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Most advice is going to be bromides and platitudes; likely, mine won’t be an exception.
A huge unknown in early-retirement is healthcare and health insurance. Health insurance costs for the self-employed (or the retired) depend mostly on age and state of residence. One’s actual health (weight, body-fat percentage, 5K running time, # of push-ups possible without resting, etc.) is almost irrelevant. So, while it’s good to keep oneself healthy, mere good health isn’t itself a cost-cutter. For this reason, it would be useful to maintain some kind of nominal employment that offers health insurance, even if the job is menial, degrading and unremunerative.
Second, all good investments are volatile (or risky), but not all volatile (or risky) investments are good. Of those who attempt the rapid route to affluence, nearly all will fail. Of those who are content with the slow route to affluence, perhaps quite a few will succeed, but their success won’t be spectacular. The stock market is probably the best mainstream investment around. But don’t expect much more than 6% annual (geometric average) gain, beyond inflation… and even that number is optimistic. 6% year after year, means that it takes 12 years to double your money. Let’s suppose for the sake of hyperbolic discussion that you already had $500K now, at age 38. Great! But to reach $1M, you’d need to wait until age 50. To reach $2M, wait until 62. Do you see how the years mount? Your portfolio is gaining, yes… but not spectacularly. And that’s even if you already had substantial money.
Third, to the aficionados of defined-benefit pensions, please realize, that most pensions have a minimum eligibility age. In the US federal government, that’s 57, if you have 30+ years; 60 otherwise. And there is a penalty if one begins taking the pension before 62. It is more important to finish late, than to start early; this is exact opposite of that of defined-contribution schemes. A pension is indeed a lovely thing to have! But it is NOT the path to early retirement.
Fourth, a lifetime devoted to saving money, won’t magically convert into a second-lifetime devoted to spending money. Those who are adept at saving a high-% of their income, will be loath to spend it in retirement. An ascetic life while working, does not become a profligate or luxurious life once retired.
Fifth, to those who suggest turning one’s hobby into a paying vocation, be realistic. I enjoy playing chess, spending 1-2 hours daily reading chess-books, or losing to my computer chess-program. I can beat most self-identifying chess players at a party, but in a state-wide tournament, I’d be at the bottom of the charts. Now take a player who could beat me in 99 games out of 100. Think about that guy (or gal). Now think about a player who could beat that other player, 99 games out of 100. This latter player is probably an international master; maybe a grandmaster. There are many thousands of them worldwide. All but the top few hundred barely earn enough money playing chess, to cover their chess-related expenses.
Sixth, neither retirement nor employment nor owning one’s own business are necessarily good, nor bad. Persons inclined towards melancholy temperament will find themselves pining for an alternative to work, once retired; for early-retirement, even if well-employed; for having a boss, if running their own business – and so forth… any imaginable combination. It’s not about being an ingrate, or mired in ridiculous daydreaming. Rather, it is about never quite seeing the sense of it all, and ceaselessly wondering “what if”.
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Originally Posted by mschrief
Never underestimate yourself.
True. But never overestimate yourself, either.
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Originally Posted by Nightengale212
...When I was the OPs age I already had 16 hard years of working in the nursing profession and was pretty burnt out. ...
One gathers that it happens to many of us, who are at the OP's age, or perhaps 5-10 years older, and having worked more or less steadily in a career for ~20 years, yearn for something completely different.
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Originally Posted by HollyhockGarden
Good friends are a huge thing in life; spend some time making friends. They can help make your "Golden Years" more "golden".
You should certainly be planning for retirement while you're young. How many people are in their 60's and all of sudden realize they have been living paycheck to paycheck and have only SS to retire on? I did a lot of exciting things during my working years, but I also planned for retirement.
^this...We get old quicker than we think. lol I see people that really struggle now that they are retired (some have had to go back to work in their 70's) and if they had planned a little better while they were young, life would be easier.
^this...We get old quicker than we think. lol I see people that really struggle now that they are retired (some have had to go back to work in their 70's) and if they had planned a little better while they were young, life would be easier.
Yes, especially if we all had a crystal ball! LOL.
A huge unknown in early-retirement is healthcare and health insurance. Health insurance costs for the self-employed (or the retired) depend mostly on age and state of residence. One’s actual health (weight, body-fat percentage, 5K running time, # of push-ups possible without resting, etc.) is almost irrelevant. So, while it’s good to keep oneself healthy, mere good health isn’t itself a cost-cutter. For this reason, it would be useful to maintain some kind of nominal employment that offers health insurance, even if the job is menial, degrading and unremunerative.
I definitely realize the importance of this and can certainly see myself maintaining some type of employment after retiring from my current industry in order to maintain health insurance (among just the benefits of having the structure of still reporting to work).
