Is the economy doing badly?

[Aseahawkfan]

This is a big question that often gets asked or rather framed as such by politicians to attack each other. But is the economy actually doing badly?

I have to say no. We had the pandemic recession due to lockdown and severe business disruption from pandemic era measures, but otherwise the economy was doing well at the end of the Obama term, did well during Trump, and has done well during Biden.

Unemployment is at 4.3 percent. Inflation is at about 3.1 percent last reading, but started off very bad post pandemic. Interest rates are about 5 percent for The Fed funds rate which is what most money lending is based in the U.S. Real wages have risen and are at all time absolute high. Economy grew at 2.8 percent in the 2nd quarter. Our economy is cruising along right now with inflation being the biggest negative impacting Main Street.

Why do people feel the economy is doing badly with most metrics indicating we're doing very well? Is it a narrative driven by the need to sell a problem or do we have real economic problems?

Given what I see, I can see a few pain points:

1. Inflation has hurt people who are on a fixed income. Folks on social security as their main form of income or welfare in the poorer class or paycheck to paycheck folks may be feeling the higher food costs more than others, especially if housing is a paid off house or rent paid by the state. Then their primary income will be most impacted by increased food costs.

2. Housing. Rents and home prices are pretty insane right now even as a percentage of income. Housing supply has been very constrained due to the pandemic and higher borrowing costs have made the cost of a home much, much higher. Rents have shot way up due to downward pressure on home buying which pushes more people into rentals creating a supply shortage with demand driven up increasing prices. This is the primary issue for most working class folks, especially younger working people who are stuck between a rock and a hard place with high rents due to high demand versus constrained supply or not being able to buy a house due to high borrowing costs and high home prices due to low supply from when COVID cut down home building.

These are two big pain points I see in the economy. Most prices have dropped or stabilized and the economy seems to be doing well though fears of a recession have risen.

Why do people perceive the economy as doing poorly right now? How are the economic problems impacting you personally if at all?

Speaking for myself, I pay slightly higher for some food products, but not sufficiently so it impacts much else in my life.

What economic issues are impacting your life? What do you feel needs fixing?

[River Dog]

This is a big question that often gets asked or rather framed as such by politicians to attack each other. But is the economy actually doing badly?

I have to say no. We had the pandemic recession due to lockdown and severe business disruption from pandemic era measures, but otherwise the economy was doing well at the end of the Obama term, did well during Trump, and has done well during Biden.

Unemployment is at 4.3 percent. Inflation is at about 3.1 percent last reading, but started off very bad post pandemic. Interest rates are about 5 percent for The Fed funds rate which is what most money lending is based in the U.S. Real wages have risen and are at all time absolute high. Economy grew at 2.8 percent in the 2nd quarter. Our economy is cruising along right now with inflation being the biggest negative impacting Main Street.

Why do people feel the economy is doing badly with most metrics indicating we're doing very well? Is it a narrative driven by the need to sell a problem or do we have real economic problems?

Given what I see, I can see a few pain points:

1. Inflation has hurt people who are on a fixed income. Folks on social security as their main form of income or welfare in the poorer class or paycheck to paycheck folks may be feeling the higher food costs more than others, especially if housing is a paid off house or rent paid by the state. Then their primary income will be most impacted by increased food costs.

2. Housing. Rents and home prices are pretty insane right now even as a percentage of income. Housing supply has been very constrained due to the pandemic and higher borrowing costs have made the cost of a home much, much higher. Rents have shot way up due to downward pressure on home buying which pushes more people into rentals creating a supply shortage with demand driven up increasing prices. This is the primary issue for most working class folks, especially younger working people who are stuck between a rock and a hard place with high rents due to high demand versus constrained supply or not being able to buy a house due to high borrowing costs and high home prices due to low supply from when COVID cut down home building.

These are two big pain points I see in the economy. Most prices have dropped or stabilized and the economy seems to be doing well though fears of a recession have risen.

Why do people perceive the economy as doing poorly right now? How are the economic problems impacting you personally if at all?

Speaking for myself, I pay slightly higher for some food products, but not sufficiently so it impacts much else in my life.

What economic issues are impacting your life? What do you feel needs fixing?

I agree, the economy isn't doing that badly. Inflation is still high, but not out of control type high. There's still a labor shortage, but the job market has cooled off some. I blame both R's and D's for the post pandemic inflation because both were partners in giving away these totally unnecessary Covid payments, of which only the first one was justified.

Personally, what I'm most concerned about is inflation. I have a pension and an annuity that does not adjust for inflation. I get the same amount each month regardless of the market conditions. That's one of the weaknesses of a pension. Social Security has a COLA, but it's inadequate in compensating for the things seniors spend their money on. Health care expenses have gone up at a faster rate than what SS's COLA has adjusted for. SS is looking at just a 2.6% increase form2025 while health care costs are projected to increase by 7%.

Gas prices are higher here than they are anywhere else in the nation except CA, and it affects people out here in E. Washington more than it does the folks in the Puget Sound area as we don't have access to mass transit. But our state government couldn't give two chits about us out here in what they consider Trumpsville that aren't going to vote for them anyway.

