Who All is Retired and How Do You Do It?

Thanks gutshootem. I was Civil Service too, but I spoke to several different people at Soc Sec, and to a couple of financial advisors. All said I'm screwed. The kicker is, if I decided to get my whopping $214 a month for Soc Sec, and I continue to work at the S.O. , after I make $15,000 I will have to pay back $1.00 for every two I make. Nothing like taking care of the working man.

JBS said:

MN public,
I plan to use the 4% rule - take 4% of the amount of invested retirement $ every year to live on. The theory is your investment should make 7% and the 3% will be reinvested to keep up with inflation. This should allow you to live forever. I would like around 2 mill invested to be able to live on about 80K. I may try to reduce spending and retire earlier with less. Nice work maxing out your 401K you didn't mention an IRA I assume because you are above the income limits. if so look up backdoor Roth it will allow you to contribute to a Roth IRA. You will likely have another 1/2 to 1 million dollars of net worth that is not invested (house, vehicles, toys). You sound like you are set up very well.
JBS

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Same approach here. A mix of good fortune and work ethic has helped. My spouse and I benefited from a jump start in life by each having a middle class upbringing with both parents in the home. I only recall one household argument involving money during my childhood and we always had food on the table though not much variety sometimes. Bread and butter sometimes filled in gaps of a dinner. I know I had a jump start by having a stable family and school came easy as well. I have no advice on how to do that for yourself but do try to create that for your kids.

If you are nervous your saving rate is not where you want it to be then create a budget. Your goal should not to be to simply match the savings rate of your peers as most of them are going to fall short of a comfortable retirement nest egg. There is no other way to achieve financial discipline than to budget and follow it. Your 70 year old self will thank you more than you can imagine. Budget has two sides, of course, earnings and expenses.

Median household income in America is around $60,000. Half the households make more, half make less. Some of those households are a single parent with 5 young kids. Some households have two parents, a grandparent and teenage kids all bringing home money for the household. Solve the riddle on how to get past 2x the median household earnings number and you should be able to save over 10% of gross earnings into retirement unless you live in one of a handful of expensive cities or have a special situation related to medical costs or specialized care of a family member.

If you are under that median number then consider taking on a second job for a few $100 more a month. Or, make and sell things for Etsy marketplace. Have the kids babysit. Rent out a spare room to a tenant. Downsize the home. Sell the boat or ATV or camper or any other item requiring insurance coverage yet not generating income nor providing a roof over your head. Four-legged pets are expensive, too. Probably will not be easy to make changes. Probably will create tension with family members. At some point you will be 70, though. Your 70 year old you is pulling for you. Good luck.

I think the biggest influence that helped my wife and I retire early was living within our means when we were working and raising our kids. We have decent pensions and good health ins. through our union. My wife was 56 when she retired a few years before me and I was 52. Most everyone we worked with had cars and homes we knew there was no way they could afford them because we all made roughly the same amount. Seems like everybody was trying to outdo the next guy. While we do have to watch our extra spending there is always enough for hunting, birthdays, Christmas, vacations, a new gun now and then. It will get a little better next year when my wife starts collecting SS so there will be more $$ to splurge with.

Laelkhunter said:

Thanks gutshootem. I was Civil Service too, but I spoke to several different people at Soc Sec, and to a couple of financial advisors. All said I'm screwed. The kicker is, if I decided to get my whopping $214 a month for Soc Sec, and I continue to work at the S.O. , after I make $15,000 I will have to pay back $1.00 for every two I make. Nothing like taking care of the working man.

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Laelkhunter, my mom was a retired Orleans Parish School Teacher. I know all too well of what you are talking about because I've handled their finances for years. It is tragic to know that you've paid in to a system for years and will never recoup those dollars. I am 49 and have two defined benefit pensions that are both over 95% funded and even stayed int he green zone during the recession. So with a little luck, house will be paid for in 2020 and we will redirect that money to another retirement fund so my wife can bail out at 60 years old and I will work until I'm 62. Either way, we should be in a good place financial with my two pensions alone bringing in close to $7000 per month. Don't know what to think as far as SSI that far out. Probably not counting on that too much as far as I am concerned.

Took SS last year @ 62. Ditto,I'm lucky to be here & I'm happy.
I can make an extra amount yearly but in this market it's moot. Not worth the headache,that surely does not pay deal.
I know nothing about taking it before 62.
Live simple.

