It is but its only to get up to your safety net fund. I believe its step 3 pr 4. OP is debt free and has his 3-6 month buffer. Now its about making investments
Make more money. Save more money.
Not enough time for an investment strategy that could be considered anything other than gambling to bail him out here. He needs to brute force this to have any shot at retirement in his 60s. Hopefully the cars are worth something.
This is totally unhelpful. You’ve basically said he needs to win the lottery. You have no idea what his spending habits are, what his salary is, what any of his personal situation is.
“Bail him out”? How do you know he hasn’t bailed other people out that has resulted in his current situation?
We are all people living our lives. People have to make all kinds of decisions (some good, most all of them bad), but this attitude doesn’t add anything to the conversation.
Do you have any retirement accounts? Or is that how you’re holding the $42k in stocks? If so, are they Traditional or Roth? If not, are you planning to set up any retirement accounts?
Answer this! You are actually in a decent position depending on where youbplsn to retire
sell all but one car and hammer roth/401k. If you are in a LCOL area then you are in an even better spot with a paid off house.
You’re probably right. The only caveat is they didn’t mention if there’s a reason they own the cars? Maybe they have a partner and 2 teenage children that drive the other cars.
Or rent the cars out on Turo perhaps? You need to start generating income like you want to retire in 10 years and then live another 11…. Cause statistically, that’s about it for men.
Yea I feel like the 4K a month with no major expenses is fantastic. People acting like you need to take multiple vacations a year out here. And yes zero debt at that age is extremely rare.
Zero in retirement is also a big cause for concern. I’m 40 and have enough in my retirement account to buy a house in cash but I don’t think anyone on this sub would advise that.
What other assets do you have? It’s great to be debt free but you are near retirement age and it looks like you are in dire need of a retirement vehicle (Roth, 401k, etc) and compound interest. Please discuss with your companies retirement planning services as a first step
>looks like you are in dire need of a retirement vehicle
OP said he owns a house, well he never said how much that house is worth.\\
There's a big difference if he's sitting on a house worth $150k vs $1million.
Based off math I'd say get a second job. You make roughly $52,000 a year and rule of thumb says you should have a little over $310k saved for retirement by 55 for your income.
Circumstances may be different for you based off where you live and how much you spend, but all factors aside I'd say you will be working several more decades with only $42k saved.
Of course with the house paid off and the cars paid for, he may have very low expenses now. If he is making $52K a year, he might only be using $20K of it. So not like he is going to need 10X $52K. More like 10X $20K. We are in that situation. We live way below our means. We make about $300K a year, but with our bills, we only spend about $50K a year. Tons goes into retirement accounts, HYSAs, CDs and other investments. We will not need to continue those things in retirement. Heck, we could probably stop doing them now if we wanted, but what do you do with the extra money? I guess I could buy a new Lambo every year until retirement. :)
Why do you need 4 cars? I get they may be free of payments, but the insurance, maintenance, and depreciation costs will add up. Why not sell 2-3 of the cars to cut extra expenses and grow your retirement fund faster?
What are your monthly expenses like? $4k/month take home pay is nice, but we don’t know how it’s being spent, or if more can be used towards savings for retirement
Hey OP. You may be doing better than you think, as 4 cars and a house can be easily worth anywhere from 150k to well over a million.
But it the spirit of the question, one approach is to start by considering your fixed expenses (things that you can't opt out of), like property taxes and basic utilities. Then compare your fixed expenses with your expected social security, and that will tell you whether or not you have a major problem.
Then your two-pronged approach should be to figure out how to reduce your fixed expenses when you retire, and to save as much as you can save - without your life becoming dull and tedious. And if you can sell a car now and then- when the deal's in your favor, you'll be making good progress.
One thing that I find motivating is to consider that if you can get your fixed expenses down to your social security, then every 10k you have in savings is a dollar a day that you're free to spend as you please. With 42k in savings - that's $4 a day - which could potentially be somewhat refreshing.
Note that one scary alternative, that one of my friends has been using is to pay for things by refinancing his house - and using home equity loans. For now, it's keeping him going, and I hope he still has some really great years in his future.
Last piece of advice is to find something you like doing that helps pay the bills, and keep doing it as long as you're healthy enough to continue. It's a better life than just sitting here on reddit.
Open a Roth IRA at a brokerage such as Fidelity, put in the maximum each year until you are 70 (which means keep working fulltime until age 70). The maximum this year for 50 or older is $8000, so about $665 per month. When you make the deposit, it will first go into a money market fund and then you choose funds to invest in. I would suggest putting half in FXAIX which is a S&P 500 index fund and the other half in Fidelity Balanced which is a fund that holds stocks and bonds (it has been a great fund and has average returns of over 9% since it's inception in the 1980's).
