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Old 02-11-2016, 12:12 PM
 
Location: Jamestown, NY
7,841 posts, read 7,334,770 times
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Quote:
Originally Posted by BellaDL View Post
There are only 2 items in my retirement criteria

1. Do I have enough money to cover expenses?
2. Do I have fulfilling and enjoyable things to do?


IMO, my item 1 covers your items 1-4 although not in the exact or specific terms. As others have pointed out, one does not need to own a home, be completely debt free, have a certain amount of cash or retirement saving to be financially prepared. As long as your expected retirement income + prudent withdrawal from your saving can cover all your expenses (housing, food, clothing, health insurance, medical expenses, desired non-discretionary spending) then you are ready to retire. For our particular case, we need to put aside enough cash to cover 2+ years while delaying collecting our SS benefits.

My item 2 is the same as your item 5. I have been in retirement for a bit over 3 months but still have not found any 'free' time let alone voids. There are just so many things to do: catching up with delayed home maintenance, downsizing/decluttering, organizing/digitizing/backing up family audio, video records and photograph, fixing/upgrading the house to get it ready for sale, checking out new retirement locations etc. It will be a while before I can do other things in my list like learning new foreign languages, traveling etc. We do try to find time to indulge in our hobbies (flying, rowing and hiking). IMO, if one already has hobbies and non-work related interests while working, one would have absolutely no problems finding things to do in retirement.
Exactly this.
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Old 02-11-2016, 03:26 PM
 
5,429 posts, read 3,454,205 times
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marino760, so true!
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Old 02-11-2016, 04:55 PM
 
2,446 posts, read 2,075,019 times
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Quote:
Originally Posted by OldDocKat View Post
You do not need 100 grand in a bank account unless you have over 2 million in investments. It would be best to have some bonds, and look into mutual funds. Learn the market; times to buy are going to be better after stock prices drop, as, in the long run, the stock will rebound, and makes for good future investment. If learning the market is not for you, then look into a finial management company.
All the rest seems spot on; ideally, one should be mortgage free by age 65, and have a paid off nice sensible car. Have all outstanding debts paid. Money in retirement tax free accounts will have to be withdrawn after age 70, so, you need good investments set up to reinvest.

Lastly, you need more than Social Security; a pension is ideal, without it, an annuity is a good choice for many people.

Look at retirement as a second, or third education; you need to know about investments. Save what you can and invest wisely, and your retirement will be secure.


100 grand in the bank is not mandatory just a goal of mine and no I don't have 2 million in investments. I am already in mutual funds and bonds with 401K, Roth and regular IRA.


I still think cash is king and having 100K available is not a bad idea if market tanks or some unforeseen expense comes up. I do not want to be worried about the stock market in retirement. Sure you need part of portfolio in stocks for growth but not totally dependent on it.


Having little or no debt eases the burden considerably.
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Old 02-11-2016, 05:21 PM
 
5,468 posts, read 2,928,375 times
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Quote:
Originally Posted by jasperhobbs View Post
I think the following are practical goals before a person can retire. It is a rather simplified plan and may not work for everyone. Just my views. I welcome others views and goals


1) Be debt free.
2) Own home
3) At least $100,000 in the bank.
4) Have as much as possible in 401K, Roth IRA and regular IRA.
5) Have retirement plans to fill void of having more free time.
#5 almost scares me the most. I like to work, I like my job even though some days are crazy. I like making a difference. I enjoy my days off, I just cannot imagine having all my days off of work.
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Old 02-11-2016, 08:20 PM
 
Location: On the road
5,959 posts, read 2,900,287 times
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Quote:
Originally Posted by TheShadow View Post
I still don't see owning a paid off home as necessary.
Exactly, owning a home is a lifestyle choice more than a financial one.

We retired a little over a year ago and the first thing we did was sell our home, our goals for the first few years of retirement were not compatible with home ownership. That doesn't mean we weren't ready to retire.
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Old 02-11-2016, 08:22 PM
 
Location: On the road
5,959 posts, read 2,900,287 times
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Quote:
Originally Posted by marino760 View Post
People are individuals. Reality is that many people cannot meet these expectations, like $100,000 in the bank. Are those people destined to work until they die in their 80s or 90s. People can and do retire with much less than is listed here and live happy lives.
If one looks only at retirement savings statistics it would be easy to assume we have a situation where millions of elderly are living under bridges in cardboard boxes and digging through trash to eat.

