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Location: San Ramon, Seattle, Anchorage, Reykjavik
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Quote:
Originally Posted by selhars
Stonepa, may I ask what some of your expenses were and what your highest salaries were?
I'm thinking #2 means you have a very good paying job.
I know all about frugality. But I also would like to hear a few more specific details about how a family of four:
-- lived off one salary
-- during some years lived in LA, Chicago, and Minneapolis, before Cleveland
-- built a strong long term cash reserve
-- traveled the world
-- fully funded college funds for 2 kids
-- fully funded IRAs and 401k (does that mean fully funded mean maxed out allowable contributions for all you working years? )
-- have a paid off house by 48 (you paid this off speedily, while you were also maxing out retirement accounts)
…and your considering retiring at 48.
I'm curious about the salaries you had while you were doing all of the above.
Specific examples:
Graduated college 1990
1990 - 1995: Lived in LA starting on $27k/yr, but I was single, living on the Strand in Hermosa Beach. On the beach. Living the high life but beyond rent most was free. High rent. Drove same Toyota I bought in 1987. Could only save 20% of my salary - all 401k and IRA.
1995 - 1999: Moved to Minneapolis. Same salary as ended in LA ($55k). All raises and bonuses go in the bank. Much lower rent. Saved 30% of my salary at this point. Same old car till 1998 when I bought a new Toyota for cash.
1999-2000: Moved to Chicago. Salary slowly increasing. All raises and bonuses go in the bank. Taxes much lower, rent the same, but the commute was ridiculous.
2000-now. Move to Cleveland. Got married, had 2 kids. Wife had a job that paid the same as mine ($75k) at the same company but we decided it was better to cut back and have her raise the kids at home. Bought a reasonable house (which in Cleveland is pretty darn cheap) with a 40% downpayment, just paid it off. Good raises and very low cost place to live. Now save 50% of my salary. Every raise and bonus, no matter how small, goes in the bank or toward paying off the house. 401k at full contribution, IRA at full contribution, 529 plan for kids college, rainy day fund. Drove my 1998 Toyota to almost 350,000 miles and then bought a Subaru for cash. Lots of travel - Paris, London, Germany, Iceland, Alaska, Puerto Rico, all over the lower 48. Not fancy, and paid for out of money saved for the trip. Zero credit.
I make a pretty good salary considering I have multiple technical college degrees. However, my mom and dad did the same thing and my dad has never made more than half of what I make now. It's all about priorities.
Fully expect health care to run about $1800/mon while the kids are home,dropping to $1400/month after that. Assuming 20% price growth/year. Property taxes $5k/year. New used car every 10 year at $15-20k. Expenses run $1500/month including food, insurance, utilities, school fees, entertainment. Lots of other miscellaneous like clothes, repairs, etc. Math works out, although I might get a part time job of my own choosing.
There are a lot more variables to factor in, that you seem to be ignoring.
Have you gained control of your budget?
How about your personal tax-plan? Are you still paying income taxes?
How much are you investing?
If you make a 'decent' income, reduce fluff spending to a minimum, form a good tax-plan to stop paying into the IRS, then you can make huge leaps with your investments.
There are a few of us technical and engineering types that take some things for granted. Typically, finding and keeping a job is not an issue. And pay tends to be above average. Usually we enjoy our jobs because problem solving and executing a solution is fun. Our mindsets are also typically straightforward, and more logical. Spend much less than you earn, and save as much as possible for retirement. I work in an engineering department of a large electric utility where there are perhaps 50 engineers. Typically, we have a paid off home, enjoy our jobs (but want more free time), and in our field, health and work benefits, job security, and retirement benefits are pretty good. Typically, we are married, and married working spouses. So household income is higher. We are typically thrifty. We typically do not advance high in to management, but it is always a possibility. More and more of our VPs and such are lawyers, not technical people. We are lucky in that its pretty hard to outsource power generation, so there is a degree of job security. Typically no one retires before 60, many go to 65, since rhey enjoy the friends at work and pay is good, typically around $100k+ by the time you are in late 50s today. Interestingly our department has trouble hiring young engineers. They all want to be the next Steve Jobs, or never get their hands dirty, or spend nights away from home as required, and think they are worth $100k right now. Starting salaries here are around $55k, with generous benefits. But they see articles and studies where some engineers do make $90k plus to start, and that's all they see.
I could have retired at 55, and indeed, I see the non engineers fairly often doing just that, but the difference between my lifestyle for the rest of my life, for working just 7 more years was immense, IMHO. The real question is when I'm 75 will I look back and say, "What a waste that I worked those extra years, it only goes to the government and I would be doing the exact same thing right now, anyway!". My father thinks I'm crazy to keep working. And there are similar mantras on C-D. I KNOW there is no substitute for youthful health. But it's almost like I'm too lazy to stop working and keep earning what I do, because it would just be too much effort to change my lifestyle! It has NOTHING to so with devotion to a job or work ethic, or not wanting to be at home with my wife, or owning expensive toys. It has more to do reaching with a feeling of financial security and a cetain lifelong thriftiness that abhors leaving what my brain considers easy money on the table.
At Christmas a group of relatives was talking to my brother who retired in his late 50s. He had lost his job but got a huge severance check and decided after some thought that with savings and great investments he could afford to retire from full time work.
I don't know if it was jealousy or ignorance or whatever, most of the relatives in the discussion did not think it was right that someone would retire in their fifties. One older guy in his 70s, told him, "In my day, you were expected to work until age 65, then you can retire." Another person said, "But your still young, why would you want to just sit around the house all day at your age?"
What do you think about people who retire in their 50s?
