# Helpful advice



## 3DayFarm (Nov 19, 2011)

Hello Everybody.. I wanted to see if I could get some advice from anybody that can help me. I am currently years away from retirement, since I am only turned 35 yesterday. But I would like to prepare myself for when that time comes. What preparations did you all do, how many years in advance of retirement, etc...
In advance, Thanks Alot and May God Bless You all.


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## Nevada (Sep 9, 2004)

Most important to me was to find a way to live rent & mortgage free. If you are mortgage-free it not only gives you peace of mind but you can live on very little if you don't have to pay rent or service a mortgage.


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## Ramblin Wreck (Jun 10, 2005)

Live below your means, and save as much as possible, especially in accounts that are tax deferred, like 401K's and IRA's.


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## Bentley (Jul 10, 2008)

When DW and I were first married, we could just barely afford to go to the Washeteria. This was during my first and second job.
My third job offered an employee stock savings plan, where we had the option to put $ into co stock, and the co would match it up to 6%. This was several years before 401k's were invented. I began this job at age 24.

I put in my 6% in order to get "their" 6%. I did this for many years, and then the 401k came about. This allowed the employee to put in as much as you wanted up to IRS limits. I put in 10%, and the co put in their 6%.....all pretax.

After several years, I increased my portion to 12%, then a few more years, 15%. This resulted in a total of 21% put in savings pretax. 

This all played out over 32 years, where we ALWAYS lived below our income. 

While all this was occurring, I developed a plan. That plan involved getting the home paid for, and in my last 2 years of employment, DW and I both bought and paid off new vehicles.

Now that we're retired, our home is new and paid for. Both vehicles are relatively new and paid for, and we have 37 times our last years take-home pay in an IRA.

So what advice would I give? Start as early as possible, and save as much as possible. Make wise choices, and watch your household waste carefully. It is so easy to lose control of the things you buy. Before a purchase, always ask yourself; what will happen if I DON'T buy this? Then after you put that item back on the shelf, Put those dollars into a good mutual fund.

Good luck, and God Bless.

B


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## Esteban29304 (Apr 29, 2003)

You have been given VERY good advice , above.
It is much easier to save during your life, if you avoid the temptation of " keeping up with the Joneses ." Most can live well & modestly & have no problems with saving . There are online " Retirement Calculators " that will help you get an idea of what it looks like when saving for retirement.
CONGRATULATIONS , on being reday to commit at your age !!


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## Chief Cook (Apr 24, 2011)

Bentley is dead on. Great advise. Get started now and you should be in good shape by the time you get to retire. Good Luck!


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## SageLady (Jun 10, 2008)

Your goal should be to be completely debt free including mortgage when you retire, and save as much as you possibly can in the years preceding retirement. Live a simple life. You'll be content and able to sleep at night too....


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## Bentley (Jul 10, 2008)

One of the things I could/should have emphasized was how LBYM is a way of life. This 'way of life' is what will open doors to an early retirement in just a few short years. 
I cannot explain in words how much freedom you will have after your home is paid for. 

Another very important savings tool is to set up an emergency fund. This fund keeps you out of the banks loan office when something unexpected comes up. 

Please read the attached article. It is a wealth of guidance for anyone in your situation.

B

http://finance.yahoo.com/news/retirement-planning-20s-105900731.html


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## Micheal (Jan 28, 2009)

Ahh yes, all good advice, be debt free, save a bundle (well ,as much as you can), don't own anything old; cause it will break the day after you retire, and live below your means........

Sounds easy don't it??????

Really - it is all good advice, but how you enter retirement or at least plan for it depends on you and what you think is important and "that" is the bottom line. 
For if you do or do not do all the advice given in one form or another, your retirement will be what you made it.......... 

Getting off my soap-box now!!!!!!!!


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## Bentley (Jul 10, 2008)

Michael, I hope your comments were not meant as harsh as they sounded. If I have misunderstood, my apologies, however, my advice is solid. 
And it neither sounds easy, nor is it easy. And you can't do it all at once. 

One of the things I've taught my children is the importance of having a life plan. 
Set goals for yourself for the next month, next year, two years, five years, etc. The farther out the goal, the less specific it can be. 
Notice in my first post about how my plan played out over 32 years. 

But I've witnessed people manage their lives in a helter skelter fashion, only living for the fun they can have THAT day, and unless they hit the lottery, they can usually forget retiring prior to 65. That's why we see older people working at devilmart as a door greeter. 

Now having said that, I may decide to work at devilmart one day as a door greeter, but it will be because that's something I want to do, and not HAVE to do.

my 2 cents

b


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## Micheal (Jan 28, 2009)

Gish, this is the 2nd time one of my replies disappeared...........anyway.

