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This article really nails it as to why people should save as if you're going to retire early.
To some, early retirees are an inspiration, showing what’s possible when you opt out of society’s consumer narrative. But too often, stories on early retirees focus on intense money-saving tactics and present those in the movement as oddities. Highlighting the novelty of the movement, and the extreme lifestyle choices of a few adherents, distracts from the more important reality: For far too many Americans, early retirement is not a novelty, but an inevitability.
It goes on to say what I've been saying on CD for quite a while now:
More than half of U.S. workers over age 50 are pushed out of long-held jobs before they choose to retire, according to a new analysis of Health and Retirement Study data by ProPublica and the Urban Institute......Only one in 10 ever matches their prior income before they were forced out..
This is more of a reminder to continually educate yourself, spend 5 hours/week studying and training new skills. Never get comfortable enough in your job that you don't have a backup plan.
If things go to plan, I'll be retiring at 51 with a pension after working 20 years. Between my pension and my retirement accounts, I should be pretty comfortable with a paid off house. I just need to make it for 12 years...
This is more of a reminder to continually educate yourself, spend 5 hours/week studying and training new skills. Never get comfortable enough in your job that you don't have a backup plan.
Yeah I like that. Option 1. Save 25% of your gross income for 25 years. Option 2 save way less and spend 5-10 hours a week upskilling and hope you end up choosing the right skills. Good point!
I don't know how things are in the US. I can only say how things have been in Oz
As a 'people manager'. I tried to explain superannuation to 'my' kids coming straight from school. In our Super scheme, you are buying tomorrow's dollars at today's prices.IE when you retire, you will receive many times the amount you have paid in.THEREFORE; take as much super as allowed, which is 10%. Hard at first, but you will adapt.
Here in Oz, I had the great good fortune to be one of the few thousand who accepted a new government employee super scheme .It was discontinued(with a sunset clause) a few years later, because some one realised how expensive it was going to be for the government.
I contributed double, 10%, which the government matched dollar-for-dollar. I had the opportunity to take 'redundancy retirement" at 51. I was pretty much burnt out, so I took it. Because I had paid 10% rather than staying with 5%, my super was worth the same as it would have been at age 60
Super varies enormously world wide. It is always a good idea, as long as you trust the company for whom you work. if not, you need to save your self. If I had to do that I would have bought property, probably on tax deductible mortgage. (my own house having been paid off as first priority)
. It would have then been fairly simple to sell my own house, (no capital gains tax) move in to my rental property for a year, then sell that. (no capital gains tax) That would leave me with enough to buy another place. The goodly sum left would be invested. Precisely in which manner would depend on the level of inflation and on how much of a risk taker I wanted to be
I am now 71, having lived a comfortable retirement for 20 years so far.
This article really nails it as to why people should save as if you're going to retire early.
To some, early retirees are an inspiration, showing what’s possible when you opt out of society’s consumer narrative. But too often, stories on early retirees focus on intense money-saving tactics and present those in the movement as oddities. Highlighting the novelty of the movement, and the extreme lifestyle choices of a few adherents, distracts from the more important reality: For far too many Americans, early retirement is not a novelty, but an inevitability.
It goes on to say what I've been saying on CD for quite a while now:
More than half of U.S. workers over age 50 are pushed out of long-held jobs before they choose to retire, according to a new analysis of Health and Retirement Study data by ProPublica and the Urban Institute......Only one in 10 ever matches their prior income before they were forced out..
It is odd that I have not seen this happen to anyone that I know. No one has been "forced out" of their jobs. They have retired according to plan. Weird that this supposedly happens to "more than half of U.S. workers over age 50"...yet I've never seen it even once.
The last three people that we hired in my department (IT) were over 55. One was someone that was recently relocated, and two were actually over 60 and had retired, and decided they wanted another gig.
This is more of a reminder to continually educate yourself, spend 5 hours/week studying and training new skills. Never get comfortable enough in your job that you don't have a backup plan.
