3 Simple Steps to a Great Railroad Retirement

Transcript:

A great railroad retirement in three simple steps.

Welcome everyone to the Highball Advisors Railroad Retirement whiteboard. My name's John McNamara of Highball Advisors. Today I thought I'd just take it back to a big, fundamental problem. Setting up for a good railroad retirement.

I thought I'd kick it up to a great railroad retirement. To me, these are the three simple steps anybody can do and have a tremendous railroad retirement.

The first part is the step one, obviously, but it's understanding. It's making that budget. It's so important. You got to make the budget, and it all starts knowing your income. Where's the money going, and how much is leftover?

Your income. You got to go buy your taxes, your payroll taxes, your regular taxes. Know your expenses, and then what's left is what you can invest in retirement.

However, the only variable in there is your expenses. Your expenses really determines your retirement funds. You got to get a handle on the expenses. Everything else is static. Taxes are taxes. That's your retirement.

Let's go to step two. You now have this amount of retirement funds and how much do you need? Step two, max out the 401k. Now, I'm talking about a great railroad retirement, not a good railroad retirement, or an average railroad retirement. I'm talking about a great railroad retirement. Max it out.

19,500 before 50. Sorry, typo before 50, and then post 50, 25,500, is the amount that you could put away every year. And, if you can't do those amounts, because that would be for people... that would be a lot of money, minimum 15% of your gross income. That's the minimum.

Use this number, if you can't match this number say, "I got to get to 15%." figure out the budget to get you there for a great railroad retirement. Then as you grow up in years in the railroad, your income goes up, lift up those contributions.

Step three. Well, now you have this pile of money. You put it into your 401k. You've saved your minimum of 15%. Maybe you're maxing out your 401k. Now I'm going to put it in there.

"Oh, I'm worried about the markets. I'm just going to put it in cash." It's not going to grow. We're talking about a great railroad retirement. Invest appropriately. You've got to grow the money now.

The interest rates nowadays aren't giving you anything. The Federal Reserve is saying, "Don't save your money because we're not going to give you any interest on it."

Banks aren't giving it either, so you need to invest it and grow it. Very important. Invest appropriately. Understand your tier two valuation. This is what railroaders make different. Why do people invest so that they have income in retirement?

Well, you're building up that income part of your retirement. I point this out all the time with your tier two. What does that give you as you build up that tier two? That gives you opportunity. Take advantage of the opportunity to invest and grow your money.

You can take a little bit more risk and be okay on that because you're getting your guaranteed retirement income. When you see people talking about target date retirement funds in your 401k, I double take on those to be perfectly honest with you, because they're targeting you, so you can take your money at the end of retirement and go buy an annuity. To guarantee that retirement income, but you have that already.

Take advantage of the opportunity. Invest. These are my three simple steps. Very basic. Learn them, and you'll have a great railroad retirement. Can't guarantee that because that's a compliance issue, but I can tell you'd being in great shape.

Everyone, please. I hope you found this video very useful. Subscribe to my YouTube channel. Give me a thumbs up on this video. Share it with your friends, because this is basically it. Starts from budgeting to investing and everything in between.

As always reach out to me, if you have any questions, you can take my free railroad retirement assessment, which is great. A lot of people have been taking advantage of that. That's good to see. As always, everyone, please stay safe. Stay on track and take care. So long everybody. Bye.

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