[Aseahawkfan]

Health care expenses are definitely another concern. I often forget about that one for myself, but it has impacted my family. Some of the drugs they take have increased pricing substantially making them expensive to obtain and then the game of whether Medicare or your insurance will pay for a particular drug. Hospital expenses across the board have gone up. That is one expense area that needs some work. Obamacare never really solved the insurance problem much. I know Buffett and I think Bezos tried to solve the health insurance problem in a good business manner, but they gave up trying to solve it. Not sure why, but my guess would be the business metrics of medical are bad. It never feels great to profit off the pain and suffering of humans as well as the tough position many hospitals and medical supply companies are in where the desire is to cure the malady thus reducing demand when the natural inclination of a business is always to drive demand up. Medical is not a business where you want consistent high demand, which is why something like a pandemic can severely stress medical services as demand spikes well above supply.

I don't know how they deal with this long-term, but Medicare is one of our largest socialized government services. They seem pretty effective so long as you don't have many problems or buy Medicare Advantage if you have quite a few problems which can also be costly for seniors.

[River Dog]

Health care expenses are definitely another concern. I often forget about that one for myself, but it has impacted my family. Some of the drugs they take have increased pricing substantially making them expensive to obtain and then the game of whether Medicare or your insurance will pay for a particular drug. Hospital expenses across the board have gone up. That is one expense area that needs some work. Obamacare never really solved the insurance problem much. I know Buffett and I think Bezos tried to solve the health insurance problem in a good business manner, but they gave up trying to solve it. Not sure why, but my guess would be the business metrics of medical are bad. It never feels great to profit off the pain and suffering of humans as well as the tough position many hospitals and medical supply companies are in where the desire is to cure the malady thus reducing demand when the natural inclination of a business is always to drive demand up. Medical is not a business where you want consistent high demand, which is why something like a pandemic can severely overly medical services as demand spikes well above supply.

I don't know how they deal with this long-term, but Medicare is one of our largest socialized government services. They seem pretty effective so long as you don't have many problems or buy Medicare Advantage if you have quite a few problems which can also be costly for seniors.

Medicare doesn't pay for long term care unless you're discharged from a hospital stay of 3 or more days, and even then, they only pay for the first 3 months, or at least that's the way it was 10 years ago when I had to put my mother in a nursing home. I have long term care insurance, but since my wife has MS, no insurance company will offer her coverage. It's a problem, but I don't want to see another socialized program or have it incorporated into Medicare. We can't support the programs we have now.

Depending on the type of drugs they are, the costs aren't that bad. My wife is on 11 prescription drugs and I'm on 3, and as of today, we've had a little over $400 out of pocket expenses for the year. What's spendy is the infusions my wife is getting for her rheumatoid arthritis, of which we've spent roughly $5,000 in the calendar year. It's not covered by Medicare as it's not considered essential, but it improves her quality of life.

It's a bit off topic, but one of the problems is that people don't educate themselves about all the various options under Medicare. They assume that someone, the government or some social worker, is going to take care of them. All government agents for Medicare and SS are instructed to do is to answer questions, explain the options, but under no circumstances are they to give advice. People have to educate themselves or find a friend or relative to do it for them.

The good news is that there's lots of excellent resources out there. The classes I've gone to are sponsored by our local hospital and supported by community donations and sales from the hospital gift shop. Not only do they hold classes, but they're also available for one-on-one appointments, all at no charge. There's also plenty of books out there and some good resources on social media like Facebook, although you have to be careful of scam artists.

Back to topic. Inflation has to be considered the biggest current threat to our economy. It directly affects interest rates that people use to buy homes and companies use to finance improvements that keep them competitive in the global marketplace. It's a genie that you don't want to let out of its bottle.

[Aseahawkfan]

Hopefully you upgraded to Medicare Advantage to help with expenses.

Inflation is at about 3.1 percent, but certain areas like rent are too high, especially in urban and suburban areas close to jobs. You don't want housing to be so expensive it eats a huge amount of income. That takes a lot of money out of circulation and pushes it into housing costs.

[Aseahawkfan]

25% tax on unrealized capital gains and a 44.6 percent tax on capital gains pushed by Harris and her leftist crew. No way in hell I vote for that. I put my capital at risk in the market and if I make a good investment decision, the governments wants to take 25% of unrealized gains whether or not the investment continues to perform well and 44.6% of my capital gains? That is pure socialist drivel and the mob trying to rob using federal government power.

You asked what is worse than Trump and his lying Riverdog, that level of taxation is far worse than Trump and his lying. Ten times worse than Trump and his lying crap. Lies I can ignore, but taking that much money off me to do what? Give to people doing nothing? Get used by an irresponsible government managing money like garbage? Hell no.

Harris a big time leftist if she thinks that level of taxation is going to fly. I find that risk far too high. Democrats coming after my investment gains is a far, far worse situation than what I get from Trump being in office. That is going to piss off a lot of people who aren't that far left. Many, many people are invested in markets with their retirement and other investments, taxing unrealized gains is an absolute no go even on the Democratic side and a 44.6 percent capital gains tax would absolutely wreck the economy because the government no matter how much Democratic supporters want to pretend is not better spending capital than the business community. It will not be used in a productive manner.

