Retirement questions

Half Fast said:
I mentioned this upthread, but I'll touch on it again. Everyone treats the question of early retirement as a financial problem to be addressed with spreadsheets and financial analysis and investment forecasts and debt payoff schedules. That's part of it, sure, but what's the real question to be answered? Regret-free retirement is not a pure math problem!

I submit that the real question is, "What do I need to have a happy retirement?"
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Interesting points.
I've been thinking on this topic HARD lately.

I'm knee deep in trying to make sense of health insurance at the moment, so I can flip the switch soon!! I guess I only have 5 years to bridge to medicare, but my wife needs it a bit longer than that

In my late 40's we discussed as a loose goal to retire by the time I was 50. But then it wasn't really retirement that I imagined then ..it was more about getting away from the career type 9-5. Do something much more flexible that would allow travel, more time with family, time to go fishing, or just time to do chores around teh house, etc...

I was laid-off, so I delayed that idea...and then let life get in the way & missed that goal by 9 years. I just turned 59 & I've decided that I'm going to call it around the end of this calendar year, maybe into January if I need to for some uknown reason..

the math equation part of this is hard. Easy enough to know how much $ we need now, but that's not all that useful. I don't plan on living and doing the same things even a week into retirement.
For a few years I plan on spending more, then of course the spending will slow after a time. I want to travel more, maybe start a kit airplane project, or maybe get a bigger boat. Somewhere along the line in a handful of years we'll very likely downsize the house so that whole picture changes too... and my picture is more complicated too, with kids still in high school and college
Then there's the health unknown. How long will my health allow travel and adventure? Will I need to slow sooner or keep traveling longer? Will something trigger some unforeseen healthcare costs? Will I need assisted care? if so, when and for how long? Those are potentially HUGE math variables that can't seemingly be answered.

Your "happy" question gives me more concern. I've got so many directions I want to go, its going to be hard to get focused on a plan, and I know how easy it is to get into a rut and let a free day get away from me. On a holiday for example, when we don't travel or have something going on...
 
Velocity173 said:
Another thing I’d add along the lines on retiring early is how healthy do you think you’ll be in your 70s, 80s…90s? Everyone thinks they’re gonna live to be like 100 so what’s the point in retiring early? The reality is, there’s a chance you’ll punch out of this life sooner than you think. There’s also a good chance you’ll have medical conditions long before then.

I’ve got a friend who flys EMS for another provider. There was a guy at his base that did the common path of 20 yrs Army and 20 yrs EMS and retired at SS age of 62. Well, this guy got brain cancer and died at 63. Didn’t even get a chance to live the “good life.” Personally, with former mil pilot guys dropping like flies from cancers these days, I’m realistic about my odds of living a long life. I wanna retire early enough so I can enjoy activities while I still have the health to do it.
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Yeah, I had a work buddy who retired early the same year I did. Retired at Memorial Day, fatal heart attack over Labor Day.

There are no guarantees.
 
don't forget the rule of 55! it should be the rule of 35, methinks.
 
There are the outliers who croak shortly after retirement, early or not. My philosophy is, I plan financially to live well into my 90s. Just in case, I expect to wake up tomorrow, but I try to live like I know there’s no guarantee. It’s a balancing act. Some days I get it backwards.
 
Matthew said:
One of his co-workers had to quit; she was just about to earn enough to push her over the edge and the extra few dollars in her paycheck would never make up for losing the subsidy.
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And therein lies the great fallacy and how the "Great Society" destroyed the middle class, and a great example of "unintended consequences".

But I'll stop here because it is probably already too late to avoid the hammer.
 
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30 should be the mandatory retirement age. Like in that movie Logan’s Run.
 
