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Old 05-27-2015, 05:57 AM
 
Location: P.C.F
1,973 posts, read 1,643,627 times
Reputation: 1607

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The difference between 62 early out and 66 full retirement is actually very little difference. I am retired and have a LOT of retired friends to confirm this. The actual math shows it takes "ABOUT" 22 years to break even .. ANOTHER HUGE ISSUE is the OP doesnt own a home.. so they will rent for the rest of their lives... " Most Often " renting is tossing money in the toilet.. Do The math.. Next issue ... People get on these boards and try to BS everyone about the passive income ( interest they are making) but at retirement age with low tolerance for loss ( because you will need income until you die and have No Way To Ever Make More Money if you lose any) the best you will do is 6 -maybe 8% and 8% is pushing it. ALWAYS when figuring for retirement , figure Income low and Cost HIGH !! It will take you $500,000.00 to earn $30,000.00 a year in passive income. Chances are good that 5% savings over a lifetime means you will sit in a rabbit hutch apt. on the computer lying to anyone who will read you post's. I live/retired to SWF ( we sold our much larger home and paid cash for this one) and most (99%) of the retirees I know now own their own homes..taxes insurance and up-keep is far less than the cost of an Apt. and when you or if you need to move to Assisted Living you have a few hundred thousand dollars from your home to get started with anyway. Most of us have passive income somewhere between $50K and $150K a year.. I have a friend trying to do this on $1350 a month and a PT job. Its not going well. He is always broke, he can never go anywhere or do anything, thats fun.. he is pinching every penny just to survive.

Quote:
Originally Posted by Escort Rider View Post
More details would be helpful in trying to answer your question. How much does your neighbor earn? If he is earning big bucks and is saving/investing, say, 40% of his salary (only possible for high earners under normal circumstances), then he may be correct about being on track to retire at 45.

For you and your husband, putting aside 5% of your earnings is NOT enough to finance an early retirement. You don't mention is there is employer matching, but if there isn't, 5% is not really enough for "normal" retirement at age 60 or 65. Will there be Social Security? Some people can live on Social Security alone if they live very frugally, but taking SS early (at 62) makes that all the more difficult, well nigh impossible. Delaying SS until age 66 or 67, referred to as "full retirement age", results in a substantially larger monthly SS benefit.

Admittedly I am painting with a broad brush here, but given the paucity of information in your original post, that's about all I can do.
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Old 05-27-2015, 06:07 AM
 
Location: P.C.F
1,973 posts, read 1,643,627 times
Reputation: 1607
My BS meter went off the scale with this post.. I AM RETIRED!! .... We Sold our home and move to Retirement Paradise.. THOUSANDS of us living in Nice Pool Homes On The Water with Boats and Motorcycles and Often Motor Homes Nice cars and even a few Air Planes and NONE of us continue to work. Warren Buffett still works too whats that got to do with YOU? Thats an addiction..
Quote:
Originally Posted by key2success View Post
Its easy to retire once you have your house and car paid for in full. Nobody reallys retire they just retire from the 9-5 rat race. Everyone loves making money. Even Donald trump is a billionaire and still work seven though he can retire now
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Old 05-27-2015, 06:10 AM
 
Location: Tennessee
23,581 posts, read 17,574,904 times
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Agreed with mysticaltiger on the main points.

Also, if you're looking to retire by age 50-55, I think it's going to be a tough slog if you're not on track by 30, probably before. Most people retire at 65 or so. Careers sometimes don't get on track to where someone is making decent money until five to ten years into the career. If a prospective regular age retiree saves diligently from 35 and plans a retirement at 65, someone looking to retiree at 50 or 55 would need to have been saving from 20 (!) or 25. At 20-25, many people are in college and just getting their first (often low-paying) jobs.

It really requires a maximization of those early career years, a good income during those years, and the goal of a very early retirement then.
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Old 05-27-2015, 06:18 AM
 
Location: P.C.F
1,973 posts, read 1,643,627 times
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Maybe not most but a lot!! Its a Life style choice..Its goes along with someone who makes sacrafices to get somewhere and do something.. If you cannot see that the bowl of ice cream every night is killling you you are NOT Likely to see the need to live way under your means.. etc etc etc
Quote:
Originally Posted by Jkgourmet View Post
Please, provide proof of that statement. I think it's baloney.

