Tired...Anyone retired this year, how has it been, any issues. Looking at 3 more yrs.

[dmccarty]

Have enough resources to retire with about the same income that you were spending when working. The key is "spending". You'll spend essentially the same when retired as when working. Medical expenses will go up when you get older, but other expenses will likely go down. For instance, we cannot eat out now because wife is non-gluten and I'm no sodium. Almost impossible. Saving money that way, but doctor and hospital fees are up.

There was an article in the WSJ over the weekend about retirement savings and spending. Mostly it was a blah blah blah article either because I did not understand what the heck they were talking about or it was just a blah blah blah article. :laughing::laughing::laughing: The one thing of value in the article was the statement that people need 75-100% of the preretirement income in retirement.

I don't see how we would need 100% of my current income if we were retired with the house and land paid off. Health insurance and bills, along with property taxes, will certainly go up but with no mortgages and not having to drive to work will save a huge mount of money. I sure hope we don't need 100% of our current income when we retire.

Later,
Dan

 

[brin]

There was an article in the WSJ over the weekend about retirement savings and spending. Mostly it was a blah blah blah article either because I did not understand what the heck they were talking about or it was just a blah blah blah article. :laughing::laughing::laughing: The one thing of value in the article was the statement that people need 75-100% of the preretirement income in retirement.

I don't see how we would need 100% of my current income if we were retired with the house and land paid off. Health insurance and bills, along with property taxes, will certainly go up but with no mortgages and not having to drive to work will save a huge mount of money. I sure hope we don't need 100% of our current income when we retire.

Later,
Dan

You read all these articles that say folks need at least $1 million to $2million to retire...That is just no true for everyone...A couple who have their home , cars etc. paid for and no debt other than current utilities, food, etc.. should be able to easily retire on a modest monthly income...Soc. Sec and a draw on their savings or interest income if they have a good rate....I think they are trying to scare folks for some reason...Of course, if folks are going to retire and travel frequently , eat out frequently, gamble, drive new cars etc....then they might need $10-Million...Bottom line ...folks can tailor their spending according to their means and needs.:2cents:

 

[sodamo]

You read all these articles that say folks need at least $1 million to $2million to retire...That is just no true for everyone...A couple who have their home , cars etc. paid for and no debt other than current utilities, food, etc.. should be able to easily retire on a modest monthly income...Soc. Sec and a draw on their savings or interest income if they have a good rate....I think they are trying to scare folks for some reason...Of course, if folks are going to retire and travel frequently , eat out frequently, gamble, drive new cars etc....then they might need $10-Million...Bottom line ...folks can tailor their spending according to their means and needs.:2cents:

Agreed.
For most of us, retirement is also a lifestyle change. Just an example, but I doubt the wife and I spend $100/year on new clothes - just don't need to, have a closet full. Now, I do go through more flipflops these days

Many other expenses are variable. We don't have to drive into a job every day, so transportation is down. I do buy more toyls and gadgets though - my choice.

David Sent from my iPad using TractorByNet

 

[Redbug]

I don't see how we would need 100% of my current income if we were retired with the house and land paid off. Health insurance and bills, along with property taxes, will certainly go up but with no mortgages and not having to drive to work will save a huge mount of money. I sure hope we don't need 100% of our current income when we retire.

Later,
Dan

Dan...I do not think you need even 80% in retirement to equal what your 100% is in working money. I keep running the numbers, (in my case), and my take home pay will about double after retirement as opposed to now. That's because I am maxing out our IRA's, 401, and saving for other funds. I won't be saving as much like I am now. Also...other costs like driving to work, etc take money. You do not need as much to live on after you are retired. And for me, I will not be using deodorant every day...like I do now! Ha!

 

[dmccarty]

Dan...I do not think you need even 80% in retirement to equal what your 100% is in working money. I keep running the numbers, (in my case), and my take home pay will about double after retirement as opposed to now. That's because I am maxing out our IRA's, 401, and saving for other funds. I won't be saving as much like I am now. Also...other costs like driving to work, etc take money. You do not need as much to live on after you are retired. And for me, I will not be using deodorant every day...like I do now! Ha!

Yeah, I just do not see needing my current salary when I retire. If I do, something has gone wrong. :shocked:

I don't see myself buying more toys/tools. I gots what I need. Even if I did need or want something, I spend quite a bit of money on fuel getting to/from work and that fuel bill would buy some nice tools/toys. Not having a mortgage frees up a bunch of money. We don't eat out much, but if I was retired, I would cook at home more which would cut down on our grocery bill since I would be cooking things from scratch. I would also have time to garden which would save us more money.

Increased health care premiums and cost, along with property taxes, are a concern. There is a big project that is starting in my county, that if it goes through as planned, will double the population of the county. This would drive up the value of our land by a huge factor. Most of our land already has a timber valuation so it is "safe" but our house tax could really sky rocket. Property taxes, increased value, and crowds PEOPLE could force us to sell. I thought the development we are seeing would not happen because of the poor soil conditions but a big pocket developer has bought up thousands of acres and wants to put in much denser development than I thought would ever happen. Course if this happens, we could sell, retire early, and move again, however, we had planned for this to be our last house and move. I really don't want to have to find new land, a new builder and build the same house. :laughing::laughing::laughing: But this might be the price we have to pay to retire early assuming the project really goes as planned.

The right away in front of us just got cleared a stacks of pipe dropped of last week. I think it is water pipe heading to the new detention center down the road a few miles. The pipe is only 3-4 inches in diameter which seems really small to me since they have to go a five miles. If the pipe is not for water, then it has to be gas I suppose. There is a gas line in that right of way already.

