Definitely - congrats on taking steps to change your perception/habits re: your finances. I think everyone here is interested in assisting rather than criticizing (well, maybe a LITTLE criticizing… ;)) IMO to some extent, once you start a thread it ceases being entirely “about you,” but also becomes the basis for a more general discussion. (Mods may well disagree! ;))
I made no effort to try to figure out the compound interest on $720/year. It may not be much. But OTOH, it will be more than a lapsed term life insurance policy. Moreover, financial responsibility depends on examining ALL of your expenditures, and eliminating those that do not provide you benefit commensurate with expenditure. Got any gym memberships you no longer use? How many streaming services? That sorta thing. How often do you eat/drink out, and how much do you spend?
I remember when I started working, I could not believe how many people bought coffee at Starbucks and ate lunch out, when our office had a coffee club for a couple of bucks a month, and my PBJs cost pennies. Any individual can make whatever such choices they feel are best for themself. But if one wishes to be minimally financially responsible, I believe it behooves them to have at least some basis for the magnitude and implications of their choices.
Final thought - financial responsibility is sorta like dieting. Some folk think all they need to do is count calories for a certain period or eliminate a specific food/drink. But changing one’s body habitus requires longterm/lifelong modifications of behaviors and perceptions. No single change is going to resolve your financial situation.
What? You got someplace to be or something better to do?
Using one of the online financial calculators, I figured the return on a $720/year annual investment. I used a generous average rate of return of 10%, compounded quarterly. After 20 years, as @Reply guessed, it’s a figure of just over $48k.
But after 30 years, the amount jumps to $141k. And that’s almost getting into serious dough territory.
There are two basic concepts of “retirement” IMHO:
You have reached the pinnacle of your chosen profession and have decided to do something else.
You are no longer able to work in your chosen profession (or maybe any profession at this point) and must continue to support yourself and your dependents
In either case, the goal is to have prepared yourself financially so that you don’t have to suffer a decrease in lifestyle while you either transition to your new career (which may not be as lucrative as your previous) or, you know, die.
Now the challenge with kind of barely working at low income gig jobs for most of your adult life is that you never really earn enough to stop working altogether for any extended period of time. Although I suppose you get used to a lower standard of living by that point anyway.
Question for the OP:
Did you ever put together a spreadsheet and figure out your finances?
What am I spending now and what am I spending it on?
What are my fixed (rent, phone, cable/internet) vs variable (groceries, dining out) expenses?
What do you realistically expect your income to be from now until you turn…say 90?
What do you expect those expenses to be from now until the same time? Assume each category will increase by the inflation rate (use something like an Consumer Price Index)
How much can you afford to squirrel away each month?
Once your savings gets past what you would need to cover six months of expenses as a contingency, how much would that extra be worth if you invested it in an S&P 500 fund?
Modelling this stuff out will actually tell you if and when you can afford to stop working. It will also tell you if you need to start thinking about finding a more lucrative career path or other income streams.
Or you have accumulated enough money to be able to stop working and not have to worry about eating. This happened for me when the joys of not working outweighed the joys of working. That’s not ironic - I did enjoy working, except for the commute. But I decided that once Medicare was in reach getting up when I felt like it and not facing I880 and doing other stuff was more fun than working.
Most of my retired friends had similar experiences.
Anyone here unretire? Or minimally wish they hadn’t?
I got schpilkes just having a full day off with nothing on my task list. Binged the latest The Diplomat season after exercising some and then went to the grocery store more motivated by wanting to get out for a bit than needing groceries.
One friend retired and tried going back part time but it started to ratchet more into a full time position so he re retired.
Another seems to be enjoying learning how to handyman by way of YouTube videos.
I don’t yet see a strong pull of joys of not working compared to the fun of working.
Depends on the job. I enjoyed working most of my career, but after a series of layoffs I ended up at a job I hated. That’s when I knew I had to retire.
My late father-in-law did. He was a mechanical engineer, and retired right at age 65. He and his wife (my wife’s stepmother) enjoyed retirement life for three or four years – lots of golf and boating (they lived in Florida). However, he was a guy who was always busy, and always creating things, and we could tell that he was a bit bored.
When he was around age 69, my FIL’s former business partner approached him with an idea for a new business; the two of them founded a start-up, which developed a new technique and apparatus for checking for metal on people going into MRI suites. They did very well, and my FIL was still working there at age 81 (and very much enjoying it), when he died after a short fight with cancer.
I retired when I felt that there was little prospect for further growth. I did not want to be one of those folks who just fade into something less than they were. I know that my energy was getting less, and since my wife and I had been planning for retirement since our thirties, we were financially able to retire at age 59. It was surprising that we could do that! The secret for us was to live below our means, save systematically, invest carefully in several different areas (real estate, ROTH programs, tax sheltered annuities, etc) and avoid things like individual stocks.
