Retirement questions

[wilkersk]

Powell has no training in economics, he earned a degree in politics.
That tells you everything you need to know.

Yeah, But Powell has a fair amount of experience in monetary policy, and a reputation as a "consensus builder" (ie. a leader that uses his experts in the decision process). And, the new vice chair has a Masters and Phd in economics. So, there's that.

I think I'll hold off on condemning Powell until this "inflation" scare has a little more history.

 

[Clip4]

Two decades ago I got sold on an alternative retirement scheme instead of the State System that everyone's used since Hector was a pup. They guys selling me claimed I'd be a millionaire by the time I retired and I'd have way more money. No pension, no Social Security.

Fat forward 20 years and they were right about one thing, I am a millionaire. Its just that a million dollars isn't what it once was.

Oh well, I like my job and its easy. No retirement for the Steingar, at least not for a long time.

The really big mystery in all this is how long I'm likely to stay above the grass. Papa Steingar had Alzheimer's when he was the age I am right now. He was dead before he hit 70. Mama Steingar lost her battle with cognitive decline early in her 80's. Could be I've only a couple decades left to do whatever I'm going to do.

On the other hand, Papa and Mama Steingar had horrid lifestyles, full of bad food and free of exercise. Papa Steingar smoke and drank even more than me, way more. Those in the Tribe of Steingar who remained free of obesity and other evils of a middle class lifestyle lived into their 90's. Difficult planning indeed when the error bar is 30%.

As for @AKBill, it really doesn't sound like you've enough money. Were I you I'd work as long as I could, save up more. Way more. 20 years ago a million dollars was a lot of money. It isn't anymore, what's it going to look like 20 years from now?

I suspect I'll eventually become an economic refugee in some Central American country with gorgeous views, sketchy government and inexpensive rentals. I'll probably die of something that could be cured here, but as least I'll live well before that event.

You were lucky you haven’t become disabled before retirement. That is what those planners do not tell you about opting out of state plans. Under my state plan I would have retired with more if I had become disabled.

 

[Jim K]

Yep, gotta have a good balance, as there are no guaranties.

At one end there are those that spend everything they make and then some; going into debt for lifestyle. At the other end are those that live frugally and saving everything. Problem is when the first one lives long, and they have to work until they drop. Other problem is when the second one dies young, never getting a chance to enjoy their savings. The goal should be to find a good balance between saving for the future and enjoying your income now.

My wife and I save well. We're not terribly frugal, but we don't live beyond our means either. My car is nice, but not expensive, I bought it used. I've bought only two new cars in my life, and one of those was a lower end model with a manual transmission and I kept it over 13 years.

We had a big house, that we down-size from almost 3 years ago, plus we travel, and the kids went with us when they lived at home. I also fly small planes. That's most of our "enjoy now" spending. Our other hobbies are fairly inexpensive; running, tennis, cycling, reading, movies, cooking.

We try to balance out saving for retirement and enjoying our money now. We see too many stories of people dying young; 40's, 50's, 60's. Can't put off spending money too long or you might put it off for your kids to spend.

Fortunately both of us had good careers. She retired in August. I have an early retirement date next summer. I'll take a 6 month sabbatical (getting 48 weeks of pay plus bonus) and then decide if I want to go find some other work to do or stay retired. We want to travel while we're still healthy and active enough to do it easily.

For the first dozen years of our marriage, I was a budget tyrant. We saved very aggressively, and I worked very aggresively. A couple years ago, it became apparent that we were almost to the point that I wouldn't HAVE to work any more. We could live hand-to-mouth until retirement age and still retire comfortably. That's when we decided it was time to enjoy life a bit more. The budget is still there, but it's a bit more relaxed. We bought the plane, travel more, I pay to have more stuff done to free up a little more time to do the travel. I've essentially stopped saving for retirement, although we are still putting a decent amount back into the farm so the net worth is still growing. Honestly if I thought none of the kids would have any interest in the farm I'd probably move out of Illinois and find a flying job. It's a good feeling to know that if this thing fell apart we'd be just fine.

