# 5 Retirement Myths



## MULTIZ321 (Sep 1, 2010)

5 Retirement Myths -  from Yahoo!Finance


Richard


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## hvacrsteve (Sep 1, 2010)

Why do so many people refuse to educate themselves?

I don't believe anyone should actually retire, most people die within 18 months of a true retirement.
The ones I laugh at are the ones that retire at 50 and start another career the next day!
I thought you retired, no I just found another job!

I plan on working til I can't, not because I can't retire, actually just the opposite!

Because I can!  I am American!


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## cotraveller (Sep 1, 2010)

hvacrsteve said:


> I don't believe anyone should actually retire, most people die within 18 months of a true retirement.



Having retired early in 1997 I must be in the non-most category.  

I followed Myth #1 and picked my retirement date and have followed Myth #5 up to this point, my retirement has been permanent.  I expect my retirement to remain permanent, I'm enjoying it.  Work is a 4 letter word.


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## BevL (Sep 1, 2010)

Interesting article.  I think the first point was the best, not to get too stuck on a date.  Life has a funny way of interrupting well-laid plans.


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## John Cummings (Sep 1, 2010)

I am retired. I never had a date in mind ever. We did plan for 10 years on where we wanted to retire. I set ourselves up for retirement in 2002 but didn't actually stop working until December, 2006. I was self employed and continued to work from 2002 for 4 years. I didn't have to work but did so because I really enjoyed my work. We spent most of December, 2006 with our son and his family and decided that it was more important for us to have the freedom to visit our grandchildren and travel whenever we wanted so that was the end of working. My wife is a homemaker so retirement is not an issue with her.


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## zinger1457 (Sep 1, 2010)

hvacrsteve said:


> Why do so many people refuse to educate themselves?
> 
> I don't believe anyone should actually retire, most people die within 18 months of a true retirement.
> The ones I laugh at are the ones that retire at 50 and start another career the next day!
> ...



I retired at 52 and it's the best thing I ever did.  Play golf 3 times a week, go hiking, biking, and do a lot of traveling.  Have my woodworking shop to tinker around in. If I was to put together a list when I wake up of the 10 things I most want to do that day, going to work wouldn't even make the top 100.

Most people die within 18 months of retirement?  Can add that one to the retirement myths article.


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## Nickfromct (Sep 1, 2010)

while  I don't think I will totally retire anytime soon, in about 5 years I'd love to work only 6 months a year. Would love 2 three month periods to travel each year.


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## Fern Modena (Sep 1, 2010)

I, too, retired at age 52.  Jerry was 9 years older than me, and had already been retired for several years.  I had planned to work till I was 55-58, but "just for the heck of it" decided to make an appointment with our Retirement Board to see where I stood.  Once they gave me the numbers, I only worked two more days, then walked away.  I also had deferred compensation (a 457 account, that you can take scheduled withdrawals from at any age with no penalty if retired).  

I'm glad I did this.  Jerry had his first heart attack 8 months after I retired.  We spent eight years together that we wouldn't have had if I had kept working.

I didn't die 18 months after I retired.  I'm still here, and still kicking.  I know you never say never, but I can't see myself going back to work.

Fern


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## Cathyb (Sep 2, 2010)

*Retired and still kicking *



MULTIZ321 said:


> 5 Retirement Myths -  from Yahoo!Finance
> 
> 
> Richard



Let's see, 1992 is 18 years ago -- that is when I was going to quit and my boss said hold on -- I may be able to get you a layoff/retirement package.  Ended up getting three month full pay after I left :whoopie: 

What are you missing when you keep working?  

1.  All those exotic places like Thailand for five weeks or Australia/NZ for four weeks instead of squeezing out 1-2 weeks.  

2.  Remember when you hit 70+, traveling ain't like it used to be.   It gets tougher even getting through crazy Security lines and the hot climates affect you a lot more.  

3.  You start worrying about having that heart attack while walking the South American jungles  and trying to contact Medical transportation home.

Please rethink your long range plans.  Relaxation is good for the soul  :rofl:


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## Ridewithme38 (Sep 2, 2010)

I'm only 30 so just now starting to think of retirement...my assumption was 67 1/2...At what ages did you guys retire?

I'm putting the Maximum in my 401k now and HOPE to be able to continue that so money isn't a worry in my 60's...but does 67 1/2 seem too old?


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## dwsupt (Sep 2, 2010)

*long range planner*

I started planning 27 years ago when I would retire! Seven more years to go. I think the original statement about dying and retireing confuses retiring and doing nothing with retiring and enjoying life! How many people retire at 57 while they can still travel and enjoy life?


