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Decision time, retire or don't retire that is the question.
Ready for our month of May visit and there is much on the agenda. Financial guy says we have enough to live at same level until 94 years of age. I turn 55 in September. Not sure I am ready to stop working but a change certainly wouldn't hurt my feelings. Bring on your wisdom and relatable points of view.
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Modeling & Assumptions.
Whatever your situation, assumptions can be made to pay thru 94. No guarantees. Advisors make money by playing with models. :popcorn: |
OK, will comment as Coach K (wife) and Sportsguy (cabana boy) are in a similar position.
What's your health care payment/insurance strategy for the next 10 years? What's your current employable skill set in the middle of rural Florida? What's your remote skill set for working at home and then playing golf in the afternoon? What weekend activities do you love currently? So your finance guy has a prediction, based on a conservative set of assumptions with an actual annual execution budget? Have you and your finance guy created an actual finance execution plan starting now? So I work in corp finance, not much different at times, and have lots of skepticism of high level blanket powerpoint exclamations and actual financial execution of said powerpoint concepts. :blahblahblah: I have been an execution killjoy to some high level executives dreams. barf So if not, I suggest that you do, so that you can see if you actually understand the expenses of retiring early, and what parttime or health care insurance you need to actually execute, remembering that most likely your current healthcare insurance needs are highly subsidized by your employer, and will not be the same in TV, as generalized by your finance guy. . If you need execution financial planning TV specific numbers, there are many posts here giving reasonable numbers. . . so, interested in your answers :) finance guy |
Too young to retire.
Either use your brain or it will go away. |
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I didn't see @dewilson's comment, but I am bit more specific as to an execution plan. @dewilson is always conceptually correct: he's more of the powerpoint guy
:bigbow: :duck: |
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If I were you, the biggest concern would be the cost and availability of medical insurance until turning age 65.
From the financial point of view, what cost estimates has your advisor made? From the health point of view, do you have any pre-existing conditions that will increase your difficulty in obtaining affordable coverage? Are you willing to accept a higher copay to lower the premium? Finally, the unpredictable: in what ways will politicians change the existing healthcare laws in the next 10 years? Good luck ... it's a jungle out there! |
Thanks for your comment
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Don't forget tax rates and inflation, if you live to be 85 a lot of changes will happen in 30 years.
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I think it really depends on what kind of work you're talking about. Are you an executive with a 6-figure salary? I'd say maybe hold on to that for another year or three. Give yourself a bit more padding, sink it all into your retirement funds/annuities, or heck just stick it in the savings account at the bank. Why? Because "just in case" you need a new roof, or misfortune strikes and ends up costing an arm and a leg, you need access to cash that won't put a dent into that magic "94" end goal.
Are you working as a shift manager at a store, for under $40,000? Maybe switch down to a part time sales clerk instead. It'll keep you busy at least a few days every week, and give you enough grocery money that you can get the prime rib and lobster tails instead of the ground chuck and shrimp. Or make organics a regular part of your grocery trip instead of just a "oh that one thing when it's on sale" thing. I'd definitely recommend doing -something- to keep busy. Keep your mind sharp, your social skills intact, plus it's a good segue from the routine of working 5 days a week down to no schedules, no cares. |
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I can see Medicare in the distance :MOJE_whot: ETA: I see you are an expert on gas fittings and piping. I am sure you could find a home for your skills here, full or part-time, if you chose. |
Always appreciate your comments.
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Model say...
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Retired at 58, 11 years ago this Summer. Not even the slightest of regrets.
Look forward to doing whatever I want to do everyday. |
Pull the pin. I just did at 51. My brother passed away at 59 last year, so there are no garuntees in life.
No one that I know from my workplace ever regretted retiring. All say they should have done it sooner. Some poor planners had to get part time jobs, a few worked out of boredom, but none wished they hadn't retired. You will adjust to whatever income you have. |
It is never too early to retire.
