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Retirement Surprises
Here's a piece listing what retirees wish they had known before they retired. The highlights:
Many retirees are surprised by the costs they faced in retirement, with health care costs leading the charge.
Thirty-seven percent of those surveyed say health care costs have been higher than expected in retirement, 45% say their total health care costs are just what they expected, and just 9% say they have been lower than expected.
About one quarter of retired investors say living expenses and taxes have been higher than expected after they retire.
Here's why they are surprised -- they don't think about retirement living costs.
I know, this should be the FIRST thing they consider before they retire -- what their retirement budget is -- but the vast majority of people don't do this.
How Much Does It Take to Be Wealthy?
Here's an interesting post from Bloomberg asking how much do you need to become wealthy?
The results:
- Millennials say you need $1.3 million to be financially comfortable and $2 million to be wealthy
- Gen X says you need $1.4 million to be financially comfortable and $2.6 million to be wealthy
- Boomers say you need $1.6 million to be financially comfortable and $2.7 million to be wealthy
Interesting how the older you get the more you think it takes to be wealthy. :)
Before you set a number, consider these net worth percentiles in the U.S.:
My Major FI Milestones
Gen Y Finance Guy recently listed his five major milestones of financial independence as follows:
- Ground Zero ($0 Net Worth)
- Six Figures ($100,000 Net Worth)
- Double Comma Club ($1,000,000 Net Worth)
- The Magic Zone for Max Happiness ($1,875,000 Net Worth)
- Financial Independence ($3,000,000 Net Worth)
Here's when I hit each of these and my thoughts on them:
1. My Quicken data goes all the way back to 1994 and it shows I was at ground zero. I'm not sure if this really was the case or if I just didn't have the numbers entered into Quicken, but let's go with it.
What’s the Best Measure of Financial Success?
The following is a guest post from Aaron of Personal Finance for Beginners.
If you’ve just started to focus on your personal finances, it can be difficult to know where to start. There are many important areas of money management – debt, budgeting, saving, investing – that make it hard to decide where to prioritize your attention and how you should measure your progress.
In this post, we’ll take a look at pros and cons behind four of the most popular numbers used to evaluate your financial success:
- Credit score
- Income
- Savings rate
- Net worth
Improving any one of these metrics has the potential to improve your financial wellness – but is there one number that rules them all?
Credit score
Why I Quit Wall Street to Do What I Love
This is a guest post by Millionaire Mob, a blog focused on investing in dividend growth stocks and travel hacking.
It was August 2011. I was freshly out of undergraduate school and about to start my first day working as an investment banker for a large bank in Chicago. I was eager, motivated and ready to do whatever it took to be the next finance king. The cover of Fortune magazine was so close. I could just see it.
After over 6 years of the grueling gauntlet of financial modeling slavery, I realized that isn’t the way to financial success or making a difference in this world.
Why isn’t a gauntlet of modeling and pitch decks the way of living?
Courage and Fire
The following is a guest post from Moose of Making Sense of Life.
There are hundreds of thousands of posts about financial independence and early retirement online. Amongst the how-tos, formulas, in-depth explanations of Roth IRA ladders, and philosophical content out there, one critical aspect of this journey is rarely mentioned: courage.
The Phases of FIRE
Courage is essential in all phases to be financially independent and retire early (FIRE). You need courage to embrace this atypical lifestyle, you need courage to sustain it, and you need courage to finally unplug from a typical working life.
Embracing Financial Independence
Why did you first pursue FI?
Is Extreme Frugality Necessary to Save for Retirement?
The following is a guest post from Michael Dinich at Your Money Geek.
Retirement takes effort, planning, and consistency. Living an extremely frugal life has never been a requirement. If you love reading financial content, you may have noticed financial experts preaching about the best ways to retire early and be set for life. Their ideas may be good in theory and may work for some, but may not work for everyone.
Extremist may make you feel as if you are behind and not worthy of your own financial goals and aspirations.
Everyone has different ideas of retirement. But the truth is, everyone has different goals for retirement. Some retirees may strive to read 60 books in 6 months and go for daily walks. Others may want to travel the world and enjoy the fruits of their labor.
Is your current lifestyle aligned with your retirement goals?
Understanding the Basics of Equity Funds
The following is a guest post from Alexander Voigt. He started his career in the financial business back in 1999. For many years, sharing investment ideas with his readers on his website DayTradingz is an important part of his life. You can almost call it his passion.
Equity Funds
Savings accounts or call money are currently not really suitable to increase one’s own capital by interest. There are other investment opportunities much more efficient, such as equity funds.
As the name suggests, this investment consists of shares, not in individual stocks, but in a portfolio of shares of different companies. The advantage here is that the risk of loss is significantly reduced if the investment strategy is correct.
Feeling Poor Despite Good Earnings
The following is a guest post from The Financial Journeyman.
Do you earn a high salary or a high combined high household income and feel like you cannot get ahead? The average household income in 2017 was $59,000 for Americans. There are many households who earn $150,000, $250,000, or much more and feel like they cannot get ahead of their spending habits.
When I hear about these households, one thing comes to mind. They do not know how to budget. The salary amount that a family earns is only part of the equation. Without having a well-planned budget as part of your financial plan, it does not matter if your household income exceeds $1,000,000.
Earnings are finite. If you spend what you earn, you will always feel poor. If you spend more than you earn, you will be poor.
Are You Treating Your 401K Like an ATM?
The following is a guest post from Bernz JP who writes at Moneylogue.
More importantly, Should You?
When “life happens” it can be extremely tempting to use retirement accounts as emergency savings accounts. And while in an ideal world, you would never need to do this, sometimes it may be necessary. Statistics state that a little over 30% of 401K investors in the last decade have cashed out before reaching the minimum age of 59½ that let them avoid the 10% early distribution penalty.
IRS rules do make room for retirement plan loans if the maximum amount of the loan is either under half of the amount of your vested balance or $50,000, whichever amount is smaller. This means you won’t be able to borrow more than $50,000 from your 401K, no matter how much your plan is worth.
So, the question is, what counts a necessary and what doesn’t?
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