Retirement: How are you funding it?

**gamecock43** · 06-02-2008, 07:33 PM

I think I am prepared for retirement. For me, its all about diversity. No one method will cover all my bases.

My parents gave me a head start by leaving me an IRA that, if left alone, will reach a million by the time I retire (so says my financial advisor). So I have not touched it. Though the stock market has wrecked havoc on it this past year.

In addition I have invested in myself and got a masters degree, so hopefully I will always be employable.

I am actively planning to buy a forever house soon,and trying to do it smartly so that I will have it paid off ASAP (ASAP in my book is by the time I retire).

And I plan to enter retirement with zero debt so that my monthly allowance will cover my spending habits.

At some point I need to be pro-active and plan for the costs of nursing homes, medical costs, ect that are associated with high costs of being in the retirement age bracket.

I will contribute to any work 401k s that are available to me and actively monitor those. (I have a feeling I will be changing jobs frequently, I have an artists mentality)

And I plan to help achieve world peace. Thats my gameplan. Am I all set? no. I'm sure something will happen and I will be living in my childs 1 bedroom apartment moaning "where did I go wrong?"
Having a child. I dont have one of those yet, but I have not planned appropriately for one. I bet that will cost me a bundle. I dont have any room in my financial plan for a kid, and have just discovered a large hole in my gameplan.

Darn it.

**AmbitiousSaver** · 06-03-2008, 02:52 AM

I think we have a good plan for retirement

DH has his pension
We'll have 1 or maybe 2 rental incomes (I plan to have the houses both paid off w/in 15 years when I'm 41/42 and that doesn't count any potential raises for either of us)
I have a Roth IRA
DH has a 403b and a Roth IRA

So hopefully we'll be doing okay. I can't imagine needing much more than that in retirement... his pension alone will be $2500-$3000 a month and when he retires from the military in 9 years he still plans to work and so do I.

Our incomes are likely to climb too... I'm in the process of completing my masters degree and DH gets around a 3% raise every year in addition to any advancements he may get or special pays.

**MonkeyMama** · 06-03-2008, 05:45 AM

Retirement plan:

*ROTHs (ideally fully funded for many years)
*Profit Sharing Plan from current employer (it's more like a 401k than a pension in the logistics, but is funded by employer)
*Taxable Investments (really the bulk for now, unless we are able to pick up a 401k plan, or 2).
*Pay off mortgage early (long gone for retirement)

Which kind of covers 3 corners of taxability. ROTHS withdrawn tax-free. Profit sharing is withdrawn as ordinary income. Taxable investments would be long-term capital gain rates, etc.

My retirement plan is really something in the ballpark of $5 million investments. I am only 30 so it is hard to pinpoint for now. But we have a roundabout goal.

ETA: We expect to inherit around $1 mil in real estate and we plan to downsize our large home in retirement as well (which for now we exchange for much in any other area of the country about). I didn't think of that stuff because we aren't relying on this for our retirement, but I imagine could likely make retirement easier/give us more flexibility. Certainly the backup plan. We lived in a condo before kids and would like to go to something smaller when they are grown.

I am also quite happy to work forever.

**Caoineag** · 06-03-2008, 06:11 AM

DH invests some in the 401(k) (up to match) and I have a Roth IRA at the moment. Once I have credit cards paid off, Roth will be maxed out and a Roth for my DH will be maxed out. Beyond that we plan on doing taxable accounts and having DH invest more in the 401(k) to keep us at the appropriate income level for investing in the Roths for as long as possible.

I am really not sure what we will do beyond that though. We are only in our mid-20's and a lot can change so I have only included the things I know we can do within the next two years on our current income. And I am equally sure that our plan will change even within the short time frame.

**Reldon** · 06-03-2008, 06:23 AM

My Retirement Plan as of right now.

- ROTH IRA's contributed to every year.
- Our company doesn't offer a 401(k) or a Simple IRA at the current point so I am not able to contribute any money here.
- The bulk of my money is currently in Vanguard and American Funds in taxable accounts.

I am waiting for my company to hopefully add a Simple IRA by the end of the year. That way, I can start contributing there.

**LivingAlmostLarge** · 06-03-2008, 06:26 AM

One penny at a time??? LOL.

**LuxLiving** · 06-03-2008, 07:16 AM

Pension - his (will be cut in half upon his demise)
Profit Sharing now in a Rollover Traditional IRA -his
401-K - his
Roth IRA - his
Social Security - his
Roth IRA - hers
Cash, Stocks, Bonds, CDs, DRIPS, coins, etc. in other accounts - hers
Babysitting, garage sales, furniture sales, gold caps, blood bank, sweat of my brow, selling the ol' homestead & downsizing and/or living w/my sister or kiddos - hers (if need be!)

I have some credits for SS but not enough to pull my own. I need to return to work if I ever hope to draw SS on my own.

Any additional monies we can sock away between now and retirement via budgeted savings, bonuses, stimulus, refunds, etc.