We stopped working 10 years ago. At that time we had a lot less income than we do now and I knew that going in. I planned to retire early and I did. What we did will not work for everyone. Most guys think I am nuts but I am not going to go back to work. I made sure everything was paid off before we stopped working. House, cars, boat and so on. We downsized the house but there is only 2 of us now and she was all for relocating and getting a smaller home. The biggest surprise was of course the crash that hurt our retirement funds and the cost of medical insurance. We use 2 different financial advisers and they have never agreed on what we should do. One says work as long as you can and delay withdrawing any money as long as you can. The other guy said to spend it as fast as you want to so you can enjoy life some while you can. I am somewhere in the middle. Even though we are both drawing SS there are other accounts we are not drawing from. My plan is to give myself a raise every five years or so until we are drawing from all available sources. Now our combined income is about 1/3 of what it once was but we are doing fine. We don't ever spend money we don't have. In the last 5 years we have purchased a new car for her, a new Polaris quad and I just purchased a new F250. We do not however go out to dinner or take vacations. I hunt and or fish about 150 days per year and she is very active in the church and her music. We don't miss out on much of anything we want to do but we never did spend money on vacations or fancy meals.
Some of my friends and relatives say they could not live like us. Oh well, they are over 70 and still working.

Bottom line I think we did the right thing and we have never been sorry.

Interesting thread. I'm 20+ years out of official retirement age and my wife is 5 years behind me. We both hope to retire early. I'm blessed to have a wife with a good income and she is a saver. We live off of a budget and are putting about 18% in retirement and another 5% or so in a money market account. The budget is key. Before we put together a budget we never really knew how much we spent on things. Now we do and that allowed us to cut back on things and save more money. If the economy keeps growing we will be in good shape. I hope to retire to Wyoming, buy a house and acreage and escape to the Caribbean for the winter. At least my wife wants to escape to the Caribbean. We set up this plan with a financial adviser and based our future budget needs assuming Social Security wouldn't be around. If it is still around then it will be a bonus.

We are still hanging in there with *limited income*. Just talked to our financial advisor couple weeks ago. We take a limited amount from wife's IRA (she was a highroller wage wise compared to me) monthly, my SS, her pension, my pension (enough to buy two boxes of 300 mag ammo). Our finance lady told us to file and suspend on wife's SS and start taking 1/2 of mine in November and let hers ride until 70. We just replaced wife's vehicle and now have first payments on an auto loan in 18 years due to getting 1.5% on loan instead of pulling $$ out of our account. Bad thing is when I reach 70 1/2 I will have to start pulling a percentage out of mine, but will quit pulling from hers. I sure hate paying our advisor quarterly, but is affording us a comfortable lifestyle.

I will be retiring in three and half weeks. I met with my financial advisor and allowed him to view my pension and other accounts to ensure my cash flow would remain a certain percentage. My pension is maxed out (90% of my salary), so it shouldn't be an issue........however, if you can, paying everything off beforehand (home, cars, toys, etc.) will also set you up for more opportunities when you retire and are living off a fixed income. I can't wait.....leaving the state I made my money in and moving to the mountains with ample archery hunting opportunities.

Very interesting thread. I'm "only" 48 yo but don't plan to retire for many years. In fact I would like to keep working until I'm 80+ yo as my father has. My work arrangements allow me to hunt a lot now so I don't really see retirement as a big change in lifestyle.

Every one is different and I know retired people who live on $35,000 per year and seem happy. I know others who say they need $300,000 per year to retire. What you really need to do is work out a budget you can live with and stick to it. 14 years ago my wife said we couldn't make it. I told her to work out a budget and show me. She did. I then showed her how we could make about 30% more than she said we needed and then she was on board and ready to pull the plug. That 30% cushion of income was what we started with, it is way more than that now and we still spend about the same as we did 10 years ago. One adviser told me I was crazy and the other guy said we would not have a problem as long as we stuck to our budget. I know one guy who has spent 25% of his nest egg in 24 months. He will have to change or go back to work. No one knows how much money you need except for you and your partner. My hunting buddy said I was too stubborn to fail and I would make it work if I had to pick aluminum cans on the highway. He may be right.

Kiwi said:

Very interesting thread. I'm "only" 48 yo but don't plan to retire for many years. In fact I would like to keep working until I'm 80+ yo as my father has. My work arrangements allow me to hunt a lot now so I don't really see retirement as a big change in lifestyle.

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I kind of feel this way, maybe with a different job that pays less but is rewarding in different ways. This thread coming back up prompted a conversation with my dad, who is retired. Some non-financial questions for those who are currently retired:

1. Did you enjoy the job you retired from?

2. Do any of you still work, but at a job that pays less, with less hours that you find more rewarding?

3. Has your retirement gone as you had hoped it would in terms of experiences? As in, are your behaviors and leisure time drastically different than when you were working?

My dad retired from a job he didn't like, and he and my mom travel all the time. They volunteer in the community and I think they are enjoying retirement. That said, we discussed how for some, retirement is a poor decision, not for financial reasons, but because it seems for some having work to do is valuable to their mental health.