Bentley,
I didn't believe that I was knocking your's nor anyone's else advice as I did state that it's "all good advice".
I was just trying to bring to light that there is "no" easy path to retirement or any other major life event for that matter.
What I, and from your post you, discovered that a loosely divised plan for retirement involves setbacks, disappointments, and a "living life in general" spread over a large number of years. You mentioned "over 32 years" for your plan to evolve. With mine it took my whole working life and after 4 years of retirement is still a work-in-progress.
Hence my statement of: "...how you enter retirement or at least plan for it depends on you and what you think is important..." 
Therefore not knowing of a person's background, lifestyle, fortitude, etc to just post - be debt free, save a bundle, live below your means, etc is taking something that takes a lifetime of steps and mis-ques of "life" and boiling it down to a sound-bite........

Again I mean no harm nor am I casting stones (at anyone) just stating something I would think would be common sense in that; the better you can make the future the better your life could be.


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## Ramblin Wreck (Jun 10, 2005)

I understand the thought/idea that no matter what you do or how hard you try, sometimes things don't work out. Oftentimes I think about all those killed on 9/11, either on the planes or on the ground or in the buildings. Their dreams, hopes, and works were dashed in a moment. Other events, like cancer, car wrecks, or Bernie Madoff can also intervene to spoil a lifetime of work. Then too, there are examples of people spending a buck to buy a lottery ticket that turns them into instant millionaires, maybe having never worked a good day in their life. 

But those extremes (and not so extremes) aside, if you live simply and save you have a better chance of retiring comfortably and earlier than if you don't. Maybe God will bless your works ... or maybe you'll get lucky.


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## Nevada (Sep 9, 2004)

Ramblin Wreck said:


> But those extremes (and not so extremes) aside, if you live simply and save you have a better chance of retiring comfortably and earlier than if you don't.


Never in our lifetime have so many lost everything as they have in the past 3 years. Americans have come to expect real estate to appreciate with time, so much so that many Americans actually defined their wealth with the equity in their homes. That was the retirement nest egg that allowed many Americans live their dream retirements.

Today, many who are just reaching retirement age have lost it all. Some have lost their homes altogether. Others are upside-down on their mortgages, paying on principal far above the market value of their homes. The lucky ones have mortgages to match their home values, yet have zero equity.

I suspect that we won't see numbers of desperate people to match the numbers of people who have lost everything in the real estate crash. Instead, we'll see people who expected to retire in their 60s continue working until they die.


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## Karen (Apr 17, 2002)

I think it just totally depends on what income your able to obtain for where you live, how big your family is, and mostly --- how lucky you are in life.

When we were young, life took us in a direction that was totally outside of anything we had ever planned for and although we worked hard, couldn't escape being unable to save. During those times, it took everything we had and was more imporatant to keep a roof over our children's heads, clothes on their backs, and food on the table. Retirement savings would have been the most selfish thing we could have done at that time. 

Then things got a bit easier but then it was time for still keeping a roof over the children's heads, bigger clothes on the backs (children's clothes are cheap; adult clothes and shoes more expensive), more food on the table as they grew, AND now college. Giving them an education was more important than retirement since it gave them the opportunity to have more choices in life, and to be able for them to have a retirement. Again, retirement savings would have been selfish.

Then the kids all left home, we both landed much better jobs, were out of debt, and had savings. 

Then life took yet another turn we didn't expect so soon. 

Let me tell you that no matter how much money you have or how great your insurance is; there is no amount that is enough when you _both_ have catastrophic health issues, surgeries, inabilty to work, high cost life-necessary medications, medical equipment, doctor bills, etc., etc.

All you can do is what you can do under your circumstances. No one can tell you what you should do. All they can tell is what worked for them; however, everyone lives in an entirely different set of circumstances and no one walks in your shoes. The best thing you can do is to evaluate your current situation periodically, and determine from there what you can do during that time. 

Don't put too much faith in a 'goal' amount. Even the best of well meaning people can sometimes make you feel like a failure if you weren't able achieve what they were able to do for retirement. Just do _as much _as you can, when you can and you'll be much more content knowing you did all you could, no matter how the rest of your life plays out!


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## Jokarva (Jan 17, 2010)

Karen said:


> . Giving them an education was more important than retirement since it gave them the opportunity to have more choices in life, and to be able for them to have a retirement. Again, retirement savings would have been selfish.


I'd have to respectfully disagree with this. Funding a retirement is every bit as important as funding college...kids have many years to pay for college (or can work and pay as they go like I did), you have limited time to save for retirement.

DH and I both retired this year at age 55, we definitely had a plan starting about age 30...but of course everything doesn't always go according to plan. So you look at your options and redo your plan. And if the SHTF, then you do the best you can.

And I'd agree that living beneath your means and being debt free (mortgage included) is the key to a comfortable retirement. Learn at least the basics about finances, diversify your investments (we have rental properties in addition to savings, pension, etc) and pay attention to what's happening around you.

