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Old 22-06-2008, 15:29   #1
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How many have a retirement fund setup? How many think you need one?

Hello

I get more and more intrigued about the idea of sailing the world day by day. I was thinking about when I would be able to set sail. I think it would take about 10 years of saving for the trip to be able to set sail. This would include having no debt, and owning the sailboat outright. I figure I could quit my "career" and just work odd jobs here and there when I needed the money. Maybe work for a year and then sail for a year, or work 6 months and sail 6 months. I think I could find work to be able to fund this type of lifestyle, but not be able to have a retirement fund.

But what happens when I get too old to work? Is this a legit concern? Shouldn't I want a mass of funds so when I can't work anymore I will be financially stable? Lets consider I would have no kids to take care of me.

As much as I want to try this lifestyle out, I'm worried about that retirement fund. I don't want to turn 70 years old, or whatever the age may be, and find I'm unable to care for myself. What happens then?

Obviously the responsible thing to do is work until I have a nice little retirement fund set up. But, I don't want to work my life away to have a retirement fund I may not even be able to use.

I'm just curious as to how many of you have a retirement fund, and how many of you are "winging" it, and what your thoughts on this subject are.

Thanks,

Casey
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Old 22-06-2008, 17:01   #2
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In reading through the handful of posts you've put up here, Casey, this is what I think: You're within a year of finishing your education, with a degree in construction management. You'll be 27 when you graduate. Through no fault of your own, you're heading into a business sector that (especially in the US) is shedding jobs left and right, not creating them. The bottom of the current recession in construction is nowhere in sight.

As with many, many students in the current era, you've taken on student loan debt to finance your education. This, too, is not your fault; very few people have the resources to self-finance the education they believe they need to compete.

Looking at the prospects of finding employment in your chosen field when you graduate, you are somewhat discouraged. You will have the student loan debt hanging over your head, and if you can't find meaningful employment in construction management, you may be forced to take whatever job you can find to service your debt.

Feeling somewhat discouraged, you are entertaining thoughts of what it would be like to just sail over the horizon, working here and there to maintain the cruising lifestyle, while earning enough to pay down your debt. It's the notion of foregoing the fifty week/year grind to get a two week vacation, and instead going on a "permanent vacation" aboard a sailboat, and working as necessary to fund the lifestyle.

As some have stated, 26-27 isn't young anymore, so it's time to get on with it. I think you already know this, Casey, and you're just trying to deal with the possibility that you may not quickly find meaningful work when you graduate. You fully accept the responsibility of taking care of your debt, though, so you're starting to feel trapped. Accepting that responsibility is commendable, and shows you to be a person of character.

People who hire are always looking for those of good character, so you'll probably find a good situation for you. I would encourage you to seriously consider what Dan (Ex-Cal) advised elsewhere: Look into finding employment outside the borders of the US. You will have your eyes opened if you begin a life as a citizen of the world, not just the US.

It's also clear that you're level-headed enough to consider the truly long-term picture, since you've asked about retirement funding. That's smart, but I wouldn't concern myself with it too much given your current circumstances. Planning "too early" is much better than planning "too late" (which is, sadly, the case with a majority of Americans), but in the context of this forum I imagine you'll find it isn't "one size fits all." Some cruisers have comfortable cushions of cash; some live day-to-day; most are in the middle of those two extremes.

Opportunities exist, and we often encounter them when we least expect it. If you stretch yourself beyond your comfort zone, you will surprise yourself. And you will likely discover, when you look back on your life, that it was the unexpected curveballs that life threw at you, and how you dealt with them, that produced some of your fondest memories.

And who knows, that may well be as captain of your own ship - in every sense.

TaoJones
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Old 22-06-2008, 17:15   #3
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Casey,
There is a whole body of knowledge that answers the kind of questions you are asking. Its called "Personal Financial Planning". There are books, courses, certifications, people who become professionals in that business, and of course many people who become clients of those professionals. The more you know about this topic yourself, the less nieve you will be about the world of finance, risk, and life itself. Look up the "College for Financial Planning" on the internet. It will be an eye opener.
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Old 22-06-2008, 17:25   #4
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Great post Tao!

I have a Roth IRA started, in hopes of not being absolutely broke at age 70. (Not a whole lot of hope of Social Security paying out at that point... grin)

I figure that 3k in for ten years, with 40 years to compound will do enough to not be absolutely broke. Adding in whatever spare change I can come up with along the way from there on out is what I'm hoping to do. The rule of 72 does some interesting things, but in the end inflation will undoubtedly make it a mere pittance when the time comes. It's the thought that counts, right?

(Though the last few years my CD's have outperformed the Roth...)
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Old 22-06-2008, 17:46   #5
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.