That isn't the case, people can make do with a lot less savings than people think.
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Old 02-12-2016, 05:00 AM
 
Location: RVA
2,172 posts, read 1,268,333 times
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Very true. Often insisting on home ownership would actually be a detriment due to the financial burden of higher taxes, maintenance, and utilities. It really should read something like "Housing meets your requirements at a cost you can readily afford." I could easily rent a home, not as nice as what I have, but certainly comfortable enough for less than half what I pay in mortgage, and bank the rest. Until the real estate meltdown though, it is was almost defacto that home appreciation coupled with good rates, and mortgage tax breaks, gave you another major savings venue, while increasing your standard of living. That really may not be the case anymore, where one truly invested the difference between the costs of home ownership and renting, they could not only come out ahead, but also benefit with far easier change of locations to live in different locales as required by job change and the stages of your retirement desires! Renting also "forces" you, normally, to avoid excess accumulation of stuff, another savings and conceivably major cost savings. Don't like your neighbors, new job, new city, etc, etc? Rent someplace else. It is easy to see the appeal. The "own your home outright" mantra is a legacy of the current generations of retired and near retired based on the "American dream" and a warped fear of having control of the place where you live. You hear it all the time: "I always have a place to live, if I own my own home", and "I'm not at the mercy of the landlord paying whatever rent he wants." In abject reality, renting always gives you the most flexibility. The longest you are "forced" to stay is what remains on your lease. Plenty of people have a huge albatross that is a money pit, and unsellable or worse, a true anchor dragging them under, that is their house.

The key to that formula is that the rent is truly less than the actual cost of home ownership, which is entirely location and size dependent. You will never come out financially ahead renting a house or penthouse that is considered luxurious compared to buying equal. Simple risk/reward and supply & demand prevent that. But rent a 1200sqft apartment vs buying same home in an average middle class locale? Sure, not that hard, plus many rentals have amenities that you would have to pay extra for in your house, like a pool, gym, security etc.

I have two single friends in their 40s that have rented and moved multiple times all their lives, changing jobs for truly better opportunities and have amassed impressive savings as a result, that would all be tied up in a house. A lot of people stay where they are, in the same house or work the same job because its just too hard to move. Until they are threatened with job loss or foreclosure, the a move is required. By then the damage is done.

That line item is really only useful as "Additional significant savings or equity in your home". It is foolish to retire if you will be house or rent poor, which translates to living above your means. In retrospect, the most important line item is missing!

6. Be able to live, by your own personal definition, comfortably on your inflation adjusted long term retirement income.

Which of course is actually, all that really matters.

Last edited by Perryinva; 02-12-2016 at 05:35 AM..
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Old 02-12-2016, 05:32 AM
 
Location: Colorado Springs
4,847 posts, read 4,964,642 times
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As for owning a paid off home, the biggest advantage is no rent due. Zero rent is a nice number.

Of course, it needs to be maintained and the property tax and insurance bills need to be paid.

But the piece of mind knowing that it's difficult for somebody else to threaten your housing is worth the expense.
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Old 02-12-2016, 06:10 AM
 
2,446 posts, read 2,075,019 times
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Quote:
Originally Posted by Vision67 View Post
As for owning a paid off home, the biggest advantage is no rent due. Zero rent is a nice number.

Of course, it needs to be maintained and the property tax and insurance bills need to be paid.

But the piece of mind knowing that it's difficult for somebody else to threaten your housing is worth the expense.
I agree
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Old 02-12-2016, 01:21 PM
 
Location: RVA
2,172 posts, read 1,268,333 times
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As long as your house is where you want to spend your life, that's fine. (BTW, I AM one of those that will be living in a paid off house at retirement! I can't shake that feeling of wanting that same security and accomplishment, and I do plan to be here for another 15 years min.
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