How much do you have saved for retirement (2019 edition)

[Kodos]

It's time once again to ask FOFC: "How much do you individually have saved for retirement?" Here are the previous polls on this topic that started in 2016 and 2013.

How much do you have saved for retirement? (2016) - Front Office Football Central (https://forums.operationsports.com/fofc/showthread.php?t=91289)

How much do you have saved for retirement? (2013) - Front Office Football Central (https://forums.operationsports.com/fofc/showthread.php?t=87770)

[Kodos]

Retirement in America | Out of Reach for Most Americans? – National Institute on Retirement Security (https://www.nirsonline.org/reports/retirement-in-america-out-of-reach-for-most-americans/)

Help Is Almost Here for Retirement Savers (https://www.nytimes.com/2019/06/11/opinion/retirement-savings.html)

[Edward64]

I like the idea of allowing annuities to be selected if desired under the assumption there is a certain level of "government guarantee" in case the annuity company goes bust or there is a recessionary period.

Does this include House? Is it your net worth or what you have in Cash/401k/IRA etc.?

[spleen1015]

I feel like I started taking this seriously a little too late in life. The good thing is though I have 20 years before I need to consider retiring.

[Kodos]

I
Does this include House? Is it your net worth or what you have in Cash/401k/IRA etc.?

It's aimed mostly at what you have in your 401(k), IRAs, and that kind of stuff.

[Lathum]

We are doing really well. Mid 40's and have a plan to retire when my youngest goes to college in 12 years or so. We are debt free and save a decent amount. My wife has worked really hard and worked her way up to be a VP/GM for a Warren Buffet owner company. This has allowed me to be a stay at home dad. We had a decent amount in savings just in cash, but just moved and bought a house we are doing a lot of renovations on.

Overall though we couldn't be happier about our situation.

[HerRealName]

Does anyone else have a pension plan through their employer? I know they are getting pretty rare but I'm glad I stuck around and have that in my hip pocket now.

[ISiddiqui]

Does anyone else have a pension plan through their employer? I know they are getting pretty rare but I'm glad I stuck around and have that in my hip pocket now.

I believe I have a small pension plan (US Government - I want to say 30% of my high 3 if I stay until I'm 67) along with my 401(k). In the previous retirement Plan (changed in the mid 80s, I think) the pension was a substantial amount (and no 401k).

[tarcone]

Does anyone else have a pension plan through their employer? I know they are getting pretty rare but I'm glad I stuck around and have that in my hip pocket now.

I do. I pay 14.5% per pay check that is matched by my employer. If I make 30 years I get 80% of the average of my best 3 years salary. If I make the rule of 80 (years of service plus age equals 80) I get 70%

[HerRealName]

That 14.5% is a big chunk but the years of service requirements are pretty decent. I think mine is similar to Issi's but way more confusing with age a big factor.

I'm hoping to retire in 11 years but having a special needs 10 year old at home adds some uncertainty.

[Kodos]

Does anyone else have a pension plan through their employer? I know they are getting pretty rare but I'm glad I stuck around and have that in my hip pocket now.

Yep. My current employer is the first employer I've had that offered this. In general, my company has great benefits (pension, 403(b) with some matching, free healthcare, tuition assistance for kids). I plan to stay here until I retire.

[Radii]

Every time this poll comes up its a great reminder of how freaking far behind I am. around 2006 - Age 30, divorce, dad's cancer, and a job change that made me hate where I worked all happened around the same time. Cash out retirement to pay off debts, quit job, move home to take care of dad. Expect that to last 2 years, it lasts 9 instead. Age 39, 0 retirement, 0 savings because I was hardly working in my 30s, total restart. I've got a good job with good benefits, I just hit $50k again in retirement at age 42, but yeah I don't honestly ever actually expect to retire, and any small bump in the road at this point could completely fuck me.

[HerRealName]

Wow, you hit the motherlode of good benefits there!

[Kodos]

Yep. Thanks to the union where I work. I'm pretty lucky.

[tarcone]

I need to work when i retire. The COBRA plan means I will pay about $850 a month in health insurance. Sad.

[Drake]

I got divorced in April. Managed to trade my 403b for my share in my ex-wife's childhood home (which I wouldn't have kept, but it made for some handy leverage). I'm feeling pretty good about that. She had $0 saved for retirement.

I can survive on mine when retirement rolls around, but I was already worrying about how I was going to spread it to cover both of us.

