What does "Retirement" mean to you?

[robkaiser.me]

I'm a *big* fan of Dave Ramsey.

After living "Dave-ish" for years...I finally bit the bullet.

Gazelle intense over the last 12-18 months has me projected to be debt free (Baby Step 2) by mid-year.

By the end of 2020, I should also have Baby Step 3 complete...which is:

• Save 3–6 Months of (Living) Expenses in a Fully Funded Emergency Fund

As a single male, 42 years old, I have determined I feel more comfortable with 6 months.

Baby Step 4 is - Invest 15% of Your Household Income in Retirement

Traditionally, Dave Ramsey and his team would suggest 401k/Roth IRA.

However, I'm wondering if a portion of that percentage could/should be devoted to "other" items such as:

• Land
• Preps
• Other

My current investments are little to none...after some poor financial decisions.

Now that I'm getting back on my financial feet again - I'm questioning traditional investing.

I have a chronic neurological condition known as epilepsy...and have been in a coma previously.

There have been a couple knocks on death's door - and I know that investments don't mean shit in the long run.

We never see a hearse pulling a U-haul trailer.

So...what does "retirement" mean to you and how are you (financially) investing in yourself and your future?

[DDJ]

There is a recordation that you should have 10 to 15% of your retirement in actual hard metals (gold and silver).  I have also heard that having a year or 2 of your property tax in metals is a good safety net.  More people lost homes to tax issues than to the bank in the depression.

Some limiting factors there are holding large amounts of metal may open you up to a can of worms should you come under the scrutiny of the government.  Money laundering laws being what they are have inadvertent affects on law abiding citizens.  Having the ability to pay your tax bill in times of hardship sounds like a good place to be.  A year ago I would have thought that the "economic collapse" was not too close but what is going on in China is going to have an economic effect that could be devastating and it could start building soon. 

As far as my retirement expectation personally.  I am NEVER expecting to be sitting on the front porch watching the world go be.  I expect that retirement for me will be a day job with little income above providing for my health care (assuming out of pocket).  My pension and 401K I am expecting to get 1/2 of my preretirement income. Life after I hang up my corporate ID will be a lot less stressful.  I am getting to the point in life where retirement is get out of the rat race, but stay in the turtle race.  Dropping my corporate ID will do wonders for my life.  Like you I am going to be getting my house paid off in the next year.  You have to view that as getting a raise of your mortgage payment.  The same is true with all dept.  Paying off that last payment is like getting a raise by that amount.  Imagine how you would feel if your boss called you into the office and offered you a $1000 a month raise.  How many people pay $1000 or more in their house payment (principle and interest).  I do not but I have been accused of being debtaphobic. 

I have been dropping a good portion of my income into my 401K for the last 20plus years (still have less than 4 years of my current income in there).  The sooner you start putting money in the sooner it will begin to grow. 

Each has their own burdens, savings styles, and expectations. 

[Mr. Bill]

My wife and I are also debtaphobic.  I think it's a good phobia to have.

[rambling-old-guy-anecdote]
Back in the year of our 25th wedding anniversary, we were trying to decide what Big Thing we should do to celebrate.  A trip to Europe?  A bunch of new furniture?  And it dawned on us to ask, what is our actual net worth, after subtracting what we still owe on the house?  Because paying for a big anniversary gift with debt sounded stupid.

Well, we realized that the amount we had in savings (outside of IRAs and retirement plans) was greater than the remaining mortgage principal.  And our investment earnings on that amount weren't much better than what we were paying in mortgage interest.

So our anniversary gift was paying off the mortgage.  That felt way better than any European vacation.
[/rambling-old-guy-anecdote]

As for how to invest for retirement, I dunno.  That'll depend on your personal situation.  What has worked for us is:

• Take full advantage of any matching contributions available in an employee retirement plan.
• Divide inventments according to Harry Browne's "Permanent Portfolio" plan: 25% each in volatile stocks, long-term Treasury bonds, gold, and cash.

Also, have lots of medical insurance.

Should you invest in land and preps?  Maybe, somewhat.  My personal feeling is, once you've got the basic emergency preps covered, money is the best prep, because it's the most versatile and you don't know for sure what you're going to need.

