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Periodic Contributor

Retiring early - share your experience! Please!

I am planning on retiring in April 2018 when I turn 62. I have worked for the same employer for 33 years and am fortunate enough to have a decent retirement. I won't be doing a lot of travelling or buying a new car but I should be comfortable, making a little more than I am working!  I have 3 grandchildren that I really want to spend more time with before Grandma isn't "the bomb" anymore, be a little more involved in my church, and open to other things. But after just taking a week off from work, I'm afraid I will be bored.  I'm so used to having a specific purpose every day; I'm used to being surrounded by great people with lots of laughs (lots of crap too!) and great working relationships.  I am not a highly motovated person and am afraid I'll spend way too much time in front of the TV, especially in the winter months!  I really don't want to work any more.  33 years is a long time to give to one organization. It's now time for ME.  (Besides, I can't keep up with the changes in technology and all the young people around me).  My retirement is all contingent on what Trump does with health care and economy.  I have budgeted a nice monthly sum for insurance premiums but it may not be enough or change over the next three years until I can get on Medicare.  It all frightens me. I'm a single woman supporting myself.  Anyway, would love to get some feedback. Thanks.

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Trusted Contributor

The question is really pretty simple. At what financial level are you willing to live? If your needs are great, don’t retire. If you can live simply, retire. But always remember living long is not promised to anyone. 

Trusted Contributor

My suggestion, probably wil be reiterated by others, is to find a hobby or some organization for which you can volunteer.  Take up a skill you may have wanted to explore but for which you did not have the time (i.e. painting, writing, playing a musical instrument, singing).  Do you like working with kids (not necessarily your own grandkids) or older people?  The homeless?  Habitat or another organization that volunteers to help people with housing, etc. would put you to "work."  These places will often work with you if you wish to give them time.  Your best bet is to find one that fulfills your needs as well, perhaps in a way that full-time employment never, ever did.  I am, right now, working on a long-sought-after hobby-perhaps second career, although not yet retired!  This is just a start...!

Trusted Contributor

Am 70 this year-still trying to figure out just how to (and if I can?!?) retire...must do so, however, before more of my life slips by!!!  Am a widow, have many grandchildren - but have plans for things that both do and do NOT include family (i.e. the go-to babysitter for everyone).  Any suggestions?  Will have Soc. Sec. and a pension, but debt, taxes and health insurance are major concerns...! P.S.  Know I must consult with a retirement counselor here at work, and plan to do that.

Conversationalist

@smetro, you should have figured that out long ago.  Not so much when you can retire in time but when can you exist on what you have.  Finding a job at your age will likely be impossible.  Trust me, I have first had experiances there.  You need to have a list of what your assets and liabilites are including a dollar amount.  You need to list and total up your different incomes and your expected expenditures. 

With family maybe you don't want to move but many retirees sell their home and buy something in a cheaper place to live.  Then you need to visit the areas to see if you could actually live there. 

 

What are your finances?  Unless you have CDs, these will not be stable.Stocks could go any which way while bonds will likely lose a lot of value.  If your funds manager hasn't warned you about bonds you have you need to find someone competent.  The tax cuts will eventually raise interest rates which will lower the value of your bonds. Because interest rates are near a record low, any bond is a terrible investment.  

Contributor

Suggest you create an Excel spreadsheet with 2 columns: first one:incoming;second one:outgoing).
Incoming will consist of your individual month income like: net pay,social security,pensions,dividends,interest.
outgoing will consist of your individual month
expenses like rent,food,utilities,auto expenses.
Incoming minus outgoing should show you if you are operating at a plus of minus for a month. Then you need to increase incoming and decrease outgoing so you can use the balance to invest..
Regular Contributor

I  dropped out of the job market as soon as I could. I was in my 50's and left the US for the first time. I finally landed in Nepal where I live now and I have never regretted it. The healthcare is really pretty good, although I wouldn't want to have heart or brain surgery here. It's so cheap I think retired people should come here for the wintertime and get their health taken care of. I had another tooth saved a couple months ago and the place is clean and modern. I've made it my mission to help as many people as I can to enjoy their golden years outside the West. 

