Retirement; Thoughts, Advice, Things to know.

[storm 64]

It seems that quite a few of us are in retirement or approaching the retirement age.
I started this thread to get some insight on the retirement stage of our lives. Without getting to personal, maybe some could give their opinions, do's and don'ts and maybe "their" plan.

I'm 57yo I've worked for the same company for 32 years. I don't necessarily want to retire, but I would like to change jobs, something like semi-retire. I guess the big question is how much money do I need, and how long am I going to live? I surely don't want to leave money on the table. When I die, I want to be broke! Thoughts....?

[trevor]

Good idea for a thread Norm.
I just turned 56 so it will be a little bit before I can retire. With covid and my motorcycle accident from last year, it has forced me to figure out how to my recovery homes from afar...and I have figured that out. I can take long motorcycle trips and still run the business. This will allow me to feel comfortable working longer.
And speaking of the motorcycle, it's likely I will see a good chunk from the settlement which will go to retirement.
My wife is 11 years younger than me and has a very good Gov job....House isn't paid off yet..so we need that to retire, of course.Not much of a stock market guy but I'm looking to learn.

[Rob S.]

I certainly agree with your idea of 'dying broke.'

32 years! When I worked on Wall Street (1980-85), the accepted wisdom was that staying more than a few years with the same firm was a negative, not a positive on your resume. It meant that you were not in demand.

My father worked in a factory for almost 40 years; started as labor, then was management. I did not inherit that discipline. The last time I worked full time was in 1989!

Advice? Have generous family members and don't procreate. Seriously, the only info I can pass on is that it's often not a good idea to wait a few more years for a few more hundred $ per month. And definitely take the lump sum option if your pension has one. Maybe seek a free consultation with an elder care attorney.

Good luck!

[Baatfam]

IMO, your number one, most important thing, is health insurance. If you got that covered, everything else is much easier.

When I was forced to retire at 60, six years ahead of our plan, we got killed by private insurance cost, until my wife found a job that covered us both.
It has been five years now, so maybe things have changed, but just make sure.

[dorkburger]

I’m in an odd spot and partly am responding to stay in the loop of this thread. I’m 49. I’ve been at the same shop for 30 years and in the union for 20.

My most significant observations of two aging men are vastly different. My father worked his arse off as a small business owner and stayed busy with work and personal passions until cancer took him at 64 years old - I like to think he was satisfied.
On the other hand my father in law retired about 20 years ago and has taken on a sedentary, non passionate life and his health has slowly, but noticeably deteriorated because of it.

I hope to hit he wall at 100 instead of slowly fading away.... and I hope to retire at some point if I desire to do so.

[trevor]

IMO, your number one, most important thing, is health insurance. If you got that covered, everything else is much easier.

When I was forced to retire at 60, six years ahead of our plan, we got killed by private insurance cost, until my wife found a job that covered us both.
It has been five years now, so maybe things have changed, but just make sure.

One of the great things of living in Canada....that is not an issue here. That must suck

[Big Block]

My Dad was working when he was 68 years old and I asked him why didn't he retire. He asked me back "how much do you need to retire?". It didn't hurt him and he retired about a year later and died a millionaire at 92 Y.O. but I never forgot the question and there is no correct answer.
Every situation is different. I started at the Railroad at 19 Y.O. and planned to work until 55 and get a full pension. I made the mistake of going into management and left when I was 49. I am glad I did leave as the stress in my job was a killer and I am in way better physical and mental health now at 65 than I would have been if I had stayed in my high stress job.
I now work a part time job 3 days a week as it is physically active and I get bored around the house, If I lose the job tomorrow it doesn't matter financially but it's nice to stay busy and get out and talk to people though.
My advice is to be honest with yourself whether working is healthy for you and if it isn't look at changing things.
Also no one is going to look after you in your elder years (govt. for example) so make sure you are honest with yourself and invest wisely (real estate is usually pretty safe if you're careful).
I have always indulged in decent houses, Motorcycles, Holidays and Musclecars and it's best to purchase those things and have everything paid for before you retire. For example I have a beautiful condition Dodge Viper and I can always sell it if things get tight in the future, no way would I take the money out of investments now that I'm retired to buy a Viper though.

[1978GS750E]

I gave my notice at work about a month ago that I was leaving at the end of the year. They asked what it would take to keep me working longer?? I replied that if I could work remotely (at home) I would stay longer. Guess what......Jan 4th I start working from home! I'm turning 64 in Feb. and have the money saved to retire comfortably (for me anyways), but the health insurance costs would be high. This way they pay for most of my insurance, I don't have to leave the house in bad weather, save the commute time and money, and no one is constantly asking me questions. Win-Win for me!

No idea how much longer I will work. Going to see how the next year or so goes and then decide if I want to continue.

It is really comforting to know that I can retire whenever I want!

I can honestly say that "I'm one bad day at work away from retirement!"

