Your Retirement Savings

I would probably drop off my laundry more except it always comes back too fragrant and I am half asian so it goes against my ethos.

I am privileged in many regards so the main money-saving practices I feel like I can praise myself for are not driving, not drinking, not smoking, and not reproducing, all of which I recommend.

i have pension, in which i am vested, and i only started 401k a couple years ago (too late for someone as "smart" as i am imo). it's going very slowly. with the pension i am closer to the top of this poll but it's not enough. i wish i didn't have so much student loans. i plan to get a job making a lot more money in about 5 years and never have children. maybe that will help. but i want farm animals and those are expensive. lol.

not driving, not drinking, not smoking, and not reproducing

I just know I'm going to go off the rails and end up doing all of these at the same time some day

the main money-saving practices I feel like I can praise myself for are not driving, not drinking, not smoking, and not reproducing

Same here (we do own a car, but we only use it about once a week). Also not owning a house.

I can co-sign all that, including the no-house thing, with one exception, in that I never mind a drink. But usually just one a day, and usually just a beer. Otherwise, I can’t say I planned such a life, but it’s suited me.

owning a house can be a retirement investment in itself.

and you can mortgage it to buy retirement ripple

Having lived through 2008, I have concluded it’s much riskier to take on a house’s worth of debt and hope that my particular house outperforms the S&P 500 over the next 40 years than it is to rent forever and be able to move if my means ever change.

as Ed pointed out (btw dude we live nearby - must meet up!) Aus has enforced super via garnishing salary, so you get told you earn 70k but it’s actually only 65 or whatever cos super. you never see or miss it. does the US have pensions? As in like if you have no money and you retire do you get a meager pension like we do?

i am in the high bracket for my 401k - i was pretty agressive with my contributions, plus the job before my last one had a gr8 matching program.
mr veg is also high bracket from his last job, though he’s no longer contributing.

Veg you know our system, whats the US one? If one hasnt saved up do they have pensions?

Having lived through 2008, I have concluded it’s much riskier to take on a house’s worth of debt and hope that my particular house outperforms the S&P 500 over the next 40 years than it is to rent forever and be able to move if my means ever change.

― direct to consumer online mattress brand (silby), Saturday, 10 February 2018 06:11 (three hours ago) Bookmark Flag Post Permalink

Yep. Tho herself feels differently I am waf vis a vis the Irish property addiction.

tbqh the thought of renting as a pensioner is terrifying to me, irrespective of how much of an income I’d have. Ideally, I’d get my mortgage paid off by 50 and save hard for the remaining years of work.

Pensioners eligible for rent supplement here depending on income.

Off down the country and bobs yer granduncle

Veg you know our system, whats the US one? If one hasnt saved up do they have pensions?

my mom still receives pension payments from her father and mother's accounts---her father's been dead for over 40 years, and her mother for almost 10 (her mother had received her father's payments until her death and then they passed on to her parents). It's remarkable how much American workers have lost over the years---the professions in question here were baker for a supermarket chain and cashier for another supermarket chain, and yet those pensions continue to a grandchild, and not insignificant amounts, either.

er "then they (her father's pension payments) passed to my mom"

I want to say my dad "made" more after his death (!) than he did when he was alive, once you add up all the pensions and whatnot, which fortunately went to my mom.

yeah, I mean, it sounds absurd, but those were the promises in order to get people to work as the bosses wanted. and now workers think they have no leverage, and maybe they don't. is this what maga means?

If you retire with no savings in the USA, then the minimum Social Security combined with Medicare are just adequate to let you starve slowly in a cold house for many years, provided you own the house, can care for yourself, and live within walking distance of groceries and some basic services. Hurray for the USA!

Oh, I almost forgot: the house must never need a new roof or major repairs!

Also in the US there is a maximum earnings that you have to pay into social security on, that is now about a little over $100k -- so someone earning $250k, is only paying into the national retirement fund on less than half of their earned income. Is this the same in other places, or do you pay the same % no matter how much you make?

If you retire with no savings in the USA, then the minimum Social Security combined with Medicare are just adequate to let you starve slowly in a cold house for many years, provided you own the house, can care for yourself, and live within walking distance of groceries and some basic services. Hurray for the USA!

― A is for (Aimless)

hahahaha don't be ridiculous aimless i knew by the age of 20 that social security was going to be bankrupt by my "retirement" age that and i'm never going to see a dime of the money i put into social security

so, are you 25 now?

i started saving and investing in index funds pretty aggressively at 19 (right before dot.com bubble) after watching my parents struggle with money my entire life. so right now, on paper, things are looking ok for me. i have absolutely no faith that this will be the case 5, 10, 20 years from now. i suspect there's going to be some kind paradigm shifting global convulsion and all this 'being responsible' bullshit will have been for naught.

If that’s the case though there’ll be entirely different problems tho, is what I reassure myself with

I have concluded it’s much riskier to take on a house’s worth of debt and hope that my particular house outperforms the S&P 500 over the next 40 years than it is to rent forever and be able to move if my means ever change.

