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Waiting to 65 to retire - death risk versus finances

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Trying to understand why people choose to wait to retire at 65 or 67 or 70.  To me its a fools choice, as your risk of death is pretty certain when that age.  Do you want ten years of healthy RV life?  or do you want one year, and then end up needing to go on assisted living due to the various other risks.  Admit I am jaded in my perception, as I provided care to a sick wife who passed from cancer years ago (now remarried).

1)  Average age of death is 72 in WV and 82 in Wash DC.  This is average, meaning many will die younger (half); and does not mean you will make that age.  It means that given all conditions half the people live to that age.

2)  Average age of cancer is one third will get it by age 70.  It takes a year to get through that, and only half survive.  A third getting cancer is pretty significant; and its pretty hard to have any energy come back so you can do things like traveling.

3)  Average heart attack age is 55 to 65; and you could have a crippling stroke or other permanent injury, if you have a heart attack.

4) Do you have any medical risk factors or mobility issues going on?  they will only get worse, so you need to fix your health as best as possible until mobility retirement.

*****************

Am retiring early with significant cut in pension, but SS at 62 will cover that mostly.  Please comment about your perception.  Can see living day to day, and just rolling the dice; but best to get out and starting living that RV life now.      

 

  

 

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We retired 6 years ago at 62 & 63, though we both still work occasionally - we help our son when needed, and I still guest teach dance very part-time at the local performing arts high school.  We enjoy doing that as it isn't a day-to-day thing and keeps us engaged. We RV for 8-10 weeks in the summer and shorter trips during the year. We are both very healthy with no issues. I take no medications, and DH takes meds for migraines.  Health issues certainly could change as we enter our 70s, so earlier is really better for feeling well and for good mobility.

My father passed away at 56 and never got to live his dream of moving to the Everglades and fish. He was the quintessential Florida fisherman and knew the Everglades like the back of his hand. My dear friend's 46-yr. old son passed away 2 weeks ago from a heart attack. Very unexpected. So, living until late 60s or early 70s certainly isn't guaranteed.

Being debt free is part of what can allow someone to retire earlier. I do think some people think they need a lot more money socked away than is really necessary, so they work, work, work until they die because they never think they have enough.

 

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Everyone has to develop the plan that fits them best. I was fortunate in that I chose to work for a company that had a great early retirement plan which included health care coverage for the employee & spouse from retirement to Medicare, but many do not have that benefit. Fortunately for us, my father convinced me not to change employers for more money with less retirement benefit, back when I was in my 30's and our kids were in school. The result was that I was able to retire and go fulltime at the age of 57, but many do not have that option. At age 62 you can draw social security but you still need some way to protect yourself from a disastrous medical expense. You can get some hint from your family medical history, but nothing is guaranteed.

If you wait until you have enough money to retire, you probably never will but preplanning for early retirement is an important part of retiring early. If I were facing the healthcare mess that our government has created to "help" us, I really do not know what I would do. For many, the age 65/Medicare option is the only viable choice. If you wreck your financial security to retire early and then live to a ripe old age, you could find yourself just surviving in miserable conditions. 

The only thing that you have which can never be recovered or replaced once gone is your time. Use it very carefully!

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It's a personal choice and each must make it based on their own personal circumstances.

However, here is one way to look at it.  If you retire late (66-70), start rv'ing, then die a year later, you will have absolutely no regrets later.  If you retire early (55-62), rv for 10 years, then live to 88, you may spend the last ten years of your life seriously regretting not working another five or six years.

I retired at 59, have spent over 10 years full time rv'ing, and am still in good health with no regrets so far.  But, my financial needs are pretty simple and I'm not responsible for any other's financial security.  Who knows how I will feel if I live another 10 years.

 

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56 minutes ago, chirakawa said:

It's a personal choice and each must make it based on their own personal circumstances.

However, here is one way to look at it.  If you retire late (66-70), start rv'ing, then die a year later, you will have absolutely no regrets later.  If you retire early (55-62), rv for 10 years, then live to 88, you may spend the last ten years of your life seriously regretting not working another five or six years.

I retired at 59, have spent over 10 years full time rv'ing, and am still in good health with no regrets so far.  But, my financial needs are pretty simple and I'm not responsible for any other's financial security.  Who knows how I will feel if I live another 10 years.

