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I am not sure exactly what her husband's retirement income consists of, but no, they would not be able to live off of whatever it is. My sister owns the townhouse where they live, he does not. She already has at least a 45-minute drive to work so that they'd be in a less expensive/high property tax area. This is a second marriage for both of them. They got married about five years ago but have been together about 20. She has one adult child, he has two. He was a tax accountant and still does some work at tax time, but I know he had a convoluted financial mess in his past. His ex-wife is a lawyer, and I believe SHE gets a piece of a pension of his. My sister maintains a 401K of her own.
Trust me. She almost died last year from COVID, has the same genetic kidney disease my mother had, and if there were some way she could retire today, she would.
I guess the good thing is that 6 years is not forever. So at least retirement is in sight for her.
I hope things work out well for them. I'm glad that you were able to retire when you did.
Actually, I am planning to go out a year earlier. I have 9 months left. I am just done. Luckily, my husband and I both have pensions which offers more of a cushion than just SS and a 401K. Things can change rapidly. Reassess where you are in 6 months, a year, etc. and you may still be on track to go out.
I fully retired in 2020, at the age of 60, and the inflation/recession does not change anything about my retirement decision, since I do not live off of market investments, but I retired on laddered fixed annuities with a lot of room for inflation (ie, new annuities are kicking in every 5 or so years, to compensate for presumable inflation of 4% per year for 30 years. The inflation has been double of my projection in the last two years, which has still not affected me much because I do not rent my housing but own it, I don't keep a car but live in a large city which is totally walkable plus there is public transportation, I don't eat out anyway, am single so do not spend too much on food etc. ongoing household expenses, and, due to Covid, have not had a chance to spend on my sole somewhat costly interest, ie, international travel).
But anyway, I keep coming across more and more articles about the present market situation resembling the market downturn of 1966... ie, after a 20-year run of high market earnings, the market turned down and then stalled starting in 1966, after which stocks did not regain their value until 1982. It would not have been great to retire in 1966 & count upon living off of the stock market, but then, social security provided pretty well in 1966, plus a lot of people had pensions, so investing for retirement wasn't generally a thing as far as I understand (I did not live in the US at that time, plus in 1966 I was 6 years old, pretty far from retirement concerns :-).
Anyway, I am not concerned about the market situation. I like frugal living regardless of economic conditions (could theoretically live fairly normally off of soc security only), every year I need one less year's worth of resources to support myself (since I am one year closer to death), I will need even less $ per year after the age of about 85 when I stop traveling, I do not need to leave a legacy, and I will start taking soc security at 70 to maximize payout at the very advanced age if I reach it. The market does not really concern me.
I have a bit in a growth stock mutual fund (my only market holdings), which I converted to Roth on down-market days in 2019 and particularly March 2020, but I don't intend to touch that for 20 years, so it is of no concern that the fund has crashed (the fund manager is managing that, presumably to fill the fund with stocks that are likely to survive the crash & grow again when the market returns to life. I don't know when that may be, but I don't worry about that, since I had invested only the bit of money that I will never strictly speaking need, and can afford to lose it completely). That's just my personal approach.
I don't know how many people have financial regrets about early-ish retirement - it seems nobody who posts here has that regret. I think I share with many other posters here the experience that our spending in retirement, at least in our 60s and 70s, seems to be lower than we expected, even factoring the inflation in the budget. Retrospectively, I could have retired ten years earlier, ie, at 50, and still would have been financially okay. I think your SPENDING patterns matter more than the market, or anything else, for your financial satisfaction in retirement. So, in the end it matters primarily what you need to SPEND in order to be happy - how much you have matters only in relation to how much you like to spend.
Hi, are those deferred fixed income annuities that you have? I'd love to learn more about how you structured them. Like, every 5 years, does a new annuity start paying in addition to the existing annuity? I would love to do this. I'm not seeking to be rich in retirement, just comfortable.
You definitely can’t buy more time. Because of a grey divorce I downsized my living situation by selling the house and buying a condo. It’s perfect for aging in place and I am happy. I won’t get to travel as much but will still take a few more trips. My other priorities are my 2 dogs. Figure out what you value in retirement and prioritize.
This time is different than most in the last forty years.
Not only are equities going down, diminishing one's retirement portfolio, but we're also being simultaneously squeezed on the expense side with inflation.
My guess is that "true" inflation, for day to day people with normal consumption patterns, is probably at least 10%. Compare that to a normal year of 2%-4% inflation. You're going to be "worse off," by 6%-8%, at least, as compared to normal conditions, just from inflation alone.
My retirement allocation is now -19.70% YTD. I'm nearly maxing out my 401k. For me, that's about $20,000 than if there had been a completely neutral market. I'd have been better off to keep the cash, forego the company match, and done nothing at all.
If you want to give an average worker an argument against defined contribution plans in favor of defined benefit, this will do it.
My thought is that we are going to be in a "higher than recent" interest environment for awhile. That's going to be a negative for real estate appreciation and equities, but those losses are going to be substantial enough to where the bond market and "cash-like" investments, like money market accounts, won't be able to pick up the slack.
Energy prices will remain elevated. Food harvest in the US appears to be poor. Climate-related economic damages are going to continue to rise. I don't think the inflationary pressures, most of them, at least, are something that increasing interest rates will dampen. Instead, it's going to kill the lower and middle classes that need to borrow for mortgages, car loans, etc.
I'd expect for people to be poorer, inflation adjusted, at least for the next five years.
This time is different than most in the last forty years.
Not only are equities going down, diminishing one's retirement portfolio, but we're also being simultaneously squeezed on the expense side with inflation.
My guess is that "true" inflation, for day to day people with normal consumption patterns, is probably at least 10%. Compare that to a normal year of 2%-4% inflation. You're going to be "worse off," by 6%-8%, at least, as compared to normal conditions, just from inflation alone.
Everything old is new again! Welcome to the 1970s! Most of the posters on this form have seen this once before.
Everything old is new again! Welcome to the 1970s! Most of the posters on this form have seen this once before.
Did the 70s have this combination of record or near-record housing prices along with interest rates doubling in the span of ten months or so? Along with inequality not seen at least since the 1920s, maybe the Gilded Age?
Yes, there are parallels, but this is a condensed timeline for the 70s issues.
I retired in 2010 at age 57 after working at one job for 34 years. In 2018, I started working full time again. I have an OK retirement income from the first job, but wouldn't want to rely on it given the current inflation rate. I'm tired of the stock market "gamble" and losing money every day. Inflation is eating into my ability to be able to "retire" again, so I guess I'll keep working as long as I can.
Did the 70s have this combination of record or near-record housing prices along with interest rates doubling in the span of ten months or so? Along with inequality not seen at least since the 1920s, maybe the Gilded Age?
Yes, there are parallels, but this is a condensed timeline for the 70s issues.
Things were tighter in the 70's to begin with. People lived much more basic lives. Growing up, it was a rare treat for my family to eat at a restaurant and when we did we went to a place like Pizza Hut. Kids spent their summers riding bikes, swimming at the community pool and catching fire flies. We did our own housework and yard work, washed our own cars, painted our own nails...
People seem to have a lot more disposable income these days, hire more done, spend more on stuff in general. So inflation hasn't hurt the average family in quite the same way that it did back in the 70's.
I was just a kid back during the Carter years but I remember sitting in the long gas lines waiting to get the car filled up. I also remember pinching pennies, mending clothes and wearing hand me downs. And my family was solid middle class.
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