All that to say I agree the balance is crucial, and the younger you start saving the easier it is to get there. If I kept up the same pace I was going I could probably afford a Citation and somebody to fly it by the time I hit 65...but flying my kids around in little piston planes is WAY more fun.

 

[kayoh190]

Interesting thread. It's nice to get some insight from those already retired or on the cusp. I still have a long way to go, but I'm a planner by nature and the hardest part of this process is wrapping my brain around what my spending habits might be decades from now. It feels like pure guesswork, so the instinct is to simply save as aggressively as comfortably possible and let the chips fall where they may once I punch out. But then I hear that people tend to overestimate their spending habits in retirement (which makes sense) and I wonder if I'm being too aggressive. Obviously there's some ideal middle ground, but most of the time I feel like I'm just throwing a dart at the dartboard while blindfolded.

 

[Velocity173]

Yep, gotta have a good balance, as there are no guaranties.

At one end there are those that spend everything they make and then some; going into debt for lifestyle. At the other end are those that live frugally and saving everything. Problem is when the first one lives long, and they have to work until they drop. Other problem is when the second one dies young, never getting a chance to enjoy their savings. The goal should be to find a good balance between saving for the future and enjoying your income now.

My wife and I save well. We're not terribly frugal, but we don't live beyond our means either. My car is nice, but not expensive, I bought it used. I've bought only two new cars in my life, and one of those was a lower end model with a manual transmission and I kept it over 13 years.

We had a big house, that we down-size from almost 3 years ago, plus we travel, and the kids went with us when they lived at home. I also fly small planes. That's most of our "enjoy now" spending. Our other hobbies are fairly inexpensive; running, tennis, cycling, reading, movies, cooking.

We try to balance out saving for retirement and enjoying our money now. We see too many stories of people dying young; 40's, 50's, 60's. Can't put off spending money too long or you might put it off for your kids to spend.

Fortunately both of us had good careers. She retired in August. I have an early retirement date next summer. I'll take a 6 month sabbatical (getting 48 weeks of pay plus bonus) and then decide if I want to go find some other work to do or stay retired. We want to travel while we're still healthy and active enough to do it easily.

Yep, unfortunately in my job I see a lot of people pass away much younger than most would expect. Everyone wants to believe they'll live to be 100 but I see a lot in their mid 40s and 50s passing away from various non trauma causes. The job has given me a clarity on my own mortality and not to put all my eggs in one basket. I always say, I’d rather have $100,000 at 45 and have fun than save all my pennies to have $1,000,000 at 65 and possibly not being able to enjoy it. Don’t get me wrong, odds are I’ll live to the average life expectancy age in the US…but I ain't counting on it.

 

[Mikey B]

I'll add a couple more comments, for what they're worth. My perspective: 68 years old, married, retired (after years of planning, then unretired when things went south, then retired again), now on Social Security and Medicare.

As you look ahead at retirement, trying to guess how long you will live, what you'll do with your time, how much $ you'll need for expenses, etc., remember this: the single worst thing you can do is to outlive your money. Some folks collect Social Security as soon as they can, not because they need it then, but because they don't want to feel ripped off if they don't live past the "break-even" point. Guess what -- you'll be dead, and won't care. To me it was much more important to look at the risk if you do live a long time. And if you're married, the odds are good that at least one of you will live into your 90s, so prepare for that.

 

[Bill]

the single worst thing you can do is to outlive your money.

That's where good projection curves and monte carlo simulations are important. How long are the funds projected to last? How well does the plan survive 1000 scenarios based on past market and economic history/performance?

 

[Clip4]

Yep, unfortunately in my job I see a lot of people pass away much younger than most would expect. Everyone wants to believe they'll live to be 100 but I see a lot in their mid 40s and 50s passing away from various non trauma causes. The job has given me a clarity on my own mortality and not to put all my eggs in one basket. I always say, I’d rather have $100,000 at 45 and have fun than save all my pennies to have $1,000,000 at 65 and possibly not being able to enjoy it. Don’t get me wrong, odds are I’ll live to the average life expectancy age in the US…but I ain't counting on it.

I see a lot of people today that are out living their retirement savings who had that philosophy. If you are willing to work until you die, have fun I suppose.

