Retirement Planning - Lessons Learned

[3Ts]

First of all, be flexible in your plans. We planned ahead and I had a goal of retiring at 66. Well, when some of my co-workers started dying on the job I re-evaluated my plans and my wife and I looked at our finances and decided that if we were careful I could retire at 57. She was going to retire 2 years later, but got laid off shortly after I retired so she retired also. Our original plan was to travel within the US and to find a small farm where we could grow fruits & vegatables and settle in for the rest of our lives. But, it didn't happen that way. We travelled some and ended up moving closer to my mom & brother which turned out to be a mistake so we moved again. We've traveled to a dozen foreign countries, done overseas missionary work, did an African safari and I say this only to emphasize my first sentence. Have a plan, but be flexible. The place we have now we can grow stuff, we can travel if we want, the neighbors are great and until COVID we got together with them regularly, so we've done far more than we ever expected to.

 

[Frankenkubota]

Did a search and didn't find any recent threads so here we go......

At 58 with the Good Lord willing my retirement window is 4 to 7 years out. Job is steady albeit stressful at times and hoping I can just ride it out and be happy until it's time to pull the trigger. Finances are in order and almost debt free! Wife and I have been truly blessed.

I hang out here on TBN hoping to buy that subcompact one day for a retirement toy. It will be the Massey GC when that day comes.

One marital debate is will we uproot and move to a retirement dream home we've always wanted or will we stay closer to home and family.

So for the experts:

- What have you learned in retirement?

- What would you have done/planned for differently?

- Did you move away or stay at home and are you happy?

Thanks for your time.

Andy in N.C.

2 Things

1. If at all possible, Try to have your house free and clear, no mortgage.

2. 4 of my buddies have retired to Pinehurst to play golf, from various northern regions, wife gets bored, wants to move home to be with grandkids so, back they go.

I understand, I love kids as much as anyone.

 

[Hay Dude]

I really enjoyed my job so I did not retire until I was over 70 years old.

In one way, that was good. By the time I retired, everything was paid for. No mortgage payments, no vehicle payments. And max Social Security payments/pensions make for a very comfortable retirement with no financial worries.

On the other hand - the way I've loved to spend my free time all my life is in exploring the outback of this great country. And so I find myself physically no longer able to undertake things like strenuous multi-day backpacking trips. Or climbing mountains, which is how I got the name "deserteagle" because my friends said I was happiest perched on the highest peaks, just like an eagle. My eyesight has gotten so bad my favorite way of exploring the outback, by dirt bike, is no longer safe.

So I'm having to adapt to old age, and the lesson here is that you need to remember your body changes with age so you'll no longer be able to do those things at 75 that you were able to do at 55.

As far as moving or staying put after retirement...I made sure when I was still young that I was living where I wanted to spend the rest of my life - moved from the east to the west just for the wide open spaces and the view.
View attachment 684242

If that is your ranch at the end of that beautiful snow dusted driveway at the base of that spire of a mountain top, you have done well sir.

 

[Thomas]

Bearsixty.
Please elaborate on this?
..................
We gotten scammer phone calls emails even contractors knock on the door wanting to do work,than there so call volunteers asking for some of your free time and donation.

 

[MossRoad]

If you have the means, having a mortgage in retirement is no different than having a mortgage in your working years.

 

[JethroB]

After 35 years of saving and investing in mostly mutual funds I retired at 57. I looked back at the losses I made infrequently dabbling or speculating on a few stocks here and there. I said huh, I'm not so good at this. So I turned the majority over to Vanguard to manage for a fixed % fee. No regrets and I sleep better too.

 

[JethroB]

If you have the means, having a mortgage in retirement is no different than having a mortgage in your working years.

But that piece of mind and sense of accomplishment is priceless. . The tax deduction advantage is gone for most people.

 

[Thall303]

But that piece of mind and sense of accomplishment is priceless. . The tax deduction advantage is gone for most people.

The tax deduction “advantage “ never equals the interest you pay on any mortgage!

Free and clear always trumps tax deduction!

 

[dmccarty]

We built our dream, retirement house, on more land than we thought we could buy and it is danged near perfect.

However, we are thinking of selling it all. :shocked:

The Grand Plan, which we have been talking about before we even had built the house but after buying the land, was to get a boat and travel the world. We have been actively looking, planning and training for this since 2014.

If we sold out today, we could easily retire, but where would we go live? We have thought about moving to The Beach, and we have found an interesting condo, but there is no way I can live in a flood zone like that. Hurricane Hazel went right over the place and the islands where all under water. The condo building would very likely survive, but the destruction would be so bad, I doubt the place would be habitable for many weeks, if not months.