[Kodos]

Sorry to hear about the divorce, but glad you came out okay in it.

[AnalBumCover]

Still not as much as I think I should have at this point in my life, but I'm happy that I moved up two notches from the last time I took this poll.

[molson]

Does anyone else have a pension plan through their employer? I know they are getting pretty rare but I'm glad I stuck around and have that in my hip pocket now.

Yup, still plugging along with the government pension. I'm trying not be too complacent, and tying not to rely on it too exclusively. It does create a modest ceiling and floor if I manage to stick around until I retire (and the nice thing is its transferable to other government employment).

[Edward64]

It's aimed mostly at what you have in your 401(k), IRAs, and that kind of stuff.

Voted but I purposely removed estimated $ budget for kids' college fund.

[thesloppy]

Wow, tarcone your pension terms are pretty impressive!

I looked into being an electrician a few years ago and I remember their pension being abysmal, something like $150 a month.

[Kodos]

Voted but I purposely removed estimated $ budget for kids' college fund.

Yeah, I excluded that money too.

[Kodos]

The new math of saving for retirement may boil down to this one, absurdly simple rule - MarketWatch (https://www.marketwatch.com/story/the-new-math-of-saving-for-retirement-2019-05-22)

[Kodos]

1 in 3 Americans Has No Retirement Savings | Money (http://money.com/money/4258451/retirement-savings-survey/)


Median Savings
Age Income Benchmark %OnTrack %Behind
24 $34,605 Started 48% 52%
30 $54,243 $16,272.90 33% 67%
40 $66,693 $100,039.50 20% 80%
50 $70,832 $212,496.00 22% 78%
60 $60,580 $260,494.00 26% 74%

[Radii]

1 in 3 Americans Has No Retirement Savings | Money (http://money.com/money/4258451/retirement-savings-survey/)


Most of my friends these days are artists and musicians who are chasing a passion and living month to month/commission to commission, living extremely cheaply, working "real jobs" only when necessary but doing whatever they can to dedicate as much of their time as possible to creating.

In that circle this thread goes VERY differently.

[sabotai]

First time I didn't have to answer in the $1-$10,000 bracket. I'm in the $10k-$25k range. At 41. Woohoo!

Yeah, I'm going to be working 'til I die.

[Kodos]

At least you are moving in the right direction. Baby steps!

[NobodyHere]

It's nice to move up a couple brackets.

Even though I don't earn much, I'm trying to subscribe to the FIRE movement and I'm saving a very a good portion of my income. I'm hoping to make work optional in about 5-10 years.

FIRE movement - Wikipedia (https://en.wikipedia.org/wiki/FIRE_movement)

[PilotMan]

I'm pretty close to the next bracket, but not there yet. I am in a good position that I both make good money, have a good outlook to make considerably more money in the future, and have good benefits. Having said that, I am and have been the sole source of income for 16 years and have supported 5 people the entire time. My youngest two are at the end of their education and we have $0 saved for college. I always said that I'm young, but I have the financial obligations of a much older person, and that's still true. We've made good financial decisions, but without my current job, we'd be deep in a hole with a deeper dig on the horizon. As of now, we can afford to give our kids a decent life, help with education and take on some debt as they hit college, but only because the outlook for future gains is there. The perfect example was my broken ankle last summer and the loss of income for 3 months. We were able to weather that hit, but I wouldn't want to do it for a long, long time.

[Sublime 2]

Right at the $125,000 mark at 34, not including my wife's teacher's pension. Pretty happy with where we're at.

Sent from my Pixel 2 XL using Tapatalk

[Edward64]

Right at the $125,000 mark at 34, not including my wife's teacher's pension. Pretty happy with where we're at.

Sent from my Pixel 2 XL using Tapatalk

My wife has a pension too which we are looking forward to supplementing savings and SS.

I can't figure out a clear answers on how teacher's/state pension and SS will work. I know double dipping has been reduced/eliminated but say during retirement I am expecting SS = $20,000, a non-working wife would get half of that SS = $10,000. But if she also gets a teacher's/state pension of $5,000 or $15,000 what would happen?

Any financial planners here that know the answer?

[PilotMan]

My wife has a pension too which we are looking forward to supplementing savings and SS.

