Onward and Upward to Retirement
By Jim Bauer
@porwest (78761)
United States
July 4, 2022 11:13am CST
I think about retirement more and more these days. That just means I am getting closer to wanting to actually pull the trigger on doing it. It's not going to happen tomorrow of course.
But it does mean something else as well. It just means I am ramping up my investments to create more income. Not anything crazy. I am always putting money to work no matter what.
But the goal changes of course. How much you devote to putting away changes. The types of investment decisions you make changes. The arrangement of the portfolio changes. The effort that you put into your current job changes as well to make more money to have more to put away and get it working.
Luckily, I have that kind of a job where I can sort of dictate how much I actually make. I realize not everyone has a job like that.
I am just simply tired of working and that is what it comes down to. And I knew there would come a time exactly like this, which is why I have spent so much time and money in my life preparing for pulling the trigger and just doing it.
Early on the goal was 55. I am now 49. Of course, the decision to retire at 55 does change the amount one needs to successfully pull it off, because health insurance is really the biggest part of the decision. You need to cover that until at least 65, so typically this means you have to have an additional $250,000 or $300,000 lying around to cover that cost for the 10 years you will need to do that.
The one good thing is that I am better off than I thought I would be to this point. So, "on track" is a good assessment of where I am.
I am sure that "thinking about it more" is going to be an ongoing thing going forward. The itch is there and it won't get any better. So ramping things up seems the only best plan there is.
11 people like this
10 responses
@1creekgirl (40515)
• United States
4 Jul 22
When I was 56, I planned to work three more years to retire with 30 years. But conditions got so bad that I decided the little decrease in my pension was worth getting out of Dodge. The thing that really made me "pull the trigger " as you say, was that the county would continue to pay my health insurance.
It's never increased beyond the $150 a month, so I add to it, but it still helps. Dale and I were both very blessed to be able to retire while we were relatively young and in good health.
Hope you can, too. Best wishes!
1 person likes this
@1creekgirl (40515)
• United States
6 Jul 22
@porwest About two years after I retired, the policy was changed that employees had to work 30 years to get insurance continued. I think sine then, it's been discontinued completely. I got out just in time.
The policy was 30 years for a long time, then it was changed to 25 because my supervisor's daughter had six babies at one time and she needed to retire early to help out. So I retired a year after that.
1 person likes this
@porwest (78761)
• United States
7 Jul 22
@1creekgirl Nice they made a policy change to suit their own needs only to turn around and change it back to the old policy after they got what they wanted. Probably a good reason to go as well. lol
1 person likes this
@porwest (78761)
• United States
6 Jul 22
Insurance is always the biggest consideration. It would be nice if private health insurance was more affordable. But it is what it is I guess. That's the reason for creating the workarounds.
I won't be as lucky as you to have continued coverage.
1 person likes this
@porwest (78761)
• United States
5 Jul 22
Ouch. I hope you're not JUST starting to think about it with only 10 years to go. That just means you are miles behind. I am sure I am misreading your comment. Retirement planning is something best started in one's 20s.
Time decay is a very real thing.
I view retirement as a time to live and enjoy all the things you couldn't do when you were working. The earlier the better, and the more money to do it the better.
1 person likes this
@mom210 (9036)
• United States
11 Jul 22
@porwest oh yes, have the typical 401K, IRA's, but thinking in terms of what will it take to have the house paid off for retirement so it's not something we have to worry about. Also, do we want to do nothing or have a couple part time jobs,just trying to figure out exactly what it might look like for us.
1 person likes this
@LindaOHio (156056)
• United States
5 Jul 22
Retirement was 66 when I was working. I made it to 62 and retired on disability. Had to pay for medical for 2 years before I could get on Medicare. Turns out we pay as much for medical now as I did during that 2 years...actually it's more. Good luck reaching your goal.
1 person likes this
@LindaOHio (156056)
• United States
9 Aug 22
@porwest Yes, medical will drain your bank account. I think we're paying around $600 apiece for medical each month out of our SS checks. I could be wrong.
