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Waiting to 65 to retire - death risk versus finances

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1 hour ago, GlennWest said:

Amazies me that y'all speak of stress from work. Work is relaxing to me. I actually wear ear buds listening to music while I weld.

Dave enjoyed his work, too. The new management--not so much. They are why he retired at age 60. 

Linda

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If anything, this topic should prove that one size does not fit all.  I am 70 and still working at a job that is way more fun than work.  There is that old saying “Choose a job you love and you will never have to work a day in your life.” I didn’t start collecting Social Security until 70 because I didn’t need it and still don’t need it but there is no reason not to collect now.  Actually, my Social Security will continue to grow since my 35-year Average Indexed Monthly Earnings (AIME) is growing.  What I’m doing works perfectly well for me but I would never suggest that anyone else should do the same.  As long as you are happy with your decisions, you’ve won.

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Just to switch it up a bit, I'm a law enforcement officer (which means I'll retain health insurance) that plans to retire at the age of 49 and full-time for at least a few years, and probably more if I go international. I'm aiming for a nest egg of $4 mil (real estates, stocks, 401k), am married with 5 dependents, and estimate yearly spending of $125,000, most of which will be charitable donations. I'll also be collecting a roughly $38k pension once I retire. In case a bad guy gets me tomorrow, I will carry life insurance until retirement that pays out $875K which means my wife will be able to retire immediately (currently 39) and the kids will all be good to go.

All of my calcs and spreadsheets say I should be good but since I've never been there, and many of you have, does anyone see any glaring faults in my planning or have cautionary tales to share?

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1 hour ago, Black said:

All of my calcs and spreadsheets say I should be good but since I've never been there, and many of you have, does anyone see any glaring faults in my planning or have cautionary tales to share?

I would say first of all that I envy you! In my opinion, you should be able to live very well for as long as you may live. For reference, we have been living on our retirement income since June of 2000 and while our income has risen slightly due to SS increases (we added SS for my wife in 2004) and then the required withdrawals from IRA some 5 years ago, and we now live pretty well on a gross income of about $50K/year. Looking at your plan and even allowing for inflation, I'd say that you are in very good shape. But it is very important to realize that managing your finances has more to do with the standard of living for most people than does the income that they have. 

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Since you have about 10 years before retiring (correct?) you will have a better feeling about 2 years out.  The biggest question will be health care and how you will cover your spouse and any dependents that haven't left the nest by then.   Other parts of your budget will be similar to what you do now.  

While it is commendable to make charity part of your budget, I would suggest that you make sure you have at least 6 months worth of donations always in reserve so that you can cover any needed repairs - AND THERE WILL BE REPAIRS.   It isn't a question of "if" but of "when" repairs will be needed.   We always give at the end of the year knowing that if something needed to be covered at the first part of the next year, we can use our RMD withdrawals to cover it.   

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I'm about 8 years away from pulling the plug although if it wasn't for the lifetime health insurance I get for retiring, I'd probably walk away right now. 

Charity will be the largest single slice of our budget by far, we're fortunate to be rather simple folks and I can't imagine any non-health related scenarios where we aren't struggling to spend down our nest egg balance. If we run low during a year, we'll just have to scale back for a bit. That said, I'll heed the advice and make sure to maintain a healthy liquid balance for when I get too tired/old of fixing my own stuff and splurge on a new Volvo:)

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When we bought our coach (diesel pusher)  I put 10% of the purchase price into. MAINTENANCE/REPAIR fundand and add to it every month.  I also set aside 1/12th of any annual bills into another fund.  Thus, when bills come due, we have the cash to pay for it.  Not everyone can do that, but if you can you will be ahead in the long way.  Remember that maintenance will also include replacing batteries and tires on your rig. We always try to do that when in Oregon to save a little on sales tax.  

One of the best things you can do is read the blogs of people who post on the different RV forums.  There is a wealth of information out there and you will be amazed at all the different ways to fulltime and all of the places people go!

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Back when I was working-post-military retirement, a co-worker decided he would retire at 65 to get as much SS as he could. Well,  he did retire at 65, the next month he was found dead in his front yard where he had been planting flowers---with his first retirement check in his shirt pocket.

Another co-worker worked until he was 70, mandatory age for Westinghouse. He and I were talking one day during lunch, he said he didn't know what he would do after Westinghouse made him retire, as he had no hobbies or interests outside of work. I suggested he establish a goal of having the best-looking yard on his block, then his neighborhood, then the entire city. His lit up and he walked away smiling.

That's both sides of that coin.

