How young is too young to retire.

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CnC
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How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 1:33 pm

Hey all, I have been here most of a year now and have read tons of interesting and varied threads and opinions.

As I have begun running my financial number forcasting possible outcomes I have found that under average to above average market conditions my original goal of retirement at age 55 is overly conservative. Granted I know that there is at least a 50% chance that the next 20 years will below average and I plan to adjust my goals accordingly to deal with lower returns.

Everything below is assuming that we keep our jobs, if not plans will change.

If DW and I retire at 55 and take Social Security at 62 we will need to make up 15k-40k a year in future dollars from 55-62 and will then surplus 50-60k a year from then on till end of life.

We are both in our early 30's with a portfolio roughly 8x our yearly expenses with plans of saving and investing ±50% of our income from now until we retire.

Under average or better market conditions by 45 our investments will more than cover our expenses via the 4% rule completely ignoring my pension and our social security.

My wife seems to think that even considering retirement before 50 is absurd regardless of how much money we have simply because the time frame is too long.



So my questions are these, once you hit your magic number does age matter? Other than the younger you are the bigger it is.

Social security is based off of your top 35 years, if you can afford to finance your own retirement via investing is getting that last 5-7 years that important?

I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?

Grt2bOutdoors
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Re: How young is too young to retire.

Post by Grt2bOutdoors » Thu Oct 12, 2017 1:49 pm

A big part of retirement is about more than just numbers - there is a social aspect whose gap must be filled. Are you prepared to fill it? How will you fill it - while you are home, your neighbors, friends and relatives are out and about working. After a while, home projects dwindle. Don't underestimate the need for social stimulation to make your retirement worth living for. The television should not be your primary stimulation.


If you are going to retire in your early 50's, then the 25x rule is out, instead you should bank on the 33x rule, that is 33x expenses. Why is that? Well, while a male has an average life expectancy of 84 years, females are statistically more likely to live longer on average. How are you going to pay for healthcare from age 55-65? Go price family health insurance today, then using an inflation factor of 10% (i'm being conservative, rates have increased at higher rates) figure out what it will cost you annually come age 55 and then out to age 65. More is better than less (that is an understatement!).
Second, go to www.ssa.gov and set up you account, there are tools on their that let you estimate what having 25 years of work will do to your estimated FRA benefit. What you are talking about is not a cut of 5-7 years, but potentially a cut of 43% - the true FRA is not 67, but age 70. Each year you delay benefits up until age 70 increases your benefit by an additional 8% per year. So now we are talking about 5-7 years (age 62) plus an additional eight years that would take you to age 70 (15/35 years) - 42.8% reduction in maximum benefits.

Listen to your wife. :)
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

soccerrules
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Re: How young is too young to retire.

Post by soccerrules » Thu Oct 12, 2017 1:51 pm

CnC-
the short answer is -- it's YOUR choice. Do it if you can afford to.

General comments about your post that I have read in other posts (assume you have too)
1) 4% SWR typically applies to those retiring in late 50's more early 60"s and planning for a 30 years time frame. I read that 4% SWR is riskier for a 40+ year timeframe, 3% might be more appropriate
2) Are you ready to retire TO SOMETHING ? what would you do with your time? (Psychologically ! -- this seems to be what your post is about)
3) as far as SS. If you individually have earned enough of indexed earnings to hit the 2nd bend point-- the extra 5-7 years will not make a huge difference, but it could mean $200-300/mo in individual benefit depending on your yearly earnings. Twice as much if both of you have similar earnings records. ($7K a year is not small potatoes) Of course if you are younger (20s-30s) there is some question about what SS will look like in 30 years.

Bottom line is you will have options and that is what matters. Plan to hit 55 (or sooner). Once you get to 40-45, pick your head up and things will be more clear then.
Don't let your outflow exceed your income or your upkeep will be your downfall.

avalpert
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Re: How young is too young to retire.

Post by avalpert » Thu Oct 12, 2017 1:53 pm

You might want to read through this series to get a better appreciation for safe withdrawal rates over longer time frames - part 17 includes an analysis of how social security impacts it (for earlier retirements the answer is not that much).

mega317
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Re: How young is too young to retire.

Post by mega317 » Thu Oct 12, 2017 1:54 pm

^ great posts. Especially about the social aspect.

I just want to add one potentially mitigating factor in the numbers which is, some lucky people can get health insurance through your employer even after they retire. That would likely be less expensive than getting it on your own.

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Raybo
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Re: How young is too young to retire.