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## cgeidl (Sep 2, 2010)

*Retired at 57*

Still kicking but quite a bit slower!!The 18 months retire and die is the biggest myth!!
Comparing people in equal health status retired versus working would be an interesting statistic.My assumption would be the retirees would live longer.
When we quit working a list of 20 places tot ravel was prepared and we have gone to all them and now have a short list of three-Botswana,Eastern Canada, and Egypt plus as seniors with failing memory we need to go back to many of the forgotten trips to revitalize the memory. Seville and Germany this month.
A list of 20 things to do was also prepared and only a handful were done and the list is lost.
Now at 70 it is getting harder to travel but we live in an active Del Webb community and have much to do. 
We are thankful that we are fortunate enough to have earned fixed pensions and sold CA appreciated real estate that has left us with a moderate income.
While I have not worked for 13 years I do believe some types of work keep your mind active. I enjoyed my time in the Navy and also as a teacher after.
Other careers in the financial world were much better monetarily but easily forgotten . In our retirement community 7000 of the 17000 people still work and a good many 20 hours or so to keep active. Others have suffered the economic disaster and have to.


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## Passepartout (Sep 2, 2010)

hvacrsteve said:


> .....most people die within 18 months of a true retirement.



The biggest retirement myth of all!

Jim Ricks


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## Kathleen (Sep 2, 2010)

Hello All,

Sam and I knew that we only needed enough. So when we acheived that magic formula. We retired in 1996. Sam went back to work at something he really enjoyed for six years. When a management change came and it wasn't fun. He left. 

I retired at 46. Sam retired at 42,took 2 years off, worked for 6 years and then retired for good.

We don't know when we found time to work. It's a great life.

Kathleen


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## Ridewithme38 (Sep 2, 2010)

Kathleen said:


> Hello All,
> 
> Sam and I knew that we only needed enough. So when we acheived that magic formula. We retired in 1996. Sam went back to work at something he really enjoyed for six years. When a management change came and it wasn't fun. He left.
> 
> ...



How does one determine how much is needed? Obviously the specific numbers are different for everyone...But is there a general formula one can use?

Retiring before 50 was a dream that i didn't think was possible for most people


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## cds62 (Sep 2, 2010)

I plan on retiring next year after 25years of doing the same job. It doesn not make finiancial sense to work past 25years witht the pension system. I will be 44 and will collect a pension of 65% of my highest salary plus my medical benefits will continue through retirement. 
I do plan on doing something to occupy my time, but I don't want anything that has responsibility attached to it. I would prefer something seasonal so that I continue to have time to travel. I refuse to work a job in "retirement" that only gives me two weeks off a year. It will be hard to give up the 7-8 weeks off a year that I get now.


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## zinger1457 (Sep 2, 2010)

Ridewithme38 said:


> How does one determine how much is needed? Obviously the specific numbers are different for everyone...But is there a general formula one can use?
> 
> Retiring before 50 was a dream that i didn't think was possible for most people



Can get some excellent information at this web site, http://www.early-retirement.org/forums.  Ask questions, the members are very helpful.  They have a firecalc retirement calculator that you may find useful.

It may sound over simplified but the key to retiring early is to start saving early and often.  It always amazed me how many of the young employees I worked with wouldn't even but enough in their 401k to get the full company matching.


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## Liz Wolf-Spada (Sep 2, 2010)

Every day since I retired August 1 seems like a miracle. I am so happy to NOT be working. A few years ago, I couldn't imagine not teaching every day. Last year with Kinder was rough and my health wasn't very good. The time was right and I needed time for DH and I to be together and I am so very glad that we have this time together. He retired 18 months ago at age 69 and I will be 62 in December.
Liz


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## AwayWeGo (Sep 2, 2010)

*Being Retired Means Every Day Is Like The 1st Day Of A 3-Day Weekend.*

I don't know how I ever had time to go down to the office, even though all I do now is goof off 24-7-365 & I never do anything & I never go anywhere. 

Life is good. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## l2trade (Sep 2, 2010)

I plan to retire at age 49.  This has been my plan for 15 years now and the date is getting closer.  If I lose my job before that date, I will consider it early retirement.

Whether I will save enough to afford a long retirement or not, I know I've saved enough to easily squeek by for over 18 months.  So, I might as well enjoy it.   

If worst comes to worst, I will live far longer than I can afford to.  In that case, I will be the oldest person serving you breakfast in Maui.


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## Sea Six (Sep 2, 2010)

hvacrsteve said:


> Why do so many people refuse to educate themselves?
> 
> I don't believe anyone should actually retire, most people die within 18 months of a true retirement.
> The ones I laugh at are the ones that retire at 50 and start another career the next day!
> ...



Some people "retire" from one career to start another in a different location. I find your position a bit insulting. I was happy to retire from where I was to start another career in a different location. There are many reasons why people "retire", and the word doesn't necessarily mean you never intend to work again.