Harris inviting a severe backlash from swing voters pushing taxation on unrealized gains and a capital gains rate that high. Real pushback. Those are absolutely insane economic policies. No wonder she was rated as far left like Sanders.

[River Dog]

Hopefully you upgraded to Medicare Advantage to help with expenses.

Inflation is at about 3.1 percent, but certain areas like rent are too high, especially in urban and suburban areas close to jobs. You don't want housing to be so expensive it eats a huge amount of income. That takes a lot of money out of circulation and pushes it into housing costs.

Medicare Advantage? You meant Medicare Disadvantage.

That's a prime example of what I was talking about regarding people who don't educate themselves. Those TV ads you see about MA are IMO criminal as they don't tell you the significant disadvantages of them like drug companies having to read disclaimers about possible side effects. MA is run by for profit insurance companies, so they'll advertise. Traditional Medicare is government run, so they won't run ads.

MA plans are generally cheaper than traditional Medicare, some have dental plans, and they may work for some that live under a tight budget and need to cut corners wherever they can. But you get what you pay for. First of all, with MA you have to go to doctors within their network. With traditional Medicare, so long as a doctor or clinic takes Medicare, and about 95% do, you can go to any doctor or specialist you want. If your primary care doctor sees a spot on your lung Xray and wants to send you to a specialist, there's a good chance that specialist won't be in your MA plans network. If your doctor sends you to a specialist, even if they happen to be in MA's network, you have to get pre-approval from them. With traditional Medicare, I need no preapproval. I could walk into a knee surgeon's office this morning so long as they take Medicare. I've read about and listened to lots of horror stories, where someone travels outside of their region, has a medical event, and MA won't let them see a doctor because they're not in their network.

MA also doesn't cover international travel, and I've been going somewhere overseas the past 3 years. The traditional Medicare supplement plan I've chosen, a Plan F, covers international travel. If you decide you don't like MA and want to change to traditional Medicare, you might have difficulty getting a supplement because they're not required to accept you. If you enroll in traditional Medicare at the get-go, they have to accept you.

I pay $174/month for my traditional Medicare Part B premium and $638/year for the supplement. That's not all that expensive when you consider the disadvantages of MA.

[c_hawkbob]

Hopefully you upgraded to Medicare Advantage to help with expenses.

Inflation is at about 3.1 percent, but certain areas like rent are too high, especially in urban and suburban areas close to jobs. You don't want housing to be so expensive it eats a huge amount of income. That takes a lot of money out of circulation and pushes it into housing costs.

Medicare Advantage? You meant Medicare Disadvantage.

That's a prime example of what I was talking about regarding people who don't educate themselves. Those TV ads you see about MA are IMO criminal as they don't tell you the significant disadvantages of them like drug companies having to read disclaimers about possible side effects. MA is run by for profit insurance companies, so they'll advertise. Traditional Medicare is government run, so they won't run ads.

MA plans are generally cheaper than traditional Medicare, some have dental plans, and they may work for some that live under a tight budget and need to cut corners wherever they can. But you get what you pay for. First of all, with MA you have to go to doctors within their network. With traditional Medicare, so long as a doctor or clinic takes Medicare, and about 95% do, you can go to any doctor or specialist you want. If your primary care doctor sees a spot on your lung Xray and wants to send you to a specialist, there's a good chance that specialist won't be in your MA plans network. If your doctor sends you to a specialist, even if they happen to be in MA's network, you have to get pre-approval from them. With traditional Medicare, I need no preapproval. I could walk into a knee surgeon's office this morning so long as they take Medicare. I've read about and listened to lots of horror stories, where someone travels outside of their region, has a medical event, and MA won't let them see a doctor because they're not in their network.

MA also doesn't cover international travel, and I've been going somewhere overseas the past 3 years. The traditional Medicare supplement plan I've chosen, a Plan F, covers international travel. If you decide you don't like MA and want to change to traditional Medicare, you might have difficulty getting a supplement because they're not required to accept you. If you enroll in traditional Medicare at the get-go, they have to accept you.

I pay $174/month for my traditional Medicare Part B premium and $638/year for the supplement. That's not all that expensive when you consider the disadvantages of MA.

Do you get prescription, eye and dental with part F? I'm asking because I've set my retirement date for 8/1/25 and will be confronted with these decisions soon. International travel is not an issue for me, but really don't understand and the alphabet soup options yet.

[River Dog]

Do you get prescription, eye and dental with part F? I'm asking because I've set my retirement date for 8/1/25 and will be confronted with these decisions soon. International travel is not an issue for me, but really don't understand and the alphabet soup options yet.

No. Prescriptions drugs are covered under Part D. Traditional Medicare does not offer a dental plan. If you sign up for a Medicare Advantage plan, then prescription drugs are combined with dr's visits and outpatient care. But under traditional Medicare, they are two separate plans.

