[dewilson58]

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.

[kathyspear]

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

[dewilson58]

Originally Posted by Craig Vernon

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.

Looks like friends & family in the background of your picture...............you can always move in with them.

[retiredguy123]

Originally Posted by Craig Vernon

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.

I think your financial guy is probably wrong. You have plenty of money to retire. I retired at 56, and my net worth continues to go up, not down. I think that is true for most people who are smart and careful with their money.

[blueash]

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.

[valuemkt]

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

[CoachKandSportsguy]

Originally Posted by Craig Vernon

Inflation is accounted for in the model at 2% annually and a 4% return on savings.

Inflation is way too low at this point in the economic cycle with the amount of stimulus entering into the system. June 21 CPI reported in July will show a year over year of just under 4.0% (yes, i do financial forecasting as part of my finance fiduciary responsibilities)

I would use at least 3% if not 3.5 for a more conservative long term model

sportsguy

[dewilson58]

Originally Posted by CoachKandSportsguy

Inflation is way too low at this point in the economic cycle with the amount of stimulus entering into the system. June 21 CPI reported in July will show a year over year of just under 4.0% (yes, i do financial forecasting as part of my finance fiduciary responsibilities)

I would use at least 3% if not 3.5 for a more conservative long term model

sportsguy

EXTREMELY conservative 3.0 to 3.5 for inflation with 4% return. That's depressing.

[tophcfa]

Originally Posted by blueash

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.

Hmmmm, you need to get your facts straight. When I retired Obama Care did not exist. I had to pay full load to buy private health insurance. I had Health New England and was paying about $300 per month for an excellent plan, with a $500 deductible and a $1,000 max out of pocket. Them came Obama Care and my premiums skyrocketed to over $1,000 per month for a plan with both a higher deductible and max out of pocket. Why did Obama Care absolutely torpedo the cost of my health insurance? Because I can afford it and those that were responsible and worked hard and saved their money have to pay for all those that are getting subsidized or free insurance under the so called affordable care act.

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.

[Craig Vernon]

Originally Posted by tophcfa

Wow Craig, I could write a book on this.

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 : )

Thank You

[Gulfcoast]

We're 55/56 and starting to think about retirement (not now but it will be here before we know it). As others have pointed out, health insurance is the big expense that you have to worry about covering before you become eligible for Medicare at the age of 65. That would be a 10 year gap between now and Medicare coverage. Also, if you have young adult children currently covered by your employer policy you will need to think about how your kids will be covered by health insurance, too. Obviously if your kids are already covered by their own health insurance and/or are over the age of 26 that is not an issue for you. If you have kids in college it would be more of a concern.

I think one solution would be to make the move now to a retirement community and continue to work remotely at your current job, if possible. That way you can get established in the community - doctor, dentist, vet (if you have a pet), banking, accountant, etc - and by the time you go to retire you will be all set, the logistics will have been figured out already and you will have gotten to know some people in the community. This is an option that we're considering.

Since your employer requires an additional 3 year commitment if you opt not to retire this year, that really is something to think about since the terms of your employment benefits would be on the table to be renegotiated. In this day and age nothing seems to be a given. In fact, there is nothing certain in life and all choices come with risk. Your financial guy is saying that you can afford to retire now. Your gut is telling you that the terms of your retirement benefits this year might change to your disadvantage if you opt to wait 3 more years to retire. Retiring at 55 under your current plan may very well make more sense than retiring at 58 with lesser retirement benefits. It's a tough call and the sort of situation that more and more people seem to be finding themselves in. I hope you enjoy your visit to TV and best wishes going forward.

Proverbs 15:22 Plans fail for lack of counsel, but with many advisers they succeed. Proverbs 12:15 The way of a fool is right in his own eyes, but a wise man listens to advice.

[Altavia]

Life is full of twists and turns, retire as soon as you can.

[Dond1959]

I would recommend taking control of your finances and doing your own modeling. It really is very simple to do. There is a site called Bogleheads.org. I would suggest you go on there read, study, and ask questions. A lot of help is available for free to help you determine if your numbers look good and help you establish what investments to use, setting up budgets, and projecting how long your money will last.

From a personal standpoint I retired at 56 and love it. We have been here a little over two years and I will be 62 this year. If you can’t find things you are passionate about here and stay as busy as you want, you probably are not ready for retirement. But for me I saw it as a new phase in life and embraced the change and pursuing my passions. Best of luck in your decisions.

[rustyp]

Originally Posted by rustyp

Very rare for an advisor to tell you to retire early unless he / she has the potential of getting more of your money. Example - do you have a 401 K ? Does he or she recommend moving it to somewhere else under their control ? I also retired early - age 53 with a bridge to 55. More than several of my friends took the same package as I. Two items I can offer from experience to you .If you have a good 401K plan do not move it. My buddies who did are sorry they did - once out you can't go back. There will be plenty of time in the future to explore that option. Two be careful of medical plan promises. Our employer ( a fortune 500 company) reneged on their promise to us and from 55 to 65 it was by far our biggest expense. On the plus side - retire early - best thing I ever did.

I did forget to mention at 55 and from a northern climate if I was here full time (been here since 2007) I would have gone bonkers. If that is your plan you need to talk to a lot more 55 year olds that are now 65 to 70 and made that trip. If like me you will need to have a place up north near the children and mother nature as to change the scenery 5 to 6 months a year. You will look forward to the change of lifestyle each year. It's like Christmas twice a year. It takes a long time but ultimately you wake up one morning and realize TV is ground hog day. At such a young age you will appreciate a dual lifestyle.

Originally Posted by Craig Vernon

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.

I would not leave such an important decision to an advisor without knowing details of the model and doing a sensitivity analysis on the assumptions. I would advise retiring early if you have no debt and at least $2 million in investments, a pension, health insurance and and do not spend your principal and are able to live within a budget. If you work part time you can still contribute to your IRA. I would also suggest avoiding annuities in your portfolio at this time.