Anyone retire a few years before taking SS and pension

[RP]

Originally Posted by tbeltrans

This is an excellent point! Back in the 80's, at work we used to go out to eat every day for lunch. "We" refers to engineers who were all close to 6 figure income at the time. However, toward the end of the 80s and into the 90s and beyond, almost everybody has been bringing their lunch and not going out to eat at all (except special occasions such as somebody leaving). The reason is that the cost of going out to eat became prohibitive. This was a good thing as far as I am concerned because it got me out of that habit and expectation long before retiring.

In retirement, my wife and I budgeted going out to eat once a week. Normally, we go out for lunch because that is MUCH less expensive than dinner. If we go out to dinner, we look for those discounts such as "buy one, get one half price or even free".

Going out is expensive for a retired person unless you are going for a walk in the park, to the library, or some other free activity. It is rather surprising how much everyday activities can cost. We don't think about that when working, because there is always another paycheck coming soon enough, where in retirement, pensions and SS only come once a month and are usually not equivalent to a full time working pay check. On first retiring, we have had to learn that and make appropriate adjustments. Life is always a series of trade-offs, and in retirement, these are certainly worth it, but it is a lifestyle change.

Tony

Great point, Tony. Here's this one and some other ways to easily lower your retirement spending...

1) Be proud to ask for Senior discounts at movies and restaurants - you earned them

2) Forgo going out to movies and wait til it comes out on video

3) Plan to keep your car longer if you're someone who has leased or frequently traded in.

4) See if you're eligible for any cell phone discounts or if you can get by with less expensive features.

5) Give up your land line if you really don't need it.

6) Decrease the amount you eat out.

7) Check to see if you can get less expensive car insurance.

8) Check your options for TV and internet and see if there's a less expensive alternative.

9) Look for inexpensive entertainment and/or reduced/free college classes. Borrow library books rather than purchasing.

10) Go to Open Mics and order water or soda. For that matter, use this as an opportunity to give up expensive, unhealthy substances.

11) This one is kind of controversial, and I know that everybody isn't going to agree. It involves home ownership vs. renting. A number of you have worked toward and have mentioned that you've either paid off or are close to paying off your mortgage. You should be congratulated for that. However, don't automatically assume that home (or condo) ownership is the best way to go. It's always been part of the American Dream, but 2008 should have taught us that it's not the no-brainer that it used to be. There are lots of hidden costs involved in home ownership, and if post retirement funds are tight and/or you're at a residential crossroads then don't automatically assume that being a renter doesn't have its own set of advantages.

12) Seven U.S. states currently don't have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. If you're thinking about moving after retiring then consider one of the above...

[tbeltrans]

This is a really good and informative thread. Is it possible to have it marked so it always sits near the top of the Open Mic sub-forum? With many people thinking about retirement, regardless of current age (the younger, the better so as to start preparing earlier), this thread makes for a good reference.

It is not always easy to get real-life experiences that contain helpful material for the rest of us. This thread does that quite well, and the subjects and answers being brought up are not tied to a specific time, but are general enough to be useful for quite some time to come.

Tony

[Gitarre]

Originally Posted by RP

Great point, Tony. Here's this one and some other ways to easily lower your retirement spending...

1) Be proud to ask for Senior discounts at movies and restaurants - you earned them

2) Forgo going out to movies and wait til it comes out on video

3) Plan to keep your car longer if you're someone who has leased or frequently traded in.

4) See if you're eligible for any cell phone discounts or if you can get by with less expensive features.

5) Give up your land line if you really don't need it.

6) Decrease the amount you eat out.

7) Check to see if you can get less expensive car insurance.

8) Check your options for TV and internet and see if there's a less expensive alternative.

9) Look for inexpensive entertainment and/or reduced/free college classes. Borrow library books rather than purchasing.

10) Go to Open Mics and order water or soda. For that matter, use this as an opportunity to give up expensive, unhealthy substances.

11) This one is kind of controversial, and I know that everybody isn't going to agree. It involves home ownership vs. renting. A number of you have worked toward and have mentioned that you've either paid off or are close to paying off your mortgage. You should be congratulated for that. However, don't automatically assume that home (or condo) ownership is the best way to go. It's always been part of the American Dream, but 2008 should have taught us that it's not the no-brainer that it used to be. There are lots of hidden costs involved in home ownership, and if post retirement funds are tight and/or you're at a residential crossroads then don't automatically assume that being a renter doesn't have its own set of advantages.

12) Seven U.S. states currently don't have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. If you're thinking about moving after retiring then consider one of the above...

You forgot New Hampshire! It's okay, we're pretty small but it's nice here.

[RP]

Originally Posted by Gitarre

You forgot New Hampshire! It's okay, we're pretty small but it's nice here.

Whoops....

And residents of New Hampshire and Tennessee are also spared from handing over an extra chunk of their paycheck on April 15, though they do pay tax on dividends and income from investments.

