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Middle class folks, how did you play it? (Retirement/housing/fun money)

Discussion in 'Bad Dog Cafe' started by naveed211, Apr 7, 2021.

  1. naveed211

    naveed211 Friend of Leo's

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    I suppose what I mean by middle class is people making between, I don’t know, $40k-60k, but I realize that varies greatly whether you’re in California, NYC, Alaska, the Midwest, etc.

    But to the point, how did allot for your retirement alongside your day to day life? Did you live in relative simplicity? Small affordable house, few possessions, very little splurging, etc.?

    Did you put a lot of money to retirement early on with plans to spend after retirement, or did you treat yourself along the way to more or less keep yourself going without working or minimal work but less splurging after retirement? Fancier house and car now, buying that dream guitar now versus waiting til retirement? Not looking for specifics on money.

    Knock on all the wood, I’m on track to retire by my mid to late 60s (understand A LOT can happen and I’ve been very fortunate so far at age 36). We just recently bought a house that is more or less a dream house (within reason, not a mansion by any means, just nice for our budget), but had considered the idea of buying a much more affordable house which would’ve been a fraction of our mortgage payment and would’ve afforded for both more money to retirement and luxuries. We can still afford some luxuries, plan to travel once we can, have money in an emergency fund and still putting money to retirement same as we were. I’ve cut down on gear purchases, which certainly makes a difference.

    Anyway, just curious. I’ve never really considered retirement as a concept until the last year or so.
     
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  2. horsespatoot

    horsespatoot Tele-Holic

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    I do know for a fact .... I am the last one you should ask.
     
  3. Chupacabra

    Chupacabra Tele-Meister

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    Had a stroke at a healthy 50.

    No blood pressure or cholesterol issues, running 5k every other day, swimming 3 miles a week, biking 15 miles, kayaking, and I have a physical job (15,000 steps a day). No junk or fast food, very little alcohol.

    I'm not holding my breath for tomorrow, I live for today now. Best wishes for your future plans.
     
  4. filtersweep

    filtersweep Tele-Meister

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    Retirement advice?

    Like save a third of your income per year?!?

    LOL!

    Ironically, this is much easier to do in your 50s, rather than in your 30s.
     
  5. tubeToaster

    tubeToaster Tele-Meister

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    A house is a great investment. When you retire you can downsize and use the profit from your current dream home as part of your retirement income. It’s never to early to talk to a financial planner. Retirement age will sneak up on you quicker than you think.
     
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  6. ce24

    ce24 Poster Extraordinaire

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    Luck!!!!! I was able to land a job teaching in bush Alaska in the 80s. Great retirement benefits then. We were able to bank one whole paycheck ( wife's) every month for ten years. Moved to Idaho and kept my head down for 25 years with automatic withdrawals to invest whatever we could afford. Now I have retirement from Alaska that also pays for all extra medicare plans..... Retirement benefits from Idaho, social security and a monthly withdrawal from investments.....I almost feel guilty...... Well almost.....lolol. life is good. My wife is also a teacher....a teaching couple can do well. In today's world I would not go into education.
     
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  7. Greg70

    Greg70 Tele-Meister

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    It was easy when I was single. I dumped a ton into my 401k. Now that I'm married with stepkids it's much harder since I share budgetary decisions with my spouse and now have two hungry chicks in the nest with their mouths wide open, so to speak. If your employer has 401k matching, take full advantage of that. Then if you get a raise you can increase your contribution. Let's say you get a 3% raise. Put an extra 1% towards the 401k and then enjoy your 2% raise. You probably won't even notice the difference in your monthly budget. In my case, money that is put into 401k is out of sight from the rest of the family and allows me to save without the family thinking we have a bunch of extra money to spend. I also "hide" savings by paying extra on our mortgage every month.

    For your mortgage, as you get further into it and your income has more than likely increased, start paying extra principal or consider refinancing into a 15 year plan. It sounds like you may have it payed off when you retire, so you're ahead in that part.
     
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  8. BigDaddyLH

    BigDaddyLH Tele Axpert Ad Free Member

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    The other real estate thread is making wonder wtf is happening with prices. Not flexin, but there is a teardown on my street going for $1.6 million. Downsize to where is the question.
     
  9. buster poser

    buster poser Friend of Leo's Platinum Supporter

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    Balance, some good financial advice/smarts, and a bit of good luck.

    Though I had some very down years income-wise between 2001-2005, we've got about ten years of current net income socked away in retirement savings (I'm 50) in addition to holding ~25% equity in a home we bought two years ago. The missus gets a decently monthly stipend for doing 20 in the military, which also makes our healthcare almost literally nothing per year.