 

I have a happier life and can do so much more for my village than I could back home. Young people are respectful and kind. Anyone interested in Nepal as an option can contact me. I guess one thing I miss sometimes is friends from my culture, so I'm always available. Nepal is about half the monthly cost as just about anywhere else and it's really beautiful; it's only polluted in the city.

Newbie

My wife and I retired early.  I was 56 and my wife 54.   We had not planned to retire this young but the opportunity to sell our home and more than double what we paid for it, made it possible.  We both had careers that we could go back to if we found it too expensive.  In our 60's we were asked to do a part-time job that was fun and we got to travel with it.  But in a few years, we didn't want to have to give up even that time.  Getting insurance was the most difficult part of the early years.  But we both loved doing things we never had time for.  20 years later we are still enjoying doing things we would not have had time for.  Our retirement kicked in during our 60's which helped.  I am now 74 and my wife 72.  I think we are both in better health than we would have been.  My blood pressure is now under control and it was a perpetual problem when I worked.   I do not regret retiring early and we would both do it all over again.   Having no debt makes our retirement much easier and no dipping into our savings to live.

Conversationalist

You need to be conservative with your fanancial expectations too many retired persons I know are struggling with finances.  Their financial projections were pretty far off.  It is likely if they had invested their mony more wisely they would have been fine.  All of them were mostly invested in bonds.  Bonds have done poorly over the last decade and will likley do much worse in the next 5 years. 

 

Things are tight for them and after being out of the market for a few years locks them out of any job that pays what they are used to getting paid.  It is hard enough finding a job as a senior fresh out of work.  These persons are way more resirable than 'lazy persons' who retired because they 'couldn't hack work' and now don't like the result of retirement.  Unless you have a special skill that is valuable and in demand, you will be lucky to find a MW job.  

Periodic Contributor

The only thing about retiring early,on time,or late is at least in my case is the high cost of healthcare,especially medications.That DONUT HOLE thing is killing my budget.I have wrote to my politicians in office and it's like talking to a wall,you get nothing in return,maybe some cracks.Good luck to you.

Contributor

A subtile detail, when eventually apply for Social Security, via ssa.gov:   There is a little check box asking, “do you want voluntary tax withheld?”

I have had mandatory tax withheld all my working life, including mandatory Social Security withholdings from my monthly income!  So, I was disgusted at the thought of volunteering any more tax to Uncle Sam.   Hence, I left that check box blank, with the intent to not “volunteer tax”! 

Translation to that decision was evidence a year later at tax time!  The result was no tax withheld at all, on our Social Security income!   Hence, having to cut a big check to IRS due to tax underpayment!!

The other ugly revelation are some of the administration staff answers, when I asked about the expected time to receive my first check after applying:  “It’s like working.  You have to wait a month to earn your benefit”!!!!  Sorry, but it is not “my benefit”!!  It is my hard earned money,  automatically extracted from my earned income for decades,  and finally being delivered back to me at the worst rate of return possible!  NOT a benefit!!!!

So, check the little “voluntary” box when you apply, to avoid suprises......

Newbie

Couldn’t agree more, what an eye opener!!!!!!

good luck,

Tim S

Periodic Contributor

Balance.  You can have more money working longer, but you never know how much time you have left.



 

Periodic Contributor

I will likely not voluntarily prepay income tax. The first year, I'll bank at least as much as I expect my tax to be, to be on the safe side, tehn go ahead and cut them a check. The next year, I'll tighten the numbers a bit. 

Periodic Contributor

I retired at 55 because my husband was dying from cancer and I wanted to be with him full time his last year of life.  I also hated my job tremendously.  Retiring was the very best thing I could have ever done.  I have worked a couple part time jobs over the years and have time now to enjoy life.  I travel a little each year to visit family and spend lots of time with my 3 dogs.  And I can now putter around in my house and garden.  Life is good.

Regular Contributor

Robin Hood took/stole from the Sheriff, the appointed tax collector, and gave to the poor because he felt that the poor were being overtaxed.

 

Had Robin Hood been a more equitable and benevolent hoodlum he would've also returned some of the money to the rich land owners who paid the most in taxes.

