How Much Do You think You Need to Retire? What Age Will You/Spouse Retire? General Retirement Issues (Part 2)

Parent Cafe
2471

I made a wish list when I was diagnosed with leukemia 19 years ago. Top of the list was seeing my sons graduate from HS (they were 10 & 11 at the time, and graduation was a couple years beyond the prognosis).

I’m staring at it right now and am APPALLED that there are chores and career-related work on this list.

One of the items was to have H home from work by 6:30 pm two-three days a week (vs his usual ,9-10 pm). Well, since he’s working at home during Covid, I guess that can be checked off, at least for the time being.

Revising this list would be a good thought exercise. It would be quite a different looking list these days.

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2472

@CountingDown I had aggressive stage III cancer when DDs were in 8th and 10th grades (they are now 25 and 27). Had a big turning point about 6 months in with treatments. Cancer free 11 years now. My prayer was to be around to guide them into adulthood. My focus continues with health, family and faith. Travel right now is with family events and getting things done around the house with H and I both now retired. 3 very young grandchildren not far (all under 3), but that may change with son-in-law’s career. May have some big changes with them in 2022 and then we will see what happens. Single DD moved out of state with a great job opportunity and DH was able to help her a lot with the move since he was already retired.

I still don’t have a ‘bucket list’. I guess I am more on what is going on and how to adapt to it, and taking opportunities as they present themselves. DH had so much travel with work that he has no desire for any big travel - but he is good with travel for family events.

2473

I’m a little shocked by how inexpensively I live now that D’s off to college. Her expenses there – and here, when she’s back on breaks – are all saved for, so that’s now a non-issue.

Otherwise, though…I just don’t use much. Part of that’s because it’s how I’ve always lived, part of it’s been a considered effort over the last few years to reduce consumption for environmental reasons. But I seldom drive, have solar panels that cover my entire annual electric bill, have a big garden and hoop house in a small backyard and the equipment for food preservation, have no debt beyond what remains of the mortgage, have had enough travel to last me for a long time, am in good health, have a house full of stuff that should last for decades, and just don’t have expensive habits generally. Even when D lived here, if I was bringing in $4K/mo, $1K+ went to savings without feeling it at all. Once the house is paid off, I ought to do fine on $1600/mo, including insurance costs. Which is an interesting thing, because I remember that being poverty money, inflation-adjusted, back when I graduated into the early-90s recession. Then again, inflation-adjusted, my rent back then on a seriously crummy little 1 br in an unexciting town was more than my property taxes and insurance on an ordinary 3br house are. And by “crummy” I mean “the building burnt down a few years after I moved out and it wasn’t a huge mystery why.” Amazing how cheap you can live, and live nicely, if you’ve already got lots of nice stuff. Just one more example of how expensive it is to be poor.

I had a laugh the other day when I realized that D took 2/3 of the water consumption with her when she left for school. It still looks a bit high to me for one person – I don’t really see why I should need 25 gallons a day, especially with low-flow fixtures and water-efficient appliances – so I swapped in habits learned in childhood, actually using the two-basin sink when washing up from cooking and fruit/veg processing (one wash, one rinse) and that should take care of quite a bit. Some of that 25 will have come from garden-watering – very dry summer here – but the city handed out rainbarrels recently, so we’ll see what that does for summer water use. Dropping water use to something closer to 15 gallons/day should be possible. It won’t take much off the city utility bill, but, you know, why waste treated water and water treatment.

Anyway - I realized the other day that even if I leave my job and work part-time hourly for a relatively low wage, I’d be fine for a long time, could walk to 62 that way and be home free from there. Shouldn’t need expensive house things for a long time – furnace and water heater are new and the water heater should last forever, roof should have another 20+ years on it, maybe the air conditioner will need replacing in another 10. The house itself is relatively new and in good shape. I’d still rather pay off the mortgage in the next few years, though, so I don’t think I’ll be doing that. But it’s nice to know how stable things are.

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2474

If you leave your job and work part-time, you will have to cover your health insurance costs until you are 65. Of course, if you have very little income from other sources, you would be subsidized on that.

My health insurance premiums are around $1,300 per month. Dh’s are less because he doesn’t have as broad of a network as I, but I think his are still around $1,000 per month.

2475

Has anyone read anything by Wes Moss? A friend was visiting last week, and she said she enjoyed reading his book, You Can Retire Sooner Than You Think. I looked it up, and he has a new one coming out soon. Apparently, his approach is more holistic than other retirement books and not so much about the nuts and bolts of getting to retirement (though I think some of that is covered, at least in terms of how much one needs). He seems to rather focus on characteristics of, “happy,” retirees.