^this...We get old quicker than we think. lol I see people that really struggle now that they are retired (some have had to go back to work in their 70's) and if they had planned a little better while they were young, life would be easier.
If you fail to plan, you are planning to fail.
If you want to retire, ever, then you must take some action toward that goal. If all you want to do is to enroll in Social Security, then fine enroll. My parents enrolled for me when I was a child. But I know a bunch of people who have dis-enrolled, as they wanted to invest their money in other ways. Their plan is different.
I dedicated 20 years of my life to a high-risk career that offers a pension. Back in the 1980s I decided that I was going to stay enrolled with SS, to give me a SS pension in my 60s.
I knew that if I were going to retire 'early' I was going to need some investments on the side.
If someone wants to retire at any age, I think it is a disservice to argue against that idea. There are plenty people who have retired 'early'. It is not that unusual.
What shocked me is how many people I have known, who absolutely refused to plan for retirement at all. I have known many servicemembers who were forced onto pension, and at that moment had never even considered the possibility of living on their pension.
Possibly. Yet there are many who planned, who failed anyway. Maybe their plans were inadequate. Maybe they made unrealistic assumptions. Maybe fate had other plans for them. And there are also others who disregarded the future, who made stupid decisions, who waffled and procrastinated, but who nevertheless did just fine.
There's a well-known anecdote among professional car mechanics: their own cars keep breaking down! That's not because mechanics systematically neglect their own cars, or tinker with them for no reason, until something manages to break (though this conceivably does happen). Rather, it's almost - almost! - because fate enjoys a kind of irony.
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Originally Posted by Submariner
If someone wants to retire at any age, I think it is a disservice to argue against that idea. There are plenty people who have retired 'early'. It is not that unusual.
Of course. But it's also sensible to offer cautionary tales. If say a person wishes to leave a desultory and failing marriage, and asks for divorce-advice, it might be a disservice to moralize on how divorce is an abomination. But it would still be sensible to explain, that divorce is traumatic, and post-divorce life is likely not all that rosy.
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Originally Posted by Submariner
What shocked me is how many people I have known, who absolutely refused to plan for retirement at all. I have known many servicemembers who were forced onto pension, and at that moment had never even considered the possibility of living on their pension.
I wasn't in the uniformed military, but had numerous military coworkers. What was indeed shocking, is that while few were dedicated savers or investors, most did just fine, typically retiring as an O-5, and immediately embarking on a lucrative second career. Most of these guys had stay-at-home wives, several children (whom they spoiled), expensive hobbies (like flying a private airplane), and not much of a 401K (or its public-sector equivalent). But somehow they coasted to a very comfortable life in their declining years.
As of 2007, 1.4 mil (or its equivalent in a reliable pension's net worth + your put away stuff) was needed to retire comfortably at age 57. In 25 years that'll be nearly 3.5 mil. Skip SS it won't be available to anyone who can click two nickels together. As I think you sorta realize, you have some big time saving to do
First thing: skip trying to impress anybody with your toys/cars/home/phone, etc. They really honestly couldn't care less what you sport around. Too many people in their 30's play the status game - especially once they start making any money that counts. Big waste of time and money - all for naught.
As you correctly say, at this point you have no idea how you're going to feel about working when you're 55, let alone 70. Overcompensate now - 20 years from now is too late.
Example: If your annual income is < $175,000, toss the i phone and get a flip phone; it's good enough.
Last edited by TwinbrookNine; 01-01-2018 at 07:40 PM..
As of 2007, 1.4 mil (or its equivalent in a reliable pension's net worth + your put away stuff) was needed to retire comfortably at age 57. In 25 years that'll be nearly 3.5 mil. Skip SS it won't be available to anyone who can click two nickels together.
**** You have some big time saving to do.*****
First thing: skip trying to impress anybody with your toys/cars/home, etc. They really honestly couldn't care less what you sport around. Too many people in their 30's play the status game - especially once they start making any money that counts. Big waste of time and money.
You have no idea how you're going to feel about working when you're 55, let alone 70. Overcompensate now - 20 years from now is too late.
People cope with what they have.
All these quotes get bandied about on here on how you need "X" to retire to safely withdraw "Y" annually, or you're going to be eating dog food under a bridge.
No retiree in my personal circle has anywhere near $1.4 million right now. Most are in small houses they've lived in for years, long since paid off. We're a low property tax, low cost of living area.
It isn't a glamorous lifestyle, and no, they're not frequent travelers or have expensive hobbies, but they're also not dirt poor either.
