Retire earlier or wealthier?
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Retire earlier or wealthier?
I'm wondering if people save more so they can be retire earlier or have a higher standard of living in retirement.
- pennstater2005
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Re: Retire earlier or wealthier?
Would like to go part time by 55. To be seen I guess.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
Re: Retire earlier or wealthier?
I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
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Re: Retire earlier or wealthier?
It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
Re: Retire earlier or wealthier?
To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
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Re: Retire earlier or wealthier?
Definitely retire early. With my personality, that will probably morph into a new job, if only volunteering for charity pretty quickly- but I always liked the idea. I like it more as some of my senior co-workers reach the point where they could retire, but are delay it for whatever reason. The look of relief, of the weight off your shoulders when you can walk at any time....I like my job overall, but how could I not want to get to that point?
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Re: Retire earlier or wealthier?
I'm not talking about low health insurance rates - but group rates rather than the current , probably 80% higher than group rates that individuals buying health insurance pay vs groups. It may well be good ( I hope ) for early retirees which was the original topic since it would seem to remove some of the "health care uncertainty" from the retire early equation.VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
Re: Retire earlier or wealthier?
You may be right. I was not paying much attention to the Affordable Care Act, because my situation is similar to cinghiale's. Once I qualify, my payments will be much lower than anything I would get with the ACA.hicabob wrote:I'm not talking about low health insurance rates - but group rates rather than the current , probably 80% higher than group rates that individuals buying health insurance pay vs groups. It may well be good ( I hope ) for early retirees which was the original topic since it would seem to remove some of the "health care uncertainty" from the retire early equation.VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: Retire earlier or wealthier?
They did (inheritance), and I did (retire earlier).
- pennstater2005
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Re: Retire earlier or wealthier?
Any idea what qualifies as low income?VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
Re: Retire earlier or wealthier?
I don't know, because as I noted I will not be using the ACA, and thus I was not studying its details.pennstater2005 wrote:Any idea what qualifies as low income?VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: Retire earlier or wealthier?
hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
No sure what you mean by group rates, but check out this on-line PPACA premium calculator.
http://healthreform.kff.org/subsidycalc ... ?source=QL
If you are single, 55 years old, live in a medium cost area and make $46,021 in 2014 dollars you get subsidized and pay $4372 in premiums (get a $4123 tax credit). Make one dollar more, $46,022, and you pay $8495 in premiums. That is not affordable for most people. My employer's health insurance group rate is about $3,000/year (employer pays $2222 of this amount based on my W-2 info).
It's my understanding that pension income, tax exempt municipal bond interest, etc. all count towards figuring one's income when it comes to the PPACA.
Mike
Avatar is a Japanese Cherry tree in Washington, DC during the peak cherry blossom time.
Re: Retire earlier or wealthier?
@ the original question:
I saved more and kept the same job in order to retire early. I did stay until 55 instead 53.5 or 54, in order to get no deductible, retiree health care for $50 a month. Retire early was my goal within a year of starting full time employment, but I wasn't a good investor during those early years. Now I see friends making those same early mistakes, but they are in their 50s, so there was a benefit from those losses.
Staying at work to become wealthier when you have enough to have a good life at a lower middle class level just doesn't make sense to me. Others are welcome to do as they wish, to suit their definition of "enough".
DW and I still save to travel, but when we go to Hawaii we do not stay at expensive hotels. We do go to the same beaches and scenic places. That shows the different utility of marginal wealth.
I saved more and kept the same job in order to retire early. I did stay until 55 instead 53.5 or 54, in order to get no deductible, retiree health care for $50 a month. Retire early was my goal within a year of starting full time employment, but I wasn't a good investor during those early years. Now I see friends making those same early mistakes, but they are in their 50s, so there was a benefit from those losses.
Staying at work to become wealthier when you have enough to have a good life at a lower middle class level just doesn't make sense to me. Others are welcome to do as they wish, to suit their definition of "enough".
DW and I still save to travel, but when we go to Hawaii we do not stay at expensive hotels. We do go to the same beaches and scenic places. That shows the different utility of marginal wealth.
Re: Retire earlier or wealthier?
It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
Last edited by YDNAL on Sun Feb 10, 2013 10:17 am, edited 1 time in total.
Landy |
Be yourself, everyone else is already taken -- Oscar Wilde
Re: Retire earlier or wealthier?
We saw in an earlier thread that folks who kept working did not increase their standard of living because their taxes ate up all the gains that their wealth gave them. They would have been better off retiring earlier and would have maintained the same standard of living.
Re: Retire earlier or wealthier?
Retire Earlier
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: Retire earlier or wealthier?
I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
Re: Retire earlier or wealthier?
You either missed my point totally, Jim, or I wasnt sufficiently clear.JimInIllinois wrote:I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
- A 55yo with $100K saved whose savings "increase 50% overnight" is not in position to be thinking retirement, etc.
- Relatively speaking, 50% is 50%, but $100K vs. $150K at 55yo is what it is.
Landy |
Be yourself, everyone else is already taken -- Oscar Wilde
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Re: Retire earlier or wealthier?