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## Kathleen (Sep 2, 2010)

Hello Ridewithme38,

Sam and I took three years(pre retirement) to gauge figures and retirement locales. We knew that if we had figured wrong, we could just get a job. That was a real safety net for us.

Fortunately, we had done the math correctly. And done our homework  thoroughly. When Sam went to work for 6 years, it was truly for fulfillment. The position paid less than 20% of his old salary. 

We are very fortunate to have retired in our 40's. But,Sam and I are easy keepers. We are not big spenders. Our biggest budget item is travel. We have control over that. 

If we had stayed at work for 3 more years,we would have been in fantastic shape financially. But, the workplace for both us had reached critical mass in a negative way. That's why I say we left when we had enough. I believed that we could get more money,but we couldn't get more time.

Kathleen


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## falmouth3 (Sep 2, 2010)

When Social security was instituted, people did die within 18 months of retirement - for the most part.  Because people are living so much longer now, the system isn't working as well as originally envisioned.


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## Cathyb (Sep 2, 2010)

*Retirement age*



Ridewithme38 said:


> I'm only 30 so just now starting to think of retirement...my assumption was 67 1/2...At what ages did you guys retire?
> 
> I'm putting the Maximum in my 401k now and HOPE to be able to continue that so money isn't a worry in my 60's...but does 67 1/2 seem too old?



Wife (me) at 55 and DH at 62.  Never regretted it!:whoopie:


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## John Cummings (Sep 2, 2010)

Sea Six said:


> Some people "retire" from one career to start another in a different location. I find your position a bit insulting. I was happy to retire from where I was to start another career in a different location. There are many reasons why people "retire", and the word doesn't necessarily mean you never intend to work again.



I agree with you. I consider my retirement to have started in early 2002. That is when I organized everything, sold our 2 homes and bought our retirement home, etc. I didn't know whether I would work or not but I was offered a tremendously interesting project so I took it. The difference was that I was financially independent so I didn't need to work. I got paid very well for the contract but I did it for enjoyment. Your whole attitude is much different when you know that you don't need to work but are doing it for enjoyment. I worked on 3 more interesting projects with different clients before hanging it up for good.

I still have people offering me work all the time.


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## Janette (Sep 2, 2010)

I don't have time to work. I'm having too much fun playing. Move to an active adult community and you will wonder how you ever had time to work. The nice thing is that you can do as much or as little as you like.


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## Pat H (Sep 3, 2010)

I haven't been working since Nov. 2009 but I can't officially retire until Feb. 2011. I am in the process of moving to my retirement home in SC where Janette & Dave M already live. We are going to start a TUG chapter. :whoopie: It's the biggest move I have ever made in my life and I'm excited and scared to death at the same time. It will be the first time I have ever really lived alone. 

I know that I need the social and physical activities associated with an active lifestyle. If I stayed where I am, I'd do very little. I figured that since I lived the first 31 yrs in NJ, then 32 yrs in PA that I will be spending 33 yrs in SC. I'll be 96, not a bad life.


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## rapmarks (Sep 3, 2010)

I have been retired since age 55, and I have lived a lot of years since the retirement date, never worked in the 21st Century.   We have a great life style and find plenty to do.  We have not taken second jobs.  

Here is a myth I discovered.  The Teachers Retirement system was funded by our money, it was run by the Retired Teachers Association. MYTH  We were well aware that the state of Illinois was not putting in their constitutionally mandated amount.  Imagine my surprise when i received a letter from the IRTA saying that the Senate passed a bill with a 7 month furlough on pension payments and also passed a bill giving us IOU's instead of our pension check.  Thank heavens the house didn't pass the bill.  They did both vote to raise the retirement age to 67 for teachers.  As we don't get Social Security, we need our pension and may be living entirely off our savings with the political climate in Illinois.


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## Fern Modena (Sep 3, 2010)

I wonder why it is teachers in many locals don't pay into social security?  I know it is the same with the Clark County School District here.  When I worked for LA County, many, many years ago, I had a choice of paying or not.  I chose to pay.  Some coworkers thought I was stupid.  I didn't care, I had a bigger picture.

Fern


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## Larry6417 (Sep 3, 2010)

*Fascinating topic*

In some ways, retirement itself is a myth. Otto von Bismarck introduced state pensions for German (Prussian) workers in the late 19th century. The retirement age then was 70; the average German worker lived only to about age 45. This (along with healthcare) was introduced to placate workers i.e fend off communists. See http://en.wikipedia.org/wiki/Otto_von_Bismarck


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## sjuhawk_jd (Sep 3, 2010)

zinger1457 said:


> I retired at 52 and it's the best thing I ever did.  Play golf 3 times a week, go hiking, biking, and do a lot of traveling.  Have my woodworking shop to tinker around in. If I was to put together a list when I wake up of the 10 things I most want to do that day, going to work wouldn't even make the top 100.
> 
> Most people die within 18 months of retirement?  Can add that one to the retirement myths article.