Brad W said:
I've got so many directions I want to go, its going to be hard to get focused on a plan,
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There are two literary quotes that stayed with me and made an impact when I was in a similar situation: "get busy living or get busy dying" and “the only thing you have to do in this life is die ... everything else is choice." And to this day, when I get a bit hesitant or unfocused even in retirement, a quick look to them hanging above my monitor gets things back into perspective. You got to start somewhere, so start now by listing your expenses for today on a sheet of paper. Then for tomorrow and so on. The rest will start to fall into place before you know it. Best of luck.
 
I retired on a Labor Day weekend. Last day was Friday. It was a 3-day weekend so I didn’t really “feel” retired until Tuesday. I woke up at my regular time and did the same thing I always did, wonder what day it was. I realized it wasn’t a weekend so I started trying to wake up. A minute or two later I realized I didn’t have to go to work and rolled back into bed and almost fell asleep again. Then I realized I not only didn’t have to go to work that day, I didn’t ever have to go back to work and that got me wide awake wondering what I had just done. So I got up, made some coffee and just enjoyed sitting alone in a quiet house for a while.

I don’t remember how long it took, but for months retirement just felt like a long weekend: yard work, house work, getting caught up on chores and mx. Eventually I settled into a nice routine. The saying for men is that we need to retire into some sort of activity, otherwise we get sedentary and die early. Mental and physical things keep the cobwebs away. I applied myself into getting and staying in shape, now that I finally have the time to do what I want and how I want. I got my instrument rating and keep trying to motivate myself to get the commercial. And now my local YMCA is recruiting me to teach swim lessons (I need to ask how far into the deep end I’m expected to toss kids. <yeet> *sploosh* “That’ll be $35!”)

Good times.
 
Matthew said:
And that’s where the game is played. That subsidy is based on earned income. Drawing from a traditional IRA or 401(k) generates earned income, and pulling from after tax savings or Roths does not. I can’t remember how capital gains comes into play. And Social Security income also works into the formula. You can monkey around with what funds you’ll use until you turn 65 when you can get into Medicare. You have to have a high enough taxable income to stay out of Medicaid, but low enough to avoid the cliff. My neighbor used to work for our local school bus operator for extra spending money. One of his co-workers had to quit; she was just about to earn enough to push her over the edge and the extra few dollars in her paycheck would never make up for losing the subsidy. That cliff was changed to a slope during covid and was “temporary”. That slope expires this year.
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Yes I wasn't clear, but the extended is what I was referring to. It will affect some.

Here is where I got info on what they include/exclude as income.

www.healthcare.gov

What’s included as income

Find out if you qualify for lower costs on Marketplace health insurance coverage at HealthCare.gov.
www.healthcare.gov
 
NoHeat said:
Delaying claiming SS until age 70 is often recommended, as a rule. That’s because of two things:

SS is an annuity with a feature no other annuity had: cost of living increases. So it’s desirable to make the most of that.

SS payments increase the longer you delay claim, until age 70. So you get the most out of SS with its rare and valuable COLA feature by waiting to claim, and relying on some other income source until then.

Exceptions to this rule: you have a short life expectancy, or you’re the lesser paid of two spouses. T here’s an online calculator to help make this decision:
https://opensocialsecurity.com/
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what about Washington’s fixation on cutting benefits across the board?
 
I retired in 2019 at 62. Had a good job that paid well, maxed 401k which also did well. My work the last year working had lost it's charm. Had two houses, sold one and paid off the other with the profits. Live in a golf community with two courses, tennis and an active membership. Got horned into serving on the Board, just as Covid hit. Worked 30 hours a week during that time. Ended up as President of the club, which is not a great thing. Term ended last year and final duties wrapped up this week. First time I've really had nothing to do. Well, except play golf 3 - 4 times per week, tennis same. Fly weekly at least. Thinking about selling my hang glider, not sure I'm proficient enough for a competition glider.

I enjoy retirement a lot. Plenty of hobbies and social interaction. Spending less than while working and should be fine barring a major economic meltdown. A big piece of the puzzle for me was replacing the friends I had from work. Going to the right community fixed that.
 
wellknow said:
what about Washington’s fixation on cutting benefits across the board?
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I thought they were fixated on NOT cutting benefits.
The reality though, is that they will have to cut benefits at some point, and the longer they put it off the worse it will be.
 