I do not have a dental plan. I have a membership with my dentist's office for $35/month that gives me two free teeth cleanings per year and 30% off all services. The teeth cleanings alone pay for the monthly fee.

FYI Part B Plan F, the one my wife and I are covered by, was closed to anyone born after 1954. The closest plan to it is Part G, which is exactly the same as Part F except that it doesn't cover the Medicare deductible, which for 2024 is $240.

I hear ya about the alphabet soup options. Basically, there are 4 "Parts": Part A is hospitalization, Part B (a.k.a. Medigap) is dr.s visits and outpatient care, Part C is Medicare Advantage (combines Part B and Part D), and Part D is prescription drugs. All have separate deductibles.

Part B has a number of "Plans" that address Medicare supplement insurance as Medicare doesn't pay 100%. I'm not sure what letter they're up to now. I know it goes out to at least N. Unless you really need to watch your budget, I'd recommend sticking with traditional Medicare with a Part B, Plan G supplement. If you don't like it or if it's too expensive, you can always change to a Medicare Advantage plan any year during open enrollment, which usually runs from sometime in October to the first week of December.

There's a Facebook group called "Boomer Benefits" (I just sent you an invite) that I've found to be a good resource, and of course, the Medicare website:

https://www.medicare.gov/

Beware of scammers.

[c_hawkbob]

Thanks! I'll start digging (and always wary of scammers)

[River Dog]

Thanks! I'll start digging (and always wary of scammers)

No sweat! Shoot me a PM if there is anything I can do to help.

[Aseahawkfan]

Medicare Advantage? You meant Medicare Disadvantage.

That's a prime example of what I was talking about regarding people who don't educate themselves. Those TV ads you see about MA are IMO criminal as they don't tell you the significant disadvantages of them like drug companies having to read disclaimers about possible side effects. MA is run by for profit insurance companies, so they'll advertise. Traditional Medicare is government run, so they won't run ads.

MA plans are generally cheaper than traditional Medicare, some have dental plans, and they may work for some that live under a tight budget and need to cut corners wherever they can. But you get what you pay for. First of all, with MA you have to go to doctors within their network. With traditional Medicare, so long as a doctor or clinic takes Medicare, and about 95% do, you can go to any doctor or specialist you want. If your primary care doctor sees a spot on your lung Xray and wants to send you to a specialist, there's a good chance that specialist won't be in your MA plans network. If your doctor sends you to a specialist, even if they happen to be in MA's network, you have to get pre-approval from them. With traditional Medicare, I need no preapproval. I could walk into a knee surgeon's office this morning so long as they take Medicare. I've read about and listened to lots of horror stories, where someone travels outside of their region, has a medical event, and MA won't let them see a doctor because they're not in their network.

MA also doesn't cover international travel, and I've been going somewhere overseas the past 3 years. The traditional Medicare supplement plan I've chosen, a Plan F, covers international travel. If you decide you don't like MA and want to change to traditional Medicare, you might have difficulty getting a supplement because they're not required to accept you. If you enroll in traditional Medicare at the get-go, they have to accept you.

I pay $174/month for my traditional Medicare Part B premium and $638/year for the supplement. That's not all that expensive when you consider the disadvantages of MA.

My father pays for supplemental Medicare insurance. I thought it was Medicare Advantage. It enhances regular Medicare. He has traditional Medicare as well, but traditional Medicare doesn't pay for some of the drugs he gets , so he needed addtiional Medical coverage post retirement to cover his personal medical issues.

Medicare Advantage to my understanding doesn't replace regular Medicare, but I'd have to ask him. His insurance is supplemental to Medicare.

[River Dog]

Medicare Advantage to my understanding doesn't replace regular Medicare, but I'd have to ask him. His insurance is supplemental to Medicare.

You are correct. Medicare Advantage doesn't actually replace Medicare. With a few exceptions, it combines Parts A, B, and D together. If you go with a Medicare Advantage plan, your medicare benefits are administered through Medicare Advantage. It's kind of an all-in-one bundle, which appeals to a lot of folks.

The supplement your dad is buying is a Part B Medigap policy, or traditional Medicare. If he has regular Medicare, he also has a separate Part D prescription drug plan. He'd be a fool if he didn't as I have a Part D plan that has no monthly premium. Part D is extremely complicated as the best plans are dependent on the types of drugs you're taking, and if you drop or add one drug, the entire matrix can change. I schedule my annual wellness visit in October so if my doctor adds a drug, it's during open enrollment and I can choose a different plan for the next calendar year.

In Part B or Medigap, the government dictates to the insurance company what they have to cover under each Plan (A-N) so all Medigap policies are the same, with the only difference being quality of service and their premium. My wife and I went with a Part B Plan F high deductible ($2800/year) supplement through Globe Life. The annual premium is $638. It's a good choice if you don't expect a lot of medical expenses because of the relatively low premium. We chose Globe Life because it had one of the cheaper premiums and it is a well-known name. I have no complaints about them.