I can't figure out a clear answers on how teacher's/state pension and SS will work. I know double dipping has been reduced/eliminated but say during retirement I am expecting SS = $20,000, a non-working wife would get half of that SS = $10,000. But if she also gets a teacher's/state pension of $5,000 or $15,000 what would happen?

Any financial planners here that know the answer?


Does your wife pay into SS? In my state, they have pensions for the very reason that they don't have SS withheld and are not earning SS credits.

[Edward64]

Does your wife pay into SS? In my state, they have pensions for the very reason that they don't have SS withheld and are not earning SS credits.

Before she was a teacher, she did pay some into SS but not enough for 10 years or necessary credits. Now as a teacher, no SS.

If she was not a teacher and did not have enough for 10 years, she would still be eligible for half of my SS (I think). So if I got $20K and she would get $10K and that would be our SS at retirement.

As a teacher with a pension ...

If her pension = $5K, would that mean she just got $10K total (e.g. half of mine) and therefore her teacher pension doesn't factor in since its less than what she would be getting as my spouse?

If her pension = $15K, would this mean she get $10K (e.g. half of mine) and $5K of her teacher pension for a total of $15K?

Just not sure how this work.

[Edward64]

Even though I don't earn much, I'm trying to subscribe to the FIRE movement and I'm saving a very a good portion of my income. I'm hoping to make work optional in about 5-10 years.


Wish you all the best here. Definitely worthwhile goal, wish I had that mindset early on. I have started talking to my college age son about this goal.

I've read blogs and reddit posts about FIRE. I get folks retiring early when they are 55-60 but some of those posts about folks in 30-40's retiring don't apply to me.

1) Many say think about your retirement first before kids college. I'm of the mindset that I have an obligation to send my kids through college and not have them graduate with crushing debt. I will help out as much as I can (but if they want a graduate degree, its on them)

2) Even if you can retire at age 40, should you? You are missing out on an additional 10-20 years of making money, adding to the kitty, having a much easier retirement, and possibly leaving a larger legacy for your kids

3) I find myself relatively cash poor. The majority of my $ is in 401k/IRAs which I can't/won't touch before 59.5. Ideally I will also wait another 6-7 years for full retirement age to give an opportunity for the $ to near-double assuming historical averages. So even if I have saved up enough total $ to supposedly retire early, I don't actually have enough cash on hand to do early retirement (unless I go live in Asia, Mexico etc.)

Its to the point where I've seriously thought about stopping 401k contributions and just putting the $ into a eTrade account to grow available cash. But the tax benefits of 401k can't be beat.

4) Definitely worried about recessions and stock market crashes. We had 2 big recessions in the oughts. They stunted my savings contribution and also saving growth. I feel "behind" from where I need to be, its like a lost decade and feel the need to "catch-up". Having a recession/crash early into FIRE would not be good unless you really had reliable multiple sources of income

FWIW, this is what I read and motivated me before the recent FIRE craze. It really changed my perspective and would encourage you to read it if you haven't already.

Millionaire Next Door
Sorry! Something went wrong! (https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474)

[Kamsser]

Does your wife pay into SS? In my state, they have pensions for the very reason that they don't have SS withheld and are not earning SS credits.
Same as here.

[PilotMan]

Is anyone utilizing a Roth 401k?

[Kodos]

I split my contributions about 60/40 between traditional 401(k) and the Roth 401(k) in my plan. Although it ends up being more like 70/30 when you factor in employer matching contributions.

[Edward64]

I did contribute to Roth 401k over traditional 401k when my previous employer had that option. My current employer only has traditional.

There were tax benefits of traditional over Roth but Roth provided a lot more flexibility re: withdrawal and also no need for minimum distribution.

[lungs]

Zero. My investments turned into nothing fast. Should've been diversified!

[Capital]

Roth vs. Traditional - depends on your situation. If you are young and in a lower tax brackets - then the Roth works very well - pay taxes now when your bracket is lower.

Otherwise, the traditional 401k works because you are lowering your AGI now when your tax bracket is likely higher than in retirement.

So, it depends...

[Edward64]

Looks like we are doing okay as a group vs national average. Probably need the age dimension to really know but the poll is encouraging.

