6 Tips For Do-It-Yourself Retirement Investors

[bogey21]

And we have a very old CC that we've had for 9 years, and gives us %5 back on gas. They're finally cutting it off and changing it to a rotating rewards program, which is BS......

It is today's world. Companies suck you in then change the rules. When they do this I usually vote with my feet. Two examples. I was with Marriott from when they first went into TimeShares (Sabal Palms pre-construction). When they changed a bunch of stuff I sold (at a profit no less). The day Southwest Airlines switched their Frequent Flyer Program from segments to miles I stopped flying them.

If I were you, I'd close out that old Credit Card and find a new one...

George

 

[bogey21]

I think that it is that simple all through life. People make choices. Bring in roommates, move to cheaper city, study at night for career advancement, side gigs, be a job hopper, start a business, etc. It IS that simple.

I agree 100%. Too many are uncomfortable with their present situation but do nothing about it but bitch...

George

 

[am1]

I agree 100%. Too many are uncomfortable with their present situation but do nothing about it but bitch...

George

100% true. But you forgot to add spend money they do not have.

Very little sympathy for these people.

But it does keep a lot of people employed and caught in their situation.

 

[geekette]

Thanks you Geekette for this link. I’ve already viewed it and there is tons of great numbers to study.
I had stumbled across Simply Safe a few months back and found the information very clear to understand. I’m finding that buying stock is as much fun as shopping! I would like to add more companies and am searching for my next buy
Enjoy the journey to your retirement!

Oh yes, buying is fun, but watching the divs get higher each and every time is even better! I do reinvest divs so it is always higher for me, and some serious juice from raises. I recently deployed a rollover. Definitely FUN, but more fun when I see the impact of that buy in the next dividend.

SeekingAlpha dot com has a dividend investor section. Screen name Chowder has some blogs that many like us discuss many aspects of div stocks, including some "what I'm buying right now" and why, but many good authors there. We all have our own styles, which makes it very interesting, and thought-provoking. It is mostly a peaceful discussion group, like Tug, but there can be some massive sassy egos to ignore.

One feature I like is entering your companies into portfolios and being able to go to one place to get earnings reports, headlines, etc. I don't bother with entering my buys and sells, I just enter the company and don't update it again since I only want the news vs a tracker. The portfolio section has a tab for dividends, the site has accommodated us quite well, imo.

PM me if you want to take this offline.

 

[DancingWaters]

Thank you, I will look at these websites some more first

 

[Steve Fatula]

Credit cards are the best with the caveat that one pays off in full off every month. The cash back and reward points help pay for our business and first class air tickets. When I met my husband, he was an all cash guy. When I explained and showed him how we could use credit cards to work for us, he became a convert. We use credit cards everywhere that accepts them.

Yes, as long as you have discipline, which many Americans do not. Totally agree, my wife was an all cash girl. Now she can't stand cash, she sees all those points, miles, whatever and we definitely take advantage. Heck, now it's almost complicated (minor). Tonight we'll be going to Kroger, we have to remember this quarter that Discover has 5% for groceries instead of using our normal grocery card!

 

[Sugarcubesea]

Credit cards are the best with the caveat that one pays off in full off every month. The cash back and reward points help pay for our business and first class air tickets. When I met my husband, he was an all cash guy. When I explained and showed him how we could use credit cards to work for us, he became a convert. We use credit cards everywhere that accepts them.

I’m a” Cash is King” kind of gal. I just last year started using the rewards cards and it’s been a cost save to use the Delta CC and my reward cards bring me extra money for my business trips

 

[Sugarcubesea]

I remember back in 2010, when I was still with Ford and they had us take multiple pay cuts, reduced our 401K company match. Everyone was crabbing non stop. Me I stated to look for a new job. If your going to treat me like a number or entity, I leave and move on.

I started looking for a new opportunity. I’m at my 3rd opportunity since that time. Each time I left it was because I was trying to better my salary and working conditions. My goal is to have the ability to retire with as much as I can save till that date.

I actually had former colleagues tell me how brave I was to leave and how they could never leave the security of FORD. Those same folks today have been downsized curtesy of Ford. I never wait to have someone else steer my career.

I researched the company I’m with, determined that they respect and honor the mature worker and that they had a 5% match. Which in the automotive industry is rare.

The job isn’t perfect but nothing is.

 

[rapmarks]

I just came home from a retirement seminar
Among the things the speaker said, or hinted at:
A safe harbor provision can allow you to move your traditional Ira into a Roth IRA with no tax consequences when you convert.
You can buy a life insurance policy that will let you have eighty percent of the death benefit for nursing home expenses, no longer need nursing home insurance, and if you didn’t use, you would get the entire death benefit. He claims ten thousand annual premium for million dollar policy with this provision.
An index fund that gives you ninety percent of the investment gains, but zero loss. You will always have at least what it was worth on jan 1 of the year.