Only you can determine if you are able to handle the financial implications. Remember, WORK is a 4 letter word. |
If you can retire now, do it. Start enjoying the best part of your life, now. I retired at 55 and have never regretted it. I find life here in the villages is wonderful. Plenty of fun things to occupy your time and plenty of great people to enjoy it with. If you do get bored, you can always find work but I never have. Been retired 10 years and loving it.
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We only paid $48/month for our health insurance last year. This year, we have to pay $130/month because this year hubby's social security is kicking in for the first time. If we earned too much to qualify, our plan would cost us $1897/month. So consider the value of that health insurance as a significant factor in your decision to stay or leave, when you choose to do so. |
I woke up one morning in Pakistan with my ears still ringing from the car bomb that went off the night before , I said that’s it I’m 63 let somebody younger try to save the world , I took my 6 figure pension that I could have taken years earlier and now at 82 never bored. My advice take it as early as you can you won’t be missed
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Retired at 57 and very glad that I did.
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I retired just after my 56 birthday. I had a health issue that really kept me going back. I got approved for SS disability and that along with my pension it made it doable. My wife is still working but as a nurse she can go most anywhere. My health care is $210 a month and I had a 401k that I flipped to an IRA. Have never had a finance guy and we still own a house up north that is worth something. We get to Florida when we can, stay up north and soon will be using our camper and boat. Health aside, life is good and retirement is great.
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You answered your own question with your question. The moment you posted anonymously, without providing any specifics about your health, desires, family situation, ability to pay for medical insurance ( for the rest of your life ), ability to purchase / rent a home ( for the rest of your life ), the ability to pay ALL your taxes, ability to pay for FUN things, and your asking people who you have absolutely no connection with, should prove to yourself that your are not ready to retire at THIS time.
In My Honest Opinion -Take your time and choose wisely based on facts that pertain to you and your family and mostly, do what makes you and your family happy. There is a lot more to retirement other than the ability to financially retire. Good Luck with your decision. |
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We have owned in TV for a few years now. We decided at the end of last year to move down and make a go of it. So we're here now, just need to sell the house up north to cut the strings. I am a critical employee at my company and they decided that rather than lose me, that I would work from home in TV and ultimately schedule time up North and when critical events happen. I don't know how long this will last, but for me, it's great. I maintain my salary and can hit the pool at 4pm and work on my Tan :)(that's a joke, I'm a burner). It's not a retire for me and I don't think I want to fully retire. I can do technical/programming services for people down here or fix golf carts or whatever. I installed 3 ceiling fans recently. I could get into that alone and live just fine :). I've got vendor's I've worked with chasing me for programming help and technical expertise. I'd love to get back into building engines again like I did 30 years ago to. I say all this as an example of the doors that opened because I am not spending 11.5 hours a day to bring home a check, two of which were spent in the car. I'm not worried about insurance. With low enough income, ACA plans are cheap or subsidized. My opinion, do what you want to do. You can't take it with you. I've had a lot of friends and family go in the last couple years. One waited until 70 to take SS, had 3 pensions, everything was paid for. Had around 2 million in cash/401k/etc plus the pensions. Dead at 71. That's not going to be me. |
I saw the writing on the wall and escaped from my profession at 57. Do I miss working, of course I do, but plenty to do in TV and the stress levels are way down.
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Your financial guy says. My mom used to say man plans and god laughs. Whatever your financial guy says will he/she guaranty that? Of course not. Social security. Check it out. I think unless you are qualified as disabled you will not be able to collect till 62. A pension, if you have that may not be payable till 62 or 65. Medicare, you need to be 65. We retired at 63. We had one year under COBRA and one year on our own. I'm sure it has gone up. The cost was if I recall 24,000 a year. Call it 50,000 that had to come from our savings. Those predictions as far as what you need to have. I am a contrarian realist. To get a perfect number all you need to know is when you will die, what will kill you, your real rate of inflation and the return on your investments between the age of 55-your death. You know none of them. It is all a guess. At 55, if you decide to go back to work, you may well discover all the people who say you can come back anytime may well now say we cannot justify your former income and in the backroom wonder do they want to higher a guy who is 55. In the real world it is tough to find a job at 55. |
Retired at 55 with no regrets.