If he's paying his own way what's it anyone else's business? And who sets the "expectation" anyway? In fact it's a goal more people should set and achieve.
There are a few of us technical and engineering types that take some things for granted. Typically, finding and keeping a job is not an issue. And pay tends to be above average. Usually we enjoy our jobs because problem solving and executing a solution is fun. Our mindsets are also typically straightforward, and more logical. Spend much less than you earn, and save as much as possible for retirement. I work in an engineering department of a large electric utility where there are perhaps 50 engineers. Typically, we have a paid off home, enjoy our jobs (but want more free time), and in our field, health and work benefits, job security, and retirement benefits are pretty good. Typically, we are married, and married working spouses. So household income is higher. We are typically thrifty. We typically do not advance high in to management, but it is always a possibility. More and more of our VPs and such are lawyers, not technical people. We are lucky in that its pretty hard to outsource power generation, so there is a degree of job security. Typically no one retires before 60, many go to 65, since rhey enjoy the friends at work and pay is good, typically around $100k+ by the time you are in late 50s today. Interestingly our department has trouble hiring young engineers. They all want to be the next Steve Jobs, or never get their hands dirty, or spend nights away from home as required, and think they are worth $100k right now. Starting salaries here are around $55k, with generous benefits. But they see articles and studies where some engineers do make $90k plus to start, and that's all they see.
I could have retired at 55, and indeed, I see the non engineers fairly often doing just that, but the difference between my lifestyle for the rest of my life, for working just 7 more years was immense, IMHO. The real question is when I'm 75 will I look back and say, "What a waste that I worked those extra years, it only goes to the government and I would be doing the exact same thing right now, anyway!". My father thinks I'm crazy to keep working. And there are similar mantras on C-D. I KNOW there is no substitute for youthful health. But it's almost like I'm too lazy to stop working and keep earning what I do, because it would just be too much effort to change my lifestyle! It has NOTHING to so with devotion to a job or work ethic, or not wanting to be at home with my wife, or owning expensive toys. It has more to do reaching with a feeling of financial security and a cetain lifelong thriftiness that abhors leaving what my brain considers easy money on the table.
I could have retired at 55, and indeed, I see the non engineers fairly often doing just that, but the difference between my lifestyle for the rest of my life, for working just 7 more years was immense, IMHO. The real question is when I'm 75 will I look back and say, "What a waste that I worked those extra years, it only goes to the government and I would be doing the exact same thing right now, anyway!". My father thinks I'm crazy to keep working. And there are similar mantras on C-D. I KNOW there is no substitute for youthful health. But it's almost like I'm too lazy to stop working and keep earning what I do, because it would just be too much effort to change my lifestyle! It has NOTHING to so with devotion to a job or work ethic, or not wanting to be at home with my wife, or owning expensive toys. It has more to do reaching with a feeling of financial security and a cetain lifelong thriftiness that abhors leaving what my brain considers easy money on the table.
That is a great explanation of the basic contentment you feel with your decision to forego early retirement. I agree with you that it is not axiomatic that earlier is necessarily better provided one does not end up a pauper. Life is good for you right now, working, so what's the big rush? Advocates of the early retirement "mantra" you referred to seem to be haunted by the spectre of early death - what if you die before getting to enjoy retirement, or after only a relatively short life as a retiree? Whether that's worth obsessing about is a philosophical question, it seems to me. We live our life as we see fit and try to create a meaningful and enjoyable one - hell, some people die in their 30's, so should we plan for that?
It is an ideological construct that retirement at some very early age, say 50 for the purpose of discussion, represents nirvana and success. Well, it does represent financial success, of course, unless one is setting oneself up for severe problems later. To me, success means creating the good life for oneself, and there are so many elements of that besides a big pile of money amassed by a given age.
However, I hasten to clarify: I do not condemn anyone who has successfully retired at age 50 (or any other particular age) and who is satisfied with that life. I do not think they made some "mistake", and it's too bad they get criticized out of jealousy. The only "mistake" might be the belief that such early retirement should be a generalized goal for everyone. If it were the goal for most people, there would be millions of very frustrated people out there, as very few of us are capable of earning such great gobs of money.
I retired about a month ago at age 60, and I've gotten a lot of comments about being "too young to retire." My answer is there is no such thing as too young to retire. If you plan well, save enough and/or have a good pension, and that's what you want in life then by all means go for it. On the other hand if you want to work until you are 75, more power to you.
In a way I feel sorry for people who envision retirement involves a lot of sitting around all day. That comment tells me there never was much in their lives beyond work and perhaps their kids, which I think is sad. I've always had a lot of other interests and hobbies outside of work, and for a long time had felt that the one thing I was most short on was time to pursue all those activities as fully as I'd like. After 39 years of devoting most of my time to my career I now have a chance to devote most of my time to other things I love to do while I am still young enough and healthy enough to enjoy them to the fullest.
Dave
Perfectly stated. After retirement there are opportunities to pursue continuing education, memberships at cultural institutions, starting a business, hobbies, reading, walking, exercise (Mental and Physical), swimming, gardening and so much more in this GREAT BIG WORLD!
I feel sorry for them too :-(
I would say that sometimes it is difficult to envision a life without work when one is in the demanding throes of work with no way out and forced to make a living.
Sometimes the only way to cope with the forced nature of work and having to look forward to many additional years of working is to staunchly remain sort of blind to what freedom and retirement can mean. It can be painful at times to want release from work but to still have years yet to work before retirement.
So to cope, some people will not allow themselves to envision that freedom....and their comments about being too young to retire or insisting that people will miss not working or trying to view the down sides of retirement.....it's a protective psychological stance.
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