Just the fact that you're asking means you're paying attention, so good for you!


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## Ramblin Wreck (Jun 10, 2005)

Jokarva said:


> and pay attention to what's happening around you.


That's so simple and fundamental, we oftentimes forget it. But it works for finances, gardening, or just walking in the woods.


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## TheMartianChick (May 26, 2009)

Jokarva said:


> I'd have to respectfully disagree with this. Funding a retirement is every bit as important as funding college...kids have many years to pay for college (or can work and pay as they go like I did), you have limited time to save for retirement.


I'm not retired yet, but I have to agree with Jokarva on this. There are many paths to college and even a few paths that don't include it. The first two years of college course work can be accomplished at a junior or community college for very little money. Many state universities have excellent curriculums and their graduates are highly employable. In NY our state university is highly rated and doesn't threaten to break the bank, even if the student has to self pay.


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## jwal10 (Jun 5, 2010)

I started the day I left home at 12. Health wasn't great and I didn't know when I wouldn't be able to "work". I lived lightly and saved as much as I could. Found cheap land and bought whenever I could and not go into debt. Bought from the owner and let them carry. Built from there. Life has been good to me. I didn't take, I used what was available to me, shared and gave back in kind....James


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## Michael W. Smith (Jun 2, 2002)

Jokarva is correct. Karen, if you COULD help your kids for college, then you SHOULD, but I don't think it should have been done at the risk of your retirement. If you were 50 when your kids were ready for college - once college was done, you would have a minimum of 10 - 15 years to save for retirement.

Your child on the other hand, has a lifetime to pay down their college loans. Do you want to help your child as much as possible? Of course! But if you have no money for retirement, there is no law that your now "very well to do" child HAS to help you out just because you helped them get to where they are. 

3DayFarm, This is good that you are asking advice now at such a young age. My advice - save as much as possible. If possible, fully fund ($5000.00) a ROTH IRA before April 17 for 2011. Between after doing that and April 15 of 2013, fully fund a Roth for this year (2012).

You will want to put your money in a ROTH IRA - NOT a traditional. While you might get a tax break for this year with a traditional, with a ROTH, you won't EVER pay ANY tax on the withdrawals!!!!!!! 

If you work for a company that provides a 401(k) with a employer match, put at least the MINIMUM in that you can to get the MAXIMUM match. You do NOT want to give up free money your employer is trying to give to you.

As your retirement accounts grow - diversify. Put some in mutual funds, put some in stocks (you do know that you can buy stock directly from some companies and some even have ROTH accounts?), and even put some in interest bearing accounts.

STAY OUT OF DEBT - or get it paid off ASAP!

Subscribe to financial magazines - Money, Smart Money, etc. Read and learn. You can invest it yourself - you do NOT need a financial advisor, an Edward Jones, or anything like that.

Vanguard - look up vanguard.com, which has the LOWEST fees in the industry for mutual funds. Both regular and retirement accounts. Many stock companies you can buy their stock directly through them - some with no fees.

When I was in my early 20's, my employer at that time, agreed to give me 10% of my total wages and set up an IRA for me. At the time, I only made about $10,000.00, so once the year was ended, my employer drove me to the local bank and set up a Traditional IRA (at that time, that was no ROTH) and deposited $1000.00 for me. He told me to NEVER withdraw it until retirement and to keep adding to it. Being a youngster, I thought "Oh wow. $1000.00 flipping dollars for retirement." 

I did at least listen to him, and never withdrew it. I did roll it over though - from a paltry interest bearing IRA account at a bank, into an IRA with an insurance company that paid more interest. Once the ROTH IRA came alive, I transferred the money out of the Traditional and into a ROTH. And once I learned I could make even more money with mutual funds, I opened an account with Vanguard and set up a ROTH IRA.

My wife and I both invest as much as possible for retirement. I put money in my 401(k), wife does the same. I put contributions into a ROTH IRA, as does my wife.

I'll be 45 next month, but if I continue, by the time I can get full SS at age 67 1/2, in 22 1/2 years, I should have quite a retirement stash. I might even be able to retire early. Now I only look back at the money I threw away years ago, and if I would have known then, what I do now and invested it . . . . . . . . well, I'd have alot more money than what I do now.

Compounding is your friend. The earlier you start and the longer your money has to compound, the more you will have.

Good luck.


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## TxGypsy (Nov 23, 2006)

I semi-retired at your age and am completely retired now at 40. 

#1 Have NO debt. I mean that. Do not pay interest.

#2 Make investments that produce income. You're saying 'duh', but many people go for pie in the sky investments rather than sound income producing investments.

#3 Rich people are frugal. I've been super frugal for so long that it is difficult for me spend money now that I actually have some.

Good luck!


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