You know you can sell the house though, right? And it's not like a car that automatically loses value? ... I feel like I have less potential mobility as a renter than if I owned a house, but that's largely because everything is super expensive, and I've been in the same place for 20 years and have rent control.

houses are kind of a weird one because, as an investment, you're banking on the idea that appreciation will be higher than the combination of (upkeep + taxes + the difference between mortgage payment and rent payment)

if you buy a new or recently completely remodeled house you're paying for a lot of the upkeep up front, but I'm not that wise

feel like rent vs. buy decisions are hugely influenced by where you live. i’m not too worried about the value of my house where i live but i can see it in other parts of the country.

Anything I have to take care of myself is not a good investment. It’s all I can do to keep myself up and running.

on the other hand, if you're not committed to it being an investment, you can do whatever the hell you want

I talked to a dude who bought a house on the cheap because the previous owner decided, fuck it, I don't need a living room -- I need a hot tub!
the house had a hot tub right in the middle of the living room, and there was some humidity damage and the room reeked like cigar smoke, because the previous dude literally just sat around in the hot tub smoking cigars when he was at home

there's some life lesson in here somewhere

xp - having to maintain property (building, equipment, plants, livestock) teaches you valuable skills imo - I feel marginally better about my chances of surviving an economic collapse because I have basic carpentry skills and understand properties of adhesives

xpost -- the previous dude was Rush Limbaugh?

The purely economic comparison between paying down a mortgage or renting is net cost of occupancy, and a dwelling's appreciation (or depreciation) only matters insofar as it figures into that cost. But a house isn't an investment, it's a place to live, too.

No two places to live are precisely equal in the quality of life they offer you, so you also have to factor in a lot of non-monetary imponderables when comparing them as a Prospective Place to Live Your Life. You try to figure out the best value in terms of net happiness, both short term and long term. Net cost of occupancy may be a big part of that equation, especially the poorer you are, but isn't ever the whole equation.

Also in the US there is a maximum earnings that you have to pay into social security on, that is now about a little over $100k -- so someone earning $250k, is only paying into the national retirement fund on less than half of their earned income. Is this the same in other places, or do you pay the same % no matter how much you make?

― sarahell, Sunday, 11 February 2018 6:28 AM (one hour ago) Bookmark Flag Post Permalink

This is similar in the UK, national insurance drops down to1% at some ridiculously low salary, £45k I want to say. NI is effectivenely just a tax, though and pensions are funded from general taxation rather than a specific government fund.

In Aus there is the age pension for low income people who never built up much of a super balance and that’s funded from taxation as well.

Anything I have to take care of myself is not a good investment. It’s all I can do to keep myself up and running.

lol otm

Why do I get the feeling that the "difference between mortgage and rent payment" equation above presumes that the rent is a lower figure

hey it was in a list, if a mortgage is cheaper it offsets some of the other pieces

my mom's mortgage is less than half my rent

my mortgage payment (mortgage + escrow for rent/insurance) is cheaper than my friend's rent downtown in.. Des Moines, Iowa

they have a pool, though

My brother was going to rent when he went back to school recently but then he just went ahead and bought a house instead because it was cheaper than renting.

(NB, he has already owned and sold a house and understands like financial stuff or whatever and makes good money and is an adult.)

Living in SF, believe you me, I know what the cheaper option is. (And I'm very, very lucky to have it.)

Yeah but the phrase "cheaper option" when it comes to living in SF, is like the phrase "safer option" when given a choice between shooting yourself in the head or having someone else shoot you in the head.

feel like rent vs. buy decisions are hugely influenced by where you live. i’m not too worried about the value of my house where i live but i can see it in other parts of the country.

― call all destroyer

my wife's grandparents bought a nice house on a river bank in west virginia after the war. when they died there they didn't have a backyard, it was all river.

on the other hand after living in indiana for a decade without buying, we bought a house within the first year of moving to portland. making a commitment to living in indiana wasn't something either of us wanted to do, and building equity was less important to us than the ability to get the hell out when the time came. also, every single goddamn west coast city is going the way of sf, and we figured we needed to buy while we could.

here's a good guideline about buying a house: if it's worth buying, you probably can't afford it.

I'll buy a house when I feel like it but I get sick of the smug attitudes of how i'm throwing money away. my parents had my childhood house for 31 years, and as a reward for their great investment....they got upside down, foreclosed and have filed for bankruptcy twice in a decade.

Obv context matters but to me doesn't seem like a slam dunk investment (at least not here). also I would probably burn the place down trying to make my first repair. my father's son I am not in that regard.

Social security is fine and is not on the verge of collapsing and sucking all our salary deductions into a babyboomer-shaped black hole by the time we're 35, btw. At least not unless the government steals all the money out of it, which is a political decision, not some kind of inevitable truth of financial instruments.

buying a house for us was a great investment tradeoff for the money it took out of my 401k. It's more the doubled in value in the past 7 years and it's never, I don't think, going to go down below what we owe on it. I mean maybe it could, but there would have to be like, a nuclear strike on the bay area, I think, to really shift housing prices that much here.

In orbit otm

http://www.nybooks.com/articles/2015/03/05/rocky-road-taking-it-easy/

on the other hand after living in indiana for a decade without buying, we bought a house within the first year of moving to portland. making a commitment to living in indiana wasn't something either of us wanted to do,

you know that if you own a house, you don't have to live in it, you can rent it out? That's the one aspect of "mobility" that is often overlooked in the own vs. rent comparison. In expensive areas, it's often more expensive for a tenant to move than a homeowner to move and keep their house as a rental property.