looking into the dividend paying stocks you’d like to buy- hell, I’d even hold some growth stocks to sell if times get rough over there (yes capital gains will also have beneficial tax treatment to you while overseas). Try to lock into some bonds (some corporate, some tax exempt, some double tax exempt). These bonds alone will most likely not put you in a higher tax bracket. Even if you do dip into the 15% for a bit it won’t hurt you in terms of dividends/capital gains being taxable.

Long story short- while you’re making money: Invest, invest, invest… But diversify. When it comes time to live abroad, the IRS will see you as a poor man with one hell of an investment account (relatively speaking).

Once you sell everything off and your IRA is no more, move back to the states and take advantage of the system that you’ve been paying into for so long. Hell, I don’t blame ya.