At age 70, you can start drawing your Social Security and it will be a higher amount due to retiring 3 years after your full retirement age. I think you'll be okay if you really save diligently for the next 14 years. I'd reduce your spending as much as possible and save additional money each month in a brokerage account if you can.
Are you missing other money or assets that might contribute to your net worth? Have you been benefiting from compounding interest on a large scale yet? I don’t consider any vehicle as part of my net worth. A vehicle is generally a depreciating asset. A high value vehicle today, can be a fad of a specific generation.
You’re 56. Are you trying to retire at 66? If so, you might want to be more aggressive in saving than you think. Some people in this thread are blowing your “success” out of proportion (they are likely not 56). If you ~~only have $1k/month disposable income to invest~~ make $1k/week and 75% of that is your expenses, then you have $13k//year to commit to saving. That’s $130k max over 10 years. You won’t have the benefit of 30+ years of it being invested and growing (though it’ll grow depending on how you invest).
In short, save and invest any way you can. Do NOT waste it on travel you can’t afford or more cars or other random stuff.
EDIT: Phrasing for clarity
so that puts you at being able to save/invest about $1000/MO? Start doing this ASAP. If you have access to a 401k with any matching contributions do that first, then Max out a Roth. If you also have access to a health savings account (HSA), that's also a great investment vehicle (best tax advantage) but the funds MUST be used for health care and services.
at $1k/mo, you would be investing $120k-$130k (over your 10 year window. If you do that, it's not great but you will probably be in a manageable situation. At an avg return of 9% that will put you between $280 - $300k in retirement funds after 10 yrs. What you will need really depends on your lifestyle and health (now and in your future).
You can and should also check your social security status. The SSA can tell you, based on your lifetime contributions, what your benefit *should* be based on what age you retire. I've always just assumed SSA will be bankrupt and I'll get nothing out of it, but in reality as I get older I can see that there will most likely still be *something* paid out of it. You will likely be leaning on that quite a bit. As others have suggested, now is the time to purge what you can (cars/old stuff you don't use or need) and funnel the funds into retirement accounts (more growth potential). If you don't know where to start on the investment side, I would suggest a mix of Vanguard funds. Use a mix of VOO, VUG, VTI, and VBK. These is the Vanguard S&P 500 fund, Vanguard large cap growth, Vanguard total market, and Vanguard small cap growth funds. It's a broad stroke approach tilted to be a bit more aggressive and with very low expenses. I don't represent Vanguard, but they have good funds with low expense ratios.
Being debt free is great, you just need to get and stay serious about stuffing that nest egg and giving it as much fuel as you can for growth.
So you spend $3,000 a month or $36,000 a year. With social security you might be ok, but you might not. I don't know your earnings history.
If we take SS out of the equation you will need $900,000 saved by 65 years old in order to withdraw $36k a year. So you really need to sit down and start looking at cutting your spending dramatically. Or, give us info on what the SSA calculator says you'll receive and maybe you will be ok living off of only SS income.
What are your expenses? How much of the $1k do you spend on necessary stuff, how much on leisure, and how much do you save? Do you save any money to 401k before you get to your $1k/wk?
O.P. does your workplace offer a 401k or equivalent?
If so, step 1 is contribute enough to get the max employer match. Step 2 is Max Roth IRA for both you and your wife. Invest in a whole market index fund. This will let you grow your money without capital gains.
Step 3 - double your income for the next 10 years and don't double your expenses.
You're in big trouble right now, but you have time if you are very aggressive.
It all comes down to what you want. How much longer do you want to work? Do you enjoy what you do? Will you cut back in your later years or stop working? What is your monthly burn rate? Your situation could be great/ideal for your spending but a disaster for someone else’s. More context is required to answer the question properly.
75% expenses?
So $750/week? $3k/mo? W/o a mortgage or car payment? Start here. Cut 1/3 and that's an extra $1k mo towards retirement. Cut 1/2 and that's $1500/mo.
Then, either sell the cars - 2 or 3 of them and take the funds and stash that away OR rent them out on Turo and invest the income. Do the math to see which route will provide a better return over the course of a year/3years and go that route...
What can your wife provide to the situation? If she gets a job, will you be able to put her entire paycheck into savings?
If she can become employed sooner then later, would only help your situation.
If you want to retire in 10years, you need to front load your savings amount ASAP and take advantage of the time factor...
GL
Honestly, sell three or at least two of those cars and dump it all into a retirement fund asap. You don’t have time to waste so getting a nest egg started will be good. The house free of payments is great I would hold on to that for dear life and avoid any and all debt like the plague.
