Why did you retire? (vacation, school, mother, kids)

[Nightengale212]

I retired this past September after a 44 year R.N. career with the 1st 23 of those years working mostly in private sector hospitals and the last 21 years working for the VA. At my age I felt it in my best interest to get out of harms way working in a high virus exposure environment. Although my pension isn't huge compared to that of many others, I think it is pretty decent after 21 years of service which was sufficient enough to allow me to afford to 1st claim my reduced SS survivor's benefit so I can delay taking my own at 70 without depleting my TSP to make that happen. I have absolutely no regrets in deciding to retire when I did, and I never imagined that I would enjoy retirement as much as I do especially on cold snowy mornings when I no longer have make that nasty drive into work.

[pknopp]

Originally Posted by mila123

How do you retire prior to 62 or 65? I'm not quite there yet and my property taxes alone are around $8K+ a year. I'm assuming you don't dare touch your pension/retirement early and you can't collect SSI. Unless you have a million in savings, how do you get by without a salary every month?

First off I live in an area where our property taxes are around $1000.

[Ralph_Kirk]

Originally Posted by pknopp

First off I live in an area where our property taxes are around $1000.

Yeah, making life changes like moving to affordable areas is part of the planning for retirement.

[leadfoot4]

Originally Posted by mila123

How do you retire prior to 62 or 65? I'm not quite there yet and my property taxes alone are around $8K+ a year. I'm assuming you don't dare touch your pension/retirement early and you can't collect SSI. Unless you have a million in savings, how do you get by without a salary every month?

The absolute, most critical factor, is planning...and not planning when you turn 50, you have to begin planning your retirement when you're in your 20s. I worked in a factory, a high tech factory, of sorts, one that had been around for quite a while, before I got hired into a work/college co-op deal, at the age of 19. I was fortunate to be working with several older guys who were pretty good with numbers, and they literally dragged me to the HR office, when I had the required 5 years of service, and had me sign up for the company's "savings investment plan" (SIP).

I made regular contributions to that plan. I worked a lot of OT, over the years, and while on one hand, the OT paid for some of my "luxury expenditures", I also invested a chunk of my OT pay into the SIP, because it deferred the taxes on the increased income. I started an IRA, when they were first introduced. And even though I put in a lot of hours at my full-time job, being a life-long car enthusiast, I also managed to have a "side hustle" working on cars, out of my home.

I retired shortly before I turned 56, as things had changed at my place of work. Yes, I had a company provided pension plan, but due to a quirk in the plan, I couldn't take a full, lump sum payout. I took what I could, in the lump, moved it into my 401K plan, and the rest I get in a monthly check. (my monthly check covers my almost $8000/yr. property taxes).

Not that I was broke, but I did wind up working a part-time job, about the time I turned 57, and worked it until I was 62, and could collect SS. However, I've had a good "money manager" at Merrill-Lynch, and he's done an excellent job at creating monetary growth for both me, as well as my wife. My wife also had a good job, and although we married somewhat late in life (40-ish), she, too followed a somewhat similar plan during her younger years, so assuming that no disasters hit either us, individually, or the US, in general, we'll be OK.

HOWEVER, as I initially stated, we laid the groundwork early........

[stank1964]

Originally Posted by mila123

How do you retire prior to 62 or 65? I'm not quite there yet and my property taxes alone are around $8K+ a year. I'm assuming you don't dare touch your pension/retirement early and you can't collect SSI. Unless you have a million in savings, how do you get by without a salary every month?

You have to replace the income. There are many ways to do that, for us, our assets provide the income. That was something I worked toward for full span of my career. When my wife and got married she thought I was crazy, but she bought into it as well. Her investable asset far exceeds the US household average. You commit to it and you do it. For me, it was simply paying myself first, living below my means, but I never wanted for nothing. Everything I ever wanted to do in this life, I’ve done more than once. I call it a success.

[stank1964]

This is a bit off the original post but I think this might help others....

