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I've always wondered how people can spend nearly as much time outside of the labor force retired as they can during their whole working years, both earning enough to fund the expenses during the younger years as well as potentially decades of retirement.
It doesn't seem possible for most folks on normal incomes.
I've always wondered how people can spend nearly as much time outside of the labor force retired as they can during their whole working years, both earning enough to fund the expenses during the younger years as well as potentially decades of retirement.
It doesn't seem possible for most folks on normal incomes.
Oh it's quite possible.
I took an early retirement.
Living off my pension right now with some slush money coming in from teaching/tutoring.
No debt though. Home and truck is paid off.
Still have a 401K I have not touched, a Roth I have not touched and SS is almost a decade away for me.
As I age I will be getting more money so SS COLA means nothing.
The government is the last entity I'd rely on for keeping up with the economy.
It's to their benefit to make sure the CPI stays low as it saves them money and that's why they swirl around that basket of goods to cheaper alternatives.
I was not born rich and had no big inheritance.
I lived beneath my means and always paid myself first.
I lucked out having a nice paying white collar job but I'm a blue collar person so I saved and invested a lot of money over the years.
I planned for increased money coming to me over the years via MY INVESTMENTS, not any government COLA.
I've always wondered how people can spend nearly as much time outside of the labor force retired as they can during their whole working years, both earning enough to fund the expenses during the younger years as well as potentially decades of retirement.
It doesn't seem possible for most folks on normal incomes.
You have a valid point. One of the bottom line guidelines some subscribe to ( I do ) is that you need to plan how to grow your income in retirement to exceed inflation etc. That in some ways is old school. We are good and having been running numbers thru FireCalc we are still good. In fact almost 8 years into retirement we are ahead of projections. However absent planning and having the resources my OP thought still remains that folks not yet retired ought to start thinking about how they are going to sustain a satisfactory growth in income during retirement. Not those already retired but those still with time and options as your point is right on target. Many with retiring with non COLA pensions are going to face a deteriorating road unless they have also invested and can use that money to grow their income. Not sure about others but even in high school and during college I was always trying to grow my/our income/wealth even if the only way was multiple part time jobs. Now it is investments to supplement pensions/ss and to plan for possible reductions in each. At one time years ago this forum was much more about information and planning then it is now. I guess I still have that nostalgia in my bloodstream
One of the bottom line guidelines some subscribe to ( I do ) is that you need to plan how to grow your income in retirement to exceed inflation etc. That in some ways is old school.
You're right. I'm 68, not retired, and make about $10K per year income from a small pension from a previous job. The problem is, that amount will never change so as the years go by I need to consider how I'm going to offset the decrease in the pension if I'm going to maintain the same lifestyle.
I plan on "semi-retiring" in 2-3 years, after I start collecting social security. In addition to social security and the pension, I'll have a modest income stream from my modest investments. I'll have to make up the rest by working part time. I'm working toward establishing that piece now, and should be in reasonably good shape by the time I pull the trigger. Not well off, but if I watch my expenses I'll be able to get by.
The unknown is of course health issues: what if I'm no longer able to work? What if health problems wipe me out financially? What if my pension goes away? Yeah, I fear those things -- but I can't live my life fearing situations that I have no control over (other than to try to live a healthy lifestyle).
The flip side of that would be economizing and possibly working again for a short stretch if there is a downturn early in retirement. If you let the principle drop too far the appreciation can't keep up. After a little while if you get breathing room like TuborgP you can handle a downturn. You usually will want to let it ride if you get ahead; don't go out and spend it. There will be good years and bad that average out and if you blow the "extra" on good years you could be in trouble if things go down for a while.
It helped us greatly in the planning stages to do a timeline of our retirement to show what our income would be at various points in time using our various income streams (pensions, 457, both SS checks, and rental and investment income. We are 5 years apart in age, so we will take SS at staggered times. We found ways to structure our income streams at various times to levelize the picture and to insure an increasing income over time to cover unanticipated needs (and wants). The one thing we found using the timeline was a gap in the early years before my DH could take SS. We filled that with a temporary annuity offered through my former employer. We also paid off our rental property early at a strategic time so as to create a larger positive cash flow which would offset the loss of the annuity when it expires. So far it's working beautifully, combining the planning with a move to a lower cost location has allowed us to actually do better than we anticipated. To be honest, I ignored all COLAs in my planning as I simply assumed that the COLA and the rate of inflation would cancel each other out, so my entire timeline is in 2010 (the year we retired) dollars. If things continue to go well we may be able to delay DH's taking SS to FRA.
omg, now there will be those who will feel compelled to list everything they own out right, amounts in retirement funds and on and on. Just to prove they did the right thing, the right way.
If you the needed to give your own personal view on the "appropriate retirement age" couldn't you just do in the COLA thread? Do we really need a town crier for this incredibly obvious fact? To which it really doesn't matter as people will do what they want.
omg, now there will be those who will feel compelled to list everything they own out right, amounts in retirement funds and on and on. Just to prove they did the right thing, the right way.
If you the needed to give your own personal view on the "appropriate retirement age" couldn't you just do in the COLA thread? Do we really need a town crier for this incredibly obvious fact? To which it really doesn't matter as people will do what they want.
This thread is for future retirees. More details would definitely help them.
I am on SSDI & live in an income based apartment. I recently received insurance payments from a car accident (her fault, not mine) & invested most of it, but kept some in savings for my emergency fund. I assume my rent will go up in January when we are re-evaluated & towards that end I am saving more each month to offset the difference. I do have extra each month & was using it to stock up for winter but am fairly stocked up now. Now, November & December I will pretend I am paying the higher rate & put the difference in savings. That way I can get used to the higher rate.
This thread is for future retirees. More details would definitely help them.
This is not a boast thread.
Never, never, read never said they would be boasting. I am always amazed that people literally list their complete ownership of things, whether it's a boat out right or the amount in their 401k and on and on and on. I don't necessarily see any of it as a boast but more having to show... hey I did it all the right way, see, see. More like a need for approval.
Is this for future retirees? It's nothing new, stated over and over again in numerous other threads. Amazing... work longer, save more and don't take SS until the bitter end. Yeah, we get it, got it, heard it.
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