Dim Retirement

How close are you to retirement? That will help to define how much risk you can tolerate.

For example (since you're talking about 10 years of employment, I am going to assume you are at least 30 years old), a 30 year old will be able to risk more because retirement isn't right around the corner. There's time to make it up. Plus there's time to put in a lot more with your contributions.

A person twice that age has a much narrower margin of error when it comes to risking principal.

Put $1000 in at age 30 and add $100 each month, with 2% annual interest and 35 years of contributions (monthly compounding) gets you $62,868.62 at the end.

With the identical scenario but you start at age 40 (same end date, when you hit age 65), you get $40,594.92.

Start at age 50, same scenario, etc., and you get $22,355.78.

Start at age 60, and you get $7,420.32 -- which is still nothing to sneeze at. See:
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#targetText=Compound%20interest%2C%20or%20'interest%20on,for%20principal%20and%20compound%20interest and plug in whatever numbers you like.

Of course numbers go up and down. You get a raise, then hopefully you put in more (you should!). Or maybe you put in less because of some sort of emergency requiring a lot of cash quickly. In the US, that can be medical bills. But anywhere in the world, your house could burn down (insurance only covers so much), you could total your car, etc.

The above is also assuming you don't interrupt your contributions. But if you lose your job, then an interruption could happen.

Best way to understand stocks (I am not a stockbroker, etc. -- I work in business credit) is to read not just the business section but the national and international news, too. Fires in the Amazon rainforest can affect the price of all sorts of things. So can war in Yemen or a tsunami hitting Japan, etc.

Do you have a good relationship with the place where you do your banking? If you do, then maybe invest with them, at least a little, and see what kind of advice comes with the territory. For some banks (Bank of America I know does this), if you keep a certain high balance, you're entitled to all sorts of financial help, maybe even with understanding tax implications. It pays (quite literally) to ask.

Your local college or adult education place might offer courses in financial literacy. And there are always books, so talk to your local librarian and see what s/he recommends.

How much can you save per month? How many years do you have until you need to retire? How much do you have in savings now?

He is running out of time for increasing his money since he would be somewhere in his 50s by now. (Said he was 48 back in December of 2013 in this thread/post - www.able2know.org/topic/230222-1 )

That makes sense given he is asking about retirement in ten years. That makes the question "how much can you do per month now". I think that means taking a hard look at your budget and seeing where you can cut back. Cutting the cable can be worth $100/month. Dropping your land line and moving to a low cost cell phone provider could be another $50, etc.

Also what options do you have in your 401k. Not all 401k plans are the same. Some businesses take a lot of care, some farm it out to financial institutions that are more worried about their profits than your retirement.

Not sure where you are from - but I would advise to reach out to an investment adviser - like jespah said you could reach out to your bank or somewhere like Fidelity where they have a retail side for the average joe.

Most may not charge you directly as they make money from the expenses associated with the potential funds you will invest in.

This industry is highly regulated (for sure in the US) - so they need to be very clear on any charges associated and these individuals are licensed in the field so they are required by law to do what is in your best interest. You can also do a quick search on ratings and read reviews so you are comfortable with whom you select.

I sat down with such an individual before as I was consolidating by retirement funds. They pulled together a whole automated planning tool that is derived by your risk tolerance, age, planned age for retirement, how much you plan on spending in retirement, etc. at no cost. However, they did suggest that I could invest in one where it is actively managed and went through what the costs associated with it would be. I work in this industry so I need someone more to assist than to actively manage but for many people it is worth it.

If you take a course like jespah suggest and work with someone to determine what you need to save like the plan they pulled together for me (at no cost) - you could try your hand at managing it. There are other plans that are available that will typically have lower costs - like investments that are geared to the year you want to retire. It is not as personal though as taking into consideration your risk tolerance so there are pros and cons to each type.

You should also ask the Social Security administration to send you an estimate of your benefit. You can do that here. You might also be entitled to benefits from previous jobs.

I started working at the museum in July of 2018 at the age of 53. I am now 54 and will be, God willing, 55 in April 2020. I live a check to check lifestyle. I currently have slightly less than $1000 in my checking account.

You seem to know a lot about retirement money. What is your best advice for a lost middle aged man renting a room in NYC? I cannot afford my own place in this ever-growing city. Apartment rent is simply outside my league. Honestly, even if it hurts me, does my future look dim?

Hello. Thank you for your reply. I started working at the museum in July of 2018 at the age of 53. I am now 54 and will be, God willing, 55 in April 2020. I live a check to check lifestyle. I currently have slightly less than $1000 in my checking account.

You seem to know a lot about retirement money. What is your best advice for a lost middle aged man renting a room in NYC? I cannot afford my own place in this ever-growing city. Apartment rent is simply outside my league. Honestly, even if it hurts me, does my future look dim?
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Hello. Thank you for your reply. You have a good memory. I was born in 1965 and thus 48 years old in 2013.

I started working at the museum in July of 2018 at the age of 53. I am now 54 and will be, God willing, 55 in April 2020. I live a check to check lifestyle. I currently have slightly less than $1000 in my checking account.

You seem to know a lot about retirement money. What is your best advice for a lost middle aged man renting a room in NYC? I cannot afford my own place in this ever-growing city. Apartment rent is simply outside my league. Honestly, even if it hurts me, does my future look dim?

Hello. Thank you. I started working at the museum in July of 2018 at the age of 53. I am now 54 and will be, God willing, 55 in April 2020. I live a check to check lifestyle. I currently have slightly less than $1000 in my checking account.

You seem to know a lot about retirement money. What is your best advice for a lost middle aged man renting a room in NYC? I cannot afford my own place in this ever-growing city. Apartment rent is simply outside my league. Honestly, even if it hurts me, does my future look dim?

Thank you for the compliment (that applied to everyone here apparently).

Although I work in the industry I am not a certified financial planner or an adviser so it would be inappropriate (since I do not have full details of your financial situation) and potentially illegal for me to provide financial advice. No different than asking legal or medical advice on here.

My best advice would be to seek out a financial adviser as was already suggested. You can do some research on your own, but in my humble opinion your best bet is seek out an adviser - you can start at your bank or call a local financial company that has retail offices.

Personally NYC is very expensive to live as you are well aware - do you plan on staying there when you retire? Do you have options to move elsewhere?

I can say if you continue this way you are likely to be in trouble - but check with a financial adviser - also other resources - I have relatives who have very modest retirements; many that are relying almost solely on social security - now they do not live in NYC and they have very modest apartments and not much disposable income.

A financial adviser will go over the options that are available to you - you can also do a little research and see if there is free financial advice for lower income people. I think this is your best bet to find someone qualified and licensed in this field.

It may not be as bleak as you think - it depends on what you have for social security, how flexible you are, and what you are willing to give up now for your retirement future. There is also subsidized housing often times for retired folks that make below a certain threshold of income. This all depends on multiple factors so that is why it is best to seek out professional help.

I will speak to a financial advisor. They should know how to escape this mess better than most people.