[LvsChant]

retirement to me?

Well... I'm currently really happy doing what I am doing, so don't know when I'll actually retire...

that being said... my husband retired in 2012. Our criteria for making the decision for him to retire were:

a) zero debt (not even mortgage)
b) pension adequate to continue living well (keeping mind that we are simple folk and are happy and content living on less than many)
c) good insurance (health)
d) enough savings for sons' education (in-state colleges - no ivy league for us)
e) investments to suit our taste (including some land and some metals, as well as retirement accounts)

Before making the decision for hubby to retire, we did a thorough examination of our lifestyle, spending habits, etc. and eliminated many things so that we knew we could live on his retirement alone... lived that way for a period of time and socked away the extra to aid in the retirement plan.

[IKN]

Sounds like you have a decent plan currently and I’d second investing in some precious metals.
As far as traditional investments, I’d hold off if I were you for the time being unless you know it’s a solid investment.
Investing when markets are at “All time highs” historically isn’t a good move. Add that to the current ‘Geopolitical’ situation and things could get real ugly real fast.

Take a listen to this guy: https://www.youtube.com/watch?v=BclcpfVn2rg

While I don’t totally agree with everything he says, he does make some interesting points. I do believe he over estimates the impact on the US and its economy.
For me, the biggest question is why are both central banks and other countries buying up so much gold during a time of prosperity ??
Consider the fact that if he’s right, many US based corporations will be forced to move their money from foreign banks to a safe haven. Of the countries he lists as ‘Sitting good” or “Very little impact”, the US would seem to be the safest place, but would be a tax nightmare for them.
I think they are either buying and moving gold here inside some sort of tax loop-hole or are getting ready to buy off politicians to pass legislation that would not result in having to pay huge sums of taxes on it.
If the general public got wind of this combined with other political time bombs like the 2A fight, I think the crap would hit the fan in a big way.

[robkaiser.me]

There is a recordation that you should have 10 to 15% of your retirement in actual hard metals (gold and silver).  I have also heard that having a year or 2 of your property tax in metals is a good safety net.  More people lost homes to tax issues than to the bank in the depression.

Some limiting factors there are holding large amounts of metal may open you up to a can of worms should you come under the scrutiny of the government.  Money laundering laws being what they are have inadvertent affects on law abiding citizens.  Having the ability to pay your tax bill in times of hardship sounds like a good place to be.  A year ago I would have thought that the "economic collapse" was not too close but what is going on in China is going to have an economic effect that could be devastating and it could start building soon. 

As far as my retirement expectation personally.  I am NEVER expecting to be sitting on the front porch watching the world go be.  I expect that retirement for me will be a day job with little income above providing for my health care (assuming out of pocket).  My pension and 401K I am expecting to get 1/2 of my preretirement income. Life after I hang up my corporate ID will be a lot less stressful.  I am getting to the point in life where retirement is get out of the rat race, but stay in the turtle race.  Dropping my corporate ID will do wonders for my life.  Like you I am going to be getting my house paid off in the next year.  You have to view that as getting a raise of your mortgage payment.  The same is true with all dept.  Paying off that last payment is like getting a raise by that amount.  Imagine how you would feel if your boss called you into the office and offered you a $1000 a month raise.  How many people pay $1000 or more in their house payment (principle and interest).  I do not but I have been accused of being debtaphobic. 

I have been dropping a good portion of my income into my 401K for the last 20plus years (still have less than 4 years of my current income in there).  The sooner you start putting money in the sooner it will begin to grow. 

Each has their own burdens, savings styles, and expectations.

Yep, I'm familiar with the strategy of having a certain percentage of one's net worth in precious metals.

As far as government scrutiny regarding my possession of metals, I view that in a similar manner to that of my guns...

...I don't.

Like you, I don't expect to (or want) to front porch sit, cruise, or anything like that. 

Unlike you, I won't be paying off the house...just my consumer debt.

The house / land is not mine, it's parent's who have a very unstable financial situation...which makes me nervous.

This is also one of the primary drivers behind my own financial motivation to change / repattern my own finances.