 

Literally have met no one who regretted retiring early in any circumstance; and can not find these mythical humans.  And that is an issue with the public at large thinking they need more to retire on, than they really do.  Many think they need at least $1.5M for each person in the bank, plus other things like paid off house and maybe a small pension, and insurance coverage.  Its just not true. 

Start with determining what you need per year to live on, including various insurance premiums (cause you need those too).  then figure the retirement requirement from that.

But.... Do understand that there are many who say they want to retire and they have nothing at all.  They have no SS benefit cause they never worked reportable income for SS (family worked, not them; or special job like old government jobs that had no SS).  Or they have nothing I savings at all.  or they have big debts due to nasty medical situations. 

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I agree with your position 100%.  Over the years I saw many of my friends and coworkers die before retiring, or falling over dead 6 months after retiring.  One couple that we knew wanted to travel after retirement but disagreed on the best approach.  My friend reluctantly gave into his wife and purchased a retirement home here in Florida first.  They sold their home in Maryland, purchased a new Suburban and Airstream trailer,  drove to Florida and put them into storage while they settled into their new home.  A few months later his wife had a serious medical event the prevented travel.  Before she could fully recover, he had a medical problem develop also.  Several years later they realized that they were never going to be able to travel so they sold the Suburban and Airstream at a great loss (after paying storage fees for years).

I decided early on that I wanted to retire early and travel, so I planned my career accordingly.  My field of employment was not the best paying, and had less than desirable working conditions, but had great job security and a wonderful retirement program.   I also started my own business to earn extra income.  By living frugally, following our plan, and a little luck, Toni and I were able to retire when I was 46.  We spent 13 years traveling full time before settling down again and becoming long time travelers.

The biggest downside to early retirement was losing our job related health insurance.  Purchasing our own has been the single largest expense in our budget.  With the introduction of Obamacare, we were able to shop around to find a more reasonably priced plan, but the high deductible came back to haunt me last year when I began having serious heath issues of my own.  Now I find that I am unable to start drawing social security at 62 as planned because that would cause the heath insurance premium to increase by more than I would be getting from SS.  Oh well, we have been getting by with out it all these years so I look forward to drawing a higher benefit once (if)  I reach 65 and switch over to Medicare.

Safe Travels...

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Keep in mind that full SS retirement is going to likely be at age 66+ some months depending on the year you were born.  For DW, born in '56 its 66 + 4 months, for me, born in '58, its 66 + 8 months.  Yes Medicare can be gotten at 65 but SS is another deal.  Now if you can afford to wait on SS, for each year beyond your full retirement benefits time, you will get an 8% increase up to age 70 when no more increases are available.

At least that is how I understood it after doing some research and attending a SS benefits luncheon with an "expert" sponsored by my CPA and an insurance company.

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IIRC, the break even point of taking SS at 62 vs waiting until 70 is 82 yrs of age.  Meaning if you wait until 70 to take SS, you make up the difference in 12 yrs.  Maybe you'll live longer and be ahead.

I plan to start collecting at 62.

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We retired early at 62/61 and have never regretted it.   We were lucky in that our previous employer included in our retirement benefits health coverage until Medicare kicked in at which time the insurance became our supplemental coverage.   One of the things we did not do at the time was touch our IRAs, which can be left to our kids, SS can not.  So now we take out our RMDs each year, but the IRAs keep growing and should we need extra beyond our SS and pension we have it available. 

 

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I was not expressing an opinion, but sharing what I have learned.  I am not retirement age, in fact only just 60 and SELF-EMPLOYED.  I have had to find a different path to invest in for retirement.  So glad that some of you have jobs/careers that allowed you to experience the fruits of your labors.  My Father retired at 59-1/2 from a Fortune 50 company and lived to 81 & was SKP.  His net worth increased each year and he did not collect his SS benefits until he was 70, he didnt need it, he told me.  He left my Mother in a good position, financially.

Some of his teachings I have been fortunate to be able to apply as well as some of my own.  He was never self-employed so that is unique in my and DWs case.  We are working on reducing working time for more time off, off course in our RV, which is why I come here to learn from many of you, and for that, THANK YOU FOR SHARING.

IRAs and real estate continue to fuel our plan and we hope that the plan will come to fruition for us.

 

 

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I can name several that regret retiring at 62. The difference in SS payments is huge. That is all they have though. I intend to work till 66ish for maximum SS payment and fact that I am in great health and active. Enjoy my profession. I could die tomorrow but my family live long productive lives. I have not abused my body and it shows. I'm working on getting my Teton energy sufficient by then and travel till I get tired of it. We been a lot of places but working and vacationing not the same.  

