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Retirement Planning

11K views 31 replies 13 participants last post by  britsteroni 
#1 ·
After some discussion on another thread, I thought this would be a good topic that doesn't get talked about much here on lawnsite.

For those of you that are full-time, what do you do for your retirement planning?

Do you utilize the services of a financial planner? A broker? DIY? Do you think about retirement at all?

Let the discussion begin!
 
#7 ·
I have to say that any investment that is tied to Wall Street is a potentially bad problem (to say it nicely.) The money that you invest into anything related will not bring the same ROI as reinvesting in yourself (your business.) Investing in real estate is probably the best option other than your business. But don't invest for capital gains, that doesn't always work. Invest for cash flow through rental properties.
 
#8 ·
I am going to keep investing in my business and paying down my personal bills. As long as my mind works, I can keep managing my empire. If my mind goes then I do not really care about much else.
Duekster,

1. Is your business to the point that you no longer work in the field?

2. Are you pretty close to being debt free?

3. Assuming you have a family, do you have insurance in place to provide for them if something were to happen to you?
 
#9 ·
I have to say that any investment that is tied to Wall Street is a potentially bad problem (to say it nicely.) The money that you invest into anything related will not bring the same ROI as reinvesting in yourself (your business.) Investing in real estate is probably the best option other than your business. But don't invest for capital gains, that doesn't always work. Invest for cash flow through rental properties.
newguy,

I think a lot of people would agree with your disdain for Wall Street. Have you done much reading on index mutual funds? I think rental real estate is a great wealth building tool. Do you have specific goals or plans to build a real estate investment portfolio that will support you upon retirement or if you are unable to continue doing manual labor? If you or anyone else is interested in learning more about real estate investment, I would highly recommend www.biggerpockets.com/forums
 
#11 ·
I did it the old fashioned way. Worked elsewhere for 31 years for my retirement. Hopefully the state/county never get their hands on the funds (private/quasi- gov utility). I will say that if you haven't started saving for retirement, do it now. Forgo the extras in life and put the money away. You will need it.
 
#12 ·
I did it the old fashioned way. Worked elsewhere for 31 years for my retirement. Hopefully the state/county never get their hands on the funds (private/quasi- gov utility). I will say that if you haven't started saving for retirement, do it now. Forgo the extras in life and put the money away. You will need it.
Although I did not have have 31 years in. I worked in my previous industry for a good 10+ years before I jumped into this game fulltime. So I have a decent amount put away, but not nearly enough to be comfortable. I have an IRA now and have been buying silver. I sold some silver off a couple years ago when it spiked to around 40$ an oz.
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#13 ·
I am going to keep investing in my business and paying down my personal bills. As long as my mind works, I can keep managing my empire. If my mind goes then I do not really care about much else.
Same here, retirement in my mind is a falicy. I want to get the business in well enough shape so my boys can take it over when they are ready and I can take a back seat. As far as actual "retirement" that doesn't interest me, sit on the couch, clipping coupons, watching court shows and living on a budget. I'd rather wake up at 5 and go to work thanks.
 
#14 ·
bristeroni, you probably have some good statistics about how well prepared people are for retirement. I've heard/read information from time to time, but cannot quote any of it here for sure. What I do recall, the preparedness is very poor. People are reaching 50, and have not yet begun to prepare. People are reach 60, 65, and have little retirement savings.

Investing in one's self is great, if your personal wealth generator is the best thing going. When talking about "putting the money into my business," remember all the thread on LS that speak to "how much to buy out another LCO." In general, buyers aren't willing to pay much for either accounts, or hard assets. I'm doubting this business is very high on the scale of "cashing out."

I understand that many don't take the matter seriously, thinking they "have a long time." The "long time" is in your favor if one takes advantage, and gets the investments placed rightly.

As somebody who resides in the upper age brackets on LS, let me warn you that financial matters at retirement get very complicated. There are many outstretched hands, ready to get their piece of the action. You really don't have what you think you have. Thinking you can take your nest egg, and go fishing every day is a scene only in the movies. And, you need to be prepared to have Medicaid take it all away if you require long-term health care.
 
