Do you guys have a 401K?

[mook]

I'm sorry to hear about your dad. Good for you for supporting your parents. You're not alone.

 

[BLAZINGGIANTS]

I'm sorry to hear about your dad. Good for you for supporting your parents. You're not alone.

Yeah, believe me, you're not alone.

Kinda funny when I hear older people talk about my generation, how we expect things to be handed to us, how we aren't hard-workers, etc.

Not trying to toot my own horn, but I have a W-2 job since I was 14. Since I started working at 14, I have always had at least one job, if not more, and I continued to pick up extra work/odd jobs at the same time. Before I was 14, I was mowing lawns, water lawns, raking leaves and doing other house work, babysitting, etc.

I was taught that I needed to save and build my bank to take care of myself and my retirement. I was told to start saving for retirement at a very young age (that was heavily instilled in me from the time I was 14).

Nobody ever told me I was really saving for my parents'/in-laws' retirements.

 

[blazerboy30]

I cannot take write offs for any interest paid because of my pay scale. I understand the "leveraged" investing benefit; but I like having them paid off and set in my living trust. I am able to place 2 million of assets that are tax deferred after death. It's a good place to put something that appreciates, because my beneficiaries will only pay the tax of the actual value of property at the time it's put into my living trust. In order to do this, I have to own the asset completely.

I know what you're referring to. I'm in the same situation. But keep in mind that even though your current income level keeps you from claiming a yearly loss on the real estate, you can still deduct the interest as an expense to offset the rent income. And then any loss that would have been claimed in a lower income bracket will be accumulated as a loss against your real estate that will be realized if / when you sell the property.

 

[MickZagger]

How much do you think you need for yearly income to do so?

80 to 90k a year. If I decide to go in feeders it'll be around 100-110k

 

[magnifier661]

I know what you're referring to. I'm in the same situation. But keep in mind that even though your current income level keeps you from claiming a yearly loss on the real estate, you can still deduct the interest as an expense to offset the rent income. And then any loss that would have been claimed in a lower income bracket will be accumulated as a loss against your real estate that will be realized if / when you sell the property.

It's easy to write off the small amount of rent by the Gardner, trash, housing tax, ect.

 

[blazerboy30]

It's easy to write off the small amount of rent by the Gardner, trash, housing tax, ect.

I think I'm missing something here.

Why wouldn't you want to take advantage of these low interest rates and just accumulate "losses" of interest and depreciation? Do you assume that you'll never sell the houses and wouldn't get to realize those accumulated losses?

 

[magnifier661]

I think I'm missing something here.

Why wouldn't you want to take advantage of these low interest rates and just accumulate "losses" of interest and depreciation? Do you assume that you'll never sell the houses and wouldn't get to realize those accumulated losses?

The houses will appreciate by the time my children are of age. These houses aren't for my benefit. I needed the houses to be paid off completely to put them in my tax sheltered living trust. If, in 10 years, the houses appreciate by 1,000,000; and I pass; the children pay tax on the price I paid for the houses at that time.

 

[Shooter]

I had a 401k. Became a 201k following the divorce.

I feel your pain.

 

[Run BJM]

Semi OT, but maybe some of you guys can help me figure out what to do. I'm 22, graduated last June, did some shit retail work while doing an unpaid internship until November when I got a temp job at a big time Fortune 500 company. The job was only supposed to go through January, but then they asked me to stay through February, and now they want to keep me through September. So that's going well, but I'm still not making much money.

But I just started paying student loans this week and that $200 extra per month is severely limiting how much I'm saving monthly. I have a bond in my name for ~$6000 and I don't know whether to put it directly toward my nearly $20k in student loan debt or to invest it somewhere (I know little about investing but I've been trying to educate myself lately). Seems like getting rid of the student loan debt ASAP will save me in interest long term and allow me to be unburdened by it sooner and thus save more at an earlier age. But then some people have been telling me that paying the minimum is fine, will get a better return on my yearly taxes (don't understand this), and that extra several K in interest I would accrue that feels so intimidating now won't be as big of a deal in a few years assuming I continue to get raises.

So basically my questions are:

1) Should I aggressively try to pay off the student loans?

2) If you were in my position wtf would you do with that $6k bond?

 

[magnifier661]

Semi OT, but maybe some of you guys can help me figure out what to do. I'm 22, graduated last June, did some shit retail work while doing an unpaid internship until November when I got a temp job at a big time Fortune 500 company. The job was only supposed to go through January, but then they asked me to stay through February, and now they want to keep me through September. So that's going well, but I'm still not making much money.

