Thanks mcat.
Have you figured out the bare minimum you think you need to live? That’s a good start.
The calculator below that has been linked often is pretty great as it allows for inflation.
Play with the numbers.
http://financialmentor.com/calculator/best-retirement-calculator
Funny you should mention that, madison. I was just talking to someone who did just that- took a crossing guard job in her community to get the healthcare benefits. She has been doing it for a long time- wonder if ti will also come with a pension.
I don’t think that is an option where I live, unfortunately, meaning it is a non-benefit position (I just checked).
“Where I live many of the school crossing guards are in that between stage for healthcare - too young for medicare but ready to retire from full-time work with health insurance. So I learned that while the hours (10-15 per week) and pay (around $10-$15/hour) aren’t great, the positions come with very inexpensive healthcare. The catch is getting up early without fail and then returning 6 hours later and standing outside in weather ranging from 25 below windchill to 90 plus with humidity and everything in between.”
25 below windchill. Yikes!! That’s working hard for the healthcare. Isn’t there a nice, heated, low paid part time office job for the school system that comes with health care? I think that actually is a fantastic idea for someone who isn’t old enough to get medicare, but doesn’t want to work full time, in order to get health benefits. People who are part time at my company get health care benefits, some retirement and tuition assistance benefits. Unfortunately, often it involves working four hours in the middle of the night, and with the ACA giving people with low income health care for low costs, and some states providing expanded Medicaid…why work? I will be interested to see what they do when the applications run dry.
"What has me worried about retirement are the unknowns. Those things out of our control. It’s hard to plan when nothing is really ever guaranteed.
Promised Pension…can change
Promised Health care…can change. 6 yrs til medicare.
Social security…can change
Assets…can change with stock market even though we are conservative, which has hurt us these last few years"
That is exactly how I feel. Anything can change. You can plan forever, but you can’t plan for everything. And unless you have a skill that is always marketable, you may not be able to go back to work at a living wage. Kind of why we’re hanging onto these rental condos even though we don’t really enjoy it, for a future income stream in case everything else craps out.
Somehow, I think people need to drink a glass of wine, relax, and be able to enjoy their retirement. What fun is there if you’re too worried about the what ifs? Retiring early, at age 59, is AWESOME. You guys need to have fun in the years that you’re still mobile…hopefully there will be decades of those years. I really hope we feel comfortable enough to retire around that age, too!
^^ Man plans and God laughs.
Given my personal actuarials, I’m not sure if I should go live large while I’m around or be miserly in case I have another catastrophic event that I survive, but am severely impaired.
^^G-d must find me hilarious or something.
"“What has me worried about retirement are the unknowns” - There have been unknowns in the work life too. But retirement has the add pressure to make our own decisions (hopefully) about When.
One of our good friends invested well and retired in late 40s. He still needed a little income and health care for wife and young son. So he’s been driving a schoolbus. It works great for him, especially having time off when his son is off. When he does retire, he’ll have enough years to qualify for discount health care.
We have actually been more comfortable in retirement than anticipated. Remember, many predictable expenses are reduced or eliminated after retirement.
Once we paid all the kids college expenses and our mortgage off, we knew we could make it in retirement. H does have medical coverage as an annuitant–we pay 25-33% and his former employer pays the balance. H is also covered by Medicare, just for extra protection.
Doing the various formulas can just make you crazy. I agree the best gauge of whether you have enough is how much you currently spend and what you will continue to spend of those categories after retirement, as well as other spending you will or won’t do in retirement. For us, travel spending was boosted, but could easily be shrunken if funds get tight.
Same here, H retired in 2013 when he was 58. Even with the 24K per year health insurance premium, we actually have money left over for investments. Frugality is a hard habit to break.
Agree with @sax on the following:
I think our kids are becoming very well-positioned to be able to support themselves. But, things can happen. And I want our kids to know that we are there as a backstop but that would be a backstop to help them get back on their feet if that were feasible.
Overall, I think the Stanley book on kids has an implication which is that you have to help each kid learn to have a sustainable financial plan. There should be no value judgment on income. You can choose the career you want based upon what will leave you fulfilled but you design your expenses so that you spend less than you earn. Higher incomes mean you have the capacity to save more and thus have more security, but as Stanley points out, many people spend to the level of your income. Easy to do if you are a lawyer, even a well-paid one. Harder to do if you are a partner in a successful HF or PE firm.
@mcat2
I did not want to respond to your concerns until I’d given them some thought. I hope you interpret what I say in the spirit in which I post, which is as a recent collaborator in this very lengthy thread.