Good for you zinger1457. Well said. People who say that they will not retire (since they do not want to die early due to retirement induced complications) either (1) can't afford to retire, and/or (2) have little or no interests/hobbies/friends/energy to make anything out of retirement.


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## rapmarks (Sep 3, 2010)

Fern, In Illinois we had no choice, could not pay into social security.  could not pay into Medicare either, but in 1986 all teachers hired after that date began to put in, but I tried and wasn't allowed.  My son is a teacher in Mass. and he doesn't pay in either.  The retirement system is supposed to take SS place, but if the politicians decide we must do without our pension , we have nothing.


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## 1950bing (Sep 3, 2010)

My mom who will be 96 this fall gave me a birthday gift in 1982 of $ 2,000.00
in a IRA. I remember her saying she was afraid the SS system would be broke by the time I need it. It was up to me from then on to do what I wanted. While working I keept funding it. Some years the max, some not. I think back and say, thanks mom.She now lives in an assisted living. Life is good !


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## CMF (Sep 3, 2010)

I'm trying to do the right things in planning for retirement - but I am very aware that "Man plans and God laughs" - a sign in the office of our financial adviser.

Charles


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## rapmarks (Sep 4, 2010)

1950bing said:


> My mom who will be 96 this fall gave me a birthday gift in 1982 of $ 2,000.00
> in a IRA. I remember her saying she was afraid the SS system would be broke by the time I need it. It was up to me from then on to do what I wanted. While working I keept funding it. Some years the max, some not. I think back and say, thanks mom.She now lives in an assisted living. Life is good !




this post reminded me of the christmas my aunt gave us all US Savings Bonds.  Unfortunately, they were all in her name, payable on death.  she gave one to my mom, who is going to be 92 in October.  We can't cash them in or change anything because they are in her name.  I believe they have all stopped earning interest.  My aunt just wanted to make sure we wouldn't run out and blow that $50 when we could save them for our old age.


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## Patri (Sep 5, 2010)

Sea Six said:


> There are many reasons why people "retire", and the word doesn't necessarily mean you never intend to work again.



Well, yes, it kinda does, unless you qualify your statement, because if you work again, you are not retired.
Dictionary - RETIRE: to withdraw from one's position or occupation, conclude one's working or professional career


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## stmartinfan (Sep 5, 2010)

I "retired" at 57 during a downsizing, enjoyed my severance pay and started collecting my retirement.  After 3 years, I had done all the repainting, etc., needed around our house and decided I missed the camaraderie of working on a team.  (My husand is still working and we aren't empty nesters yet, so extended travel wasn't an option).  I tried some volunteer projects, but then went back to work part time for a nonprofit.  I've still got lots of free time and flexibility in my schedule, but I'm enjoying being able to put my skills to use for a worthwhile organization.  I purposely choose a low-stress job, when I make a difference, but don't have the obligations and pressures of my old career.  It's a great fit for me.


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## frenchieinme (Sep 5, 2010)

Fern Modena said:


> I wonder why it is teachers in many locals don't pay into social security?  I know it is the same with the Clark County School District here.  When I worked for LA County, many, many years ago, I had a choice of paying or not.  I chose to pay.  Some coworkers thought I was stupid.  I didn't care, I had a bigger picture.
> 
> Fern



The major reason is $$$.  Whether in a private gvt retirement program or Social Security, a matching contribution is required of both which needs to come from somewhere.  Some of my teacher friends have participated in both as they view it as a good investment for the futre hence they contribute to both the private and soc sec retirment programs.  However I would say 90% of teachers do not participate in social security if a government retirement program exists.  The reason for this is the private gvt retirment program does not care if the retiree has other retirement programs.  However, social security does and thus imposes the infamous "double dipping" penalty aka "windfall elimination" which in essence reduces one's social security to nothing if one has a gvt pension.  That being said, if a person has worked in both systems and has had what social security calls "substantial contributions yearly" then a person can receive the maximum allowed under both retirement systems.  

frenchieinme


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## Fern Modena (Sep 5, 2010)

Now I sort of understand it; I worked for City and County of SF, and I paid into both social security and a pension.  I don't have to worry about the windfall deducting from my social security because I paid 7% of earnings to my pension.  I always wondered why I contributed so much (or so it seemed at the time).  Now I don't mind so much...

Thanks for explaining.

Fern


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## Kagehitokiri2 (Sep 5, 2010)

i only agree with one - "Retirement is permanent."

...

"You can pick your retirement date" - depends on age/assets when picking

"A $1 million nest egg will provide you with a lavish retirement" - depends where you live, what other assets/resources you have

"Social Security won't be around when you retire." - depends on age at time of statement

"You're too old to start saving" - depends on age at time of statement


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## AwayWeGo (Sep 5, 2010)

*I Resemble That Remark.*




rapmarks said:


> In Illinois we had no choice, could not pay into social security.