[marvinsc]

Best advice I have ever been given is DO NOT retire in debt. I am in the two year window now and paying off debt is my priority. I have done well with my 401K and draw a pension from a previous employer. My intent is for that and Social Security to be spent on living, not paying debt on stuff I don't even own anymore.

[GSXR7ED]

Interesting thread Norm...and definitely something that has been on my mind.

#1 Is the health insurance thing. I am retired military/currently have Employer Insurance + TriCare Prime...at Social Security Age, policy turns into TriCare 4 Life. I was told APPLY for Part B.
#2 Retirement Income...fortunate enough to have worked for a company to receive this payment? Military Retirement is my safety net.
#3 Debt free...or at least just have a Mortgage to pay + utilities. This is not a problem if you have retirement income and set a budget to live within your means.
#4 I'm paying into my IRAs...Roth & Traditional. Maxing out the annual amount to $7K for the next 4.5 years when (Lord willing) I reach the age of 60.
#5 Save income now if you don't have credit card debt. That money you use to pay creditors is now money to put away.
#6 My wife & I recently had a discussion of amount to have in the bank for safety...even w/Military Retirement Income...she said 1yrs worth of what we pay out now. We estimated $48K.
#7 Include Social Security income when eligible...that's another income we haven't incorporated into the budget but it will be a + to the spreadsheet. Waiting for the higher estimate is key.

Those are just some things off the top of my head but as my wife and I sit down and have these financial meetings, we seem to come up with more topics.

#8 Establish a Trust with executor and account for every piece of asset we own.

That one was my mother's advice. She has put every decision on Legal Paper so my sisters and I don't have to make decisions when the time comes. It may seem selfish but it's their wishes and their money.

I'm saying to myself, I don't want to work past the age of 60. I'm focusing on that goal moving forward.

Start changing the way you eat...include more greens and less beef...go without meat (chicken/pork) would be better. Improve your mind with meditation and also exercise.

Man! There is so much to think about it can be overwhelming!

Good luck you guys! But at least start a plan. Glen/Dorkburger is well to evaluate what others are doing in our mid 50s.

Ed

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[Kiwi Canuck]

I can give a bit of insight here but like Trevor I'm in Canada, so most info is transferable except the cost of healthcare which I understand can be expensive in USA.

I'm in my early 60's and own my own business, I started my business 37 years ago will probably work for another 7-8 years if I'm still healthy and continue to love what I'm doing.

If not I'll sell my remaining ownership in the company and move onto something else, I have a few hobbies and would probably go moto travelling or take an RV and go travelling with my wife for a few months to figure things out.

I would certainly need to stay busy as I don't do well sitting around.

A few things I've learned from observing friends as they reach the age where they are ready to retire or already have done so.

The ones who have done it well usually have a good team of people around them to help plan their life including retirement, so a good accountant, banker (or mortgage broker), financial advisor, lawyer, notary, real estate agent, real estate appraiser, insurance broker, doctor, physiotherapist, naturopath, etc, whatever suits your life style.

Before you need one of these advisors it's good to have them already onboard as you navigate your life, they can cost money but they can sure pay for themselves if you get the right ones.

I've been working with the same core team for about 20 years but recently changed out my financial advisor as my original guy was burnt out and not working for me anymore.

The financial part is pretty difficult to nail down, because there are so many variables you can't control, but you can guess based on what has happened previously regarding inflation/investments etc, and how long will you live for, that's a big one?

Old age care can be expensive even in Canada, depending on the level of care required, many places here are $6,000 to $10,000 per month for full care in a nicer place with a good nurse to resident ratio, how long should you budget for that and how much is it going to be in 20 years?

Like Trevor, my wife is 11 years younger than me so she will probably out live me by a bit so hopefully I won't be sent off to a care home if I start losing the plot anytime soon.

Most retired guys find themselves very busy doing hobbies, playing sports and working on side projects for a little extra cash and volunteering.

Some of my friends who have retired were not very well off but have somehow made it work for them, stretching every penny, others who are very wealthy and have extravagant lifestyles travelling and spending like there is no tomorrow, to each his own.

I'm somewhere in the middle, and being frugal most of my life I should be OK financially when I do stop working, but the "number" that I need to "retire comfortably" keeps moving higher and higher, it used to be 1 million in investments, now it's minimum 3 million, who knows what It will be in 5 years.

Ultimately it depends where you retire, If I stay at my current property I will need about $15,000 month income (investment and other income) to make the machine run, if we sell and move to a smaller property maybe half that.

I will avoid reverse mortgages, I will take advantage of property tax deferral as long as the rates are favourable and I regret not using whole life insurance products more rather than term insurance as part of my retirement planning.

Creating a Holdco Corporation and/or Family Trusts are a good vehicle for sheltering investments and maximizing investment dollars rather than taking the money into your hands personally and then investing. It costs money upfront but it works out in the long run if you do it early enough in your working life.

If those aren't available to you RRSP & TFSA for Canadians and 401K's for Americans can help as well.