Last edited by Macgregorsailor51; 05-27-2015 at 06:49 AM..
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Old 05-27-2015, 07:38 AM
 
Location: Los Angeles area
14,018 posts, read 17,740,386 times
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Quote:
Originally Posted by Macgregorsailor51 View Post
The difference between 62 early out and 66 full retirement is actually very little difference. I am retired and have a LOT of retired friends to confirm this..............
O.K., rather than argue what constitutes "very little difference" versus a "substantial difference", let's put some numbers to it. At age 62, one gets only 75% of the benefit one would get at age 66. That is, if the benefit at age 66 is $1000, at 62 it's only $750. The break-even age is typically in the late 70's. If that mean "very little difference" to you, then so be it.

Quite apart from Social Security issues, there is a lot of difference between continuing to work until age 66 and stopping work at age 62, namely the amount one would earn during those four years. That, combined with the greater SS benefit amount at full retirement age, could be the difference between scraping by and being comfortable for many people. Remember, the context of this thread is early retirement for someone who is only putting aside 5% of earnings.

Your many retired friends do not constitute the basis for any general statements. All you mean, whether you realize it or not, is that you, like most people, tend to have friends whose financial situations are similar to your own. A couple of miles away in a different neighborhood, the average situation may be quite different.
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Old 05-27-2015, 08:10 AM
 
48,516 posts, read 83,943,432 times
Reputation: 18050
It really depends on what one did or was able to do pre-retirement as always. To others its just a bird in hand thing. The context was is it possible to retire at young age and of course the answer is; if you can afford to. Not even a SS question; really at young age.
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Old 05-27-2015, 10:37 AM
 
Location: Denver CO
21,177 posts, read 11,791,368 times
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Quote:
Originally Posted by Escort Rider View Post
O.K., rather than argue what constitutes "very little difference" versus a "substantial difference", let's put some numbers to it. At age 62, one gets only 75% of the benefit one would get at age 66. That is, if the benefit at age 66 is $1000, at 62 it's only $750. The break-even age is typically in the late 70's. If that mean "very little difference" to you, then so be it.

Quite apart from Social Security issues, there is a lot of difference between continuing to work until age 66 and stopping work at age 62, namely the amount one would earn during those four years. That, combined with the greater SS benefit amount at full retirement age, could be the difference between scraping by and being comfortable for many people. Remember, the context of this thread is early retirement for someone who is only putting aside 5% of earnings.

Your many retired friends do not constitute the basis for any general statements. All you mean, whether you realize it or not, is that you, like most people, tend to have friends whose financial situations are similar to your own. A couple of miles away in a different neighborhood, the average situation may be quite different.
Isn't there is also a much greater expense for health insurance? (since I believe you don't qualify for medicare at 62, regardless of being retired.)
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Old 05-27-2015, 11:24 AM
 
Location: NC Piedmont
3,911 posts, read 2,879,340 times
Reputation: 6291
Comparing 63 to 67 for myself. If course my heirs will get more money if I keep working or I will retire with more money to spend, but I will have enough to be able to stop working and the odds are better that I will be in a condition to enjoy retirement. Those are likely to be my best 4 years of retirement. The increase in ss payments is not worth it to me.
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Old 05-27-2015, 11:26 AM
 
9,893 posts, read 3,276,816 times
Reputation: 7254
[quote=texdav;39765179]
Quote:
Originally Posted by evilcart View Post
Until healthcare is fixed and made available at a reasonable fee , the majority of people will NOT being able to retire very early no matter how much they save.

All it takes is one curable cancer or heart attack to wipe out years of savings and derail long term plans.[/quot
Whether retired/ insured or working/ insured such a illness can mean either you have the financial ability to cover or you don't. Its like any other emergency funding at any age. Either you have it covered or your have insurance that does. Even Medicare age people often face the same if not financially prepared. No matter what health treatments will never be fix; its just now you or government pays for it; in end it has to be paid for with consequences in other areas. Certainly Greek people are learning that nothing is really free now.
Nonsense you picked Greece because you wish to conflate healthcare with a failing state.. Why not pick Canada that is a MUCH MORE comparable country... OH hang on you cant use Canada because then your entire point fails as CA has proved that a state backed healthcare system WORKS.
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Old 05-27-2015, 11:31 AM
 
Location: New Mexico
116 posts, read 79,244 times
Reputation: 313
Default Possible

I retired in my early 40s. I was from a regular-joe middle class family. I had a degree, but always had quite low-paying jobs yet was always able to save money. There are so many variables for everybody. Basically I led a pretty frugal life, but never was uncomfortable nor did without anything. Frugal doesn't mean austerity. As much as is possible, eliminate the debt. If home and vehicle are paid for, one nearly has it made. Have a balance of wants vs. needs: Very little is actually needed, and that includes the type and size of the home. Society creates the whole illusion of lifestyles and goods to give the impression they can't be lived without. That path is easy to fall into
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