Retirement...and dates...

[VirginiaCat]

COVID has done many things. One it had done for me is get me focused on retirement and setting a date. As a former accountant I had always been focused on a number but that was not a date, it was a fiscal amount.

As I have seen several acquaintances pass away suddenly in the past 11 months, all of a sudden that fiscal number is less important than the date number.

I am 56 today. Do I have fiscal balances I wish I could hit before stepping away from an income...yes.

But also now know there are things I want to do with the wife and family before I am gone.

Complicating is a 13 year old daughter I have to get through college (and high school).

But, the dates are somewhat set. If I am where I think I will be investment wise my last day of work will be Dec. 31, 2028. I will have just turned 64. If not, I will go another 18 months and fiscal balance be damned, I will be done June 30, 2030.

Have any of you set dates yet?

[Darrell KSR]

Not retiring. I'll just take time off when I want (as I do now, and have for years) and get more choosy on what type of work I do. But I'm the oddball.

My Dad worked until he was 80. My father-in-law, until mid-80s. I plan on beating both.

[blueboss]

I’m ready now, but trying to dig it out 2-3 more years. I do think, while I am going to retire from full time work, I still might do some consultant work part time on my own schedule.


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[Catonahottinroof]

I retired a year and half ago (medically). Best thing ever

[suncat05]

I retired the day after my 66th birthday, last May, which was my plan.
I intend to go back to work, but not full time, perhaps at the Air Force base or at the Kennedy Space Center.
I just want to stay busy, get out of the house, but not have a boatload of stress.
And not have to carry a gun or worry about having to arrest anyone or have to write a damn report ever again.

[CGWildcat]

I'll work doing something till the day I die. VERY POOR money decisions when younger have led to no real savings or 401 to speak of.

[KSRBEvans]

I've kicked around retiring in a few years. Mrs. BEvans and I have pretty much decided 2025 will be the date. Our plan right now is to sell here in Kentucky, get a place in Florida, live in it part of the year, rent it part of the year and travel on the rental $ while it's rented, like this couple did. I'll be in in my early 60s at that point and still healthy enough (knock on wood) to do some stuff.

[KentuckyWildcat]

I'm hoping I can retire in about 100 more years. That would put me at 141. With some luck, I'll have about 2 days to enjoy retirement.

[KentuckyWildcat]

My more serious post...

Currently in a dilemma. I am 41 and can retire from my job at 50. I make a decent salary, but I am likely maxed out at this point. Retiring means that I get their insurance at my current rate, but I cannot touch my 403 until I am 60. I could certainly make more money by leaving education, but then I am committing myself to working until my wife is 65 or so. My wife has some preexisting health issues and we will need insurance. But who knows what insurance will be like by then? But, I think the safe decision is to stay and get the insurance.

At 50, I will know if I should go make more money, or just start phasing out retirement where I am at. Ideally at 55 I would move to an 11 month contract. Then eventually to a 10 month contract. And at 60 or so, I hope I could move into a less stressful role and just work until I die. Like Darrell, I don't think I will ever fully retire. But I sure hope to be working at my own pace around 60. The men in my family die at about 72 and I may work until I die. But I hope I am working at my own pace by 60.

So I guess my date to "retire" is 60 (19 more years).

[VirginiaCat]

My more serious post...

Currently in a dilemma. I am 41 and can retire from my job at 50. I make a decent salary, but I am likely maxed out at this point. Retiring means that I get their insurance at my current rate, but I cannot touch my 403 until I am 60. I could certainly make more money by leaving education, but then I am committing myself to working until my wife is 65 or so. My wife has some preexisting health issues and we will need insurance. But who knows what insurance will be like by then? But, I think the safe decision is to stay and get the insurance.

At 50, I will know if I should go make more money, or just start phasing out retirement where I am at. Ideally at 55 I would move to an 11 month contract. Then eventually to a 10 month contract. And at 60 or so, I hope I could move into a less stressful role and just work until I die. Like Darrell, I don't think I will ever fully retire. But I sure hope to be working at my own pace around 60. The men in my family die at about 72 and I may work until I die. But I hope I am working at my own pace by 60.