I started going to Medicare and SS classes several years before I retired. Some came with free dinners, but you had to listen to their sales pitch. I also read a book on SS titled "Get What's Yours." Plus, I have a financial advisor through New York Life who manages my IRA's that I can visit with or email anytime free of charge.

[Aseahawkfan]

You are correct. Medicare Advantage doesn't actually replace Medicare. With a few exceptions, it combines Parts A, B, and D together. If you go with a Medicare Advantage plan, your medicare benefits are administered through Medicare Advantage. It's kind of an all-in-one bundle, which appeals to a lot of folks.

The supplement your dad is buying is a Part B Medigap policy, or traditional Medicare. If he has regular Medicare, he also has a separate Part D prescription drug plan. He'd be a fool if he didn't as I have a Part D plan that has no monthly premium. Part D is extremely complicated as the best plans are dependent on the types of drugs you're taking, and if you drop or add one drug, the entire matrix can change. I schedule my annual wellness visit in October so if my doctor adds a drug, it's during open enrollment and I can choose a different plan for the next calendar year.

In Part B or Medigap, the government dictates to the insurance company what they have to cover under each Plan (A-N) so all Medigap policies are the same, with the only difference being quality of service and their premium. My wife and I went with a Part B Plan F high deductible ($2800/year) supplement through Globe Life. The annual premium is $638. It's a good choice if you don't expect a lot of medical expenses because of the relatively low premium. We chose Globe Life because it had one of the cheaper premiums and it is a well-known name. I have no complaints about them.

I started going to Medicare and SS classes several years before I retired. Some came with free dinners, but you had to listen to their sales pitch. I also read a book on SS titled "Get What's Yours." Plus, I have a financial advisor through New York Life who manages my IRA's that I can visit with or email anytime free of charge.

Sounds like you planned well. I am about 17 years or so from retirement. Though I doubt I'll ever really retire as I can't sit still for long periods of time not doing something to earn money. I am not a relaxed person which I imagine to some degree comes across on the forum and my mind is in constant hyperdrive. I can't rest it too easily. Retirement doesn't look enjoyable to me, though maybe if I can retire I can finally push harder to publish some books and get a publishing company going. That would interest me in retirement.

[River Dog]

Sounds like you planned well. I am about 17 years or so from retirement. Though I doubt I'll ever really retire as I can't sit still for long periods of time not doing something to earn money. I am not a relaxed person which I imagine to some degree comes across on the forum and my mind is in constant hyperdrive. I can't rest it too easily. Retirement doesn't look enjoyable to me, though maybe if I can retire I can finally push harder to publish some books and get a publishing company going. That would interest me in retirement.

I had some experience in having to manage my mom's doings before she passed away 10 years ago, but yes, if I give myself credit for anything, it's planning our retirement. I haven't even started taking my SS payments as I am waiting until I turn 70, which happens this October, so I can get 132% of my full retirement amount. I've taken advantage of my relatively low income over the past 6 years to transfer as much money from my conventional IRA into my Roth and pay tax at just the 12% rate. That's something I learned by going to one of the free classes. We also had our house paid off as well as our car loans before we retired.

Although you want to have retirement as a goal and pump as much money into a 401K and/or IRA as you can afford, it doesn't make a lot of sense to do much research at your age as things are likely to change by the time you retire. Judging by what I know of you in here, you'll have no problems when it comes time to hit the rocking chair.

An old wise man told me that you only get one shot at this gig, so you damn well better do it right the first time.

[Aseahawkfan]

I had some experience in having to manage my mom's doings before she passed away 10 years ago, but yes, if I give myself credit for anything, it's planning our retirement. I haven't even started taking my SS payments as I am waiting until I turn 70, which happens this October, so I can get 132% of my full retirement amount. I've taken advantage of my relatively low income over the past 6 years to transfer as much money from my conventional IRA into my Roth and pay tax at just the 12% rate. That's something I learned by going to one of the free classes. We also had our house paid off as well as our car loans before we retired.

Although you want to have retirement as a goal and pump as much money into a 401K and/or IRA as you can afford, it doesn't make a lot of sense to do much research at your age as things are likely to change by the time you retire. Judging by what I know of you in here, you'll have no problems when it comes time to hit the rocking chair.

An old wise man told me that you only get one shot at this gig, so you damn well better do it right the first time.

I have not thought about retirement much. You are correct. I haven't built up a Roth or IRA as I like to have full access to my capital for use. I always felt that a Roth or IRA was there specifically for retirement with penalties for early access to capital. I don't like restricted access to my capital. I expect excellent returns from my capital. I probably should put some into a retirement account. The IRA I believe is a pre-tax benefit and the Roth is a post-tax benefit to the income invested. The Roth would be what I more likely invested in. It probably also doesn't help I never had good matching when I worked and the investment instruments I had access to in the 401ks offered did not allow access to quality investments as I'm more a stock picker and personally manage my assets.

We'll see in time if I made a bad decision or not with the IRA or 401k. Definitely getting burned during the Dot Com crash made me a more careful and better investor.