#20 ·
newguy,

I think a lot of people would agree with your disdain for Wall Street. Have you done much reading on index mutual funds? I think rental real estate is a great wealth building tool. Do you have specific goals or plans to build a real estate investment portfolio that will support you upon retirement or if you are unable to continue doing manual labor? If you or anyone else is interested in learning more about real estate investment, I would highly recommend www.biggerpockets.com/forums
I haven't done a lot of research on index, but again I'm not a big fan of mutual funds either. Thanks for the link to the forum I'll check it out. I plan on using the profits (after my cut too) of my business to invest in cash flow properties. That way I can be done with manual labor in about 10 years and still operate (manage my business) if I choose to.
 
#21 ·
I have to say that any investment that is tied to Wall Street is a potentially bad problem (to say it nicely.) The money that you invest into anything related will not bring the same ROI as reinvesting in yourself (your business.) Investing in real estate is probably the best option other than your business. But don't invest for capital gains, that doesn't always work. Invest for cash flow through rental properties.
You hit the nail on the head. In these times many investors are looking for brick and mortar investments, also know as rental property. My two last properties purchased are showing 30% returns. With bank financing I'm able to purchase $100k worth of property for $20k and have a ROI in 3 years.
 
#22 ·
bristeroni, you probably have some good statistics about how well prepared people are for retirement. I've heard/read information from time to time, but cannot quote any of it here for sure. What I do recall, the preparedness is very poor. People are reaching 50, and have not yet begun to prepare. People are reach 60, 65, and have little retirement savings.
You could give people all the statistics in the world, and unfortunately most won't listen. One of the most staggering that I have found is that 75% of Americans nearing retirement age have less than $30,000 in their retirement accounts. Another statistic that is hard to imagine is that 70% of the population could not come up with $1,000 cash if given a month to do so!

From my own personal experience working with small business owners, the numbers might indeed be worse compared to the average W-2 worker. Most have little to nothing saved at all. Most live paycheck to paycheck. Most spend as much or more than the earnings they take from their business.

[/QUOTE]Investing in one's self is great, if your personal wealth generator is the best thing going. When talking about "putting the money into my business," remember all the thread on LS that speak to "how much to buy out another LCO." In general, buyers aren't willing to pay much for either accounts, or hard assets. I'm doubting this business is very high on the scale of "cashing out."[/QUOTE]

The above is really good advice that everyone should take note of. It is true that lawn care, like any other business, can be built into a self-sustaining operation that exists outside of the owner. But I would guess that would be less than 1% of the members on lawnsite.

So when you say "I'm investing myself, my biz, equipment, etc", how is that going to reap greater rewards for you and your family in the future? Most all equipment purchased in this business has little value after it has been used a few seasons. Accounts are difficult to sell for top dollar. Most lawn care operators do not own a shop or commercial real estate, so selling that is out. So when you boil it all down, most of the assets necessary to operate in this business sector have very little real value outside of the cash flow provided to the owner.

It is very admirable to build a large, sustainable lawn care operation. But even if that is your goal, you should still make it a priority to set aside some of your take home pay for a rainy day.
 
#23 ·
Same here, retirement in my mind is a falicy. I want to get the business in well enough shape so my boys can take it over when they are ready and I can take a back seat. As far as actual "retirement" that doesn't interest me, sit on the couch, clipping coupons, watching court shows and living on a budget. I'd rather wake up at 5 and go to work thanks.
I would agree with your assessment of retirement. Who wants to sit around on the couch all day and do nothing? I have watched my grandfather in retirement (he has been retired for my entire life) and think it is both depressing and boring. I also know others who have retired only to get bored and then go back to work. I plan on doing some sort of meaningful work as long as my mind and body are capable.

Maybe a better phrase would be life planning? Or financial life planning? Even if you plan on working until you expire, don't you think some planning would be prudent?

I have a son who is only seven months old. I, like you, hope that when he grows up we can work together and then eventually pass the business on to him. But what if he wants to be a doctor? What if he wants to be a pastor or missionary? What if he wants to study computer science? What if he wants to work in one of the trades?