 

Ironically, the current tax laws actually favor the poor as will the proposed new tax reforms; however, the proverbial middle class ($50k - $250) will pay more taxes in 2018 than they do now.  The rich will make out with a 5% decrease in taxes while the middle class will have a 5% increase.  The poor will get to continue not paying taxes but getting unmerited tax credits and deductions so that they'll get tax refunds at our expense.

 

Where is Robin Hood when you need him?  🙂

Conversationalist

You need to find the facts and not propaganda.  I am certain this bill will not take effect until 2019-2020.  Middle class is from 50-200k  not 50-250k and will likely benft a little from the tax bill.  The poor benifit the most.  The wealthy pay the most and the very wealthy will pay most of the tax.  Every year you will give Uncle Sam half what you make over 1 million. How is that a 5% decrease it looks like a 20% increase to me.  The middle class will benift the most if they didn't itemise. I will likely lose some now but most of my deductions are going away over the next few years, so the bigger standard deduction will likely help me by the time the bill becomes law.  I will need to buy a new vacation house.

Periodic Contributor

And.... here is a re-writing of history, or a commonly held fairly tale. Robin Hood was known for taking from the rich and giving to the poor. However you wish to change my allegory, how would you feel about someone taking your money from you, which you earned, without your permission, and just giving it to people who have not earned it.

Actually, that happens a plenty now with the various welfare programs we now have. I worked 27 years in low income housing, I'll admit to being a bit cynical about the subject, having seen what I've seen, repeatedly.

Still, to try to get this back on subject, retiring early is a privilege. Or a hard earned right. Once the time to take advantage of that opportunity arises, many are able and willing to do so. It's been one of the best decisions of my life. I count on every thing I have to do so, and so long as not much changes, I'll be okay, or better than okay. I am certainly factoring into the equation the Social security due to me, that I forcibly paid into. To say I am better off than the spendthrifts who save nothing for retirement, and thus they should be entiteled to my retirement is, frankly, an insult to the work ethic and savings ethic I have lived by all my life to put myself in this position.

Conversationalist

Robin Hood took from the rich to give to the poor.  That was their money and it was taken by force. 

 

I may retire close to 70.  This is my last job.  No one will hire someone pushing 70.  Thanks to an insane stock market, I can say if I retired at 62 I would have likely had 25% of what I hope to have at 70.  It looks as if I may double my nest egg from 65 to 70.  For the last few years I have been making 15-20% on return.  That does crazy things to coumpounded interest.  Doubling in about 5 years.  We are too cheap to spend that lkind of money.  We are starting to take nice vacations now that money is not an issue.

 

They are now predicting if you are alive and 65 or older most of us will see 90.  The odds makers are predicting 85 because they are conservitive on how much longer we will live due to medical advances.  Most of my friends are figuring they will not see 80 but they are all very ignorant.

Regular Contributor

From the Single taxpayer perspective:  Nonsense, the 'middle class' will not benefit except for the extra $50 from the $12k standard deduction (vs $11,950 from the current standard deduction + personal exemption); however, those that are 65/blind will lose their supplemental senior standard deduction of $1550 unless the plan is 'fixed', otherwise the 'middle class' will stand to lose $1500 per year once the retiree turns 65.

 

Single taxpayers who make between $45,001 to $200,000 will pay a straight 25%.

 

I, personally, will have a tax hike of 5% to help the rich to pay for the poor.  🙂

 

I complain though I make more than I need and my income streams are perpetual, plus I have excellent medical/dental/vision care, etc.; however, I do not approve of the unequal and unbalanced tax system, nor the government's 'Robin Hood' approach either.  A straight national sales tax would be best.

Conversationalist

Uechapa, where did you get that info? 

 

1) I dug deep my self and couldn't come up with anything that detailed.

2) It conflicts with what I did find.

 

I believe straight tax is not fair for the poor and a bit immoral.  I personally don't mind paying a few more grand in taxes so a stupid person working 2 jobs can stay afloat. I will not notice 2-3 grand missing while some fool working 2 jobs just to make 20k will. 

Regular Contributor

The rich pay more in taxes than the middle class while the poor don't pay taxes yet get to collect a tax refund; therefore, given the current tax laws, the federal government is already a 'Robin Hood' by stealing from the rich and giving it away to the poor.

