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It's Official: I'm Retiring!

CalGalTraveler

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Congrats Dave. Well deserved. I am jealous. Would love to retire but have two kids in college and 7 years to Medicare eligibility. Have slowed down my schedule though. As a business owner, and recently added a part time encore job, so I am not sure if I will ever retire 100%.

However my DH and I frequently talk about cashing out our California home and downsizing to Nevada. I can work from anywhere but DH job and my encore job prevent us from moving for now. Several of my colleagues with similar businesses have kept their business in Calif. but moved their home to Wash, Oregon, Idaho, Arizona and Nevada. Zoom and cheap Southwest flights are their friend. However the incentive is to do more remotely, because they must log every day they work in Calif. as Calif. high tax income.
 
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Luvtoride

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Well for me I had planned to work until age 65 so I could go on Medicare. Either that or hubby would have maybe stayed on his job until he was 67 so I could be on his employer health plan and also continue to bring in a paycheck. Not that I wanted to work until 65- I really was burnt out and tired of the schedule of work, though there were certainly some things I liked about it.

Unfortunately, there were changes in management in the workplace and to make it short- I and other long time employees were forced to resign, with no severance packages or anything like that. Small company- no pensions. Meanwhile, hubby was more and more expressing each day how he wanted to retire. He was getting tired of the commute and again- the schedule of work day in and day out. I am 63 and he is 65.

Soooo...last February I interviewed several financial advisors and chose one- an independent that is a fee only and does not manage your assets- just is paid for his advice and planning. We had decided at first that hubby would retire at age 66 (his FRA for SS), which is this upcoming April. But the FA said that of he wanted to, he could retire sooner.

Meanwhile, we had intentions of moving out of state at some point (and were considering a lot of different options for that) after my husband retired and the FA told us to check with some realtors to see what we could get for our home, so we interviewed a few of them also. After the long winter last year, we also made a couple of appts to go up to our state of choice- NH- to see some real estate and take a mini break for a few days. Checked out independent living cottages way up north there and a development in the lakes region, where we preferred to live.

But we were not ready yet, of course. That said, it really bothered us that we could not move forward. We felt we were getting older and were tired and, living in a very rural setting in isolation, we were ready for a change of lifestyle. We really liked the new construction development and location that we had seen in NH (nothing else like it in the state and at our price point) and I was very sad that we were not in a position to buy yet- or so we thought.

Thanks to TUGGERS when I expressed my feelings about the situation, on THEIR suggestions, I called our FA a week after that visit to NH to see if there wasn't some way we could buy the new construction home before our current home was sold. To our surprise he said to go ahead and buy it and not worry about our house selling as it eventually would and we could float some of our money or maybe even get some kind of temp. investment loan or something like that. Elated, I contacted the realtor for the new house, contacted a chosen realtor for our current house, and the following weekend we were up in NH signing papers and our current home was listed the same day. The next day on our way back to NY, the people who were to become the buyers of our house were there looking at it!

I immediately- that same day we got home from NH- started the downsizing process- listing our possessions on Facebook Marketplace. Our porch furniture was taken that very night we got back! We accepted the offer on our current home two weeks after the buyers looked at it.

We closed on our NY home on 9/30, moving on 9/27 into the former home of the people who purchased our home! They needed renters in order to qualify for the mortgage and we needed a temporary place to live until hubby retired. Costing us a fortune to live here but at least we have a 6 month lease- not easy to get. We have paid through February and unless they can get another tenant will be responsible for March as well. Money flying out of our accounts like crazy.

Because the new house was supposed to be done by 11/1 (which it turns out we didn't close on it until 12/31 (and it is still not totally done- but that is another story)), we wanted hubby to retire sooner, like in the Fall, but the process was very overwhelming. He had Medicare Part A, but now needed B and SS needed a form his employer to get him on that, and come to find out if he retired the end of the year and receiving the money in January (which he did officially retire on 12/31) he would get more money (due to an interest rate change or something?) in his lump sum pension (which was cut off at the knees years ago as the company went to a stupid cash balance plan- even after promising older employees that would not happen). Him taking the annuity monthly pension amount would be nothing to live on, which is one of several reasons why we chose the lump sum instead. There was a process for the rollover for that as well, as our FA wanted a Borkerage IRA set up for hubby (for more flexibiltiy with investments) and he only had IRA mutual funds with a mutual fund company. So I had to get that set up for him as well to accept the money.

