Thread regarding Ford layoffs

A co-worker left in 2006 and joined Microsoft. He took his 401K with him. Moved all his money to MSFT stock. Maxed out his 401K contribution each year, got stock options year after year.

We stayed in touch. Talked with him last week, he is sitting on $10M+, only 54 years old. Ready to retire at 55 (so he can take money out of his 401K without penalty). He played his cards right...

Ford stock will NEVER move up as long as there is control over the preferred voting stock!

I’m mid career with a net worth around $5 million. How did I do it? I quit Ford several years ago and found a job at a profitable company that pays me enough to invest….then I invest well. Ford is not the place to work if you want to build wealth.

@2fgn…. I think the OP mentioned he did not have a Ford pension. So it’s an even more impressive amount of net worth he and his spouse has accumulated.

There’s no mention of kids, so that could enable a bit more wealth accumulation. And there is mention of $1.5M cash… which is interesting. Gotta make sure that gets properly diversified for the long run.

The comments in this thread are a good example of the saying: "Whether you think you can, or you think you can't – you're right"

It might be a humble brag, but the numbers are realistic that proves you can accumulate a good amount of wealth by starting early and being disciplined.
I will go a step further & say that OP has $3.5M + another $800k to $1 M available from his lump sum
I can relate to his situation since I am on the same boat as him
Yes OP , you can retire well. Congratulations!

If op can’t figure out about retiring with that nest egg then he is a Id-E-ot

This thread exemplifies some basic differences in people’s mindset:

Are you a person that can make short term sacrifices for long term gains?

Or are you a person who gives in to instant gratification? makes excuses for lack of success due to external factors? just gives up quickly because something didn’t go your way?

Luckily for my health and finances, I am in the first group.

OP has been working assumingly from post bachelor degree since age 23. 58-23=35 yrs.

Spouse works too. If you started 401k investing in 1988, you’d easily attain their net worth on two professional salaries.

@2pgv+1lHB5hVf, I was thinking the same thing and skipped wasting time to call it all out. It may be possible, but both halves of the couple would've having to be doing exactly the right thing all along. Possible to for someone to have a million in their 401k if they were maxing it out early and it was well managed. House and cash could be inherited &/or a large life insurance payout since at 58 their parents would most likely be pushing early 80's. In theory a large lawsuit payout is also possible. But still, anyone in this position almost certainly would've been exposed to retirement & financial planning and thus I think it's either a BS post or humble brag to make others feel bad.

Spending of 8K a month and reporting that they have no debt tells you these folks are not frugal
For nice round numbers lets assume 100K salary and 24% tax bracket so take home of 76K divided by 12 = $6,333 take home a month.

So that tells you that if they were a single income family they spend everything they make.
If they were a two income family they spend 2/3 of their income

We were single income while working. Yes we saved up 3 mill by age 60. But our monthly expenses were and still are 3K. Fortunately the better half is frugal. We still live in the modest starter home that we paid off a long time ago.
Many paths to the end goal, but ya gotta control your expenses.

I say bravo to the OP and let’s celebrate he and his spouse,s success. Too many people in society today , who made their own bad life decisions, wish to attack those who have done the right thing and accumulated a modest nest egg that fits their needs. There were wealth tax schemes floating around in 2018 2019 (some fancy pants guy named Picketty) that were looking to apply a wealth tax starting at 1% per year starting at $1.3M then 0.5% on wealth between $250k and $1.3m.
Every year. On your business value, house value, 401k, Roth’s, even the imputed value of your lump sum pension.

Yes, a couple with 2 GSR incomes could have 3.5 million in assets pretty easily. 10% per year in 401k plus match would already get them pretty close before other savings/investments. If you blow your money on things like constantly buying overpriced cars, maybe not.

It's not how much you make, it's how much you keep

My LL5 started working straight out college and almost 20 years at Ford, he has 3kids.
Yet, he spent most of his income and do not have extra 10k to buy I bonds.

So a GSR8 has 3.5M net Asset? lol...

