Retirement questions

Found this article interesting. Across all asset and income levels, retirees adjust expenses rather than use assets to fund their lifestyles. Why oversaving and reluctance to liquidate is more psychological than it is financial.

https://ofdollarsanddata.com/how-do-retirees-actually-spend-their-money/

I'm 64 and am getting a bit tired of the farm thing. Starting to look at alternatives in the next few years.
 
I retired when I was 51, 10 years ago. Having flexibility in your budget, being able to put off big expenses when investments are down is key.
Having no mortgage or other debts, no children to take care of means your budget is smaller and more optional line items.
 
MooneyDriver78 said:
I retired when I was 51, 10 years ago. Having flexibility in your budget, being able to put off big expenses when investments are down is key.
Having no mortgage or other debts, no children to take care of means your budget is smaller and more optional line items.
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I'm with you on the debt thing. Paid off my mortgage 20 years ago, I owe nobody nuthin', except of course property and income taxes. So nice to be free of those burdens, even if it means I drive 30 year old vehicles and fly a 60 year old airplane.

Now if only the stock and bond markets would chill out....$7 avgas sucks out loud too.
 
Never. Your investments will collapse in the next six months. I plan on working until I croak.
 
MooneyDriver78 said:
We’ll see if it gets challenged in SCOTUS, presidents aren’t supposed to be able to spend $.
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We are in a Post Rule of Law nation. How does a court undo something like that? Simply re-instate the debt? People go nuts over a cold order of fries. What do you think will happen after a court says that someone owes something another government official just said he didn't?
 
FWIW: on debt sometimes you need to look at the pros/cons of paying off certain debts especially mortgages depending on one's financial plan. For example, if your investments are returning at a percentage rate much higher than a mortgage rate you'll be money ahead. I kept my mortgage at retirement because my money was earning 3x more than the loan rate. That said when I hit 65 and no longer have income limitations for my medical insurance plus apply for SSI, I will pay off my mortgage over one or two years depending on the payoff amount as that is how my plan is structured. As to flexibility with retire income I followed the route to always have 18-24 months of cash and liquidable assets on-hand to weather any market issues affecting any investment or qualified accounts.
 
cessna182b said:
So what are these benefits of which you speak? They will cost you $170 per month (for each insured) at present; probably more in the future.

Dave
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I don't recall specifics. I was talking to someone about this, did a quick search and came up with site pointing out the pros and cons.
 
Bell206 said:
FWIW: on debt sometimes you need to look at the pros/cons of paying off certain debts especially mortgages depending on one's financial plan. For example, if your investments are returning at a percentage rate much higher than a mortgage rate you'll be money ahead. I kept my mortgage at retirement because my money was earning 3x more than the loan rate. That said when I hit 65 and no longer have income limitations for my medical insurance plus apply for SSI, I will pay off my mortgage over one or two years depending on the payoff amount as that is how my plan is structured. As to flexibility with retire income I followed the route to always have 18-24 months of cash and liquidable assets on-hand to weather any market issues affecting any investment or qualified accounts.
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The problem with that is you maybe forced to paying the mortgage payments when your investments have dropped substantially. Selling low, now if the 3X ROI you have is guaranteed then that’s a good idea. If not, then choosing to pay off the mortgage, say end of last year would been better. There’s no 1 correct answer.
Having no mortgage means your required spending is less and gives you more freedom to lower your spending when investments are down. For example, my aviation budget this year will be a lot less than last year.
It depends on how much guaranteed income vs investment income you’ll have.
BTW, if OP is the type to panic when investments drop 25% or more, either he needs a FA (whose job will be to talk him off the ledge) or should just buy annuities.
 
MooneyDriver78 said:
The problem with that is you maybe forced to paying the mortgage payments when your investments have dropped substantially.
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Thats only provided you are solely living off your qualified investments which adds risk across the board. As I mentioned, if you keep 18-24 months of "cash" on hand your monthly budget (mortgage) is covered for the length of your average down market. Its simply something to look at and depends on your specific situation. However, to generically state you must pay off all debt as a requirement to retire is not financially sound either. I found a number of people maintained a mortgage after retirement which led me to my plan when I retired.
 