Post by Raybo » Thu Oct 12, 2017 1:56 pm

Early retirement means that all of your friends will still be working while you are not. If you have hobbies/interests that can be done solo or together with your wife or kids, not having established friends around is OK. If you like doing things with other people, you will either have to find new friends or learn to enjoy things by yourself.

How do you make your friends now? If it is through work, then you will need to find a way to make new non-work friends. Volunteering is always a possibility but then most of your co-volunteers will be much older than you.

Money is something that can be calculated, estimated, forecast, and invested (relatively) safely. But, time is another thing altogether.

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Re: How young is too young to retire.

Post by climber2020 » Thu Oct 12, 2017 1:58 pm

CnC wrote:
Thu Oct 12, 2017 1:33 pm


My wife seems to think that even considering retirement before 50 is absurd regardless of how much money we have simply because the time frame is too long.

How bout going part time once you hit a comfortable number? That's my plan regardless of how old I am when I reach that threshold.

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Pajamas
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Re: How young is too young to retire.

Post by Pajamas » Thu Oct 12, 2017 2:09 pm

It may help you and your wife to think in terms of being financially independent rather than in terms of working or retiring as they can be completely separate. Once you are financially independent, you don't have to exchange your time and effort for money, but you can if you want to. It's not hard to find things to do and those things may be more meaningful and satisfying than whatever it is that you do to get money now. On the other hand, some people like their work and keep doing it full- or part-time. Being financially independent gives you choices and freedom.

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Re: How young is too young to retire.

Post by niceguy7376 » Thu Oct 12, 2017 2:16 pm

Are there kids in the picture?

I personally would love to retire now at 41 (retire from rat race to have a paycheck) and do what I love to do. I have enough things to do, people to meet (that are available during work hours) and places to visit that I would definitely not miss friends and relatives during regular work hours.

But, it is just a pipe dream as of now because I have two kids to take care of and also the huge white elephant of the Health Insurance.

CnC
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Re: How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 2:23 pm

Pajamas wrote:
Thu Oct 12, 2017 2:09 pm
It may help you and your wife to think in terms of being financially independent rather than in terms of working or retiring as they can be completely separate. Once you are financially independent, you don't have to exchange your time and effort for money, but you can if you want to. It's not hard to find things to do and those things may be more meaningful and satisfying than whatever it is that you do to get money now. On the other hand, some people like their work and keep doing it full- or part-time. Being financially independent gives you choices and freedom.

Yes I understand if we "retire" at 45 it is unlikely that I will never earn another paycheck.

I'm in construction management/engineering and in my position with my current 10 years of experience I can walk into any of a dozen jobs if I choose unless the climate drastically changes in 15+ years I should have a very in demand skillset.

I may look into getting a job where I run 1 project a year just to stay relevant and then stop working for the year. We also will own quite a bit of acreage of woods and farm ground through the family.

I definitely don't plan on sitting on the couch watching TV and eating Cheetos for the rest of my days!

CnC
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Re: How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 2:33 pm

niceguy7376 wrote:
Thu Oct 12, 2017 2:16 pm
Are there kids in the picture?

I personally would love to retire now at 41 (retire from rat race to have a paycheck) and do what I love to do. I have enough things to do, people to meet (that are available during work hours) and places to visit that I would definitely not miss friends and relatives during regular work hours.

But, it is just a pipe dream as of now because I have two kids to take care of and also the huge white elephant of the Health Insurance.

Yes we have 2 kids these numbers are including a good $200,000 -$300,000 for local state schools like we went to if we have another we will likely bump it back another year so we will have an extra $100+ for our third to go to school.

Our kids are one of her sticking points, she keeps saying how wierd and unnatural it would be for us to be "retired" before all of our kids graduated college. Which I admit it would be exceedingly wierd to meet the in-laws and explain that yes we are retired and no we didn't get laid off and we didn't win the lottery or get some inheritance. :shock:

As you said this is all just a pipe dream I'm just wondering what other people here think about it since everyone I know in the real world lives ± paycheck to paycheck and it would be very rude to bring it up. It's awkward enough to admit our house is paid off.

ThriftyPhD
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Re: How young is too young to retire.

Post by ThriftyPhD » Thu Oct 12, 2017 2:34 pm

CnC wrote:
Thu Oct 12, 2017 1:33 pm
Under average or better market conditions by 45 our investments will more than cover our expenses via the 4% rule completely ignoring my pension and our social security.
For one, the 4% 'rule' isn't really a rule as much as a rule of thumb. Worth reading up on Safe Withdrawal Rates. Note that in general, 30 years has been used as the retirement time. If you're retiring at 45, you may need to plan on 40-50 years for one of you to need retirement income. This extended timeline tends to reduce the safe withdrawal rate to obtain the same percent chance of success.

