<p>So, I’ve been running the numbers for the past couple of weeks. It started with the decisioning process of the financial logic of going to get a college education when I will not have many years left to leverage the resulting degree into a financial benefit (unlikely, I’ll have to be satisfied with the learning experience).</p>
<p>But all that aside, when I look at the numbers - home equity, investments, etc., no matter how I calculate, even considering that I have 20 more years to work until age 65, and considering a consistent high income, there is simply no easy avenue I’ll ever be able to accumulate “enough” money to actually ever be able to retire and maintain standard of living. If the projections are real, I will have to save and invest obsessively in order to be able to have a retirement option. </p>
<p>Does anyone else here think they will continue working forever? Are the numbers really as scary as they seem?</p>
<p>I plan on working into my late 60s as long as my health holds out. I have to: I have to pay off my kids’ college bills.</p>
<p>But I hope that you can continue your education part-time through evening and distance classes. More and more are available now. And if you don’t plan on trying to leverage a degree into a better-paying job or a different career, you may be able to take courses which you will truly enjoy and may be as life-changing as any career move. A friend of ours, an urban planner, discovered a love of opera that way.</p>
<p>I see so many formerly successful people lose their identity and detiorate in retirement, that I think I’m going to postpone it for a long while. If my health holds out, I may have the luxury of going part time, rather than retiring and this option appeals to me. It would give me enough income to support our lifestyle without dipping into savings. For this approach to be fulfilling, you must enjoy your work! </p>
<p>On the other hand, my dad retired young from his teaching career with a great pension and my parents are living better now than while he was working.</p>
<p>Although I plan for retirement, I don’t plan to retire. I think that in five years or so, I will find a way to switch careers to one with a more flelxible schedule so I could take time to write that great American novel. It’s going to be about a sea captain who has a strong desire to capture a big white whale.</p>
<p>I hope you copyrighted that plot before putting out such a great idea in a public forum. You never know if someone will steal the concept and publish it before you.</p>
<p>Marite, I’m in a similar boat, I already told her that I would help with professional or grad school, and besides, I want to help her. And my savings and investments are hopelessly anemic. What I don’t get though is by the numbers, why is it necessary to have 80% of annual income available for retirement (per year), especially when one’s home will be paid off? Is it because of estimated health care costs?</p>
<p>If 80% is a real number, I just cannot see how it will be possible to accumulate enough money. </p>
<p>Audio - I do agree many people lose their identity when they retire. I actually don’t know anyone among our older friends who is truly 100% retired. But they aren’t earning 80% of last annual income - they’re engaged in work that maybe gives them 20% - 50%. </p>
<p>Mr. B - trying to imagine how to make up the numbers, I have been fantasizing about being the next Rowlings. But then, it apparently takes years to collect royalties.</p>
<p>My observation about retirement is that those who retire and live long, are surprised about the long term effects of inflation. If I had retired in 1990, todays gas prices and heating oil prices would surely be a problem.</p>
<p>latetoschool: 80% of income is an unrealistic number. It might be closer to 60-70% of your after tax pay. Here is what I did: For almost two years, I used Microsoft money and entered all our expenses (well almost 90%, I am sure there was some leakage) to figure out exactky how much money we spend. The numbers surprised me and now retirement is more realistic.</p>
<p>Too many people don’t start thinking seriously about saving or investing for retirement until they really have only about 20-25 years left. It’s so important to start in your 20’s or early 30’s, and then you have the advantage of the doubling time of your investments over a long timespan.</p>
<p>I will probably retire in my late 60’s and if all goes reasonably well with my 401(c) defined contribution retirement plan I should be OK – somewhere between 70 and 90% of current income. My current house will be totally paid off next year, so although we need to do some substantial improvements we will have a fair amount of home equity to use to relocate if we choose to.</p>
<p>I wish I had started a supplemental 403(b) a long time ago, but really it was not practical as we were saving for the kids’ college and supporting them while they were in college. I’m trying to accelerate some of that now that the kids are out of college, but really there isn’t a lot of time for my meager additional contributions to grow a lot. </p>
<p>My dad retired at age 65 and has had a very good company defined benefit plan which, along with social security and investmens he had, has provided him with much more money than he needs now at age 91. Pension plans like that are a dying breed.</p>
<p>LTS, I’m a single mom like you are. My question is, why would you want to retire? I understand the attraction of cutting back dramatically on work hours, but I can’t see sitting at home by myself as a doddering old woman. What will I do with myself? Crochet? Anyway, as a soon to be empty nester, I don’t have much of a life outside work and career. I certainly see the attraction of retirement for an aging couple, but it seems a rather lonely route for a single person.</p>
<p>Calmom, I’m still living in that fun little fantasy world where someday I actually meet someone wonderful and walk down the isle. And I want to PLAY someday - I want to travel, learn to ski, sleep late, goof off, etc. And some day there might even be grandchildren to play with! But to your point, no, I don’t think that I will ever retire 100% - but I don’t see being able to pull down a sizable percentage of “current” income either. In any case, I want to keep working from the sole position of enjoyment for the work, not because economics force me to do so. </p>
<p>Also, something interesting happened to me too once empty nesting happened - after I adjusted to the silence, I starting doing the “fun” things again that I used to do before D was born and I had such serious day-to-day responsibilities - socializing with friends, going to parties, football games, shopping for fun vs. need, staying out late, trying new sports, getting intensely involved in home remodeling projects, etc. Made me realize I don’t want to work forever. </p>
