long boring personal retirement strategy
But not everyone wants to leave a legacy for their kids. I cut a deal with mine when they were in their teens. I would pay for all the education they could consume and I would buy them 2 cars each. In exchange they were put on notice that I planned to die essentially broke. I probably spent $500,000 on my end of the deal and my kids (now ages 41, 32 and 31) are content knowing that there is nothing there for them when I die.
George
I agree that not everyone wants to leave a legacy to their kids. I have no kids.
I like "the deal" you made with your kids because: it's simple, everyone knows the deal, and everyone gets what they need. I respect the protected income aspect of your revenue foundation and agree that if someone chooses annuities, use different providers. Part of the reason I don't like annuities is that risk of defunct provider. I have a long distrust of insurance/insurance companies so my bias is strong.
I have to plan only for me. I'm hoping to stall SS until 70, my FRA is 67. No pension, but I have a 401k I've nourished for nearly 20 years, and more than 20 years to FRA, so, 20 years or so to keep stashing it away. My target is $1 mil minimum to consider ditching the day job, and $5mil to be certain I don't need to work. At some point I could cut to partial year contract if I'm between the 1 and 5 mil and still contribute to a retirement plan. Hard to know the future.
Life Changes, part one.
After I was downsized, I rolled 401 to an IRA and took a bit more control of it. Also started a Roth, which I feel is a very important component to a retirement strategy. Tax free withdrawals at your discretion is something everyone needs, no matter your level of wealth. Better than traditional IRAs for inheritance considerations, also.
It was a good place to put the money I would have been putting in my 401k. It's money I can afford to have tied up for at least 5 years, in case I need to pull any back out in an emergency. Also a nice aspect of Roth, getting your bucks back if you need to. An "insurance plan" whose premiums I dictate (up to fed max) and determine for myself what claims are valid!
Life Changes, part 2.
I have to give xHub about 1/4 of 401k/IRA (that part sitting safely in money market) which I hope I can delay long enuf for it to be more like 1/5 of it. Losing that chunk was not part of my plan, so I am cashing in a life insurance policy I no longer need and will live on that cash while jacking up my 401k contribution to max to decrease tax bite for this half-employed year and try to restore some of that lost retirement nest egg. I suddenly have ground to make up. but, I have 20 years to do so. Time is on my side, I'm lucky I got started early, I'm glad I put my research in many years ago. I'm fortunate to know enough to know how to manage my changing circumstances.
I just became eligible for starting the 401k with new job but won't be rolling over to it soon. The larger potential investment landscape is preferable as a rollover; I simply have more options and can control costs. combining them is going to have to happen eventually to have the compounding effect but I'm currently offsetting that "loss" with about 10 div-paying stocks with positions larger than I can swing outside my retirement plan, and I can't get pure stock in a 401k. Don't worry, that's not all I invested in; this account is where I have my risk balancers and some low-expense index etfs.
I come from some long-lived ancestors so must plan for living into late 90s. this is why I am such a proponent of stocks, and div stocks in particular. The growth potential beats any other vehicle. So does the risk, yes. I diversify across market cap and industry to alleviate some of that, etfs and mutual funds get me international exposure.
I carry maybe 10% of all assets in treasuries, tips, bond indexes. I am an aggressive investor in terms of risk, but I would not equate it to gambling since I'm not trying to time the market, just capture growth and the best compounding available to me: dividends. I don't chase trends, don't try to ride a hot new stock to the top. I do my research on companies, their management, track record and of course, history of paying dividends. I wanted to be a drip investor long before I had the money to invest. what's not to like about getting paid to invest in a company?
Dripinvesting.org has a spreadsheet of long-term div payers
http://dripinvesting.org/Tools/Tools.asp
my approach is not appropriate for everyone, and maybe very few. I can sleep at night knowing that I am not taking excessive risk although others may think I'm way too exposed to stock. If I were 70, I'd agree.
Sure, my accounts lost value like everyone elses, but those downs bought more fractional shares of stocks that will earn more dividends and the train keeps rolling. And, when/if I want to sell in taxable accounts, I'll be able to control gain/loss because of so many fractional shares at different prices through time.
Hope this isn't too political, but, I believe in American companies and invest in them. I've been through a couple downs and haven't once glanced at the exit. Instead, the downs cause me to belly back up to the bar.