Jake
Wholenote
Posts: 564
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Post by Jake on Jan 12, 2021 9:56:20 GMT -5
Any rule of thumb would contain pitfalls of course. This one says, that at full retirement age, 67, if you have ten times your final salary on hand you are likely in good shape. But what if I wan to retire at 62 say? What would I need then? I am 60 now. With a great 2020 year in stocks it's hard not to notice the balance there and wonder if I need to be working anymore.
I am pretty sure I am going to wait at least until COVID is in the review mirror, but with my modest lifestyle and lack of dependents, some of the calculators say I should be good to go now. I don't believe that automatically, I think in the summer I will talk to a CFP on an hourly basis, and see if that might straighten me out a bit and help me see what I am not seeing.
Thoughts?
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Post by Leftee on Jan 12, 2021 10:01:39 GMT -5
I'll jump right on the elephant in the room.
Health care?
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1600
Wholenote
Posts: 106
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Post by 1600 on Jan 12, 2021 10:33:23 GMT -5
You could look at from the point of having 20/25 years of your living expenses in your retirement accounts. So if you will need $50K per year to live on you need a cool million plus. Have to figure in health care, taxes, RMD's etc. Health care up until Medicare is available. Also part of that hypothetical $50K will be supplemented by SS? It's not as hard to come up with the numbers you need as it is to actually have the numbers you need.
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Post by budg on Jan 12, 2021 10:35:38 GMT -5
What leftee said. That’s the most important question. I have access to great health insurance at a fairly low premium. I turned 62 last august and decided to take the reduced amount rather than wait until 66 and 8 months. For me I could afford it with SS and my pensions , plus I have been spending the last 7 years getting my finances in order. One never knows how long one lives, so I would rather take less longer, but a lot of that depends on health care.
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Bbendfender
Wholenote
Mostly play Fender guitars and amps. I'm 71 and have had a guitar since 1964. Got serious in 1975.
Posts: 216
Age: 71
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Post by Bbendfender on Jan 12, 2021 10:38:38 GMT -5
I agree with Leftee. I have a good retirement plus great health care coverage. I know people who are retired and don't have good health care and sometimes they struggle. I have a good State retirement and get a small VA check due to my major hearing loss. I retired too early. I should have at worked at least 5 more year but I was fed up and had to get out. Make sure you have adequate health insurance and make sure you gave good coverage when you get 65. I have a Zero copay now with my Medicare and other insurance and that helps me. My advice for you is to work as long as you can. Again, I retired too early.
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 12, 2021 10:50:59 GMT -5
I have determined that if I was laid off or quit, COBRA would be good for 24 months and would cost around $750. My younger brother was looking on the exchanges and found a plan around that same price. Then his company hired him back.
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 12, 2021 11:00:38 GMT -5
But I am trying to figure out thresholds around when I might be able to quit.  Some calculators say maybe now, as I think I stated. |
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Buster
Wholenote
Posts: 213
Formerly Known As: Buster Strings
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Post by Buster on Jan 12, 2021 12:35:33 GMT -5
There is also the 4% method. Just Google it and see if it applies to you. Basically, if you can live on Social Security plus 4% of your investments annually, you should be good.
I'll be 62 this summer and considering retirement then. I am on my wife's health insurance that will carry us both until Medicare. I have plenty invested but I plan to find something that'll bring in about $1,000 a month for a couple of years doing something I enjoy just as a bit of security against stock market fluctuations.
I am in management now and want out. I'd much rather have less to spend than to be wheeled out of the office on a gurney, which is what I am afraid will happen if I stay much past June.
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Post by LTB on Jan 12, 2021 14:27:47 GMT -5
I retired a little over a year ago and wife 4 months prior to that. We live on a pension from my job of 42.5 years and social security. If something happened to me she would get my pension and her social security. Suffice to say, just with me I make more now than I did when I worked which was a pleasant surprise. Our medical is Medicare and Suppliment G which is good so far. Medicare part D (drug benefit) is not as good as when I worked but ok.
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Post by LVF on Jan 12, 2021 14:39:25 GMT -5
What will your overhead be when you retire? Retirement, IMO, is the business of not having to work to sustain your lifestyle. If done correctly, you could actually up your lifestyle depending on how much extraneous financial obligations you may now have. That would be house payments, loans of all kinds that include credit card debt. Going into retirement with no debt other than living expenses can be a key to upping your lifestyle or at least maintaining what you now enjoy let alone, being a must. This also depends on where you live and how expensive it is to live their but, that could be a non factor current income should be adjusted to that.