 

[Bill]

I see a lot of people today that are out living their retirement savings who had that philosophy. If you are willing to work until you die, have fun I suppose.

Working until I die would absolutely kill me. No thanks.

 

[Clip4]

I'll add a couple more comments, for what they're worth. My perspective: 68 years old, married, retired (after years of planning, then unretired when things went south, then retired again), now on Social Security and Medicare.

As you look ahead at retirement, trying to guess how long you will live, what you'll do with your time, how much $ you'll need for expenses, etc., remember this: the single worst thing you can do is to outlive your money. Some folks collect Social Security as soon as they can, not because they need it then, but because they don't want to feel ripped off if they don't live past the "break-even" point. Guess what -- you'll be dead, and won't care. To me it was much more important to look at the risk if you do live a long time. And if you're married, the odds are good that at least one of you will live into your 90s, so prepare for that.

I don’t see where it matters if you are dipping into retirement savings to delay social security.

 

[Pugs]

Obviously there's some ideal middle ground, but most of the time I feel like I'm just throwing a dart at the dartboard while blindfolded.

About 15 years ago we consolidated everything except my wife's Fed TSP with Fidelity. It helps my companies 403B is managed by them. Quickly it was valued at a point where Fidelity appointed us an "advisor." I say advisor in quotes because she did give us some advice about where to invest but mostly what she did was set us up with goals and using the Fidelity tools to track progress plus an annual (or whenever we wanted) meeting to discuss progress and any changes. No cost.

We looked at how much we needed monthly in today dollars and inserted that # and assumed a long-term underperforming market and just tracked against that value - We hit it several years ago and are now at a point where a 30-40% market downturn wouldn't affect our plans at all. Doing something like that, even if you use a myriad of free tools that are our there, gave us great confidence that we were planning well and evidence to back it up.

 

[wayne]

Yep, unfortunately in my job I see a lot of people pass away much younger than most would expect. Everyone wants to believe they'll live to be 100 but I see a lot in their mid 40s and 50s passing away from various non trauma causes. The job has given me a clarity on my own mortality and not to put all my eggs in one basket. I always say, I’d rather have $100,000 at 45 and have fun than save all my pennies to have $1,000,000 at 65 and possibly not being able to enjoy it. Don’t get me wrong, odds are I’ll live to the average life expectancy age in the US…but I ain't counting on it.

We've had a few very sad cases at our office. I'm in IT, so not hard manual labor, but rather sitting in chairs, discussing, thinking, typing. So, not hard on the body.

Several years ago we had someone retire. I didn't know him well, more knew of him. He worked from home 3 or more days a week like many of our technical teammates did even pre-COVID. Well, he was supposed to stop by and drop off his laptop, but didn't. Everyone thought, "busy running errands". His manager called, but didn't get a reply. After about a few days of calls and no replies the manager found some family contact info, the retiree's father and called him. His father stopped by his home and found his son dead. He retired, and hadn't even turned in his laptop and died.

A few years ago I had a teammate on one of my teams that was planning on retiring at the end of November on his 65th birthday. He hadn't filed for it yet, but that was his plan. Early in August of that year he had a heart attack. He got through it. He wanted to get back to work, but I could hear in his voice he was tired. I told him to take whatever time he needed. A couple weeks later he called and sounded much better, pretty much sounded normal. Said he'd been driving his wife around on errands and was ready to come back; I don't think he was supposed to be driving yet. I told him I wanted his doctor to sign off on coming back, mostly thinking the doctor would push his to wait, relax and recover a little more. His neighbor called me late the next morning, he had passed away earlier that morning. I had just talked with him the afternoon beforehand.

It's those types of events, and others you've seen, that drive my wife and I to enjoy our money now. We're not going to blow through it all as we want it to last, but we're not waiting until "sometime in the future" to start spending it. Nope. No guarantees.

My parents are still kicking and they will be 80 years old next year. I can see my dad is slowing down. I think it's mostly his back, but there could be other things. Otherwise they are doing well. On my mother's side of the family she has relatives that live into their 90s and one that made it to 103. As they say, if you want to live long, pick your parents well.

