1. How far are you from being able to draw social security?
2. Can you live on Social Security? Many people do.
3. When can you start drawing a monthly annuity from your investmests?
4. Will social security and investment income meet all of your monthly needs?
5. Do you have private health insurance and are you eligible for medicare?
6. What does your financial planner mean by "stay the course"? Keep working or keep investing and not drawing.
These are the questions you need to ask yourself. Is the investment savings to supplement your monthly income or a nest egg?
“All I know is that if we'd retired at the end of 2007, we would be sitting here today watching our value decline, and we'd really be facing the fear that we really might run out of money before we run out of living.”
Probably most Americans have lost money in their investments in the last six months and fear losing more in the next year. There just aren’t any sure fire answers. Only you will be able to determine how much income and investments will be enough. There is a lot to think about when making the decision to retire. Since you have a financial advisor he/she should be able to give you some guidance.
My 79 year old FIL has a nice monthly pension and $75,000 in assests. He no longer worries about having enough money to last to the end of life. Infact he no longer worries about anything, he has Alzheimer's. So once he has to go to a nursing home the monthly pension will be gobbled up and so will the $75,000. Then he will go on medicaid.
You just can't worry about all of the "what if's". Plan the best you can and enjoy yourself. Life is just too short.
Paul and Karen
New to us 93 Pace Arrow
01 Tracker Toad
Kbix wrote: You just can't worry about all of the "what if's". Plan the best you can and enjoy yourself. Life is just too short.
I think that pretty well sums it up.
You plan the best you can and then you just have to take it a day at a time and do what you need to do to get by. There's just no way of knowing what tomorrow will bring, or how may tomorrows are out there. So I figure that the important part is to take care of getting everything I can out of today. If I spend today worrying about what I'll have in 20 years I'm missing what I have today.
Sure what I have today is worth less than it was yesterday - but then the economy could turn around and I could be worth more tomorrow OR it could go in the tank & all this could be a mute point tomorrow. Shall I spend the day worrying about which way it will go? Will my thinking about it change it
Hey, the suns out I'm in SD with some of the best riding in the country - DW and I are going for a bike ride We'll worry about our net worth some other day, and if it all goes south, or we end up broke just think of all the memories we'll have to keep us smiling while we stand in the soup line
John Ewing
2007 Allegro Bus 42QRP ("TisIt")
2005 Sportster/HydraLift ("Dinky")
2002 Miata toad ("Mellow Yellow") www.jandse.com
FMCA 104106
What goes around comes around - always treat others the way you'd like them to treat you.
My pension will be calculated at 60% of the average of my two highest paying years. But that doesn't mean an actual 40% cut in take-home pay. After I factor out what I currently loose to Social Secuity, Medicare, retirement contribution, medical (I'll have an account that will be paying medical insurance for a few years), union, savings bonds, etc. the amount deposited to my checking account will actually be a bit higher than what it is now. This doesn't do much for the inflation factor but after 5 years Social Security kicks in for me, adding a bunch to the bottom line. Icing on the cake is that I'll no longer be paying $1,500 a month to the credit card company (they doubled my interest rate from 4.99 to 9.99 so I doubled my payment amount. ) My "toad" will be paid off 9-10 months after retirement - if I don't pay it off early with that new-found $1,500 a month.
Can I afford to retire? A definate "yes".
Can I afford to full time or at least do some traveling? We'll see but it certainly looks like it. That $1,500 available to me and not the credit card company and the $400 not going to car payments will buy a lot of fuel (well, at least some).
Hope it doesn't seem like we've hijacked this thread from Steve, the OP. It's just that he asked how people made the financial decision to retire, and that's what we're trying to figure out, too, so we wanted to join in the conversation.
CrusinSusan wrote: C&J, you will never be able to "know". Honest. I'm not trying to be annoying here...and I know you know you can't know, but sometimes, seeing it in print (or from someone else) helps.
You're not being annoying, and yeah, you're right, we do know. That's what we liked about this thread is that it's written by others who are, or have been, in the same boat as we are, would know exactly what we mean and remind us of what we know.