[Radii]

Every time this poll comes up its a great reminder of how freaking far behind I am. around 2006 - Age 30, divorce, dad's cancer, and a job change that made me hate where I worked all happened around the same time. Cash out retirement to pay off debts, quit job, move home to take care of dad. Expect that to last 2 years, it lasts 9 instead. Age 39, 0 retirement, 0 savings because I was hardly working in my 30s, total restart. I've got a good job with good benefits, I just hit $50k again in retirement at age 42, but yeah I don't honestly ever actually expect to retire, and any small bump in the road at this point could completely fuck me.

I didn't check my retirement accounts for pretty much all of 2020, and just did a yearly check-in today. I'm up over 100k at age 44 finally. Of course we'll see if there are market corrections and blah blah, but its nice to see progress regardless.

~$9500 of that has come from a company 401k match since I went back full time at my job after about a decade of being a contractor.

[sabotai]

Let me check my accounts to see how I'm doing!

*checks*

Yup, still working 'til I die.

Jokes aside, I'm close to moving up to that 3rd bracket of $25k-$50k.

But I'm also only including what's in my Roth IRA (I can only deposit $6k per year). If I were to include money that's in savings and investing that I don't plan to ever touch unless I absolutely have to, that would double it to ~$50k.

[Drake]

I topped $300k this year (at 49). I'm behind where I want to be, but feel better about it than I did two years ago when I was married and my (ex) wife hadn't worked for most of our marriage and had no savings beyond mine.

(I traded the house for a hands-off retirement agreement in the divorce. She signed it because we'd bought her childhood home after her dad died. I didn't have any interest in taking it from her or forcing a sale. At the time, it was probably a 50/50 split in terms of real value.)

It feels a bit mercenary as I tip my toe into dating pool again, but potential retirement income is part of the equation when I think about relationships going forward. You don't have to be rich, but you'd better have something -- or at least a plan -- if you want me to take you seriously.

[Edward64]

Up 25+% net worth (not counting house because I can't trust Zillow). Continuing our 401k contributions during the crash helped, and got lucky with AAPL & tech heavy funds.

2020 was a pretty good year market wise for us. Hoping for the same in 2021.

(Is it time for a new poll?)

[BYU 14]

Same for us, I increased contributions and it paid off after the initial nosedive my portfolio took. Still on track for retirement at 62 which is now coming up on 4 years away!

[Lathum]

We are approaching the top tier if you factor in the equity in our house and a few other random accounts. Also putting away enough to send the kids to college, unless its some crazy Ivy League school. Couldn't be happier.

[Lathum]

Same for us, I increased contributions and it paid off after the initial nosedive my portfolio took. Still on track for retirement at 62 which is now coming up on 4 years away!

That's awesome, so close.

[molson]

There's a big battle going on in a few states about re-negotiating pensions. One of the advantages living in a conservative state is that doesn't seem to be a concern here, at least at the moment, the pension and state budget situation are very strong. If that changes, I'm kind of screwed, but if it doesn't, I'm pretty good, I'll probably be, if I retire at 60, around 70% of my last salary as a guarantee for my life and then a beneficiary's life if I die first (with cost of living adjustments). I've just started aggressively investing in a side Roth IRA the last few years as a supplement, but there's only so much I can put in when the pension takes so much.

[Edward64]

There's a big battle going on in a few states about re-negotiating pensions. One of the advantages living in a conservative state is that doesn't seem to be a concern here, at least at the moment, the pension and state budget situation are very strong. If that changes, I'm kind of screwed, but if it doesn't, I'm pretty good, I'll probably be, if I retire at 60, around 70% of my last salary as a guarantee for my life and then a beneficiary's life if I die first (with cost of living adjustments). I've just started aggressively investing in a side Roth IRA the last few years as a supplement, but there's only so much I can put in when the pension takes so much.

Because you have a state pension, does that mean you don't get social security also? I assume you get pretty good subsidized health insurance also after you retire at age 60 (but before medicare).

[NobodyHere]

Wish you all the best here. Definitely worthwhile goal, wish I had that mindset early on. I have started talking to my college age son about this goal.

I've read blogs and reddit posts about FIRE. I get folks retiring early when they are 55-60 but some of those posts about folks in 30-40's retiring don't apply to me.