The next step was getting him on a Medicare supplement and Part D plan, which he had to go through a broker his company uses to qualify for a $60 monthly HRA employer contribution. A nightmare in and of itself and too long a story. And then, of course, there was the issue of health insurance for me, which right now I am on his retiree medical at $545 per month for a high deductible plan! The FA wants me to go on an ACA plan when we move as we are currently living o;n our cash savings, which is freaking me out.

When I tell you dealing with all this involved more time and logistics than you would think would be an understatement. Plus building a new construction house long distance. I handled it all as my husband was commuting and working all day. Getting used to being renters for the first time in our lives and living out of boxes in our 60's. I have been crying for months.

To think, we have to go through this whole process again in 2 more weeks when we finally move to our new home. Changing addresses took me 6 hours to do on this last move. Then we have to get new health insurance for both of us. Not easy. I dread it.

I have also worked on getting medical records sent to the new state- where we had to immediately get a doctor for hubby who is on high blood pressure meds. Not as easy as it sounds. Lots of docs not taking new patients or Medicare or even my insurance. Try to get a recommeneded doc- oh well- no new patients. Ended up taking a crap shoot for a new doc in a practice. I am still trying to get my records sent from my current doc in NY, who just merged with another practice and his office is in a flux. So I have yet to get an appt with the new doc in NH for myself.

So back to the financials- our FA told me to use our cash savings for now to live on until we move and the dust settles. Right now I fugure we are good until June at least. We have a signed agreement with him for this year so he will work with us to get us through. He insists we do not take SS until age 70 and he insists we try to get our tax deferred account balances down (with some Roth conversions) as much as we can as to avoid at least a little bit of the tax torpedo that people incur when they are required to take RMD's at age 72 (or if they need to before). He is taking taxes into account and wants me to go on an ACA plan with subsidies which would involve keeping our income very low on paper. I am still nervous about everything with not having a paycheck coming in and watching our savings account dwindle is so scary to me..

Not only using the money to live on for everyday expenses, but we have so many other expenses with the new house- this little cottage didn't cost that much less than what we sold our home for so we have limited funds left from the former house sale to play with. I just keep withdrawing money and writing out checks and I cringe when I have to look at our savings and checking accounts. But- I have to have faith in this FA we hired to get through it.

So- this has been my- our life so far in retirement. We did get to go to our timeshares this summer and Thanksgiving week (where we got to see our house in person for the first time!) and we were able to squeeze in a planned trip to Utah in Sept. right before we moved into the rental and closed on our NY home. thankfully.

But very little-social life since I retired. Maybe two or three lunches with a friend since 9/'18., and a dinner with 2 former coworkers- again in 2018- and 2 annual friend reunions. 2018 Thanksgiving with my brother and his family. You can see there were so few of them I can remember them easily.

That is why we chose the development to live in in NH. It is not a 55+, but it is like that. Not an ACTIVE adult community with endless activities scehduled, but the residents do plan some parties and activities throughout the year. Some evenings they might get togather for a card game. A senior daytime bowling. Stuff like that. There is a clubhouse and a pool and as I mentioned this is in a tourist area so a lot to do right nearby and we can also walk to the boardwalk/beach/lake. It is quaint and very New England, yet like something you might also see in Florida. HOA does the tiny lawns and plows the private road and covers trash.

So this is just what it takes I guess, but certainly not how I envisioned retirement to be so far.

The good news is- we ARE retired and we did get our little retirement cottage in the area we wanted (which is near where our only child lives as well) and ,God willing, will be moving there in 2 weeks! And- we are so far healthy for the most part and that is priceless.

At some point hope we will look back on this all and laugh, but right now not so much. Sorry this is so long but I wanted for you to get the whole picture. The retirement process for us has not been easy but we are hanging in there.

