Retirement Question

[mkr7734]

Retirement has changed. It used to be you worked until you reached retirement age, which for many, meant you were not really able to work anymore. You retired and then died shortly thereafter. You only were retired for a few years and then you were gone. There were exceptions of course but this happened to many people.

Dan

Dan that is so true. When I started at Caterpillar in 1973 the average life span of a retiree after retirement was 18 months. And they banked on that.

 

[DKCDKC]

Retired first at 55 with incentive that gave me 28 years credited time and a decent pension, with col adjuster. Built a new home on my farm, but felt too good to actually retire, so went back to work for a local city for another 7 years, then quit when their budget cuts threatened my position. Now work my land, volunteer on local boards, etc., and helped found a new church. Not enough time in the day.

Luckily my retirement included great, fully paid health insurance - now Medicare supplemental - so good that I did not even take benefits from my first post-retirement job. Mine were better.

Was able to do some traveling and such, but my challenge has been the financial struggles of a child and grandchildren. We have had to intervene frequently and do not have as great a net worth as we wanted as we pass 70.

We designed it so our SS and pension and other income was about two-thirds of our pre-retirement income, and I still think that was about right. We have an IRA which we now have to withdraw a bit each year, but should have enough barring economic crisis. We didn't opt for long term health care insurance, since folks in our families have rarely lingered, so we do worry about nursing home costs and all that. But there are no assurances in life anyway.

There is inevitably some "crap-shoot" quality to retirement planning. The secret is to approach it logically, make reasonable choices, then learn to deal with and survive the unexpected disasters that can crop up.

 

[ultrarunner]

When I switched from self employed to a corporate employee it was in part in search of benefits and retirement was at the top... especially since no one in my family has ever had a pension... still remember how glad my Dad was... it really gave him great satisfaction and seeing him happy meant a lot... often wonder what he would think the same today... he's been gone 16 years now and the last 5 years of his life battling cancer with never a complaint... worked until he was hospitalized and three weeks later that was it...

As posted before... the great retirement plan was suspended about 10 years ago... at one time I was putting 50% of my check into the 401k to max out sooner because who knew if they would still have a job 9 months from now.

I've always been frugal and have never used a single dollar of my wages to live on going back to day one 25 years ago... I didn't want to be dependant on a job that could end at anytime... and a few times through mergers/sales my position was to be eliminated and only when management realized they would need several to replace me did I get a reprieve...

I've seen too many with great jobs crash and burn when they lost their jobs... crash and burn because even though they made good money or very good money... they had nearly as much going out as coming in...

Twenty five years is a long time to hold a position and never really feel secure... I do think it is the new normal in today's business environment...

 

[kthompson]

I am an insurance agent. Work heavy in the health insurance market with small employers, the aca plans for individuals and plans for those on medicare. First prices do vary with the different areas of the country so no prices here but think some of the concern on prices is little over stated. If you are not on Medicare looking for ideas on cost of ACA plans go to KFF.org and search for "calculator". Put in your info there and it will give you a very accurate idea if you are eligible for any tax subsidy and will give you some idea on price of "silver" plan in your area. I really suggest you talk with an independent insurance agent. Price is the same regardless how you buy and a professional agent can help you with things you will miss. Suggest lo using the Dave Ramsey organization for this and also for a financial person.

Please do not believe it will be a easy and swift end to the ACA or Obamacare which ever you prefer to call it regardless of who is elected. Will there be changes to it, yes and it does not matter who is elected. Many issues in it that need to be changed. Has to, if you knew how much the tax payers are paying for this it would amaze you. I have a couple who have just retired with pulling about $95,000 per year from 80% none income sources and their $1,474 per month premium for the four in the family is less than $100 per month for great coverage. Tax payers paying $1,400 per month. Like I said changes have to be made.

If you are going onto or are on Medicare again talk with independent insurance agent and ask what companies do you sell with. If they only name one or two wrong agent. They should be working with at least four but eight probably max for any reason. Ask about rate increases with the company. Some companies with BIG NAMES are terrible the games they pay with load lead in prices and then heavy increases. If you are 65 ask to see the rates for age 75 and 85 also. If you are looking at Medicare Supplement or Medigap the same product, just different names used. There are also the Medicare Advantage Plans and they will have lower premiums but I greatly prefer the Medicare Supplement with stand alone drug for a variety of reasons. One they can not be cancelled, they can not be changed once issued, all Medicare Providers accept them not true with Medicare Advantage Plans. On the Medicare Supplements those plans use a letter such as "F" or "G" or "N" for the plan names. Plans with same letter name have the exact same coverage with every company selling them. Makes it much easier to shop. Will tell you those letters I just used are the tree plans I suggest anyone look at. To me the best plan for pricing and coverage is the G.

Now if you are going onto Medicare the Part A has no premium for most people it is paid by payroll taxes if you have think it is 40 quarters of work that paid wages and thus taxes. Part B is option and you do pay a premium for it. It went up to about $121 per month this year with a Deductible of near $150 per year. You really need an agent who can fully explain this coverage, they are different and not bad but different from any other type of coverage. The drug coverage is totally different than your group insurance and again if the health insurance agent does not help you with the drug coverage wrong agent, move on.