 

The poor also get to indulge in welfare, food stamps, subsidized/free housing and medical care, etc., and all these 'Robin Hood' programs are provided mostly by the federal government at the expense of the middle class and the upper income brackets.

 

It seems to me that the poor don't have to worry about their retirement years 'cause they'll simply continue to be wards of the state.  The middle class have a choice to prepare to maintain their standard of living or slide into the poor bracket.  The rich don't have to worry much about retirement except to avoid overpaying in taxes.

 

It's all about choices, still, but it's a bummer when things aren't equitable nor balanced such that the middle class and the rich get stuck with the tax burden.  As it stand now, the Trump proposed tax plan will continue to favor the poor and the rich will enjoy a 5% tax reduction while the middle class gets to absorb a 5% tax increase thus making it harder to live blissfully in retirement on fixed incomes.

 

Robin Hood doesn't do a very good job...  🙂

 

Conversationalist

Even though you are right on a good deal, you are probably off on a lot.  Yes, the government will take care of you if you don't have the money.  Don't expect that to be confortable.  Expect that you will be lucky if your diapers are changed once in 24 hrs. if you need a nursing home.  You will be powerless to effect changes.  Welfare makes less than half minimum wage and if they double the MW your life will be misreable.

 

Actually the middle class also gets a free ride and that goes up to 200k.  It is the less than 1%s who pay for everything.  They give up half what they make after their first million each year.  If you can't make it on over a million a year I can't be sorry for you.  

 

Who ever thought life was fair?

Regular Contributor

I firmly believe that we get to create our own destiny in America if we get to work full time for at least 40-50 years, which includes teachers.

 

It's not 'rocket science' nor do we need some spectacular epiphany during our work tenure since we all know what's "at the end of the line", besides taxation and death (i.e., at one point we're 'gonna retire and probably at age 60-70).

 

If we all had followed two simple rules during our 'working years' we'd all be retired with at least two (2) income streams --our SSA and some annuity/MRD from another source (e.g., an investment portfolio (IRA/401(k)/403(b), or a savings account, etc).

 

If everyone would learn to live under their means their whole lives they'd have ample funds to save and invest during the course of 40 to 50 years while working.  The familial 'rule of thumb' I've preached to my kids, and to which I adhered for decades, was simple:  80/20 (gross/net).  If you make $100, you get to spend $80 and save $20, always; however, you're compelled to actually spend the entire 80% every month...

 

If you managed to gross $50,000+ per annum for 40-50 years your 'nest egg', before compounding interest, would be at least (.20 x $50k x 45yrs) $450,000.  Even at 2% APY you'd be a millionaire while retired.

 

We often create our own plight due to ignorance, procrastination, compulsive consumerism or laziness so we have no one to blame but ourselves.  It's a shame, and highly unfortunate, that some folks have to live only on SSA during their last years and still prey to inflation and high medical costs.

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Trusted Contributor

@uechapa, Thank you for your insight.  I'm going to share your post with my neices and nephews.  They are always bemoaning about their "slave pay".  They change jobs so frequently (chasing the next gig/salary) I'm always dumbfounded at their complaints. They never seem to have difficulties getting another job. Because they don't stay employed at a company long enough to become vested,  I am constantly stressing to them the importance of saving and funding an independent retirement portfolio.  I remind them that it does not matter how short/long they stay at a company,  or job/payroll title, or their payscale.  What matters is their sustained long-term and lifelong commitment to saving and investing while they are earning.

Yes...Life happens.  And, as long as you earn an income while life is " happening", there is no excuse not to include saving/investing as part of living your life.  My parents taught me how to budget and save/plan for possible emergencies; but they were not long-term savers or investors.  Their focus was to keep the bills paid.  Retirement was a dirty word to my parents.  They planned on "dying with their boots on".

In the 80s one of my mentors was a school bus driver who retired on SS and EE Savings bonds.  I was initially shocked by that.  However, she was a bus driver for over 30+ years and she saved and bought savings bonds every year for 30+ years.  This woman lived WELL.  She did not live an extravagant lifestyle; but, she wanted for nothing and anything she wanted to do or buy she could afford it.  Her motto was, " I keep the streets hot!". She loved being behind the wheel, and she was always on the go.  I tried to hang out with her and her friends--it was exhausting, but fun.  I was in my late 20s she and the others were in their 70s and 80s. I felt privileged that they allowed me to hangout with them.