I think the opportunities are exactly the same: work less or spend more. $50K isn't "retire now" money, but it's a year or two of living expenses so you can retire earlier than you otherwise could have or lifestyle enhancements (before or after retirement) if you don't.YDNAL wrote:You either missed my point totally, Jim, or I wasnt sufficiently clear.JimInIllinois wrote:I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
- A 55yo with $100K saved whose savings "increase 50% overnight" is not in position to be thinking retirement, etc.
- Relatively speaking, 50% is 50%, but $100K vs. $150K at 55yo is what it is.
I suspect that most people have both a target retirement age and a target retirement lifestyle and would retire early if they could be sure of maintaining that lifestyle, but will reduce their lifestyle expectations to avoid working much past their target age.
Re: Retire earlier or wealthier?
This isn't a hypothetical for us; it happened last year. It occurred to my husband that he could retire and volunteer for a charity that we support. But his time as a volunteer isn't worth nearly as much to the cash strapped charity as the $ he can afford to give while he keeps working. So we increased our financial support.digit8 wrote:Definitely retire early. With my personality, that will probably morph into a new job, if only volunteering for charity pretty quickly- but I always liked the idea. I like it more as some of my senior co-workers reach the point where they could retire, but are delay it for whatever reason. The look of relief, of the weight off your shoulders when you can walk at any time....I like my job overall, but how could I not want to get to that point?
I think much the value lies in the knowledge that one is free to walk away. You don't have to actually do it.
Re: Retire earlier or wealthier?
What??? Could you link to this please?livesoft wrote:We saw in an earlier thread that folks who kept working did not increase their standard of living because their taxes ate up all the gains that their wealth gave them. They would have been better off retiring earlier and would have maintained the same standard of living.
Re: Retire earlier or wealthier?
I would be thrilled to pay only $8495 in health care premiums, compared to the $12K I now pay annually.ascenzm wrote:hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
No sure what you mean by group rates, but check out this on-line PPACA premium calculator.
http://healthreform.kff.org/subsidycalc ... ?source=QL
If you are single, 55 years old, live in a medium cost area and make $46,021 in 2014 dollars you get subsidized and pay $4372 in premiums (get a $4123 tax credit). Make one dollar more, $46,022, and you pay $8495 in premiums. That is not affordable for most people.
Mike
Re: Retire earlier or wealthier?
I am 57 years old, currently working and really enjoy my career in sales and can see doing this until they shove me out the door (with workplace changes which are difficult to handle) or they make me an offer I cannot refuse. Meanwhile, my wife can see the day she retires, so perhaps I will continue on with the health coverage (currently her's is better) and work for another 10 years.
Technology has made my career much easier. With 23 years with the same company, I have gone from making phone calls from phone booths to limited number of minutes of cell coverage to today's world of email being the primary means of communication. Actual sales calls (face to face time with customer) has gone from 20+ per week to perhaps 5 per week. Working out of my home makes it that much better.
So, for me it is not about more money, but simply figuring out what to do with the next phase of my life and keeping busy. Health care is probably more critical than accumulating more $$$.
Ed
Technology has made my career much easier. With 23 years with the same company, I have gone from making phone calls from phone booths to limited number of minutes of cell coverage to today's world of email being the primary means of communication. Actual sales calls (face to face time with customer) has gone from 20+ per week to perhaps 5 per week. Working out of my home makes it that much better.
So, for me it is not about more money, but simply figuring out what to do with the next phase of my life and keeping busy. Health care is probably more critical than accumulating more $$$.
Ed
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Re: Retire earlier or wealthier?
I chose to retire earlier. It's done wonders for my overall health. I've had more time and inclination to eat healthy and exercise and my stress level has been decreased substantially. I was fortunate to be healthy and have remained so.
Last edited by FrugalInvestor on Sun Feb 10, 2013 5:09 pm, edited 1 time in total.
Have a plan, stay the course and simplify. Then ignore the noise!
Re: Retire earlier or wealthier?
I'm close anyway with only a year or two to go. It would only take about 10% for me to pull the plug now.
Re: Retire earlier or wealthier?
Not quite, Jim, $100K + $50K is not "retire earlier than you otherwise could.." The point is that a 50% increase in savings is relative.JimInIllinois wrote:I think the opportunities are exactly the same: work less or spend more. $50K isn't "retire now" money, but it's a year or two of living expenses so you can retire earlier than you otherwise could have or lifestyle enhancements (before or after retirement) if you don't.YDNAL wrote:You either missed my point totally, Jim, or I wasnt sufficiently clear.
- A 55yo with $100K saved whose savings "increase 50% overnight" is not in position to be thinking retirement, etc.
- Relatively speaking, 50% is 50%, but $100K vs. $150K at 55yo is what it is.
I suspect that most people have both a target retirement age and a target retirement lifestyle and would retire early if they could be sure of maintaining that lifestyle, but will reduce their lifestyle expectations to avoid working much past their target age.
Sure, people with with a "date" target vs. "lifestyle" target MAY retire early if they can meet the latter. That doesn't necessarily translate to a 50% addition to savings or anything of the sort.
Go HEAT!
Landy |
Be yourself, everyone else is already taken -- Oscar Wilde