Also something that early retirement people need to consider is healthcare. You would be 20+ years from medicare, and without access to an employer plan you'll be paying full price. Price goes up as you age, so this would be an increased expense compared to what you pay now, and may grow faster than inflation. So plan for your expenses to grow after retirement.

CnC wrote:
Thu Oct 12, 2017 1:33 pm
Social security is based off of your top 35 years, if you can afford to finance your own retirement via investing is getting that last 5-7 years that important?
Depends if you're in the 90%, 32%, or 15% brackets on average monthly income.
CnC wrote:
Thu Oct 12, 2017 1:33 pm
I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?
The younger you are, the more unknowns you'll have. Someone who is retiring at 30 doesn't know if they'll get married, if kids will go to college, weddings, etc. In addition to having a lower SWR, this requires you to budget a bigger amount for unknown expenses. The closer you are to 'normal' retirement, the more locked in your expenses will be, and you can plan better.

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Re: How young is too young to retire.

Post by Jack FFR1846 » Thu Oct 12, 2017 2:35 pm

Kids? College? Quarter mil each for private school (what I currently pay).
Bogle: Smart Beta is stupid

CnC
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Re: How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 2:44 pm

ThriftyPhD wrote:
Thu Oct 12, 2017 2:34 pm
CnC wrote:
Thu Oct 12, 2017 1:33 pm
Under average or better market conditions by 45 our investments will more than cover our expenses via the 4% rule completely ignoring my pension and our social security.
For one, the 4% 'rule' isn't really a rule as much as a rule of thumb. Worth reading up on Safe Withdrawal Rates. Note that in general, 30 years has been used as the retirement time. If you're retiring at 45, you may need to plan on 40-50 years for one of you to need retirement income. This extended timeline tends to reduce the safe withdrawal rate to obtain the same percent chance of success.

Also something that early retirement people need to consider is healthcare. You would be 20+ years from medicare, and without access to an employer plan you'll be paying full price. Price goes up as you age, so this would be an increased expense compared to what you pay now, and may grow faster than inflation. So plan for your expenses to grow after retirement.

CnC wrote:
Thu Oct 12, 2017 1:33 pm
Social security is based off of your top 35 years, if you can afford to finance your own retirement via investing is getting that last 5-7 years that important?
Depends if you're in the 90%, 32%, or 15% brackets on average monthly income.
CnC wrote:
Thu Oct 12, 2017 1:33 pm
I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?
The younger you are, the more unknowns you'll have. Someone who is retiring at 30 doesn't know if they'll get married, if kids will go to college, weddings, etc. In addition to having a lower SWR, this requires you to budget a bigger amount for unknown expenses. The closer you are to 'normal' retirement, the more locked in your expenses will be, and you can plan better.

Could you give me some more information about the social security brackets? I have heard that the ROI greatly changes based on your income but I haven't had it really explained.


I figured we would be spending 25%- 50% yearly adjusted for inflation more than we currently do hoping that would cover medical and toys.


If we retire at 45 our age 62 pension and social security (estimated because I'm not sure if it is taking into account being under 35 years) will cover 75% of our expenses then our rate of withdrawal will be around 2% so that's why I thought the 4% for 10 years 3% for 7 years then 2% for remainder of life would be reasonable

CnC
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Re: How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 2:50 pm

By the way, I am not asking if I can retire, at absolute best we are talking 13+ years in the future of money I don't yet have.

I'm just more trying to think of all the pitfalls. Thanks to everyone so far, if it seems like I'm trying to justify retirement it's just my was of answering questions saying that I did consider them.

I just have been very impressed with the additional things people here mention and think of that I do not. That's the purpose of my questions.

runner540
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Re: How young is too young to retire.

Post by runner540 » Thu Oct 12, 2017 2:51 pm

CnC wrote:
Thu Oct 12, 2017 2:33 pm
niceguy7376 wrote:
Thu Oct 12, 2017 2:16 pm
Are there kids in the picture?

I personally would love to retire now at 41 (retire from rat race to have a paycheck) and do what I love to do. I have enough things to do, people to meet (that are available during work hours) and places to visit that I would definitely not miss friends and relatives during regular work hours.

But, it is just a pipe dream as of now because I have two kids to take care of and also the huge white elephant of the Health Insurance.

Yes we have 2 kids these numbers are including a good $200,000 -$300,000 for local state schools like we went to if we have another we will likely bump it back another year so we will have an extra $100+ for our third to go to school.