So I guess my date to "retire" is 60 (19 more years).

This is not intended as a political post and I hope is not crossing the line.

My wife too is 5 years younger than me so under current law if I retire at 64 I will need to pay for health insurance for 1 year and we will need to purchase hers for 6 years until Medicare kicks in.

However, given current environment, I believe we will have some type of national health care at that point. And in a way, I can support that IF I know what is looks like. One of the biggest unknowns in my company budget each year is the amount of claims in our selfinsured health plan.

[kingcat]

I retired the day after my 66th birthday, last May, which was my plan.
I intend to go back to work, but not full time, perhaps at the Air Force base or at the Kennedy Space Center.
I just want to stay busy, get out of the house, but not have a boatload of stress.
And not have to carry a gun or worry about having to arrest anyone or have to write a damn report ever again.

I hope you really consider the space center. I want to take all my grandkids and need someone on the inside.

[suncat05]

I hope you really consider the space center. I want to take all my grandkids and need someone on the inside.

😉

[KeithKSR]

My more serious post...

Currently in a dilemma. I am 41 and can retire from my job at 50. I make a decent salary, but I am likely maxed out at this point. Retiring means that I get their insurance at my current rate, but I cannot touch my 403 until I am 60. I could certainly make more money by leaving education, but then I am committing myself to working until my wife is 65 or so. My wife has some preexisting health issues and we will need insurance. But who knows what insurance will be like by then? But, I think the safe decision is to stay and get the insurance.

At 50, I will know if I should go make more money, or just start phasing out retirement where I am at. Ideally at 55 I would move to an 11 month contract. Then eventually to a 10 month contract. And at 60 or so, I hope I could move into a less stressful role and just work until I die. Like Darrell, I don't think I will ever fully retire. But I sure hope to be working at my own pace around 60. The men in my family die at about 72 and I may work until I die. But I hope I am working at my own pace by 60.

So I guess my date to "retire" is 60 (19 more years).

I was able to withdraw from my 403 upon retirement, because I retired after I turned 55. Had I retired at 54 I couldn’t take a draw on the account until after I turned 59.5.

A 457b is a better option for educators who plan to retire before 55. The major difference is you can withdraw funds anytime after retirement with the 457b.

[KentuckyWildcat]

This is not intended as a political post and I hope is not crossing the line.

My wife too is 5 years younger than me so under current law if I retire at 64 I will need to pay for health insurance for 1 year and we will need to purchase hers for 6 years until Medicare kicks in.

However, given current environment, I believe we will have some type of national health care at that point. And in a way, I can support that IF I know what is looks like. One of the biggest unknowns in my company budget each year is the amount of claims in our selfinsured health plan.

Not taken as political and neither was mine intended to be that way. It is just something we have to guess at and plan for our best guess at this point. And what cost will any insurance be then? My group rate is pretty darn cheap today. Will it be in 20 years? Maybe, maybe not. I just know insurance will be a big part of my retirement plans.

Fingers crossed my in-laws have a fortune that I am not aware of. Because I know my parents do not. lol

[KentuckyWildcat]

I was able to withdraw from my 403 upon retirement, because I retired after I turned 55. Had I retired at 54 I couldn’t take a draw on the account until after I turned 59.5.

A 457b is a better option for educators who plan to retire before 55. The major difference is you can withdraw funds anytime after retirement with the 457b.

Some KCTCS employees can draw at 55 instead of 59.5. There was a recent change that has allowed that. But we still have some on UK contracts, and we have changed policies and retirement plans more than once. I'm not close enough to worry about those details yet, so I have not really looked in the recent changes. So I might be able to get it sooner, but I don't see it happening until 60 anyway.

[MickintheHam]

COVID has done many things. One it had done for me is get me focused on retirement and setting a date. As a former accountant I had always been focused on a number but that was not a date, it was a fiscal amount.

As I have seen several acquaintances pass away suddenly in the past 11 months, all of a sudden that fiscal number is less important than the date number.

I am 56 today. Do I have fiscal balances I wish I could hit before stepping away from an income...yes.