 

[MooneyDriver78]

Interesting thread. It's nice to get some insight from those already retired or on the cusp. I still have a long way to go, but I'm a planner by nature and the hardest part of this process is wrapping my brain around what my spending habits might be decades from now. It feels like pure guesswork, so the instinct is to simply save as aggressively as comfortably possible and let the chips fall where they may once I punch out. But then I hear that people tend to overestimate their spending habits in retirement (which makes sense) and I wonder if I'm being too aggressive. Obviously there's some ideal middle ground, but most of the time I feel like I'm just throwing a dart at the dartboard while blindfolded.

It’s not guesswork, you’ll end up spending based on how much you save. So save away…
If you don’t have enough money, you’ll spend your retirement years wishing you could afford to fly.
Don’t worry about having too much, as long as you’re interested in aviation, you’ll find a way to spend it. Maybe a future TBM or Citation is in your future.

 

[GaryM]

the single worst thing you can do is to outlive your money.

My wife and I, rapidly approaching retirement, recently spent a month creating and populating the mother of all estimated retirement expense spreadsheets. I looked at a bunch of them online, consolidated them, and added in more rows specific to us (how is it that none of the online retirement expense calculators include 'aircraft' as an expense?). We ended up with something like 60 expense categories. We spent a lot of time looking up or generating the best numbers we could for the place we want to retire to, in every category, both baseline and contingency (what we thought would be the most we would spend in a category if we were surprised by added costs). I took baseline totals plus half of the contingency (since we'd be unlikely to hit the worst case numbers in every category) as the most likely estimate of what we'd be spending in retirement, at least for the first decade.

It was a lot of work, and early in retirement our expenses are projected to be higher that what we spend now while working, but the retirement estimate includes a LOT of recreational travel, buying a big RV, and planning on a retirement home in what has become a very hot local market, so the new smaller home will cost quite a bit more than the current enormous home. So the planned expenses were eye-opening, but we feel we now have a good handle on the worst-case, with lots of elective expenses that could be trimmed if things don't go to plan.

With the new numbers, two financial planners doing the modeling for us say we can retire next year. With the old numbers, they said we could have retired a year ago, so spending time working up worst-case expense numbers we think are pretty solid was worth the effort for us.

 

[weilke]

Now that I have learned on this thread 'how money works', I have decided that the only way to retire is as a billionaire.



I'll keep it in a safe deposit box knowing that I have 'a billion dollars in the bank'. If I ever want to cash the check, I'll just put a billion in the bank account and it's all a-ok.

 

[Mahneuvers]

Now that I have learned 'how money works....

Now...that...is...funny!

 

[Everskyward]

I think another thing people are leaving out is how much your identity and purpose in life is tied to your job. Both my father and stepfather declared they were never going to retire, and they didn't. My father died at 54 and my stepfather in his late 60s. Both were still working. My mom retired when she got married the second time in her early 60s and lived to 97. Granted, the last few years were expensive and not wonderful.

I'm glad I retired early, but I often get asked if I miss flying. Maybe for a second, but the job, no. I also am not tempted to do it recreationally. I want my hobbies to be less regulated.

I don't think the OP has that issue, though. It seems from his post that he is not wedded to his job.

 

[Bell206]

I'm a planner by nature and the hardest part of this process is wrapping my brain around what my spending habits might be decades from now. It feels like pure guesswork, so the instinct is to simply save as aggressively as comfortably possible

FYI: The place I started 30 years ago was determining what my actual "spending habits" or expenses were at that time. In some cases I tracked those costs down to the nickel. As to investing be as aggressive as you can early in life. Compound interest is your biggest ally when starting early. Then as time passes you can start to get an idea on how your money is growing and how much money you are spending. These are not guesses or recommendations but the actual hard cash you have working for you. Then with that known foundation of your personal costs you can start plugging in what additional costs you may want to pursue in retirement. I didn't stop tracking these items until the day I retired. Then it was on to Plan B for post-retirement.

 

[GaryM]

I think another thing people are leaving out is how much your identity and purpose in life is tied to your job.