WW, thanks for the very detailed REAL LIFE considerations which are needed to deal with when retiring. Yes, it sounds like much was complicated by the move to another state, both logistically and financially. I truly hope that your new home/ community is exactly what you expect it to be and gives you the joy and social interaction that you are expecting.

Health issues and insurance coverage are certainly a significant consideration for retirement. Feeling "boxed in" until reaching full medicare eligibility is a REAL concern and needs to be planned and calculated into the financial equation. Luckily, both my wife and I have medical coverage available to us in retirement BEFORE medicare kicks in and at a cost, but better than ACA options.

I'm glad to hear you hired a fee Financial Advisor to help you with your planning. My only question is why does he "insist you not take SS until age 70". I understand the concept of maxing out your benefit up to age 70, but it sounds like without other sources of regular monthly income, that strategy should be reconsidered. Without getting personal about your specific finances, will your non-qualified savings be enough to last until you both reach that age? Perhaps you should discuss with a certified Social Security consultant about the best strategy to use.

Best of luck with the move and finally being able to enjoy Retirement. Keep us posted as to how it goes!
Brian
 

Timeshare Von

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That's kind of how I'm approaching things. I do like my work, but I have things I want to do away from there. The joke I've been telling everyone is that "work is getting in the way of my time off." :)

Dave

HERE HERE! Some of my favorite work times was when the gig ended and I was unemployed for months. (In one case over 15!)
 

Luvtoride

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Congrats Dave. Well deserved. I am jealous. Would love to retire but have two kids in college and 7 years to Medicare eligibility. Have slowed down my schedule tthough. As a business owner and recently added a part time encore job, so I am not sure if I will ever retire 100%.

However my DH frequently talk about cashing out our California home and downsizing to Nevada.

Cal Gal, At least starting the conversation is a step in the right direction.Someone once told me that "you will know" when the time is right to retire. I'm not sure that this is completely true with all of the moving parts you need to consider (see Winnie's posts above) but I get the point that mentally and emotionally it becomes clearer.
Best of luck with your planning.
 

WinniWoman

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WW, thanks for the very detailed REAL LIFE considerations which are needed to deal with when retiring. Yes, it sounds like much was complicated by the move to another state, both logistically and financially. I truly hope that your new home/ community is exactly what you expect it to be and gives you the joy and social interaction that you are expecting.

Health issues and insurance coverage are certainly a significant consideration for retirement. Feeling "boxed in" until reaching full medicare eligibility is a REAL concern and needs to be planned and calculated into the financial equation. Luckily, both my wife and I have medical coverage available to us in retirement BEFORE medicare kicks in and at a cost, but better than ACA options.

I'm glad to hear you hired a fee Financial Advisor to help you with your planning. My only question is why does he "insist you not take SS until age 70". I understand the concept of maxing out your benefit up to age 70, but it sounds like without other sources of regular monthly income, that strategy should be reconsidered. Without getting personal about your specific finances, will your non-qualified savings be enough to last until you both reach that age? Perhaps you should discuss with a certified Social Security consultant about the best strategy to use.

Best of luck with the move and finally being able to enjoy Retirement. Keep us posted as to how it goes!
Brian


I have asked him about this several times-again recently in fact when we just met with him. He said no where will we get 8% returns on a safe investment like SS. That to think of it as an insurance policy. (which I have always said it is like an annuity).

He is using a tax advantaged strategy- for us to take money from taxable accounts first- and even some from tax deferred accounts- as well as a few small Roth conversions. Stay under the income qualification limit for ACA subsidies as well for me (I turn 65 June- 2021), We have a decent amount of money- but certainly not millions. I am not that smart with this stuff - especially when it comes to taxes- though I have done our taxes for many years- I depended on the TAX ACT software! LOL!

This year I already scheduled an appt. with a CPA in NH to do our taxes as I just can't handle it.

(My husband's FRA for SS is 66 and for me it is 66+ 4 months.)

So for me- it is so new- to live off the money we have saved all these years. I honestly don't get how it will last, and that is why we hired the FA. He uses the Monte Carlo plan and other things and has us living into our 90's to draw up the best case scenario. (I doubt we will live that long).