1 person likes this
@porwest (78761)
• United States
9 Aug 22
@LindaOHio Well, the cost is definitely much higher if one is under 65 which is why I have to allow for an additional $20,000-$25,000 a year to make up for it until we are Medicare eligible. The wife will be eligible in 10 years. I won't be for another 16. So, it is a definite consideration. I estimate we need an additional $320,000 just for that before we are both eligible.
1 person likes this
@ihasaquestion (8274)
•
4 Jul 22
That cute kid's pic is TDF! So cute.
Early retirement is desired by many for sure.
Early retirement is desired by many for sure.1 person likes this
@porwest (78761)
• United States
4 Jul 22
The thing I find is that many people desire it, few people actually have a plan or know how to actually achieve it. That's unfortunate, but it is also the reality.
Most people spend for the day. Not save for the future. So, most people will not retire early and most people will also likely retire broke.
I agree about the kid. lol
@porwest (78761)
• United States
8 Aug 22
@ihasaquestion I have thought about it myself, especially the Philippines. But the wife won't go. Not that we don't have enough to retire here. But we could live like kings there. lol
@ihasaquestion (8274)
•
4 Jul 22
@porwest This is a reality check for many. I guess that's also why a lot of retirees are migrating to other countries with lesser burden of financial spending.
1 person likes this
@FourWalls (62120)
• United States
4 Jul 22
Retirement rocks!!!! I retired at 59, and I’m loving it.
1 person likes this
@porwest (78761)
• United States
4 Jul 22
Actually this is very good advice. I am not going to discount it one bit. But it applies more to people who do not know how to invest and have less means. The key is having a number to work with that offers the proper return to sustain yourself indefinitely.
For me that number is $2.1 million with a 4% annual draw with a minimum 5% expected return. This provides for roughly $84,000 per year of income with a minimum annual return of $104,000.
Doing it this way the principal remains, and the return exceeds the draw, meaning this money would last forever and also provide an additional annual cushion of $20,000.
Being an avid investor of more than 30 years the 5% expected return is extremely conservative. It is more likely I would have returns in the 8%-15% ranges.
In essence, doing it this way, one would not retire in the year the $2.1 million is achieved. But on the second year so that the first draw is actually from the return, not from the principal. Therefore you would start retirement with $2,204,000, draw $84,000 and have a remaining principal of $2,120,000. In year two you would have a balance of $2,226,000, draw $84,000 and have a remaining principal of $2,142,000.
As you can see, at this point you are only living on the interest and dividends. Not the principal itself, and your balance rises each and every year. Even if you gave yourself an annual cost of living increase of 3%, you'd still have more than enough to sustain this money for the rest of your life and the annual cushion provides for things like market fluctuations that will occur from time to time.
Retirement is all about planning and having a plan, and making sure one understands the nuances of things that might occur while retired.
1 person likes this
@moffittjc (118435)
• Gainesville, Florida
5 Jul 22
At my previous place of employment, I had planned on putting my 20 years in and then retire with a full pension. And I held true to that, retiring at age 50. But, like you said, health insurance costs are astronomical, and since it would be 15 years for me before I hit 65, I couldn’t afford absorbing that much health cost out of my pocket. So I found a nice easy job that’s fun, and provides excellent health benefits. So I’m kind of in a hybrid retirement right now…working but enjoying the freedom of retirement.
1 person likes this
@porwest (78761)
• United States
20 Feb 23
That is what I thought may be a solution as well. Hell, I can work in a grocery store or something and have quite a lot of time flexibility and still be able to get on their health plan. The one here, Schnucks, is unionized, and while I am not a fan of unions, I am a fan of being able to get access to the healthcare even if I am part time.
Something to certainly consider at some point if and when the decision is made...unless I hit the big lotto or something, and then it won't matter what health care costs. lol
1 person likes this
@misunderstood_zombie (8142)
• United States
5 Jul 22
Wow, retiring at 55 would be so great. I hope you can do it.
1 person likes this