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20 minutes ago, GlennWest said:

I can name several that regret retiring at 62. The difference in SS payments is huge. That is all they have though. I intend to work till 66ish for maximum SS payment and fact that I am in great health and active. Enjoy my profession. I could die tomorrow but my family live long productive lives. I have not abused my body and it shows. I'm working on getting my Teton energy sufficient by then and travel till I get tired of it. We been a lot of places but working and vacationing not the same.  

It must depend on your definition of 'huge' .

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In our case we both had survived life threatening medical issues (ovarian cancer/stroke) and once you face the fact that you are that close to death, you want to make sure you get to enjoy what ever time you have left.   As it turned out, not only had Dave survived his stroke, but just before we retired we found out he had blockages in his coronary artery, so 6 days after retiring he had three stents (longest 2 1/2 inches) inserted to break up 5 blockages.  We have viewed all of our time on the road as a gift and I know that if he had kept working another 3 years he would have died before we got to retirement.   Retiring removed him from the stress and lengthen this life.   Not to mention being able to ENJOY all that fulltiming has to offer when we were healthy enough to get around.  12 years later, we have slowed down because our bodies are not as limber as they once were and other aliments are showing us that we are aging.   Had we waited until now, we would have missed out on so much.   

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4 hours ago, offroad said:

Trying to understand why people choose to wait to retire at 65 or 67 or 70.  To me its a fools choice, as your risk of death is pretty certain when that age.  Do you want ten years of healthy RV life?

Who are you trying to convince? It sounds like yourself. You also sound angry at those who decide to retire later.

First, both my wife and I did retire before 65 -- she at 62, me at 63. Would we do it again? Probably not in the current health insurance environment. We both retired when the ACA (ie, Obamacare) was new and relatively affordable. Today it's a very different story -- and, sorry, health ministries aren't for us.

Yes, as you age your chances of dying increase, but so do your chances of getting ill or getting a debilitating (but not fatal) chronic disease. You're going to need decent, affordable health care that covers pre-existing conditions. Currently, that's Medicare. And for that you have to wait until you're 65.

Finally, I think you also need to factor in Quality of Life in your retirement plans. Being alive is great, but in your later years if retiring early means forever stuck in one AZ campground using Hamburger Helper four days a week . . .

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Well, that just goes to show you, that when you get there, there ya are!

We each have different circumstances and have to make decisions that work for us, and I am grateful we each can do that.  

We seem to all enjoy the journey rather than the destination, and its the journey that offers up the experiences we can later reminisce about.

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10 minutes ago, Barbaraok said:

In our case we both had survived life threatening medical issues (ovarian cancer/stroke) and once you face the fact that you are that close to death, you want to make sure you get to enjoy what ever time you have left.   As it turned out, not only had Dave survived his stroke, but just before we retired we found out he had blockages in his coronary artery, so 6 days after retiring he had three stents (longest 2 1/2 inches) inserted to break up 5 blockages.

 

1 hour ago, Barbaraok said:

We retired early at 62/61 and have never regretted it.   We were lucky in that our previous employer included in our retirement benefits health coverage until Medicare kicked in at which time the insurance became our supplemental coverage

This is my Apples vs Oranges pitch . . .

What if you were retiring now at 62/61, but without that employer health coverage? Would you still retire?

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Zulu,

The answer to your question is YES.   Having once faced near death, the idea of waiting was not something we would do - - we know that we only have a finite time to enjoy retirement.   If it were today that might mean buying a less expensive DP in order to have funds to purchase heath care until Medicare kicked in.  

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7 minutes ago, Barbaraok said:

Zulu,

The answer to your question is YES.   Having once faced near death, the idea of waiting was not something we would do - - we know that we only have a finite time to enjoy retirement.   If it were today that might mean buying a less expensive DP in order to have funds to purchase heath care until Medicare kicked in.  

Thank you for your perspective.  This is a pretty personal issue and having the opportunity to have your experience shared with those of us(me) in a place in life that we are considering this type of decision, is very generous.

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I should also add that we CONSCIOUSLY made the move to Texas for our jobs there  (UT Tyler) because of their retirement package.   We had other offers from universities to consider, but the health care portion of the retirement package was the deciding factor in our going to UT Tyler; and the reason it was included was that UT had years before found that including health care coverage for their retirees was a good benefit to offer to get faculty from around the world to come to one of the UT campuses.