Since my husband is quite a bit older than myself, there is some monies from life insurance proceeds that I would be using to get to my golden years should I outlive him. (It's not enough to my way of thinking as he's a smoker and that limits what amounts we can buy at this time - via our budget. He's not had any associated medical problems yet, but if we could buy more before a medical event the better it would be for me in the long run. I absolutely hate thinking about this stuff, but I do try to be practical. We recently increased his life insurance by 15,000, which is what we can afford at the moment. As soon as more cash becomes available, I'm thinking we should up it considerably! This life insurance money is what I will likely use to cover the income needs from now should something happen to him till I reach the age to receive SS benefits - it is a ways off.) We do have enough life insurance to get myself buried.

And we are currently discussing a few options 1)him just never retiring or at some point just going to part time or consulting. He really is into working & the longer he works the larger the SS payouts to me should be when I reach retirement age & we maintain our health coverage this way or 2)us starting a small part-time business of our own at whatever joy or passion he'd like to pursue for extra income. He's much more leaning towards #1 and I'd like it for his sake if he'd lean towards #2. I'd like to finish college and return to the workforce. He'd rather I didn't as he likes me home. Ehhhh, he may not get his wish on this one. Conceivably we're at a point where we could switch places with him coming home and me going out to work, which I could do okay with now w/o further education, at least enough to get us health coverage and me possibly a 401-K w/a match!

We are working diligently to get the mortgage paid off so we can retire w/o any debt.

**Ima saver** · 06-03-2008, 07:35 AM

My husband and I both have IRAs and roth Ira's but there is not enough in them to live on for more than a few years. We have no pensions at all. My social security check is small and so will my dh's. We have never been big earners.
We do have a paid for house.
We have quite a bit in mutual funds and cash that is earning us about $20,000 a year in interest. (just the cash) I supposed we will live on that when dh quits working. I also hope to sell this big house some day and downsize to something smaller.

**jIM_Ohio** · 06-03-2008, 09:18 AM

Retirement has 3 phases for me-

early retirement
normal retirement
draw down

each with different plans.

Early retirement needs no more than a 3% withdraw rate to allow a longer withdraw period.

Normal retirement is when SS kicks in and a 4% withdraw rate can be used.

Draw down is when I start selling shares and the actual amount I have saved starts decreasing.

I have 3 pools of money:

Not taxed- these are my 401ks and rollovers. Right now this is close to 66% of what I have saved.

Tax free- these are my Roth's. Close to 1/3 of what I have set aside now.

Taxable- this account has a little in it now and is just one fund- PRPFX.

The goal is to get the taxable account high enough that it can be drawn down in early retirement. The next goal would be to pay taxes on the assets not taxed yet a little at a time (by converting them to a Roth).

The 401ks would also supplement income too (if needed) depending on 72(t), tax law at time of withdraw and similar.

Roth would only be used once other options are exhausted.

edit- I will probably purchase some form of an immediate annuity to increase the probability I would not run out of money because of early retirement. That depends on how much income I have coming from dividends in taxable accounts when I actually decide to retire.

**gamecock43** · 06-03-2008, 09:31 AM

Wow. reading everybodies plans is showing me I have a long way to go learning all the retirement lingo, and also makes me feel morbid. I dont mind planning it for myself, but reading other peoples plans sounds very...final.

**moneybags** · 06-03-2008, 09:45 AM

Pre-screen DS & DD's future spouses to make sure they are onboard with supporting me in my old age.

**tripods68** · 06-03-2008, 11:01 AM

My CalPERS pension (State of California) will fund majority of my retirement (roughly between 66% to 95% of 1-year final comp) depending what age to retire. Our health and dental will be 100% covered. I'm 39 now, but if for instance my BU never received any more raises or I don't promote. My pension is worth based on actuarial valuation @ 100 years life expectancy.

Age 55 worth $1.605 million
Age 63 worth $1.974 million

This is really my million dollar question, what age to retire?

Not counting my eggs before they hatch but I expect to receive few more raises or promotions (i hope

) which changes those amount. But its nice to plan things ahead knowing what you will end up. The rest of my retirements comes from ROTH and 457 deferred comp. My DW also has their own pension and 403(b) with employer match.

**disneysteve** · 06-03-2008, 11:07 AM

I am 43. My wife is 44.

My wife has a rollover IRA from an old job and a 403b from an old job. Neither is being added to. She also has a Roth IRA that we max out each year. She currently works part-time and 50% of her gross goes to her 401k (plus the company match which she won't be vested in until next summer).

I have a rollover IRA from an old job and a traditional IRA that I no longer contribute to. I also have a Roth IRA that I max out each year (already maxed for 2008). In addition to the Roth, I have a few taxable mutual fund investments that I contribute to. And there are some other assorted investments such as our money market accounts, a brokerage account with some individual stocks, some I-bonds, a CD, etc.

Neither of us have a pension.

**KellyB** · 06-03-2008, 11:40 AM

My partner and I both max out our 401ks and Roth IRAs each year. Next year she'll hit 50 so we'll have to figure out a way to add another $6000 ($5000 catch up for 401k and $1000 for Roth IRA). We have mutual funds and a home that I will make sure is paid off before retirement. I also have an annuity, a Traditional IRA, and some separate mutual funds. She has a small pension as well. We have life insurance of course, as well as a Joint Asset Trust, which is needed because as "legal strangers" we can't inherit anything from each other without paying taxes, etc. through the nose.

The trick now is to remain debt free, pay off the house, and continue saving so we can hit the magic number (2 - 2.5 million) in 15 years or less.

Retirement: How are you funding it?