Lots of great advice here...thank you! As far as buying a place with separate living quarters, "if" I bought, that is what I wanted, however, the ones within my budget would usually be duplexes. Now, I understand from a friend of mine in real estate that we do not really have duplexes in my city which I realize now is the case. I guess the other choice would be a home or townhome with an in law suite? Honestly I figured at this point if I bought to just go as close in the city as I can (since real estate estate is all about location and I'd love to continue living car-less for as long as I can) and going as small and inexpensive as comfortable.
Not sure if you saw my other post about rents rising in my city and being concerned that continuing to rent means I won't have much additional money to invest. (I gave the example that the last apartment I had here in 2012 doubled in price between 2012 and 2017. And that I currently rent a 625 sq ft studio for $1150 that's currently priced at $1300+ for new renters coming in.) There are still some opportunities to get small 1 br condos in the city for under 150k (in few cases under 100k) so I have been thinking long and hard that maybe I should consider this end of the year.
Thank you for the health and other additional tips. That is really scary what you went through but I'm glad you are doing well and it's awesome that you took such good charge and are so disciplined with your diet. I wish you many more healthy cancer-free years to come
Couple of things here I didn't see mentioned on housing, but should be thought about.
We have entered an economy where quality jobs are consolidating into fewer and fewer metros. Atlanta is a winner in that case, and is likely to remain a winner. Getting in now, locking in a relatively consistent housing payment, is likely to pay off many times years from now.
I live in a medium-sized college town in northeast TN now. I recently bought an inexpensive townhome in a "vinyl box" development for $69,900. The outside is all vinyl siding, but the inside is tastefully updated, if a bit basic.
All in, my mortgage + COA fees are around $525/month. Renting a similar 2BR/2BA townhome built by the same developer (though not in this same neighborhood) would be nearly twice that. At that kind of delta, it doesn't take long at all to make up your transaction costs. If I had to, I could probably float the mortgage for awhile until I could either rent the unit (I have a personal friend who is LL over several properties and his property manager will basically run anything)
I used to live in an affluent suburb of Indianapolis in a plain, older apartment complex. Keep in mind - this place was only desirable on price by neighborhood standards. I lived there for three lease cycles. Rent went up by 7%, on average, over those three years. Some more, others less. And I wasn't even in a hot market.
I know several guys around my age (late 20s - early 30s) who were able to ride equity waves in various areas, not just the hot coastal markets, to hundreds of thousands in equity, and were then able to relocate to a smaller town, slower paced lifestyle with a paid for house.
I dream of retiring one day and I read the threads here often.
My idea of retirement is changing as up until my mid thirties I thought retirement would mean exiting the workforce early and not working (at all). However, lately I've been thinking that some form of work is actually very healthy for me and I probably need to be doing 'some'thing come retirement time. Ideally it would make some money but I know after a certain age I might not have the ability to do things that generate an income.
I digress...
The real purpose of my thread is I'd like some/any advice from those who are already retired. It can be any type of advice (personal, financial, health-wise, etc etc) but mainly I was hoping moreso for things you would have done differently in life leading up to retirement....it could be anything.
I don't have a goal yet of a specific retirement age because I don't have much in retirement funds and hardly any assets, so honestly right now I'm thinking I have to work until full retirement age. Basically I would like to be financially independent enough to pay all of my bills from investments, SS (I include getting 50% of projected benefits as an estimate in my future budget) and maybe a few gigs here or there by age 57ish.
I will admit here that sometimes I think I read a lot of retirement forums and threads because deep down maybe what I really need to focus on is creating a life I don't want to retire from (those that can relate will know exactly what I'm talking about). I want to make sure I'm balancing having a good life and fun now with making sure I have a plan for when I get older...I mean I'm almost 40 and really need to start thinking about what life will look like for myself when I'm 60+.
By the way I'm currently single, no kids (no plans to have any), live in the southeast and work full time from home. Any questions, ask away. So with that said, tell me: what are some things you would have told 38-year old you that could be advice applicable to me for the future? What are some things you did right that have led to a good life in retirement? Did you have worries going into retirement that aren't worries now that you're actually retired? Any insight/advice at all you feel like sharing, please do...
I`m a recovering alcoholic and when I got sober at 35 I was flat broke with no job prospects. At 38 I found work I didn`t hate and started working my ass off. I started buying rental property at the age of 43 and now at age 60 I own eight properties. I have very little social security benefits and wife has no retirement to speak of.
But we should be o.k.
The key is finding work you like or at least don`t hate in which you can earn decent money. Then work hard and save, save and save. Many like to invest in stocks but since I know nothing about stocks I went into real estate. Not that I made a killing mind you. Got clobbered in 2006 but rebounded in 2011.
Good luck.
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