: Look into finding employment outside the borders of the US. You will have your eyes opened if you begin a life as a citizen of the world, not just the US.
TaoJones
Last night at dinner our host was saying that there are more than 100 multi story buildings under construction here in Panama City. This place is right in the middle of a boom where US (and western) university grads would be welcomed with open arms... Dubai is another place...

But also remember that a construction management degree is similar to all degrees. They mark someone as educated. Therefore you could get jobs in many professional fields.
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Old 22-06-2008, 18:23   #6
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I don't think it's possible to predict how your health will be or how much money you will need to retire. The rules of the game are always changing. Just ask the baby boomers who watched their pensions get vaporized,and look at the costs of health care in your later years.

Probably your nationality is the most important factor as to what your situation will be at "retirement" age. Some countries have free healthcare, and that takes a huge dent out of the retirement budget.

In the USA, you can save up a million dollars and have a single illness wipeout all your money if you are under insured or not insured at all like 47 million citizens.

I stopped working and went sailing when I was 47, and I'm not sorry that I did. My friends who died at age 47 and 54 never got to see their retirement.

Unless you are a bazillionaire, it's going to be hard to cover all of your bases with 100% assurance.

My sollution was to set sail on my circumnavigation at age 47, and then go back to work as necessary. My master plan is to become a greeter at Walmart if I run out of money. Until then, I will live my dreams.

Check this out for additional information:GO AHEAD
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Old 22-06-2008, 18:37   #7
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Thanks

Tao,

Thanks for the input. Though I'm not feeling discouraged about possible job prospects (I have one lined up if I choose to stay with my current company), or about paying off my debt, I am feeling discouraged about the daily grind. And as you said it, I am more so looking to avoid that grind, and turn my life into a half-time "vacation" by cruising part time and working part time. I hope that doesn't make me sound lazy or worthless. I just feel there is more to life than working. If you think about it, work (11 hours a day, taking into account lunch and commute time) and sleep (8 hours a day) constitutes about 60% of your life, taking into account weekends and such. And even with 40% left to yourself, is it really time for you to do what you truly want? You need to plan according to your work schedule. I understand you need to work to make money, to be able to survive. But, so many of us forget that this is initially the reason we work. Many think the meaning of work is to get that next big promotion, or having a more prestigious title, or to be able to buy that BMW, etc... Not that there is anything wrong with that, to each their own, but my true passion lies with travel, and that is the reason I work. I also love the water, and I think the two would go very well together. But as you might know, I have never lived aboard, and it's something I would try out before making that step. I'm pretty sure I wouldn't complain though .

I also understand you need to plan accordingly for the future. I realize I won't always be in good health, and I'll need a backup plan for when that time comes. But, as stated earlier, I don't want to work my life away soley for retirement. Unfortunately "career" type jobs are the ones that pay the most, but they don't allow you to work and play as you please. Although, I am going to inquire about this with some of my professors and see what types of well paying jobs in construction are contractually based.

It's kind of a catch-22 huh? Build a career, and retire 30 years later with a nice amount of funds. Or play while working and never retire.

This wouldn't even be an issue if I lived in Europe and got 6 weeks vacation a year, but alas, this is not the case.
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Old 22-06-2008, 18:41   #8
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Maxing Out

Maxing Out,

I just read what you said about becoming a greeter at wal-mart. That gave me a chuckle. That is a great master plan. My girlfriends grand-father always gives me a hard time asking if that's what I'll become some day. He's always joked about it, but maybe there is a little bit of truth to it .

Thanks for your thoughts.
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Old 22-06-2008, 19:42   #9
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Avoiding wine, women and song...

While my financial position is now OK the biggest mistake that I made in my younger years was overindulgence in wine, women and song.

That is I could take what seemed like a moderate amount from the bank on a Friday and blow it during the weekend.

If I had been way less friendly and inebriated during those days and had invested that money wisely then my current financial position would have been way better. Most that I know of who choose this path were able to retire before 40.

Your earning ability when young is huge. Find a second (or even third) job on the weekend, curtail your social life and watch the money (and security) roll in.
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Old 22-06-2008, 20:31   #10
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While my financial position is now OK the biggest mistake that I made in my younger years was overindulgence in wine, women and song.

He He.......I didn't do that much, but ended up getting married and then came the kids.

Sucked dry........errr......the bank accounts, nothing else.
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Old 22-06-2008, 20:34   #11
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Your earning ability when young is huge. Find a second (or even third) job on the weekend, curtail your social life and watch the money (and security) roll in.
This is probably good advice, Casey. It's a bit like the young phenoms who forsake any semblance of a social life entirely, to train for the Olympic Games. To most observers looking in from the outside, it seems somewhat draconian - possibly driven by the unmet dreams of a parent or parents.

