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A Bogleheads Guede to a Great Railroad Retirement Thumbnail

A Bogleheads Guede to a Great Railroad Retirement

Video Annuity Retirement Financial Planning


Learn these eight steps to build a great railroad retirement.

Welcome everyone, to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara of Highball Advisors, and today we're going to talk about... I came across this article, a bunch of people, they're called Bogleheads for John, actually Bogle, who runs Vanguard. And John Bogle had these eight really keys or rules for building a great retirement nest egg, how to become wealthy. So what I thought I'd do is take what he said and put it into a video because they're just so great. I get a lot of railroaders, they might be in their 30s, 35, they're not near retirement yet, so they're like, "John, what can I do to help build a great railroad retirement?" So I want to go through these and if you can live by these and working in the railroad, I don't know how you can mess up retirement, I got to be honest with you, right?

This will be the key. All right, so here we go. Number one, invest early and often. That takes the power of compounding coming into play. The more you can invest earlier in your life, that is fantastic. Early and often because, and often is that dollar cost averaging. Market goes down, hey, things are on sale. I'm going to buy a little down here, buy a little here. And just over time, just let that compounding effect kick in. Stay the course. Another great tip, just stay the course. Put those blinders on. You know where you're going in 20, 30, 40 years. I don't care about the next three, four months, right? I'm just going to stay the course. Very, very important. Here's another one. Live below your means. Another fantastic one, right? Don't be spending, there's investors and there're consumers in life, the way I always look at it. Be an investor. Put your money to work instead of spending it out on things.

Obviously there's always things you need in life, but you don't need everything. So live below your means. Fantastic tip there. All right. Don't take on too much risk or don't take on too little risk. So that's great. So hey, crypto, that's too much risk, all right? You don't want to be doing that. Too little risks. Hey, all my money's in the bank account or underneath my mattress. That's too little, all right? So find that balance. And as railroaders with that guaranteed retirement income of railroad retirement, you can be a little bit on the higher end of the risk spectrum, as long as it's prudent. We're not investing in single stock or anything, but you can look at that risk. Very, very important. Number five, that goes back to the risk. Diversify your portfolio. No single point of failure. Very important.

So we've got a lot of different investments all working to toward our goal, but you want to be diversified. Use index funds. So a lot of people talk about actively managed, right, a manager or passively, which would be an index. The index funds have beaten active managers 80% of the time. So index funds are the way to go because then that goes to our next thing, keep costs low. And that's where the index funds come in, very low, lot cheaper. Your expense ratio is a lot lower, that's great. And then your taxes are low also. You want to keep your taxes low. Very important to make sure that you're doing that. That means taking advantage of those tax-deferred accounts and doing the Roth conversions in retirement. Those are all great tips. And then finally, don't try to time the markets.

So, oh, this is it. This is the end of the world, I'm getting out or I'll get back in. I hear this sometimes, I'll get back in a couple months. I mean, who knows when things are going to... Just don't time the markets. Stay the course. Going back to that. So these were John Bogle's eight great tips. I think they're fantastic. Obviously if I had a bonus tip, it would be leverage that railroad retirement annuity. That's going to be really, really helpful.

So if you can stay in the railroad and follow these eight tips, you're going to have a great railroad retirement. There's no ifs, ands, or buts about it. I'd be shocked. Let me know if you follow these eight tips and you have a horrible retirement, let me know because well, I'd love to find out what happened. So feel free to reach out to me. Go through the Boarding for Railroad Retirement Assessment if you're at or near retirement. Love to go through some of this stuff with you, that'd be great. Click on my notification bell on the YouTube channel to get the latest videos. Share this with other railroaders. I do appreciate that. Subscribe. We're over 5,000 viewers now, which is great. And until next time everyone, please stay safe, stay on track, and take care. So long everybody. Bye.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.