“I’m going to work until I die”

[NWPilgrim]

Yeah, I remember being young and seeing "layaway" commercials. I guess that used to be common. They still offer weird no money down, no payments offers on furniture.

I doubt there's a human alive who would fault you for buying a computer to finish school, especially 30 years ago when grad school meant something.

I kinda feel that's the theme here. We all get financing a truck to start a landscaping business. Or taking a loan to expand a factory. But those have returns. Living in debt with no savings and struggling to pay the minimum monthly is a different animal. There's a guy out there right now who has a 10 year loan on his Escalade and is excited to finance his new iPhone. And he will work until he drops dead.

I think that is a key point, David!  Loans or any debt should be very short term and easily within current monthly budget discretionary limits, or "investing" in something with a sure return (vehicle to commute to new/better job or business, tools for job/biz, education with direct path to better career, etc.).  Personally I prefer to just avoid short term consumer debt entirely and pass up the occasional great buy on a credit card to pay off in 1-3 months.  But for a job or biz then I think it makes sense to take on some manageable debt as long as it DIRECTLY improves your earning ability.  But education loans have gotten stupid these days with $50K-$100K loans for degrees with no hope to ever lead to a career that could pay them off in 20 years let alone 3-5 yrs.

[David in MN]

Marketwatch put up an article claiming you should have double your salary saved by the time you are 35. People reacted negatively.

http://www.businessinsider.com/how-much-money-saved-by-age-35-experts-2018-5

That's not that much money. If we had saved twice our income at 35 there would have been a discussion at the mound and a little rough language.

Not that I'm not sympathetic with 30 year olds who spent 6 years in college accumulating debt and studying Latvian poetry because they were lied to by just about everyone in society. But holy crap do we have a savings disaster.

[LvsChant]

With the kind of student loan debt so many of them accumulate, I'd guess they would see that type of saving as an impossible dream... we are working hard to make sure our kids don't have any debt when they graduate... it is something we really want to do for them.

[Smurf Hunter]

Marketwatch put up an article claiming you should have double your salary saved by the time you are 35. People reacted negatively.

http://www.businessinsider.com/how-much-money-saved-by-age-35-experts-2018-5

That's not that much money. If we had saved twice our income at 35 there would have been a discussion at the mound and a little rough language.

Not that I'm not sympathetic with 30 year olds who spent 6 years in college accumulating debt and studying Latvian poetry because they were lied to by just about everyone in society. But holy crap do we have a savings disaster.

My name is Smurf Hunter and I have a problem.
I turn 42 next month and in my 401k+IRA I have about 1.75 times my gross salary saved.
I withhold 11% from each paycheck, and my employer matches another 3%.  So 14% of my gross income is withheld.

I saved aggressively before I had kids, then my wife stopped working and at the time we lost 40% of our household income, so foolishly I pulled back from the contributions in those years.  For the past decade I've been better, started with 5% and increased 1% annually to where I am now.

Though I've always thought when I retire my lifestyle would be considerably less expensive. There are SO many child related expenses that will go away after retirement. I wouldn't have to deal with commuting, buying overpriced convenience meals while working late, etc.  Not to mention the hope of downsizing and relocating to a less expensive zipcode, or possibly even relocation to fly over country.  I could replace a $600K west coast home with a $300K home with more property in much of the US.

The odd thing is, I'm a rockstar saver compared to my peers.  There are a lot of engineers on my team in their mid twenties, and few do any retirement savings, not even to the point of the free 3% company match.  I have gently, but firmly explained that's literally free money, but it has not clicked for them.

[Zef_66]

My name is Smurf Hunter and I have a problem.
I turn 42 next month and in my 401k+IRA I have about 1.75 times my gross salary saved.
I withhold 11% from each paycheck, and my employer matches another 3%.  So 14% of my gross income is withheld.

I saved aggressively before I had kids, then my wife stopped working and at the time we lost 40% of our household income, so foolishly I pulled back from the contributions in those years.  For the past decade I've been better, started with 5% and increased 1% annually to where I am now.

Though I've always thought when I retire my lifestyle would be considerably less expensive. There are SO many child related expenses that will go away after retirement. I wouldn't have to deal with commuting, buying overpriced convenience meals while working late, etc.  Not to mention the hope of downsizing and relocating to a less expensive zipcode, or possibly even relocation to fly over country.  I could replace a $600K west coast home with a $300K home with more property in much of the US.