(1) It sounds like reading about other people’s scenarios is giving you anxiety. Just remember that none of us knows who the other posters are in real life. Some have chosen to share information in the context of the issue being discussed: whether it is pension v. lump-sum; Roth conversions; downsizing to a smaller home; premium cable; extravagance of vacations; any number of things. It makes for fun reading and I find that it helps put their views and opinions in context. If someone says that he has $X in retirement savings, and is ready to retire, that is great. But that is ALL we readers know. This person may have underestimated his expenses or be in poor health that may require long-term care. Or someone’s retirement funds may all be invested in two stocks, one of which is Apple and the other one is Goggle. No one knows. You should try to read posts with that in mind. You cannot compare yourself to anyone without context. Does it make sense?
(2) Your posts and user name suggest that your child or children are in medical school. If I’m guessing right, then you should try to stop worrying about how they will do financially when they are in practice. So long as they finish medical school, land an internship-residency-fellowship, they’ll be more than fine. They won’t be making too much money while they are in those years of training, but that should not come as a surprise to anyone. They should certainly be trying to live within their means. It took my H 10 years of medical school+training before starting his practice. During the years he earned any money at all while in training, he made less money/hour than what our next door neighbors paid their teenaged babysitter. Those years taught us how to live well below our means. Perhaps your child(ren) can do the same. That alone would free you from worrying about them when they start their professional lives because they will have learned one of the tenets of financial independence, which is not to spend every last dime of their income on instant gratification.
(3) The “formula” and its usefulness: I posted what the authors of The MND considered to be a good financial fitness test. People in this thread commented that they consider the book to be good and useful guide for their financial lifestyle. Whether or not you meet the authors’ “formula” is not intended to be a test for retirement readiness. It’s one guideline. Nothing more. Some are happy with their result, others haven’t been. Personally, I run our numbers through many retirement calculators and continue to do so every year as soon as I have that year’s figures in hand, typically during tax time. If I get good results consistently, I can claim that we are “on track.” Those tests and calculators are only good if you have accurate numbers and everyone will tell you THAT requires that you track your expenses accurately and evaluate your retirement resources judiciously. Projecting that inflation will be low is probably OK, but projecting that your rate of return will be an annual rate of 10% is probably foolish. Again, I hope you see my point.
I find this retirement thread very useful for the information and information generously shared by everyone. Kind of like the many SAT/ACT prep threads that populate CC. Everyone wants the highest score, and people will post about their 2300+ SATs and 35-36 ACTs. Great for them and I don’t begrudge them. But, back when I perused those threads, I was more interested in HOW they prepared so that I could help my D prepare in the most optimal way so that SHE could maximize her scores. If someone kindly shared a good book or resources, that was especially welcome.
About crossing guards: if your school district offers medical benefits for them, that’s wonderful. I just hope that’s true in most districts. All the years my D attended her elementary school, there was one kindly crossing guard and she loved seeing him as much as any of her teachers every day. He always had a happy disposition which I know I wouldn’t have if I were out there in the elements every day trying to flag down traffic.
The key thing is to learn and incorporate what you learn to apply to your own life. When you make money mistakes, learn from the mistake and move on.
H and I have felt so much more secure with having more financial diversification with our financial guy Don, and our 401k has grown to a level that we are no longer having the setbacks below a particular level - in part because I am looking more at it and we have had some good returns with the markets. H is just putting in 4% at this time, because so much money is making money and we need to build up emergency fund - home maintenance items and other things that can happen.
I bet @sax you will feel better as time goes on - that you control your spending, monitor what comes in, and monitor the sources of income and make any adjustments accordingly. Maybe do some kind of mantra before you go to bed, reassuring yourself that everything is good. Somehow your subconscious is still mulling things over. Do some things and plan some things that make you happy during the day that don’t cost a lot - and more and more of your day will be happy.
I do like to listen to Dave Ramsey while I am doing other things. He does have some good methods for people that are deeply in debt. He is right about four areas - thinking the same about money, working out religious differences, making sure about any family issues, and agreement about having children PRIOR to marriage.
H and my first jobs were many states away from our home state, in large part so that we could be independent of parent and in-law advice/interference, and good job opportunities. MIL wanted grandchildren immediately - another of her offspring fulfilled that many years (over a decade) before we had children. She had trouble turning off her running the show. Some have kids young and do great with that - they have the advantage of more energy! We were able to build up our finances, be in our ‘final’ home before kids were born.