Time to change the family tree...and I suppose this is an entirely different variable with potential to impact *everything*

First and foremost, I'll be saving 3-6 months of living expenses (more like 6).

If I have enough sense, I'll keep going - I should probably plan for worst case scenario in that I may not be able to stay on the land that I'm currently on...even though it's owned by family and I *am* paying rent.  What little I do know about my parent's financial situation has me concerned about my own ability to purchase it in the case they die.  Again, another issue.

Lots to think about this year as I finalize my debt and begin crossing off savings goals.

[robkaiser.me]

My wife and I are also debtaphobic.  I think it's a good phobia to have.

[rambling-old-guy-anecdote]
Back in the year of our 25th wedding anniversary, we were trying to decide what Big Thing we should do to celebrate.  A trip to Europe?  A bunch of new furniture?  And it dawned on us to ask, what is our actual net worth, after subtracting what we still owe on the house?  Because paying for a big anniversary gift with debt sounded stupid.

Well, we realized that the amount we had in savings (outside of IRAs and retirement plans) was greater than the remaining mortgage principal.  And our investment earnings on that amount weren't much better than what we were paying in mortgage interest.

So our anniversary gift was paying off the mortgage.  That felt way better than any European vacation.
[/rambling-old-guy-anecdote]

As for how to invest for retirement, I dunno.  That'll depend on your personal situation.  What has worked for us is:

• Take full advantage of any matching contributions available in an employee retirement plan.
• Divide inventments according to Harry Browne's "Permanent Portfolio" plan: 25% each in volatile stocks, long-term Treasury bonds, gold, and cash.

Also, have lots of medical insurance.

Should you invest in land and preps?  Maybe, somewhat.  My personal feeling is, once you've got the basic emergency preps covered, money is the best prep, because it's the most versatile and you don't know for sure what you're going to need.

After a few years of continual input of Dave Ramsey and Uncle Jack...I've become debtaphobic also.

I think a paid off mortgage sounds incredible...and always admired those who have done that - even before I wised up financially.

Regarding the retirement suggestions, yes - many variables for sure with each person / circumstance.

Harry Browne's "Permanent Portfolio" will be good material to read in addition to Gary Collins (and others?)

Looking to diversify financial information from people within homestead/prepper circles as well.

Medical insurance is huge - because I have an existing condition (chronic neurological condition - epilepsy) and require medication.

The "requirement" is/may be fluid as I continue experimenting with lifestyle changes and alternative/adjunct treatment methodologies.

Land and preps may be cart before the horse and an increased savings fund is likely the best place to start.

I suppose I'm just trying to lubricate the grinding gears with ideas from others as we all move forward.

[robkaiser.me]

retirement to me?

Well... I'm currently really happy doing what I am doing, so don't know when I'll actually retire...

that being said... my husband retired in 2012. Our criteria for making the decision for him to retire were:

a) zero debt (not even mortgage)
b) pension adequate to continue living well (keeping mind that we are simple folk and are happy and content living on less than many)
c) good insurance (health)
d) enough savings for sons' education (in-state colleges - no ivy league for us)
e) investments to suit our taste (including some land and some metals, as well as retirement accounts)

Before making the decision for hubby to retire, we did a thorough examination of our lifestyle, spending habits, etc. and eliminated many things so that we knew we could live on his retirement alone... lived that way for a period of time and socked away the extra to aid in the retirement plan.

The through examination you wrote about is key. 

I plan on taking some steps to do exactly this - great point!

[robkaiser.me]

Sounds like you have a decent plan currently and I’d second investing in some precious metals.
As far as traditional investments, I’d hold off if I were you for the time being unless you know it’s a solid investment.
Investing when markets are at “All time highs” historically isn’t a good move. Add that to the current ‘Geopolitical’ situation and things could get real ugly real fast.