Many people south of 44 are young retirees; I’ve met a few in their 40s. :clap2: |
People who retire in their 40's are living a pipe dream. It will eventually catch up to them. The reason, there are too many unknowns in the world. One bad health scare is all it can be at that age. Also the change in various laws can change too.
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Ask yourself three critical questions. Do I work to live, or live to work? Do I have lots of interests outside of work that would keep me busy and am I willing to take on new interests as I age and can not necessarily do some of the things I currently enjoy? Does my financial situation allow it? Retirement was a no brainer for me. I worked to live, the day I got out of graduate school I was planning my retirement. I have more interests than the day is long, and have taken on new interests as my body ages and I can't do some of the things I used to love (skiing, basketball, hiking the white mountains, mountain biking in the woods, etc...). And I was/am fortunate to have adequate financial resources. I retired just before I turned 50 and am rapidly approaching 12 years of retirement. I could have retired much sooner if I was willing to take one of the several offers I had to work on Wall Street which would have increased my income multiple times. However, there was not enough money to get me to work long hours in NYC. Not living in a beautiful rural area, with a great school system, and being around to be a big part of our daughter growing up simply was not an option. The way I looked at it, and still do, is every day I went to work was one day that I was closer to being dead and not doing the things I would rather be doing. Time is the most precious resource we have in life (along with health). Craig, based on other posts I have read, you seem to be the type that has lots of interests and will not get bored, and you seem to be the type that worked to live. So it comes down to finances. Both the integrity of the financial model as well as the key assumptions put into the model, are critical to accurate projections. Since I am a finance guy (MBA with a concentration in Finance, CFA (Chartered Financial Analyst), and worked a professional career in the investment management field (managed fixed income mutual funds, the General Account of a Life Insurance Company, various structured finance vehichles, etc...) I built my own financial model and was very careful to put in conservative assumptions. The three critical assumptions are your expenses, inflation, and income sources/ investment returns. Based on that you can project future yearly sources and uses of funds statements and personal balance sheets. I would advise the following regarding assumptions: Expenses - Health Care is by far the biggest and most unpredictable expense until you reach 65 and become eligible for Medicare (assuming Medicare is still around and has not been gutted by politicians by the time 65 rolls around). Identify what other expenses are necessary as well as those that can be managed if necessary. Non manageable expenses are things like food, property taxes, utilities, energy prices, auto/homeowners insurance, etc... Manageable expenses are stuff like a travel and entertainment budget. Inflation - This is the assumption that is the most difficult. Do not put in what the government publishes as the Consumer Price Index, that is a big mistake. This gets back to non manageable expenses. The main expenses for retirees are things like health care, food, homeowner and auto expenses including insurance, gas, utilities, associated taxes, and for me green fees. To make the assumption that these types of expenses will run at the rate of the CPI is a dangerous mistake. Actual inflation of these critical expenses runs in the double digits, and more some years. Inflation as reported by the government is a big lie, and it has to be or interest rates would correspondingly go up and every penny of revenue the government collects would go toward paying the debt service on our countries out of control debt. And that leads into the assumption about another mostly unmanageable expense, taxes. The debt of our country is unsustainable, so taxes have no where to go but up. Income sources/investment returns - For most retires, the income sources include some or all of the following. Investment returns on savings and a 401K (traditional or Roth), Social Security, and pension. The only certainty is that you can spend your savings. Returns on your investments, as well as the future viability of both Social Security and a pension are a crap shoot. We all know about our governments unsustainable debt burden and the problems with adequate Social Security funding from an actuarial prospective, so counting on Social Security not being gutted is a big mistake. Pensions are another uncertainty. Most pension plans are underfunded and turbo charged with equity exposure and their viability will be stressed with a major long term correction of the equity markets. Also, since the equity markets are at or near all time highs and fixed income returns are very low, assuming a high ROR on your investments is very dangerous. What does all this mean. Be very careful to make conservative assumptions in your financial model, including high inflation on non manageable expenses and returns on your investments. And don't hang your hat on Social Security and your Pension as being your primary source of funds in retirement. If your financial model has you not running out of money until you're late 80's or 90's, using conservative assumptions, go for it. I have several friends and acquaintances who have died of heart attacks, cancer, and other nasty ailments while still working. Why wait? What good is having money when your body can no longer do the stuff that makes you happy. Enjoy your money now rather than being the old curmudgeon that has lots of money in their bank account and their primary expense is to pay someone to come and wipe the drool off your chin. One last piece of advise, responsibility and a happy retirement are at odds. By all means, follow up on your current responsibilities, but avoid new ones like the plague. When people ask me what I do with all my free time in retirement, my answer is whatever the fuc$ I please. Responsibility gets in the way with that. Here is wishing you the best of luck : ) |
Go for it.