So as I said- though I am a worrier - I have to have faith that the FA knows what he is doing when he advises us. I don't get it and I am so tired of making decisions this year and dealing with everything I have to let go and let God as they say. (though definitely not my nature!)
 

Timeshare Von

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This thread and all of the conversation is really helpful to me as I continue my "planning" towards May 2024 (when I'm 66.5 and at full retirement age).

If it weren't for the high cost of medical insurance for me and my DH, I would probably consider retiring now, living on our IRAs until I can go on Medicare and file for full SS benefits. But given our current medical insurance (just a mediocre silver plan) is costing us $1,800/month . . . quitting before Medicare (at least for me) ain't in the cards.

I have considered going on some sort of limited hours/work plan at some point prior to May 2024, which would afford me the opportunity to do some extensive summer travel (like camp-hosting in a state or national park). My board president is open to it, and it would serve their purpose during a slow time of the year, to reduce payroll.

My DH hasn't worked since we married (nearly 18 years ago) although he is younger than me. So his "timing" is really more about when we sell this house in Wisconsin, or more accurately, buy something somewhere else. I will admit, renting as a lot of appeal as we look towards retirement especially since we don't have children/grandchildren to worry about leaving assets to.

I wonder how many people have done that exercise/calculation of buy vs. rent in retirement? Thoughts . . . experiences . . . pros/cons?
 

CalGalTraveler

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Cal Gal, At least starting the conversation is a step in the right direction.Someone once told me that "you will know" when the time is right to retire. I'm not sure that this is completely true with all of the moving parts you need to consider (see Winnie's posts above) but I get the point that mentally and emotionally it becomes clearer.
Best of luck with your planning.
Good point. I was called frequently by recruiters when I worked in Corporate America, however the opportunities did not feel right. When I left the time was right. In hindsight I should have left to start my company 5 years earlier - more money, more control over my schedule...

I now worry that health problems will prevent us from enjoying travel etc. when we eventually retire. We are making a priority to travel now but limited by vacation time off. Our biggest perceived limitation is healthcare. If Medicare was available to 55 or 60 I would retire.

Is there a way to estimate the cost of healthcare during the gap years to Medicare?
 

WinniWoman

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Good point. I was called frequently by recruiters when I worked in Corporate America, however the opportunities did not feel right. When I left the time was right. In hindsight I should have left to start my company 5 years earlier - more money, more control over my schedule...

I now worry that health problems will prevent us from enjoying travel etc. when we eventually retire. We are making a priority to travel now but limited by vacation time off. Our biggest perceived limitation is healthcare. If Medicare was available to 55 or 60 I would retire.

Is there a way to estimate the cost of healthcare during the gap years to Medicare?

Well- for starters- of the ACA plans are still in place- you could go that route. You can go on the website and play around with the projected income and so forth and see what the prices are right now. For me- with an income of $24,000 per year, for example, in the state of NH, it would cost me like $40 per month for a senior plan. Larger incomes to $40,000- around $250 per month.

Again, this is on paper and dependent on a tax strategy you could work out so you have a lot more money to live on- in our case it is cash which is not considered income. Obviously, your account balance will go down as you withdraw, but no taxes on it. Or maybe even withdraw from a taxable brokerage account but just enough to keep your income low enough to get subsidies.

Or- the other option is a higher income expected and seeing what the premiums would be for that and I believe they will be high. Keep in mind also these plans are EPO's and HMO's- though every state is different. So when you go on the site- since you are planning to move to another state at some point, use the zip code where you think you might live.

Then there is always private insurance.......

As for health CARE itself- no one knows what is to be in life and what kind of care you will need and what it will cost. If you are getting care right now and on meds- you can probably figure it out from that standpoint but anything can happen at any time and cost Lord knows what.
 
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DaveNV

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Back in the 80's, I was the systems manager for a VAX 11/780, in addition to my job as a software developer. My wife still grumbles about the affair she thought I was having with VaxAnne. She wasn't sad at all when the lab hired a full time systems manager.