But also now know there are things I want to do with the wife and family before I am gone.

Complicating is a 13 year old daughter I have to get through college (and high school).

But, the dates are somewhat set. If I am where I think I will be investment wise my last day of work will be Dec. 31, 2028. I will have just turned 64. If not, I will go another 18 months and fiscal balance be damned, I will be done June 30, 2030.

Have any of you set dates yet?

Don’t wait too long! I did. I liked what I was doing. Once I reached critical mass I should have gone. I tooke an extended trip across the country when I retired and want to take another when I get my next Covid shot.

One thing you want to seriously consider. Make waiting on 70 for SS part of your plan regardless of what age you retire. From 62 on you get a guaranteed rate of return of 8% on SS. That’s likely better than where your retirement account is invested. I lived off my IRA balance when I retired and because I had 8% locked up as secure was able to invest retirement funds heavily in the stock market. I feel very good about what I did. I started SS withdrawals a year and a half ago and now have been able to invest more money in the market at strategic times. As a matter of fact my retirement job has become investing and managing investments. All of this is to say I am living a better life today than 3 years ago! Knowing your background and tenacity, you will, too!

Above all, invest to the extent you are comfortable. A long time friend converted everything he had to cash the day he retired. Even with low returns ( short term rates could go negative soon) he is happy. He says he is happy. But as fuel prices increase, the cost of climate change legislation creeps in, I’m not as sure I would be as happy as he currently. He worried about losing his savings. I worried about not having enough to keep up with the economy. As of today we’re both happy. I trust it will continue.

[VirginiaCat]

Mick,

great comments and thoughts.

first, my Wife and I already thinking about 90 days in Europe the spring/summer after I retire. not sure the model (Diff City every 2 weeks or Central Apt with day trips etc) but we have have 8 years to plan.

As far as SS I am planning on taking at 65 right now. My full draw is 67.5. The 8% is a tempting thought however and have been looking at the numbers.

Based upon my earnings history, my full retirement benefit is $2750 at age 65$3206 at age 67 and $4055 at age 70 ($33000 vs $38472 vs $48660 annually. If I do not take it at 65 I will likely wait until 7o. A difference of $456 a month (65 vs 67) and $1305 a month (65 vs 70) it quite a bit diff.

What is playing into the SS decision is genetics. My dad died at 69. Had some health issues I do not have but in general, his brothers all died in late 60's and early 70's making me want to take the money up front.
honestly, a lot will depend no how my current retirement assets perform in the next 8 years. If it performs the way it has the previous 4 years I would feel good about waiting. But alas, not sure I have confidence in the next 10 years stock market performance. hope I am wrong.

From an investment standpoint, I tend to be a bit less risk averse in my investments than the average guy. I am planning on a return of 7.25% throughout retirement. If so, my cash flow from investment earnings alone will be about 60% of current cash flow. With the SS it gets me to 75%-80%.

So much unknown over the next 8 years...college for the 13 year old included...

Don’t wait too long! I did. I liked what I was doing. Once I reached critical mass I should have gone. I tooke an extended trip across the country when I retired and want to take another when I get my next Covid shot.

One thing you want to seriously consider. Make waiting on 70 for SS part of your plan regardless of what age you retire. From 62 on you get a guaranteed rate of return of 8% on SS. That’s likely better than where your retirement account is invested. I lived off my IRA balance when I retired and because I had 8% locked up as secure was able to invest retirement funds heavily in the stock market. I feel very good about what I did. I started SS withdrawals a year and a half ago and now have been able to invest more money in the market at strategic times. As a matter of fact my retirement job has become investing and managing investments. All of this is to say I am living a better life today than 3 years ago! Knowing your background and tenacity, you will, too!

Above all, invest to the extent you are comfortable. A long time friend converted everything he had to cash the day he retired. Even with low returns ( short term rates could go negative soon) he is happy. He says he is happy. But as fuel prices increase, the cost of climate change legislation creeps in, I’m not as sure I would be as happy as he currently. He worried about losing his savings. I worried about not having enough to keep up with the economy. As of today we’re both happy. I trust it will continue.