<p>Simba - I may try Microsoft money, D and I have made several attempts the last year to document all of our spending. We get a month or two into it, get busy and then let it slide, so we never get a handle on it. </p>
<p>Mackinaw, congrats on your positioning, I wished I’d been smarter about it years ago. Your father’s position is enviable too - my best friend’s father is now 80+; he worked for the same company for nearly 40 years once out of the air force, and his employer went bankrupt when he was within a year of getting his pension - so he now has no pension. He and his wife are o.k. in that their home is paid for and they’re in reasonably o.k. heath - wife has a small pension from her employer, but he mows lawns for a sizable client list in order to be able to help his children and grandchildren.</p>
<p>Just curious - is anyone doing their retirement planning with the expectation of receiving Social Security benefits? We haven’t been - we just calculate our retirement income as if SS has gone the way of the dinosaurs. I actually think there will probably be some semblance of a program left, though nothing to count on.</p>
<p>I keep reminding my husband that we can always be greeters at Walmart. Though actually my dream retirement job is to be a cast member at Disney World (admitted with intense embarrassment).</p>
<p>latetoschool: First we made a habbit of charging everything. Most utlities can autocharge your credit card. Then in MS money I made all those payments a recurring payment with some artificial number. Then once a week I would manually correct those entries, but bulk of the work was automated.</p>
<p>frazzled1–I often kid my H that I could be a cast member (one of the dwarves, probably) due to my being vertically challenged!</p>
<p>We’re living in the bulk of our retirement fund–our house. Thanks to great advice 11 years ago from an economics faculty member at the college where I worked, we bought in a strong community. Also, thanks to H’s retirement planning that he’s been overseeing for many, many years (he uses Excel), we are contemplating a career switch such as the kind that audiophile mentioned when D graduates from college. As our respective parents did with us, we’ll offer to help our kids with purchasing their first home(s) and possibly a car–when the time comes, but they’ll be responsible for graduate school. On the other hand, my M (now 93) didn’t really retire until she was 80–after serving 12 years as a Peace Corps physician, so we plan to stay active no matter what.</p>
<p>latetoschool: Yes, my father’s company has been strong and stuck to their commitment. The latter could be because of his level on the company; I don’t know.</p>
<p>frazzled1: I do figure Social Security into the mix, perhaps because I’m of an age that may be relatively better protected, even if they change the COLA calculation. It would be about 20-25% of my income at current projections.</p>
<p>I also do want to retire some day. There’s a certain level of burnout in my job, and while I’m still quite productive it’s much harder to motivate myself. I am hoping to have more time to pursue my interests, travel, and possibly part time work or volunteer work. Having been “stuck,” as it were, half way between two oceans, I want to move to or near a coast.</p>
<p>I suggest that you get a retirement job like I did. A retirement job is a job where you don’t get angry. You don’t worry about promotions. You don’t take it home with you. It’s a job that you enjoy and had dreamed about doing.</p>
<p>If your main love of life is your work, sure, that makes sense. Me ? There are a million things I would do with the time I spend at work: write more, read more, travel, walk, kayak, bike, camp, spend more time with friends, spend more time with family, do gobs of volunteer work, cook from scratch more often, write some more, read some more. Actually, I’d love to learn to crochet or knit, too, but I don’t know if I’d have time!</p>
<p>My H and I are looking to “retire” as early as possible. We see it as feasible, as we’ ve always lived far, far, below our income (well, not our present income, which just went down to about 25% of what it had been…eek.) </p>
<p>Ideally, we’d love to both work part time right now, but then you don’t get benefits. (why I’d like to see national health insurance.)</p>
<p>Consumer reports did an article on this topic entitled “How NOT to go broke in retirement” (Jan '05) and I read another article somewhere (?) that was also helpful talking about income stream. Basically, by utilizing a variety of cost-svaing methods it IS possible to retire. Combined strategies from both articles: own your house outright, move to an area with lower-priced housing and taxes, work 3 to 4 years longer than you were planning to, have no credit card or other debt, take a parttime job in retirement, maintain your exercise/health level as much as possible, have a steady income stream (annuity, pension, etc), in a worse-case scenerio take out a reverse mortgage.</p>
<p>My 80-year-old father still works full-time (Monday-Saturday) running the automobile dealership that his uncle began in the 1930s. As a result of staying busy with a fulfilling career and exercising a very healthy lifestyle (walking daily, eating well, mowing his own lawn), my dad is the picture of happiness! For those who are truly involved in a satisfying career, it seems that retirement is not really much of a temptation. Also, because he has devoted himself so fully to a successful business venture, my dad’s main hobbies are the time he spends outside work with his family. Whenever he has gone to the hospital for minor health problems, the workers are always shocked that he is not on Medicare!</p>
<p>I doubt that he would be nearly as healthy if he had opted for retirement at age 65. Furthermore, my very active mom, age 78, would probably not feel as fulfilled in her very busy volunteering schedule if he were with her at the house every day. </p>
<p>Whenever my husband starts talking of early retirement possibilities, I simply remind him to take a long, hard look at these two wonderful examples of strong mental and physical health.</p>
<p>Our plan is based on moving to a lowcost, low tax area with no debt and several income properties which we are now in the process of acquiring and paying off ASAP. My faith in the stock market is close to nil so we only have limited investments there. Luckily we are old enough to be able to count on significant SS payments. We both hope to have some sort of work and income after retirement as my year off last year taught me that having nothing much to do gets old quickly.</p>