Countdown to retirement

[aprilgail]

DH and I are planning to retire at the end of 2027. Three years that I'm sure will go fast but feels so far away. My job is stressful but I make a good salary. Anyone else counting down the days? What did you do to help pass the time? Not wanting to wish my life away but so tired of the corporate crap. Anyone in the same place as me?

I started counting down when I was in my 30's LOL- the last 2 years seemed to take forever! I retired at 50 with a nice pension.

 

[greeneyedchick]

My husband obsesses about retiring. He's still at least 10 years away but looks at his retirement spreadsheet at least once a week. However, he refuses to talk to a financial planner about retirement. I think he's over estimating how much we need to have saved to retire. For those who are within 10 years of retirement, have you talked to a financial planner? Has he or she given you a ball -park number for saving? My hubby thinks 4.5-5 million is needed. I'm wondering what the general consensus is. He's hoping to retire at age 57. I do realize that that is a long time to live without an income, especially if we don't get social security until we're 70.

 

[princesscinderella]

My husband obsesses about retiring. He's still at least 10 years away but looks at his retirement spreadsheet at least once a week. However, he refuses to talk to a financial planner about retirement. I think he's over estimating how much we need to have saved to retire. For those who are within 10 years of retirement, have you talked to a financial planner? Has he or she given you a ball -park number for saving? My hubby thinks 4.5-5 million is needed. I'm wondering what the general consensus is. He's hoping to retire at age 57. I do realize that that is a long time to live without an income, especially if we don't get social security until we're 70.

At 57 4.5-5 million would be considered a no worries retirement for most everyone with a $200,000 annual budget using the traditional 4% rule. It really all depends on your spending habits and if you live in a high cost of living location if that number works for you. If your house is paid off and all you need to worry about are insurances, property taxes, maintenance, utilities etc, a lot of that pot becomes fun money. However, if you have a large house to maintain those costs can be very expense as a new roof on a 4000K sq ft house is about 100K by us vs $25k for a 1400 sq ft house. I think it's important to sit down together as a couple and map what you see as your wants, needs and goals in retirement and once you have that it's easier to focus in on a number that you need to achieve. With so many financial calculators available on the internet, I don't think it's necessary to sit down with a financial planner if you have been maintaining your assets and investments on your own all along and are financially savvy. Too many just want a cut of off the top of your investments without doing anything different than you can do yourself.

 

[tvguy]

My husband obsesses about retiring. He's still at least 10 years away but looks at his retirement spreadsheet at least once a week. However, he refuses to talk to a financial planner about retirement. I think he's over estimating how much we need to have saved to retire. For those who are within 10 years of retirement, have you talked to a financial planner? Has he or she given you a ball -park number for saving? My hubby thinks 4.5-5 million is needed. I'm wondering what the general consensus is. He's hoping to retire at age 57. I do realize that that is a long time to live without an income, especially if we don't get social security until we're 70.

Oh wow, YES you should be consulting a financial planner. And LONG LONG before you are 10 years from retirement. I've been with my financial planner since 1989, when I left a job and had a 401k plan I had to roll into an IRA. I retired in 2021 so 30+ years before I retired. These days they input what you are actually spending to live right now into software that uses historic data to estimate what you actual costs are going to be in retirement. Then a good financial planner will talk to you, get your priorities, and structure a financial plan that meets your projected expenses and desires. You don't HAVE to follow their advice, but the information they give you can help you make an informed decision.
Not knowing your situation, and the cost of living where you live, I would say that yes, your husband's figures are high. However, you will likely face huge health insurance costs for the 8 years between your husband retires at 57, and age 65 when he qualifies for Medicare.

 

[tvguy]

At 57 4.5-5 million would be considered a no worries retirement for most everyone with a $200,000 annual budget using the traditional 4% rule. It really all depends on your spending habits and if you live in a high cost of living location if that number works for you. If your house is paid off and all you need to worry about are insurances, property taxes, maintenance, utilities etc, a lot of that pot becomes fun money. However, if you have a large house to maintain those costs can be very expense as a new roof on a 4000K sq ft house is about 100K by us vs $25k for a 1400 sq ft house. I think it's important to sit down together as a couple and map what you see as your wants, needs and goals in retirement and once you have that it's easier to focus in on a number that you need to achieve. With so many financial calculators available on the internet, I don't think it's necessary to sit down with a financial planner if you have been maintaining your assets and investments on your own all along and are financially savvy. Too many just want a cut of off the top of your investments without doing anything different than you can do yourself.