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2476

Wow…. that would be impressive, especially with cost of health insurance these days (but maybe you could have low ACA rate if income low?)

2477

Ouch!

One of the major factors in my decision was that a benefit of my last employer was retiree health care. I pay $184/month.

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2478

$1,600 per month, or $19,200 per year, goes a lot further once you have paid for housing. Property tax generally costs a lot less than renting housing (or renting money to buy housing + property tax).

Of course, the alternative is to save / invest enough in other assets (versus owned housing) so that the investment returns pay for renting housing. But that may be somewhat riskier due to volatility of investment returns and rent prices.

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2479

Yep, already taken into account.

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2480

Exactly. At today’s offered rates, I’d have health insurance very similar to what I’ve got now for a max $600 out of pocket, $0 premium.

I find that the people who get upset about marketplace insurance either haven’t done their homework or have quite high incomes, and have recently moved from employer plans, where the fact that a whopping insurance subsidy was actually part of their compensation wasn’t something they felt. And at that point, unless they’re living very high-rent lives (sky-high rent/maintenance/mortgage, kids in private schools, etc.) it’s not that paying the insurance premium’s going to kill them, it’s that they’re shocked by the expense. I have a fond hope that someday this will translate to political action in the direction of “what the hell, why is American healthcare so expensive, we must fix that” rather than “how dare someone take that much of my money, I must put a stop to that immediately, I am an island,” but, y’know.

The other thing is that the complainers tend not to know or remember what it was like pre-ACA, especially if you weren’t in mint condition. I bought my own health insurance for a long time pre-ACA, and it was a nightmare. Not only was it a sea of fake policies that existed so that you could say you were covered and not fall into the “I haven’t had health insurance for 60 days” pre-existing-conditions abyss, these things were wildly expensive and good luck getting them to cover anything you actually needed. And then of course if they denied something listed as covered, it was on you to fight. If you were really at the end of the line there was the “high risk pool”, a Clinton-administration patch, but you had to be able to show that nobody else would sell you insurance, which meant you were wandering around from door to door uninsured and hoping nothing bad happened till you got admitted to the (wildly expensive) high-risk pool.

I had a student who went off to work for Republican senators and kept in touch; I asked him sometime in 2017ish what he was working on, and it was healthcare policy. He described what they were kicking around to replace ACA, and I said, “That sounds like the high-risk pool,” and that was the end of the conversation. He’s too young to remember any of that himself, but clearly there was some sensitivity there.

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2481

Yeah, it’s extraordinary. It aslo helps if you live in a place that’s retained a sense of “public”, so public services are good. Transit, libraries, recreation, youth and elder services, all the usual. Or what used to be usual. Part of why my private transportation costs are so low is that my town is walkably dense, has pretty good bike infrastructure, and a bus goes past my house twice an hour. I don’t really need a car; if I had to get rid of mine – say internal combustion engines were outlawed, as maybe they will be soon – I can’t see buying something like that again. If smart cars were still a thing I might do that, just for convenience sometimes? But otherwise no.

The owned-housing vs. investments discussion was one I had repeatedly with lawyers and trust officers when my kid was little and, as a single mom who was her own net, I wanted to make sure that if something happened to me, she wasn’t just SOL. Trust people are used to talking with people who have lots of cushion in many directions, so it made no sense to them not to sell property and just manage the money – much easier and possibly better returns. The problem’s the possibility of significant losses, and if the point is to provide security for a young woman on her own, and they ain’t mountains of cash and family around to absorb losses, her having her own place is what you want. Gambling that the money would still be there by the time she needed it – no thank you. Maintaining and renting out the house, and providing a small income stream from that, till she was old enough to make those decisions for herself, yes. Nothing of this was part of the trust people’s experience, though, so they were just baffled by the strategy, plus annoyed that I wanted them to do more work, paid or not. In the end I got it worked out, though she was nearly grown by then.

