retiring

[MH8675309]

I am about as conservative as they come, but something does have to be done about the cost of Medical care. Not who pays for it, but the COST. Until the cost is controlled we will not be fixing this problem. Normal market forces are not in play here.

Agree 100%

 

[KennyG]

So much about retirement planning would be easier if we knew when our time will be up.

So true, but I still think it's a "plan for the worst" situation (but in this case the worst is actually the best - you live to over 100). After I retired, I had plenty of assets to do everything I wanted without tapping SS, 401K, pension annuity or IRA. From my perspective there was no downside in delaying and lots of potential benefits, especially since my wife is 11 years younger than I am. Others will have different situations.

Relative to the question on expenses, mine have gone up after retirement. Items like having to pay for health insurance, especially with my wife not being on Medicare. We spend about 2 months a year traveling internationally, which I never had time to while I was working. And there's some minor cost to all the projects I didn't have time for before.

 

[3Ts]

For those of you are retired, have you seen a decrease in your expenses or have they stayed the same and what was the change?

Be sure to include the inflation rate in your retirement calculations - that's probably the biggest factor. As for expenses it's hard to say for me - we've gotten by on 60% but had to be careful of expenses. Our investments have done well and have matured so now I have more money available than when I was working, so we are doing more and traveling more. Most guides I've seen say to plan on 80% of your income being needed to maintain your lifestyle in retirement which assumes any mortgage is paid off. That seems to be pretty valid. Your 2 biggest expenses are going to be inflation and healthcare. Good health insurance is important.

 

[Chris616]

When to take government benefits for the retired?

In Canada we have a similar system to the US where the government incentivizes people to delay receiving benefits by increasing the amount.

It's easy to find websites that help to determine the "break even" age that you'd have to live to in order to get the same amount as you would have taking the money as early as possible. That's useful to know if your family history doesn't predict longevity.

I've read here about people taking the benefits as early as possible in order to "get their money back" but that might not be the best financial decision. If your only interest is ensuring that you have enough to fund your lifestyle after retiring, then pulling money from your own investments earlier and deferring taking gov't benefits to maximize them is something to consider. That way when you're older and possibly less capable of managing your investments, more of your income will be a stable monthly income from the gov't to your bank account.

And yes, I'm assuming that money coming from the government will be reliable. If it isn't, I have even less faith in what will have happened to our other investments.

And yes, you might die before you collect the benefits, but that's not going to bother you at that point.

Chris

 

[Travelover]

And have a very good income thru your working years. What was you highest year?

It doesn't matter. My advice is to spend less than you earn and invest early. There is always the excuse that "I'll invest later when I have more money". For most, that time never comes because of lifestyle creep.

 

[ovrszd]

I retired at 57. My pay was a little less than my co-workers because I'd put time in the military (Vietnam Vet) and didn't have as much applicable experience as those who were not in the service. However, I always lived below my means and maxed out my 401k and invested bonuses when I received them. If I couldn't afford it, I didn't get it. I drove cars until they wouldn't get me to work anymore. I did not take vacations to exotic places. Always paid off the credit card every month (that's the worst way of borrowing money). So, I do claim to have managed my money wisely and hopefully I'm not thought of as boasting, certainly not my intent, but rather to point out that with careful planning it can be done. Now we are in a situation where we can help others from both a time, materials/tools, and money standpoint. Most of what we try to do is thru the church or Masonic lodge so our name is not directly associated with the help.

What was your highest annual income?

 

[ovrszd]

For those of you are retired, have you seen a decrease in your expenses or have they stayed the same and what was the change?

The necessities decreased. Clothing costs, mileage on vehicle especially. Otherwise not much change.

 

[ovrszd]

It doesn't matter. My advice is to spend less than you earn and invest early. There is always the excuse that "I'll invest later when I have more money". For most, that time never comes because of lifestyle creep.

It always matters. You might have been making twice as much as someone else reading this thread.

My advice is to be debt free at retirement.

 

[dnw64]

None of us actually "KNOW" our time will be up.

Let me introduce you to "Dr" Kevorkian...

 

[dnw64]

In answer to polkwrangler's original question:

I second what others have written. If you're unable to do the complex calculations to work this out yourself, it is money well spent to get independent financial advice. And by "independent" I mean going to a "fee only" financial advisor where you pay to get unbiased advice from someone who is not in the business of selling financial products. It is very easy to make a mistake doing retirement financial planning on your own that will cost more than the price of the advice from a professional.

Chris

Well put, sir!