Same here -- until the new retirement system began, federal civil service bureaucrats did not pay into social security & did not receive social security retirement benefits.  If they qualified for social security retirement payments via separate non-federal employment, their benefit payments were hit with an "offset" (reduction). 

Later, when the new retirement system was introduced, all new federal employees started paying into social security & were eligible for matching federal contributions into their Thrift Savings Accounts, up to some maximum matching percentage.  (Thrift Savings is like a form of federally managed 401(k) plan for U.S. civil service bureaucrats.)  

People covered by the old CSRS retirement plan could switch to the new FERS plan if they wanted.  But newbies under FERS could not get in on CSRS.  

FERS retirees collect social security payments.  CSRS retirees don't (not based on their federal employment anyhow). 

People in CSRS could also participate if they want in the Thrift Savings system, up to some maximum percentage of their pay, but without the federal matching feature. 

About the time FERS started, people covered by either FERS or CSRS also started paying into Medicare, & retires in both plans are eligible for Medicare benefits starting at age 65, with premiums deducted from the retirees' CSRS annuity payments or social security payments, as the case may be. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## bigrick (Sep 20, 2010)

hvacrsteve said:


> I don't believe anyone should actually retire, most people die within *18 months* of a true retirement.



The *18 months* comes from the SSA.  I can't find the source right now.

Typically Social Security pays recipients for 18 months or less. 
IOW most people work until 65, retire, and then die within 18 months.  

The stat stands out to me because my dad beat their estimates.  He drew social security for 20 months before he died.  Bummer!


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## bigrick (Sep 20, 2010)

Fern, a change took place in 1986-ish.  Prior to that date many government workers did not belong to SS, just their internal retirement program.  Sometime just prior to 1986-ish they could choose to 1) stay with their internal program only or 2) pay less to their internal program and also join SS.

All new government hires after 1986-ish had no choice and joined both programs automatically.

The change was probably driven by the feds/SSA as a way to collect more SS monies.

Obviously not all government workers had to comply with this change but I believe most did.


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## Tia (Sep 21, 2010)

I wonder if the stat includes somehow people who contribute but never collect?



bigrick said:


> The *18 months* comes from the SSA.  I can't find the source right now.
> 
> Typically Social Security pays recipients for 18 months or less.
> IOW most people work until 65, retire, and then die within 18 months.


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## x3 skier (Sep 22, 2010)

*18 Months?*

Retired on the day I was eligible back in 97. 

Consulted part time since then and if somebody calls, I work, if they don't call, I don't work.  A true, "Don't call us, we will call you" arrangement and it suits me fine. Used to be an average of about a week a month but now about 4 weeks a year.

I do three months a year skiing using my timeshares in Steamboat Springs Colorado and the rest of the time doing what I want when I want where I want (including using our time share in London every Oct) and plan on doing just that for another 15 years or so. 

Cheers


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## MULTIZ321 (Sep 22, 2010)

x3 skier said:


> Retired on the day I was eligible back in 97.
> 
> Consulted part time since then and if somebody calls, I work, if they don't call, I don't work.  A true, "Don't call us, we will call you" arrangement and it suits me fine. Used to be an average of about a week a month but now about 4 weeks a year.
> 
> ...



X3,

I think Allen House is RTU which I think expires in 2012.

Do you know what their plans are beyond that?

Thanks

Richard


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## x3 skier (Sep 22, 2010)

MULTIZ321 said:


> X3,
> 
> I think Allen House is RTU which I think expires in 2012.
> 
> ...



It is 2014 not 2012 when the RTU expires. I had asked via email when I booked this year's stay what are the future plans and the office staff had no idea what will happen then. I plan on asking again when I am there is a couple of weeks.

It would be nice to have an extension but if not, I have enjoyed all my stays so far.

Cheers


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## pittle (Sep 22, 2010)

Hubby retired 11-1/2 years ago when he was 53, but did say he was just changing jobs.  Having full retirement benefits allowed him to try several other things and since he never really "found the dream job", he is now totally retired and the only "work" he does is handyman work for several widows who are 80+.  He does this for the cost of expenses.  He loves it and they do too.  I retired on schedule 8-1/2 years ago at age 55 after working 29 years with a great company.  I have never regretted it and we are doing great.  We have a steady income from IRA's, plus we choose to take SS early so that we could still get it, and have moved to the Phoneix area and have an awesome home here.  I can say that I have never missed working a single day after I retired - even though I loved my job.  I love being able to do whatever I want.  Some days it is volunteering, some days I do various hobbie/craft projects, many days we travel, and I love the internet and blogs like TUG!!!

