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We are about five years out from retirement - at least according to our calculations. We'll be 58 and 53. I'm wondering what preparations some of the current retirees here did prior to "pulling the plug." Besides downsizing your house (if that was in your plans) did you create a retirement budget and begin living on it? Did you accelerate your savings? Did you begin living some of your retirement plans in tends of lifestyle, hobbies, etc? Are there things you know now that you wish you knew then? Thx.
just make sure you have insurance coverage and such figured out. That a good time because how ACA effect your insurance coverage will be settled likely by then; especially if employer coverage.
just make sure you have insurance coverage and such figured out. That a good time because how ACA effect your insurance coverage will be settled likely by then; especially if employer coverage.
Good tip. Just a little more background: In our case we have a retired military pension with health care coverage at a nominal fee. Also we are planning to pay house off prior to retirement, and remain there at least for the time being. We might consider snowbirding.
Location: Prescott Valley,az summer/east valley Az winter
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Sounds a little young to me~ considering the inflation rates as high as 28% in the 70's and the youthful age you are planning the retirement I'd ere on the side of caution. Chances are you are planning on doing and being active the first part of your retirement. I found that I spent more in retirement than while I was working. Will your retirement income be more than your current expenses? Didn't say income, but expenditures. Will you have a sufficient nest egg for unexpected expenses? Is it pretty well inflation protected? If you have not thought about snowbird locations may I suggest Az. I'd lean towards Tucson area because of proximity to AFB ( my biggest regret) If you have any specific questions I'm open to answering by DM.
You're smart to be looking into things several years before you plan to retire. DH and I were close to your ages when we retired in 2010; he was 59, I was 52.
You asked about living on a retirement budget before actually retiring. We did that for a year before we pulled the plug. We already had a good handle on our expenses and had no debt, and intend to keep it that way. We knew what our income would be from my pension, and figured on eventually receiving about 75% of our estimated Social Security amounts (expecting that changes to the system would likely occur before we reached the ages at which we plan to file -- 70 for DH, and 62 for me).
You mentioned accelerating savings in the years before retirement. We did that, taking advantage of my 457 and DH's 403(b) savings plans' "catch-up" provisions. In the three years before retirement, we saved the maximum allowed under the catch-up. IIRC, we ended up saving between 50 and 60% of our incomes for each of those years. Note: we have no kids; I very much doubt we could have saved that much if we did.
When we first started talking about retirement, we agreed that we wanted to relocate to someplace with a less interesting climate and more natural beauty. Long before our planned retirement date, we researched several locations, and over a four-year period we visited those that appealed to us most. (Climate was not our only criterion, just one of several factors -- but it was a major one.) Once we decided on our preferred location, we made a second trip there. We worked with a realtor, saw the kinds of places we could afford, and finalized our housing budget. We definitely wanted to downsize, because it was too much effort to keep up our 2800-SF two-story house and 2-acre yard. When we sold our house, we rented an apartment in our chosen location and spent the next five months looking at properties in our price range. We ended up in a 2-bed, 2-bath 940-SF condo and it's plenty of room for us two. We bought the place for cash, using some of what we got from the sale of our old house.
You asked about living some of our retirement plans/hobbies before we actually retired. We didn't do that. For one thing, we worked long hours and our spare time was mostly spent on just keeping up with errands and chores. For another, we longed to be outside in the free time we did have, but the climate in our old area made that untenable for much of the year.
As far as things I wish we'd known before we retired, the only thing I can think of is the incredible increases in the cost of health care premiums we've seen in the three years since we retired. For the two of us, health care premiums -- not counting deductibles, copays, and drugs -- now take up 20% of our budget. Since you'll both be retiring well before Medicare age, as we did -- and it's certainly possible that could be pushed back to beyond 65 -- you really need to make extra room in your budget for health care costs once you retire. If your employer(s) offer retiree coverage, know that they may change it at any time. They may increase your premiums, reduce any subsidies, or eliminate retiree coverage altogether. We'll be looking into whether we'd pay less under the Affordable Care Act for coverage similar to what we now have through DH's former employer. At least you have about five years to see how the ACA works (or doesn't) before you actually retire. For those of us already there, and below Medicare age, it's going to be interesting.