I have seen some get bored and have issues at home because they don't know what to do. I have a retired neighbor who said it best. He said he is so busy with hobbies and his yard work he has no idea how he had time to work. When we downsized we bought a modest home on 5 acres that will need work forever. I fish 3 days a week when the weather is decent and hunt more now than ever. My wife has a lot of things going on so we aren't bored.
No we have not thought about another job nor do we volunteer in the local community simple because most organizations want to set a schedule and I don't want go by a schedule.
We both were so tired of our jobs we could not continue to work and that prompted us to retire early.
Staying busy is the key as far as I am concerned. If volunteering is what you like then go ahead. I am fishing a small trout derby today with a group of retired men who volunteer for a lot of things locally. They have asked me for years to join them. I participate at a minor level when I can but not on a pre set schedule. My fishing partner today has stated he wishes he could do less things for some groups and fish more.

Here is my question.....you need more money early in your retirement than later. I don't need $100,000 per year for my 90s! The hard part is deciding how to plan that out. I plan on retiring 1 day before my 60th birthday. I might change to a part time fun job, but whatever. Regardless, when I am in my 60s I will need max retirement spend. In my 70s, probably 75% of that. 80s? 50%? 90s (should I be so lucky) 25%. It would be best if I drained my last account the day before I died! (uh, sorry kids!).

So you retired folks, is everything based on equal annual spend or is it front loaded?

I'm in my early 30's and save a lot of money over the years. I plan to retire at age 55. Insurance will be the deciding factor.

MNElkNut said:

Here is my question.....you need more money early in your retirement than later. I don't need $100,000 per year for my 90s! The hard part is deciding how to plan that out. I plan on retiring 1 day before my 60th birthday. I might change to a part time fun job, but whatever. Regardless, when I am in my 60s I will need max retirement spend. In my 70s, probably 75% of that. 80s? 50%? 90s (should I be so lucky) 25%. It would be best if I drained my last account the day before I died! (uh, sorry kids!).

So you retired folks, is everything based on equal annual spend or is it front loaded?

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While I agree with you in theory about needing more money when you are more active and probably able to do more that is not how I structured our retirement. For us the first few years were the toughest with the least income. We were careful with our spending but I was still able to hunt and fish often. As you get older every advisor will tell you you need more money every year. That is how ours is set up. I have the ability to draw more money as we get older and hopefully it will be enough. I doubt I could sleep if I thought we would have less income 10 years from now than we currently have. For us retiring while still in our 50s gave us a chance to get jobs had we needed to. We never did. I won't draw any additional funds until I need them since the longer I wait in theory the more I will be able to draw on a monthly basis. My next planned increase is 2 years away but if I don't need it then I will just keep waiting.

I'll probably be dead before I can retire. They will keep pushing retirement age later and later. Good luck to you all in retirement and enjoy your time in the field!

1) I loved my job, but when I hit age 55, there is a mandatory retirement. The good thing is, I have full pension and benefits (after 36 years of LE).
2) I work part time in the woods and for a Sheriff Dept. when I want.
3) My retirement is just super !! I am hunting, fishing, and traveling at will.

CampRipley, (or anyone) Take a look at Dave Ramsey. He offers "Financial Peace University" and "Every Dollar" courses. This is the real deal for anyone that wants to get out of debt and start to save for retirement. You can't retire if you have debt hanging over your head.
This statement; "They will keep pushing retirement age later and later" is only for those that want to rely on Social Security. Many of the folks on this site have shown that you can retire at any age you want to if you have saved and invested wisely in your early years. My wife and I were on course to retire at 55, then she decided a boyfriend was a good idea... Now after divorce 55 won't happen, but it also won't be 70 either. My point is, start saving 15% of your income right away, no excuses, do it every single month just like paying rent or mortgage, put it in ROTH IRA's, and other mutual funds. Find a trusted financial advisor that some older folks have used and let him help you set early retirement goals. It CAN happen, you just have to plan and be persistent with a purpose. Best wishes, I can't wait!

I actually really though about retirement a bit to late. But I managed to get out of debt and my home paid off then got medically disqualified from driving and ended up with Social Security Disability at age 60. My medical come through the VA, don't know that I could afford it if I had to buy it. When I first got SS medicare was $109 a month and as I had VA I didn't see a need for it, still don't. I do get a pretty good shot over average SS though and if I'm reasonably careful can save a bit of money every month. Most people I know get about $1250mo or less in SS most of those less at $800 a mo. Have no idea how they make it. I'm in income bracket where I don't pay tax's anymore, that helps. It wouldn't take a real major disaster to create a problem for me. Really should have thought about retirement long before I did. Something I think is true is in retirement people that need $300,000 a year need it because that is the life style they grew used to. People like myself do fine at $20,000 because I committed myself to it and am pretty frugal to begin with!