But I just started paying student loans this week and that $200 extra per month is severely limiting how much I'm saving monthly. I have a bond in my name for ~$6000 and I don't know whether to put it directly toward my nearly $20k in student loan debt or to invest it somewhere (I know little about investing but I've been trying to educate myself lately). Seems like getting rid of the student loan debt ASAP will save me in interest long term and allow me to be unburdened by it sooner and thus save more at an earlier age. But then some people have been telling me that paying the minimum is fine, will get a better return on my yearly taxes (don't understand this), and that extra several K in interest I would accrue that feels so intimidating now won't be as big of a deal in a few years assuming I continue to get raises.

So basically my questions are:

1) Should I aggressively try to pay off the student loans?

2) If you were in my position wtf would you do with that $6k bond?

From what I remember, student loans are very low interest right? I think it's actually better to save that bond or invest in something that theoretically gives you better interest yields than what interest you pay on your loan. I think a student loan is around 3% right?

 

[Run BJM]

From what I remember, student loans are very low interest right? I think it's actually better to save that bond or invest in something that theoretically gives you better interest yields than what interest you pay on your loan. I think a student loan is around 3% right?

Its comprised of 4 smaller loans whose interest rates are between 3.4% and 6.0%.

The bond has averaged 7.92% return annually since 1994, but 1.45% year to date. Is the bond a good place to park this cash or should I move it to something else?

 

[blazerboy30]

Its comprised of 4 smaller loans whose interest rates are between 3.4% and 6.0%.

The bond has averaged 7.92% return annually since 1994, but 1.45% year to date. Is the bond a good place to park this cash or should I move it to something else?

I would look into paying off the loans at the 6% rate. In the current low interest rate environment, it is very difficult / impossible to find a low risk way to approach 6%. If you want to take the higher risk / reward approach, I would suggest researching buying a stock market ETF such as SPY or DIA.

 

[The_Lillard_King]

According to this board, I wouldn't put the money in the stock market . . . crash coming soon.

 

[maxiep]

Amen, brother. Not my parents, but several other people I'm close to who are boomers have fucked up their retirements flatter than hammered shit. I look at my generation and the Millennials and it just gets more and more bleak.

Seems like there will be literally hundreds of millions of Americans who retire in this century with little more than social security. You can blame stupidity, bad planning, bad policy, whatever. But it's pretty clear to me that at some point there will be a massive tax on the wealthy to sustain SS, pay for health care and probably clear out billions in student debt.

You can argue its socialist or whatever, but when a lot of broke people can vote and a very tiny few have most of the wealth, it will not go well for the wealthy.

Personal responsibility has gone out the window. You're right that people can vote themselves all kinds of weath transfers from people who have worked not only hard but smartly, taken risks with their own capital, and been responsible. After all, it's those people who should pay for those who didn't bother to educate themselves or work hard enough to provide for their own retirements. And we wonder why we find ourselves in this condition?

 

[mook]

Personal responsibility has gone out the window. You're right that people can vote themselves all kinds of weath transfers from people who have worked not only hard but smartly, taken risks with their own capital, and been responsible. After all, it's those people who should pay for those who didn't bother to educate themselves or work hard enough to provide for their own retirements. And we wonder why we find ourselves in this condition?

Yup. Those tens of millions (hundreds of millions?) of Americans suck. When you see them as you go to your local grocery store/bowling alley/baseball game, don't you just want to punch them in the face for being lazy and stupid?

 

[BLAZINGGIANTS]

According to this board, I wouldn't put the money in the stock market . . . crash coming soon.

Hold on to your shorts!

 

[BLAZINGGIANTS]

Yup. Those tens of millions (hundreds of millions?) of Americans suck. When you see them as you go to your local grocery store/bowling alley/baseball game, don't you just want to punch them in the face for being lazy and stupid?

BenDavis says "YES!"

 

[maxiep]

Yup. Those tens of millions (hundreds of millions?) of Americans suck. When you see them as you go to your local grocery store/bowling alley/baseball game, don't you just want to punch them in the face for being lazy and stupid?

Go ahead and mischaracterize my point. Somehow generations before us managed to be self-sufficient, yet we're incapable.

 

[magnifier661]

According to this board, I wouldn't put the money in the stock market . . . crash coming soon.

Just invest in precious metals

 

[BlazerCaravan]

Go ahead and mischaracterize my point. Somehow generations before us managed to be self-sufficient, yet we're incapable.

Dude, it's the generation before me that isn't self-sufficient!