Me, I retired from the Army, then Westinghouse, then their successor/ABB at 58, then raised cattle until 60; I've never looked back. Since then I've been a truck driver pulling a 5er, now a bus driver for current rig; or so says my BIL.

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On 10/29/2018 at 2:02 PM, Kirk W said:

Your article quotes Michael Kitces, a widely respected guru to the financial planners.  Kitces further writes on his own blog additional supporting evidence (with more in-depth analysis than most are willing to read):

Quote

....the bottom line is that when a retirement spending goal is tied to a 4% safe withdrawal rate, the strategy effectively is a floor-with-upside approach – and one where the odds are overwhelming that the client will preserve all of the original principal, and potentially several multiples thereof, which will be available to either safely raise retirement income further some number of years down the road, serve as a contingency against unexpected longevity, or leave a substantial legacy. 

In other words. . .you'll could be leaving a lot of money on the table by strictly adhering to the 4% rule.

 

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12 hours ago, Barbaraok said:

you will be amazed at all the different ways to fulltime and all of the places people go!

I like to say that the only limit to the number of ways to live in an RV is only limited by the imagination of the RV owner.

I often wonder at those who feel that their job is such an important part of their life. There are so many things to do with your time, once you do not have the constraints of earning an income! It would make me very sad to face the end of life with my career as the major accomplishment of my having lived. There are so many ways that one can leave a real legacy behind after they depart life but very few of us are long remembered at our jobs. 

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must be great to be rich.

i must work till 100% socialist insecurity, has been reached.  had some money, but it went pop with the housing market years back.

but had nothing like some here talk about, like it is pocket change. in 8 years i will be lucky to get (total all sources) $3, grand a month, gross.

but hope to manage not having to go back to work just to eat.

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This thread came to mind today as I ran some figures on delaying Social Security another 16 months or starting it shortly.

Obviously, everyone's situation is unique to them (health and other income sources being the main drivers).   In my case, I've already delayed Social Security a while and I'm working on when to pull the trigger.

My math shows that the loss of income from delaying 16 more months to get a bigger monthly benefit will even out when I am 82, after that, of course, it will be a gain.

Honestly, I was a bit surprised to see that it would catch up that soon.

Right now, though, I'm inclined to go to Social Security now and not wait much longer.

Again, this is no one size fits all - and my thinking is not intended to address the concerns of those who are financially hand-to-mouth right now.  Still, I found the speed of "catching up" on deferred Social Security income to be as quick as it is for me to be a bit of a surprise.

Edited by GR "Scott" Cundiff

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2 hours ago, GR "Scott" Cundiff said:

My math shows that the loss of income from delaying 16 more months to get a bigger monthly benefit will even out when I am 82, after that, of course, it will be a gain.

If my memory isn't too far off it seems to me that when Dave ran our scenarios they all came out to even about 82 whether we took our benefits at 62 or 72.

Linda

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 I think my sense of worth is likely tied to my work. I'm not real sure what keeps me working. I lack interests outside work. I'm 55 and I can't figure out if I should retire tomorrow or work another 15 years. In my case finances are not part of the equation.

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1 hour ago, 4x4ord said:

 I think my sense of worth is likely tied to my work. I'm not real sure what keeps me working. I lack interests outside work. I'm 55 and I can't figure out if I should retire tomorrow or work another 15 years. In my case finances are not part of the equation.

Most of us retired folks quickly find out we no longer have time to go to work. It's amazing how you can fill your time especially when traveling. Sometimes we'd have to stay somewhere another day just to finish planning our next segment of travel.

Linda Sand

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18 hours ago, GR "Scott" Cundiff said:

My math shows that the loss of income from delaying 16 more months to get a bigger monthly benefit will even out when I am 82, after that, of course, it will be a gain.

What you haven't said is the age that you are now, or will be in 16 months? Then you need to consider how long you will live as the average lifespan for a US male is currently 79 years. How long did your parents live? Lots of things to consider as there is a risk that you will live to the age of 82.

12 hours ago, 4x4ord said:

I'm 55 and I can't figure out if I should retire tomorrow or work another 15 years. In my case finances are not part of the equation.

Welcome to the Escapee forums!

What do you want to be remembered for and what do you want for memories when you do eventually reach an age that working is no longer an option? I remember well dealing with the dilemma you now face, although mine was financial. I reached the age to qualify for early retirement with my employer when I was 57 but had I stayed longer it would have increased my monthly retirement checks and also my 401k. Now after 19 years retired, I am so happy that I left the very first day that I qualified! We did not stop working when retired, but we did stop choosing who to work for based on their willingness to pay us. There are so many places that need volunteers and they need skills of every type so there is a place for you too!  Without knowing more about you than you have shared it is impossible for us to suggest what might be best for you, but there must be something that can be found for you which will be a better choice than just doing a good job at your work!