I'm not trying to pick on you, but I think you brought up some excellent, common objections. Financial planning is an ever evolving process that changes as we all age. Life will never work out exactly how we plan or would hope for it to, but to have no plan at all doesn't seem like a good alternative either.

I think what most don't realize is that life happens. You wake up one day and your body just doesn't work like it used to. You might not have the physical or mental capacity to continue to work into your 70's and beyond. So for all folks who make it to that age and haven't planned and saved accordingly, they wind up dependent on the government and/or family.

Maybe Mike Tyson has the best quote of all for planning: "Everyone has a plan 'til they get punched in the mouth." :)
 
#24 ·
Those are the kind of statistics I was thinking about. Yes, they have been circulated for a long time, and obviously most don't listen because the statistics don't change.

I agree that "retirement" is not an appropriate word for a change of seasons in the workforce. I smile when I read comments about those intending to work until their final breath, hoping they will pass while sitting on their ZTR. There are way too many unknowns, including financial setbacks, family situations, and health.

As people reach 60, 65, and 70, the #1 concern, "Will I run out of money?" This is a well-known statistic. When the safety net becomes necessary, an individual looses all control. Others are making decisions for you, decisions that may be very disconcerting.

As for "working until I die," that takes many forms. There is great value in remaining active. I've seen too many people my age "fold their tent" after work life, and their name is in the obit column a few months later. On the other hand, I've seen others take on a new career, remaining productive, keeping physically active, and keeping mentally active. Family situations vary greatly. I saw an article this past week that said 30% of those over 65 are active in the workforce, a percentage that is higher than ever, and continues to grow. The reason is financial, not a desire to remain active.

Two of my present customers are cases of "warehousing Mom and Dad." Adult children are buying houses for their parents, as a place to have them close, and live out their last season. I use the term "warehousing," because that is exactly the nature of the issue. Adult children need to find a place close by, so they can care for their parents, yet giving the parents some independence. It is the next step to moving to a structured home, either as independent living, or assisted care living.

The demand for financial resources in later years has risen steeply in recent years, and will continue to rise. The average cost for a care home is $96,000/yr. With continued changes in medicine, and the desire to remain living longer, the costs to support elderly will grow.

Also, the costs for professional help are significant. Accountants and financial planners are necessary to navigate the complex taxing structures regarding retirement monies. The government rules in handling these matters is a maze. Attorneys are necessary to assemble documents associated with trusts, foundations, living wills, etc.
 
#25 ·
Most of us like to buy stuff. That boat sitting in the yard, atv in the shed etc getting used a few times a year while making payments on them is a huge drain on the household. Selling just those two items even at break even cost of what's owed will most likely save you $1,000/month or $12,000/year not including insurance/ maintenance costs. A two pack a day smoking habit (you can do the math), going out to dinner versus cooking at home are just a few other areas that if cut will save you lots of money. Sell what you can and use that money to pay off the credit cards, change some other habits and then direct all of that money into a savings/retirement account. You will not miss nor regret doing it.
 
#26 ·
Also, the costs for professional help are significant. Accountants and financial planners are necessary to navigate the complex taxing structures regarding retirement monies. The government rules in handling these matters is a maze. Attorneys are necessary to assemble documents associated with trusts, foundations, living wills, etc.
I think the other problem is that people do not value services without getting something tangible in return. When preparing tax returns, some may claim that the fee is too high, but at least they have a copy of their tax return to take home with them. With tax planning or financial planning, it becomes difficult because what is being "sold" is knowledge. For whatever reason, people despise paying for knowledge even though it has far greater value to the bottom line than the preparation of the tax return, bookkeeping, payroll, etc.

And in the above scenario lies the paradox, the people who need the guidance the most either are unwilling to pay the professional fees or cannot afford to. The entire financial planning profession caters almost exclusively to the already wealthy. The obvious reason being those folks have the money to pay the fees.

But it is the chicken or the egg paradox. Did the client become wealthy because they had professional advisers all along the way? Or did they acquire advisers after becoming rich? I think it is the former. Good business men and women recognize the need for competent advisers along the way. If you look at some of the more successful business owners here on lawnsite, there seems to be a common theme of professional continuing education and focusing on the areas of the business they are good at. "Work on the business, not in it."
 
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