So, another question is: Do you now live comfortably with the income you have and does it maintain the lifestyle you want? Another 'IMO' would be to have the same or as close to your current income for your retirement. However, if you go into retirement with no debt, you may find that less is more.
For myself, I found it difficult to know what my income would be so it was a must to go in not owing anybody or thing financially. I thought about this 12 years before I retired and started a 401k type of savings to use only to pay off my house which worked out better than I thought because it also allowed me to pay off all other 'extraneous' bills before I retired. Which made it easier not to worry so much about my retirement income that would not increase to its fullest for another couple of years. That came about 8 years ago. I've had no concerns about sustaining my income or lifestyle since and that is how it should be.
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Post by rickyguitar on Jan 12, 2021 14:49:16 GMT -5
Good medical coverage and no bills are big factors.
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Post by LTB on Jan 12, 2021 17:09:28 GMT -5
Good medical coverage and no bills are big factors. Agree, however some bills are always upon us in utilities and insurance but I get the jest of what you mean. 😉 |
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Post by rok-a-bill-e on Jan 12, 2021 18:11:43 GMT -5
Yes, for the first time in my life I now own a paid for house. And after the $3K+ taxes and the $4K+ insurance I can live there for about $700 a month.
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Post by jhawkr on Jan 12, 2021 21:02:46 GMT -5
Speaking of the elephant 🐘 in the room, when thinking about insurance and Medicare and supplements, don’t forget about prescription drugs. I’ll be paying about $4,000 out of pocket for drugs this year over last year due to 2 new cutting edge drugs, Entresto and Farxiga for my heart failure. I have 12 regular Rx medications.
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Post by 6l6 on Jan 13, 2021 1:27:24 GMT -5
Just to a pass on another option...
The father of a childhood friend lost his wife when both were around 50 years old. At the same time his business was failing and so he packed it in.
it was at that point he decided he would marry money. SO... he thought there was no better place to find a rich widow than West Palm Beach, FL. He packed his car and headed to FL from Indiana.
Six months later he was married to a lovely widow he met in a West Palm club and they lived their next 40 years together enjoying the best life money could buy.
Like I said, it might be an option to consider. It sure worked out well for my friend’s dad.
Health care cost is something you have to REALLY understand. Inadequate coverage can wipe you out. Fortunately for me, everything is covered by Medicare and my supplemental insurance (Tri Care for Life). Try Care for Life is provided to me as one of my benefits for retiring from the USAF after a 23 year career.
6
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Post by muttley on Jan 13, 2021 7:01:24 GMT -5
How common is it these days to have medical coverage included in your retirement benefits? (I won't.) One unsettling aspect of the elephant in the room is that you don't know what it will look like year to year.
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 13, 2021 8:10:18 GMT -5
"I'd much rather have less to spend than to be wheeled out of the office on a gurney"
Great point
"Do you now live comfortably with the income you have and does it maintain the lifestyle you want?"
Yes. I plan to pursue inexpensive hobbies and to get out into nature.
"find a rich widow"
Ha!
Any other rules of thumb, or decent easy to use retirement calculators? Thanks all.
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1600
Wholenote
Posts: 106
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Post by 1600 on Jan 13, 2021 10:56:00 GMT -5
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Post by LTB on Jan 13, 2021 11:08:35 GMT -5
Speaking of the elephant 🐘 in the room, when thinking about insurance and Medicare and supplements, don’t forget about prescription drugs. I’ll be paying about $4,000 out of pocket for drugs this year over last year due to 2 new cutting edge drugs, Entresto and Farxiga for my heart failure. I have 12 regular Rx medications. I have been on Farxiga for diabetes. Very good, On Medicare they didn’t cover it and now taking Jardience ( Farxiga’s equivalent) it is good but it think Farxiga worked better. Between the two I have lost 80 lbs in 3 years ( 266lbs to 180) |
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Post by jhawkr on Jan 13, 2021 11:27:31 GMT -5
Farxiga is now covered by Medicare. I’m taking the 10mg dose for heart failure. But I have had a borderline high glucose level (110) for years so I should get the added benefit of lower blood glucose. My problem with cost is with both Farxiga and Entresto priced at around $500/mo each I will be in the donut hole in April. Then, the out of pocket cost gets pretty high. I have a BCBS Part D plan and both are covered as a tier III drug.