I subscribe to the if it sounds too good to be true theory, so that is one reason I won’t follow up for it, the second is that he came across loud and clear that women make less and know less, and won’t know what to do when spouse passes away. And finally he decided to blame our previous president for a surcharge that existed before he was in office.

 

[WinniWoman]

Yes, as long as you have discipline, which many Americans do not. Totally agree, my wife was an all cash girl. Now she can't stand cash, she sees all those points, miles, whatever and we definitely take advantage. Heck, now it's almost complicated (minor). Tonight we'll be going to Kroger, we have to remember this quarter that Discover has 5% for groceries instead of using our normal grocery card!

I actually put sticky notes on my credit cards to remind me which ones have the best cash back on what for the quarter! Drives my husband nuts when I tell him, for example- "Don't use this card for gas for the next 3 months- use the other card" LOL!

 

[bogey21]

I just came home from a retirement seminar. Among the things the speaker said, or hinted at:

You can buy a life insurance policy that will let you have eighty percent of the death benefit for nursing home expenses, no longer need nursing home insurance, and if you didn’t use, you would get the entire death benefit. He claims ten thousand annual premium for million dollar policy with this provision.

This one sounds interesting. I would check and see if such a policy exists. If it does and it makes sense for you, find another agent. There is no need to buy it from the jerk who put on the seminar...

George

 

[VacationForever]

You can buy a life insurance policy that will let you have eighty percent of the death benefit for nursing home expenses, no longer need nursing home insurance, and if you didn’t use, you would get the entire death benefit. He claims ten thousand annual premium for million dollar policy with this provision.
An index fund that gives you ninety percent of the investment gains, but zero loss. You will always have at least what it was worth on jan 1 of the year.

I subscribe to the if it sounds too good to be true theory, so that is one reason I won’t follow up for it, the second is that he came across loud and clear that women make less and know less, and won’t know what to do when spouse passes away. And finally he decided to blame our previous president for a surcharge that existed before he was in office.

Something similar exist.

Look at Lincoln Moneyguard II. Lump sum payment, covers LTC with an inflation rider. If LTC benefit is unused, you get back from 140%-110% of amount or balance of the amount if used.

Look at Merrill Lynch packaged/sold 5-year step up notes, backed by the institution that is behind it. HSBC, BOA are some of them. Get all index gains, plus certain percentage above it, with 20% downward protection.

I am very familiar with both.

 

[Steve Fatula]

Something similar exist.

Look at Lincoln Moneyguard II. Lump sum payment, covers LTC with an inflation rider. If LTC benefit is unused, you get back from 140%-110% of amount or balance of the amount if used.

Look at Merrill Lynch packaged/sold 5-year step up notes, backed by the institution that is behind it. HSBC, BOA are some of them. Get all index gains, plus certain percentage above it, with 20% downward protection.

I am very familiar with both.

But that's more than zero loss, potentially at least. A 20% downward protection could still lose 80%, but that's only in theory of course. Or, are the ones you are speaking of somehow different? I am not sure about the zero loss quoted at his seminar?

 

[Talent312]

Drives my husband nuts when I tell him, for example: "Don't use this card for gas for the next 3 months- use the other card."

My DW goes nuts when I say: "Please wait three days to order those shoes. Our CC bill closes in two."

.

 

[VacationForever]

But that's more than zero loss, potentially at least. A 20% downward protection could still lose 80%, but that's only in theory of course. Or, are the ones you are speaking of somehow different? I am not sure about the zero loss quoted at his seminar?

Correct. Not zero loss, but on maturity, you can always buy another 5-year note. When that happens, you are already at a 20% advantage over current price. You keep on investing and you are always going to do better than the stock indices. Make sure you buy S&P 500 or Dow Jones and not a commodity index.

 

[Steve Fatula]

Correct. Not zero loss, but on maturity, you can always buy another 5-year note. When that happens, you are already at a 20% advantage over current price. You keep on investing and you are always going to do better than the stock indices. Make sure you buy S&P 500 or Dow Jones and not a commodity index.

Obviously the odds are slim to exceed a 20% downfall except in a "crash" year. But also correct, after you absorb whatever the excess loss was, you can buy back in and you'll get it back sooner. Yes, you do not want to pick some far more risky index, agree for sure.

More than likely in your scenario you lose any dividend yield of the index, and, liquidity. The key is not to use them for money you may need before the term. What kind of underwriting discount does the Merrill Lynch have (if you know off hand)? Generally, a step up note such you are talking about will work best in a relatively flat market assuming my assumptions about dividends and underwriting discount are correct.

I have researched these before but have never purchased one. Am I on target with the observations and assumptions?

 

[rapmarks]

After thinking a little bit about what amounted to scaring everyone about how illness was going to take away your entire nest egg, I realized he never mentioned having enough of a nest egg so that the dividends would produce enough to cover expenses without touching principal.