I do like your advice on Medicare. I know almost nothing about Medicare other than what I hear from my parents. I will have to use it someday. I'll make to research it well before hopping in.

[River Dog]

I had some experience in having to manage my mom's doings before she passed away 10 years ago, but yes, if I give myself credit for anything, it's planning our retirement. I haven't even started taking my SS payments as I am waiting until I turn 70, which happens this October, so I can get 132% of my full retirement amount. I've taken advantage of my relatively low income over the past 6 years to transfer as much money from my conventional IRA into my Roth and pay tax at just the 12% rate. That's something I learned by going to one of the free classes. We also had our house paid off as well as our car loans before we retired.

Although you want to have retirement as a goal and pump as much money into a 401K and/or IRA as you can afford, it doesn't make a lot of sense to do much research at your age as things are likely to change by the time you retire. Judging by what I know of you in here, you'll have no problems when it comes time to hit the rocking chair.

An old wise man told me that you only get one shot at this gig, so you damn well better do it right the first time.

I have not thought about retirement much. You are correct. I haven't built up a Roth or IRA as I like to have full access to my capital for use. I always felt that a Roth or IRA was there specifically for retirement with penalties for early access to capital. I don't like restricted access to my capital. I expect excellent returns from my capital. I probably should put some into a retirement account. The IRA I believe is a pre-tax benefit and the Roth is a post-tax benefit to the income invested. The Roth would be what I more likely invested in. It probably also doesn't help I never had good matching when I worked and the investment instruments I had access to in the 401ks offered did not allow access to quality investments as I'm more a stock picker and personally manage my assets.

We'll see in time if I made a bad decision or not with the IRA or 401k. Definitely getting burned during the Dot Com crash made me a more careful and better investor.

I do like your advice on Medicare. I know almost nothing about Medicare other than what I hear from my parents. I will have to use it someday. I'll make to research it well before hopping in.

There are two types of IRA's: A traditional, where you defer taxes, and a Roth, where you pay the taxes up front. Both have certain advantages. The traditional can keep your current tax bill low as you deduct your contributions straight off earned income, so if you're in a very high paying job, it would make a lot of sense to defer the taxes and pay them at a much lower rate when you retire. The Roth is after tax contributions but the entire account, earnings and all, are tax free. When I was working, I put all of my contributions into the Roth and paid the taxes.
 
401K plans are employer sponsored plans where the employer will match your contributions. They behave just like an IRA. If your employer has a 401K, you need to at least be making a large enough contribution to it so that you max out theirs. Otherwise, you're leaving money on the table. The nice thing about 401K's is that their portable, that you can roll them over into a future employer's 401K or into a self-directed IRA if you leave your company.

You can still access your 401K/IRA contributions at any time without penalty or paying taxes if you put it into a Roth. You have to wait 5 years, or age 59.5, to access accrued funds, ie earnings, without paying a 10% penalty, so it's not like it's completely inaccessible. It makes for a nice emergency fund.

When I got within 10 years of retirement and after we had our house paid off, I started bumping my 401K contributions to the Roth side to the maximum allowable by law.

Anyway, just some advice. The important thing is that you're saving money, which it sounds like you are.

[Aseahawkfan]

There are two types of IRA's: A traditional, where you defer taxes, and a Roth, where you pay the taxes up front. Both have certain advantages. The traditional can keep your current tax bill low as you deduct your contributions straight off earned income, so if you're in a very high paying job, it would make a lot of sense to defer the taxes and pay them at a much lower rate when you retire. The Roth is after tax contributions but the entire account, earnings and all, are tax free. When I was working, I put all of my contributions into the Roth and paid the taxes.
 
401K plans are employer sponsored plans where the employer will match your contributions. They behave just like an IRA. If your employer has a 401K, you need to at least be making a large enough contribution to it so that you max out theirs. Otherwise, you're leaving money on the table. The nice thing about 401K's is that their portable, that you can roll them over into a future employer's 401K or into a self-directed IRA if you leave your company.

You can still access your 401K/IRA contributions at any time without penalty or paying taxes if you put it into a Roth. You have to wait 5 years, or age 59.5, to access accrued funds, ie earnings, without paying a 10% penalty, so it's not like it's completely inaccessible. It makes for a nice emergency fund.

When I got within 10 years of retirement and after we had our house paid off, I started bumping my 401K contributions to the Roth side to the maximum allowable by law.

Anyway, just some advice. The important thing is that you're saving money, which it sounds like you are.

I see my cash savings as capital. I purchase assets that grow in value. I know a lot of people with money also get Roth IRAs whether they need them or not. You have to start taking it out at some point and the Roth as you stated is no tax on gains that you can start using later on. What is it? 70 you have to start using 2 percent or something? I usually pay my capital gains every year and engage in tax selling to reduce my capital gains tax liability. You don't really have this ability with an IRA or Roth to sell stocks for a capital loss to reduce the tax liability for your gains offsetting some of the tax burden. But then you have to wait 30 days to reenter an investment after a WASH sale.