Much earlier in my career, I had a wonderful job at a company that was abruptly shut down by the corporate parent. We were all sent to an outplacement service.

I vividly remember a career counselor telling a very depressed group of former employees in the orientation session that 'Men tend to think of their job as who they are. Women tend to think of their job as what they do. The women are correct.'

The point being that you don't want your job to become your identity. You're much more than that.

 

[AKBill]

It is nice to see the POA community here offer good ideas and suggestions related to the topic I posted. I've had a few PM's that addressed the subject with good information on how to proceed.

Thanks everyone for your insight.

 

[weilke]

I think another thing people are leaving out is how much your identity and purpose in life is tied to your job. Both my father and stepfather declared they were never going to retire, and they didn't. My father died at 54 and my stepfather in his late 60s. Both were still working. My mom retired when she got married the second time in her early 60s and lived to 97. Granted, the last few years were expensive and not wonderful.

Depends a bit on what you do. In my career, there are ample opportunities to cut back to part-time work while still earning a good income and receiving benefits. I enjoy what I do, and if I had an opportunity to do it two days a week and at a relaxed pace, I can continue pretty much indefinitely (and some in my field do). So once I hit the number that I have in mind, I have no reason to 'retire', I'll just cut back to a part-time job in a location where I want to be.

 

[Half Fast]

Now that I have learned on this thread 'how money works', I have decided that the only way to retire is as a billionaire.

View attachment 102745

I'll keep it in a safe deposit box knowing that I have 'a billion dollars in the bank'. If I ever want to cash the check, I'll just put a billion in the bank account and it's all a-ok.

I assume you will be running for Congress soon?

 

[Velocity173]

I see a lot of people today that are out living their retirement savings who had that philosophy. If you are willing to work until you die, have fun I suppose.

Oh I don’t plan on working til I die. I’ll be retiring at 62. Obviously I’ll downsize but If I cant live comfortably on military pension and SSA, something has gone seriously wrong.

What I’m saying is, I don’t compromise my way of life today in hopes that I’ll get to enjoy a higher standard of living in retirement. Example, friend of mine flys EMS for another company. Coworker of his did the usual 20+ military, 20+ EMS and retired at 62. I plan on doing the same. Anyway, this guy died a year later of brain cancer. So he worked hard all his life and was hoping to roll into retirement and live the good life only to have those dreams come to an abrupt end. My friend thought about that scenario and said, I’m gonna start living life now vs later. He went off and bought a $70K RV that he originally planned on getting in retirement and has been driving all over the country with his wife. He starting spending more on enjoying life now vs later.

So that’s my philosophy, spend (responsibly) it while I can now because there’s no telling if I’ll be alive to enjoy it late in life. Or, might not even be physically healthy to truly enjoy it. Like I said, in my job you can bet I see a lot of people whose end came a lot sooner than they imagined. I’m not taking any chances.

 

[steingar]

Most of my colleagues work until they're septuagenarians or more. I know a couple that worked until shortly before they died, and I know of quite a few more. One of my septuagenarian colleagues just retired, surprising the heck out of me. He is going to invest his time and money into a company that sort of does what he did for a living. In my line of work you are the job.

I've always been a bit less so, probably why I suck at it. Still, what I do is easy and very rewarding, so I might just keep doing it. Can't really see the down side, especially since if things are as I think they will be I'll not be able to fly after I retire anyway.

 

[Sam D]

Yeah, But Powell has a fair amount of experience in monetary policy, and a reputation as a "consensus builder" (ie. a leader that uses his experts in the decision process). And, the new vice chair has a Masters and Phd in economics. So, there's that.

I think I'll hold off on condemning Powell until this "inflation" scare has a little more history.

Regardless of their education, each chairman since Greenspan has basically done the same thing -- akin to forest management practices in the west in the 20th century. The problem is we've got a lot of fuel built up in the last 20+ years.