Life is good in retirement.


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## John Cummings (Sep 22, 2010)

I agree with Phyllis. Retirement is great. It is true that there are times when I miss my work as I loved what I did. However we love the freedom we have to do what we want, when we want. I haven't done any work for almost 4 years now. My wife has always been a homemaker for the 46 years we have been married.


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## MuranoJo (Sep 23, 2010)

To me, the most important asset to retirement is still having your health to get out and do things.  

I am so impressed by the # of folks who post here who have been retired for some time and get out there and ski, travel, volunteer, take grandkids on trips, etc.  

And many of them took early retirement--that's my dream.  Get out and do it while you still can.


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## geekette (Sep 23, 2010)

I'm not sure I'll ever quit working, but do look forward to withdrawing from the rat race.  I'd like to try some of those jobs that always sounded fun but wouldn't pay enuf to make a career of.  Part-time, of course, and probably not for 6 months or so.  Won't have to take any crap from anyone.  Don't like the boss or the direction the company is going?  leave.  no worrying about having to have another job.  Don't need a good reference, don't have to explain gaps in employment.

FREEDOM is what retirement means to me.  

I have more interests than I can fit into my life now.  My retirement will be filled with a lot of things I just don't have time to do now.  

My biggest fear is being old and poor (after experiencing how much Young and Poor sucked) so I am squirrelling away all I can while I can.  I have friends about my same age who spend everything that comes in, and some years they do REALLY WELL.  I don't think they will ever be able to retire but they are Live For Today people, so, not like it will dawn on them that someday it's not going to be so easy to just pick up a second job.

Those that don't contribute enuf to get full match on their 401ks are simply foolish.  "I can't afford it" is crap, how can anyone afford to bypass FREE MONEY!?   I've also been fortunate to have 2 employers that not only matched, but a couple times a year threw in an additional percentage of my salary.  Wonderful benefit:  more free money!

The 401k is what's gonna save my butt when I'm old and I've got another long while to collect free money and grow it.


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## Conan (Sep 23, 2010)

Tuggers I imagine are mostly middle-class, and I'm surprised to see so many able to retire early, especially in the US.

Do your former jobs give you medical coverage until age 65 when Medicare begins?  Do you have sufficient savings to live without Social Security until age 62/66/70?

Maximum social security benefits are approx $24,000/yr for age 62 retirees, $30,000/yr for age 66 retirees, and $39,000/yr for age 70 retirees (for one worker, plus 50% for the spouse).

In round numbers, if it takes $90,000/yr to be comfortable (of which about $25,000 goes for income and property taxes), and allowing for future inflation and reasonable investment returns, don't you need about $2,000,000 of savings to retire at age 60?

[I figure $2,000,000 because if that's your sole source of income from age 60 to age 70, the ten year draw-down of $90,000/yr will consume about half the pot, after which you'll still need to draw about $50,000/year to supplement the social security checks.]


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## MuranoJo (Sep 24, 2010)

Conan said:


> Tuggers I imagine are mostly middle-class, and I'm surprised to see so many able to retire early, especially in the US.
> 
> Do your former jobs give you medical coverage until age 65 when Medicare begins?  Do you have sufficient savings to live without Social Security until age 62/66/70?
> 
> ...




In our earlier married years, we were not even concerned about retirement.  How I wish we had plopped down another $100 or more per month in the 401K--and we even borrowed against it once.  OMG!   

But throughout the years, I've always at least deposited enough into 401K to get full employer contributions.  (This should be a no-brainer.)  And I will have retirement med to fill the gap before Medicare, but will have to pick up future price increases.

We think I can take early retirement and maintain a fairly similar standard of living.  But who knows about the future of SS and investments.  I continue to play the lottery.


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## tompalm (Sep 24, 2010)

Ridewithme38 said:


> I'm only 30 so just now starting to think of retirement...my assumption was 67 1/2...At what ages did you guys retire?
> 
> I'm putting the Maximum in my 401k now and HOPE to be able to continue that so money isn't a worry in my 60's...but does 67 1/2 seem too old?



Hope for the best.  Plan for the worse.  The future is uncertain.  So many things can happen before you reach 67.  I had a couple jobs that I couldn't stand and didn't think that I would stay there until age 60.  Then I had a great job and wanted to stay there for ever.  The company went bankrupt and shut down and I will be lucky if I get another job at 54 years old (unless it is something that I don't enjoy doing).  So now it appears my retirement age is a lot younger than I ever planned for.  I am glad that I saved for a rainy day.  

Other people have injury or health problems and things change.  Keep maxing out your 401k and good luck with the future.