1) Many say think about your retirement first before kids college. I'm of the mindset that I have an obligation to send my kids through college and not have them graduate with crushing debt. I will help out as much as I can (but if they want a graduate degree, its on them)

2) Even if you can retire at age 40, should you? You are missing out on an additional 10-20 years of making money, adding to the kitty, having a much easier retirement, and possibly leaving a larger legacy for your kids

3) I find myself relatively cash poor. The majority of my $ is in 401k/IRAs which I can't/won't touch before 59.5. Ideally I will also wait another 6-7 years for full retirement age to give an opportunity for the $ to near-double assuming historical averages. So even if I have saved up enough total $ to supposedly retire early, I don't actually have enough cash on hand to do early retirement (unless I go live in Asia, Mexico etc.)

Its to the point where I've seriously thought about stopping 401k contributions and just putting the $ into a eTrade account to grow available cash. But the tax benefits of 401k can't be beat.

4) Definitely worried about recessions and stock market crashes. We had 2 big recessions in the oughts. They stunted my savings contribution and also saving growth. I feel "behind" from where I need to be, its like a lost decade and feel the need to "catch-up". Having a recession/crash early into FIRE would not be good unless you really had reliable multiple sources of income

FWIW, this is what I read and motivated me before the recent FIRE craze. It really changed my perspective and would encourage you to read it if you haven't already.

Millionaire Next Door
Sorry! Something went wrong! (https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474)

Keep in mind that most people in the FIRE community put a lot more emphasis on being "Financially Independent" than "Retiring Early". FIRE is simply a cooler acronym than FI.

1. I don't have kids and I don't plan on having any. If I do and they want to go to college, then they can do what I did and join the military.

2. That's kind of the trade off. One value you have to look at is time. You kind of have to weigh spending time working vs how much money you'll be living off of. I could work until 80 and pile a bunch of cash. But is it worth all that time being at a job? Conversely I could in theory FIRE now and live on near poverty wages for the rest of my life. It's up to the individual to find their happy balance.

3. I need to look closer at where to park my money as well. Right now I have a 401k (mostly when I saved earlier in my career before I came across FIRE). I do mutual funds right now based on the idea that the taxes are 0 for people withdrawing under $40,000 or so.

4. There's a lot of debate on how much money you can take out and survive money fluctuations. I think the minimum accepted withdrawal rate is about 4% as the Trinity Study (https://en.wikipedia.org/wiki/Trinity_study) gets thrown around a lot. If the market does tank than you can always get a side-hustle.

[NobodyHere]

Good year financially for me as well. Covid didn't affect my job and I stayed the course when it came to investing.

[molson]

Because you have a state pension, does that mean you don't get social security also? I assume you get pretty good subsidized health insurance also after you retire at age 60 (but before medicare).

We do get social security, and we have social security taxes withheld.

You can also take a lump sum of the pension when you leave employment, but, that would be dumb. But I don't know if that's something that differentiates situations where you don't get social security - I know some who are in that boat. Or if it's an opt-out thing.

There is some kind of subsidized health insurance for retirees, and your unused sick time at retirement is converted into payments for that. And everybody has lots of unused sick time. I'm not sure how good and affordable a program it is aside from that, but the retirees I know all use it. But they are also in Medicare. I don't know how those systems interact. Probably should figure that out.

Regular retirement age is 65, buy I hit my rule of 90 at 59. But you can keep working after that and increase your benefit. I figure I'd try to go a few more years, but, if I can stay employed by any state agency until 59, then, I'm not really worried about losing my job anymore, and I can walk away if my boss sucks or whatever.

Edit: My dream would be quitting my office job in my late 50s, and then spend some years working for the parks department, driving around emptying trash from campsites or something, still adding service time. But I think they have to clean the porta potites too, so, maybe not. But a lot of people do stuff like that. A city police chief left his job and became our office runner for a year to stretch out his service time. He made copies, ran documents to the courthouse, and gossiped all day. He loved it.

[Icy]

How do you guys calculate that in USA?

Does it include properties like houses, cars, business shares, art, cash in the bank, investments in stock markets? crypto? pensions plans that you contribute yearly? Government retirement (don't know if you have that in USA)?

I guess part of your savings go towards potential health issues when you get older, that is fully state covered in Spain until you die for example, so no need to save at all for that. Same with your kids university, that is also "free" in Spain as it's health (with free i mean that it's paid from everybody's taxes, of course somebody is paying for it).

Also when you retire, you get state pension if you have contributed with taxes for at least 15 years. The amount depends on how much did you contribute over your working years but there is a minimum enough to survive (barely) if at least you have already paid your mortgage (that you should).