Wow, even in my working years my budget........in reality, my income was about half the $200,000. For most folks that is a generous budget in retirement. Like I said above, we have been living over two years on $48,000 a year, before taxes. With withholding, that in reality, that was $36,000. But we are in such a low tax bracket that we have been refunded most of the withholding every year. Now with two social security checks coming in, a small annuity starting to pay out and savings withdrawals ended we will have about $7,000 available, but our expenses will remain the same. So now we can start traveling, and that travel starts next week!

 

[NH-to-FL]

My husband obsesses about retiring. He's still at least 10 years away but looks at his retirement spreadsheet at least once a week. However, he refuses to talk to a financial planner about retirement. I think he's over estimating how much we need to have saved to retire. For those who are within 10 years of retirement, have you talked to a financial planner? Has he or she given you a ball -park number for saving? My hubby thinks 4.5-5 million is needed. I'm wondering what the general consensus is. He's hoping to retire at age 57. I do realize that that is a long time to live without an income, especially if we don't get social security until we're 70.

I retired about 9 years ago but I'll pass along some thoughts.

You are doing pretty well if you are on track for 4.5-5 million at age 57. That said, the first, and most important, question to ask is how much income you need to support your desired lifestyle.

Once you have that number then you can determine how much you need to have saved. The 4% rule, 25 times your desired annual income, will give you a good savings estimate. You will have to assess your comfort level around the risk of that 4% number. Maybe 3% might make you feel better. Also your confidence in your expense estimates. Since you are planning to delay social security than your saving will have to support you for quite a while. Remember to account for taxes if your savings are in a tax deferred account. Make sure you carefully account for healthcare expenses before becoming eligible for medicare. These days healthcare can be a big and potentially uncertain number.

I did not use a financial planner. The basics of these equations are pretty easy to understand. For the years leading up to retirement I was casually watching our annual expenses and then two years before I retired I carefully tracked expenses, thankfully confirming my "casual" estimates. Overall I did pretty well with my planing. Though looking back I probably would have benefited with some professional help on tax planning.

After 9 years of retirement I am doing well. Some might say I over saved but I am comforted by having the buffer.

 

[disykat]

A financial advisor is good for advice on stock market, what kind of accounts to have, etc. Having some money working in the market to generate income is really important. In general though, the math isn't that hard. Figure out your monthly budget, determine if have loans or other things that may change before retirement. Make yourself 3 budget scenarios - one bare bones, one with fun and travel, one with additional medical and care needs. Do the math.

Since our home is paid off, we have enough with pension money and what we anticipate getting with social security to cover the bare bones. Our investments will provide some income for fun and travel AND a big chunk set we won't touch unless/until we need it for care needs. We plan to draw between 1 and 3 percent of our investments per year as income and leave the rest in our investments for the future. (Because I've had two parents in memory care and don't qualify for long term care insurance due to some what I consider minor health issues, I'm really watching the last category. I've managed their finances, and I know EXACTLY how much it costs! The house sale will cover a chunk of it, but DH is younger than me and realistically could still be living in it when I need care.) We hope to leave some money to heirs, but if we were to spend all our assets then we would qualify for help.

I said this before and I'll say it again - sitting down and figuring out the budget and how much money you will need is the first step. Even if you have or get a financial advisor you need those numbers first.

Don't let scary numbers like the husband's 4 million put you off. We have waaay less then that and are doing fine. Options like downsizing if you have a large home with a mortgage can also help. I have friends that chose to move to a smaller house when they became empty nesters and didn't need 4 bedrooms and extra living spaces that still were mortgaged. It made retirement more possible.