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2482

Thanks for sharing your plans, bennty. Curious of long-term care insurance or paying for in-home help if you become less independent when older is factored in? To me that’s such a huge potential financial need…

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2483

So this is an interesting thing – the fact that my overhead’s so low means that unless something really goes wrong, I should be able to get by almost entirely on Social Security and rents from a small well-managed rental property, which I paid off some years ago. So the retirement savings should just keep on growing. Barring something like early-onset dementia or some other disability that strikes before I hit 75 or so, I should have a fair bit on hand to pay for in-home care. After that it’ll really be up to my daughter – if I really need to be living with other people, it’s her inheritance on the line, so she can decide whether she wants to build me a granny shack or see the money go to assisted living. Some years ago, when she was designing her future dream house, I was surprised to see that she’d already built in a bedroom and study for me so that I could stay over when I came to visit. (Her idea was that I’d live close, but not too close.) She was less concerned about a future partner’s mom’s accommodations. So who knows, maybe that means there’s a granny shack in my future. :rofl: My house is also a 3 br, with a downstairs easily converted to a small walkout apartment, so that could help with the cost of hiring help.

I did look at LTC, but I have trouble making it make sense. The difference between pay in and pay out isn’t huge, and there’s risk involved in not knowing whether the company will survive that long. I figured just save on my own.

If I’m really in a bad way and need nursing care, well, all bets are off. At that point I’ll just hope for everyone’s sake that it goes fast. But I imagine that would turn into a Medicaid story fairly quickly, and then it would depend on whatever clawbacks exist at the time.

Of more immediate concern to me is fitting out my house for the ordinary infirmities of old age, assuming I stay here and don’t move to an apartment house full of oldies, which doesn’t sound like a terrible idea. My house is a split-level, so I think eventually I might want a lift – that’s expensive, but not staggeringly so.

I’m in good health, though, and still manage to stagger along on runs, though it does take me the first two miles to warm up these days, and after 3-4 I’m finished. So I’m guessing I’ll have a couple-few more decades’ independent living ahead.

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2484

But then going up and down stairs may help you stay strong enough that stairs will not be a problem.

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2485

Yes! This is also assuming that being a klutz doesn’t do me in. I finally got ready to put some nice slate floors in and then I realized that I already fall down sometimes, and inevitably I’ll fall down the stairs. I want whatever’s at the bottom to be softer than my bones. The sad thing is I can actually see myself putting wrestling mats on the landing and downstairs hall someday so that I can go on using stairs instead of lift…

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2486

You are very fortunate. I am envious of those who get that. I do always wonder what (if any) kind of guarantee an early retiree has that that benefit will continue as long as needed.

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No guarantee.

However, things are actually more complex than those two words, because in a number of individual negotiations, they have promised “if you stay X more years, you’ll get retiree health benefits until age 65”. Lots of case law here - in many cases, dragging out for years. It is surely cheaper for them to change the plan for new retirees and live with the expenses for current retires (there aren’t that many of us, and the vast majority who do this do this at 63 or 64) than to pay the lawyers to try and claw them back.

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2488

My dad had company paid health care in retirement, which was one of the things that factored into his decision to accept retirement when his company pushed him out early. Then they changed the terms. He got health care until 65, but he had to pay an ever-increasing share. The company’s retirees filed a class action lawsuit, which they lost.

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2489

One key issue is that a lot of the people who are in this plan are in “phased retirement” - you go on retiree health care, and then do 100% of your job for 50% of pay. They don’t describe it that way, of course. But they have incentives not to screw this up.

Is this perfect protection? Nope. But it’s not my biggest worry.

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2490

There isn’t any.

I think the best guarantee we have is a large young generation that knows intimately what “poor” means and is in the midst of concluding that the Great Society wasn’t such a bad idea once you do something about the industrial-strength bigotry. Ordinary for the kids: single-mom households, grandparent-headed households, parents who don’t speak the language, green-card panics. “Equitable” has genuine and complex meaning for them. My guess is that over the next 30 years, that’ll mean that some extremely well-feathered nests grow a little chillier, with retirement not quite the executive-level affair once imagined, and considerable relief for most other people when it comes to everything but long term care.

That one…I’m watching the childcare-infrastructure fights carefully, because that’s just the other side of the mountain called “free care labor from women”. If you pay people to do the work halfway properly on either side it’s extremely expensive: it’s a lot of responsible work. And you run into a lot of resentment from people who don’t want to recognize that their own work happens on the backs of that much free skilled labor, especially from women, and who have a lot invested in bootstrapsy ideas of themselves and their achievements. The same generation that starts discussing this out loud will also refuse to punt to exploiting guest-worker labor. Fast-forward to reps of the future giving speeches about having to go with their immigrant moms to sleep over at Mrs. So-and-so’s house, where Mom got some pittance for taking care of Mrs. better than she had time to take care of her own family, and what her family’s life could’ve been like if Mom had been paid properly for her work instead of being exploited.

But the ordinary healthcare part of it – I think they’ll work that part out.

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