For example my mother, who is 70, has her mortgage already paid, so her expenses are just food, etc, electricity and gas. She worked for 30 years, low contribution, so she gets like the minimum salary from the state, that covers these expenses and can live without any luxury but with no troubles either. Health is fully covered by state.

If you are happy with just surviving like that, you don't need any savings in Spain as the government has you covered. I'm not happy just surviving nor I trust government a lot working with my money towards my retirement, so I'm also saving on my own despite what I'm forced to contribute from my salary.

[Edward64]

How do you guys calculate that in USA?

Does it include properties like houses, cars, business shares, art, cash in the bank, investments in stock markets? crypto? pensions plans that you contribute yearly? Government retirement (don't know if you have that in USA)?

To me ... "savings for retirement" = Net Worth. And net worth = Assets - Liabilities

However, IMO there is no need to go to the nth degree. So how I calculate come up with Assets:

House = Yes
Cars = No, unless they are collectibles
Business shares (e.g. partnership) = Probably not, hard to come up with a $ and no guarantee you could sell it for that much
Art = No, unless they truly can be sold for a significant sum
Investments in stock markets = Yes
Crypto = Unsure, no experience
Pension Plans like 401k, IRAs = yes
Pension Plans like Social Security = No, it's in the future and you don't have it in hand
Government Retirement = Unsure, no experience but think like Social Security

Additional ...

Bank checking, savings = I kinda just estimate an average; most of my $ is in investments, 401k, IRAs
Jewelry = maybe if they can be sold for a significant sum. Things that you just pawn, probably not
Life Insurance = No, it's in the future and don't have it in hand

[bob]

Depends on the state / job. My wife is a teacher in GA. No social security taken out and no social security paid later. But teachers contributed 6 percent of their salary to the pension fund.

[sovereignstar v2]

How do most of you manage your retirement funds and savings? I have a brokerage account and Roth IRA with Vanguard (pretty modest sums) and a traditional IRA through my current employer (again pretty modest sum). My brokerage account is a pretty basic combination of domestic/international stock and domestic/international bonds. I have both of my IRA's invested in targeted retirement funds. In the very near future a very sizeable amount of money is going to be moving from a trust in my mother's name into an inherited IRA I recently set up. This thing is roughly 4x my current portfolio and I'm debating how I want to allocate funds.

I know this is largely about preferences and I don't think that anyone here is a financial/advisor planner. I'm just looking for general comments on what you guys do. I'm leaning towards using another targeted fund and just relying on the expertise of Vanguard to manage the correct asset mix and risk for my age. Does anyone think there are reasons not to use a targeted fund and do more of what I'm doing with my current brokerage fund? Are the fees that much more substantial with the targeted funds?

[Swaggs]

How do most of you manage your retirement funds and savings? I have a brokerage account and Roth IRA with Vanguard (pretty modest sums) and a traditional IRA through my current employer (again pretty modest sum). My brokerage account is a pretty basic combination of domestic/international stock and domestic/international bonds. I have both of my IRA's invested in targeted retirement funds. In the very near future a very sizeable amount of money is going to be moving from a trust in my mother's name into an inherited IRA I recently set up. This thing is roughly 4x my current portfolio and I'm debating how I want to allocate funds.

I know this is largely about preferences and I don't think that anyone here is a financial/advisor planner. I'm just looking for general comments on what you guys do. I'm leaning towards using another targeted fund and just relying on the expertise of Vanguard to manage the correct asset mix and risk for my age. Does anyone think there are reasons not to use a targeted fund and do more of what I'm doing with my current brokerage fund? Are the fees that much more substantial with the targeted funds?

I'm not financial planner, but some thoughts:

If you are getting a lump sum from a traditional IRA, it will almost certainly be tax deferred for you which sort of changes the present- and future-day values. If it was a Roth, you have more flexibility as it will be tax-free to move around and use (there are some exceptions to that if there have been more recent contributions).

If you have any bad debt (like student loans, if you have a large PMI on a mortgage, or credit card balances with a high interest rate), you could consider trying to retire it even though the trade off in paying taxes may not make it the best move - I just prefer to be debt-free and have that flexibility (aside from low interest mortgage and car loans). Otherwise, assuming you are not planning to retire in the next 10 years or so, I'd go with rolling it into your existing IRA and think about shaving a few years off your expected retirement date.