One other thing, debt is the enemy, do everything you possibly can to reduce and preferably eliminate debt of any kind. The average person cannot grow their assets weighed down by the burden of debt. Do the math on your mortgage costs. I am sorry to say that even your home, assuming your carrying a mortgage on it, is anything but a good investment. Refinance your mortgage, reducing the number of years. Most people refinance and extend the years and add to the indebtedness. Don’t do that, it’s stupid, but the banks love ya. A 15 year mortgage builds equity much faster than a 30 year; the principle takes a bigger hit each and every month. I’ve always held 10 or 15 year mortgages. Most people are shocked to realize when they bought their home, financed at 30 years that the total cost they agreed to at closing (principle and interest) is double or nearly double the purchase price. This is why a home is anythiing but a good investment for the average person.

That being said, our retirement dream home is mortgaged and even it’s at 15 years. We did that instead of selling assets as mortgage rates were in give away range and you cant’t spend home equity. Home equity is a good way to grow your assets, but you have to be smart about how you try to build it. You get one go round in this life, don’t waste it.

[dcfas]

Originally Posted by pknopp

First off I live in an area where our property taxes are around $1000.

There is a property around the corner from where I live for sale. 24k in property taxes per year. Lol. We pay exorbitant taxes, but we do also get a lot of services. The schools are amazing, town services are impressive, pristine parks everywhere, property values seem very consistent, etc.

In the spring the highway department cleans any tree debris right from our curbs, a street sweeper then washes and scrubs the street. In the fall we dump our leaves on the curb and they bring a vacuum truck. We have no potholes anywhere. In the winter the plows clear snow and drop salt usually before we leave for work. The town guys really do good work.

This past week at our town hall they were dispensing Covid test kits, also at the high school.

We have nothing but good things to say about our location and neighborhood.

But, yeah, it is expensive. It may be prudent to move to a lower cost area in retirement.

[Dire Wolf]

Originally Posted by mila123

How do you retire prior to 62 or 65? I'm not quite there yet and my property taxes alone are around $8K+ a year. I'm assuming you don't dare touch your pension/retirement early and you can't collect SSI. Unless you have a million in savings, how do you get by without a salary every month?

I retired at 50. The simple answer is that you spend well less than you make and you invest those savings so that your money works for you.

The “don’t dare touch your pension/retirement early” isn’t necessarily true. Your retirement money is just savings. Money is fungible. Taking advantage of accounts like IRAs and Roth is more about taxes than anything. Once you understand that there are ways around early withdrawal penalties, using these accounts to your advantage can help you greatly in early retirement. For Roth IRAs, you can access the principal penalty free. There’s 3 primary ways of accessing tIRAs penalty free pre-59.5. The “rule of 55” lets you access your current 401K early if you retire between 55 and 59.5. SEPP lets you take regular withdrawals via a formula for at least 5 years or until age 59.5, whichever is later. And perhaps the most useful is the Roth Conversion Ladder. You convert traditional to Roth, paying any taxes, and in 5 years you can access that money. One common way of using that approach involves having 5 years of spending saved elsewhere and living off that while you build a ladder.

In my case, I maxed out 401Ks (that were also getting decent matches), and also invested heavily in my own brokerage accounts (VTSAX, mostly). And, yes, you need a lot of savings to fund retirement and early retirement. The 4% Rule used in traditional retirement is too aggressive for a substantially longer retirement, so becomes a 3.5% Rule. That equates to needing roughly 30x spending. I count NPV of pensions and SS in my savings. There’s a whole movement, Financially Independent/Retire Early (FIRE), that concerns itself with how to build the wealth needed to do this. Dozens of blogs, several forums/groups, podcasts, etc.

Without a salary, you just live off your portfolio each month (or year).

SSI is not the same as SS. It is a means-tested disability program, and not applicable here.

Edit to add: there’s also other approaches to RE. Some FIRE devotees prefer to use leverage and acquire properties they can rent and create monthly cash flow

[Futuremauian]

Originally Posted by StealthRabbit

Don't take it personally, mods are recruited from all comers and all corners, +/-


Chill... (Hawaiian style). Smile... Possibly we can see you from Molokai! (Had nothing better to do, was raining at home)

Are you in Molokai now? That is the view from the recliner I am sitting in now. From the middle of my living room, I can see the channel and Lanai as well.

I've visited Molokai once and wasn't impressed. Two days was enough. Love me some Maui though!

Enjoy your stay!

[TwinbrookNine]

I retired when I did because people around me were acting like children and using my office to vent their animosities toward each other - which they'd never do face to face. I had enough money set aside and got tired of that childish crap.