Our kids are one of her sticking points, she keeps saying how wierd and unnatural it would be for us to be "retired" before all of our kids graduated college. Which I admit it would be exceedingly wierd to meet the in-laws and explain that yes we are retired and no we didn't get laid off and we didn't win the lottery or get some inheritance. :shock:

As you said this is all just a pipe dream I'm just wondering what other people here think about it since everyone I know in the real world lives ± paycheck to paycheck and it would be very rude to bring it up. It's awkward enough to admit our house is paid off.
There have been some other threads about how young is too young to advertise that you're "retired". As I recall, some posters suggested referring to your work status as "independent consulting" or "in transition". No need to tell anyone that you have enough dough to never work again.

LiterallyIronic
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Re: How young is too young to retire.

Post by LiterallyIronic » Thu Oct 12, 2017 2:52 pm

CnC wrote:
Thu Oct 12, 2017 2:23 pm
I definitely don't plan on sitting on the couch watching TV and eating Cheetos for the rest of my days!
I do. :D
CnC wrote:
Thu Oct 12, 2017 2:33 pm
Our kids are one of her sticking points, she keeps saying how wierd and unnatural it would be for us to be "retired" before all of our kids graduated college. Which I admit it would be exceedingly wierd to meet the in-laws and explain that yes we are retired and no we didn't get laid off and we didn't win the lottery or get some inheritance.
Heh. We just had our first baby earlier this year. The race is already on - my retirement versus our baby's future high school graduation. I guess that would be June 2035.

So, to your question, I would say that there is no "too young" to retire. If you have the money, why not retire as soon as you finish your education to the desired level and never work a day in your life?

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Re: How young is too young to retire.

Post by rkhusky » Thu Oct 12, 2017 2:56 pm

CnC wrote:
Thu Oct 12, 2017 2:44 pm
Could you give me some more information about the social security brackets? I have heard that the ROI greatly changes based on your income but I haven't had it really explained.
Your SS benefit is based on your top 35 years adjusted for inflation, with the adjustment factors provided by the government. There are two bend points in the conversion between your adjusted average yearly SS wage and your SS benefit. From 0 to the first bend point, you get 90% of the amount, between the two bend points your get 32% of the amount, and above the second bend point you get 10%. SS is a flat rate on contribution, but is progressive on payout. Roughly, and this may be a bit dated, if you average $20K per year you will end up at the 1st bend point, $50K per year is at the 2nd bend point, and you don't pay into SS beyond $110K per year.

ThriftyPhD
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Re: How young is too young to retire.

Post by ThriftyPhD » Thu Oct 12, 2017 3:01 pm

CnC wrote:
Thu Oct 12, 2017 2:44 pm
ThriftyPhD wrote:
Thu Oct 12, 2017 2:34 pm
CnC wrote:
Thu Oct 12, 2017 1:33 pm
Under average or better market conditions by 45 our investments will more than cover our expenses via the 4% rule completely ignoring my pension and our social security.
For one, the 4% 'rule' isn't really a rule as much as a rule of thumb. Worth reading up on Safe Withdrawal Rates. Note that in general, 30 years has been used as the retirement time. If you're retiring at 45, you may need to plan on 40-50 years for one of you to need retirement income. This extended timeline tends to reduce the safe withdrawal rate to obtain the same percent chance of success.

Also something that early retirement people need to consider is healthcare. You would be 20+ years from medicare, and without access to an employer plan you'll be paying full price. Price goes up as you age, so this would be an increased expense compared to what you pay now, and may grow faster than inflation. So plan for your expenses to grow after retirement.

CnC wrote:
Thu Oct 12, 2017 1:33 pm
Social security is based off of your top 35 years, if you can afford to finance your own retirement via investing is getting that last 5-7 years that important?
Depends if you're in the 90%, 32%, or 15% brackets on average monthly income.
CnC wrote:
Thu Oct 12, 2017 1:33 pm
I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?
The younger you are, the more unknowns you'll have. Someone who is retiring at 30 doesn't know if they'll get married, if kids will go to college, weddings, etc. In addition to having a lower SWR, this requires you to budget a bigger amount for unknown expenses. The closer you are to 'normal' retirement, the more locked in your expenses will be, and you can plan better.

Could you give me some more information about the social security brackets? I have heard that the ROI greatly changes based on your income but I haven't had it really explained.


I figured we would be spending 25%- 50% yearly adjusted for inflation more than we currently do hoping that would cover medical and toys.