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## John Cummings (Sep 24, 2010)

Conan said:


> In round numbers, if it takes $90,000/yr to be comfortable (of which about $25,000 goes for income and property taxes), and allowing for future inflation and reasonable investment returns, don't you need about $2,000,000 of savings to retire at age 60?
> 
> [I figure $2,000,000 because if that's your sole source of income from age 60 to age 70, the ten year draw-down of $90,000/yr will consume about half the pot, after which you'll still need to draw about $50,000/year to supplement the social security checks.]



Your calculations are very negative. You are assuming that your $2,000,000 is not going to earn anything. You can withdraw $90,000 /year without reducing your capital assuming you have invested it and not stuck it under the mattress.

My income tax plus property tax doesn't even come close to $25,000 and my retirement income exceeds $90,000 /yr.


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## Conan (Sep 24, 2010)

Here's $1 million at age 60. Investments yield 3.5%. Withdrawals are 90,000/yr for 10 years (inflation is 2.5%), then starting year 11 because social security becomes available, withdrawals are reduced by half. 

After about 14 years, the money's all gone

1 1,000,000 35,000 (90,000) 
2 945,000 33,075 (92,250) 
3 885,825 31,004 (94,556) 
4 822,273 28,780 (96,920) 
5 754,132 26,395 (99,343) 
6 681,183 23,841 (101,827) 
7 603,198 21,112 (104,372) 
8 519,938 18,198 (106,982) 
9 431,154 15,090 (109,656) 
10 336,588 11,781 (112,398) 
11 235,971 8,259 (57,604) 
12 186,626 6,532 (59,044) 
13 134,114 4,694 (60,520) 
14 78,288 2,740 (62,033)

Or if you'd rather use the actual return of the S&P 500 over the past 10 years, $1,000,000 would have been insufficient to fund 9 years of retirement:

2000 1,000,000 -9.10% (91,000) (90,000)
2001 819,000 -11.90% (97,461) (92,250)
2002 629,289 -22.10% (139,073) (94,556)
2003 395,660 28.70% 113,554 (96,920)
2004 412,294 10.90% 44,940 (99,343)
2005 357,891 4.90% 17,537 (101,827)
2006 273,601 15.80% 43,229 (104,372)
2007 212,457 5.50% 11,685 (106,982)
2008 117,161 -37% (43,350) (73,811)
2009 0


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## zinger1457 (Sep 24, 2010)

Conan said:


> In round numbers, if it takes $90,000/yr to be comfortable (of which about $25,000 goes for income and property taxes), and allowing for future inflation and reasonable investment returns, don't you need about $2,000,000 of savings to retire at age 60?



One of the keys to retire early is to have your expenses under control (mortgage paid off, no loans, no credit card debt).  If that is the case one can live very comfortably with much less than $90K/year.


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## Conan (Sep 24, 2010)

zinger1457 said:


> One of the keys to retire early is to have your expenses under control (mortgage paid off, no loans, no credit card debt). If that is the case one can live very comfortably with much less than $90K/year.


 
I've been using mint.com for a year so I can (finally!) keep track of income and expenses

Here's a budget for $65,000 (which does not include anything for income tax or tax on social security/IRA/401k withdrawals)

10,000 food shopping, restaurants, fast food, wine and liquor
10,000 t&e (airfare, car rent, timeshare maint/exchange, theatre, movie and museums)
8,000 property tax (real estate and personal property)
8,000 home insurance, maintenance, lawn and garden
8,000 Walmart, Macys, TJ Maxx, Target, Marshalls, Amazon
8,000 car insurance, fuel, maintenance and replacement
6,000 electricity, oil, telephone, cable TV, internet
5,000 medical and dental, insurance supplement and out-of-pocket
2,000 gifts


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## Lawlar (Sep 24, 2010)

*57*

I retired at 57 (five years ago) and love it.  No stress!!!  I hang out at the Santa Barbara beach and enjoy life.

Spouse:  Don't show my wife this post.  I keep telling her how much I miss my work.  I need to keep her working until we're 65 (Medicare)!!!

Social Security:  I remember discussing in high school civics class (a long time ago) how retired Americans were moving to Paris and living the good life on their Social Security checks.  My, how times have changed.  That sounded so good (but Santa Barbara is nice). 

ZINGER:  Thank you for the great website info.


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## geekette (Sep 24, 2010)

Conan said:


> I've been using mint.com for a year so I can (finally!) keep track of income and expenses
> 
> Here's a budget for $65,000 (which does not include anything for income tax or tax on social security/IRA/401k withdrawals)
> 
> ...



I appreciate your running numbers as I also do not need $90k annually.  But, holy crap, I cannot imagine spending these amounts!  good thing I don't have The Shopping Gene as I'm not about to budget 8k for retail therapy!  Med, well, who knows, but the other items are many (and in some cases MANY MANY) times more than we spend today.  Inflation is of course a major consideration. 