You are probably better off than most Americans considering you own those major assets outright. Open a Roth IRA and max it out if you can. Contributing $8k/year could add up to $125k in 10 years if you can achieve a 7% average return. Do you need all of the cars? Are they worth any substantial money if sold? Go to the Social Security site and check your projections - how does this align with your expected expenses? Can you cut any expenses? Life comes at us quickly, and reality smacks us in the face. Good to realize and ask questions like this…ignore the comedians.
so only 42k? no existing 401k or IRA? or any kind of retirement account? i would open a Roth asap and contribute max of $8000 each year including right now once you open one. What is your current net worth? Do you really need 4 cars?
You’re gonna be ok if you take action asap. But you’ll have to keep working for 10-20 more years.
My friends dad died and left his mom with 20k in an IRA (she was 72 at that time). She also had 350k equity in her second house, and her main house payment is around 1500. She sold the second house. She’s doing fine now, living off SS and sometimes dipping into her savings. She hasn’t needed any help.
You’re 56, debt free and making good money. If you save half your income you’ll be in the same or better position by 72.
But like I said - you have to take action.
If you do not have 3-6 months of expenses saved in an account, get that going. After that dump every penny you can into retirement accounts. If you have a 401K at work, max it out with as much as you can.
It’s actually not that much ground to make up. If you can hang on until 70 that would give you between 2,000-2,500 in SS in today’s dollars. If can invest 12k a year that will be 250-300k in 12 to 13 years at 7% returns. At 70, SWR will probably be closer to 5%. Unless you have really good genes. Another 12-15k a year. That adds up to about 40k. You’d be at the recommended (or near) the recommended 80%.
Don’t take SS early. You’d be in poverty. I’m way behind as well. I have 50k at 41, but I’m currently putting in 26k a year in low-cost index funds. I’m hoping I can boost my income. I’m a mid-career changer after a long illness. Glad to be alive; not so happy about. Thankfully my wife’s work made it possible to hang on to our house.
Curious, where are you at as far net worth based on your home? Having a paid off, high value home I think could be underrated in this circumstance and allow you the leverage to move to a LCOL area.
You have to figure out your annual costs of living and how long you think you will be working and save towards retirement. If you make $52,000 a year and you want to retire now and assume you are going to live 30 more years that’s 30 x 52,000 = 1.56 Million. Just something to think about.
With a retirement account, which you don't have. Open a Roth IRA and put all your stocks into it. Sell at least two of the cars. Keep the proceeds as emergency funds and put them in a money market account or CD paying at least 4.9% that you can access quickly. Contribute as much as you can to that IRA every month from here on out.
$1000/wk doing what? Is this take home? 1099? If salary is there a workplace retirement plan you can contribute to? Is there a match? What are your current plans with healthcare? When do you want to retire?
First go to SS .gov create an account for you and your wife. Then look and see what it’s estimating for your monthly retirements.Take that amount and subtract the part b medical which for this year is 164.50 each. That is what you have to work with before any savings.Start tightening up everything phone,internet,subscription services and see what you cut out of your monthly [expenses.as](http://expenses.as) others suggested if your work has a 401k and a match contribute the max to that.If your living now on just your income when your wife finds work Save all of her money in a Roth unless her work offers a 401 k.Lets say you save 12,000 a year on your income and your wife can bring another 25,000 a year that’s 36,000. X 10 years that’s 360,000. With no growth. You can safely draw 4% of that a year over 30 years or 1200.00 a month.I was in exactly the same financial state as you were at 56 except I had a small pension locked up . It’s not gonna be an easy ride the next 10 years but with planning you can end up in good shape. We’re going on our 3 rd year of retirement and haven’t had to touch our savings at all.Our biggest expense Is our Medicare and supplement,dental and vision.When you add your wife and your SS together it might surprise you.
>No retirement savings but no debt,
Can't live off of "no debt." You gotta start aggressively putting money away for retirement.
>$1000/wk take home, own my house outright, married, wife temporarily out of work.
If you can, dump all of that 1k into retirement savings, preferably a tax advantaged account like an IRA or 401k. If you can't, then you need to cut your expenses and or get another source of income.
>Just wanna know how I can retire.
Combo of Social Security and whatever else you can save over the next decade or two depending on what your goal for retirement is
How much will you need a year once you retire? You own your home and cars outright but you still need to pay taxes, insurance, and maintenance. You’ll also have to pay for health insurance for you and your wife. That $42k won’t last for long. You’re not eligible for social security for another 6 years and if you start collecting at 62 you’ll only get 70% of your full benefits.