 

[tvguy]

Another thing a Financial Advisor can help you with is determining how much risk you are willing to take, or are comfortable taking. And their advice can include investments that you have that they do not control, like if you have a 401k plan at your employer.
About 10 years before we retired, my wife reached the dollar amount goal our Financial Advisor suggested to maintain a comfortable retirement for the rest of her life. She shifted out of stocks and into low or no risk options in her 401k. She did not want the risk anymore that could jeopardize her retirement. I stayed aggressive in my 401k. In hindsight, she would have made more money staying in risker investments. When we retired out financial advisor ran the numbers. Her peace of mind and moving her money into a conservative track cost her $200,000 because stocks continue to grow. But there NEVER was a guarantee of that.

 

[dvcgirl67]

When I say working and reworking the numbers - we were obsessed and still are. I keep a budget. We know all our numbers. On any given day I could probably accurately recite our entire financial picture. (I say that because I'm sometimes surprised when talking about retirement how many people I talk to that are of that age that haven't really sat down yet and crunched the numbers. I think fear keeps some of us from wanting to know. For us it helped us feel ready.)

This is us as well. I don't really think of it as obsessed though. I know people who don't keep any type of budget who seemingly do fine with it and others who really struggle. But we've always been zero based budgeters....every dollar has a place to go. And that fear of not having enough is real for a lot of people for sure.....usually hits in their 50s. For us, we've always been hyper-aware of what we have, but our "number" did increase over the years as we began to enjoy more international travel.

We just returned from a 16 night trip to South Africa that was just incredible. And we both came away thinking that it wasn't a "one and one" for us for that destination, or Africa in general. We'll go back for sure. We've hit our expanded "number", and DH has set his finish date for the end of next year, in his mind anyway. But then on this trip he did say that it's pretty nice to have received two nice paychecks while enjoying this vacation.....and maybe he could just dial back his engagement a bit (but I think that would be hard for him). But...we'll see. I do know as a childless couple who enjoys travel that our number needed to be bigger than what we anticipated in our 30s....now that we're there, I feel like we're just continuing to build a buffer.

One thing for sure, as we've watched two parents age and pass away....two others aging with issues here and there, we know that the clock is ticking on getting out there and seeing this world of ours. And the older we get, the more couples we know where one is having serious health issues affecting travel, etc. A real "tick-tock" feeling begins to set in.

 

[greeneyedchick]

This is us as well. I don't really think of it as obsessed though. I know people who don't keep any type of budget who seemingly do fine with it and others who really struggle. But we've always been zero based budgeters....every dollar has a place to go. And that fear of not having enough is real for a lot of people for sure.....usually hits in their 50s. For us, we've always been hyper-aware of what we have, but our "number" did increase over the years as we began to enjoy more international travel.

We just returned from a 16 night trip to South Africa that was just incredible. And we both came away thinking that it wasn't a "one and one" for us for that destination, or Africa in general. We'll go back for sure. We've hit our expanded "number", and DH has set his finish date for the end of next year, in his mind anyway. But then on this trip he did say that it's pretty nice to have received two nice paychecks while enjoying this vacation.....and maybe he could just dial back his engagement a bit (but I think that would be hard for him). But...we'll see. I do know as a childless couple who enjoys travel that our number needed to be bigger than what we anticipated in our 30s....now that we're there, I feel like we're just continuing to build a buffer.

One thing for sure, as we've watched two parents age and pass away....two others aging with issues here and there, we know that the clock is ticking on getting out there and seeing this world of ours. And the older we get, the more couples we know where one is having serious health issues affecting travel, etc. A real "tick-tock" feeling begins to set in.

You and DIsneykat sound like us. My husband worries about it much more than I do and he's definitely aware of all the numbers in his spreadsheet and has been since his early 20s. We started with nothing and have done well for ourselves, but we haven't travelled much at all in the past 20 years due to having kids. I've never even stayed at a Disney resort. We've always been super careful with our spending. You're all making me feel better about my husband retirement number, and knowing that it's not crazy over-inflated.