CrusinSusan wrote: If it doesn't feel right, at this time, then it isn't right at this time. If it scares you more than it makes you feel good, then don't do it.
But really, don't do something that is too scary - if it feels like a dream...do it...if it feels like a nightmare...don't. Only you can know and research your situation and crunch the numbers as you need them crunched.
Actually it does feel like it will be a dream. What we're afraid of, though is what if we act on the dream and it turns into a nightmare when we either run out of money or just have to cut back so much that we can't do the things we enjoy!
Kbix wrote: C&J:
1. How far are you from being able to draw social security?
2. Can you live on Social Security? Many people do.
3. When can you start drawing a monthly annuity from your investmests?
4. Will social security and investment income meet all of your monthly needs?
5. Do you have private health insurance and are you eligible for medicare?
6. What does your financial planner mean by "stay the course"? Keep working or keep investing and not drawing.
Is the investment savings to supplement your monthly income or a nest egg?
C is 60, J is 51.
Social Security might be enough to meet some of our day to day needs, but definitely wouldn't be enough for us to travel as much or be as comfortable as we'd like.
We won't have health insurance, so have included that in our budgeting.
The financial planner told us that we had reached our retirement goal, but that as long as we were continuing to work we should continue to invest. And we have continued to work, and invest -- and now, as I mentioned in my first post, we're 8% down (all investments and retirement funds combined) for the year, which already puts us 16% behind our target for the year, and we haven't even started drawing! We haven't gone for a reevaluation by the adviser, but we're pretty sure that with these numbers he'd no longer say "congratulations, you've reached your retirement goal."
Kbix wrote: C&J:
Probably most Americans have lost money in their investments in the last six months and fear losing more in the next year. There just aren’t any sure fire answers.
Yeah, that's the crux of the problem. There are no sure fire answers. If only there were!
Somebody on here said if he went ahead and retired too early at least he'd having great memories when he's in the soup line. I know that person was joking, but, well, it wouldn't be funny if that's where he ends up, and if working just six more months or one more year would make the difference, then it would be worth it.
The thing is that we're in our highest earning positions right now -- if five or 10 years from now we would decide we need more money, of course we'd go back to work to supplement our need to, but of course we'd have to work much longer and harder to make the same amount that we could by just extending a little while longer before retiring. So what we really want to do is what steveolds was talking about, try to figure out when enough is enough, and not quit until we've achieved that.
And of course there are so many unknowns. Our financial planner has us living to 94. We could live to 64 -- or we could live to 104. If 64, we'd have plenty of money, if 104 not so much.
We're at the place right now where we really, really want to make the change, but we don't want to make it prematurely. We're not in careers where we can just give two weeks notice and be off, so, in addition to the unknown of how much we're going to need, and for how long, we also have to predict many months in advance what the market might look like months from now, before we announce our intention of leaving. And of course right now all signs say "down, down, down."
Looking for the sign...
C and J, and Maine Coon cat Hinky
2002 Coachmen Catalina Sport 285QB
C&J: Well I understand what you mean about being afraid you will run out of money. Health insurance is a big factor. You'll have to wait at least until you are 62 won't you to draw social security? And medicare kicks in at 65. It's all really confusing isn't it? We too were at the height of our earning capacity just before we retired but we decided we could live on less. We were never going to be millionaires anyway. But we both have our own retirement income so that makes a difference. At this point we don't live off of our investments. Everyone's circumstance is different. You have to make the best decision for your needs.
Try talking to your financial advisor about moving funds to something safer like a mutual fund or bonds. I don't know much about the stock market but did a crash course last week on where to move the money to ride out the storm, so I went with a mutual fund and bonds.
Quote: Somebody on here said if he went ahead and retired too early at least he'd having great memories when he's in the soup line. I know that person was joking, but, well, it wouldn't be funny if that's where he ends up, and if working just six more months or one more year would make the difference, then it would be worth it.
Would it be worth it to say you are going to work one more year and 10 months from now drop dead from a heart attack? Happens all the time.