You'd have to be able to max out your 401K from the get go, not have significant college expenses for the kids or other major expenses in life, in addition to being very careful with your money. It maybe possible, but needs many factors to align.

You can have this amount of wealth by working at ford in the GSR 8 level….if both you and your spouse have professional jobs (especially engineering) that you stated straight out of undergrad (very early 20s) with minimal to zero student loans (Note: in my case and my spouse, we had very little parent contributions, mostly scholarships and our work pay to fund our college)….then always max out your pretax 401k contributions, and a Roth IRA until you are no longer eligible. Buy a house and pay it off as fast as possible, then continue to invest after tax money in low cost index funds. Keep doing that for 20-25 years while you enjoy life and raise a family.
Done. It is possible, but start young and time is on your side. Then set your family up for continued generational wealth buy funding your kids college and not saddling them with any debt as they start out.

I think a real question is how do you manage to have this amount of wealth by working at Ford?

1. Your total asset mentioned is about 3.5M
2. You have no debt, so your house worth probably at least another 0.5M
3. You have total around 4M asset, assume you and your wife worked 30 years full employment, at some white-collar jobs, how did you get 4M? Only thing I can think of is genius at investing, but that being said, you don't need to ask dump question here, let alone financial advisors.

So you are trolling!

@1wbj+1lHB5hVf Setting your retirement goal based on salary assumes you're spending that much. If someone has a savings rate higher than 20%, they would oversave using that strategy.

One thing I haven't seen mentioned is that Ford has very good part time benefits available. I would explore those if you're on the fence as you could go to 3-4 days per week while maintaining health insurance and a salary.

Really, you have to ask this question with the amount of money you mention. I cannot believe you don't have a financial advisor already.

This guy is full of s**t and is trolling you.

Excellent advice in the previous post. My SO and I are both in our late forties and could both (or one) retire now if we wanted due to our commitment to regular savings since we were 22. Just that knowledge makes going to work less stressful. We haven’t pulled the plug on it yet, but instead continuing to invest for ourselves and our kids, and live a reasonable lifestyle we enjoy. We are exploring hobbies and side gigs for when we do retire. If I get let go in the next round of cuts…oh well!

@OP. What I am about to say, it is not be what the majority of people think, but it may be applicable to you. When people think about retirement, some think about healthcare (very important), some think about the finances (very important), but very few think about what to do with the time off.

You are not going to travel for years and years. In fact, the older you get, the less you want to get out and explore. Besides, all the traveling and fun is usually not included in the financing plans, so a lot of people, after making their calculations for what they need annually for living, end spending twice as much and with money anxiety.

Getting a new hobby usually don't work. Many people spend money to keep them engaged, and end with a bunch of new stuff that goes away in the next garage sale. Of course, if you already have a hobby, specially one that fill your days, is a plus.

However, the reality is that there is a limit on how much golfing, binge watching, traveling, or another repetitive activity can fill your days and your personal needs. Many retired people end going back to work after a year or two, more because they are bored or lonely, than for money.

So here is my idea. You may not want to retire yet. If you are one of those guys that wake everyday at 5-6 am because are used to do it for over 40 years of work, you may not enjoy retirement. If you don't have much outside your job, you should not retire. If your job is one of the pillars of your life, or you enjoy doing it, or you are used to tell people around what to do, you should not retire.

If you are feeling stressed, don't be. Take it easy. They are now calling it "quiet quitting", but in real terms is just doing your 40 hours. Remember, it is not your name in the front of the building. You are there just for the paycheck. Knowing you can walk away should shield you from any stress and let you enjoy the time at work.

You could also look for another job, while still at Ford. Remember we have less people now in the workforce, so it should be easier for you, even with the age discrimination. Forget about salary requirements, since you don't really need it as you have enough money for the rest of your life (if well managed). Look for something that interests you and won't stressed you much. Maybe start a second career.

The pros of not retiring:
1- Salary (better financial prospects if you retire later)
2- Health Insurance (at least until you are 65)
3- Keeps you busy and motivated

The cons of not retiring:
1- Less time off for yourself.