That's funny, but not totally unheard of. I trained and worked on a VAX system in the early 80s at a Navy shore command in San Diego. We had several systems I rotated through in the computer center, but working the VAX was always my preference. Very precise equipement. I couldn't say the same for the Univac or Honeywell stuff we had. :)

Dave
 

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Then there is always private insurance.......

Private insurance, with decent coverage is no bargain . . . at least not here in Wisconsin. Our policies are very expensive ($1,800/month) for a silver plan. It is $5,100 deductible and $8,150 max out of pocket . . . PER PERSON . . . with $50 PCP and $100 specialist copays . . . and 60/40 split on the co-insurance.
 

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Private insurance, with decent coverage is no bargain . . . at least not here in Wisconsin. Our policies are very expensive ($1,800/month) for a silver plan. It is $5,100 deductible and $8,150 max out of pocket . . . PER PERSON . . . with $50 PCP and $100 specialist copays . . . and 60/40 split on the co-insurance.

My gosh. Forget disease and age illness....the cost alone will kill ya. That’s insane.


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Timeshare Von

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My gosh. Forget disease and age illness....the cost alone will kill ya. That’s insane.

No kidding. And some of the meds are barely covered . . . like Eliquis. WITH insurance, it's $455/month! I'm hopeful with the FDA's recent approval of a generic, the price will come down.
 

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Thanks again, everyone, for your kind thoughts and comments. I've tried to keep things focused more inward as I've worked through this process the last few years. I didn't want to just reach retirement age, stop working, and decide then if I could afford to not work. The time and effort has been worthwhile, and now I can move forward into retirement with a clear knowledge of what I should expect. As pointed out upthread, retiring is not always an easy process.

I can see from some of your other examples that my situation is far from unique, but overall has been much simpler than many of you. Retirement with planning is challenging for everyone, no doubt. I encourage everyone to look forward, plan for the day when you'll want to stop working full time, and then think ahead for what you'll want to do after that. Regrets? I have few, but there are two: Not starting a 401(k) back in my 20s, when I first learned what they were all about. And Oh, if only I had taken the opportunity to buy Apple stock back in the '80s when it was around $25 a share. It was so cheap! I'd be a very wealthy man today. Live and learn. :)

In my case, planning for retirement was pretty simple - based on my working history I knew I had the usual income sources in place (military pension, Social Security, and some investment accounts.) I could have retired with only those, and been okay. The sticking point for me was a VA disability, due to the damage the military did to me. After working through the VA system for several years, I finally (FINALLY!) resolved things at the end of 2019, and I was able to move forward. So when I say "the stars aligned and I've decided to pull the plug," it wasn't without a lot of effort beforehand. My delays in retiring sooner were all because of this unfinished business. I am glad to have it resolved and I can look ahead. (Sidebar: If you are a Veteran and have an injury or disability caused by your military service, start the conversation with the VA about compensation NOW. They won't offer it unless you go through the process - and it is definitely a process. If there is not a VA center in your area, contact the American Legion or DAV [Disabled American Vets] to see if they have a rep available. It's absolutely worth the effort.)

Dave
 

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This thread and all of the conversation is really helpful to me as I continue my "planning" towards May 2024 (when I'm 66.5 and at full retirement age).

If it weren't for the high cost of medical insurance for me and my DH, I would probably consider retiring now, living on our IRAs until I can go on Medicare and file for full SS benefits. But given our current medical insurance (just a mediocre silver plan) is costing us $1,800/month . . . quitting before Medicare (at least for me) ain't in the cards.

I have considered going on some sort of limited hours/work plan at some point prior to May 2024, which would afford me the opportunity to do some extensive summer travel (like camp-hosting in a state or national park). My board president is open to it, and it would serve their purpose during a slow time of the year, to reduce payroll.

My DH hasn't worked since we married (nearly 18 years ago) although he is younger than me. So his "timing" is really more about when we sell this house in Wisconsin, or more accurately, buy something somewhere else. I will admit, renting as a lot of appeal as we look towards retirement especially since we don't have children/grandchildren to worry about leaving assets to.

I wonder how many people have done that exercise/calculation of buy vs. rent in retirement? Thoughts . . . experiences . . . pros/cons?