The post about the parents paying BIG DOLLARS for Medicare coverage not saying is a lie but will say does not sound right but then BIG DOLLARS is the persons opinion. Here for a 75 year old couple I would say their drug coverage would be about $50 per month each. Their medicare supplement plan (Plan G) would be about $175 each and the Part B (the government) about $125 again each per month. So about $350 each. With that medical coverage the only MEDICAL bills they should have is the Part B deductible per year. Less than $150 per year each.

Again the prices will vary even within a state. On the drug plan the Federal Government has a web site for comparing the drug plans and the Medicare Advantage Plans. Not the Medicare Supplement Plans. Now must add I used the base prices on Part B but depending on your income you may have basically a high income tax added by the federal government. Those income and added premium is on Medicare's web site.

Sorry for how long this got but hope it helps. Kenneth

 

[dmccarty]

...
The post about the parents paying BIG DOLLARS for Medicare coverage not saying is a lie but will say does not sound right but then BIG DOLLARS is the persons opinion. Here for a 75 year old couple I would say their drug coverage would be about $50 per month each. Their medicare supplement plan (Plan G) would be about $175 each and the Part B (the government) about $125 again each per month. So about $350 each. With that medical coverage the only MEDICAL bills they should have is the Part B deductible per year. Less than $150 per year each.

Twas I that said it. My retired parents premium is more than I pay and I have a decent policy. Their premium costs are higher than the older plan that we used to have but which we can no longer afford. It is BIG DOLLARS and is more than my first house mortgage from a decade or so back. The high cost may be to known and expensive health issues and their wishing to cover any possible future problems but I don't know and I have not asked. My assumption is that they would rather pay for a policy that reduced risk and not worry about future costs/risk. We just mentioned in passing premium costs and I was shocked.

Later,
Dan

 

[California]

The high cost may be to known and expensive health issues and their wishing to cover any possible future problems but I don't know and I have not asked. My assumption is that they would rather pay for a policy that reduced risk and not worry about future costs/risk. We just mentioned in passing premium costs and I was shocked.

Could they be paying for a Long Term Care insurance policy along with simple medical coverage? That might explain the cost.

 

[ultrarunner]

Twas I that said it. My retired parents premium is more than I pay and I have a decent policy. Their premium costs are higher than the older plan that we used to have but which we can no longer afford. It is BIG DOLLARS and is more than my first house mortgage from a decade or so back. The high cost may be to known and expensive health issues and their wishing to cover any possible future problems but I don't know and I have not asked. My assumption is that they would rather pay for a policy that reduced risk and not worry about future costs/risk. We just mentioned in passing premium costs and I was shocked.

Later,
Dan

Those with means are paying for those without... only difference is who pays and who receives has now been codified with penalties...

My annual Property Tax is more than I paid for my first house!

 

[Capricious]

Looking at retirement in maybe 5 years or so.

Was 1/2 owner of a rental property (a shack we called a house, along with a mobile behind it) a long time ago, in southwest Missouri. My partner dealt with the renters so I did not have to. I don't know if I would have gotten involved in it if I had to deal with the renters. I don't like dealing with people much.

So I am trying something else. I had a 7.5 acre parcel of rural land- have posted on here about clearing it. The guy who lives on 20 acres next to it was interested in it, so I sold it to him: 15% down and a note payable and deed of trust. 6.5% interest, which is darn good interest these days. Assuming he pays it. First payment was due on Monday and haven't seen it yet. Called him on Tuesday. "Check's in the mail." Of course. Having to deal with people, again.

If it works out, I have a 27.5 acre parcel a few miles away that I am considering subdividing into (5) pieces and trying to sell the pieces under more or less the same arrangement.

It would not be all that much money, but everything helps. Might be able to put-off collecting SS a few years. And give me a project to work on- clearing a 1000 foot road into the woods so the back lots would have access.

Would need to get a bigger tractor if I were going to try to do the road on my own. So I would not have to hire someone. So I would not have to deal with yet more people

 

[ultrarunner]

Keeping residential rentals viable is a job... sometimes it's knowing what not to say or do.

In places with tenant friendly laws and rent control it becomes even more complicated... a landlord could be 99% right and that 1% wrong will do you in.

That said... a very wise 90 year old woman I know gave this advice years ago... take care of your property and it will take care of you.

 

[rmorey]

The simple answer is, you don't have to retire. At 56, you may still need to feel challenged, both mentally and physically. (After 60, that feeling goes away!)

The thing to keep in mind is, your pension at 30+ years is probably calculated at 2% per year of service, So your pension should be around 60% of your pay. Which means you're working for 40% of your original salary at your current job. (because they are going to pay you 60% whether you go to work or not)

Another option is to retire, then go get another job. As long as you make at least 40% of your original salary, there will be no difference in lifestyle. The difference is you can now either work part time or seasonally and make out just fine.