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Post by rickyguitar on Jan 14, 2021 21:22:14 GMT -5
Just to a pass on another option... The father of a childhood friend lost his wife when both were around 50 years old. At the same time his business was failing and so he packed it in. it was at that point he decided he would marry money. SO... he thought there was no better place to find a rich widow than West Palm Beach, FL. He packed his car and headed to FL from Indiana. Six months later he was married to a lovely widow he met in a West Palm club and they lived their next 40 years together enjoying the best life money could buy. Like I said, it might be an option to consider. It sure worked out well for my friend’s dad. Health care cost is something you have to REALLY understand. Inadequate coverage can wipe you out. Fortunately for me, everything is covered by Medicare and my supplemental insurance (Tri Care for Life). Try Care for Life is provided to me as one of my benefits for retiring from the USAF after a 23 year career. 6 Thinking my wife woul be pissed. Really pissed. |
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 15, 2021 9:15:24 GMT -5
Can anyone maybe try the AARP retirement calculator to see it it makes sense? It says I can retire at a savings number significantly below what I got. I selected "same lifestyle as now" at that option. I don't want to have false hopes. |
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Post by Seldom Seen on Jan 15, 2021 20:15:13 GMT -5
I've tried the AARP calculator but it's been awhile. My favorites are the simple CalcXML offerings and I have a decent iPhone app (Ez calculators) as well. I started thinking about retirement at age 59 because the retirement calculators indicated I'd be okay. However, starting that early made it difficult to manage the dreaded early short-timers disease. I decided it was smarter to hold out until age 63 and I'm glad I did. I haven't started collecting SS yet but holding out put me in a much stronger position to hold off collecting until I hit Medicare age or even longer.
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rickv
Quarternote
Posts: 15
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Post by rickv on Jan 16, 2021 22:11:02 GMT -5
Fidelity has lots of info and tools, including calculators.
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Post by LTB on Jan 16, 2021 23:47:45 GMT -5
Farxiga is now covered by Medicare. I’m taking the 10mg dose for heart failure. But I have had a borderline high glucose level (110) for years so I should get the added benefit of lower blood glucose. My problem with cost is with both Farxiga and Entresto priced at around $500/mo each I will be in the donut hole in April. Then, the out of pocket cost gets pretty high. I have a BCBS Part D plan and both are covered as a tier III drug. Thank you. I will check into Medicare and Farxiga Update: Just checked and indeed they do. Both same cost Thanks jhawkr |
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 20, 2021 20:03:35 GMT -5
I have a feeling I am going to do it this spring sometime. Neat trick for a 60 year old. I am looking at some books and looking for an advisor who might work on an hourly basis.
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 27, 2021 5:57:27 GMT -5
A freind of a freind is willing to do an evaluation and discuss pertinent issues with me, tomorrow evening. Had been looking for someone to advise on an hourly basis she doesn't work this way, would like to take my funds under management she knows I am unlikely to do that but will do the session in exchange for me listening to the pitch.
One thing she mentioned was "sequence risk", a risk of taking distributions at various points where market conditions are not favorable, can be detrimental to the overall portfolio over the whole retirement period. AARP seems to have nothing on this. Anyone know much about this? I see "bucket" approaches to mitigate the risk, and apparently taking distributions with an eye toward maintaining the preferred allocation mix, along with rebalancing, also can mitigate. This is what a wanted to talk to someone about on an hourly basis, to advise how to set this all up, and then I would execute. Plus whether my numbers make sense to do it in the first place. This person thinks I am in the ballpark for pulling the trigger, but we'll see tomorrow.
Thanks.
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Jake
Wholenote
Posts: 564
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Post by Jake on Jan 29, 2021 9:21:27 GMT -5
The friend of a friend says I am in good shape to retire now, and that I ought to actually up my lifestyle a bit so as to not leave a financial legacy, which i don't need to do. I guess this spring, we will see.
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Post by Mikeyguitar on Jan 29, 2021 9:46:15 GMT -5
Good for you!
I've also considered retiring soon...but between health insurance and having 20 years still left on the mortgage, I'll probably wait about 5 years and retire when I'm 63 (God willing).
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Post by Leftee on Jan 29, 2021 9:55:09 GMT -5
My wife is seriously considering retirement this June. She’ll be 59. She loves her work, but she’s also grown weary of it... if that makes sense.
She has a long-time financial advisor who helps her with all this.
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Some calculators say maybe now, as I think I stated.
