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I'll suggest a novel definition of early retirement by saying that it's a age where you have a high probability of living 25 or more years once retired.
I liked my job and I enjoyed my work, but people in my office started dying. By the time the third person in my office was wheeled out toes up on a guerney I started to feel like I might be the next customer at the morgue. My father died about a month before his retirement at the age of 64. At 59 I put in my papers. Since my wife was a few years younger I was home alone for about a year and got tired of it. I went back to work for 2 years at which time my wife had retired, and I retired for good the month I got my first SS check at 62. My friend's father was retired early for 5 years and then went back to work. He told my friend in those 5 years he had the equivalent of 43 years of 6 week vacations, while he was young enough to enjoy them.
I work for a school district and everyone goes through the same mental gymnastics and often come up with having more money to live on in retirement than they had working. That is skewed to the 30+ year employees, but even for those of us with around 20 years, when you stop saving in your 403B, stop contributing to the pension system, stop paying Medicare and unemployment insurance, stop paying into social security....you see how much less than your full paycheck you are already living on. I have been maxing out my contribution to the 403B for a number of years, so I have already adjusted to living on less.
Yes, I work in a public sector job and I am starting to hit that point, too. With just over 20 years of service, I am 8 years from retirement age, but a quick glance at how the math works out:
--15.23% goes straight to the pension and the percentage goes up every year.
--1.45% to Medicare (We don't pay into SS.)
So that's almost 17% in pension and Medicare right off the top.
I also save just over 30% of my gross in the 457 plan. So that's 47% gross that comes right off that top (not to mention other taxes, union dues, health insurance, etc), that I don't see.
After 20 years of service, the pension plan pays out 50% of my gross, so if I could collect the pension today, it would pay more than my take home. Of course, I can't start collecting until age 55, but it just shows how the math works. Since I have significant savings, I could walk away now if I really wanted to. Not sure I want to do that, but it's becoming a viable option if I couple savings with a part time job in a lower cost area and then start receiving the pension at 55.
Last edited by mysticaltyger; 05-23-2017 at 07:43 PM..
I know way too many people who were forced out of corporate jobs by their late 50s. They were not able to find a comparable job with benefits. Age discrimination is illegal and it's pervasive.
They ended up having to buy individual health insurance policies to hold them over to Medicare age. That caused many of them to spend savings at an unhealthy rate.
All of that advice about working to FRA is just a dream for most people.
The bolded is very true. People think they're going to work at good paying jobs until their mid 60s. That's the exception, not the norm. I think you have to prepare to at least be able to at least semi retire by the time you're in your 50s. That means socking away at least 15% of income is really a bare minimum, not some lofty aspirational ideal.
It seems most of the folks retiring early(younger than 60) either have 1) A pension or 2) A work health care plan that will go with them until 65.
I have neither so it looks like I will be at the daily grind till at least 62.
Not necessarily true. But you do have to have a high savings rate to pull it off. The problem is, most people set up their lives wrong when they're young. They buy too big a house, too much car, have long commutes. Then they have kids and/or pets, which further reduces flexibility. Basically, they adopt the standard American lifestyle, which is designed to keep you broke your whole life.
There IS another way, but in order to be open to it, you have to think the normal way sucks and you have to have a "I'll do whatever it takes" kind of attitude to do early retirement:
I so relate to this. I count the days (168 work days). Every day is tougher than the last, just getting up at 5:15 am, putting on my make-up, clothes, traffic, etc. 30 minute lunch and then back to my cage.
Right now work is getting in the way of the rest of my life. What we do for a bit of extra money.
This is exactly how I feel except I work many more than 168 days per year.
This is exactly how I feel except I work many more than 168 days per year.
I had my old Y2K count down clock in my cubical counting down the days to July 6th, 2021 at 3:30pm, for a while,
Never told any one what the count was to, But got depressing seeing how long that date was out in the future, and when the battery died did not replace it.
I got Package and was outsourced in April 2016, Was so glad it happened.
I had my old Y2K count down clock in my cubical counting down the days to July 6th, 2021 at 3:30pm, for a while,
Never told any one what the count was to, But got depressing seeing how long that date was out in the future, and when the battery died did not replace it.
I got Package and was outsourced in April 2016, Was so glad it happened.
My observation: The people with the count down clocks are usually the first ones to be downsized.
My observation: The people with the count down clocks are usually the first ones to be downsized.
My Boss was 1,000 miles away...
The Y2K clocks were used all over the office for countdowns to Vacations. End of some project, End of school year, Start of school year, weddings,....All sorts of things.
When they did the outsourcing, There were three of us, in our group.
One wanted the package, he didn't get it. (He was 62 then, and retired a year after the package, the month before his 63 birthday)
I was sort of then fence at first, But when I saw what was going on, I was glad I got tapped for the package.
The "Youngest" she is in her late 40's needed the job, She got tapped also, She was not happy.
As a footnote my boss wanted the package, but did not get it, His wife who also worked for company did get a package (Different Area of IT) , He retired about 2 months after I did.
My former co/worker went thru 6 manager in 1 year. His Last manager he never met, and only talked to him on the phone once. But he knows his job, and did not need much "Management" support, since he know when his retirement date was he did not care that much who he was working for,
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