While my situation isn't exactly like the OP's,I did some serious soul searching and pulled the plug back in October. I too will be 62 in March,but I will be drawing SS at 62 to help out.

I have quite a bit (I'm sure it's never enough) invested that will fund me until I depart this life,or so my advisor tells me.

For me it was the relentless pressure of a high level mgt job that took a serious toll on my health. After surviving a Widow Maker and subsequent open heart surgery, I decided that my remaining years were going to be spent with my family coming first.

I guess we'll see, but I am at peace with my decision.

[RP]

Originally Posted by Ron614-CE

I guess we'll see, but I am at peace with my decision.

Bottom line is there is no one decision that fits all situations for all people. I decided that all I could do was make a decision as to when to retire and when to start Social Security and not look back....

[Mr. Jelly]

I've retired from my profession of 32 years and work a part time job. My wife and I are 63, haven't started SS and are waiting until we are 66 to fully retire. We have no loans and can easily live off our future SS and pensions. But I need to do something with my 401K and have an appointment next week with some people. I am not looking forward to it as it'll probably be a waist of time. But I might learn something. So I am trying to figure out what to do with the 401K in a couple of years. It is hard to figure out what's best. Our thoughts range from very conservative to almost stupid but fun. I just want to make the right decision.

[SFCRetired]

Originally Posted by TBman

The in bold says it all. You have a boat load of money in the bank. Do you want to blow through a lot of it over the next few years just for living expenses before SS and pension kicks in or just work so you have it to last until you are 100?

Solution - get a low pressure position that pays living expenses. Use some savings to finance fun.

That's what I did, sort of.

Of course I retired from the military so I get a small monthly pension and I have medical coverage as well. I worked at the University of Missouri, and if anyone has watched the news this past year and saw all the issues they have had, I finally had enough. They do give me a small retirement but it's about enough to cover a car payment, but it is something. I was going to get a part time job for spending money but after applying for a few part time jobs I decided the heck with it.

So I have all of my monthly expenses and my monthly allowance taken care of and I will use my savings for anything that may pop up. Of course my wife still works and makes good money but we keep our money separate and share all household expenses equally.

I am 58.

The thing you have to do is prepare for the unexpected. And I WILL start drawing my SS at 62. Heck I may not live to reach 62 or I may not reach 66 1/2. If you can survive and keep up your lifestyle and retire young, then do it. Life is far to precious to give it all to someone else. Unless of course you are a workaholic.

My dad was forced into retirement by a company that had bought out the company he worked for, for over 30 years. To hell with these people, you don't owe them anything. Enjoy your life on your terms, not someone else's.

[amyFB]

Originally Posted by RP

....
11) This one is kind of controversial, and I know that everybody isn't going to agree. It involves home ownership vs. renting. A number of you have worked toward and have mentioned that you've either paid off or are close to paying off your mortgage. You should be congratulated for that. However, don't automatically assume that home (or condo) ownership is the best way to go. It's always been part of the American Dream, but 2008 should have taught us that it's not the no-brainer that it used to be. There are lots of hidden costs involved in home ownership, and if post retirement funds are tight and/or you're at a residential crossroads then don't automatically assume that being a renter doesn't have its own set of advantages.

......

I spend a lot of time thinking about this point.

My home is paid for.

I think about future property taxes - today it is low, will my savings be up to any increases in the future.

I'll probably need a new roof a few years into retirement. I've actually started a dedicated savings account two years ago for this. using 2014 estimate + 25%.

Now while i am earning decent wages, I'm attending to home improvements with an eye to an easy upkeep in the future. For example, someday, I won't be able to do stairs, and my first floor is fully set up to accomodate my moving to one floor living when the day comes I have to do that.

I do sock away small amounts in Certificates of deposit, $1000 at a time or more if available, and just let them roll over. I'm expecting those to be really handy in the future when my 401k disbursements and SS check falls short of my needs.

if you are young and reading this - listen to us old folks - start to save when you are young and never stop. our 401k broker said the real trick is from day 1 of working life, save 10%. always 10% no matter what your wages are.

good luck to us all.

[RP]

Originally Posted by amyFB

I spend a lot of time thinking about this point.

Amy: It sounds like your thinking has been productive in coming up with a viable plan that will hopefully work for you. All I wanted to suggest previously was that contrary to much popular thought, home ownership may have disadvantages and renting may have advantages. I say this from the prospective of someone who has been a renter for the past 20 years. My rent is very reasonable, especially considering that sewer, water, lawn maintenance, and trash pickup are provided. My other prospective is having a ladyfriend who purchased a very nice urban condo a decade ago. Not only has her property value dropped ever since, but her condo fees have risen to the point that she pays in fees and taxes about what I pay in rent. Like everything else discussed in this thread, there isn't a one size fits all answer to everybody's situation...

