How else will you pay for those cruises?
I’m not retired, but I’m in those years when I am deciding when I should retire, so that fits the OP a bit. I’ve worked with my CFP, and Monte Carlo currently says I can retire next year at 60 on $127k a year basically forever. But. I’d need to shell out $14k a year for healthcare for the next five years until Medicare kicks in at 65. Gaming out the numbers, I’ll add $16k/year additional income (forever!) for every year I delay retiring. So at 65 it’s up to $207k/year.
$127k/year sounds like barely enough – my expenses all-in (house, car, food, insurance, yada) are about $81k a year, then add medical + low-but-still-present income tax, and it’s a bit tight. $207k sounds like way more than enough. So I’ll probably pick some year in between, say 63, and pull the pin.
The only problem is figuring out when you’re going to kick it. And dealing with unexpected expenses. We’re probably going to leave lots of money to our kids and grandkids, who don’t need it, but that means we don’t have to worry now.
Anyhow, meetings (or calls this year) with our financial adviser isn’t stressful. He’s a good guy and has made us lots of money.
That’s the real problem. Ensuring you’ll be comfy to age 95 even in an adverse market essentially guarantees that in a decent market you’ll be stupid wealthy at your actual death at age 82.
If only we could come up with some collective system to lay off these risks so each of us doesn’t need to oversave to cover the 1% or 5% likely worst case outcome.
Good point. But what I’ve learned is that it all depends on cash flow. If you can structure things so that your Social Security, any pensions, and earnings (dividends, interest) from your investments are close or above your living expenses, market fluctuations can be pretty much ignored.In that case you’ll be fine at 82, 95 and 102. Not everyone is lucky enough to be able to do this, but relatively stable income producing funds smooth things out. You don’t get all the upside, for sure, but that’s never bothered me.
Speaking of which, I should mention the biggest reason I was able to retire:
I married a humble woman.
Even though she’d love a huge old house (I blame that Please Don’t Feed The Daisies TV show), she’s been happy in our smaller-than-the-apartment-we-moved-from house. It was our first place, and my dad kept referring to it as “a decent starter home…” We’d just smirk: “It’s a decent ending home, Dad.”
And she’s been okay with used cars (y’know, the Toyotas that’ll never die, no matter how sick of them you get). I’m driving an early hybrid that I bought for two grand and nursed back to health.
Simple vacations, grilling out instead of going out, waiting to see movies til they’re on TV or Hulu…
Point is, our expenses are really low.
My brother-in-law is a constant reminder of the wisdom of this. He can’t retire. He has to have a muscle car and a truck with the top-of-the-line package because he needs heated seats. Premium cable so he gets ALL the sports channels (we have rabbit ears), a huge custom-built house with a huge custom-built mortgage… Oh, almost forgot the country club membership and the time share in Orlando, which means theme park tickets, too. And then he laments: “I’ll be working forever to pay for my life.” Well, no shit.
Yeah, I’ve got to give a shout-out to my wife… “Hey, hon, you are rockin’ those lowered expectations! W00T!”
I retired at 65. My job went away, and six months later I still hadn’t found a new one and the unemployment was about to run out, so I said the heck with it and put in for Social Security.
You have to remember I had to work a shit ton of overtime in order to drive up my highest average salary, and then take the pay for it instead of comp time. So that was time that got taken away from my family during that stretch. And I didn’t start doing that until I was at my max hourly wage, so I was in my 40’s, making working all the time harder than it was when I was in my 20’s.
I was fairly lucky to have gotten the position in the first place. In 1982 many larger agencies hiring practices were guided by strict affirmative action standards. There were several departments I couldn’t even apply for.
Okay fair enough. That’s a serious tradeoff. It’s similar to my military time. Well, not pay-wise anyway. Time was taken away from my family. And that is time you can’t get back.
Which is why on my 2nd career I usually refuse to volunteer for any overtime. Unless it’s mandatory I won’t work it. I have grandkids now and a fairly successful business that I enjoy. Nobody lies on their deathbed wishing they spent more time at work.
Sure, it’s called buying annuities.
That’s generally true but you haven’t met my father.
Excellent! Right on dude! While I only do this during cocktail hour my neighbors probably think this way about me. Keep it up!
I’ve been in the hospital twice with a pretty chance of dying and I answered emails from my phone after I got out of the ICU. It gets pretty damn boring sitting in the hospital and answering emails helped. Of course my bosses told me not to do so due to legal implications of using company email while on sick leave. So I text messaged response from my private phone.
Of course if I was already retired I would have nobody to talk about work issues. Like when I took an early retirement buyout 3 years ago.
This is where my wife and I are. I am 51 and she is 45. We both make good salaries but we are not spenders. At all. Our house is paid off. We paid cash for our car and expect to drive it for a total of 15 years (we don’t drive much since we both walk/ride to work) and no other debt. We save an enormous amount of money. When we put our numbers in the retirement calculators and select us retiring when I turn 60, our money grows until we die. So, we are now starting to think about retiring even earlier. Health care is our big unknown cost. Along with whatever we decide to buy house-wise for retirement (we will move, but we should have plenty to buy whatever outright). We don’t have kids so we have no “legacy” to preserve.
I’m starting to think 55 
Nice story. I hear you. We’ve never had a budget in 42 years of marriage because neither of us spend money we don’t have, or even money we do have. If we do spend it is for a good cause, like for safety features on our new cars. It meant that we didn’t have to adjust our lifestyle at all when I retired.
This will be us as well. It is easy for us to save. We don’t spend on stuff. We do spend on experiences/vacations. That’s why we want to retire early: To be able to spend more time doing the things we like, like biking and hiking.
But Covid put an end to my favorite part of Porch Life* … my pitcher of margaritas and stack of red Solo cups. I’d sit with a dog, a stack of books, and my blender. Neighbors would say hi, and I’d pour them a cupful (THEN I’d ask if they wanted some…otherwise their Midwestern-ness would require them to say “Oh, no, that’s too much bother” first).
I think psychologically it’ll be a long time til we can hug or take a drink from someone not in our bubble…
…
*“I didn’t choose the porch life, it chose me.”
Biggest reason I’m not retired: I didn’t. Always something more she wanted. A backyard in ground pool/spa. An RV. A vacation home in the mountains. Multiple vacations a year. More more more. I’d put my foot down and she thought I was being a jerk for no reason. Thank god I’m divorced.
Well, sorry and congratulations in that order.