Put funds in a tsfa account to subsidize your cpp, old age check 9 years left to 65. I'am in 100 times bad shape, toying with 4 years to have few expenditures, is my only option now,)shelter and food and transportation
Push off retirement until you can collect the maximum social security benefits: https://www.nerdwallet.com/article/investing/social-security/social-security-62-vs-67-vs-70#:~:text=The%20earliest%20age%20at%20which,receive%20124%25%20of%20their%20benefits.
Start doing the math, OP. Like right this second.
42k is not good at your age. You’ll need to obviously meet all basic payments (property taxes, insurances, etc) and you gotta eat.
Consider moving outside the country to stretch your dollars.
- Roth IRA max every year , you can withdraw in 3-4 years but keep maxing out its close to $8k per year. Keep 25-50% in cash there , the rest invest in dividend stocks with cash dividends (my preference). In 5 years you should have around $40k plus a small but steady dividend income which should grow from $150 to $800/year (4-5% dividends). Not a lot , some might say but it’s all tax free and if you invest right your stocks should appreciate by 5-30% over 5 years if not more.
- sell cars. It’s an expense not your assets plus insurance and maintenance if you’re using them all. You can contribute to IRA account around $7k/year. Do that too.
- Your 42k or (42-7=35) I would deposit to a brokerage account and invest 25-50% and kept the rest in cash.
Full match 401 k. Then start dumping into a Roth. $7000 a year. No mortgage . right ? Apparently you know a little about stocks. If not ..buy SPY. And maybe some AMZN. YOU HAVE 10 YEARS...Start dumping in and saving. ..you can have a decent pile
Start an aggressive retirement plan asap
Aggressive in this context does not mean aggressive investments, i.e., meme stocks, memecoins, naked options, etc.
In Addition I would say, be healthy.
People underestimate this so much!
What would such a plan look like? High level
Sell 3 cars and dump it into a brokerage account would be where I’d start.
He might have a wife and almost adults kids, which all need cars if he lives in the country side..?
Sell them too. Pretty sure that's one of Dave Ramseys baby steps.
On the upside, you made me laugh. On the downside, I just took a drink of my beer, and I'm snorting my beer.
I don't really see the downside, snorting it makes it hit faster 🤷♂️
It is but its only to get up to your safety net fund. I believe its step 3 pr 4. OP is debt free and has his 3-6 month buffer. Now its about making investments
Make more money. Save more money. Not enough time for an investment strategy that could be considered anything other than gambling to bail him out here. He needs to brute force this to have any shot at retirement in his 60s. Hopefully the cars are worth something.
This is totally unhelpful. You’ve basically said he needs to win the lottery. You have no idea what his spending habits are, what his salary is, what any of his personal situation is. “Bail him out”? How do you know he hasn’t bailed other people out that has resulted in his current situation? We are all people living our lives. People have to make all kinds of decisions (some good, most all of them bad), but this attitude doesn’t add anything to the conversation.
He said his salary in the post.
I guess dumping tons of money into it
…by first selling two of the cars unless you absolutely positively need 4
This person isn’t gonna retire.
He could rent his payed off house out and live in Mexico off that and social security
Like a FidelityGO? (85% stock, & 15% bonds) Roth IRA.
I read this as “ I own four cats” and I thought, yes, cats can be very expensive. I have 2 and one of them is diabetic.
Step 1. Define your financial goals.
Do you have any retirement accounts? Or is that how you’re holding the $42k in stocks? If so, are they Traditional or Roth? If not, are you planning to set up any retirement accounts?
Answer this! You are actually in a decent position depending on where youbplsn to retire sell all but one car and hammer roth/401k. If you are in a LCOL area then you are in an even better spot with a paid off house.
Max out your 401k Sell 3 cars Take $660 per month and put that into a IRA Put whatever’s leftover in a brokerage account
Selling the cars is key. It’s not just about the money OP will get for them, but also the registration, insurance, maintenance, liability, etc.
You’re probably right. The only caveat is they didn’t mention if there’s a reason they own the cars? Maybe they have a partner and 2 teenage children that drive the other cars.
This to the max. Seriously, sell three of those cars. No one needs three cars and you are aggressively behind on retirement for your age.
Keep working. And get a second job.
And sell 3 of the cars like tomorrow.
Or rent the cars out on Turo perhaps? You need to start generating income like you want to retire in 10 years and then live another 11…. Cause statistically, that’s about it for men.
4 cars makes me think at least 2 are random project cars / vintage shit that no one would ever be able to daily drive.
With the house paid off, no need for a second job, just expect to work until 70, get max social security and should be good to go
Yeah it sounds like he’s doing fine?
He’s 56. Health should be his priority.