    We never had kids and we've always put away at least 10% of our gross salaries. We don't carry revolving debt, our (non-luxury) cars are paid off, and we live in a house that cost about 45% more than last year's median U.S. new home. However, it's not filled up with expensive furniture, jewelry, etc. I've had a few cool cars since 2004, and we've only taken what I'd consider four "big" trips, three of them when I was earning about double what I do now.

    Worked out so far, but I need to start ciphering on exit strategy from work.
     
  10. DavidP

    DavidP Friend of Leo's

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    That's almost as bad as Vancouver... Well, scratch that plan to move out of SW British Columbia to the interior and realize some profit!!
     
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  11. SRHmusic

    SRHmusic Tele-Holic Silver Supporter

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    A few concepts that worked so far for us. (Note - "You" here is anyone - not the OP or anyone in particular.)
    1) Pay yourself first, meaning savings at first then an IRA or 401k as soon as possible. If/as your pay increases, increase the the amount you save. Try to save/invest 15% of what you earn. Live within your means.
    2) Be very careful with debt - credit cards and car payments are a great way to eat up huge amounts of cash that could be working for you. So save first, buy later and minimize debt. In the long run you'll see debt requires you to keep working, and having no debt is a form of freedom. The main exception is a house.
    3) For the IRA/401k: Index funds are good, esp. in an IRA when re-invested automatically. The dividends the fund pays out will be used to purchase more when the market is down, less when the market is up (dollar cost averaging). Most funds do not beat the passive index funds over time, and cost more, so not really worth bothering with unless you're in the financial industry and have inside knowledge. Note that dividends are a big part of the historic returns (when people quote the long term stock market gains of 8 or 11% annually, a few percent are from reinvesting dividends).
    4) A house worked out for us, but we were careful to look at taxes, and the mortgage interest tax break and compare it to renting in our area. It was sort of a wash for us cash-flow wise but we were building equity. Do not buy as much as the real estate and loan people will tell you. Shoot low. Don't buy the best house in the neighborhood. And be sure to have enough in the bank to make the mortgage payment for a few months or longer if you need to look for work.

    And as others said, health is critical and unpredictable. Good luck to you.
     
  12. Dan R

    Dan R Poster Extraordinaire

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    I had a house for 18 years. I'm now a renter. I could not possibly afford a house at today's prices. I am paying more than I've ever paid in my life to have roof over my head. I'm still able to put money away in savings due to having a roommate. The cost of living is way up for a place to live. I think many people are getting pinched by this. That's my perspective, for what it's worth.
     
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  13. BigDaddyLH

    BigDaddyLH Tele Axpert Ad Free Member

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  14. medownsouth

    medownsouth Tele-Holic Gold Supporter

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    Living simply and allocating as much as I can afford to my retirement account every month. Over time it has paid off. Also, even though I started in the 40 to 60K range I have jumped employers several times & have been able to do a little bit better. I still live like I’m earning and 50K though.

    Retirement planning is a marathon for sure
     
  15. bgmacaw

    bgmacaw Poster Extraordinaire

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    You have to think outside the box...

    mobile-home.jpg
     
  16. Telekarster

    Telekarster Tele-Afflicted

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    Geesh... that's a tear down? I see it sold in Aug 2008 for 490K.... this should say a lot about the current price IMO ;) Post 08 crash price vs. right now... hmmm.... another crash coming? If someone actually buys this for that $$$, don't get caught holdin' the bag is my advice :cool:
     
  17. BigDaddyLH

    BigDaddyLH Tele Axpert Ad Free Member

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    I say it's a teardown because there is no way it's worth $1.6 million -- it was built in 1973 and the interior has not been updated. The master bedroom is tiny (9x11) and two of the four bedrooms are in the basement. Teardown.

    OTOH, the lot is 0.7 acres. What is happening in my neighborhood is that houses are being torn down and the lots subdivided into two, three, four or more smaller lots.
     
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  18. telleutelleme

    telleutelleme Telefied Silver Supporter

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    Except for the past year I planned as well as I could. I was taught early to target 10% for savings and retirement. Past that it was investment strategy and I probably could have made better decisions. Most of what I dreamed of likely won't happen and most of my fears won't happen, so I'm okay with the result.
     
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  19. sixstringbastard

    sixstringbastard Friend of Leo's

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    I have the kind of DNA that takes the stress out of long term retirement financial planning.
     
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  20. MilwMark

    MilwMark Doctor of Teleocity Ad Free Member

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    Don't forget HSA if available. Powerful tool.
     
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