Here's something to consider, timing.

If you aren't retiring straight into Medicare, you'll be needing medical insurance, and probably wanting dental coverage

Until Medicare, you're pretty much limited to the Marketplace and an ACA plan.

Right now, at least until the end of the year, the subsidy cliff is a slope. But that's temporary and expires. Unless the law is changed by the end of the year to extend it or make it permanent, the cliff returns. If you make a dollar more that the limit, you don't qualify for a subsidy. In my case (age, zip code), that means about $2k/month for two people with no subsidy. I'm not sure what that limit is right now, it's based on some percentage multiplier of whatever the poverty level is considered to be. I think, for a couple, that's somewhere around $75k(?).

If you decide to retire early in the year, you won't have a lot of taxable income and you can qualify for the subsidy. If you retire later in the year, you'll likely have blown through that income limit and won't qualify. At that point, you have some decisions:

1) Keep working until the end of the year and start fresh with an ACA plan on 1 Jan.
2) COBRA until the end of the year and start fresh with an ACA plan on 1 Jan.

In my case, I retired at the end of Sep, then COBRAd for Oct/Nov/Dec and started on an ACA plan on 1 Jan. By then we had worked out a strategy to keep our taxable income low enough that we didn't have to pay full price for the premiums when we started in the new year.

You'll have to do the math and see how much COBRA will cost you vs waiting a few more months to retire.
 
Regarding COBRA:

You can use it for 18 months, and you can use tax-exempt HSA funds to pay for it. That’s what I did, and at the 18 month mark, my wife became eligible for Medicare.
 
Half Fast said:
Regarding COBRA:

You can use it for 18 months, and you can use tax-exempt HSA funds to pay for it. That’s what I did, and at the 18 month mark, my wife became eligible for Medicare.
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Fortunately we switched to one of the Christian sharing programs a few years ago, so COBRA/HSA/.gov aren’t players in our planning until we get to Medicare.
 
Half Fast said:
Yeah, I had a work buddy who retired early the same year I did. Retired at Memorial Day, fatal heart attack over Labor Day.

There are no guarantees.
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I watched this where I worked. A friend retires, draws a couple of checks and then he's gone. I wanted to retire while I had some health and energy left. Been four years now and the only thing I can say about retirement is, "I highly recommend it!" ;)
 
Matthew said:
I'm not sure what that limit is right now, it's based on some percentage multiplier of whatever the poverty level is considered to be. I think, for a couple, that's somewhere around $75k(?).
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The income limits for 2026 for a 2 person household are $21,150 to $84,600. Single household is $15,650 to $62,600. Thats without the Medicaid expansion provision that ups the low end by a $1000 or 2.

Matthew said:
Unless the law is changed by the end of the year to extend it or make it permanent, the cliff returns.
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From what I've read they may keep it for another cycle. But since this is being used as a pawn hard to get a good read. But if the cliff returns, it drops the 12M people who got it in 2020 and the ACA total drops back to the 12M numbers pre-covid.

Matthew said:
In my case (age, zip code), that means about $2k/month for two people with no subsidy.
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For comparison, my single BCBS silver plan is about $1200 pre-subsidy plus I get a separate dental as well.
 
One of the guys where I used to work retired. First day at home he tripped over his dog and landed headfirst on the back porch steps. I heard about it the day after it happened, "You weren't at work yesterday, did you hear about Dennis?"

You never know when it's your time, or how much quality time you have left. Enjoy what you can, when you can.
 
I've retired 4 times....first time wasn't even 40 when the company was about to go under (Digital Equipment). Drove home, got a speeding ticket, called the Dean at the university (who I've known for years) and said "Bill, I'd like to get my PhD". His reply was "Great, I need a TA for the next quarter starting in 2 weeks". Spent 4 years there, brought in $multimillion dollar grant (while as grad student with no help from anyone - most of the faculty hated me for it). Left and went back to my 6-figure software job.