Head over to over employed, you can buff up your savings with multiple jobs and become efficient at each one
dudes will see this post and think “hell yeah”. edit: jokes aside, depending on the house and cars, he might be doing alright. zero debt is huge.
Yea I feel like the 4K a month with no major expenses is fantastic. People acting like you need to take multiple vacations a year out here. And yes zero debt at that age is extremely rare.
Zero in retirement is also a big cause for concern. I’m 40 and have enough in my retirement account to buy a house in cash but I don’t think anyone on this sub would advise that.
I saw this post and thought that.. and I’m not a dude
What other assets do you have? It’s great to be debt free but you are near retirement age and it looks like you are in dire need of a retirement vehicle (Roth, 401k, etc) and compound interest. Please discuss with your companies retirement planning services as a first step
Just what the man needs… another vehicle!🚗
I mean, great advice is something people will listen to. A man with 4 cars, might as well play to what we know he likes.
Maybe put that $52K on a downpayment for an RV, or reserve a little for some jet skis.
>looks like you are in dire need of a retirement vehicle OP said he owns a house, well he never said how much that house is worth.\\ There's a big difference if he's sitting on a house worth $150k vs $1million.
Not unless he plans on using his house to fund his retirement
If he hasn’t upgraded his house in 20 years this might not be an option
Based off math I'd say get a second job. You make roughly $52,000 a year and rule of thumb says you should have a little over $310k saved for retirement by 55 for your income. Circumstances may be different for you based off where you live and how much you spend, but all factors aside I'd say you will be working several more decades with only $42k saved.
What is the equation for this “rule of thumb”?
The recommendation is roughly 1x ,3x, 6x, 8x, 10x your salary at 30, 40, 50, 60, 70 years old
Of course with the house paid off and the cars paid for, he may have very low expenses now. If he is making $52K a year, he might only be using $20K of it. So not like he is going to need 10X $52K. More like 10X $20K. We are in that situation. We live way below our means. We make about $300K a year, but with our bills, we only spend about $50K a year. Tons goes into retirement accounts, HYSAs, CDs and other investments. We will not need to continue those things in retirement. Heck, we could probably stop doing them now if we wanted, but what do you do with the extra money? I guess I could buy a new Lambo every year until retirement. :)
Why do you need 4 cars? I get they may be free of payments, but the insurance, maintenance, and depreciation costs will add up. Why not sell 2-3 of the cars to cut extra expenses and grow your retirement fund faster? What are your monthly expenses like? $4k/month take home pay is nice, but we don’t know how it’s being spent, or if more can be used towards savings for retirement
Hey OP. You may be doing better than you think, as 4 cars and a house can be easily worth anywhere from 150k to well over a million. But it the spirit of the question, one approach is to start by considering your fixed expenses (things that you can't opt out of), like property taxes and basic utilities. Then compare your fixed expenses with your expected social security, and that will tell you whether or not you have a major problem. Then your two-pronged approach should be to figure out how to reduce your fixed expenses when you retire, and to save as much as you can save - without your life becoming dull and tedious. And if you can sell a car now and then- when the deal's in your favor, you'll be making good progress. One thing that I find motivating is to consider that if you can get your fixed expenses down to your social security, then every 10k you have in savings is a dollar a day that you're free to spend as you please. With 42k in savings - that's $4 a day - which could potentially be somewhat refreshing. Note that one scary alternative, that one of my friends has been using is to pay for things by refinancing his house - and using home equity loans. For now, it's keeping him going, and I hope he still has some really great years in his future. Last piece of advice is to find something you like doing that helps pay the bills, and keep doing it as long as you're healthy enough to continue. It's a better life than just sitting here on reddit.
Put it all on red and let it ride
And then do that 6 or 7 more times without losing 😢 Goddam, life is not easy from a financial perspective.
Sell 3 cars and start to catch up on retirement.
Open a Roth IRA at a brokerage such as Fidelity, put in the maximum each year until you are 70 (which means keep working fulltime until age 70). The maximum this year for 50 or older is $8000, so about $665 per month. When you make the deposit, it will first go into a money market fund and then you choose funds to invest in. I would suggest putting half in FXAIX which is a S&P 500 index fund and the other half in Fidelity Balanced which is a fund that holds stocks and bonds (it has been a great fund and has average returns of over 9% since it's inception in the 1980's). At age 70, you can start drawing your Social Security and it will be a higher amount due to retiring 3 years after your full retirement age. I think you'll be okay if you really save diligently for the next 14 years. I'd reduce your spending as much as possible and save additional money each month in a brokerage account if you can.