I also feel the pressure to travel while we're younger. I'm not even 50 yet and I feel like my energy to travel and my tolerance for all the inconveniences that come with it have diminished. My back and neck aren't co-operating either. But I feel if I don't do it now, things will only get worse. My parents have never been to the west coast or to Europe. They were going to travel when they retired. They retired right before Covid. Then my dad's health went down hill and he struggles to walk. They never travelled. I don't want to make the same mistake. Even my husband who is tight with our budget told me to plan a trip. Then I look at the calendar and all of the unknowns with our kids' schedules and I don't do anything. That's a separate issue....But anyway, glad to know that we're not alone. I feel like most of the people I talk to don't have any retirement plans. Then I take on the attitude with my husband that if we can't survive retirement with all our saving and planning, no one can. Glad he's willing to track it.

 

[shh]

For many teachers, they have paid into both so it seems unfair to lose out on most of SS.

I sympathize for everyone dealing with this WEP thing. There are several unfair rules regarding Social Security that really need to change. My career was spent as an independent 1099 contractor. I had to pay DOUBLE the social security and extra medicare tax on every dollar of my earnings compared to what w-2 employees pay. Yet none of that extra money counts towards my benefits calculation. Why should working for oneself vs working for an employer require paying 2x the tax?

 

[shh]

After 9 years of retirement I am doing well. Some might say I over saved but I am comforted by having the buffer.

When people talk about oversaving or think about what they need to retire, many don't consider (or don't want to think about) long term care needs.

Unless you have dedicated family members willing and able to be caregivers (which is a LOT to ask), you either need a robust ltc policy (with few decent ones sold these days) or you need a generous cushion of savings set aside (apart from daily expense and fun money) to fund a CCRC, assisted living or possibly a nursing home.

Or there's always the Medicaid solution- which most will seek by default. Transfer away all assets over the bare minimum allowed by law 5 years prior. Then rely on a facility that accepts medicaid. (The ones I've seen are not good.)

 

[princesscinderella]

I sympathize for everyone dealing with this WEP thing. There are several unfair rules regarding Social Security that really need to change. My career was spent as an independent 1099 contractor. I had to pay DOUBLE the social security and extra medicare tax on every dollar of my earnings compared to what w-2 employees pay. Yet none of that extra money counts towards my benefits calculation. Why should working for oneself vs working for an employer require paying 2x the tax?

You are basically your own employer so that’s why you pay double for SS/MED. As a 1099 contractor you are also entitled to write off expenses against your earnings which an employee is not allowed to do. There are tax strategies such as becoming an s-corp and paying yourself as an employee for a portion of your earnings and doing a distribution for a portion so you avoid paying the FICA. Your wages are also less towards your SS benefit at retirement if you go that route.

 

[shh]

When we retired out financial advisor ran the numbers. Her peace of mind and moving her money into a conservative track cost her $200,000 because stocks continue to grow. But there NEVER was a guarantee of that

I'd have never asked the advisor to calculate what "I would have had" for my fixed/safe funds because those dollars were never meant to invest, grow or gamble. It wasn't their job and it didn't cost her anything bad.

You already HAD a bucket for growth: your funds. Her dollars did exactly what they were tasked to do: be your SWAN...your "sleep well at night" cushion.

You never try to get richer on SWAN money. It's the umbrella shielding us when the $#*% hits the fan. Losing 100k or 200k feels orders of magnitude worse than gaining 100-200k.

 

[tvguy]

I'd have never asked the advisor to calculate what "I would have had" for my fixed/safe funds because those dollars were never meant to invest, grow or gamble. It wasn't their job and it didn't cost her anything bad.

You already HAD a bucket for growth: your funds. Her dollars did exactly what they were tasked to do: be your SWAN...your "sleep well at night" cushion.

You never try to get richer on SWAN money. It's the umbrella shielding us when the $#*% hits the fan. Losing 100k or 200k feels orders of magnitude worse than gaining 100-200k.

We didn't ask. But it is kind of part of a Financial Planner's responsibility as a Fiduciary to disclose those things even if they are on assets outside their control. He also disclosed that the High Tech Fund he put us in in 1999 lost 75% of it's value.