The odd thing is, I'm a rockstar saver compared to my peers.  There are a lot of engineers on my team in their mid twenties, and few do any retirement savings, not even to the point of the free 3% company match.  I have gently, but firmly explained that's literally free money, but it has not clicked for them.

Thanks for the honest post, Smurf.

I'm in an odd spot, I think. I'm 36. Just my own personal IRA & 401K, I have about 2/3 of my gross salary saved. But my company is employee owned, so the company pays our retirement money into an ESOP. Basically, we get shares of our company and an independent company sets a yearly stock price for those shares. So my ESOP is currently 1.65 times my gross. All total, I'm around 2.3 times my gross.
Doesn't look bad on the surface. But I'm always worried. The majority of my retirement is in one company. Yes, we are doing well and growing each year. But with 25-30 years before I retire, I'm worried that trend will continue. If 10 years from now, when I have $250k in my ESOP, and the company hits some hard times, do I ride it out, or jump ship and take what I have with me? If the company goes down the tubes, everything is gone. I only have what I've saved myself in my Roth and unmatched 401K.

Just the chance I have to take I guess. If all goes well and we keep going as we have been for the past 10 years, I could retire at 60 with $1.5mil. It is such a gamble to be all in on one company. Not to mention that my wife is now a stay at home mom. So it's just me that we are relying on for the future. I'm currently saving about 7% of my salary and trying to up that a little each year. But it's tough with 3 kids and only one income.

[FreeLancer]

I saw this table recently that suggests savings targets should be adjusted up as household income increases. 

[David in MN]

I don't cling to any metrics as gold, Reasonable people can disagree on the correct metric and I've experienced shifting our savings plans due to life events. We were lucky to achieve a ~20% savings early on though it delayed buying a house until we were 26... in 2006. So it's a double edged sword. Put money here or there? We could have saved a lot less and bought earlier and not been hit so bad in the recession but we ran the math on compounding interest and decidded to build the savings rather than go all in to a house.

I more focus on the people who call good savings unrealistic. It's a good debate whether to fund the 401 or pay off the mortgage. We did that game for a while in order to refinance and generate more savings. The math is difficult and you could be making a bad decision for all the right reasons. And you still have the ability to lose the timing game.

The odd thing is, I'm a rockstar saver compared to my peers.  There are a lot of engineers on my team in their mid twenties, and few do any retirement savings, not even to the point of the free 3% company match.  I have gently, but firmly explained that's literally free money, but it has not clicked for them.

That's what is crazy to me. My company matched up to 5% (I think). So I used to coach new employees to put 5% in the 401, 10% in the IRA and voila you have a 20% savings for 15% cost. The next step was to survive 5 years and vest in the pension. I watched guys not use the 401 match and jump gigs 4 years in. Just plain crazy.

[Smurf Hunter]

My place vests in just 2 years.  Extra stupid not to opt into that.

[David in MN]

Michelle SUmmerfield tells us why she's not worried about not having savings:

https://www.yahoo.com/finance/news/why-m-not-worried-being-090000424.html

While she's at least somewhat on track in that she does contribute to her retirement it's befuddling to me that there is no desire to optimize or even hint at planning. Too bad.

[Ken325]

A lot of people have already made this point but I want to repeate it.   Stay active or die.  I spent 10 years working in a medical research lab.  We did some long term studies for drug companies on the side.  People on experemental medications or treatments would come in every 6 months for a physical exam.  Some of these studies tracked people over decades.  When I looked at the data for people who had just retired I noticed about 70% would develop a major medical issue within a year of retiring.  They would have heart problems, kidney failure, develop diabetes, get dementia, you name it.  The only exception seemed to be people who got up and did something everyday. We had one guy in his 90s who was doing great.  He owned 3 small grocery stores and everyday he got up, dressed for work and went to check on one of his stores.  He didn't stay all day but he would drop by for 3-4 hours.  That is the kind of retirment I want.  I heard one person call it an encore career.  I want to get to where I don't have to work then find something I enjoy doing and continue to work anyway.  Maybe voluntering at a state park or own a small shop that rents kayaks.  Maybe I will do volunter work for my church.  I don't know what I will do but I do know that sitting around the house watching TV will kill you.