Take a listen to this guy: https://www.youtube.com/watch?v=BclcpfVn2rg

While I don’t totally agree with everything he says, he does make some interesting points. I do believe he over estimates the impact on the US and its economy.
For me, the biggest question is why are both central banks and other countries buying up so much gold during a time of prosperity ??
Consider the fact that if he’s right, many US based corporations will be forced to move their money from foreign banks to a safe haven. Of the countries he lists as ‘Sitting good” or “Very little impact”, the US would seem to be the safest place, but would be a tax nightmare for them.
I think they are either buying and moving gold here inside some sort of tax loop-hole or are getting ready to buy off politicians to pass legislation that would not result in having to pay huge sums of taxes on it.
If the general public got wind of this combined with other political time bombs like the 2A fight, I think the crap would hit the fan in a big way.

Thanks for the comment and the input.  I'll be sure to note those videos for future reference.

Precious metals will certainly be part of the plan when I'm ready to begin making investments.

Still a ways out from doing that yet while paying down debt and establishing savings.

[David in MN]

I guess "retirement" to me means living off my investments without touching principle. We'll pay off the house in our mid 40s and that's all the debt we have (we're debt-phobic too). So we are having the conversation about what we want out of life.

A bit oversimplified but if you can net a 3% dividend of $2 million you end up with $60k per year and with almost no expenses that's not bad. I'll never get the Porsche G3 but I'll live the quiet life in relative comfort. We already set up the daughter with $30k seed money and I manage her portfolio.

What will our actual day to day retirement look like? I'll still manage our finances and keep doing art shows with my woodwork and I suspect my wife will read the entirety of the local library. She's a bookworm. We already have plans to go back to Paris and we've been kicking around a Spain trip. My in-laws do a lot of river cruises in Europe and I'll admit they look like fun.

[Mr. Bill]

A bit oversimplified but if you can net a 3% dividend of $2 million you end up with $60k per year and with almost no expenses that's not bad.

It's a great target to aim for.  I think, for a lot of people, $2 million is about 200 years of savings.  But you're right about not touching the principal -- you'll use up the $2 million in your last few years of life on long-term care and medical expenses.

Sorry to be dismal about it.

[IKN]

IMHO, that is a normal goal of many people.
The problems I see with it are that it needs to be invested to get even a 3% return. A big market recession like 2008 could greatly reduce your income overnight and a crash could wipe it out completely.
There's also the concern of the government deciding they can "Handle you money better then you can", grab it away from you, and decide how much you should get every month.
They've already tossed this idea around, but figured it would piss off too many voters.
The people have a huge amount of money in investment portfolios and they want it. With a lot of the younger generations either unable or unwilling to invest their money, it's just a matter of time before they won't fear the voting public when the older savers/investors are a minority.

[David in MN]

Well I'm not the first generation to do this and there's a date in the future where I say the final goodbye to my parents and inherit somewhere north of $5 mil. I don't know what the in-laws will leave behind but they're in the hunt too. When I say I will be fat and happy on $2 mil the real number will be closer to $10.

It's an odd stress. Better to have the money than not but I am going to feel the pain of inheriting the liquid value of the farm without having the farm. It's a very hard topic to wonder what you really want out of this life and look to your child and realize for 6 generations we grew the war chest and now it's in your hands.

There's a lot of emotion that comes out when I think of this. I still only allow myself 1 pair of jeans and a $20 Costco jacket. I'm not sad or deprived but I grew up poor while sitting on a massive inheritance. I don't know different.

[IKN]

Something to consider.
Unless Trump changed the Inheritance tax that Obama put in place, you would stand to lose a majority of that inheritance in taxes.
As I understand it, Obama reduced the exempt amount of inheritance down to $1,000,000. While you still had to claim that $1 mill on your income and pay a hefty percentage, any amount over that is taxed at 60%. And that is the government assessed total of cash, property, possessions, and investment value.
So for a $10 mill inheritance, $1 mill would be taxed around 35% to 40% or more unless it was sheltered and the remaining $9 mill would be taxed at 60%. A quick estimate would be having to pay close to $7 mill in taxes for a $10 mill inheritance leaving you about $3 mill. Still a tidy sum, but way less than $10 mill assuming you received the whole thing.

You may already be aware of this and have a plan in place. If not, I wouldn't wait until it comes through to talk to an attorney or CPA.
If Trump changed it, it's still something to consider.