That's certainly a valid point. But it's also not an either/or. Lots of smart and well trained people get kicked out of good paying employment in their 50s. Sometimes it's age discrimination. Sometimes it's their own health issues. Sometimes it's because they're taking care of other people. Some people get burned out.
I see this with my 50 year old sister who has a graduate degree. She has a good paying job in healthcare but is burned out. Her 33 year old self never thought health care would have changed so much for the worse in the ensuing 17 years (ever more bureaucracy and paperwork and work quotas). She didn't bother saving for retirement until she was 40--and at that, it's been fairly modest amounts. It's not so easy to retrain for a new profession at 50. Her situation is typical of the Catch 22 situation I see for undersavers. They didn't want to save when they were younger. And once they get started, they save only modest amounts. They're not willing to make the major downward adjustment in lifestyle to save a significant nest egg in 10-15 years, which typically takes a large savings rate of at least 1/3 of income. Yet at the same time, they're burned out or booted out of their jobs in their 50s. Getting retrained for something else sounds good but often isn't practical because of the time and financial cost as well as age discrimination.
Last edited by mysticaltyger; 04-10-2019 at 08:20 PM..
Yeah I like that. Option 1. Save 25% of your gross income for 25 years. Option 2 save way less and spend 5-10 hours a week upskilling and hope you end up choosing the right skills. Good point!
The operative word there is "hope".
I'm not knocking upgrading your skills, but way too many people delude themselves into thinking they'll always be able to work and/or earn more.
Personally, I'd rather save 25% of my gross income. It's pretty much what I've been doing for most of the last 22 years. And no, I don't make a lot. It's a much lower stress life than constantly worrying about what the next cool skill is. That sounds cool in your 20s and 30s to some people. But you get burned out on that after a while--at least I would.
While I wouldn't be happy about it, my job going obsolete won't be the end of my world. I have enough money to get by with my portfolio, a part time job, and my pension that kicks in in 7 years in that less than ideal scenario.
That's certainly a valid point. But it's also not an either/or. Lots of smart and well trained people get kicked out of good paying employment in their 50s. Sometimes it's age discrimination. Sometimes it's their own health issues. Sometimes it's because they're taking care of other people. Some people get burned out.
I see this with my 50 year old sister who has a graduate degree. She has a good paying job in healthcare but is burned out. Her 33 year old self never though health care would have changed so much for the worse in the ensuing 17 years (ever more bureaucracy and paperwork and work quotas). She didn't bother saving for retirement until she was 40--and at that, it's been fairly modest amounts. It's not so easy to retrain for a new profession at 50. Her situation is typical of the Catch 22 situation I see for undersavers. They didn't want to save when they were younger. And once they get started, they save only modest amounts. They're not willing to make the major downward adjustment in lifestyle to save a significant nest egg in 10-15 years, which typically takes a large savings rate of at least 1/3 of income. Yet at the same time, they're burned out or booted out of their jobs in their 50s. Getting retrained for something else sounds good but often isn't practical because of the time and financial cost as well as age discrimination.
I did not start until I was past 40. It never entered my mind - money was just too tight before then.
It is odd that I have not seen this happen to anyone that I know. No one has been "forced out" of their jobs. They have retired according to plan. Weird that this supposedly happens to "more than half of U.S. workers over age 50"...yet I've never seen it even once.
The last three people that we hired in my department (IT) were over 55. One was someone that was recently relocated, and two were actually over 60 and had retired, and decided they wanted another gig.
Just goes to show you anecdotal evidence is not hard data. It's fine to question the data source used, but you can't refute it with anecdotes.
I know several people who've been put out of work in their 50s. One did find better paying employment after retraining, but ended up declaring bankruptcy in the meantime, because he couldn't really afford the transition (There were other complicating factors involved as well--as is often the case.) Last I heard he was working full time but expecting to work until 70, pretty much living only a little better than payday to payday. I know many more who are burned out but somehow keep going to keep up the lifestyle they've become accustomed to. Even if the evidence presented in the article is a bit exaggerated, there are plenty of articles out there about how people were effectively forced to retire earlier than they planned. I've read it's somewhere around 40%.
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