Yes, the market is down and people get scared. Guess what, the market will come back and go up and then go down again. Its the nature of the beast. If you are well diversified, it helps smooth out the bumps. You won't reach the great highs, but also won't hit the bottoms so hard.
Pick your target date, start living on less now, and go for it. The hardest thing is the health insurance - make sure you have that locked in.
Barb
Barb & Dave - full-timing Traveling catpanions Kit (age 17) and Shadow (age 10) Figment II (2002 Alpine 36 MDDS) Mischief (2004 Subaru Forester Toad) FMCA - F337834, SKP #90761 http://homepage.mac.com/barbaraok/ Our blog
Quote: Somebody on here said if he went ahead and retired too early at least he'd having great memories when he's in the soup line. I know that person was joking, but, well, it wouldn't be funny if that's where he ends up, and if working just six more months or one more year would make the difference, then it would be worth it.
Would it be worth it to say you are going to work one more year and 10 months from now drop dead from a heart attack? Happens all the time.
Yes, the market is down and people get scared. Guess what, the market will come back and go up and then go down again. Its the nature of the beast. If you are well diversified, it helps smooth out the bumps. You won't reach the great highs, but also won't hit the bottoms so hard.
Pick your target date, start living on less now, and go for it. The hardest thing is the health insurance - make sure you have that locked in.
Barb
Barb has said it all!
We retired at 55 and while we could have worked more to have more money, our lives are full with travel and living a stress free life.
CJ wrote: Somebody on here said if he went ahead and retired too early at least he'd having great memories when he's in the soup line. I know that person was joking, but, well, it wouldn't be funny if that's where he ends up, and if working just six more months or one more year would make the difference, then it would be worth it.
Actually I wasn't kidding I was serious. Co-worker back when I was in my 20's taught me a very valuable lesson - he was mid 40's, going to retire mid 50's, had it all worked out. Body builder, health nut, etc. grabbed his chest one day and fell on the floor dead. Lesson - you've got this MOMENT but the next one is uncertain.
So I don't live paycheck to paycheck - that's not what I'm advising, but I also don't do without something that would give pleasure or make life better today so that I'll have a better tomorrow. If your advisor told you that you had reached your retirement goal then you probably have a lot more than most of us out here. The decision is do you go for it and enjoy life today or do you keep planning for the tomorrow that will never come
BillnBama wrote: When I first started thinking about retiring (again - retired from the USAF 21 years ago) I thought I would work until 72 or 30 years with my current employer... well after talking to some close friends and thinking about my health issues (diabetic) and my wife now not working (health issues)... said, "self, you ain't working until you fall into the grave"... put the pencil to it (well actually a spreadsheet) and figured I could ditch the suit and tie at 65 (next year) comfortably.. my ex gets most of my USAF retirement, but between investments, SS, and my current retirement system, I can make do on about 55-60% of my current 6 figure salary... and maybe have a few years to enjoy not getting up at 6am everyday of the week.. I am debt free (or will be at retirement time) with enough money to pay cash for a new truck and 5er and enough income to afford fuel (well at least I hope so on that)...
Being free of installment debt at retirement time lets you more closely know where you stand financially. Carrying debt into retirement just increases risk, and that's something to not have around. In your case, debt-free status will be just one more ace-in-the-hole in the retirement equation. The more aces, the better. Two things that will always remain wild cards are your health, and family member's health. When it fails too badly you can't travel, and when family members need your caregiving presence, same thing. That's why it's good to keep your feet wet travelling any time you can, and hang it up for good when you can too. Another wild card you mentioned was your ex-wife that receives a large portion of your USAF retirement. If she precedes you, that amount would then be turned back over to you.
Perhaps, just maybe , you have set your sights too high . Keeping up with the Jones in fulltime rving, dont cut the mustard.
I have to admit, Ibeen flat broke and I have money, I like having money a whole lot better, BUT, if it came to being happy, money only smooths the ride where you dont feel as bad. I would rather be happy and broke , than rich and sad.
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I'm in SD with some of the best riding in the country
) My "toad" will be paid off 9-10 months after retirement - if I don't pay it off early with that new-found $1,500 a month.