A retirement place has to be either rural or in a development where we can walk for exercise and to get groceries and such but not in a city. It also has to be near good hospitals but not in a flood zone. The wifey wants to be near the beach but that flood zone thing won't go away. The boat can get us where we want, or need to be, but we can move as we see fit. :laughing:

The other issue is kids and elderly family members. We have family members with some major issues right now. Some are sorta nearby and some are not. It is a problem and not an easy one to solve. Our kids do not seem to want to stay in the area and will almost certainly leave so at some point, WE will be the family members with issues and need to get close to family.

The boat idea would allow us to travel, and if need be, get close to family members who need help. When we get to that stage in life, we would have to sell the boat and move near where one, or both, of the kids live. Who knows where that will be. :confused3:

Or we might just stay here. :laughing:

Later,
Dan

 

[riptides]

I found out through hardships with medical, that one cannot have enough good medical insurance. <- try finding that.

Unexpected medical issues can bankrupt even the savviest investor.

 

[shooterdon]

If you have the means, having a mortgage in retirement is no different than having a mortgage in your working years.

If you have the means...get the mortgage paid off. It takes a huge load off your mind. Even if your IRA tanks, you have your home.

If you have any credit card debt, you should not retire. You have established a lifestyle that is above your means. If you cannot control it you are going to be in trouble quickly.

Have all or most of your "toys" paid for.

If you have a spouse or partner that wants to retire "in style" and you cannot afford it...get rid of her/him if you can. If married to her/him prepare for "issues".

Cost of divorce should be evaluated. Many seniors realize they will not enjoy retirement with the person they have only had to endure 24 hours a day for two days a week. Spending 7 days a week them, with no work to escape can trigger it. If you have friends and your partner does not...that is a another "red flag".

You will need/want about 65% of your pre-retirement income until you learn to live on less.

If you do not have a company pension or government job pension, do not depend on SS. Which means you need about $500k to $1 million in investments.

About 15% of people over 65 live in poverty and only 58% live at double (or more) than the poverty level. The good news about living in poverty is that life expectancy goes down so you may not suffer for long.

Lots of folks do not have "Golden Years".

 

[riptides]

If you have the means...get the mortgage paid off. It takes a huge load off your mind. Even if your IRA tanks, you have your home.

If you have any credit card debt, you should not retire. You have established a lifestyle that is above your means. If you cannot control it you are going to be in trouble quickly.

Have all or most of your "toys" paid for.

If you have a spouse or partner that wants to retire "in style" and you cannot afford it...get rid of her/him if you can. If married to her/him prepare for "issues".

Cost of divorce should be evaluated. Many seniors realize they will not enjoy retirement with the person they have only had to endure 24 hours a day for two days a week. Spending 7 days a week them, with no work to escape can trigger it. If you have friends and your partner does not...that is a another "red flag".

You will need/want about 65% of your pre-retirement income until you learn to live on less.

If you do not have a company pension or government job pension, do not depend on SS. Which means you need about $500k to $1 million in investments.

About 15% of people over 65 live in poverty and only 58% live at double (or more) than the poverty level. The good news about living in poverty is that life expectancy goes down so you may not suffer for long.

Lots of folks do not have "Golden Years".

Dang...what a ball buster....now I don't want to retire.

 

[turnkey4099]

I'm late to the thread and didn't read all of it.

One thing that is important if it hasn't been mentioned.

Get a funeral policy and make sure everybody in the family knows what you want. Funerals are expensive and left to the survivors they will overspend enormousley "what will the neighbors think if we ddon't go whole hog".

I bought mine about 20 years ago and waited dtoo long then. My first bid for cremation was $7xx. 5 years later when I bought it had risen to $1700. I'm sure it has gone up a lot higher.

Make a will if you haven't. Name your estate executor and a backup. You need a Power of Attorney for that plus on for someone as a medical boss. MAKE SURE EVERYDODY knows what you want in the 'end care' stuff. I for sure did not want to end up conneccted to a bunch of tubes and wires

I'm 85 and in good health except for a bit of arthritis in the spine...hoping to have that cleared up next month. Live alone as my partner died 10 years ago. Alone is not fun but I do have regular contact with good friends. .

 

[JethroB]

If you have the means...get the mortgage paid off. It takes a huge load off your mind. Even if your IRA tanks, you have your home.

If you have any credit card debt, you should not retire. You have established a lifestyle that is above your means. If you cannot control it you are going to be in trouble quickly.

Have all or most of your "toys" paid for.

If you have a spouse or partner that wants to retire "in style" and you cannot afford it...get rid of her/him if you can. If married to her/him prepare for "issues".

Cost of divorce should be evaluated. Many seniors realize they will not enjoy retirement with the person they have only had to endure 24 hours a day for two days a week. Spending 7 days a week them, with no work to escape can trigger it. If you have friends and your partner does not...that is a another "red flag".

You will need/want about 65% of your pre-retirement income until you learn to live on less.