My original target savings goal was $2 mil and hope I'd have at least $1 mil if I go out disabled.  Depending on what assumptions are used for returns, inflation, tax rate, I'm on target but will not take my foot off the pedal.  

To the just-starting-to-think about it - educate yourself and assess your overall portfolio at least annually.  Money must be managed carefully to achieve your goals.


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## pgnewarkboy (Sep 24, 2010)

Since retirement, I have come to the realization that work is a myth.   I also realize that there are many more myths about work than there are about retirement.  Now that I am retired I have more time to think about myths.


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## Conan (Sep 24, 2010)

geekette said:


> I cannot imagine spending these amounts!


 
Try mint.com for a year, you might be surprised!


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## John Cummings (Sep 24, 2010)

All these tables etc. don't tell the true picture. I have been retired for some time and live pretty well. I do agree that those spending amounts are out of whack in many categories for most folks. Our spending is much lower for many of the categories but much higher for entertainment and travel

I have a very diverse investment portfolio. When I retired, I shifted from capital appreciation to income stream with some appreciation. I have several income sources averaging 6.8% return.


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## geekette (Sep 25, 2010)

Conan said:


> Try mint.com for a year, you might be surprised!



nah, we're terrible consumers, living simply.  we watched our money long before mint existed.   

don't have the latest whatnot cuz we don't need it.  grow food, cook food, DIY house stuff, drive cars until they die.  I'm a bargain shopper, too.  Used to be an avid coupon clipper, saving 10-20% on grocery bills.  We save and live cheap so maybe I can retire before I'm old, and then when I'm old, be able to afford luxuries like yard guy and housekeeper.  and a lot more travel!  

I live in the midwest so my prop taxes are nothing like that (I'd have to own a lot more than I do), and other expenses would be a lot less here, too, on an apples-to-apples basis.   Assuming we were to partake in a more economically stimuating lifestyle.


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## Tia (Sep 25, 2010)

zinger1457 said:


> One of the keys to retire early is to have your expenses under control (mortgage paid off, no loans, no credit card debt).  If that is the case one can live very comfortably with much less than $90K/year.



Sure hope so cause many including self are not going to be able to retire as jobs don't provide a retirement plan and savings got killed along with a job loss 1 1/2 years ago. Right when oldest was starting college in the fall, and qualified for little FAFSA as it's based on year prior numbers.

 Actually people I work with joke about retirement as a myth that we will need to be working with our walkers there instead.... but we know that won't happen cause they will lay us off for younger cheaper workers. :ignore:


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## deemac (Sep 25, 2010)

*Me too*



dwsupt said:


> *I started planning 27 years ago when I would retire! Seven more years to go*. I think the original statement about dying and retireing confuses retiring and doing nothing with retiring and enjoying life! How many people retire at 57 while they can still travel and enjoy life?



ROTFL -- From day one (of my employment) to the end, I was planning my retirement.   I retired at age 58 (1999), and have not regretted it one bit.   Have been A timeshare owner for 26 years, love to travel.

Did a lot of volunteering while working (Smithsonian; Shelter for Abused Women), thought I would continue after retiirement (did for 5 years, but the lure of the road took over).

Hubby and I both retired at the same time (some say this is not a good idea, but it worked for us -- celebrated 50th wedding anniversary in June)


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## rapmarks (Sep 25, 2010)

I don't believe we spend $90,000 a year, and we own two homes and three cars, eat out a lot and play golf a lot  we have always been careful with our money, always saved, and we still save money from our pension.  
I do think that $5000 number for medical is too low, we spnd more than that on premiums and then have eye and dental and hearing and deductible and c.opays.


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## geekette (Sep 26, 2010)

This is a great thread!  Fabulous discussion.

My dream had been to retire by 40 but by end of 20s knew it was shot and didn't even goalpost 50, figured I'd keep the dayjob as long as I needed to.  Will refine plan after another 10 years of working, and hope I'm within 10 years of retiring!  SIGH.

come on, stock market!  Mommy needs fat divvies!

Anyone here live my dream and retire by 40?!?!?   :whoopie:


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## Passepartout (Sep 26, 2010)

We don't live all that high-on-the-hog, but are certainly not suffering. I know that we don't spend anywhere close to $90K. The house still has 3ish years of mortgage left, though either LOML or I could write a check for the payoff. I retired, not entirely voluntarily at 62 last year, and am thrilled beyond belief that I did.

We are both children of children of the depression. Our parents impressed upon us to live frugally and pay ourselves first. We continue to live by these principles. A lifetime of being a saver isn't easily abandoned by a detail like no further paychecks. I still save almost as much as I spend.

DW insists on continuing gainful work until she reaches both Medicare and FRA age in 2-3 years. She's slowed down some, but increased her volunteer and civic activities. Our biggest expense by far is travel. So far we go away about 2 weeks every other month or so.

Jim Ricks


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