The whole medical insurance thing is a nightmare and the biggest hurdle for people who want to retire before age 65 in this country. I still say we should have moved to Canada- we are almost there as it is now. LOL!

If you can play around with your income on paper as I stated in my prevoious posts you could get ACA subsidies. But many people just can't. Their investments throw off too much income or they are getting pensions or have a business or do not have sufficient tax free cash to live on for a few years.

We went through that renting scenario with our FA as well. Bottom line is he felt for us it was better to pay cash for a home- under $400,000- and preferably under $350,000. (our home cost us list price $249,900 and then with the so called upgrades (what a joke that is) the final was $274, 400+. We sold our former home for $317,000- but when all was said and done (you know how that goes- atty fees, town permit fees, other stuff) I figure maybe we ended up with $306,000 - $300,000- not sure.

FA said it was best also for our son as it is a possibility for us to leave it to him depending on how our end of life goes.

HOWEVER- I have a friend who just bought a house using a reverse mortgage FOR PURCHASE. She, too, has no family - no children or spouse- to leave a home to. I had never heard of this option before, but essentially she sold her previous home and put a nice chunk of money down on this new house and got a reverse mortgage for purchase for the balance so she could keep the balance of the funds from her previous home sale to live on. A novel idea! She is very happy with her decision.

Rents on the east coast are outrageously expensive. This old, little house on 1/2 acre (great area- I must say- horse farms and close to all conveniences and medical) is $1800 per month plus utilities plus must fill oil tank for heat and propane tank for hot water and cooking plus having to take care of the two driveways and 1/2 of the steep private road and plus internet and TV and all that. And this is no luxury place either.

The FA figured we could probably afford up to $3000 per month(Unfathomable to me. We had a paid off mortgage and our high property and school tax bill in NY was still only $850 per month!)) for a rental depending on the terms, but it would not be in our best interests to rent.

Then there is the issue as you do not own the place and you cannot do whatever you want with it in terms of remodeling and so on. But we did seriously consider it. Hubby hated the idea from the onset.
 
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The whole medical insurance thing is a nightmare and the biggest hurdle for people who want to retire before age 65 in this country. I still say we should have moved to Canada- we are almost there as it is now. LOL!

If you can play around with your income on paper as I stated in my prevoious posts you could get ACA subsidies. But many people just can't. Their investments throw off too much income or they are getting pensions or have a business or do not have sufficient tax free cash to live on for a few years.

We went through that with renting scenario with our FA as well. Bottom line is he felt for us it was better to pay cash for a home- under $400,000- and preferably under $350,000. (our home cost us list price $249,900 and then with the so called upgrades (what a joke that is) the final was $274, 400+. We sold our former home for $317,000- but when all was said and done (you know how that goes- atty fees, town permit fees, other stuff) I figure maybe we ended up with $306,000 - $300,000- not sure.

FA said it was best also for our son as it is a possibility for us to leave it to him depending on how our end of life goes.

Rents on the east coast are outrageously expensive. This old, little house on 1/2 acre (great area- I must say- horse farms and close to all conveniences and medical) is $1800 per monht plus utilities plus must fill oil tank for heat and propane tank for hot water and cooking plus having to take care of the two driveways and 1/2 of the steep private road and plus internet and TV and all that. And this is no luxury place either.

The FA figured we could probably afford up to $3000 per month(Unfathomable to me. We had a paid off mortgage and our high property and school tax bill in NY was still only $850 per month!)) for a rental depending on the terms, but it would not be in our best interests to rent.

Then there is the issue as you do not own the place and you cannot do whatever you want with it in terms of remodeling and so on. But we did seriously consider it. Hubby hated the idea from the onset.

I agree with the health care. Being Canadian, I don’t need to factor in any major costs. My blue cross private will end up being 125 a month and that’s the premium plan. I get 30 days unlimited emergency travel health care on the blue cross plan too. Provincial Health Care pretty well covers any major risks.

Almost half my colleagues who are Americans and live in the US plan to retire in Mexico or Cost Rica so they can retire early without worrying about health care.