I did not have employer matching for my 401k. If I had that, I would have taken advantage as that is too tasty to pass up. Roth allows for open investment? 401ks often have limited access to investments. I don't do too many mutual funds and need full access to stocks with maybe ETFs being attractive.

I haven't seen the need to take advantage of retirement accounts. I will continue to make money in the market when I retire. That party will likely never change as I enjoy investing. It's fun and studying companies is interesting. There are so many of them doing so many different things.

[River Dog]

I see my cash savings as capital. I purchase assets that grow in value. I know a lot of people with money also get Roth IRAs whether they need them or not. You have to start taking it out at some point and the Roth as you stated is no tax on gains that you can start using later on. What is it? 70 you have to start using 2 percent or something? I usually pay my capital gains every year and engage in tax selling to reduce my capital gains tax liability. You don't really have this ability with an IRA or Roth to sell stocks for a capital loss to reduce the tax liability for your gains offsetting some of the tax burden. But then you have to wait 30 days to reenter an investment after a WASH sale.

I did not have employer matching for my 401k. If I had that, I would have taken advantage as that is too tasty to pass up. Roth allows for open investment? 401ks often have limited access to investments. I don't do too many mutual funds and need full access to stocks with maybe ETFs being attractive.

I haven't seen the need to take advantage of retirement accounts. I will continue to make money in the market when I retire. That party will likely never change as I enjoy investing. It's fun and studying companies is interesting. There are so many of them doing so many different things.

You're talking about a required minimum distribution (RMD), and that only applies to conventional 401K's/IRA's that you owe taxes on, not to Roth accounts. The government is going to want their tax money, and they want you to withdraw it or roll it over into a Roth and pay the tax. It kicks in at 73 years old. That's one of the reasons why I've been rolling money from my traditional IRA to the Roth. Otherwise, waiting until 73 to roll it over might kick me into the next highest bracket.

I'm surprised that your employer doesn't offer a 401K. They've replaced pensions as the preferred option as employers don't have to worry about them in the future, which is one of the problems companies like Ford and GM were having as they owed so much money to their pension plans that it adversely affected their pricing and competitiveness with Honda and Toyota. At one point, GM had 2.5 retired workers drawing on their pension for every active employee. With the way car manufacturers automated jobs and shrunk their work force from what it was in the 50's and 60's when they first created their pensions, they were also shrinking the number of employees paying into their pension. It's the same type of problem Social Security has as it was designed for current workers to support retirees.

I had a very favorable 401K from my former employer. By the time I retired, I was getting 4% that they contributed without a matching requirement and 6% maximum 2 to 1 employee match, so I was getting 10% of my salary contributed to my retirement fund by my employer.

So long as you retire with a significant nest egg, I don't see a problem with how you're handling it. The big thing is not to count on Social Security for anything more than 40% of your post-retirement income. You might want to keep a Roth IRA in mind as there are some significant tax advantages after you retire, and you can only contribute a certain amount each year so as to prevent someone from plopping down tens of thousands of dollars just before they retire.

[Aseahawkfan]

You're talking about a required minimum distribution (RMD), and that only applies to conventional 401K's/IRA's that you owe taxes on, not to Roth accounts. The government is going to want their tax money, and they want you to withdraw it or roll it over into a Roth and pay the tax. It kicks in at 73 years old. That's one of the reasons why I've been rolling money from my traditional IRA to the Roth. Otherwise, waiting until 73 to roll it over might kick me into the next highest bracket.

I'm surprised that your employer doesn't offer a 401K. They've replaced pensions as the preferred option as employers don't have to worry about them in the future, which is one of the problems companies like Ford and GM were having as they owed so much money to their pension plans that it adversely affected their pricing and competitiveness with Honda and Toyota. At one point, GM had 2.5 retired workers drawing on their pension for every active employee. With the way car manufacturers automated jobs and shrunk their work force from what it was in the 50's and 60's when they first created their pensions, they were also shrinking the number of employees paying into their pension. It's the same type of problem Social Security has as it was designed for current workers to support retirees.

I had a very favorable 401K from my former employer. By the time I retired, I was getting 4% that they contributed without a matching requirement and 6% maximum 2 to 1 employee match, so I was getting 10% of my salary contributed to my retirement fund by my employer.

So long as you retire with a significant nest egg, I don't see a problem with how you're handling it. The big thing is not to count on Social Security for anything more than 40% of your post-retirement income. You might want to keep a Roth IRA in mind as there are some significant tax advantages after you retire, and you can only contribute a certain amount each year so as to prevent someone from plopping down tens of thousands of dollars just before they retire.

That is nice. I work in a contracted job. So the 401k is not the greatest. All they offer is the tax advantage portion then a fairly limited list of mutual funds managed by money managers who charge a fee on the on fund. I don't really need my money managed by someone else for a fee. I haven't paid broker fees for 30 plus years and recently they even got rid of trading fees allowing movement in and out of a stock far more cheaply than when I was younger.

