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[Nabubrush]

Jesus, I'm a million years old. Anyway, I'm thinking about how I will sustain my (and Robert, Josie, and my lovely wife's) way of life after I retire from the workforce. All you little shits who are continually traipsing across my lawn can move on and not respond to this, but for the other, more mature denizens of this place, what are you doing in terms of retirement planning? I have a 401k that is cooking along nicely, and I put $250 a month into an ING direct account at 4.5%. I can't fund an IRA. What else? Should I take a dip into the market?

[Muse_Of_Fire]

Depends how truly "old" you are. The younger you are the more you can afford the risks of playing the market. I would suggest doing whatever you can to fund an IRA or two now. That is one of the best (and most tax-advantageous, particularly if you do a Roth) ways to plan for retirement.

Since you asked, my retirement plans include:

1. A SIMPLE IRA rolled over into a Roth from a previous job (not sure how much is in it but it's not a lot)
2. A 401k from a previous job (same as above in terms of amount)
3. A Roth IRA
4. My husband's Roth IRA
5. My husband's 401k from a previous job (quite a bit in there, wahoo!)

As soon as we have steady jobs (again... *sigh* that's been a familiar refrain for us and it's starting to piss me off), we'll be dumping a crapload into our IRAs and also opening a 403-b (I think that's what it's called) which is a special retirement shelter for teachers. Basically we're hoping to double our household income with this move (because then we'll both have jobs instead of just me), but continue to maintain our current standard of living for at least two years, despite the increase in income. All of the extra will go towards student loans and into retirement funds, the theory being that we'd rather be uncomfortable when we're young than when we're old.

I'm always a little skittish of playing the market, but then again I've spent the past 5 years bouncing from silly money to nothing, so I find that kind of yo-yo-ing to be mentally exhausting.

[Nabubrush]

Yeah, unfortunately we are past the income cut-off for IRAs. I'm thinking that other than the 401k that I am currently conrtibuting to, my only option is playing the maket.

[littlefallsmets]

The Market is the lottery for people who think they're smart, except that instead of two dollars you are flushing your life savings down the toilet and instead of money going to dudes who own the local convenience store and local public schools, your money is going to billionaire with diamond necktie pins and they will use your money to take a vacation to a country where there are no laws so that they can do Terrible Things.

The only sure way to make a lot of money in the market is to start with just a little less than a lot.

Until you reach that threshhold, just go to Chief Splitting-Eights Casino and put your nestegg all on red. You'd probably do better over the same number of tries.

[AugustWest]

I disagree about playing the market.  Depends on what you mean.  If you're talking about trying to time the market and buy low/sell high in the short term, LFM is exactly right.  Might as well go to the track.

On the other hand, consistently buying shares of a group of strong diversified companies is a pretty sure bet over the long haul.

[Mr Trout]

Even though I'm relatively young (25) I've done a bit of research into this topic since the idea of working as a Walmart greeter at age 85 scares the ever-loving shit out of me. A great simple set of steps that I've seen recommended many times are as follows (from Scott Adams, http://tiA-CAPrl.com/336bwp):

1. Make a will
2. Pay off your credit cards
3. Get term life insurance if you have a family to support
4. Fund your 401k to the maximum
5. Fund your IRA to the maximum
6. Buy a house if you want to live in a house and can afford it
7. Put six months worth of expenses in a money-market account
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

From what I've read, unless you do it for a living (and even then it's extremely risky) you can't really beat the broad-market indexes over the long term. Unless you have gobs of money to blow on hedge funds, or you want to have an aneurysm worrying about how your individual stocks are doing on a daily basis, simply spread your money around and bet on everything going up, not specific sectors or companies.

