Inspired by this article, and most especially some of the “letters” commenting on the article. Read it all if you’re wondering why this came to mind.
After reading both article and accompanying comments, I’m starting to wonder if hopping on Carousel isn’t such a bad idea after all. Any thoughts out there?
Very interesting.
What people neglect to mention, is that the financial sword swings both ways. Like Vegas, it’s great hearing about the home run you scored and doubled your investment in 2 months, but the reality is often much worse.
My parents lost 2/3rds of their savings when they took a 6 week vacation from civilization. They worked for YEARS, started businesses, nearly went bankrupt, crawled their way out of massive debt, found that, if they sold everything off entirely, they could just buy a boat big enough they could live on, and get by with their savings. (about 750k.) When they got back into cellphone range, that 750k had dropped to 110k.
Likewise, I started out with that wonderful ‘put away $100 a month, rain or shine when you’re 20 and you’ll have a cool million when you retire.’ So I put away $300 (greedy), Dot Com pushed all that waay up to $40k or so. W00t! I needed to drop a car payment to move into the next house, so I pulled $10k out, paid off the car, and the bottom dropped out of the market. It settled around $10k and stayed there for 5 years.
We’ve got the house, a couple of 401k’s, my PERA, and whatever we may get from inheritance.
We just stopped 5 years of paying $18k a year for daycare…just in time for my wife to take a projected $20k a year paycut. hopefully. Now we’re operating on one income and it’s pretty tough.
I’m hoping to live inexpensively in retirement. I’ve found a few trueisms:
Yes, I plan to retire. Granted, I started late, but I will draw a retirement check when I turn 51 (again, I know, I came in late, my boss will start to draw retirement when he is 37.) That will leave me enough time to work in another field for about 10-15 years and add my retirement pay to my nest egg.
Unless the country is taken over, I will be ok.
SSG Schwartz
I dream of retiring, especially after a rough day at work.
If it ever happens, my dream is to go back to college, and to learn how to teach. You see, I love to read, and my dream for a long time has been to teach adult literacy. As I said, I love to read, and I would love to pass that love of reading on to a nonreader.
I remember seeing a movie where a woman taught a Mexican rebel to read by using the Bible. (Can anyone enlighten me to the name of the movie?) As I am Christian, I would like to use the Bible as one of the books I use to help teach an adult to read. Because this might not be considered appropriate for curriculum, I think I might need to be able to volunteer my services rather than be hired by the local school district.
Anyway, this is my dream, if I am ever able to retire.
Love, Phil
I think a lot of these retirement calculators are designed to sell retirement planning. Any one which doesn’t take social security into account is junk. Anyone who seriously thinks Social Security won’t be around in 20 years is a fool. Even if nothing is done - and simple things can be done - it is fine for longer than that. When we ran the numbers, Social Security made things go from good to great.
I think the problem with articles like this is that if supposedly even people who save are in trouble, some will think why bother?
I tried the retirement calculator. I’m in good shape, but there are a lot of bad assumptions built in. For one thing, you don’t need the same income throughout retirement. At 65 you may be active, but at 85, even if healthy, you’re not likely to be running out to shows every night. It has no place for the benefit of selling your house for something smaller or cheaper in another place, which is mentioned in the comments.
I’m not saying that people with giant debts and no equity aren’t going to be in deep shit, but with some prudence you can do ok.
I keep forgetting some of my intial assumptions. I used to be pretty smart before I had kids. 
Working for the state, we have a retirement plan where, roughly, you’ll get 80% of the average of your top three years, IF your age and years of service add to a certain number (changes depending on when you started.) Based on that, I’ll be eligible to draw against it at age 52. I figure, easily, I’d have another 10-15 after that to continue earning. Based on watching my parents lose their nest egg, I’m hoping that:
Social Security
PERA (the Retirement fund for the state)
401k x 2
The house (and perhaps my mom’s house)
a couple of classic cars
Any additional savings we may get around to creating
Hopefully that’s enough pots that we can keep the lights on and a room over our heads if any one (or more) hit the crapper.
I don’t know if I’ll ever retire - but I hope I never want to. I get bored when I have a week off from school or work - I’d go nuts with years of “vacation” time. Thing is, I’m also miserable when I’m doing work at a job whose only purpose is to keep me in beer, broadband and pizza. So, the trick is to find a job I actually believe in, and stay there until they drag me out on a gurney. 
I have retired. But there is no spare time- it is taken up by other things. And I can now work where I want part time. Work?
I figure I’ll “retire” in about 15 years but at that point I want to become a high school sports coach and possibly teacher. Since the salary is so low I figure I’ll need to have my retirement taken care of by that point. Not sure how long I’ll do that for. The thought of working for the rest of my life terrifies me.
Some of the numbers in that article are quite nonsensical.
Take a look at http://www.retireearlyhomepage.com/
4% is the accepted “safe” withdrawal rate and the explanation they give for it makes quite a bit of sense. The numbers in that article don’t really add up.
http://fireseeker.com/ is by far the best retirement calculator I’ve found.
YMMV
Nope.