[sovereignstar v2]

I'm not financial planner, but some thoughts:

If you are getting a lump sum from a traditional IRA, it will almost certainly be tax deferred for you which sort of changes the present- and future-day values. If it was a Roth, you have more flexibility as it will be tax-free to move around and use (there are some exceptions to that if there have been more recent contributions).

If you have any bad debt (like student loans, if you have a large PMI on a mortgage, or credit card balances with a high interest rate), you could consider trying to retire it even though the trade off in paying taxes may not make it the best move - I just prefer to be debt-free and have that flexibility (aside from low interest mortgage and car loans). Otherwise, assuming you are not planning to retire in the next 10 years or so, I'd go with rolling it into your existing IRA and think about shaving a few years off your expected retirement date.

So as a non-spousal heir I was required to open a new 'inherited IRA' and cannot roll it over into an existing IRA or make new contributions to it. Some recent law made it a requirement to empty inherited IRA's within a decade, however I've been informed the original trust pre-dated this requirement. I am only required to make an annual RMD.

I'm debt-free and have a low interest mortgage, however I am going to be looking to level up from my townhome very soon. The current housing market sort of scares me, but shared walls is crimping my style so it's possible I may try to take advantage of some of the new money. I think I can avoid paying tax on it if I can replace it within 60 days.

[sabotai]

To answer your general question on what I'm doing with my retirement and brokerage accounts (because I have absolutely zero knowledge on what to do with an "inherited IRA", I literally just found out about their existence from you right now)...

Brokerage Account: Just about all of it is in the Vanguard STAR Fund. But I am thinking of taking my money out of that and spreading it out to various other funds.

Roth IRA: Until the beginning of this year, I had it all in a Target Retirement Fund. But then I noticed two things. 1) The STAR fund is 40% bonds and 60% stocks with the target retirement fund is 90%+ in stocks and yet both perform similarly (though the last several months that target fund has done better), which led to me noticing 2) the target retirement fund (a managed fund) is mostly made up of other managed funds. Seemed like Vanguard was double dipping a bit there (which is also why I'm thinking of getting out of their STAR fund for my brokerage account).

I think I was in their Target Retirement Fund 2045, which certainly hasn't done poorly. Ave. return over the last year right now is 30%, but their various index funds of stocks are well above that for the last year. So I figured I'd just split the money amongst several index funds and keep ~10% in bonds and safer funds for now, essentially creating my own "target retirement fund" of mostly index funds.

So right now, My Roth IRA investments look like this:
Total Bond Market Fund (~10%)
STAR Fund (~5%)
Total Stock Market Index-Fund (~20%)
Mid-Cap Growth Index Fund (~20%)
Small Cap Growth Index Fund (~20%)
Small Cap Value Index Fund (~20%)
Utilities ETF (~5%)

And so far this year, my biggest returns have come from the Total Stock Market Index Fund and the Mid Cap Growth Fund. The two Small Cap funds are fairly volatile.

Was it worth it? Hard to tell (but probably not on purely financial terms). If I did this on Jan 1st, I'd be able to just compare YTD percentages straight up, but I didn't split up my investments until the end of February. I have gotten an ~11% return so far since then, and I know the target fund is at 14% YTD right now (which I know I got a piece of since their chart shows a steady increase starting from last October to now, so I got some of that return in the first two months), and the Small Cap Growth Index Fund (riskiest fund I'm in) hasn't really done much overall since I bought into it (I missed its last big spike). So I'm probably around what I would have if I had just left it all in the target retirement fund.

But I am paying more attention to my investments, which probably counts for something, and in the long run, I do think the index funds will outperform that target fund, which is also why I'm thinking of just ditching the STAR fund and the Total Bond fund for now and going 100% into index funds. No matter what happens, it looks like I'm 50/50 for even if I'll ever be able to retire at all, so might as well push all in on the index funds and see what happens I guess. (not that the difference between the two is going to that big)

But don't take my advise on anything. I'm just winging it so far.

[sovereignstar v2]

Thanks for sharing, sabotai

[Ksyrup]

I still haven't done anything to actively manage (or have someone actively manage) my 3 401Ks. They are all in target retirement age funds and all have made about 11% this year.

EDIT - just checked and they are all right around 11.75% for the year.

[Edward64]

I still haven't done anything to actively manage (or have someone actively manage) my 3 401Ks. They are all in target retirement age funds and all have made about 11% this year.

EDIT - just checked and they are all right around 11.75% for the year.