[Smurf Hunter]

A lot of people have already made this point but I want to repeate it.   Stay active or die.  I spent 10 years working in a medical research lab.  We did some long term studies for drug companies on the side.  People on experemental medications or treatments would come in every 6 months for a physical exam.  Some of these studies tracked people over decades.  When I looked at the data for people who had just retired I noticed about 70% would develop a major medical issue within a year of retiring.  They would have heart problems, kidney failure, develop diabetes, get dementia, you name it.  The only exception seemed to be people who got up and did something everyday. We had one guy in his 90s who was doing great.  He owned 3 small grocery stores and everyday he got up, dressed for work and went to check on one of his stores.  He didn't stay all day but he would drop by for 3-4 hours.  That is the kind of retirment I want.  I heard one person call it an encore career.  I want to get to where I don't have to work then find something I enjoy doing and continue to work anyway.  Maybe voluntering at a state park or own a small shop that rents kayaks.  Maybe I will do volunter work for my church.  I don't know what I will do but I do know that sitting around the house watching TV will kill you.

Hard to argue against that advice.

More clinically, are you suggesting that in the first year of retirement a person went from "perfectly healthy" to the diagnosis you listed?

My hypothesis is that a couch potato during working years just became a bigger couch potato in retirement.
If you cram recreation or a side hustle into your evenings and weekends while you work, it seems reasonable you'd do even more M-F/9-5 in retirement.

[Ken325]

Yes,  the problems started within a year of retirment.  I'm not saying they died, but people start developing major problems within a year if they just putter around the house doing nothing.  Men worse than women.

[Fyrekat]

I've known a few retirees during my 21yr career so far.  Only 1 of them has died suddenly after retirement.  He was diagnosed with stage 4 pancreatic cancer about a year before he retired, and then the year after, had a stroke.  He was a hard working farmer at home, and a Civil / Mechanical Engineer at work.  I think a lot of the problems with retirement only stem from 1) Prior Health followed by 2) Activity.

I'm seeing articles coming out now that show Millennials are "eating their feelings" in some studies.  This will mean that they too will start dying off faster, especially if not eating healthier (though other studies show they do in some cases).

I myself was perfectly fine until one day a few years ago... I went to the Dr. for consistent migraines and found out my BP was 220/125, went through lots of tests, lowered eating habits, lost 40 lbs (40 more to go), and 4 meds, I'm at ~130/80.  I probably won't make it to retirement.  It's all a matter of habits and genetics.

[iam4liberty]

I look forward to working in retirement.  The trick is to find a labor of love.  For example, my father made handcrafted wood puzzles, a friend of mine is a "closed-door" gunsmith, and another owns a gameshop.  These were all hobbies which could provide 50%+ of their pre-retirement income.  The Wall Street Journal regularly runs articles on this.  The most recent was a salesman who became a professional magician. 

https://www.wsj.com/articles/a-former-salesman-finds-the-trick-to-being-happy-in-a-new-career-1542381787
A Former Salesman Finds The Trick to Being Happy in a New Career
Professional magician David Bowers realized that people often put off what they really want to do until it’s too late

All his life, David Bowers wondered what it would be like to be a magician. Growing up, he read about magic, attended magic shows and regularly watched “The Magic Land of Alakazam,” a nationally syndicated TV series starring magician Mark Wilson.

But for 39 years, Mr. Bowers was a salesman for Columbia Rubber Corp., based in Beltsville, Md., selling conveyor belts to quarries and heavy industrial operations. He enjoyed the job and was good at it. “All of my customers became friends,” says Mr. Bowers, who lives with his wife in Chambersburg, Pa.

Then, for his 50th birthday party, his wife, Judy, hired a magician to perform. The magician, tipped off by Mrs. Bowers, spoke to Mr. Bowers about what it was like to be a magician—and offered to be his mentor. Mr. Bowers enthusiastically agreed.
...
But in 2008, Mr. Bowers says he realized something. “People in life wait to do things, and then something happens and they don’t get to do it,” he says.

He retired from the rubber company that year, at age 62, and set out on a new career as a professional magician.

He performs for people of all ages, from preschoolers to the elderly. Last year, he had 110 shows. His largest show was when he performed before a crowd of 2,000 at a 2014 event in Harrisburg, Pa.