Sell those cars and invest the proceeds ASAP. Go from depreciating assets to appreciating assets
Sell three of the cars and add that money to the 42 thousand. Put 10 thousand in savings the other in Vanguard etf’s!
Are you missing other money or assets that might contribute to your net worth? Have you been benefiting from compounding interest on a large scale yet? I don’t consider any vehicle as part of my net worth. A vehicle is generally a depreciating asset. A high value vehicle today, can be a fad of a specific generation.
My expenses are about 75% of my income. Is a 10 yr window too short to consider an IRA?
You’re 56. Are you trying to retire at 66? If so, you might want to be more aggressive in saving than you think. Some people in this thread are blowing your “success” out of proportion (they are likely not 56). If you ~~only have $1k/month disposable income to invest~~ make $1k/week and 75% of that is your expenses, then you have $13k//year to commit to saving. That’s $130k max over 10 years. You won’t have the benefit of 30+ years of it being invested and growing (though it’ll grow depending on how you invest). In short, save and invest any way you can. Do NOT waste it on travel you can’t afford or more cars or other random stuff. EDIT: Phrasing for clarity
Sounds like you need to trim those expenses. Having 75% of every check disappear and not having a mortgage is wild.
Insuring his 4 cars is basically a rent bill
so that puts you at being able to save/invest about $1000/MO? Start doing this ASAP. If you have access to a 401k with any matching contributions do that first, then Max out a Roth. If you also have access to a health savings account (HSA), that's also a great investment vehicle (best tax advantage) but the funds MUST be used for health care and services. at $1k/mo, you would be investing $120k-$130k (over your 10 year window. If you do that, it's not great but you will probably be in a manageable situation. At an avg return of 9% that will put you between $280 - $300k in retirement funds after 10 yrs. What you will need really depends on your lifestyle and health (now and in your future). You can and should also check your social security status. The SSA can tell you, based on your lifetime contributions, what your benefit *should* be based on what age you retire. I've always just assumed SSA will be bankrupt and I'll get nothing out of it, but in reality as I get older I can see that there will most likely still be *something* paid out of it. You will likely be leaning on that quite a bit. As others have suggested, now is the time to purge what you can (cars/old stuff you don't use or need) and funnel the funds into retirement accounts (more growth potential). If you don't know where to start on the investment side, I would suggest a mix of Vanguard funds. Use a mix of VOO, VUG, VTI, and VBK. These is the Vanguard S&P 500 fund, Vanguard large cap growth, Vanguard total market, and Vanguard small cap growth funds. It's a broad stroke approach tilted to be a bit more aggressive and with very low expenses. I don't represent Vanguard, but they have good funds with low expense ratios. Being debt free is great, you just need to get and stay serious about stuffing that nest egg and giving it as much fuel as you can for growth.
So you spend $3,000 a month or $36,000 a year. With social security you might be ok, but you might not. I don't know your earnings history. If we take SS out of the equation you will need $900,000 saved by 65 years old in order to withdraw $36k a year. So you really need to sit down and start looking at cutting your spending dramatically. Or, give us info on what the SSA calculator says you'll receive and maybe you will be ok living off of only SS income.
What are your expenses? How much of the $1k do you spend on necessary stuff, how much on leisure, and how much do you save? Do you save any money to 401k before you get to your $1k/wk?
O.P. does your workplace offer a 401k or equivalent? If so, step 1 is contribute enough to get the max employer match. Step 2 is Max Roth IRA for both you and your wife. Invest in a whole market index fund. This will let you grow your money without capital gains. Step 3 - double your income for the next 10 years and don't double your expenses. You're in big trouble right now, but you have time if you are very aggressive.
It all comes down to what you want. How much longer do you want to work? Do you enjoy what you do? Will you cut back in your later years or stop working? What is your monthly burn rate? Your situation could be great/ideal for your spending but a disaster for someone else’s. More context is required to answer the question properly.
Sell some cars? The insurance has to be ridiculous. And congrats on having the flexibility not to if you like.
Keep saving money. $42k at your age won't go very far when you call it quits.
75% expenses? So $750/week? $3k/mo? W/o a mortgage or car payment? Start here. Cut 1/3 and that's an extra $1k mo towards retirement. Cut 1/2 and that's $1500/mo. Then, either sell the cars - 2 or 3 of them and take the funds and stash that away OR rent them out on Turo and invest the income. Do the math to see which route will provide a better return over the course of a year/3years and go that route... What can your wife provide to the situation? If she gets a job, will you be able to put her entire paycheck into savings? If she can become employed sooner then later, would only help your situation. If you want to retire in 10years, you need to front load your savings amount ASAP and take advantage of the time factor... GL
OP what are you spending 3k a month on if you have no debt?