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Rolltydr

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That is quickly becoming extinct in these parts...
Home delivery of a newspaper

I have all the fat newspapers I want every Sunday in my little iPad. All the words are still there. They just come in a different wrapper now.


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DaveNV

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Rents on the east coast are outrageously expensive. This old, little house on 1/2 acre (great area- I must say- horse farms and close to all conveniences and medical) is $1800 per month plus utilities plus must fill oil tank for heat and propane tank for hot water and cooking plus having to take care of the two driveways and 1/2 of the steep private road and plus internet and TV and all that. And this is no luxury place either.

That's a bargain. In my area $1800 a month plus utilities might get you a 2br apartment. Freestanding houses rent for well over $2K a month.

That's one of the reasons we've decided to stay in our current home till my spouse retires. We've been looking, but it's absurd trying to downsize in our area - smaller homes are selling for much higher prices than we want to pay. It makes much better financial sense to maximize the condition of this home, then cash out and move when we're ready.

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Rolltydr

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Regrets? I have few, but there are two: Not starting a 401(k) back in my 20s, when I first learned what they were all about.

Dave, I want to second the point you made about the 401k. I was about 30 before I finally started putting money in my employer sponsored 401k. I had resisted because I couldn’t withdraw the money if I needed it before age 59 1/2. My young, ignorant self thought, “It’s my money. I want it when I want it!” So, I missed several years of my own contributions, as well as, the employer match offered by my company.

Fortunately, in my early-mid 40’s, I started earning a salary that allowed me to put the maximum amount in my 401k for the last 12 years or so of my work life. I was actually able to retire at the age of 58yrs, 8 months because of that one decision. I had actually planned on taking SS at 62 or 66 but with both our pensions and my 401, barring any unforeseen catastrophes, I will be able to hold off until 70. My wife has a much better pension than mine, but my 401 was a lot larger than hers. I’m 65 and she just turned 66, and we’re doing great, so far. We haven’t touched her 401 yet.

So, for those of you who are still working, and young enough that it can still make a difference, I highly recommend putting as much as you can afford in a 401k. Even though I was late starting mine, it allowed me to retire several years before I thought I would/could.


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WinniWoman

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That's a bargain. In my area $1800 a month plus utilities might get you a 2br apartment. Freestanding houses rent for well over $2K a month.

That's one of the reasons we've decided to stay in our current home till my spouse retires. We've been looking, but it's absurd trying to downsize in our area - smaller homes are selling for much higher prices than we want to pay. It makes much better financial sense to maximize the condition of this home, then cash out and move when we're ready.

Dave


Agree. And financially it would have been better for us to stay in our house as well, as we just recently updated the whole house. The little cottage we bought cannot compare with what we used to own. For us, as I mentioned, it was more of the lifestyle factor that needed to change, not to mention we do not like what is going on in NY and in the area we lived in specifically.
 

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Dave, I want to second the point you made about the 401k. I was about 30 before I finally started putting money in my employer sponsored 401k. I had resisted because I couldn’t withdraw the money if I needed it before age 59 1/2. My young, ignorant self thought, “It’s my money. I want it when I want it!” So, I missed several years of my own contributions, as well as, the employer match offered by my company.

Fortunately, in my early-mid 40’s, I started earning a salary that allowed me to put the maximum amount in my 401k for the last 12 years or so of my work life. I was actually able to retire at the age of 58yrs, 8 months because of that one decision. I had actually planned on taking SS at 62 or 66 but with both our pensions and my 401, barring any unforeseen catastrophes, I will be able to hold off until 70. My wife has a much better pension than mine, but my 401 was a lot larger than hers. I’m 65 and she just turned 66, and we’re doing great, so far. We haven’t touched her 401 yet.

So, for those of you who are still working, and young enough that it can still make a difference, I highly recommend putting as much as you can afford in a 401k. Even though I was late starting mine, it allowed me to retire several years before I thought I would/could.


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I will reinforce this same message. I went to college for finance and securities analysis to learn about the power of compound interest and the time value of money over the long term (among other more complex analyses). Couple those concepts with wise investment decisions over a 30-40 year timeframe and a healthy financial retirement is achievable for many.