If you do not have a company pension or government job pension, do not depend on SS. Which means you need about $500k to $1 million in investments.

About 15% of people over 65 live in poverty and only 58% live at double (or more) than the poverty level. The good news about living in poverty is that life expectancy goes down so you may not suffer for long.

Lots of folks do not have "Golden Years".

Great points! I'll disagree with a couple though.

65% of pre-retirement income is on the low side. Most advisors say 80%-ish. Lots of variables.

The rule of thumb for retirement income from financial investments is about 3 1/2 to 4% of principal. This takes into account income taxes, inflation, and not outliving the principal. So $1M will net about $35-40k a year on average. Again a lot of variables.

And as mentioned before medical insurance cost, particularly if your under 65. The premium is my largest expense.

 

[cdaigle430]

Funny how this topic comes up today. Last week I had a meeting with the boss and HR where I was told my position was terminated and I am welcomed to apply for another job within the company. There are none that I qualify for, I am in my 50s and deaf. After 23 years...just like that your done.

I am in a state where IT jobs are scarce and pay little....no one will come close to paying the salary I made...so what do I do? Retire early? File for Social Security Disability?

Move to a third world country?

I remember hearing companies like to get rid of the older folks and now I believe them(age discriminations). Keep in mind yes IT jobs are plenty in place like Maryland...but I would have to move. Also I cannot work with customers or venders and I have other complications I will not mention here.

I do have a lot of anxiety and I am a little worried....will try and retire now if I can and get over having to deal with working for others for good.

 

[fried1765]

Good thread. I've got 4 years on you (62 this week) and am hoping to leave my job at 65... not because of SS, but that's when I should be able to afford it. I will still need to do something part time butbit will be on my schedule. By then everything should be paid for, if I make enough to pay for expenses I won't need to touch my 401K for a while. I don't need much except my health, so as long as that stays as it is now I should be good.

The minimum yearly withdrawal under the 401K rules is something like 4% per year.
I have been withdrawing that minimum for 10+ years, and my 401K value keeps slowly rising.
Just a number (%) you might want to think about.

 

[MossRoad]

...
Free and clear always trumps tax deduction!

Building wealth trumps free and clear on a mortgage.

There's ZERO tax deduction from a mortgage until your interest paid during the year (plus any other itemized deductions) exceeds your standard deduction.

The standard deduction for married filing jointly rises to $24,800 for tax year 2020, up $400 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,400 in for 2020, up $200, and for heads of households, the standard deduction will be $18,650 for tax year 2020, up $300.

On a $250,000 mortgage at 3% interest, your annual payment will only be $12,684. Your total payment doesn't even equal the standard deduction, let alone the interest portion of it, so there's NO tax advantage to having a mortgage. There IS a wealth building advantage in that you can take that extra money that you're paying down that 3% loan early with and investing it at 8% average return.

So yes, it is nice to be free and clear. We've been "in the black" since we said "I do" back in 1985. "In the black" is not "free and clear". It means you have a positive net worth. One should be more concerned with building that positive net worth (in the black) than they should be with attaining the goal of "free and clear". Once you hit a point in your life where if you sell everything you own, then pay off everything you owe, and the amount left is enough to afford you a monthly income that will last you the rest of your life in the style you are happy with, that's when you've made it financially.

So while we are technically not debt free (we have a home equity loan with a balance, and that's considered a mortgage), we have enough to last us more than the rest of our lives.

Concentrate more on building wealth than being in the clear. It's a better strategy.

 

[caver]

+1 on make a will. It was one of the earliest questions my (then) new financial advisor asked. One thing I would have done different is just hired someone to rough in a cabin for me at my retirement property. I'm still not there and now have to focus more on a quick and dirty remodel of this house I neglected for years. My old home town just isn't the same anymore so I have no urge to move back. I retired at 55 a couple years ago and hope to move over to my property some day. My medical insurance premium takes 1/4 of my pension. At 59.5 I will be able to pull from the 401K. If you do plan to move start de-hoarding NOW

 

[MossRoad]

....If you do plan to move start de-hoarding NOW

Amen! Built a garage addition just to consolidate the basement, shed, rented storage shed items into one place for industrial sized de-cluttering and sell-off of too much stuff. Spent the better part of Saturday just going through boxes of saved items from my father's estate.... he died in '95! It's easy to become a slave to your stuff. If you spend more time dealing with your stuff than using/enjoying your stuff, you have too much stuff.... stuff.

 

[RustyA]

1. Have a will, power of attorney, healthcare directive
2. Figure out a plan for health insurance especially if one of you get's diagnosed with something bad
3. Have a plan that is flexible for both of you (see above diagnosis)
4. Try to be debt free
5. Find someone you really trust to give you solid legal and financial advice 5-7 years ahead of time
6. Take peace that you have things arranged so your spouse and family know your wishes