If we retire at 45 our age 62 pension and social security (estimated because I'm not sure if it is taking into account being under 35 years) will cover 75% of our expenses then our rate of withdrawal will be around 2% so that's why I thought the 4% for 10 years 3% for 7 years then 2% for remainder of life would be reasonable
https://www.ssa.gov/pubs/EN-05-10070.pdf

You calculate your average monthly earnings from the 35 years with the highest annual earnings (indexed for inflation, and up to a maximum earnings per year). Then, multiply the first $885/month by 0.9, the portion from $885 to $5,336 by 0.32, and the rest, up to a maximum of $9,875/month, by 0.15. This will be your monthly social security payment. So, once your average monthly salary becomes greater than $5,336, you're only increasing your SS amount by $0.15 for each extra dollar increased on the monthly average. These are the bend points someone mentioned above.

Then, if you plan to retire at 62, multiply the above by 0.74 to calculate the reduction in taking early social security. You can see the maximum amount here: https://www.ssa.gov/oact/cola/examplemax.html

Slacker
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Re: How young is too young to retire.

Post by Slacker » Thu Oct 12, 2017 3:05 pm

CnC wrote:
Thu Oct 12, 2017 2:44 pm

If we retire at 45 our age 62 pension and social security (estimated because I'm not sure if it is taking into account being under 35 years) will cover 75% of our expenses then our rate of withdrawal will be around 2% so that's why I thought the 4% for 10 years 3% for 7 years then 2% for remainder of life would be reasonable
If your 4% covers the greatly increased healthcare costs - I think your plan is reasonable. You are saying you have a pension that starts at age 55?

With 4% for only 10 years and 3% or lower from there on out, the plan you have actually sounds very conservative unless you experience a huge loss in the first few years, but at 45-48 it may not be that difficult to go back to work and still make relatively decent wages to ride through such market turmoil.

renue74
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Re: How young is too young to retire.

Post by renue74 » Thu Oct 12, 2017 3:06 pm

I'm thing I'm for sure....when you walk out that door, they aren't going to give you a gold watch and they aren't going to really miss you. Bonus....on your obituary, they aren't going to say "He was a good worker and manager." I'm never one to think about what other people think about me...so I wouldn't be worried about that.

Like someone else said....you should plan for what you goals are in retirement and be aware things change....even when you are in your late 50s or 60s...things can change.

How many bogleheads save for retirement, secure a very nice retirement lifestyle, and still leave millions to their kids? We all don't have crystal balls to find out when we will die, but the one thing that we all must agree on: Time is more valuable than money.

Slacker
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Re: How young is too young to retire.

Post by Slacker » Thu Oct 12, 2017 3:07 pm

Here is an interesting take on Bengen's "4% rule" which was reportedly not actually a "4% rule" but the Trinity study had just used 4% as it was easier and catchier than saying the "4.2% rule"

https://www.fa-mag.com/news/how-much-is ... 10496.html

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Sandtrap
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Re: How young is too young to retire.

Post by Sandtrap » Thu Oct 12, 2017 3:09 pm

Beyond the numbers and the minutiae of projection and forecast, there is another aspect of "retiring young".

Onward:

There is no age, too early or too late, in which one can reinvent oneself and one's lifestyle. And, in that, the term "retire" is unique to everyone beyond the financial aspects.
To some "early retirement" is the idea of no longer being an employee, collecting a paycheck, having sufficient monthly income to take care of one's needs, get off the "treadmill" or "hamster wheel" so to speak. And, that would be the end of it.
To others, it's a jumping off point for other endeavors that are more entrepreneurial than leisurely; open a consulting business, open a chain of laundromats, or. . .like Ray Croc, who "retired" from the Lilly Paper Cup Company, buy a small hamburger stand from the McDonald brothers and found what we know of today as, "McDonalds".
The later path would negate whether you need 25x or 33x or yx.
As was said earlier, it's more than just numbers. There's a lot more years ahead and what happens there should also be considered.

Some actionable and non-actionable thoughts to consider as you consider early retirement.
Some may find value in it, others not so.
Congratulations on your accomplishments.
j :D
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Re: How young is too young to retire.

Post by Meg77 » Thu Oct 12, 2017 3:12 pm

I don't think there is an age where you are too young to retire. Plenty of people are born with enough to "retire" and never launch traditional careers. Others inherit windfalls from deceased spouses or parents; still others earn millions or sell a company, giving them the ability to give up their careers if they want to at a relatively young age.