25years and a bit retired now, loved every minute of it. Still going ............... strongish!:) |
What's today's number????..................You have a 1/4 chance of living to age 95.
3/4 are dead and did not enjoy their financial model they paid for. :1rotfl::1rotfl::1rotfl: |
My father retired at 62, thinking he was healthy. Got sick shortly thereafter. The day he passed my mom and sister came home from the hospital to find his first SS check in the mailbox (which, incidentally, mom had to mail back because it arrived on May 31st but was for the month of June).
YMMV (but who knows). Good luck with your decision. kathy |
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Warning Will Robinson
There is pending before the Supreme Court a decision on the Affordable Care Act (Obamacare) brought by several GOP controlled states to have the whole thing declared unconstitutional. Your financial advisor certainly used the cost of health insurance with the ACA intact in making his projections. If the SCOTUS tosses the law as has been demanded by those several states, there will be no more balancing of cost based on age so older people will pay WAY more as there are caps in the ACA on age based premiums. The present cost is well over 1000/mo/person for a Silver plan which has a fairly high out of pocket and/or coinsurance requirement. There also will be cost determined by pre-existing condition so if you or your spouse have an elevated BP or cholesterol be prepared to get slammed or refused coverage at all. Now if you are a multi-millionaire this will all be pocket change. |
My closest friend retired 2 days after he turned 55, and one month after getting a $ 25 K / year pay cut. He plays golf and tennis several times a year, spends half his time in Central NY and half in Ft Myers. He also has a "hobby" that nets him 50K or so a year. No pension. Both he and his wife are 69 and they have never looked back. I enjoyed my job, waited until SS full retirement age (FRA) and just celebrated 3 years of retirement. In the last six months several acquaintances have died, had strokes, open heart surgeries or cancer diagnoses. Both my friend and I are blessed. As long as you dont do something stupid with your money, sounds like you have enough. Whether you are ready for 24x7 unstructured time with your spouse is a totally different question A little fact to ponder in closing. The average life expectancy of a 52 year old male is 80; the average life expectancy of a 68 year old male is 84 ! Most people would be surprised at that. Good luck, and welcome to the Villages
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I would use at least 3% if not 3.5 for a more conservative long term model sportsguy |
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Your two points on capping premiums based on age and pre-existing conditions are good points. Since I was a Massachusetts resident when buying insurance pre-Obama care, I was protected by Romney Care. Massachusetts was the first state to provide a state insurance exchange, well before Obama Care, and they did have protection to cap risk pricing of older folks. However, I don't buy your point on pre-existing conditions. As long as I can ever remember, insurers could not deny or add a risk premium to people with pre-existing conditions, as long as they had prior health insurance without a break. The point is to not allow healthy people to not have insurance and then be able to immediately sign up when they get a serious medical condition. That is not how insurance works. That is why Obama care had penalties for not having insurance. Healthy people opting not to have insurance throws off the balance of risk pricing a large population of both healthy and not so healthy people. People who are responsible and have always carried health insurance do not have to worry about being denied because of pre-existing conditions. That is just a talking point of a certain party to push their agenda. |
Great information and insight...
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