I have repeatedly given my children one key example. If you were to save 10k per year into your 401k from age 25-35, and assume a ten percent compound annual return (which really isn’t a valid assumption any longer for various reasons, but for the sake of the lesson it works well), and then stop saving into that same 401k at age 35, and compare your 401k balance to someone who starts saving 10k per year into their 401k for the rest of their career starting at age 35, again assuming a ten percent annual return, the second person will basically never catch you despite the fact that they have to save for the rest of their working days. This is because of the power of compound interest and the time value of money.

Technically toward the end of the 30 year window, the second person does finally eventually catch up - but the lesson is that the second person had to save 300k vs only 100k for the first person. The time value of money is a powerful concept.

Unfortunately for my Gen X generation, we have no such thing as pensions to help us with retirement - so 401k/403b savings are pretty much all we have left to fund our retirement years. I hope to still have SS but even that I’m not certain will be there for us the way it is today 20 years from now.

My wife and I are both 48, and we max out both of our 401k plans every year and have been for the past several years. I’ve been saving into my 401k since age 25 for the reasons I outlined above. At times I had to scale back from max 401k contributions to prioritize college savings and to account for my wife being a stay at home mom for the early parts of our child rearing years.

With wise investment choices we hope to be able to retire around age 62. We have two investment properties and hope to add a few more to boost our income over the next five years, and we plan to pay off our home mortgage within that same five year period of time which will really help us in so far as monthly cash flow is concerned. Fingers crossed that everything we are doing gives us a leg up when our golden years approach!


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bluehende

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So, for those of you who are still working, and young enough that it can still make a difference, I highly recommend putting as much as you can afford in a 401k. Even though I was late starting mine, it allowed me to retire several years before I thought I would/could.


Perfect advice. This is why I actually think the trend toward retirement accounts as opposed to a defined plan is a good thing. With a good transition plan for those that are forced to transition to protect them. I started putting away at 23 in my 401k and contributed all my life. I retired at 51 because of that account. That account is worth about 5 times the value of my pension for income today using the 4% rule.
 

DaveNV

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I'll absolutely agree with both @Rolltydr and @HitchHiker71. In my 20s I was a lowly enlisted man in the Navy. My income wasn't much, and I felt I needed every penny to live on each month. The military in those days didn't say much about investing for the future, and there was a mentality of "My Navy retirement pension will take care of me." Truth be told, that pension isn't all that great. It helps, certainly, but it won't even cover the mortgage on my house. So my regret is that I didn't start saving for retirement when I was young. I can't change my own history, but knowing then what I know now, I'd definitely have made better choices.

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Sugarcubesea

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Maryanne, I followed your story very closely because prior to the company I am at now, my company was just as yours was and I knew I had to find a new job or they would force me and everyone else that was over 50 out the door. Thankfully I found an opportunity at a Japanese Company, which is known for hiring and retaining the mature worker. I plan to stay hopefully at this company till 65.

I'm looking for a FA fee only this year, because ever thou I'm in Finance I want someone for verify our stats and spreadsheets to ensure we can retire. The company I worked at for the bulk of my career had a pension but did not offer a 401K, when the company went bankrupt in 2009 (along with all of the other auto companies in Detroit during the great recession) In 2011 when the company finally got through the bankruptcy process their pension plan was so underfunded that I will only get a sliver of what I was to receive...so knowing that now I will only receive a $110 a month pension ( I've been told that the number could even be less by the time I qualify at age 65) I knew that I had to readjust my retirement planning.

I'm saving like crazy and being Uber frugal.

Can I ask how you found a fee only FA?
 

Ralph Sir Edward

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My retirement target has been moved up to July 2nd (from end of year 2020).

I have 18 months of bridge funds "In the bank", and plan on 18 months of COBRA to Medicare. (Expensive, but cheaper than ACA here)

The next question is whether or not I'll make it to July 2nd. My current contract is nasty, the commute is nasty (28 miles one way in high speed, heavy traffic. I call it 70 mile per hour bumper cars. . .) I don't like the management, and they don't like me. Either one of us may say "Here's the door, use it" at any time. . .
 
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