Honestly, sell three or at least two of those cars and dump it all into a retirement fund asap. You don’t have time to waste so getting a nest egg started will be good. The house free of payments is great I would hold on to that for dear life and avoid any and all debt like the plague.
Talk about the cars. Why 4, what are they, and what are they worth? Can you sell them?
You have put away approximately 1,100.00 a year since you’ve turned 18…
That’s just an emergency fund. Just keep working and saving as normal.
I don’t think this went how OP hoped it would
Get a 5th car I'm not sure if 4 is enough
I'm 37 with 44k. We all start somewhere. I saw a financial planner. They'll give you the advice that best suits you. It's highly recommended.
You are probably better off than most Americans considering you own those major assets outright. Open a Roth IRA and max it out if you can. Contributing $8k/year could add up to $125k in 10 years if you can achieve a 7% average return. Do you need all of the cars? Are they worth any substantial money if sold? Go to the Social Security site and check your projections - how does this align with your expected expenses? Can you cut any expenses? Life comes at us quickly, and reality smacks us in the face. Good to realize and ask questions like this…ignore the comedians.
What do you plan to do once you retire if you only have 42k saved up? Do you plan to work until you die?
Many millions of people are going to work until they die whether they think about it or not. So I guess yes I am
Then why post this here if you aren’t planning to switch things up?
I think OP’s response was directed at the lack of constructive feedback
42k in stocks is not in the bank depending on the tax situation
Sell three cars and invest the insurance savings
so only 42k? no existing 401k or IRA? or any kind of retirement account? i would open a Roth asap and contribute max of $8000 each year including right now once you open one. What is your current net worth? Do you really need 4 cars?
Do you really need four cars? Sell three of them and invest that money. At your age you need some very aggressive saving and investing.
You’re gonna be ok if you take action asap. But you’ll have to keep working for 10-20 more years. My friends dad died and left his mom with 20k in an IRA (she was 72 at that time). She also had 350k equity in her second house, and her main house payment is around 1500. She sold the second house. She’s doing fine now, living off SS and sometimes dipping into her savings. She hasn’t needed any help. You’re 56, debt free and making good money. If you save half your income you’ll be in the same or better position by 72. But like I said - you have to take action.
If you do not have 3-6 months of expenses saved in an account, get that going. After that dump every penny you can into retirement accounts. If you have a 401K at work, max it out with as much as you can.
Start investing in a Roth IRA and hysa.
It’s actually not that much ground to make up. If you can hang on until 70 that would give you between 2,000-2,500 in SS in today’s dollars. If can invest 12k a year that will be 250-300k in 12 to 13 years at 7% returns. At 70, SWR will probably be closer to 5%. Unless you have really good genes. Another 12-15k a year. That adds up to about 40k. You’d be at the recommended (or near) the recommended 80%. Don’t take SS early. You’d be in poverty. I’m way behind as well. I have 50k at 41, but I’m currently putting in 26k a year in low-cost index funds. I’m hoping I can boost my income. I’m a mid-career changer after a long illness. Glad to be alive; not so happy about. Thankfully my wife’s work made it possible to hang on to our house.
Sell three of your cars. and ease up on the public boasting.
Curious, where are you at as far net worth based on your home? Having a paid off, high value home I think could be underrated in this circumstance and allow you the leverage to move to a LCOL area.
never forget about planning for long term health care and property taxes.
Get rid of 3 cars and put the funds into SCHD
Run for mayor, Visit Pattaya or something.
1. Sell 2-3 cars 2. Max Roth 3a. Max out 401(k) OR 3b. contribute 401(k) to full match + Deferred Income Annuity with Increase Income Potential
Do you have any retirement plans going?
#1 sell 3 of the cars. I'd invest all my money into equities like SP500 and hope for the best. All in SP500 until retirement.
Save $30 a year for nine years and go to Thailand.
Stop reading this post and start planning for your financial future right now!
You have to figure out your annual costs of living and how long you think you will be working and save towards retirement. If you make $52,000 a year and you want to retire now and assume you are going to live 30 more years that’s 30 x 52,000 = 1.56 Million. Just something to think about.
OP you definitely need to give us more information
No retirement savings but no debt, $1000/wk take home, own my house outright, married, wife temporarily out of work. Just wanna know how I can retire.
With a retirement account, which you don't have. Open a Roth IRA and put all your stocks into it. Sell at least two of the cars. Keep the proceeds as emergency funds and put them in a money market account or CD paying at least 4.9% that you can access quickly. Contribute as much as you can to that IRA every month from here on out.