More often than not, though, the talented youngster is driving him/herself, and the parent(s) then do all in their power to help. A person with a strong will can accomplish astonishing things. Witness Tiger Woods winning the U.S.Open on a recently-surgically-repaired knee, and a double stress fracture of his tibia in the same leg.

As he said, "It's only pain."

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Old 22-06-2008, 22:13   #12
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I was about your age when I decided to go cruising. I had a degree in English and had worked my way thru college as a carpenter. I got some really good advice from a friend of mine's Dad. It was this, " You can be a doctor or a lawyer (he was one of twelve people in the state of California who was both) and you'll earn a nice salary but you'll never get rich. If you want to get rich you have to go into business for yourself." What he did is worked his butt off pulling extra shifts and working hard in his profession." The thing that set him apart from others is that he saved his money and poured it into buying real estate. He never bought a new car. He put 8 kids thru private colleges. But he ended up more wealthy than most doctors b/c he invested his moeny. This was on a GP salary not a specialist.

When I started reading books about starting a construction company one of the things that one of the books said is that you should build at least 1/3 of your projects for yourself. In other words keep them. I was able to do that and I traded those houses for apartment buildings. B/c I saved money on taxes by not selling the houses and then doing a 1031 tax deferered exchange I was able to invest alot of money in my retirement (and boat fund). By investing in things you understand and starting early you should be in aposition to retire and cruise as you please. Especially if you map out a plan which I didn't really do.
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Old 22-06-2008, 23:02   #13
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My master plan is to become a greeter at Walmart if I run out of money.
I'm gonna drive the Hertz bus at the airport. They embroider that Hertz in yellow on the cuffs of that excellent white shirt and your name on the pocket.

Way cooler than a plastic Wallmart nametag.
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Old 22-06-2008, 23:04   #14
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While my financial position is now OK the biggest mistake that I made in my younger years was overindulgence in wine, women and song.

"I spent most of my football millions on booze, women and fast cars. The rest I just wasted."

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Old 22-06-2008, 23:36   #15
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Tao,
I am feeling discouraged about the daily grind. And as you said it, I am more so looking to avoid that grind, and turn my life into a half-time "vacation" by cruising part time and working part time.
You've identified something extremely important. That is that you must identify a career that absolutely fascinates you first, and then worry about whether it makes you rich. Fortunately for me, my dad gave me that advice when I was young and headed for law school.

I diverted into aviation and it has taken me all over the world and allowed me to live in many different countries and cities.

As Mark points out. You are educated, find out what it is that excites you and go do it.

BTW - 26 is not old and don't listen to people who tell you to "get moving" - Jeez I just turned 47 and have lived 2 lifetimes since I first came to Asia at the age of 24. I sqandered my first million, decided to skip my second million and am now going straight for my 3rd. I have about $1.98 save up towards it...


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Tao,
...but my true passion lies with travel, and that is the reason I work. I also love the water, and I think the two would go very well together. But as you might know, I have never lived aboard, and it's something I would try out before making that step. I'm pretty sure I wouldn't complain though .
Life is the journey - not the destination - you really will get distracted if you let yourself. You may feel peers, parents and society expect you to knuckle down, pay your bills, progress in your company, get married, buy a house, knock out a couple of kids, get a mini-van, go to soccer practice & ballet lessons on weekends after cutting the grass and cleaning the pool.

It absolutely does not have to be that way and we all know it.


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Tao,
Or play while working and never retire.
Retirement is a state of mind. Honestly it's also not all that it is cracked up to be. Continuing the journey above:

Send your kids to school, then college, then weddings, then sell your house, move to a retirement community in Florida - No way!

Retirement is simple - take 10% of your take-home pay. Now and forever. Stick it in a managed fund. Get a raise? Keep saving 10% - You will never have to worry about retiring or not.

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Tao,
This wouldn't even be an issue if I lived in Europe and got 6 weeks vacation a year, but alas, this is not the case.

Those lucky B@stards - LOL

I have worked for the same company for 27 years. My company has sent me to live all around the world. I am a so-called expert expat. I have skills needed in places other than home. There are lot's of folks in my company that can do what I do. But they bought into the dream above and choose to stay home. They are living fine and many of them are my friends. But their desire to stay home makes me valuable.

I chose this and have never regretted it. I am now in that sort of semi statesman class. I can get doors opened in Asia - People who were low level when I got here are now all high level. We grew up together.

Advice - Already given enough and don't want to sound preachy - But here's a tip find an international construction firm to work for here's a starting list -

The Top 225 International Contractors - McGraw-Hill Construction | ENR.

And remember what someone else here said - It's a global economy - be a global player and you'll get all the adventure and excitement you need.
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