Dave has a growing audience because of large student loan debt. He personally moved to a better school zone when he was recovering financially when his kids were young instead of private school. However he is not against people budgeting for private school and going if they can afford. He is from a practical brain kind of place - instead of liberal arts kind of thinking. Essentially someone does need to earn their own income one way or another. Sometimes people have a paying job and their passions are with their hobbies and their free time.
Life is not all about money - you just have to ‘have enough’. Dave seems to be two dimensional - money and Evangelical Christian. One or the other can turn someone off.
However having a financially positive life through retirement does take thinking, planning, adjusting.
In Oct, we will be 6 years from retirement, and continuing to count down!
I learn from what other people are doing and some of his special guest like Dr Meg Meeker. We (H and I) have credit cards that we pay off every month (and use store cards that give me various benefits) and we have a credit score that allowed us to get a 2.5% 10 year mortgage with low closing through one of our credit unions - I looked at the perfect time! Dave says having credit cards is ‘playing with snakes’ - but all of us with sense do know how to use them appropriately. There are buying behaviors (like buying something easier using debit or credit card versus cash for some - while some that have cash in their pocket will spend it before writing a check) different for different people. I am interested in human behavior to a certain extent (BS in Psychology, graduate business concentration in marketing).
Glad people have found a way to pay for health care before 65, be it a job that gives a low cost option, or out of pocket ($24K - yikes for me!). My dad closed his company when he was 58/59 due to no longer profitable and he had other income sources - so he went from company BCBS to paying high risk insurance available in his state for himself - $11,000 in premiums/year and $2000 deductible just for himself in 1990-1995; mom was able to have a lower cost individual policy. So he was paying substantially more for just himself based on what things cost 20 years ago.
One of my kid’s careers is more financially fruitful than the other, but each has personalities that can live within their income level. Dave’s semester HS class was helpful for DD2 that needed to learn the income/expense principles, while DD1 is naturally frugal like her father. We are helping structure things for the kids like Roth IRAs and term insurance. We hope to leave an estate for them like my parents did for my siblings and myself.
There is an awful lot of life to learn in early years. H and I didn’t know insurance and stumbled around on that. Term insurance was more difficult to find back then than now.
I think one of the worst financial and personal mistakes is when one marries badly - and it doesn’t mean someone making a lot of money or coming from a wealthy family. You want to be able to carry on through life with a life partner. You also have to take care of your health.
eliminated repost
AttorneyMother, very wise.
And at the end of the day we won’t know who truly had a happy life until … the end of the day.
@hayden
Thank you. I’ve used up my reasonableness for the day and will now return to fretting. 
I wish I knew half as much about investing as many of the posters here. We have certainly made investing errors along the way. I will be retreading many of these posts.
But here is what I do know. My husbands job is sucking the life out of him. It’s time to go. No matter how much money we leave on the table…it is time to go. What we have will have to be enough.
SOSConcern…we have also both had cancer. A serious wake up call to what is important in life.
You are right…you just need enough…and a little bit of luck.
@notrichenough, love your advice in post 5395.
@sax
I remember one NYC financier whose wife I knew through business contacts back in the 1990s. He was a principal at Drexel Burnham back when it was the source of junk bond financing and was one of the good guys described in “Den of Thieves.” Anyway, the wife always told me that people would ask her husband about “good investments” they could make. His answer always was “I don’t know.” What he was trying to say was he could look at financial statements and tell you what they say about a company but that he could not / would not tell anyone what is a good investment for them unless he stood squarely in their place. I took that to mean that it’s best to understand one’s own risk tolerances before I decided what to do.
It makes sense to value non-financial goods like your health and well-being as highly as monetary balances.
@sax, I think that if you aren’t a professional investor, the evidence is strong that buy-and-hold on average beats attempting to time the market because most people time the market by getting out too late and getting back in too late. Twenty years ago (?), I helped set up a couple of hedge funds that were very tightly focused and could see how hard it was to make and stay on top of investment decisions (I never ran anything and just kibitzed). When we closed the funds, I either put things in index funds or with professionals – I don’t have the time to do the work and may not have the emotional wherewithal to time the market even if I think I could read it (which I don’t).
Recently I was advising a very wealthy investor. Very smart guy with a long history of buying stocks at deep value. I asked him about a replacement for an investment I’d made that was cashing out. He advised me to put it into four companies in the same industry, but said, “I hate to do this because I’m not going to tell you when to get out.” It takes a pro to do it well – although there are some people on this thread who may be doing it well also. The most I make are some sectoral bets.