She and several other mentors schooled me about the one rule to live by regarding planning for a successful retirement:  Saving/investing is a lifestyle choice. Living by that principle rule helped me to retire at 58 the way (financially) that I wanted to retire. I hope I can imprint this same principle rule into the mindset of my neices and nephews.

Fey Lady
Conversationalist

When I was a kid, during the 1950's, I remember TV ads encouraging people to buy savings bonds to fund retirement. I didn't hear of any other ways until I hit my 20's.
Conversationalist

You are soooo right! Saving a little is the key to a comfortable retirement. We never made a lot of money. We are near center of the middle class. We never save a lot but we always saved some. I would invest in the market and would lose most in the market crashes. Still, I learned the hard way. I doubt I will get caught the third time for the strike out. For the last decade I have been reading the financials and am fairly comfortable. We will do much better than most persons we know who have been making more money than we have.

If you want a comfortable retirement you need to invest in learning how to invest, how things work financially and how to keep healthy once you are over 50. By the time you hit 70 it is too late, your ship has already left the dock.
Regular Contributor

Living under your means & being virtually debt-free allows you to save and invest. I chose to invest in mutual funds and established a well diversified portfolio which survived 5 recessions since 1980, and a costly divorce, rather than fumble around with stocks and trying to 'time' the volatile market.

My portfolio has maintained a 12%+ ROR average for over 30 years, plus I managed it alone thus saving on fees. Besides my investment portfolio I have substantial savings and CDs also. Thank God, my retirement is in fact 'The Life of Riley'.

As Albert Einstein once stated: '...where there is a will, there is a way...' 🙂 Kids today at age 30 need to develop long-term vision and start planning their retirement then thus giving themselves at least 40 years.
Conversationalist

Obviously, you know what you are doing.  Time in the market helps a great deal.  There is a world of difference between reading about a disaster and living through one.  I was in the market in my 20s.  Life was so much easier then.  We didn't make much money but we had a better standard of living than the kids do today. They may spend more on recreation than we did.  

 

You can time the market if you have the resorces.  Institutions ALL time the market.  It could cost them a half billion a year to do so but they are protecting hundereds of billions, so it is a cost of doing business.  There is a cheaper way that is not nearly as good but still saves the bacon.  They watch the market for subtle movement.  They firstly monitor all sorts of indicators that predict which way the market is headed.  Then when a crash is likely, they look for traces of instatutions subtelly dumping their most vulnerable stockand replacing it with defensive stock. This only costs a few million and is employed by high-end portfolio managers.  Needless to say, no individule has these resorces.  If you are that smart, you just find a manager that will do that for you. The monitoring requires a team of analysts.   I didn't know you could make 12% ROR using a passive technique.  10% doubles in less than 10 years.  You must be sitting on 10 times what you had in the 80s.

 

Enjoy your retirement!  You earned it.

Regular Contributor

Far too many people want to live for today which is irresponsible 'cause when they retire they're basically destitute and a burden to others; however, we can all be lead to water but not all will drink, especially when it calls for sacrifice.

 

I failed to mention in my previous entry is that being debt-free while in retirement helps out tremendously.  I've been debt-free since before I retired and 5 years before I retired I spent a lot of money 'upgrading' my retirement home so I wouldn't have to worry about it as I got older.

 

I have no needs that go unmet.  We all have wants and desires but they're secondary to needs but today's generation, the millennials, think otherwise unfortunately.

 

To each his own and we do reap what we sow.  🙂

 

 

Conversationalist

Being debt free in retirement is safer but not always smart.  We have enough money to pay off our mortagage but at 2.5% interest rate and a return on our investments of about 17%. We make about 15k profit on our money after paying our yearly P&I from the money made from not paying off our mortgage.  That is 15k free and clear and we get to write off the I on our taxes ( a few more k). 

 

It is best to be shrewed when you are not working for a living any more.

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