[Muse_Of_Fire]

Seriously, all your IRAs and 401k's are, are categorized market-playing. The difference is you do your retirement accounts through a company that gets paid to decide where to invest your money (based on guidelines from you and industry best-practices) so you don't have to worry about it. Mr. MoF and I throw a set amount of money at some dude every month and he deals with the details. Honestly I don't even know his name. I scan the statement every quarter to make sure we aren't being robbed blind, but until we're in our 40s and moving our money to less aggressive funds, it can be someone else's problem.

I've been dreaming of my retirement since I was 14. I have it all planned out, what I want it to be like. The hard part is I've always been terrible at saving money. This is why I married Mr. MoF. He is the World's Second Biggest Tightwad (the Biggest being a guy I dated right before I met Mr. MoF; but that guy's Tightwadery was so great that it was interfering with other aspects of the relationship), so he is helping to ensure that we will have enough money when we get there.

I've always viewed retirement as a time to really simplify. We hope to never have a really big home; ideally we'd have a condo of no more than about a thousand square feet (30 minutes of cleaning and you're done, no yard to deal with, etc.). We also want to spend our money on experiences more than on "stuff." So we'll live frugally in terms of "stuff," but we plan to spend most of our retirement money on travel and food. We are pretty much planning to sell almost everything and live like paupers, stuff-wise, when we retire; just bumming around the world maybe picking up odd jobs in French co-op farms for a while or something.

Plan B is to sell everything and buy a catamaran and live on that, sailing around in the tropics and taking on charter jobs as we feel like it to pull in extra cash.

We're planning for that now by the aforementioned Tightwadery, and also by really being vigilant about our health now, so we can withstand the physical stresses of, say, living on a boat or hiking the Alps when we're in our 60s.

That's the plan anyway. We'll see if we actually make it. So far life doesn't seem to be cooperating too well.

If you're over the income limit, I would suggest talking to a financial planner and/or a trusts & estates lawyer who can guide you towards certain tax shelters and ways to hide your money from the government to maximize your return for retirement.

[wombat]

I've been dreaming of my retirement since I was 14.

But...but... that is the saddest thing!

[littlefallsmets]

Yeah.

That is completely the saddest thing. I have forgotten all previous candidates for Saddest Thing because it is just that sad. All that saving and work and dreaming and when you get there... you are unable to do most things and death is stalking you with her hot breath on your very neck. Right on the goddamn hackles.

I've always figured that I'm dying young, anyway.

Maybe a heart attack. Maybe cancer. Most likely some kind of assassination.

"Retirement"... jeez. The Mayans say it's all ending in 2012, anyway.

[Nabubrush]

You might as well commit suicide, as those old fucks are going to take all your retirement funds anyway.

[robot_god]

Open a pizzeria.  Pizza makes hell of cash money.

Then, use the store as a front to hustle coke and weed.

[wombat]

That is completely the saddest thing. I have forgotten all previous candidates for Saddest Thing because it is just that sad. All that saving and work and dreaming and when you get there... you are unable to do most things and death is stalking you with her hot breath on your very neck. Right on the goddamn hackles.

And all that, like, just wanting to get the rest of life over with?  When you are 14 shouldn't you be dreaming of having a great time in between 14 and retirement?

Personally I am working on finding work that I like well enough to never want to retire. Since I'm starting over so late in life I think I have a decent shot of not getting tired of it, you know?

[Nabubrush]

Open a pizzeria.  Pizza makes hell of cash money.

Then, use the store as a front to hustle coke and weed.

Goddamn I want to do this, but my wife has scruples!

[littlefallsmets]

Open a pizzeria.  Pizza makes hell of cash money.

Then, use the store as a front to hustle coke and weed.

Where I grew up, to say the first is to automatically assume the second.

That is why there are six pizzerias for 4,500 people and they all stay in business.

[linnea]

I have a Roth IRA with a few K in it... nothing spectacular, but then again I'm 28.

I also have a public employee's retirement plan with just over $10K in it. I have a mandatory contribution per paycheck that Payroll automatically deducts. I can take my balance and leave anytime I want to, but after 5 years I'm vested in the system and will collect my retirement when I'm 65.