I'm 18 months away from retirement. Around age 50, I accelerated my savings. Started putting extra money in my 401K at age 50 (catchup) in addition to the regular maximum contribution, a couple of years later began a Roth IRA (should have done it earlier), and paid extra on my mortgage each month. Will get mortgage paid off this year and then start using that money for some needed improvements to my house. Several of my co-workers who are getting close to retirement are making significant improvements to their homes (e.g., remodeling kitchens). If I did not plan to relocate, I would do the same. I also plan to start a Health Savings Account next year.
This year I am tracking my expenses to evaluate what I spend in each category to get a better handle on what my costs in retirement might be and where I can cut costs. Based on current spending, I have a retirement budget in mind that includes travel and unexpected expenses (e.g., new roof, new appliances) and am running the numbers through retirement calculators to see success rate for not running out of money by age 95. I keep a notebook and a file that includes this information and a "to do" list for the last year (e.g., get a line of credit loan). And I read a couple of retirement forums to look for other ideas. One thing that I have not done that is on my "to do" list is to talk to a financial planner or tax advisor - however, other's experiences on this seem to be mixed.
Also sign up for any retirement planning course that your employer may offer - five years prior to retirement is a good time to take the training.
We are about five years out from retirement - at least according to our calculations. We'll be 58 and 53. I'm wondering what preparations some of the current retirees here did prior to "pulling the plug." Besides downsizing your house (if that was in your plans) did you create a retirement budget and begin living on it? Did you accelerate your savings? Did you begin living some of your retirement plans in tends of lifestyle, hobbies, etc? Are there things you know now that you wish you knew then? Thx.
You have some great tips here. texdav's tip on looking at where your health insurance is going to be coming from is probably the first. If you are considering retirement now at your ages you probably have been saving and have a bit o' money. You might even have a pension or two lined up as well.
We are in similar time frames. I am 56 DW is 55. I have to retire from my current job at 60 though the system has been known to offer some part time and even full time positions back to some I do not plan on seeking it. I might get a part time job some place so that we can purchase supplies for my home detailing project getting ready for downsizing.
We are looking at options of moving to a community of active adults with a lot of that built in. If you search around here you will find several threads on the subject of moving to or from and snowbirding.
Good luck. You I believe are in the perfect window to begin to consider options, provided you have income and expenses figured out.
...Since you'll both be retiring well before Medicare age, as we did -- and it's certainly possible that could be pushed back to beyond 65 -- you really need to make extra room in your budget for health care costs once you retire. If your employer(s) offer retiree coverage, know that they may change it at any time. They may increase your premiums, reduce any subsidies, or eliminate retiree coverage altogether....
Quote:
Originally Posted by golfingduo
You have some great tips here. texdav's tip on looking at where your health insurance is going to be coming from is probably the first.
I think you both may have missed the OP's statement about being retired military. There's not a chance in hell that the government would eliminate health care coverage for them.
Quote:
Originally Posted by dmills
In our case we have a retired military pension with health care coverage at a nominal fee.
We are about five years out from retirement - at least according to our calculations. We'll be 58 and 53. I'm wondering what preparations some of the current retirees here did prior to "pulling the plug." Besides downsizing your house (if that was in your plans) did you create a retirement budget and begin living on it?
That is exactly what we did. Just as a point of reference, I was 54 and my wife was 50 when we took early retirement.
I think you both may have missed the OP's statement about being retired military. There's not a chance in hell that the government would eliminate health care coverage for them.
Eliminate no.
Go from free to copay, and cover less and less every year, with higher and higher co-pays/premiums.
It has and will.
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