I'm kind of strangely lazy insofar as I don't enjoy working too deeply in a corporate structure. I'm in management, but I don't seek to rise up too much. I don't enjoy corporate politics. Since I don't desire a CEO position, I've always kind of looked at jobs as a means to acquire capital and cheap health insurance why I build up assets in the markets. I like that America has these investment markets where you can convert cash into assets that grow in value versus the common teaching to the middle and lower class that consumption is all their money is good for.

When I was 17, I started reading business books like Trump's The Art of the Deal and Rich Dad, Poor Dad which changed my view on money and what should be done with it.

Yes. I should "retire" with enough to relax in my older years and focus more on some personal goals like building a career as an author with a personal publishing business and focus more on the markets daily. I want to write horror and fantasy fiction and maybe some political or finance books to help others better navigate the world and think about politics. I remember growing up in a working class home that became a poor working class home after my parents divorced since women were trained to marry and trust their husband which proved a poor strategy in my mother's case. I'm glad it has changed as I do not believe women should become too dependent on a male for their income as it can lead to a very bad outcome if the male proves untrustworthy. So I chose a different path for myself when young which books allowed me to follow as you learn the wealthy see the world in an entirely different way from the middle and working class. A real eye opener that changed my life view for the better I believe.

Enough musing on this. If I need some help with medicare and we're still posting on this board, I'll hit you up. It's pretty amazing that you, myself, and posters like c-bob have been posting on a Seahawks forum for 20 plus years now. I know I come off as cantankerous and aggressive in debate because this is like an intellectual dual to me to some degree or just a chance to disseminate knowledge accumulated over many years, I don't take it too seriously. This stuff I kick out takes 5 minutes or so as when you have written books and stories, it's hard to be succinct in forum discussions as it's easy to kick out a lot when you type really fast and are a proficient writer with a large vocabulary.

Forgive me for my overly verbose communication style at times. Overactive mind and fast typing ability is a bit like talking too much face to face.

[River Dog]

That is nice. I work in a contracted job. So the 401k is not the greatest. All they offer is the tax advantage portion then a fairly limited list of mutual funds managed by money managers who charge a fee on the on fund. I don't really need my money managed by someone else for a fee. I haven't paid broker fees for 30 plus years and recently they even got rid of trading fees allowing movement in and out of a stock far more cheaply than when I was younger.

I'm kind of strangely lazy insofar as I don't enjoy working too deeply in a corporate structure. I'm in management, but I don't seek to rise up too much. I don't enjoy corporate politics. Since I don't desire a CEO position, I've always kind of looked at jobs as a means to acquire capital and cheap health insurance why I build up assets in the markets. I like that America has these investment markets where you can convert cash into assets that grow in value versus the common teaching to the middle and lower class that consumption is all their money is good for.

When I was 17, I started reading business books like Trump's The Art of the Deal and Rich Dad, Poor Dad which changed my view on money and what should be done with it.

Yes. I should "retire" with enough to relax in my older years and focus more on some personal goals like building a career as an author with a personal publishing business and focus more on the markets daily. I want to write horror and fantasy fiction and maybe some political or finance books to help others better navigate the world and think about politics. I remember growing up in a working class home that became a poor working class home after my parents divorced since women were trained to marry and trust their husband which proved a poor strategy in my mother's case. I'm glad it has changed as I do not believe women should become too dependent on a male for their income as it can lead to a very bad outcome if the male proves untrustworthy. So I chose a different path for myself when young which books allowed me to follow as you learn the wealthy see the world in an entirely different way from the middle and working class. A real eye opener that changed my life view for the better I believe.

Enough musing on this. If I need some help with medicare and we're still posting on this board, I'll hit you up. It's pretty amazing that you, myself, and posters like c-bob have been posting on a Seahawks forum for 20 plus years now. I know I'm come off as cantankerous and aggressive in debate because this is like an intellectual dual to me to some degree or just a chance to disseminate knowledge accumulated over many years, I don't take it too seriously. This stuff I kick out takes 5 minutes or so as when you have written books and stories, it's hard to be succinct in forum discussions as it's easy to kick out a lot when you type really fast and are a proficient writer with a large vocabulary.

Forgive me for my overly verbose communication style at times. Overactive mind and fast typing ability is a bit like talking too much face to face.

Medicare and Social Security might look quite different by the time you hit retirement age, so even if I still have my wits about me, my experience might not be relevant. But if I'm still north of the sod level, I'll certainly give you my two cents worth. You seem like the self-help type that doesn't expect someone or the government to take care of you like so many people I know, so I don't think you'll have a problem. My only advice is to do your homework.

Your career path is a lot like mine was. I had no desire, let alone the ability, to progress up the corporate ladder. I once had a job that was a 24/7 on call type of thing, and I became like Pavlov's dog, conditioned to salivate anytime the phone rang, sending me into an instant rage. I hated to be interrupted and was mean with the caller despite the fact that it was a legitimate call.
My job was eliminated by budget cuts, so I went back to 'the floor' and was content with an 8 hour a day job that didn't follow me home after work. I ended my career one step up from the management entry level, which is how I came to work so closely with immigrants.

You don't have to apologize to me for what at times can be a corrosive style as I try not to take things personal, but I appreciate your thoughts. It's called manning up.