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re: Met a personal financial milestone today!
Posted on 2/23/15 at 11:02 am to Bayou Tiger
Posted on 2/23/15 at 11:02 am to Bayou Tiger
quote:
Net worth is one thing, but that would be a lot of money in a 401k. I wonder how early somebody could reasonably become a 401k millionaire.
I expect to hit $1M in my 401k/IRA between the wife and I by 45. Compound interest for the win.
1
Posted on 2/23/15 at 1:09 pm to Hawkeye95
Fat:
^This. Also other passive income is important like pension and SS. Say your annual expenses are <$70k, and your pension + SS > $100k, then the money in your 401k and other savings become less important and can continue to grow untouched (for whatever purpose). The net present value of pensions and SS can be substantial.
quote:
Cash flow is a better indicator. Once you have enough passive monthly income to meet or exceed your bills you are then technically retired. That's WITHOUT drawing down from a retirement account. That's maintaining principal and having that money work for you in the form of sustainable monthly Cashflow.
^This. Also other passive income is important like pension and SS. Say your annual expenses are <$70k, and your pension + SS > $100k, then the money in your 401k and other savings become less important and can continue to grow untouched (for whatever purpose). The net present value of pensions and SS can be substantial.
This post was edited on 2/23/15 at 1:31 pm
Posted on 2/23/15 at 1:30 pm to Nawlens Gator
quote:
quote:
Cash flow is a better indicator. Once you have enough passive monthly income to meet or exceed your bills you are then technically retired. That's WITHOUT drawing down from a retirement account. That's maintaining principal and having that money work for you in the form of sustainable monthly Cashflow.
^This. Say your annual expenses are <$70k, and your pension + SS > $100k, then the money in your 401k and other savings become less important. Your pension + SS have a net present value all their own.
But your money that will be your income during retirement comes from the principal amount. Be it purely the interest that it draws, or actually dipping into the principal amount to cover your expenses in a planned way as to have the money last your lifetime. Most people do not have pensions and I am definitely not relying on SS to even exist at my time of retirement (not saying it won't, just not relying on it). Therefore, the principal amount that I'm going to retire off of is my 401k for the most part. I have other savings and have net worth in my house, etc.. But the savings I have now isn't something I necessarily envision as retirement funds. That's my current safety net, and my children's college fund, etc. . I plan to have additional savings when I retire, but my 401k and IRA's will be the bulk of my retirement. Therefore I look at them as quite important.
Posted on 2/23/15 at 1:39 pm to KG6
quote:
KG:
But your money that will be your income during retirement comes from the principal amount.
Not if you have a pension. Without a pension you are 100% correct. I'm an old retired dude with a pension and see things from a different angle.
Posted on 2/23/15 at 3:23 pm to Nawlens Gator
you are lucky you have a pension to help your monthly cash flow. I will never have a pension and i'll bet i will never see social security so I'm basically in the "create cash flow now" mode while at the same time maxing my roth ira and putting in the match ONLY of my employer. I'm really not crazy about 401k's due to lack of control. I would much rather put that money straight into my RE endeavors but it is what it is. I'm taking that match and running with it.
Now, you can also draw out dividends from an index fund in your ROTH IRA (once you hit that age) just like taking distributions from dividend paying stocks(at any time), you just need alot of jack for it to help your real estate cashflow or cashflow from a side business or pension or social security or whatever cash flow you have.
Now, you can also draw out dividends from an index fund in your ROTH IRA (once you hit that age) just like taking distributions from dividend paying stocks(at any time), you just need alot of jack for it to help your real estate cashflow or cashflow from a side business or pension or social security or whatever cash flow you have.
This post was edited on 2/23/15 at 3:30 pm
Posted on 2/23/15 at 4:36 pm to Fat Bastard
How many current retirees rely on social security as a main source of income? I'm going to guess at least half.
What will happen when, over the next 20 years, there is no more social security revenue due to there being way too many baby boomers to support by the younger classes?
Will another government subsidy program be created? Will people with retirement accounts be taxed at a much higher level to fund those who do not have retirement accounts?
What will happen when, over the next 20 years, there is no more social security revenue due to there being way too many baby boomers to support by the younger classes?
Will another government subsidy program be created? Will people with retirement accounts be taxed at a much higher level to fund those who do not have retirement accounts?
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