So you should think carefully about yourself, your family and your needs. Don't imagine yourself in the future in a cruise, but what are you going to do when routine sets in.

Good luck!

You're good to retire. For living in retirement, budget 80% of your current salary to maintain your lifestyle.

Healthcare until you are Medicare eligible is important. Price it out carefully, maybe use a salesman who comes recommended by someone you trust. You also can price it out on the ACA exchange. You annual deductibles will double if you’re on your own on the exchanges vs total of 7k per year total for you and spouse. So figure $14k max deductible plus monthly premiums plus dental and vision. Work in a 10% annual increase in health care costs as a safety factor. Hopefully you and spouse are healthy. You’re in good shape.

One rule of thumb is this.

1. Start with what you currently make per year and see how much you're willing/able to cut back on that income for a reduced lifestyle. Call that value, y.
2. The "average" stock market equity increase per year over the last 100 years is around 10%. Since inflation averages around 5%, you need your investments to continue growing even as you withdraw from them, to keep up with inflation. 10% growth - 5% inflation leaves you with 5% per year that you can withdraw to maintain your lifestyle.
3. Find x in y = x * 5%

Example. you need 50K per year retirement income today. 50K divided by .05 = 1,000,000 or one million. For a 100K income, you'd need 2 million.
What I wrote is very rough but it gives you an idea how to start. The hardest part is figuring out what you need to live on. Hope this helps.

It all depends on your lifestyle expectations. Most financial advisors say something like "to maintain the same lifestyle you need..." I personally don't expect to maintain the same lifestyle when I retire. I would say make sure to pay off home and vehicles and a good diet of rice and beans would do it.

Humble bragging on a layoff site. Classy.

25x annual expenses is a good general rule for retirement funding. You are well beyond that.

Vanguard has a tax efficient mutual fund that does 50% muni and 50% equities
VTMFX

Likely safer than picking your own munis

@OP plug in your info here https://www.firecalc.com/ or https://www.retirementsimulation.com/ and see your probabilities of success
Also visit https://www.portfoliovisualizer.com/backtest-portfolio to evaluate your portfolio - be sure to model starting years where there was equity/bond corrections.

Financial advisors run the Monte Carlo simulations that you can do for free

Keep the money that you have in cash now in us treasuries and FDIC protected CDs. Don’t put that money into non-us treasury bonds or equities until the elephants stop fighting. Give it 2 years.
You are quite likely to get burned if you venture into muni or other bonds at present. I am sure everyone saw the intentional VC actions that took down SVB and then the same cohort threaten US govt to torch more of the economy if the US govt didn’t give all the un-insured depositors their money. Same parties trying to force the fed to lower interest rates. Wait for the elephants to stop fighting.

@prl+1lHB5hVf Muni bonds - that's such a great idea! I 've never purchased a bond before but I can see now that the tax efficiency is excellent. Thank you!

Live off the post-tax it should read.

$3.5M is plenty. That’s $175K/Yearly in 5% T Bills. Granted the $2M 401K part is taxable which stinks. Live off the pretax while withdraw just up to the 15% tax bracket to pay minimum taxes yearly and start at 59 1/2. Once SS kicks in that’s taxable and in the equation.

The last post should say keep the $500k in as many savings accounts as you can and still have FDIC coverage.

Invest $3 million with a good investment firm.

Keep $500k in a savings account. Withdraw $110000/year to live on and you'll never, overtime drop your balance. You'll be living off the interest.

Yes you have enough. Just get to 59 1/2 and you can then withdraw without a penalty.

Congratulations!

This is who you need to call.

https://fa.ml.com/michigan/bloomfield-hills-/post_associates/

See a financial advisor at Merrill Ly--h ask for a senior Vice President there to help you. Basically, you can get $50k per every million you have in AA or AAA muni bonds. The muni bonds don’t have federal tax and if you buy ones in Michigan you don’t pay state tax. So, ballpark, say $3MM invested gets you $150k a year tax free. You should be fine.

If I was you, I would try to get myself a package and just basically stop working so they will force you out.