This doesn't mean they sit around doing traditional retirement activities for decades though. It doesn't even mean they think of themselves as retired or ever use that word. Many people volunteer or serve on boards or focus on their kids/family and discuss those activities when asked what they "do." They may dabble in activities that sound like paying occupations and may conceal early retirement: writing a book, investing in a real estate project or other start up, consulting, freelancing, etc. For example, my mom does online tutoring 12 hours a week and has a small time window treatment (aka curtains) business, but she is fully "retired" in every sense of the word. If a stranger were to ask what she does, she could spin the story any way she wanted to.

More people than you know go without traditional jobs. Just look how full all the malls and Starbucks's and parks are on a weekday afternoon if you want some proof. Whether they are a student or unemployed or retired or parenting or freelancing or side-gigging or entrepreneuring is becoming less and less of a stark dividing line.
"An investment in knowledge pays the best interest." - Benjamin Franklin

JBTX
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Re: How young is too young to retire.

Post by JBTX » Thu Oct 12, 2017 3:20 pm

Agree with a lot of the posts especially gr82Boutdoors. A lot can happen in 20-30 years. Your individual situations change. The market has a long protracted pull back. Social security laws change making it much less lucrative. Agree 33x is better goal to shoot to early retirement.

I’m 54 and not working at the moment for the last couple of months. In some ways it is nice but also you feel a bit odd while most of the rest of the world is working and you aren’t.

Agree keep doing what you are doing and shoot for financial independence. Then you have options. If you like work no reason to stop. Or maybe contract or part time or change professions to something you enjoy but less lucrative. Or if you really want to retire then do so but have sort of plan as to what you’d

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Re: How young is too young to retire.

Post by JBTX » Thu Oct 12, 2017 3:24 pm

CnC wrote:
Thu Oct 12, 2017 2:23 pm
Pajamas wrote:
Thu Oct 12, 2017 2:09 pm
It may help you and your wife to think in terms of being financially independent rather than in terms of working or retiring as they can be completely separate. Once you are financially independent, you don't have to exchange your time and effort for money, but you can if you want to. It's not hard to find things to do and those things may be more meaningful and satisfying than whatever it is that you do to get money now. On the other hand, some people like their work and keep doing it full- or part-time. Being financially independent gives you choices and freedom.

Yes I understand if we "retire" at 45 it is unlikely that I will never earn another paycheck.

I'm in construction management/engineering and in my position with my current 10 years of experience I can walk into any of a dozen jobs if I choose unless the climate drastically changes in 15+ years I should have a very in demand skillset.

I may look into getting a job where I run 1 project a year just to stay relevant and then stop working for the year. We also will own quite a bit of acreage of woods and farm ground through the family.

I definitely don't plan on sitting on the couch watching TV and eating Cheetos for the rest of my days!
I worked for an engineering firm that did that sort of thing and agree you probably have a lot of options down the road. If you tire of the field work there may be office support/ management positions available. To the extent you keep your skill set broader it will make you more valuable and give you more options.

livesoft
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Re: How young is too young to retire.

Post by livesoft » Thu Oct 12, 2017 3:31 pm

No age is too early to retire. Many people retire when they get married.

Here is the go-to series of articles on what it takes to fund early retirement:
https://earlyretirementnow.com/2016/12/ ... t-1-intro/

If you don't understand these articles, then perhaps only you can retire and your spouse can just keep working while you do your retirement thing and your spouse pays for it.
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flamesabers
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Re: How young is too young to retire.

Post by flamesabers » Thu Oct 12, 2017 4:13 pm

CnC wrote:
Thu Oct 12, 2017 1:33 pm
I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?
I don't think there is any particular age that is too young for retirement. However, it's simply not feasible for the vast majority of people to retire too early. Even if you have a lot of money saved up for your routine expenses, what are you going to do about health insurance? Unless your employer will be giving you access to a decent health insurance plan when you retire, you'll have to either buy insurance on the individual market or go without insurance. Neither of which I think are favorable options for most people, especially when they start to incur major medical bills. Retiring at age 45 means you'll have a solid twenty years to go before you can enroll in medicare under normal circumstances.

Rather then retire fully at age 45, I think a better alternative would be to continue to work but put in fewer work hours. This will give you time to slowly adjust to retirement life. Plus, you'll continue to have an income that is contributing to your social security earnings and ideally you'll still have access to health insurance via your employer.

scrabbler1
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Re: How young is too young to retire.

Post by scrabbler1 » Thu Oct 12, 2017 4:24 pm

As someone who retired at 45 nine years ago, I can't say any age is too young.