 

[Matthew]

Interesting thread. It's nice to get some insight from those already retired or on the cusp. I still have a long way to go, but I'm a planner by nature and the hardest part of this process is wrapping my brain around what my spending habits might be decades from now. It feels like pure guesswork, so the instinct is to simply save as aggressively as comfortably possible and let the chips fall where they may once I punch out. But then I hear that people tend to overestimate their spending habits in retirement (which makes sense) and I wonder if I'm being too aggressive. Obviously there's some ideal middle ground, but most of the time I feel like I'm just throwing a dart at the dartboard while blindfolded.

In our case, we started early. 401(k)s with the company match plus at least 10% (sometimes more) contributions each check, and keeping the money in some reasonable funds and we ended up with a pretty good return and nest egg after all those years. Something to think about - we are also "pack rats" if we had anything leftover, we'd save it. For that, we ended up putting that cash into Roth IRAs, and I'm glad we did. Now we can withdraw from those accounts and since they've already been taxed it doesn't count as taxable income for certain things.

Many accounts now have the "retire in 20xx" funds that handle rebalancing inside the fund for you.

I can't recommend and investment strategy, but whatever you do make sure to rebalance now and then to keep the percentages where you expect.

Figure that the rule of thumb is that withdrawing 4%/year will mean you won't run out of savings. This year is a problem since inflation is running at 6%, but hopefully that won't be a forever thing.

The other rule of thumb is you'll need 80% of your employment income to maintain your standard of living in retirement. I'm finding out (over the last 3 months), that may be generous, but it's safe. So figure what you're making now, and either settle on 100% or 80% ($x). Then work backwards to see how much you'll need in your retirement fund so that 4% of $y = $x. So it's x/0.04, and that's the simple number to reach. That number, however, doesn't account for other funds, like Social Security, so it's just a little more complex that that. You can use Excel to figure out how much to save each paycheck by assuming some reasonable rate of return on your 401(k) and any IRAs, I can't remember the Excel formula for that right now.

If you have some spreadsheets and are pretty good with tinkering with numbers, you can get a pretty good idea of your progress.

I had the same thoughts you did, "are we saving too much?" and missing out on things because of it? But we found a good balance between saving and living, and it looks like we can pretty much not worry about money anymore.

 

[MooneyDriver78]

The other rule of thumb is you'll need 80% of your employment income to maintain your standard of living in retirement. I'm finding out (over the last 3 months), that may be generous, but it's safe. So figure what you're making now ($x), and either settle on 100% or 80%.

That’s a silly rule of thumb IMO. Before you retire, you’re probably (hopefully) saving a significant percentage of your income. So if saving 50% of your income, you won’t need to continue saving after you retired, so at worst you’ll need 50% of your income assuming same rate of expenses.
If you can’t save a significant percentage (say >25%), I would be concerned that your retirement is in jeopardy because of your spending discipline. You need to be able to control your spending, unlike the government, you can’t print money.

 

[Matthew]

That’s a silly rule of thumb IMO. Before you retire, you’re probably (hopefully) saving a significant percentage of your income. So if saving 50% of your income, you won’t need to continue saving after you retired, so at worst you’ll need 50% of your income assuming same rate of expenses.
If you can’t save a significant percentage (say >25%), I would be concerned that your retirement is in jeopardy because of your spending discipline. You need to be able to control your spending, unlike the government, you can’t print money.

Yeah, that 80% number is pretty high, at least that's the way it's been for us so far. And it really gets lower when SS kicks in. But that's the one that a lot of quick and dirty calculators use.

 

[ColoPilot]

... You need to be able to control your spending, unlike the government, you can’t print money.

Well, you could print your own money, but it better be really good or the gov't will provide you with a special 10-20 year retirement program.

 

[MooneyDriver78]

…or the gov't will provide you with a special 10-20 year retirement program.

Free housing, free health care, recreational activities….what’s not to like?! ;-)

 

[Half Fast]

Free housing, free health care, recreational activities….what’s not to like?! ;-)

Y'know, that might be a better retirement plan after all!

 

[Half Fast]

I recommend this book:

https://www.amazon.com/You-Retire-S...t=&hvlocphy=9061312&hvtargid=pla-493259108818


It will give you some good perspectives on retirement. It's not really an investment book per se, though it does address financial planning. It's really more focused on figuring out what you will need and some options for achieving it. The neat thing is he works from a standpoint of achieving happiness in retirement, not just monetary analytics, and happiness can be had for less money than you might think.