 

[mook]

For those who haven't put away much in their 401k, you aren't alone:

That’s the alarming conclusion in a new report from the Deloitte Center for Financial Services, which found that 60% of preretirees believe health care costs will consume their savings no matter how much they save. Similarly, 39% believe investment returns won’t be high enough to provide decent retirement income regardless of how much they manage to put away.

Deloitte found exasperation at every turn: 58% don’t have a retirement plan; nearly 40% don’t know what an annuity or mutual fund is; and 20% expect to rely purely on Social Security for their retirement needs. More than half don’t trust anyone’s advice.

Collectively, we seem to be throwing the towel. It’s not difficult to understand why, to be sure. After a sharp pullback in 2008 and ’09, stocks are only now touching levels they first reached in the late 1990s. So the market has been dead money for nearly 15 years if you bought then and simply held on. A lot of folks who were on track with savings at, say 45, have fallen way behind and now they are 60. This helps explain why so many boomers now plan to work past their normal retirement age of 66 or 67.

 

[maxiep]

Dude, it's the generation before me that isn't self-sufficient!

It's every generation living that is no longer self-sufficient. Every generation has been less self-sufficient than the one before. At some point, it will end, and as the old saying goes, "chance favors the prepared mind".

 

[maxiep]

For those who haven't put away much in their 401k, you aren't alone:

Is it any surprise that more and more people are refusing to pull the cart and are hopping on instead? We are a charitable people, but we hate being taken for suckers. The political policies accelerated under the current Administration turn producers into suckers. It's better to stop working, enjoy the ride and then be bailed out.

 

[mook]

Is it any surprise that more and more people are refusing to pull the cart and are hopping on instead? We are a charitable people, but we hate being taken for suckers. The political policies accelerated under the current Administration turn producers into suckers. It's better to stop working, enjoy the ride and then be bailed out.

I don't think it's exclusively some great moral failing that people aren't preparing for retirement. That 40% of people don't even know what a mutual fund is tells me that there's just a lot of ignorance about the topic. 30 years ago you could be ignorant, because the pension did all the thinking for you. Not anymore.

But it's not just ignorance. It's also just life. My brother is a hard worker. Never been unemployed for long. He and his wife both have degrees. But at 42 years old, he doesn't have a dime in his 401k. Family emergencies and being underemployed (working crappy temp jobs) wiped it all out, or at least what was left after the economy tanked. He's not a free rider or a sucker. And he's definitely not the only guy I can think of in that boat.

I think if you looked around at the people you know, you'd find a lot of people like that. Particularly among those you know without college degrees.

 

[BlazerCaravan]

Yeah, I wouldn't characterize my dad as a free-loader; he gave the best years of his life working salaried overtime for that shithole company, but here he is, broke, 60, and with no retirement savings, all because he made one bad (very bad) move with stocks in 1999.

 

[blazerboy30]

I don't think it's exclusively some great moral failing that people aren't preparing for retirement. That 40% of people don't even know what a mutual fund is tells me that there's just a lot of ignorance about the topic. 30 years ago you could be ignorant, because the pension did all the thinking for you. Not anymore.

But it's not just ignorance. It's also just life. My brother is a hard worker. Never been unemployed for long. He and his wife both have degrees. But at 42 years old, he doesn't have a dime in his 401k. Family emergencies and being underemployed (working crappy temp jobs) wiped it all out, or at least what was left after the economy tanked. He's not a free rider or a sucker. And he's definitely not the only guy I can think of in that boat.

I think if you looked around at the people you know, you'd find a lot of people like that. Particularly among those you know without college degrees.

We'd also find a huge portion of those people with iphones, lcd TVs, and playstations.

 

[mook]

We'd also find a huge portion of those people with iphones, lcd TVs, and playstations.

My brother does have a used Wii I sold him for $50 (he wouldn't take it for free) and he just got his first android. He does have a nice 36" plasma, though. His two sons seem to like it. I guess I should go tell him to stop being such a mooch on society.

I have a feeling, though, that he'll tell me that socking away the $1500 or so he's spent on consumer electronics devices in the past 3-4 years into a 401k seems pretty hopeless. He had a lot more than that vanish seemingly in months.

When you live paycheck to paycheck, year after year, and a little money comes your way, it's not hard to see how you buy something like a decent tv just to see your kids faces light up. You feel like somebody who is keeping up with society, enjoying life just a little, a provider, a man.

Maybe the smart thing, the moral thing, is to put it all in a 401k or a college fund or a penny jar so you have it for the next uninsured medical expense that hits you like a freight train. But I don't look down on you if you can't bring yourself to do it.