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4 hours ago, Kirk W said:

We did not stop working when retired, but we did stop choosing who to work for based on their willingness to pay us.

That's Dave, too. He still spends his days doing computer stuff but now it's mostly in support of other model railroaders instead of the business he supported for so many years. When he writes a new program he gives it away free with the disclaimer that it is unsupported. He still supports every one of them but he doesn't want to HAVE to do so. That keeps his hobby from turning into work while allowing him to continue to find new solutions to challenges.

Linda

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6 hours ago, Kirk W said:

What you haven't said is the age that you are now, or will be in 16 months? Then you need to consider how long you will live as the average lifespan for a US male is currently 79 years. How long did your parents live? Lots of things to consider as there is a risk that you will live to the age of 82.

Welcome to the Escapee forums!

What do you want to be remembered for and what do you want for memories when you do eventually reach an age that working is no longer an option? I remember well dealing with the dilemma you now face, although mine was financial. I reached the age to qualify for early retirement with my employer when I was 57 but had I stayed longer it would have increased my monthly retirement checks and also my 401k. Now after 19 years retired, I am so happy that I left the very first day that I qualified! We did not stop working when retired, but we did stop choosing who to work for based on their willingness to pay us. There are so many places that need volunteers and they need skills of every type so there is a place for you too!  Without knowing more about you than you have shared it is impossible for us to suggest what might be best for you, but there must be something that can be found for you which will be a better choice than just doing a good job at your work!

Thanks for the welcome. Much of what you wrote is part of what makes retiring not so automatic in my case. I've been self employed for the last 30 years so I already have much of the freedom that many employees long for. I also have to consider the value in seeing my business carry on with the next generation.  To do so would be interesting and enjoyable but also time consuming and challenging. As has been said everyone comes from a different set of circumstances .... no one size fits all.

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Hey 4X4,

One size does fit all, of that one size. :lol:

Welcome to the forums.

We have been lucky in surviving to retire from the military and being tech savvy enough to have bought Tesla at 2010 IPO and sold recently to buy a house, cash, and then I can take my time selling this house which is paid for. That because I was offered a percentage of newish company selling and designing/siting post frame steel buildings with slabs. From 2005-2009 I was making very good compensation and my then house was paid for. So we were buying when everyone else was selling losing. The market is cyclic and can't be timed. All we can do is buy low and sell high. It does not need to be bought at the lowest, nor sold at the highest, but close enough. Close only counts in horseshoes, hand grenades, and yes, investing. The worst that can happen is you have to wait a five or ten year cycle to see it come back up, or back down to buy or sell appropriately.

We both took our paid in Social security at 62, and since we are military retired we already have income and medical set.

I made financial decisions like I was going to die younger and take care of my family at every step.

Edited by RV_

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5 hours ago, 4x4ord said:

I also have to consider the value in seeing my business carry on with the next generation. 

I do understand that. I have friends who did much the same, staying on with the business until the son was ready to take control. My comment was more related to your comment about a sense of worth being tied to your work. That can sometimes also get in the way of turning things over to the next generation. You might even be able to continue to be involved from the RV travels once the kids begin to take on the business. My circumstances were much different from yours as I was employed by a major, nationally known corporation that offered an excellent early retirement plan with medical coverage as well. Had my situation been like yours it is quite likely that I'd have done things at least some differently. Just be sure that your kids want to take over the business. 

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Scott is Jackie receiving SS? I assume hers will be larger than 50% of yours.

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I like this topic and return every once in a while. It is very interesting.Helen and I had a few  minor medical issues last summer that caused us to stay home and not travel for the first summer since 2006.Helen fractured a bone in her leg unhooking the Rv and I had to have a old knee injury repaired

We are now back on track enjoying our Florida winter but moving a bit slower. We both made the decision not to do any kind of part time work. We no longer work at Disney world .It was fun but and  as we both said we enjoyed working at Disney but not working for Disney.It was a experience. We are good and we carry on.

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This is a bit off the recent posts BUT relevant to the original subject.  My DW will turn 63 later this month and I am 2.25 years younger than her, but I do the planning in this arrangement.

My question has to do with her bring able to collect SS on my account before I do.  I have seen some things about this but am not understanding what is available and how to decipher it.

She was mostly a stay at home mom with not lots of income to show on her SS account.  I have been the principal income provider but since younger, looking at options.

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