Instead of creating a new thread, I thought I'd dig this one up instead.

Has anyone retired early and come to regret it later?

I'm still a long ways from retirement, but other than living in an expensive part of the country, I'm finding that my wife and I have pretty modest needs to be happy. I don't see this changing, and it's making me think that "the number" is significantly higher than it needs to be. So maybe the answer is to pull the cord early (I'm not planning to do this now - this is a thought experiment for maybe 10 years from now).

I'm fiscally conservative so the idea scares me, but hell, why work if I don't have to? I know a few of you have done this, whether it be 2 years early or 20 - but did you come to regret it?
 
kayoh190 said:
Has anyone retired early and come to regret it later?
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Depends on how you define regret, but in my 11 years of early retirement, no. And don't see any change till the end. Have I seen some people return to the work force after retiring early? Sure, but they didn't "regret" their initial retirement. The only real "regret" I ran across in the dozens I spoke with before I retired early and the dozens since then, is the regret of not retiring even earlier as their perceived fears became unfounded once retired, if that makes sense. And that would include me as well.
 
Bell206 said:
Depends on how you define regret, but in my 11 years of early retirement, no. And don't see any change till the end. Have I seen some people return to the work force after retiring early? Sure, but they didn't "regret" their initial retirement. The only real "regret" I ran across in the dozens I spoke with before I retired early and the dozens since then, is the regret of not retiring even earlier as their perceived fears became unfounded once retired, if that makes sense. And that would include me as well.
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are any numbers known in these scenarios, like person x retired at age y with $z saved, etc...? I'm guessing not but can't hurt to ask.
 
kayoh190 said:
… I don't see this changing, and it's making me think that "the number" is significantly higher than it needs to be. ….why work if I don't have to? I know a few of you have done this, whether it be 2 years early or 20 - but did you come to regret it?
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Couple of things. The biggest expense is the mortgage. Once that debt (and all other dent) is gone, the magic number doesn’t need to be as high as many planners suggest.

The second thing to keep in mind is where you’re pulling from….qualified vs non-qualified accounts…for one, you need to be 59 1/2, for the other, it’s a tax question.

The third is healthcare cost and whether or not kids stay on your plan to age 26.

The fourth thing is college tuition if that’s part of your plan. The biggest raise in disposable income came as soon as we got the last kid thru college.

The fifth thing to figure out is what to do in your free time. Idle hands and all that.

The last thing is what employer benefits do you lose if you stop working before retirement age. For example, had I not retired from the Air Force, I would have lost my space available travel and healthcare benefits (others too, but those are the big ones).
 
eman1200 said:
are any numbers known in these scenarios, like person x retired at age y with $z saved, etc...? I'm guessing not but can't hurt to ask.
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There are a number of retirement prediction tables out there that a lot of people swear by, to include some new ones generated by AI. However, what I learned in talking to retired people and through my own experiences, is that everyone’s financial requirements are specific to the person and situation. Even two people in the same household can have a different retire requirement.

If I had followed those prediction tables, I’d still be working right now because the fund amount I did retire with was supposedly not enough since I left with my mortgage still intact. However, if you want to build a prediction table for your personal situation, a good place to start is to track your living expenses down to the nickel. I did that for several years which gave me a solid foundation to predict what my specific financial needs would be post-retirement.

Regardless, retirement is a mindset whether early or late. And the key to a successful one is that you must retire to something vs retire from something. Once every day becomes Saturday the financial end becomes easier to process provided you did your own due diligence and not what someone else told you needed.
 
Appreciate all the thoughtful responses. I fly with a lot of guys that retire in the next year or two, and I think I'm getting to an age where this sort of thing is starting to feel closer than I want it to. To @asicer 's point, 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.
 
Bell206 said:
a good place to start is to track your living expenses down to the nickel. I did that for several years which gave me a solid foundation to predict what my specific financial needs would be post-retirement.
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:yeahthat:
 
kayoh190 said:
Instead of creating a new thread, I thought I'd dig this one up instead.

Has anyone retired early and come to regret it later?