One of the more interesting graphs in the book is from survey data that he developed in cooperation with Georgia Tech. They found that, as you might expect, happiness increased with retirement income. BUT, what wasn't quite so expected was at how low a value the happiness vs dollars curve began to flatten. People who were making ~$80k/yr in retirement (book was written in 2014) were significantly happier than those with an income of ~$40k, but somewhere around that 70k-80k mark the curve became flatter. Those making ~$150k were only slightly happier than those at the $80k level.

Once you're above a certain level, your needs are met and you can enjoy life. When you're able to eat out whenever you choose, take a few trips a year, splurge on a purchase once in a while, drive a decent car, etc., you relax a bit and life is good. That can be a pretty low threshold.

For me, I've found that experiences bring more happiness than possessions. And experiences don't have to cost a fortune. One person might stay in high-dollar hotels and one might stay in a Motel 6, but if they're both vacationing in the same locale, seeing the same sites, going on the same tours, etc., the difference in their pleasure might not be that great. The Grand Canyon is an awsome sight whether you go there in a Mercedes or in a Ford.

I'm enjoying flying my baby Beech. Would I be happier in a plane costing 10x or 100x as much? Sure, but certainly not 10x or 100x happier. Would a Lambo make me 100x happier than my Challenger? Nope.

Spend a little time thinking about what you will really need for your retired life to be a happy one. It might be less than you imagine.

 

[Half Fast]

I think another thing people are leaving out is how much your identity and purpose in life is tied to your job.

This is true, but maybe I can offer a bit of perspective. The job shouldn't be who you are, but your profession or trade might be.

A few years before I retired, this was worrying me a bit. Then I realized that it's okay for who you are to be tied to your profession without being tied to the particular job you hold. I am an engineer. I am still an engineer even though I no longer practice at Lockheed. "Engineer" is a big part of who I am; I dedicated a sizeable chunk of my life to learning my profession and it influences how I think, how I act, etc. That's not a switch I can turn off, and I don't even want to turn it off. I'm quite proud of being an engineer and I think that's healthy.

And even though I'm retired, I can continue doing engineering if I choose. I've been doing a little pro bono practice and I expect to do more in the coming years plus I've done a little volunteering for the IEEE. It keeps me engaged and contributing. I know other retired engineers who serve on standards committees or do a little consulting work or some mentoring, etc.

 

[Rcmutz]

FYI: The place I started 30 years ago was determining what my actual "spending habits" or expenses were at that time. In some cases I tracked those costs down to the nickel. As to investing be as aggressive as you can early in life. Compound interest is your biggest ally when starting early. Then as time passes you can start to get an idea on how your money is growing and how much money you are spending. These are not guesses or recommendations but the actual hard cash you have working for you. Then with that known foundation of your personal costs you can start plugging in what additional costs you may want to pursue in retirement. I didn't stop tracking these items until the day I retired. Then it was on to Plan B for post-retirement.

I did the same thing about 10 years before I thought I wanted to retire. Now in retirement for 6 years, our monthly expenses are within a couple hundred dollars of prior to retirement. The only way you will find out what the minimum you can live on is to track your expense prior to retirement. What my analysis showed is that we can live on my pension and wife’s SS if required. All the retirement savings is for playing. Problem is I’m to pragmatic to go out and buy a different airplane! LOL

 

[Oldmanb777]

I think another thing people are leaving out is how much your identity and purpose in life is tied to your job. Both my father and stepfather declared they were never going to retire, and they didn't. My father died at 54 and my stepfather in his late 60s. Both were still working. My mom retired when she got married the second time in her early 60s and lived to 97. Granted, the last few years were expensive and not wonderful.

I'm glad I retired early, but I often get asked if I miss flying. Maybe for a second, but the job, no. I also am not tempted to do it recreationally. I want my hobbies to be less regulated.

I don't think the OP has that issue, though. It seems from his post that he is not wedded to his job.