The wifey and I were talking about the new development, and I told her we might have to sell the land and house, retire early, buy a big RV and start traveling. :laughing::laughing::laughing: One slight problem is the kids, don't know what to do with them. Military School? :laughing::laughing::laughing:

Later,
Dan

 

[txdon]

I have two recurring unexpected expenses after I retired. Health insurance has gone up 600% and fuel has gone up 100%. I compensated for the fuel by buying a Prius, as soon as I turn 65 I'll get a break in the insurance. If you need to find out how much it will take to live on, just figure how much you make now minus what you save and that's about what it will take. There will alway be unexpected monthly expenses, inflation and increased insurances (property, health, vehicle) and more taxes.

 

[buckeyefarmer]

I had two sisters retire this year. I want to, but it will be at least 8 more years to get college out of the way.

 

[ultrarunner]

I know people in the SF Bay area that do just fine with $1800 social security each month... manage to sock away some too.

Basically, property tax, utilities, food and insurance supplement premiums.

 

[QRTRHRS]

I might have missed the tax topic now that this thread has run some 15 pages but it is a concern. While you can locate in a state that does not tax your retirement income as bad as others do, you still have to deal with Uncle Sam. I think many will be surprised at their tax bill upon retirement. I know I was.

Also thought I would mention that I have added the "S" as in school bus endorsement to my CDL and will start a new gig this coming Thursday. Medical through the school district for myself alone is 61/month. Wife is on Medicare.

Is this something I want to do? Of course not. I would just as soon stay home and fuss with our horses or mow or whatever. But then I do need medical for a couple of years until I hit 65 and I am learning some new tricks (old dog, you know the joke). This venture has opened new doors that I had not thought about. New friends and oppourtunities. I will be busy for sure so in the long run, it should be a good experiance. Nothing ventured, nothing gained.

 

[smfcpacfp]

I am 66 years old and have been retired for six years. Prior to that I was a college tax professor for 30 years and prior to that I was a tax attorney in New York City specializing in corporate tax-free reorganizations (mergers, split ups, etc.). I was also a Certified Financial Planner (CFP) and CPA for many years, finally giving up my licenses in all three areas last year. Although I did financial planning for a few private clients, I was my most important customer. Although CFP's have training in many area, most of their work is in doing retirement planning for individuals.

My own personal retirement plan was relatively simple. I would invest as much as I could in tax sheltered savings over my working years, such that when I had a desire to retire I would be able to do so. I really didn't have a set retirement date although that is a good feature for retirement planning. My employer had a defined contribution plan and contributed 15.65% of my salary into the plan, and in addition I maximized my 403(B) and 457 plan contributions along with establishing a SIMPLE IRA for self-employment earnings and contributed to Roth IRAs when possible.

I used what I call the, "brute force" method of accumulating wealth for retirement or whatever other goals that I had - Invest a large amount of money in a diversified portfolio of common stocks, or common stock mutual funds, for long periods of time to ensure that you should accumulate sufficient wealth to retire comfortably, and it worked. I called this method "brute force" because it didn't require me to be an expert stock picker which I am not.

When my wife was offered an opportunity for early retirement benefit seven years ago, I seriously looked at my own situation and said to myself, "Why am I still working?" I gave my employer one years notice and retired a year later. Social Security was never part of my retirement plan. However, if it was still there when I retired I would take it. I began collecting Social Security at age 62.

What struck me about this thread was how many posts have been made in a relatively short period of time. So the concept of retirement is still important to many people. Since sfloggie wants to retire in three years, he needs to see if he is going to be in a financial position to do so, living a lifestyle that meets his desire.

Retirement planning actually begins with the end of your life, working backwards through time. As many of you mentioned, the first step in doing retirement planning is preparing a retirement budget. I don't know about most of you but I absolutely hate budgeting. Often times when I would tell my clients this, they would roll their eyes because they didn't like to do a budget either. However, for retirement planning purposes, you don't need a detailed budget (spending on electricity, food, taxes, whatever). What you need to know is how much are you going to spend each year during retirement? The best place to start is look at how much you are spending each year now (spending doesn't include savings). Once you know how much you are spending now then you need to make adjustments for changes in your retirement spending. For example you won't need to buy work clothes or provide for transportation to work. However you may want to travel more than you did during your working years. Most financial planners will tell you that you will spend less money during retirement. That is probably true if you don't want to travel. In my own case I assumed that my spending would be 200% of my pre retirement spending for the first 10 years of retirement, 100% percent of my pre retirement spending thereafter.

The next step, and this is one that you would need one of the financial calculators that I know exist on the Internet, or better yet hire a personal financial planner, is to determine how much money you would have to have on the day you retire in order to fund such a spending plan. This is called a present value computation. You would compare this number with the anticipated value of your savings at retirement and the present value of your defined-benefit pension plan and Social Security at retirement date. If the values of your retirement savings and pension plans, and Social Security in the above computation exceed the present value of your retirement spending needs, you will be able to retire comfortably. If there is a shortfall then you need to save additional money, or modify your spending plan. This last paragraph is fairly technical and would require some training on your part to actually do the computation.

Another way to do the above, but not quite as accurate and really only works if your spending pattern during retirement is the same each year, is to compare your retirement spending with the amount of pension and Social Security benefits you will receive each year. In my own case, my wife's pension, my pension and my Social Security exceed our basic spending needs. We don't need our tax sheltered and nontax sheltered investments to meet our day to day needs. Instead we use this money to take vacations and purchase things that we want. In other words my tax sheltered savings represents cushion in case are spending needs go up, or are pension benefits would go down. You need cushion.