As for financially planning for it, I split my ER plan into two parts. The first part is getting to age ~60 intact and the second part, the far easier part, is beyond age ~60 once the "reinforcements" begin to arrive. They include unfettered access to my IRA, my frozen company pension, and Social Security. In the meantime, I live off only my taxable account.

I worked part-time for 8 years before fully retiring, so it wasn't a huge transition going from working 2 days a week to zero days a week. It was a bigger change going from working 5 days a week to 2 or 3 days a week, but it was a most welcome one and I will never go back to working.

A good website which contains many early retirees is http://www.early-retirement.org/forums/ . You may want to check it out.

JBTX
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Re: How young is too young to retire.

Post by JBTX » Thu Oct 12, 2017 4:28 pm

livesoft wrote:
Thu Oct 12, 2017 3:31 pm
No age is too early to retire. Many people retire when they get married.

Here is the go-to series of articles on what it takes to fund early retirement:
https://earlyretirementnow.com/2016/12/ ... t-1-intro/

If you don't understand these articles,then perhaps only you can retire and your spouse can just keep working while you do your retirement thing and your spouse pays for it.
That can be a strain on a relationship if both don’t fully buy into the concept. Expecting a spouse to curtail her/ his standard of living so that you don’t have to work can lead to resentment. I speak from a bit of experience here. Even if the spouse buys into it initially down the road her/his feelings may change.

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Re: How young is too young to retire.

Post by BanquetBeer » Thu Oct 12, 2017 4:45 pm

I would (and am) planning for around age 45. Doesn’t mean I agreed to that date in a blood oath. When I hit age 45 I might say I don’t have enough money or I want to only drive Ferrari’s.. a few more years work. Or maybe I have more than enough and want to live in a Buddhist temple.

That’s a decisions for 15+ years from now. In the mean time I’m saving as much as I can and living a great lifestyle (at least from a spending perspective lol).

I can think of plenty of things I would like to do. But when I think about my hobbies 15 years ago vs today - everything is different. You have the big picture. Work towards it and worry about the details as the time gets close.

I don’t think there is an age that is too early. That is such an individual question.

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PhysicianOnFIRE
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Re: How young is too young to retire.

Post by PhysicianOnFIRE » Thu Oct 12, 2017 4:49 pm

I would stop thinking of your goal as early retirement, but instead frame it as achieving financial independence (FI). That might make more sense and sound more appealing to you and particularly your wife.

FI means that, yes, you have enough money to retire, but retirement is just one of many options. You can work part-time. You can take a lower paying but more meaningful position. You can try an entirely different career. You can take an indefinite sabbatical and travel the world. Still have kids at home? Take them along -- how many kids get an experience like that?

There are plenty of places online where you'll find plenty of people talking about FI if you want to take a deeper dive. The FI subreddit is very active with dozens of discussions happening daily.

To answer the question, there's no right or wrong age to retire, but there is a right and wrong amount of money to have -- it sounds like you're well versed in that aspect and will be in good shape. And of course, as others have mentioned, have some specific plans and goals that you'll be working towards as an early retiree if you choose that route.

:beer
-PoF

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wander
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Re: How young is too young to retire.

Post by wander » Thu Oct 12, 2017 5:16 pm

Never say to early to retire. I can't wait to declare financial independent and leave the rat race. I always have some things to do.

David Scubadiver
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Re: How young is too young to retire.

Post by David Scubadiver » Thu Oct 12, 2017 5:38 pm

I went to school with a girl who earns 12 million a year. She is still working. If you are thinking of retirement at 40 consider changing careers to something you enjoy more.

CnC
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Re: How young is too young to retire.

Post by CnC » Thu Oct 12, 2017 6:24 pm

flamesabers wrote:
Thu Oct 12, 2017 4:13 pm
CnC wrote:
Thu Oct 12, 2017 1:33 pm
I know this is really hypothetical but for the people on here, do you feel that there is an age that is simply too low to consider retirement regardless of assets?
I don't think there is any particular age that is too young for retirement. However, it's simply not feasible for the vast majority of people to retire too early. Even if you have a lot of money saved up for your routine expenses, what are you going to do about health insurance? Unless your employer will be giving you access to a decent health insurance plan when you retire, you'll have to either buy insurance on the individual market or go without insurance. Neither of which I think are favorable options for most people, especially when they start to incur major medical bills. Retiring at age 45 means you'll have a solid twenty years to go before you can enroll in medicare under normal circumstances.

