|
Post by Sandbur on Aug 18, 2018 10:49:21 GMT -6
While contemplating retirement, I am trying to figure out that if we use any of our investment money, what rate does a guy pull out on a yearly average and not hit the principle to hard? 2%, 5%, 8%? No way to know? I have heard 4 % or a bit less, depending on your age and your spouses age. There are estimators available that can give you the per cent chance of running out of money. Are they accurate? Who the heck knows. Less than 4% would be a better choice.
|
|
|
Post by Bwoods11 on Aug 18, 2018 12:34:12 GMT -6
5%
The more you have the less a percent will matter.
|
|
|
Post by Foggy on Aug 18, 2018 14:08:35 GMT -6
FWIW......I've been using the 4% divided by 12 to get a monthly income for 12 + years now. Even since BEFORE the stock market meltdown in 2008. We have recovered from that debacle and feel we could survive another such meltdown.....and still be able to live though it. At this point we still have more money in our investment accounts than when we started......abeit I don't think I have quite kept pace with inflation.
I think a person could use 4% and be somewhat conservative......but to go to 5% may take a better investment performance......and more risk? Get too high of a payout and more risk is required....which could be your undoing? I stay relatively risk free compared to some. More-so as we age. We have a professional investment company that does the work....and get paid for doing it. Most of these outfits can be a 1/2 to 1 point drag on your portfolio. Still.....you'd also pay that to a mutual fund.
One thing I might look at is a company like Vanguard offers planning for a very nominal fee....and offers some top notch funds with low-expense ratios to get the job done. (so do others like Fidelity.....but Vanguard is good and is a price leader.....IMO). I think they have this service available in Minneapolis. My info is old.....proceed with caution.
Edit: One thing tho......I would mostly stay away from Bond Funds that are offered by Mutual Fund companies. These are difficult to get a handle on for me. Seems you never know what you have as their is no maturity to the dates when the pool keeps re-investing. Maybe there are some other products now?.....dunno. I think you can do better on the fixed income part of investing by holding your own bonds or fixed income investments. (I think?).
|
|
|
Post by MoBuckChaser on Aug 19, 2018 7:17:15 GMT -6
FWIW......I've been using the 4% divided by 12 to get a monthly income for 12 + years now. Even since BEFORE the stock market meltdown in 2008. We have recovered from that debacle and feel we could survive another such meltdown.....and still be able to live though it. At this point we still have more money in our investment accounts than when we started......abeit I don't think I have quite kept pace with inflation. I think a person could use 4% and be somewhat conservative......but to go to 5% may take a better investment performance......and more risk? Get too high of a payout and more risk is required....which could be your undoing? I stay relatively risk free compared to some. More-so as we age. We have a professional investment company that does the work....and get paid for doing it. Most of these outfits can be a 1/2 to 1 point drag on your portfolio. Still.....you'd also pay that to a mutual fund. One thing I might look at is a company like Vanguard offers planning for a very nominal fee....and offers some top notch funds with low-expense ratios to get the job done. (so do others like Fidelity.....but Vanguard is good and is a price leader.....IMO). I think they have this service available in Minneapolis. My info is old.....proceed with caution. Edit: One thing tho......I would mostly stay away from Bond Funds that are offered by Mutual Fund companies. These are difficult to get a handle on for me. Seems you never know what you have as their is no maturity to the dates when the pool keeps re-investing. Maybe there are some other products now?.....dunno. I think you can do better on the fixed income part of investing by holding your own bonds or fixed income investments. (I think?). I am not a real big bond guy, although we do have a small percentage of money in Vanguard Wellesley Income Fund Investor Shares. I don't think I will do anymore than this shared bond and stock fund. We have the rest of our money in these 3 Vanguard funds. I like the low cost approach now that I am getting older. And they seem to be doing really well so far. Maybe that 5% will be doable in the future.
|
|
|
Post by MoBuckChaser on Aug 20, 2018 19:03:44 GMT -6
How does a guy calculate compounding interest on a Investment? One of the kids that worked for me wants to get started in investing. He is 18 years old, works construction where my son works and is making about $1,800 a week. I told him if he saved $3,000 a year for 30 years, in a good no load IRA mutual fund, that averaged 7% over 40 years he could have over a million in the bank at retirement. How close would I be?