[MickintheHam]

Mick,

great comments and thoughts.

first, my Wife and I already thinking about 90 days in Europe the spring/summer after I retire. not sure the model (Diff City every 2 weeks or Central Apt with day trips etc) but we have have 8 years to plan.

As far as SS I am planning on taking at 65 right now. My full draw is 67.5. The 8% is a tempting thought however and have been looking at the numbers.

Based upon my earnings history, my full retirement benefit is $2750 at age 65$3206 at age 67 and $4055 at age 70 ($33000 vs $38472 vs $48660 annually. If I do not take it at 65 I will likely wait until 7o. A difference of $456 a month (65 vs 67) and $1305 a month (65 vs 70) it quite a bit diff.

What is playing into the SS decision is genetics. My dad died at 69. Had some health issues I do not have but in general, his brothers all died in late 60's and early 70's making me want to take the money up front.
honestly, a lot will depend no how my current retirement assets perform in the next 8 years. If it performs the way it has the previous 4 years I would feel good about waiting. But alas, not sure I have confidence in the next 10 years stock market performance. hope I am wrong.

From an investment standpoint, I tend to be a bit less risk averse in my investments than the average guy. I am planning on a return of 7.25% throughout retirement. If so, my cash flow from investment earnings alone will be about 60% of current cash flow. With the SS it gets me to 75%-80%.

So much unknown over the next 8 years...college for the 13 year old included...

You make a good point about genetics. If you don’t plan a long life, take the SS early and preserve as much as you can of the Retirement account. After all anything you don’t spend from your IRA goes to your estate. SS and Pension plan go away upon your death (unless you take a survivor option) and do not pass to your heirs. For sure there is no magic answer. Risk tolerance, lifestyle, family needs make the answers unique to everyone.

[catmanjack]

Always enjoy these threads, gets me to thinking and trying to figure out my future.
Believe I will work into my 70’s just because that’s the easiest thing to envision.

[catmanjack]

Wish I had a mentor on the retirement front.

[KentuckyWildcat]

Wish I had a mentor on the retirement front.

I think you have some here. I am far from the expert and far from retirement. But my best advice is similar to what Mick said. Do what makes you comfortable. And if you get an actual advisor, make sure they understand your plan and goals.

Went round and round with the father in law early in our marriage. He is a CPA and probably knows more than I'll ever know about money. But early on, he wanted us to do what he wanted us to do. He and I argued. The wife and I argued. She was on his side. Guess what....his plans ended up not working out very well for us. He now stays out of our business and the wife mostly listens to me know It was not that he was wrong, it was that he did not understand our plan or our goals.

[VirginiaCat]

As a former CPA I realized my knowledge is somewhat slanted to a more conservative model. So, I have always read investment articles and books on different styles and models. And I also have friends that are advisors and we always have discussions of point and counterpoint.

But, one thing I think I have figured out (and wish I had figured it out 10 years earlier than I did). The S&P 500 almost always returns around a 10% return over a 10 year period. Some outliers but from an investment/bet standpoint it is somewhat predictable over that timeframe.

https://www.slickcharts.com/sp500/returns/details

It can be down for 2-3 years in a row. So, if my retirement window is 2-3 years, I think I can get out and be ok.


BTW, I still believe if you start young enough, Dollar Cost Averaging will work out in your favor over the long haul.

Guess we will find out if I have any brains at all...

[CitizenBBN]

Stocks will return 10-12% lifetime. They're pretty dang stable in that respect as this goes back to the 1920s.

The problem is, as you said, that within a 2-3 year window there can be significant drops impacting that rate. If you can diversify enough that you can avoid withdrawing during one of those downturns then the negative impact can be minimized or negated.

Which is why planners will move people to more stable but lower return holdings as they near and enter retirement. Bonds, etc. are an obvious choice. it's to avoid those downs that happen within that overall 10% growth.

It's a good long term investment, but must be offset to deal with the timing of market fluctuations.

[MickintheHam]

Stocks will return 10-12% lifetime. They're pretty dang stable in that respect as this goes back to the 1920s.