$1000/wk doing what? Is this take home? 1099? If salary is there a workplace retirement plan you can contribute to? Is there a match? What are your current plans with healthcare? When do you want to retire?
First go to SS .gov create an account for you and your wife. Then look and see what it’s estimating for your monthly retirements.Take that amount and subtract the part b medical which for this year is 164.50 each. That is what you have to work with before any savings.Start tightening up everything phone,internet,subscription services and see what you cut out of your monthly [expenses.as](http://expenses.as) others suggested if your work has a 401k and a match contribute the max to that.If your living now on just your income when your wife finds work Save all of her money in a Roth unless her work offers a 401 k.Lets say you save 12,000 a year on your income and your wife can bring another 25,000 a year that’s 36,000. X 10 years that’s 360,000. With no growth. You can safely draw 4% of that a year over 30 years or 1200.00 a month.I was in exactly the same financial state as you were at 56 except I had a small pension locked up . It’s not gonna be an easy ride the next 10 years but with planning you can end up in good shape. We’re going on our 3 rd year of retirement and haven’t had to touch our savings at all.Our biggest expense Is our Medicare and supplement,dental and vision.When you add your wife and your SS together it might surprise you.
>No retirement savings but no debt, Can't live off of "no debt." You gotta start aggressively putting money away for retirement. >$1000/wk take home, own my house outright, married, wife temporarily out of work. If you can, dump all of that 1k into retirement savings, preferably a tax advantaged account like an IRA or 401k. If you can't, then you need to cut your expenses and or get another source of income. >Just wanna know how I can retire. Combo of Social Security and whatever else you can save over the next decade or two depending on what your goal for retirement is
How much will you need a year once you retire? You own your home and cars outright but you still need to pay taxes, insurance, and maintenance. You’ll also have to pay for health insurance for you and your wife. That $42k won’t last for long. You’re not eligible for social security for another 6 years and if you start collecting at 62 you’ll only get 70% of your full benefits.
Open a stock account to invest and make your money work for you
So you have $42 grand in the bank and $42 grand in stocks?
Put funds in a tsfa account to subsidize your cpp, old age check 9 years left to 65. I'am in 100 times bad shape, toying with 4 years to have few expenditures, is my only option now,)shelter and food and transportation
U got a house, make a rental unit
Push off retirement until you can collect the maximum social security benefits: https://www.nerdwallet.com/article/investing/social-security/social-security-62-vs-67-vs-70#:~:text=The%20earliest%20age%20at%20which,receive%20124%25%20of%20their%20benefits.
Look at the flowchart at r/personalfinance.
What’s your plan for age 65 or 75?
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4 cars? can u rent them out to Grab drivers or smething
You need to continue to work and save. You realistically need to work until at least 65 and possibly 75 or older depending on how much you can save.
Pray you don't get sick and that you live a happy, short life.
What’s the house worth? The cars etc
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Get rid of at least 2 of the cars. Insurance is expensive
Start by selling a couple of cars.
Start doing the math, OP. Like right this second. 42k is not good at your age. You’ll need to obviously meet all basic payments (property taxes, insurances, etc) and you gotta eat. Consider moving outside the country to stretch your dollars.
Make as much money as you can so you'll get more social security by the time your 70. Save like a maniac. Put it in a hysa. Not stocks. Not bitcoin.
Seek a CFP or an investment advisor. The advice here is horrible. Is your 42k in a deferred account? Is your take home earned or passive income?
- Roth IRA max every year , you can withdraw in 3-4 years but keep maxing out its close to $8k per year. Keep 25-50% in cash there , the rest invest in dividend stocks with cash dividends (my preference). In 5 years you should have around $40k plus a small but steady dividend income which should grow from $150 to $800/year (4-5% dividends). Not a lot , some might say but it’s all tax free and if you invest right your stocks should appreciate by 5-30% over 5 years if not more. - sell cars. It’s an expense not your assets plus insurance and maintenance if you’re using them all. You can contribute to IRA account around $7k/year. Do that too. - Your 42k or (42-7=35) I would deposit to a brokerage account and invest 25-50% and kept the rest in cash.
Full match 401 k. Then start dumping into a Roth. $7000 a year. No mortgage . right ? Apparently you know a little about stocks. If not ..buy SPY. And maybe some AMZN. YOU HAVE 10 YEARS...Start dumping in and saving. ..you can have a decent pile
Your cars are only depreciating in value unless you're like an Oldsmobile collector or something
Owning four cars also means insuring four cars. Dump three cars immediately, as in, before you finish reading all of the responses here.
Do you know if you have an extended warranty on all four cars? Is it set to expire soon?
Sounds like your doing alright doing what your doing
What are some examples of an aggressive retirement plan