Edit: with about a 2% dividend!
|
|
|
Post by nhmountains on Aug 20, 2018 19:13:25 GMT -6
How does a guy calculate compounding interest on a Investment? One of the kids that worked for me wants to get started in investing. He is 18 years old, works construction where my son works and is making about $1,800 a week. I told him if he saved $3,000 a year for 30 years, in a good no load IRA mutual fund, that averaged 7% over 40 years he could have over a million in the bank at retirement. How close would I be? I calculated $685k. If he's making $90k he should be putting away $5-10k It will be tough the first year but, he'll save some more in taxes too. www.moneychimp.com/calculator/compound_interest_calculator.htm
|
|
|
Post by MoBuckChaser on Aug 20, 2018 19:14:46 GMT -6
How does a guy calculate compounding interest on a Investment? One of the kids that worked for me wants to get started in investing. He is 18 years old, works construction where my son works and is making about $1,800 a week. I told him if he saved $3,000 a year for 30 years, in a good no load IRA mutual fund, that averaged 7% over 40 years he could have over a million in the bank at retirement. How close would I be? I calculated $685k. If he's making $90k he should be putting away $5-10k It will be tough the first year but, he'll save some more in taxes too. www.moneychimp.com/calculator/compound_interest_calculator.htmWas that with reinvesting the dividends?
|
|
|
Post by sd51555 on Aug 20, 2018 19:24:54 GMT -6
How does a guy calculate compounding interest on a Investment? One of the kids that worked for me wants to get started in investing. He is 18 years old, works construction where my son works and is making about $1,800 a week. I told him if he saved $3,000 a year for 30 years, in a good no load IRA mutual fund, that averaged 7% over 40 years he could have over a million in the bank at retirement. How close would I be?
Edit: with about a 2% dividend!
He's 18. Unless he's got a grip of kids and a cocaine habit, he should be socking away $30,000 a year for ten years and then quit saving. Then he should build a cabin, get a cat, and focus on living more.
|
|
|
Post by MoBuckChaser on Aug 20, 2018 19:26:52 GMT -6
How does a guy calculate compounding interest on a Investment? One of the kids that worked for me wants to get started in investing. He is 18 years old, works construction where my son works and is making about $1,800 a week. I told him if he saved $3,000 a year for 30 years, in a good no load IRA mutual fund, that averaged 7% over 40 years he could have over a million in the bank at retirement. How close would I be?
Edit: with about a 2% dividend!
He's 18. Unless he's got a grip of kids and a cocaine habit, he should be socking away $30,000 a year for ten years and then quit saving. Then he should build a cabin, get a cat, and focus on living more. I know "0" 18 year olds that would sock away $30K a year let alone $3K. I think its best he starts with that! LOL!
|
|
|
Post by sd51555 on Aug 20, 2018 19:31:42 GMT -6
He's 18. Unless he's got a grip of kids and a cocaine habit, he should be socking away $30,000 a year for ten years and then quit saving. Then he should build a cabin, get a cat, and focus on living more. I know "0" 18 year olds that would sock away $30K a year let alone $3K. I think its best he starts with that! LOL! He wouldn't be the first one to piss away a huge opportunity to get ahead. Almost everyone does. If he did $30,000 a year until he was 28, and zero after that, he'd have $4.5 million by age 58.
|
|
|
Post by kl9 on Aug 20, 2018 19:34:42 GMT -6
He's 18. Unless he's got a grip of kids and a cocaine habit, he should be socking away $30,000 a year for ten years and then quit saving. Then he should build a cabin, get a cat, and focus on living more. I know "0" 18 year olds that would sock away $30K a year let alone $3K. I think its best he starts with that! LOL! Google “annuity end value calculator” and you will be able to input your variables.
|
|
|
Post by MoBuckChaser on Aug 20, 2018 19:38:36 GMT -6
I know "0" 18 year olds that would sock away $30K a year let alone $3K. I think its best he starts with that! LOL! He wouldn't be the first one to piss away a huge opportunity to get ahead. Almost everyone does. If he did $30,000 a year until he was 28, and zero after that, he'd have $4.5 million by age 58. I will say this, he has made almost $15K in 8 weeks and has it all in the bank. Lives at home with his parents and plans to for a few years. He has no bills, so who knows, maybe I can get him to invest more. I will know shortly!
|
|
|
Post by nhmountains on Aug 20, 2018 19:42:11 GMT -6
Was that with reinvesting the dividends?
Nope. I didn't see that part.
|
|
|
Post by kl9 on Aug 20, 2018 19:44:17 GMT -6
He wouldn't be the first one to piss away a huge opportunity to get ahead. Almost everyone does. If he did $30,000 a year until he was 28, and zero after that, he'd have $4.5 million by age 58. I will say this, he has made almost $15K in 8 weeks and has it all in the bank. Lives at home with his parents and plans to for a few years. He has no bills, so who knows, maybe I can get him to invest more. I will know shortly! Saving is a great start... many of us don’t make. But investing is another step. Convince him to earn more than .25% on his money! I’d explain the risks too though lol
|
|
|
Post by sd51555 on Aug 20, 2018 19:46:39 GMT -6
He wouldn't be the first one to piss away a huge opportunity to get ahead. Almost everyone does. If he did $30,000 a year until he was 28, and zero after that, he'd have $4.5 million by age 58. I will say this, he has made almost $15K in 8 weeks and has it all in the bank. Lives at home with his parents and plans to for a few years. He has no bills, so who knows, maybe I can get him to invest more. I will know shortly! He may already be that guy if he's not blown any of it yet. Life will throw big tires and firm tits at him. If he can navigate that well, he's got a chance of keeping it. Otherwise he's just a juicy duckling paddling around in a musky lake.
|
|