I'm still a long ways from retirement, but other than living in an expensive part of the country, I'm finding that my wife and I have pretty modest needs to be happy. I don't see this changing, and it's making me think that "the number" is significantly higher than it needs to be. So maybe the answer is to pull the cord early (I'm not planning to do this now - this is a thought experiment for maybe 10 years from now).

I'm fiscally conservative so the idea scares me, but hell, why work if I don't have to? I know a few of you have done this, whether it be 2 years early or 20 - but did you come to regret it?
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I retired at 60. It turns out I could have afforded to do it earlier, but I wasn’t mentally ready.

My biggest lesson was: I really didn’t need as much income in retirement as I thought. There’s a rule of thumb about you can live on 80% of your annual pre retirement income. That number might not be 80%, but that’s how I remember it. I found that number to be very conservative. During the years prior to retirement I was putting a lot into my 401(k), putting a lot into my HSA, putting a lot into Roth IRAs, and living off whatever was left. If there was anything left at the end of the month, that went into savings. I wanted to be able to live on 100% if necessary. What I simply didn’t consider was that, after all the income I was diverting to savings, I was living just fine on well under that 80%. The house was already paid off. If I had taken into account that I could do very well on <80% I might have retired earlier than I did, but maybe not. It really did take me a while to decide to make that final step.

Post retirement I had to play that whole O’care subsidy game to keep it affordable, but I had enough after-tax savings to be able to stay above Medicaid mins and away from the ACA “cliff”. I’m starting Medicare soon so that problem will go away.

So, no regrets. Set a reasonable financial goal, and when you get there you can begin getting yourself mentally prepared.
 
My brother retired from the FAA at only 50. 20 + years of doing FSS & ATC. I wouldn’t say he regretted it because he was getting burnt out at working at an understaffed class C, but wasn’t ready to retire either. He was getting bored and I don’t think financially he was completely set. Couple months ago he got hired at a sleepy contract class D and quit the first day. Didn’t like the town or the tower.

I think it’s different when we’re younger. We have a passion for the job and willing to put up with living / work conditions that are substandard. Getting older, the motivation and the patience for putting up with BS starts to wane. Ultimately my brother decided, maybe retirement isn’t that bad after all.
 
Velocity173 said:
…Getting older, the motivation and the patience for putting up with BS starts to wane.…
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Funny you mention that. I’m in my ninth year post .mil retirement. I enjoy the work I do and it’s not terribly hard. The guy I work for knows two things
1. If I win the lottery I’m out tomorrow.
2. I do this job for (really good) beer money. The instant it becomes stupid, I’m putting in my notice and he’s got two weeks to unf- it. So far, he shields/diverts/overturns the stupidity before it gets to me. We’ll see long it lasts.
 
kayoh190 said:
Instead of creating a new thread, I thought I'd dig this one up instead.

Has anyone retired early and come to regret it later?

I'm still a long ways from retirement, but other than living in an expensive part of the country, I'm finding that my wife and I have pretty modest needs to be happy. I don't see this changing, and it's making me think that "the number" is significantly higher than it needs to be. So maybe the answer is to pull the cord early (I'm not planning to do this now - this is a thought experiment for maybe 10 years from now).

I'm fiscally conservative so the idea scares me, but hell, why work if I don't have to? I know a few of you have done this, whether it be 2 years early or 20 - but did you come to regret it?
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I'm 59; my wife is 60. We're both going to retire at the end of the year. So, I can't answer the question about regrets, though I don't expect we'll have any. After a 37 year career in the tech industry, we're both ready to stop working for others, worrying about how much vacation time we have to travel, thinking about how many emails have shown up while away, dreading Monday mornings, hating the sound of the alarm, etc. We're finally going to be able to live our life on our own terms, and we are counting the days eagerly. (31 working days left!)

I do have a few book recommendations that can help, perhaps, make the retire now or wait decison:

Die With Zero - Bill Perkins

Spend Your Damn Retirement Money - Richard Sheffield

Top 5 Regrets of the Dying - Bronnie Ware

We're all in on the Die With Zero philosophy. Years of saving -- now it's time to play before we get too old and decrepit to enjoy ourselves.
 