Every time I get bored at work or the company folds (I've been thru 7) I go back to teaching college. I think this time it'll for good. Teaching college, taking interest classes since I don't pay tuition. So far: Orbital mechanics, aerodynamics, instrument ground, music technology, history of broadway musicals. This summer or fall I'll take Quantum Computing at one of the other local universities and probably Music Theory (again).

All the while teaching 3rd grade....uh...excuse me, teaching lower division Computer Science. Pay covers the expenses on the cherokee. I paid off the house years ago. Still have a loan on the new Ford - why should I take money out of investments at 7-11% to pay off a 4% car loan?

The thought of the next 10-20-30 years playing bridge or golf is a non-starter. Pinochle, maybe. Poker, definitely.
 
Bell206 said:
The income limits for 2026 for a 2 person household are $21,150 to $84,600. Single household is $15,650 to $62,600. Thats without the Medicaid expansion provision that ups the low end by a $1000 or 2.


From what I've read they may keep it for another cycle. But since this is being used as a pawn hard to get a good read. But if the cliff returns, it drops the 12M people who got it in 2020 and the ACA total drops back to the 12M numbers pre-covid.


For comparison, my single BCBS silver plan is about $1200 pre-subsidy plus I get a separate dental as well.
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I'm not sure what the whole story is with all the extra people that signed up during Covid and then never made a claim. I haven't seen a good explanation on that.

My understanding is that the subsidy extension expires 31 Dec. One side says, "Let's re-open the government and then we can discuss and debate that subsidy", and the other side says, "Let's extend the subsidy and then we'll reopen the government". Maybe there's a back room compromise in the works.

I also have BCBS, the last time I paid close attention, about a year ago, I think it was around $1000 each, but might have been higher. I think it did go up closer to $1200 each because I got another year older. So I think we're pretty close on that number. I also get a separate dental plan.
 
Velocity173 said:
Another thing I’d add along the lines on retiring early is how healthy do you think you’ll be in your 70s, 80s…90s? Everyone thinks they’re gonna live to be like 100 so what’s the point in retiring early? The reality is, there’s a chance you’ll punch out of this life sooner than you think. There’s also a good chance you’ll have medical conditions long before then.
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I'm a generally healthy guy, but I always kind of figured I'd be lucky to make it to 80. That's definitely part of what's driving this - if I go all the way to 65 I'd have what, maybe a decade to enjoy it? In July we had a well liked captain retire, flying his final leg home from Milan on a Thursday, just to die of a friggin' bee sting that Saturday.

Really appreciate everyone's perspective on this.
 
When I hit my number I sold my company and jumped of the treadmill. It was so nice to have complete control of my timeline and schedule.

After some good advice from a friend, I chose to continue to work a little bit as a consultant. Enough to pay for my hobbies and travel. I now work about 3 days a week and it pays for a couple planes, travel when ever we want it, etc. and we haven't touched a penny of the initial amount. The market has been good to us and it has more than doubled. Feeling good.

The most important advice above is to retire "to" something. Life will not be good if you just buy a big-screen and veg out.
 
Matthew said:
I'm not sure what the whole story is with all the extra people that signed up during Covid and then never made a claim. I haven't seen a good explanation on that.
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The word I heard was it was to increase the ACA rolls similar to what the previous medicaid extension limit tried to do plus provide an optical to providing healthcare during covid. I guess those extra didn't get covid? If you remember, when ACA launched they said 50M would be signed up, however, it never got above 12M until 2021.

Matthew said:
My understanding is that the subsidy extension expires 31 Dec.
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What I found interesting in the back and forth was one side consistently states that 50K will die without the subsidy after Dec 31. So if thats true why didnt 50K die before 2021?
 
jbarrass said:
The most important advice above is to retire "to" something.
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:yeahthat:

The “something” doesn’t have to be some new job, BTW.