 

[Bucky]

Yes, as long as you have discipline, which many Americans do not. Totally agree, my wife was an all cash girl. Now she can't stand cash, she sees all those points, miles, whatever and we definitely take advantage. Heck, now it's almost complicated (minor). Tonight we'll be going to Kroger, we have to remember this quarter that Discover has 5% for groceries instead of using our normal grocery card!

The nice thing about retirement is the ability to not have to keep track of what day of the week it is. We have mastered this very well! We use our Chase Amazon CC for everything. 5% back on purchases sold by them and I believe 2% on all other purchases. Makes it very simple. Pay the bill in full when it arrives and then rinse and repeat. Always nice to use the points for “free” purchases! LOL.

 

[AnnaS]

For many years, I was an all cash girl myself. Now, everything is on cc for protection and rewards. Paid in full even before I get my statement (I pay as I go along a few times a month on-line). Hate balances. My motto is, if you don't have the money to pay for it today, you won't have it tomorrow. Don't count on money that you think you might get, might come, expect tomorrow, next year, etc. When you have it, then it's yours.

I charge everything and anything I can charge without a "fee". I know I can get better cards and "invest" for better returns. I am comfortable with what I have been doing. Hubby would take more chances/change.

I am also the one that takes care of the finances - might not know or always make the best financial decisions but we have done well so far. (not a stock market player).

Since hubby's disability - his two life insurance policies do not require him to pay the premiums - that turned out to be a good (however small) "investment"/decision to buy when we did (even though many advise against it).

Ever since my youngest finished with school/college, I have no clue what day of the week it is half the time - I have to keep track because we babysit the grandchildren here and there and I still work p/t - working won't be much longer (so I keep saying the last two years ).

We should all live within our means and hopefully "stay healthy" - yes, this can take a nice chunk out of your income/savings (we experienced it and we were young). As we get older, experiencing more "doctor bills/hospital bills".

 

[VacationForever]

More than likely in your scenario you lose any dividend yield of the index, and, liquidity. The key is not to use them for money you may need before the term. What kind of underwriting discount does the Merrill Lynch have (if you know off hand)? Generally, a step up note such you are talking about will work best in a relatively flat market assuming my assumptions about dividends and underwriting discount are correct.

I have researched these before but have never purchased one. Am I on target with the observations and assumptions?

You are not.

There are many Step Up notes to choose from. Some offer a multiplier of index of say 15% to 20% of the final index. That is sufficient to cover loss of dividends. Merrill Lynch gets an underwriting fee from the issuers so it does not impact the buyer of the notes. The biggest downside is that it is unsecured and if the institution (HSBC etc...) goes belly up you lose the entire investment. The other thing is the lack of liquidity until maturity. While there is a private market before maturity, you won't get current value on that note.

It works in all markets, better in a bear or bull market. If it is flat market, you might as well hold CDs.

 

[Steve Fatula]

You are not.

There are many Step Up notes to choose from. Some offer a multiplier of index of say 15% to 20% of the final index. That is sufficient to cover loss of dividends. Merrill Lynch gets an underwriting fee from the issuers so it does not impact the buyer of the notes. The biggest downside is that it is unsecured and if the institution (HSBC etc...) goes belly up you lose the entire investment. The other thing is the lack of liquidity until maturity. While there is a private market before maturity, you won't get current value on that note.

It works in all markets, better in a bear or bull market. If it is flat market, you might as well hold CDs.

I see, did not realize there were many different kinds. Thanks for the tutorial!

 

[Elan]

I just saw this info the other day. Avg 401K balance by age. Pretty frightening.

https://www.wptv.com/article/the-average-401k-balance-by-age

The numbers:

Age 20-29 $11.6k
Age 30-39 $43.6k
Age 40-49 $106.2k
Age 50-59 $179.1k
Age 60-69 $198.6k

 

[Brett]

I just saw this info the other day. Avg 401K balance by age. Pretty frightening.

https://www.wptv.com/article/the-average-401k-balance-by-age

The numbers:

Age 20-29 $11.6k
Age 30-39 $43.6k
Age 40-49 $106.2k
Age 50-59 $179.1k
Age 60-69 $198.6k

those 401k balances don't compare to the prior generation that got a good pension

 

[am1]

I never have concerned myself with the average/median. It really does not matter as the goal is as much as possible or on a projection to be able to retire comfortably. There will be a lot of competition to be a Walmart greeter in years to come.

 

[WinniWoman]

I just saw this info the other day. Avg 401K balance by age. Pretty frightening.

https://www.wptv.com/article/the-average-401k-balance-by-age

The numbers:

Age 20-29 $11.6k
Age 30-39 $43.6k
Age 40-49 $106.2k
Age 50-59 $179.1k
Age 60-69 $198.6k

You have to realize, however, that those people might have money in other types of retirement accounts, like IRA's and taxable accounts.

If you looked at our 401k accounts you would say- not good. But it would not tell the story of all the money in our IRA accounts, banks and brokerage accounts.