It’s a psychological journey, you have to be able to handle it mentally. Many people cannot. Can you fill your schedule, friends and family, go to the gym (stay healthy!!), do hobbies, join groups or clubs? If not, then don’t retire. But the freedom is the best feeling there can be, you can also do some side stuff like managing a rental property or investing to keep your mind thinking. Remove the media from your life and you’ll be amazed at how peaceful it can be.
 
I work part time in retirement - CFI and part time college instructor. Low stress, flexible scheduling and I need something to do that is significant. The full time work issues are gone - meetings that I don't want to go to, grinding schedule, etc. I don't know that I will ever stop working if I am able - I enjoy part time work! In my free time I play sports and work out. And fly...
 
I retired at 55 when I was eligible for a full pension. I tried a couple of times before that when they were offering "Early Outs" but was refused eligibility because of my position. Did some part time consulting for about 10 years when offered the opportunities but never actually looked for jobs. I really enjoyed both the full time job and part time consulting but I could and did quit both without regrets.

I fit in the category of adjusting spending to what I have coming in and never really touched savings except for RMD's. If I get a big bump like recently by selling a share of a vacation condo, I do something stupid like buy another airplane before I sell the one I have already :biggrin: or fly first/business class to Europe for a week or two.
 
I’m not quite 60. I went part time at work last month (basically I work two weeks a month) to start easing into retirement. We’re living off the income from our investments, and throwing the money I earn into funds for specific things. My wife has been kind of nervous about losing the security of job income, but we’ve been able to shuffle things around to make her comfortable with it.

While getting rid of some job stresses is one of the goals, a lot of the job stresses revolve around not having the opportunity to do the things that are more important, so retirement is about moving toward things we want to do rather than just eliminating the job.
 
I retired June 2024 at 57. I liked the technical aspects of my job, and many of the people I worked with. I only miss the money, but I made a choice based on the math and it’s been fine.

I now see it as an adventure into something I haven’t done before (like marriage, kids, new job, new house, etc.). In the end, I figured if I made a bad decision or did not like it, I could always go back to work.

Spending more time with family with more patience, flying more, working on a PhD, and goofing off.

Saw this yesterday at an in-laws house who we were visiting. I’m so glad I retired. I keep getting affirmations that I did the right thing.

IMG_9644.jpeg
 
TCABM said:
Funny you mention that. I’m in my ninth year post .mil retirement. I enjoy the work I do and it’s not terribly hard. The guy I work for knows two things
1. If I win the lottery I’m out tomorrow.
2. I do this job for (really good) beer money. The instant it becomes stupid, I’m putting in my notice and he’s got two weeks to unf- it. So far, he shields/diverts/overturns the stupidity before it gets to me. We’ll see long it lasts.
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He sounds like me!initially my job was a breath of fresh air after 20 yrs mil. Over time we added more layers of red tape and I became a manager. My easy mil retirement gig isn’t as easy as it used to be. Still, I really can’t complain about company culture or pay. Considering I fly a whopping 150 hrs ish a year with only 3 days travel (sim), there’s worse things to do in life. Doesn't mean I don’t look forward to retirement though.

I’ve seen guys go well into their 70s in this gig. Not sure if they just aren’t set financially or they just enjoy what they’re doing. Both I guess. I also think some just look at retirement as throwing in the towel and no longer being a contributing member in society. Then there are studies that show working late in life contributes to longevity. I don’t know. Personally, I think I’m leaning towards quality over quantity.
 
Matthew said:
What I simply didn’t consider was that, after all the income I was diverting to savings, I was living just fine on well under that 80%.
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This is often something people dont realize when trying to calculate living expenses pre-retirement. You can even add in other pre-retire costs like work transport costs, lunches, clothing in some cases, etc. which can make a huge difference for some people when those expenses are no longer paid post-retire. First world problems for sure, like when a friend was trying to follow me down the same early path but didnt think he could swing it until I pointed out a rather substantial expense item listed on his spreadsheet would go away the day after he retired. A couple key strokes later and his projected retire income jumped a couple notches. Needless to say that mf retired a month before me.... should have waited 6 months more before I showed him.
 