Retirement is a great opportunity to take on charity work, for example. I do a fair amount of pro bono practice, and since retiring I’ve done the electrical design for a women’s facility in Pinellas Park, a school for a remote village in Sudan, and a mission church in North Cyprus. In addition, my wife and I volunteer year ‘round for Samaritan’s Purse, and we are active in church activities. I picked up electric guitar again after retiring and I’ve been playing in our church band for the last few years.

Lots of opportunities. Get involved in a political campaign, mentor school kids, join an advocacy group, become a museum docent, volunteer at a hospital, deliver meals-on-wheels, learn a musical instrument, join a band or choir, poison pigeons in the park, whatever. No matter your interest, there’s almost certainly some way to indulge it.
 
Bell206 said:
What I found interesting in the back and forth was one side consistently states that 50K will die without the subsidy after Dec 31. So if thats true why didnt 50K die before 2021?
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Ah! The vaccines worked!
 
Matthew said:
So I got up, made some coffee and just enjoyed sitting alone in a quiet house for a while.
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sounds like a dream. I love that on a weekend morning. I look forward to doing it on some random Tuesday morning!

Matthew said:
. The saying for men is that we need to retire into some sort of activity, otherwise we get sedentary and die early. Mental and physical things keep the cobwebs away.
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I've heard and read that many times. A while back I had decided that I was going to retire straight into a kit airplane project. My wife plans to keep working a while and I figured that such a project would give me a more or less 9-5 job maybe 4 days a week...with 1 day a week on average set aside for doing honey-do stuff at my wife's office or around the house. I'm rethinking that stategy a bit now....
MauleSkinner said:
Fortunately we switched to one of the Christian sharing programs a few years ago
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Do you find that it's good insurance for catastrophic stuff.... major accident with surgeries...or major disease
or are those things more of a way to balance out voluntility in the more routine Doc visits and meds?
Ever run into things not covered? therapy maybe, stuff like that?
Matthew said:
My understanding is that the subsidy extension expires 31 Dec.
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So these income thresholds mentioend earlier seem quite low. Earlier today I was plugging in my best guess for my wife's income for 2026 which was much higher than those, and the BCBS site was showing a significant subsidy.
What's expiring?
 
kayoh190 said:
I still very much enjoy my job, but it also doesn't define who I am (this is a big problem in my industry) and it doesn't scare me to not have it be part of my identity anymore. A growing family has really changed my perspective on that score. A lot can (and will) happen in the next 10 years so perhaps it will all be moot anyway, but I know we have a lot of retired folks on this board and I'm interested in the various experiences.
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I retired at 60 (8 years ago), and I don't regret it. Like you, I enjoyed my job, but it was not part of my identity. I wanted to move on to another phase of life. For me that included traveling to places I wanted to go, instead of where my job sent me. I moved to another part of the country and took up other hobbies, like sailing, and working on traditional wooden boats. What made the decision somewhat easier for me is that I had a health scare about 5 years before I retired that made me realize that flying was not everything. After 6 months off, I recovered completely and got my medical back, but wanted to do other things while still healthy. I was also lucky enough to be relatively secure financially, with lower fixed expenses. I don't think anyone can answer this question for someone else, but it takes being self-aware of what is important to you.
 
Brad W said:
Do you find that it's good insurance for catastrophic stuff.... major accident with surgeries...or major disease
or are those things more of a way to balance out voluntility in the more routine Doc visits and meds?
Ever run into things not covered? therapy maybe, stuff like that?
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We haven’t had to deal with anything more than about $20k, but I haven’t heard of anything not being paid. “Routine” doctor visits (physicals, checkups, stuff like that) aren’t covered, as it is more for the accidents/surgeries/birthing of babies, stuff like that. It’s basically our responsibility to stay healthy, and they help out when something goes wrong. Insurance tends to ignore wellness anyway (this isn’t actually insurance…if you have a medical event, you get a bunch of checks from other members.)
 
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