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Old 05-31-2015, 11:55 AM
 
Location: NC Piedmont
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Quote:
Originally Posted by davephan View Post
. . . There's also some risk in working longer. We could be giving up the best retirement years so we can save more money for retirement, that we might not end up needing.

There are two sides to the social security issue. I've heard if you don't need the social security money to eat and live, then it may be better to take social security earlier and invest the money. I've calculated the break even at about age 72 to 73 if you take social security at age 65 or wait until age 70. If you die before age 70, then you've lost all that money too.
I suspect your calculation is way off. My breakeven with 65 versus 70 is close to 80.
I hope you enjoy working. I really do. Because there is little doubt that the first few years will be when you are able to do the most if you want an active retirement.
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Old 05-31-2015, 01:39 PM
 
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An interesting article in a Philly newspaper about a couple who retired at age 38:

Retiring Before 40: How It
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Old 05-31-2015, 03:50 PM
 
Location: Woodbury, MN
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Quote:
Originally Posted by CarvedTones View Post
I suspect your calculation is way off. My breakeven with 65 versus 70 is close to 80.
I hope you enjoy working. I really do. Because there is little doubt that the first few years will be when you are able to do the most if you want an active retirement.
Let me correct what I posted. I was thinking about the difference between collecting social security at age 62 verses age 65 when I said that.

If you start collecting social security at age 65 verses collecting social security at age 70, it will take about 13 to 14 years to break even. So the break even age for the person who started collecting social security at age 65 would be about age 78, which is close to age 80.

I think the point is it doesn't pay to retire, then delay collecting social security so that you collect more money at that older age. If you die in your 70's, you'll collect nothing, or next to nothing. If you live longer, then you are just saving the social security for the nursing home, an idea I do not care for. If your social security isn't high enough, then I think you just have to keep working till it is high enough. It makes no sense to collect social security while you are still working because of the high penalty.

Quote:
Originally Posted by elliotgb View Post
An interesting article in a Philly newspaper about a couple who retired at age 38:

Retiring Before 40: How It
A retirement nest egg of $500K doesn't seem very high to me. I don't know how we could live on only $23K a year.

Usually people who post blogs about retiring very early are living at a very minimalist lifestyle, like living in a very low cost area, living out of a van, eating rice and bean, beans and rice, etc. That's certainly an option for people to retire early and maybe sit around, drink beer all day and watch TV. They won't be able to afford much in life. I think it is better to suffer in school for a few years, educating yourself in a high return on investment subject matter. Then after your education is completed, making an above average income and saving a high percentage, like 40% to 50% of your income while living below your means. My idea of living below my means is not driving a luxury car, buying fancy clothes at high end stores, not joining a country club, and living debt free.
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Old 05-31-2015, 04:02 PM
 
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Spending down a balanced portfolio to delay taking ss until 70 when coupled with the checks you didn't take have a break even of 22 years.

If your spouse can't get the spousal adder until you file and suspend and if medicare increases are greater than the increases when you collect under hold harmless break even can be 23-24 years.

Few consider the fact that to delay if you need your portfolio to live you are spending down assets that lose compounding forever as well as all the issues i mentioned above.

A break even of 22-24 years just to get to the zero point is a big bet on longevity.

To get a decent return would take living until age 90 ,you can see a 5% real return. That is a great return for a guaranteed investment but will you or a spouse live long enough to make it worth waiting.

Last edited by mathjak107; 05-31-2015 at 04:41 PM..
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Old 05-31-2015, 04:12 PM
 
Location: Tennessee
23,613 posts, read 17,598,460 times
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Quote:
Originally Posted by davephan View Post
Let me correct what I posted. I was thinking about the difference between collecting social security at age 62 verses age 65 when I said that.

If you start collecting social security at age 65 verses collecting social security at age 70, it will take about 13 to 14 years to break even. So the break even age for the person who started collecting social security at age 65 would be about age 78, which is close to age 80.

I think the point is it doesn't pay to retire, then delay collecting social security so that you collect more money at that older age. If you die in your 70's, you'll collect nothing, or next to nothing. If you live longer, then you are just saving the social security for the nursing home, an idea I do not care for. If your social security isn't high enough, then I think you just have to keep working till it is high enough. It makes no sense to collect social security while you are still working because of the high penalty.



A retirement nest egg of $500K doesn't seem very high to me. I don't know how we could live on only $23K a year.

Usually people who post blogs about retiring very early are living at a very minimalist lifestyle, like living in a very low cost area, living out of a van, eating rice and bean, beans and rice, etc. That's certainly an option for people to retire early and maybe sit around, drink beer all day and watch TV. They won't be able to afford much in life. I think it is better to suffer in school for a few years, educating yourself in a high return on investment subject matter. Then after your education is completed, making an above average income and saving a high percentage, like 40% to 50% of your income while living below your means. My idea of living below my means is not driving a luxury car, buying fancy clothes at high end stores, not joining a country club, and living debt free.
Everyone has to strike their own balance between living too high in the hog they can't save or run net losses all the time and being a miser who has no fun. To me, eating beans and rice and sitting around the house, all to retire early, wouldn't really be living.
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Old 05-31-2015, 04:18 PM
 
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Our life time goal was to live better in retirement then we did during our working years raising a family and trying to save and invest.

Now it is about living as many of our dreams and wants as we can.
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Old 05-31-2015, 05:24 PM
 
26,134 posts, read 28,529,259 times
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Quote:
Originally Posted by elliotgb View Post
An interesting article in a Philly newspaper about a couple who retired at age 38:

Retiring Before 40: How It
Yes, a fair number of articles have been written about that couple over the years.
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Old 05-31-2015, 05:27 PM
 
26,134 posts, read 28,529,259 times
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Quote:
Originally Posted by Emigrations View Post
Everyone has to strike their own balance between living too high in the hog they can't save or run net losses all the time and being a miser who has no fun. To me, eating beans and rice and sitting around the house, all to retire early, wouldn't really be living.
Most early retirees will earn some kind of part time income, either from a small side business or a part time job so that they can pay for extras. Most, at least the ones blogging about it, don't just sit around at home. They are creative about finding cheap ways to do things, like the couple mentioned in the article cited in post #82.
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Old 05-31-2015, 05:52 PM
 
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Quote:
Originally Posted by mysticaltyger View Post
Yes, a fair number of articles have been written about that couple over the years.
$500,000 is quite a good amount of money back in 1991 but not that much these days, and with the little stock market growth the last 15 years I wonder if their principal has grown or stayed the same. I don't think they would have much social security ... basically they might not be able to afford to come back permanently to the US.
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Old 05-31-2015, 06:01 PM
 
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less than 2% growth adjusted for inflation the last 15 years from the s&p 500 including dividends ..
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