The problem is, as you said, that within a 2-3 year window there can be significant drops impacting that rate. If you can diversify enough that you can avoid withdrawing during one of those downturns then the negative impact can be minimized or negated.

Which is why planners will move people to more stable but lower return holdings as they near and enter retirement. Bonds, etc. are an obvious choice. it's to avoid those downs that happen within that overall 10% growth.

It's a good long term investment, but must be offset to deal with the timing of market fluctuations.

If you look at the S&P 500, back to 1933, I don't believe you will see a three year period of decline. Just shy of two years is the longest losing period. Going back to the 60s, any annual declines (I believe there are only 13 years in which there has been a decline), have been wiped out within a year.

To avoid forced selling in a down market, i.e. a required minimum distribution, I keep a minimum 1 year RMD in liquid assets, mostly cash. This enables me to do two things. First I avoid a forced sale of securities when the market declines. Two, I have cash to buy stocks when the market is down. In 2020, I hit the exacta when Congress suspended the RMD requirement for 2020. Not only did I avoid the forced sale, but I had cash to invest in early April when the market was down. I was able to buy some nice stocks at a very attractive price. The gains on those stocks has been stunning.

My investment object is to achieve returns that exceed 4%/ yr. which is also about the amount of my annual RMD. So, if I get a return of 1-2% on 4% of my retirement funds, a total stock market return of 5 or 6% keeps me well ahead of the 4% I have to earn to cover withdrawals. This keeps my core IRA balance I had at retirement intact. I view this strategy to be very conservative.

In years in which there are windfalls I feel very comfortable taking excess earnings and doing something extravagant.

The basis for my philosophy on investing, believe it or not, comes from the Gospel of Matthew Chapter 25, the parable of the talents. I believe it is a sin to bury your savings(talents) in the ground and dig it up to spend it as you go. Take what you have saved and let it grow and flourish. If things go as planned, I can live comfortably in retirement and still have the principal I saved in my working life for my heirs giving them an opportunity to let it continue to grow for them.

[MickintheHam]

I stand corrected. in 2000, 2001 and 2002 the S&P 500 had declines. But look at what the market did between 1995 and 2004:

Year Return
2004 10.88
2003 28.68
2002 -22.10
2001 -11.89
2000 -9.10
1999 21.04
1998 28.58
1997 33.36
1996 22.96
1995 37.58

These are three of the 13 annual declines in the last 60 years. My investment strategy did not suffer in that three year down period. Any money invested in 1995 would have faired well in a 10 year period that included the worst three year period in my lifetime. I guarantee you half of the so called investment counsellors out there if you went to visit them would concentrate of the years 2000, 2001 and 2002 to scare hell out of you. It causes a lot of people to bury their money in the ground.

[KentuckyWildcat]

My parents invested a lot of money just before 9/11. They have not trusted the market since.

[MickintheHam]

My parents invested a lot of money just before 9/11. They have not trusted the market since.

Had they not sold anything they would have been in good shape by 2005. The way to get killed in the market is to sell when it is down and fail to diversify. It’s easy to invest in broad markets with ETFs. Failure to invest in the economy means you fall behind as the US economy grows. An alternative is to have have an excellent salary get 10% increases each year. That way you will stay ahead of the economy and the broader markets.

[Catfan73]

When the market dipped last March I increased my 401k withholding from 12 to 15%. People were like wth are you doing?? I just replied, everything is on clearance lol.

[MickintheHam]

When the market dipped last March I increased my 401k withholding from 12 to 15%. People were like wth are you doing?? I just replied, everything is on clearance lol.

I like your attitude!

One additional thought. If you have learned to live with a 15% lower income as a result of your payroll deduction, it will make it easier to retire in the style to which you are accustomed.

My goal was to reach critical mass, a point where my investment income + Social security equaled ny take home pay. What you are doing makes that easier to achieve. You are saving more and spending less. It’s a great strategy if you don’t drop dead at 45. Congratulations.

[Catfan73]

Got past 45 lol, at 59 now. Sometimes I think about the grim reaper but outliving my retirement benefits scares me more.