This is not to say that all pleasures of life had to be postponed - we planned to have a disciplined expenditure for vacations and other “non-essential” fun.
If possible, find out how to find pleasure and rewards in ways that don’t harm financially.
Fortunately both of our sons have done the same rather smoothly and with the exception of a divorce interrupting one son’s financial plans, they have done very well when compared to many of their generational cohort.
My advice: become educated on retirement planning, and commit to sticking to it. This is hard to do with so many goodies and experiences to distract and lure you into spending money that might have gone into investments for the future.
Sorry for the delay… spent the weekend putting up holiday lights and being way too excited about a new video game. Small distractions to take my mind off just how underwater I am, lol.
Yeah, I’ve made many plans across all the accounts, in many spreadsheets and budgeting software, but it never really “sticks”. Part of the difficulty is that my income fluctuates a lot, making it hard to sustain any sort of realistic plan. In the last 4-5 years, my income’s gone from like $20k to $60k to $100k to unemployment for like 6 months and back down to like $30k. It’s always a feast-or-famine kinda situation. Part of it was that I tried to go back to school for a while to switch careers, until I realized I really couldn’t afford to (see: bad at financial planning ).
Realistically, this thread was a “good to know” for me, and a hopeful thing to consider if stability is ever in my future. That’s a big “if”, though, if the last few years were any indication. I really have no guarantee of any sort of job stability – or employment at all. Right now I’m freelancing for a small company based out of Europe that I just happened to have connections to from years ago. I couldn’t find any local or US-based jobs despite months of trying.
So it’s all a bit mentally (and emotionally) overwhelming to try to think that far ahead in the future, when I don’t even know if I’ll have an income by January.
On the other hand, my partner and I share some limited household expenses, which we track in spreadsheets and accounts we opened for the purpose. That’s been going well and good practice for future budgeting.
I think the concepts are all there – they click – but the actual implementation is difficult when I can’t really count on any particular number coming in. Hopefully that’ll change soon; I’m trying to negotiate for a full-time job with this company instead. Fingers crossed, baby steps and all that
Work isn’t fun for me. It is often interesting, challenging, and stimulating, but I wouldn’t call it fun. Fortunately, there are many interesting, challenging, and stimulating activities that are also fun that I do in my spare time and on vacation. Those will dominate my life once I retire.
I’m not sure if signing a contract to produce a book counts as unretiring. Writing did take up a good chunk of each day, but I could do it more or less at my own pace in my home office, so it didn’t seem like the kind of work I did in the office. I retired before Covid so I never did full work from home, so it might have seemed more like that.
That’s me to a T, but also very frustrating when I can’t seem to solve a problem (I’m a programmer). It sucks when sometimes a week or weeks go by when I have to continue to say ‘I don’t know, I’m working on it’
That kind of stuff really made my decision for me to retire. Maybe I’m losing my edge. And my primary code base is being replaced by new systems. NO way we all decided that I would teach someone new to navigate through 10,000 lines of custom code written by me. The libraries it uses are also at EOL (end of life)
One of my siblings is about to for the second time. He retired from his government job young (54) under an older pension system that allowed that and promptly went back to work for a new employer doing a similar job for similar pay, only now he was a double-dipper. He genuinely enjoys the work, his wife had at that point not yet retired, so it was a “hobby that pays well.” Then Long-COVID knocked him out - he had to reluctantly quit due to mental exhaustion caused by any kind of even temporary work stress.
Now, a couple years on and feeling rejuvenated (despite catching COVID five fucking times now - guy is a new COVID strain magnet), he wants to return. He was fishing for a referral at his last gig when they eagerly offered him a job back working for them again. We’ll see. He loves the work and it is certainly lucrative to keep working. Plus his wife is of a similar mindset - retired, but was very in demand and missed it, so returned to work on a 1,000hrs/yr basis. But I do worry that once back in a work situation the mental stress will cause another disease-related relapse into exhaustion.
I’m in a position of being stuck. I really don’t like my current position. I went from a whole career developing things (products, programs, companies) to now I’m managing the US operations of a foreign company. And it’s boring as fuck. And just by chance of personalities, I don’t really like the people I work with (except the German office. I like them). I had not realized how much of my social life was tied into my work. But I’m under contract, and honestly I’d be a fool to walk away from the compensation. So I spend most of my day wishing I had never taken it.
It’s the opposite for me. Besides being a bit of a loner, except for my wife and a handful of friends.
I have hearing aids, but they don’t really help in a crowd. Say a Christmas party. It’s a great reason to not attend these functions. I don’t even attend meetings in person. I work from home.
).