 

[shh]

You are basically your own employer so that’s why you pay double for SS/MED. As a 1099 contractor you are also entitled to write off expenses against your earnings which an employee is not allowed to do. There are tax strategies such as becoming an s-corp and paying yourself as an employee for a portion of your earnings and doing a distribution for a portion so you avoid paying the FICA. Your wages are also less towards your SS benefit at retirement if you go that route.

Oh, I get the official reason why (paying as employer and employee) and am more knowledgeable than the avg bear from 40+ years in biz + guiding others in starting businesses.

Many gig workers don't have expenses that offset the double SS they must pay: this varies greatly by nature of their work.

Scorps are definitely smarter for some, not for others. They cost more to set up and maintain. For anyone hoping to cut SS taxes through a lower claimed salary, IRS challenges those that seem under mkt avg. SCorps are great for accountants: more docs to file=more billable hrs. I've worked both ways.

I still don't buy the logic that every self employed worker should pay 2x SS and medicare taxes, w/zero added benefit.

 

[tvguy]

When people talk about oversaving or think about what they need to retire, many don't consider (or don't want to think about) long term care needs.

Unless you have dedicated family members willing and able to be caregivers (which is a LOT to ask), you either need a robust ltc policy (with few decent ones sold these days) or you need a generous cushion of savings set aside (apart from daily expense and fun money) to fund a CCRC, assisted living or possibly a nursing home.

Or there's always the Medicaid solution- which most will seek by default. Transfer away all assets over the bare minimum allowed by law 5 years prior. Then rely on a facility that accepts medicaid. (The ones I've seen are not good.)

We got Long Term Care Insurance 20 years ago. Back when premiums were reasonable compared to today's premiums. My coverage costs $2,700 a year because I bought it when I was in my 40s. We had a broker check for us, and the cheapest coverage for me now would be $7,000.

 

[Dan Murphy]

When people talk about oversaving or think about what they need to retire, many don't consider (or don't want to think about) long term care needs.

Unless you have dedicated family members willing and able to be caregivers (which is a LOT to ask), you either need a robust ltc policy (with few decent ones sold these days) or you need a generous cushion of savings set aside (apart from daily expense and fun money) to fund a CCRC, assisted living or possibly a nursing home.

Or there's always the Medicaid solution- which most will seek by default. Transfer away all assets over the bare minimum allowed by law 5 years prior. Then rely on a facility that accepts medicaid. (The ones I've seen are not good.)

Oh, I get the official reason why (paying as employer and employee) and am more knowledgeable than the avg bear from 40+ years in biz + guiding others in starting businesses.

Many gig workers don't have expenses that offset the double SS they must pay: this varies greatly by nature of their work.

Scorps are definitely smarter for some, not for others. They cost more to set up and maintain. For anyone hoping to cut SS taxes through a lower claimed salary, IRS challenges those that seem under mkt avg. SCorps are great for accountants: more docs to file=more billable hrs. I've worked both ways.

I still don't buy the logic that every self employed worker should pay 2x SS and medicare taxes, w/zero added benefit.

Are you saying that you will NOT receive SS benefits, similar to many teachers and government employees, due to their pensions? Not that I agree with that law/rule either.

 

[Jasper&Bowie]

I have 1,189 days if I leave at the end of 2027. I will be 55 with 30 1/2 years. Hubby will still be working so we will switch to his insurance even though I will keep mine through retirement. I may have to stay until the end of 2028 if our youngest doesn't have insurance yet.

 

[shh]

Are you saying that you will NOT receive SS benefits, similar to many teachers and government employees, due to their pensions? Not that I agree with that law/rule either.

no - totally different rant, lol. I was piggybacking on posts discussing teacher/govt WEP rules by adding that there are a couple of other rules in SS land that don't seem quite fair to everyone playing either, so I empathize with their frustration.

As gig workers, we do get SS benefits - we're just taxed 2x for them. 15% of every $1 we earn goes to SS tax plus 2.9% to medicare tax. Traditional W-2 employees pay 7.5% and 1.45%. We can deduct this 100% extra tax as an expense, but it still doesn't pencil out equitably.

Sorry OP and others! Didn't meant to hijack the thread.