Unless you are near retirement age, put it in the S&P 500 index fund (about 20+% YTD).

I suspect your target retirement age funds have a nice dose of bonds which IMO, unless you are really risk adverse or nearing retirement, you probably don't need to have.

[sovereignstar v2]

I checked Vanguard's targeted funds in regards to bonds:

Vanguard's VTIVX (Vanguard Target Retirement 2045 Fund Investor Shares) consists of 11% bonds, 53.5% domestic stock, and 35.5% international stock.

2040--18.6% bonds
2035--26.6%
2030--~34%
2025--~42%

[Ksyrup]

I think I've probably got the target 2035 fund IIRC. I'll check into it.

[sovereignstar v2]

I just rebalanced my brokerage account and will probably do the same allocation for my incoming new inherited IRA funds.

90% stock
---
VTSAX (total stock market index)--70%
VTIAX (total international stock index)--30%

10% bonds
---
VBTLX (total bond market index)--70%
VTABX (total international bond index)--30%

[PilotMan]

I've found my targets funds to be a bit too conservative, but I still have a portion in them for balance. I think that the 90/10 split works well, for that fund, if it were me, I'd probably park that money in funds with a slow an expense ration as possible. If you're looking for specific funds, I'd look at the Kiplinger 25 and their model portfolios. I've read Kiplinger for as long as I can remember, and they offer solid advice on money management.

[AgustusM]

The Number (https://www.amazon.com/Number-Completely-Different-Think-About-ebook/dp/B000FCKO2M/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=)

I bought this book 10 years ago when our vote would have been - where is the negative net worth button? Today I clicked living large

I have read 100s of economics books in past 15 years - none did as much to get this part of our life in order as this one. Highly recommended

[sovereignstar v2]

Got the moola today and had to make several six figure transactions to set up the right portfolio mix. Not for the faint-hearted and thankfully I'm good a spreadsheets.

[PilotMan]

The Number (https://www.amazon.com/Number-Completely-Different-Think-About-ebook/dp/B000FCKO2M/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=)

I bought this book 10 years ago when our vote would have been - where is the negative net worth button? Today I clicked living large

I have read 100s of economics books in past 15 years - none did as much to get this part of our life in order as this one. Highly recommended

Thanks for the recommendation. I read through the sample and it's nice to know that I'm in the ballpark of where my head needs to be financially. I learned a long time ago that my parents taught me dick about finance and I screwed myself royally in my mid 20's. It took a ton of discipline to make it through my 30s as we went on food stamps twice and supported 5 people on my very average salary. I read a lot of books in that time and that's when I vowed that my kids would not be so financially illiterate as me. I talk openly about general budget strategies, I show them my bank accounts, how I manage the family finances, and best strategies and importance of planning for retirement early. And that has paid off as they have learned and are putting those things into practice with their own budgets.

[Lathum]

We got this letter today from Athene regarding an annuity surrender request for a rather high 5 figure amount. Says surrender request was processed and payment would be sent separately. Thing is we never requested anything. I can only speculate it is from my wifes prior employer and a policy that matured or something like that. Need to call them later.

[Toddzilla]

The Number (https://www.amazon.com/Number-Completely-Different-Think-About-ebook/dp/B000FCKO2M/ref=tmm_kin_swatch_0?_encoding=UTF8&qid=&sr=)

I bought this book 10 years ago when our vote would have been - where is the negative net worth button? Today I clicked living large

I have read 100s of economics books in past 15 years - none did as much to get this part of our life in order as this one. Highly recommendedPutting away $200,000 a year is no small feat

[Ksyrup]

I decided a while ago that as great as it would be to retire early, I just cannot wrap my head around restricting my spending to the degree required to save enough money to make that happen. If I was single, or even a DINK, sure. But raising 2 kids and wanting to live fairly comfortably during that 25 year period, I decided to bank on catching up in the next 10 years as the kids move out, expenses dwindle, higher income continues at the current rate, and the percentage of income I can squirrel away greatly increases.

That's basically what my parents did, with less income, and they've been retired for over 5 years and have yet to touch their investments.

[PilotMan]

With Tesla popping the last week, my 401k has moved into a new box. Can't count on it staying there once investors start to take some profits, but it's good for the long run. Well, at least I hope it is. In fact, just yesterday, my Tesla gains were nearly double the total I have invested in it. That's a very crazy thing to watch.