There are a lot of investments that get preferential tax treatment in Canada and are worth looking at, that's were the advisors come in to help set all that up if you are inclined to dabble in those type of investments.

Stay away from family friends who just got into a retail financial investment firm, they will eat all your money up in fees, been there done that.

I have kids and a wife so I plan on leaving plenty,

That's about all for now from me, if I think of anything else, I'll add to this.

David.

[Redman]

Norm,

Are a couple significant things/situations that you didnt even mention.

One being: Health Insurance
You didnt say if maybe you can retire with paid (or moslty paid) health insurance, maybe from a union benifit.
WHen I first started looking at retirment at about age 60 and then again at 62, the cost of health insurance was a significant factor - NO, it became the main factor.
If you will have to buy your own insurance, call some agent (are not many) or look at that goverment webpage, I think you will find the least cost plans are like $1000-1200-orMore a month, and those are the very high deductable plans like $12-15 thousand. So, yah, $15K a year premiums and then $15K expenses before insurance pays much of anything. And anywhere close to decent plans, cost more than double that. (so basically, you will need a $10/hour job just to only pay for health insurance.)

Other being: For your birth year (1964, I suspect), what age are you elgible for minimum socialsecurity (62?), and what age for "full" benifits (it aint 65 anymore). For my birthyear (1952) it was 65, but that was the last year for that, about every couple years after that it went up a fraction of a year. For my wife it something like 66 and 3 months.

I looked seriously at retirement at 62, and every year after. And retired at 65 when was elgible for SS full benifits and Medicare (but got plan other than medicare).

THose are two things that are significant factors that you didnt mention, nor ask about.

What you did ask about was: how much money do you need (in savings/investment) to retire. Which is something of a valid question.
A More important question is: how much income will you need in retirment.
And to start to answer that, you can look at your current income and subtract out how much of that you put in savings, in other words: what is your current expences. And then think of how much of those expences are related to going to work that you will not have in retirment (probly not much). And then also think how much added expences are you going to need to do whatever you are going to want to do in retirment. THat is going to vary quite a lot depending on if you are going to do about what you do now, or if you are going to do somethng a lot different like travel full time in big toy-hauler motorhome with your FJR and TIger staying at RV resorts and going to steak houses most every day.

Anyway, need an estimate of expenses (monthly or annaul). And an estimate of income: pension, SocialSecurity. THen the difference will need be be made up by income generated by your savings/investment. Need to convert at least some of your investments into something that generates income to suplement pension and SocialSecurity.

Most people these days dont have any pension, is all 401K and such investments.
My job from 1976 to 1987 did have a pension plan that now pays a few hundred a month. But jobs after that, no pension, but did have 401k and such.
Wifes job (part time) of 30 years did have pension at the start (1982), and next ten years or so, and then was "grandfathered" in after that (new employess didnt), so she did/does have something of a pension.

<<better post this before I loose it>>

[Redman]

So, yah, need to figure out (or quess) what your expenses are going to be in retirment.
And then look at what income you will have, and how your investments can provide the rest of that income.

ANd that is just for the near term, what you want to do in retirment, in the somewhat foreseeable future, doing whatever you want, not going to work.

ANd if that isnt hard enough to figure out: Thihnk about Long term . . . . eaaasssssch . . . that gets scary.
Long term, like after maybe have some years doing stuff in retirement, whatever, but sometime later, have health problems. . . . . assited living .... nursing home . . . . . talking $8-10-12-16-18 thousand a month. Yikes. Sorry. Not what you are asking. Sorry.

[Nessism]

If you will have to buy your own insurance, call some agent (are not many) or look at that goverment webpage, I think you will find the least cost plans are like $1000-1200-orMore a month, and those are the very high deductable plans like $12-15 thousand. So, yah, $15K a year premiums and then $15K expenses before insurance pays much of anything. And anywhere close to decent plans, cost more than double that. (so basically, you will need a $10/hour job just to only pay for health insurance.)

This is frightening. Anyone else have hard and fast numbers regarding how much health insurance will cost? HMO like Kaiser?

Then there is supplemental insurance in case of serious injury or illness.

And managed care living when the end is near.

My 401k is approaching my goal (almost got there a while back before the recent market "correction.") I get a small pension from a previous company which I'm already drawing. And I've got a cash reserve and some good equity in my home. Plan is to sell the home and move out of CA, where I can pay cash for some new place and have money left over. Ideally I'll execute this plan at 62 or 63. I don't live an extravagant life style; give me a decent low maintenance home w/large workshop and I'll be happy.

[storm 64]

Lots of sage advice here. Health insurance seems to be the major factor in planning for retirement. It seem there are so many different scenarios that it is impossible to follow one guideline. For me, retirement may be in the distance future.
However a career change may not be. Going to the same machine shop for the last 32 years is getting old. And now with the new ownership of the company, everything is about to change. Hopefully for the better, we'll see. For now, I'll hang in there. But I'm "a bad day at work" till I move on...