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We were also self employed and had to fund our own retirement and provide our own healthcare coverage. We do not have a pension and did not/do not have a retirement health care package. Fortunately, Obamacare hadn't hit when we retired, and we were able to limp to Medicare. In today's health care climate, I'm not sure if we would retire prior to Medicare. While our premiums weren't cheap because it was not group coverage, our business paid the premiums, and we had the income to pay them. What I'm reading now as to what poor coverage costs makes my stomach turn. It's robbery.

Edited by Dance Chick

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3 minutes ago, Barbaraok said:

I should also add that we CONSCIOUSLY made the move to Texas for our jobs there  (UT Tyler) because of their retirement package.

Good for you, but from what I've seen most RV retirees didn't have this option.

 

29 minutes ago, Barbaraok said:

Zulu,

The answer to your question is YES.   Having once faced near death, the idea of waiting was not something we would do - - we know that we only have a finite time to enjoy retirement.   If it were today that might mean buying a less expensive DP in order to have funds to purchase heath care until Medicare kicked in.  

 

For the benefit of others, let's SWAG a current retirement scenario for you & spouse, but without that great university health plan. Now you have to purchase your own health insurance.

So, you're 61 and 62 today and you have to buy your own health insurance. Some assumptions:

  • You'll go with an ACA plan.
  • The ACA will still be available in its current form until you go on Medicare.
  • Health care costs will only go up 6% a year.
  • FL will still have nationwide health plans until you go on Medicare.
  • You now domicile in FL, not TX, because you want a nationwide health plan.
  • Your MAGI is $65k (or greater).

I used www.healthsherpa.com and found the least expensive FL BCBS EPO plan for a 61 and 62-year-old:  $1319 month or $15,828 year.

Over 4 years @ 6% increase, that's about $69000 in just premiums, but to be fair let's figure for at least one of those years you had a pay a OOP max of $7350. So, conservatively, that's $76,500 over 4 years.

However, if you earned less and had a subsidy, this could be considerably less.

On the other hand, imagine the 20-state lawsuit against the ACA successfully repeals Obamacare or the ACA is no longer able to sell heath insurance for pre-existing conditions. Now we're back to the old days -- you get cancer at 62, and your health insurance is cancelled at 63.

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Zulu brings up one the main reasons those I know regret retiring at 62,  health care. One I know has throat cancer and no insurance. Can't buy it on SS funds. 

Edited by GlennWest

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5 hours ago, offroad said:

Literally have met no one who regretted retiring early in any circumstance; and can not find these mythical humans.  And that is an issue with the public at large thinking they need more to retire on, than they really do.  Many think they need at least $1.5M for each person in the bank, plus other things like paid off house and maybe a small pension, and insurance coverage.  Its just not true. 

 

I have had a very different experience.  I could name at least 20 of my previous co-workers who have told me they wish they would have worked another five years or more and increased their retirement income.  They thought about retiring for years before they became eligible, then couldn't wait to retire in their late fifties.  Now in their seventies, they regret it.

My father is another example.  He retired at 55 after being self employed all of this life.  He and my mother were full time rv'ers for 15 years.  In his late seventies, he had serious regrets.  His retirement savings were gone and he was living month to month.  Poor planning?  Absolutely.  Regrets nonetheless.

By no means are these people the rule.  Most people I talk to say they wish they had retired earlier.  However, they do exist and certainly are not mythical.

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And in my case odds are I will live a long healthy life. Now very well know life can fool me too. So I work till 66ish and likely retire sorta. Will likely hit a few shutdowns here and there but pick time of year to work. 

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By the time people reach 62+ years their circumstances vary wildly.  There simply is no one size fits all.   There are elderly parents, disabled children, past health issues, financial windfalls and disasters and a thousand other situations that impact one's retirement decision.  That doesn't take into account one's current work situation - some people love their jobs and are having the time of their life going to work every day.  Others are just barely hanging on trying to get to exits.

If you narrow the discussion down to just one specific aspect of retirement - like which will get the biggest monthly check or will result in the biggest pile of money at the end of life - it gets a bit easier but even then different people have different life situations.

So, ultimately, we have to each do what we think is best for us at the time.  For me to tell others they need to do what I did is foolish on my part and, if they copy what I did it would be foolish on theirs.

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