When you calculate your budget, don't skip inflation, and make sure you calculate your proposed income after taxes.
And yes, healthcare can be expensive, especially without subsidies. They are on the chopping block right now. For reasons I don't think can be discussed here.
As an example, some folks I know are paying around $15k per year premium only. Then there are like $7-9k deductibles/max OOP before you get decent benefit.
I retired earlier this year, and wasn't aware the subsidies could expire. While I won't go back to work, it will affect my spending habits somewhat if they do.
But it's still the same answer to the real question, no regerts. ;)
 
I didn't retire way early, but at 63 and change. We had the mortgage and everything else paid off. I'd been plotting my escape for a while, and thought I had a pretty good handle on our burn rate. As it turns out, I was being pessimistic about both that and the performance of our investments, so it's been pretty stress-free. My biggest worry was medical insurance cost. We were both on ACA medical plans until this month when I turned 65; my wife will go on Medicare next year. Just needed to manage our incuome numbers to keep that cost under control.

I don't regret it for a minute. I loved what I did, right up until I didn't. It was obvious the company was in a death spiral, and I hung on for a while longer just to extract as much salary as I could before they cratered. Now I'm busy on the days I want to be, and less busy when I don't feel like being really busy.

As for the money and all... there's a guy named Kevin Lum who does a bunch of retirement planning videos on Youtube. He shared access to a software tool called RightCapital that is/was extremely helpful in figuring out how much to pull from which accounts in what order, and why. Most of it's a matter of minimizing taxes later on.
 
Skyrys62 said:
I retired earlier this year, and wasn't aware the subsidies could expire.
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The core ACA subsidies are not expiring. Only the extended subsidy which started in 2021 due to covid and required a renewal every 2 or 3 years. That cycle ends on Dec 31. Basically these subs removed the "cliff" or upper income hard limit and replaced it with a scaled % limit capped at 8.5% regardless of income. So if those extended subs do not renew, the 2026 "cliff" subsidy income limit will be $62,600 for a single person.
 
kayoh190 said:
Has anyone retired early and come to regret it later?
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I've yet to meet anyone who regretted an early retirement.

I retired in 2020 at 59 and have loved it.

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?"

Addressing that should lead to some introspection about the things that actually bring joy and happiness to your life, and once you understand what those things really are, you may find that you can achieve them for less cost than you think. Failing to address it can lead to a retirement that's less than satisfying.

For me, coming to an understanding of my personal happiness generators was key to a happy retirement, and to a happy life in general for that matter.

Simple example: SWMBO and I enjoy dining out with friends from time to time. What makes us happy is the time with friends in a pleasant environment, and we can derive just as much pleasure from that with a meal at Golden Corral as we can at Ruth's Chris. It's the conversation, the laughter, the camaraderie that matters, much more than the quality of the steak (and I love a good steak as much as anybody).

Another example: I absolutely love taking a fast performance vehicle along a fun, winding road. That does not require a Ferrari! I have a Triumph Daytona 675 that I bought new for $13k and it will walk away from a Ferrari, and for me is more fun anyway.

I enjoy flying. Would I be having more fun in a new Cirrus than I am in my 1969 Musketeer? Maybe a little, but not 20x as much.

There's usually a way to make the spreadsheet work out, as far as paying the bills and healthcare and groceries are concerned. The real trick to not regretting early retirement is to understand what you personally will find satisfying and then figuring out how to make that happen within the figures the spreadsheet is giving you.
 
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Bell206 said:
The core ACA subsidies are not expiring. Only the extended subsidy which started in 2021 due to covid and required a renewal every 2 or 3 years. That cycle ends on Dec 31. Basically these subs removed the "cliff" or upper income hard limit and replaced it with a scaled % limit capped at 8.5% regardless of income. So if those extended subs do not renew, the 2026 "cliff" subsidy income limit will be $62,600 for a single person.
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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.
 
Matthew said:
And that’s where the game is played.
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Exactly. I've been playing the same game almost since ACA went live. And capital gains is applicable income of which I've taken advantage of the extended limit subsidies to cash out of some funds and pay the extended % to replenish my living account. But I only have 18 months left to play the ACA income game. Yea!
 
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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