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Ask HN: How do you plan to retire from a long-term career in technology?
22 points by agentultra on Apr 23, 2012 | hide | past | web | favorite | 12 comments
I don't really plan to ever stop programming, but I have been wondering how one would eventually retire from this field. I haven't heard of a company offering pensions to its technology workers and relying on the government doesn't seem feasible. So the question on my mind lately has been how are other programmers and tech workers planning on retiring from the field?

Been there, done that ...

I was laid off by an AI research company in 2006 at age 55, where I was a programmer - I have been a programmer or project manager since 1976.

My wife and I have been frugal our entire lives and are very aggressive savers. When I was laid off, I persuaded my wife that if I accepted one of several job offers it would just put more money in our retirement accounts and investment real estate. Furthermore, our financial advisor said that we already had enough saved.

I have been researching and developing my own AI software since 2006 at home and without pay - I have published a few workshop/conference papers. I work 8-5, happily self-directed, on stuff that I really enjoy and which - maybe - might eventually make a big difference in our world. I use the latest technology. At age 60 I became an Android programmer and soon I will be setting up cloud infrastructure using Amazon Web Services - and so forth.

Programmers and software developers make good salaries. Here is my advice to follow in my footsteps ...

1. Aggressively save from your family income.

2. Get the advice of a financial advisor. I am too much of a risk taker for my own good and would have wasted my savings gambling in the options and futures market. Better to simply buy and hold index ETF or mutual funds. I average an 11% annual return on investment residential real estate that I manage and about 8% annual return over several decades on a mixed stock / bond diversified mutual fund portfolio.

3. Avoid non-investment debt. I.e. mortgage on investment property is OK, credit card debt is not OK.

4. Marry well! E.g. Be sure your mate is an aggressive saver.

5. Live substantially below your means. The greatest benefit of being comparatively wealthy is simply not having to worry about money. E.g. avoid university debt, do not buy too big a house, do not take expensive vacations, do not have an expensive wedding or throw an expensive bar/bat mitzvah, buy used cars, etc.

Your advice sounds very good. I'm looking at the situation from the other end of the tunnel. One point I would add is that you have to be very careful in finding a financial adviser. A large portion of people that work under that title are actually just commission based "whole life" insurance salesman. It took me and my wife quite a while to find a person we felt comfortable with and that was 100% fee based.

I would like to second the need for avoiding insurance salesmen as investment advisers. Beware anyone trying to sell you "Cash Value Life Insurance" (Also known under other names, such as "whole life". These are all broadly in the Permanent Life Insurance camp[1][2]). They are only masquerading as a financial adviser in that role. There's no good reason to combine insurance and investment.

Stick with "Term" [2] life insurance (good coverage, cheap, but only for a fixed number of years), invest the difference, and plan to self insure after the term is up. Good financial planning makes this approach much more cost effective.

I've recently had the experience of a friend going into the life insurance business, and it's been painful to observe how sleazy the life insurance "products" that they try to sell you are. We sat down to discuss my savings/insurance plans, and when it became clear that I was not interested in starting his "Cash Value Life Insurance" plan, he resorted to pitching the product to me with the desperation of a Quickstar/Amway[4] representative. It was a very off-putting experience, but it makes sense now that I know his only compensation comes from commission.

[1] http://en.wikipedia.org/wiki/Permanent_life_insurance

[2] http://en.wikipedia.org/wiki/Life_insurance#Permanent_life_i...

[3] http://en.wikipedia.org/wiki/Term_life_insurance

[4] http://en.wikipedia.org/wiki/Multi-level_marketing

But do you have children?

By saving wisely and living well below my material means. I don't plan to retire lavishly after selling a hot start up for hundreds of millions of dollars. Sure, that might happen but I am planning on retiring from a average paying job after working for many years while saving and going without luxury items like fancy cars, giant TVs, having kids and real estate I can't afford.

Max out the 401k and IRAs every year. Save more on top of that. Hope we don't get hyperinflation to wipe out all those savings. If necessary, keep working (maybe part-time, maybe telecommuting, whatever) into old age.

Save money. Invest it well. That's it.

Most people in technology are earning significantly more than the median income in their region. If you can learn to keep your spending near median, you end up with a sizable cushion.

If you can save 1/3 of your income and earn a 4% real rate of return on your savings, in about 8 years you have 5 years worth of living expenses in the bank. That gives you a lot of flexibility for taking risks that can earn big payouts.

Or if you keep doing it for 30 years, you end up with enough savings to live off the investment income alone. This is the slow, reliable way to get rich.

Most people (self incl.) have 401(k) or Roth IRA. My long term goal is to build a very profitable business that is itself my retirement plan.

I'd imagine that many HN readers intend to use money from an exit to fund their life after "retirement".

Do you mean how to manage the retirement from a financial perspective or in general, how to spend one's retirement?

From a financial perspective, in general.

I've come to realize in researching the issue that there are several options and in asking this question I am hoping to get a sense for popular strategies.

I am uncertain how it is possible to retire at all at this point (even though I've still got a few decades if I'm lucky).

I think the shortest answer is: live below your means.

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