Social Security, if it’s still around in forty some years, will be vastly different, as will our economy. I have a ton of student debt, and plan on pursuing a career that I will enjoy. Neither of my parents successfully did that (because they starting having kids without thinking about their financial situation), and I’ve seen what being in a career you don’t really enjoy does to you.
I don’t understand why people spend the good years of their life worrying so much about how to get fat and lazy in their old age. There’s no guarantee you’ll live that long anyway, and seriously, why add the stress of worrying about it when you’re young and healthy?
Because they’re not stupid.
In fifteen to twenty years you will rue these words and wish you’d thought differently.
I tell my wife that I do not expect to retire, but rather I fully expect to be found slumped over a keyboard someday.
Of course I think I’ll be able to retire.
I think that some of the assumptions made in that article are pretty silly. Like the idea that a retired couple with kids out of the house will need an aggregate income of $80K or $100K (inflation adjusted) a year. It seems like a clear case of over saving if they are giving up all eating out and buying new clothes now to have a really nice income later on. I notice she didn’t mention what they did spend money on now.
She mentions a mortgage that’s larger than average, but small for LA, so let’s say it’s around $400K. They’ve got a fixed rate, so they’re paying it off. In 20 years when they retire, their housing expenses should be just property tax (~$5K/yr) maintenance, and insurance. Without a mortgage to pay, they’re probably fine with half the income that she planned for.
And, of course, Social security, downsizing their house, etc. could all help.
Because when I’m old and frail I’ll have other worries, I don’t need to worry about how I’m going to afford cat food. The ideal time to worry about retirement is when you are young and healthy - particularly before you have those bottomless pit of resources children.
There is no reason for me to believe I won’t live long enough to not want to/be able to work (hell, somedays I don’t want to work now). My paternal grandmother is currently dying of lung cancer - she is 81 years old and has been a three pack a day smoker since she was 16. My paternal grandfather is 83 years old and has been a diabetic for 40 years. My maternal grandfather died of a stroke at 83. My maternal grandmother committed suicide in her 40s, but of the twelve children who survived to adulthood, she was the only one not to see her 70th birthday. There is also no reason for me to believe I’ll be either fat or lazy, since my grandparents who lived to see retirement were all very active (or are still very active) until the last months of their lives.
It doesn’t get any easier to worry about it when you get older, and the burden of the amount you need to put away gets larger. I started saving for retirement when I was 21. With 20 years of savings under my belt, none of it onerous, we could stop saving tomorrow - a nice thing when I look forward ten years and think “I can stop contributing to my retirement account when I have two in college.”
By the time I’m 65 I expect the retirement age to be 70, but I do expect to retire at some point. I’m in a little bit of professional flux right now and am feeling the “grind” part of the daily grind, but I’ve only been working for 15 years. Sometimes it’s depressing to think that I could have another 30 years of working ahead of me, but sometimes I take comfort in that number (like when I look at my 401(k) balance). My SO, on the other hand, definitely wants to be retired before he’s 65. I think he might even be aiming to retire before he’s 50. We should probably talk about that someday.
The issue I’ve heard is: You’ve been married to a person for XX years…but really onl spend 30 hours a week with them (2 hours a day during the week, a little more on the weekend), then you both retire and are spending 7x24x365 together.
Being 15 - 20 years further along, I can attest to that. I did think differently, and I’m damn happy. When my youngest was about two I went to a college planning seminar, got involved with a financial planner, and started investing big time. One big benefit of this is that you have someplace to put the money if you get a windfall, which I did when I left AT&T. My father is 92 and my father in law is 93, so we expect to live for a while.
Retirement, by the way, means working my ass off on stuff I like without commuting and without feeling guilty about having too much fun. I expect to do some freelance writing for money, like my wife does. The big thing would be to go on vacation and not have 500 e-mails waiting when I get back.
I’ve always been a nut for saving, I’ll almost certainly get out of undergrad without debt, I hate being in debt to someone, and I get pangs of guilt any time I spend money on myself. So yeah, I think I’ll have no trouble getting to a point where I can retire financially. But I get so incredibly bored when I haven’t got a job, I can’t imagine ever wanting to retire. Maybe I’ll end up doing something part-time, or something where I can take a month off and travel, but I’ll never completely quit unless medical issues force it.
We are going through the Retirement Decision right now. Our situation is somewhat different than many couples. Mr. K is 11 years older than me and we paid off the house Saturday (wooHOO!!!). In all likelihood he will be retiring next month. We are “practicing” living on my income and his social security check (and not tapping the 401K money for 2 more years) to see what it will feel like. My company pays for my phone and internet and we only have a car payment outstanding.
We were late to the party with regard to Using Our Financial Heads. We powered on and got a decent chunk of money in the 401K and since I’m still working and building my 401K, we should be fine. That is, if nothing catastrophic befalls us.
Anyone who is 30 and still not doing their planning is going to have to do some fancy footwork to catch up. It was hard for us, even with the relative breaks we have (the age gap presumably will work in our favor) and that fact that my husband was a combat vet, and hopefully entitled to some sort of health benefit from the gov’t. However, I can add him to my insurance to get past that hurdle as well.