[tbeltrans]

There are pros and cons to both renting and home ownership.

A potential problem with renting really came into focus in the years during and following the housing market collapse. A lot of people had homes foreclosed and there therefore entered the rental market. Rents skyrocketed, forcing many retired folks out of their apartments and into lower cost living conditions. Rent can be a real wildcard, making it difficult to know what to budget for when doing retirement planning.

A homeowner has a bit more control (i.e. better planning is possible) over many costs involving repairs by choosing when (or if) to get them done. However, there are a lot of costs associated with home ownership that those who have not owned a home, may not fully realize. You pay for water, garbage collection, as well as the gas and electricity and whatever form of heat you use if different from natural gas or electricity. Property taxes always seem to go up, rather than down (except during the housing crises).

I find, as a condo owner, that the costs are quite contained. Of course, this depends on how financially sound your association is. Our association was originaly populated by "Depression babies", rather than baby boomers. Depression babies, in general, seem to have a VERY different view of personal finances and debt than baby boomers. Boomers all too often seem to embrace debt, while the Depression babies seem to want to avoid it. Our association was set up with a very healthy view toward planning for future expenses by Depression babies. We have NEVER had an assessment because we have always had the money to pay for all manner of repairs and expenses. We have continued that. This makes budgeting easier for each of us in the association because there are no surprises.

We have common hot water heat, so no heat bills and this is a very efficient means of heating the building. Our association fee covers everything except entertainment (TV, internet, satellite, whatever), phones, electricity, and individual unit property taxes. The amount we each pay for association fees is based on the amount of square footage we each own. I had a house before moving into the condo 30 years ago, and as far as I am concerned, this is about the lowest cost living situation I know of - certainly much cheaper than rents for equivalent space or individual home ownership. We live close in to downtown and everything of interest to us, and right on the major bus lines. I couldn't ask for more.

Condo living is not for everyone though. We have seen people come through for whom it was not a good fit. that can be painful for the person and the association. The good thing is that those people seem to move on soon enough. I wish that realtors would take the time to understand what they are selling and then take the time to explain that understanding to potential buyers instead of just moving product. That would help a lot. Unfortunately, the realtor gets his or her money and just moves on to the next prospect, leaving the situation to work itself out.

Tony

[OldGuitarGuy]

Originally Posted by Mr. Jelly

I've retired from my profession of 32 years and work a part time job. My wife and I are 63, haven't started SS and are waiting until we are 66 to fully retire. We have no loans and can easily live off our future SS and pensions. But I need to do something with my 401K and have an appointment next week with some people. I am not looking forward to it as it'll probably be a waist of time. But I might learn something. So I am trying to figure out what to do with the 401K in a couple of years. It is hard to figure out what's best. Our thoughts range from very conservative to almost stupid but fun. I just want to make the right decision.

How to diversify retirement money at our age is another big issue. I have an appointment with a.financial planner in two weeks. I don't believe in trying to time the market, but I am concerned about taking a hit when the inevitable market correctional occurs. I'm curious to see what the FP recommends. I feel like I.should move a big % of money out of stocks and into a money market position to lessen the damage of a.correction.

[raghanger]

Like many here I am also considering retirement, and wondering whether my money stash will last. I have found using the site firecalc.com to be very helpful, which helps you to evaluate the potential longevity of your portfolio in the context of past historical data. Also, the forums on the site http://www.early-retirement.org have been extremely helpful to evaluate monetary and life style issues that may arise with early retirement.

[Rip VanWinkle]

Guitar guy....that's a classic question. Now allow me to give you the classic response. "Fine, but how do you know when to get back in?" Risk to the down side is not the only kind of risk. Risk from lost opportunity is equally important. The only right answer is time heals all. At our age we are obviously worried about running out of time. But just because you retire you must not think that do not need to still earn something with your money. At the very least, to keep up with inflation. You just don't want to be as aggressive as you might have been in your thirties. If you are looking to funds, take a look at balanced funds...stocks and bonds...with fairly priced active management. They are pros and they will reallocate between stocks and bonds on a constant basis. Just pay attention to long term performance ideally last ten years so you capture the debacle of 2008.

[buddyhu]

Originally Posted by OldGuitarGuy

How to diversify retirement money at our age is another big issue. I have an appointment with a.financial planner in two weeks. I don't believe in trying to time the market, but I am concerned about taking a hit when the inevitable market correctional occurs. I'm curious to see what the FP recommends. I feel like I.should move a big % of money out of stocks and into a money market position to lessen the damage of a.correction.

NO ONE can predict corrections or bear markets. Choose an investment strategy that is appropriate for your age, net worth, age, and health; and then stick with it. If you are over-exposed to the market, then take some money out of stocks and put it in bonds or real estate or some other investment (money market fund is an option, but probably not the best option). But don't pull money out of the market in a (vain) attempt to avoid downturns.

Your FP will probably say something that approximates what I have said.