That said volumes............... I loved flying, but the job not so much. Loved the people, the exhaustion not so much. etc, etc.

 

[s35pilot]

I haven't read through all 5 pages, but I wanted to add something I heard about for long term care expenses. I haven't explored it so I can't vouch for the workability of it. If your house is paid off pay some money for a reverse mortgage line of credit. The bank doesn't get any rights to your house unless or until you take some money on that line of credit. Just keep the line of credit in your back pocket in case you ever need it. If you ever do need it there are no payments on the loan, and you keep your house until you die.

 

[judypilot]

This is true, but maybe I can offer a bit of perspective. The job shouldn't be who you are, but your profession or trade might be.

A few years before I retired, this was worrying me a bit. Then I realized that it's okay for who you are to be tied to your profession without being tied to the particular job you hold. I am an engineer. I am still an engineer even though I no longer practice at Lockheed. "Engineer" is a big part of who I am; I dedicated a sizeable chunk of my life to learning my profession and it influences how I think, how I act, etc. That's not a switch I can turn off, and I don't even want to turn it off. I'm quite proud of being an engineer and I think that's healthy.

And even though I'm retired, I can continue doing engineering if I choose. I've been doing a little pro bono practice and I expect to do more in the coming years plus I've done a little volunteering for the IEEE. It keeps me engaged and contributing. I know other retired engineers who serve on standards committees or do a little consulting work or some mentoring, etc.

You said exactly what I was thinking as I read this thread. I am a geologist. I retired 10 years ago, but I'm still a geologist and I'm still doing geology. I'm just doing it on my own terms. I love it because I love being outdoors and doing geology gives me all the motivation I need to keep moving and stay in shape, which is more important the older you get. I also do a lot of what we loosely call service; currently I'm president of the foundation associated with one of my professional societies. It's nice to continue to use all the skills I built over my long career.

On another topic, I think sometimes people make the mistake of thinking the money they retire with is all they'll ever have. Invested properly and spent wisely, it's not, it will keep growing, even despite the occasional setback in the economy. So one question here is, is $1M enough? I think it can be. Coupled with Social Security, reasonable investments, and a conservative withdrawal rate, it could be. I guess it depends on whether you want to leave money to your heirs and how expensive you want to (or have to, depending on where you live) live.

 

[Daleandee]

It's those types of events, and others you've seen, that drive my wife and I to enjoy our money now. We're not going to blow through it all as we want it to last, but we're not waiting until "sometime in the future" to start spending it. Nope. No guarantees.

Many years ago I remember reading an article a woman had written about her mom always saving the best dishes for a certain occasions, not wearing her best clothes as she was saving them for special days, keeping the new car in the garage and driving the old one to keep the new one from getting worn out. As you might guess the mother died and left a lotta nice stuff for other people to enjoy but she didn't take the time to enjoy it herself.

You are correct, The wife and I will keep care over what we have earned but there is a time to enjoy the fruit of your labors before you get too old and decrepit. I'm fairly frugal and at times I squeak when I walk but I have no intentions of leaving the earth with monies left for others to fight over.

 

[sourdough44]

It sounds like you plan to stay in AK? I do like AK, if you have family, friends & familiarity there, no reason to leave. I see some that retire, then feel the need to relocate full time, 4-5 years later they come back. Not to say it’s always wrong, depends on situation, location & strength of roots.

The relative had an acquaintance from work retire last June, she was 60, no known, obvious health issues. She died the end of June, just never know. It wasn’t Covid.

Most I know over 80, deal with endless health issues. Those health issues often start a fair bit sooner.

 

[Bell206]

So one question here is, is $1M enough? I think it can be.

And so do I. But I think what's more important is when you ask that question: before or after retirement. While I believe that answer is very subjective to the person, just like what is airworthy, I've found where a person is in their journey affects that answer. However, I think the core question when it comes to retirement is which risk do you prioritize first: having enough money or having enough health. For me, I accepted a lot more risk that my money would be there, than if my health would be for the simple reason I could manage the money risk. To me it is/was all about managing the risk vs managing toward a target wealth number. As they say money can't buy you an extra day of life.