Rather then retire fully at age 45, I think a better alternative would be to continue to work but put in fewer work hours. This will give you time to slowly adjust to retirement life. Plus, you'll continue to have an income that is contributing to your social security earnings and ideally you'll still have access to health insurance via your employer.
I have heard the idea to put in fewer hours before but to me this is simply not a reasonable solution. Both my wife's and my job are not careers that support part time work, I honestly don't know of any potential job with reasonable pay that would support part time work.

I may work a full time job for a few months a year if the opportunity arises but that is it.


This is of course just a goal to shoot for, I tend to do much better if I have direction and goals to shoot towards.

I just don't want a goal that even if I reach it I can't "achieve" it.

davidsorensen32
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Re: How young is too young to retire.

Post by davidsorensen32 » Thu Oct 12, 2017 8:09 pm

So if my lifetime earnings have been 35 * 12 * 9875 = $4,147,500 packed in 15 years then I’m going to get the maximum SSN assuming I collect at 70 ?
https://www.ssa.gov/pubs/EN-05-10070.pdf

You calculate your average monthly earnings from the 35 years with the highest annual earnings (indexed for inflation, and up to a maximum earnings per year). Then, multiply the first $885/month by 0.9, the portion from $885 to $5,336 by 0.32, and the rest, up to a maximum of $9,875/month, by 0.15. This will be your monthly social security payment. So, once your average monthly salary becomes greater than $5,336, you're only increasing your SS amount by $0.15 for each extra dollar increased on the monthly average. These are the bend points someone mentioned above.

Then, if you plan to retire at 62, multiply the above by 0.74 to calculate the reduction in taking early social security. You can see the maximum amount here: https://www.ssa.gov/oact/cola/examplemax.html

aristotelian
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Re: How young is too young to retire.

Post by aristotelian » Thu Oct 12, 2017 8:46 pm

Really good tool for calculating your up-to-the-minute SS (you need to download your data from ssa.gov and then paste it into the tool):

https://socialsecurity.tools/app.html

Just keep saving while keeping an eye on your spending. When you hit 25X expenses, you can start thinking about early retirement. You may find that you like the structure and stimulation of work, or your wife may find herself burned out. A lot can happen between now and then, so best to try to enjoy your work now and see what the future holds. Maybe you can transition to something you really like that pays less. The more you save and invest, the more options you will have.

EddyB
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Re: How young is too young to retire.

Post by EddyB » Thu Oct 12, 2017 8:53 pm

davidsorensen32 wrote:
Thu Oct 12, 2017 8:09 pm
So if my lifetime earnings have been 35 * 12 * 9875 = $4,147,500 packed in 15 years then I’m going to get the maximum SSN assuming I collect at 70 ?
https://www.ssa.gov/pubs/EN-05-10070.pdf

You calculate your average monthly earnings from the 35 years with the highest annual earnings (indexed for inflation, and up to a maximum earnings per year). Then, multiply the first $885/month by 0.9, the portion from $885 to $5,336 by 0.32, and the rest, up to a maximum of $9,875/month, by 0.15. This will be your monthly social security payment. So, once your average monthly salary becomes greater than $5,336, you're only increasing your SS amount by $0.15 for each extra dollar increased on the monthly average. These are the bend points someone mentioned above.

Then, if you plan to retire at 62, multiply the above by 0.74 to calculate the reduction in taking early social security. You can see the maximum amount here: https://www.ssa.gov/oact/cola/examplemax.html
No, because you can’t pack it into 15 years—there’s a limit (approaching $130,000/year) to how much of your earned income is subjected to the social security tax.

davidsorensen32
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Re: How young is too young to retire.

Post by davidsorensen32 » Thu Oct 12, 2017 8:56 pm

So 4147500 / 130000 = 32 years !! That royally sucks
EddyB wrote:
Thu Oct 12, 2017 8:53 pm
davidsorensen32 wrote:
Thu Oct 12, 2017 8:09 pm
So if my lifetime earnings have been 35 * 12 * 9875 = $4,147,500 packed in 15 years then I’m going to get the maximum SSN assuming I collect at 70 ?
https://www.ssa.gov/pubs/EN-05-10070.pdf

You calculate your average monthly earnings from the 35 years with the highest annual earnings (indexed for inflation, and up to a maximum earnings per year). Then, multiply the first $885/month by 0.9, the portion from $885 to $5,336 by 0.32, and the rest, up to a maximum of $9,875/month, by 0.15. This will be your monthly social security payment. So, once your average monthly salary becomes greater than $5,336, you're only increasing your SS amount by $0.15 for each extra dollar increased on the monthly average. These are the bend points someone mentioned above.

Then, if you plan to retire at 62, multiply the above by 0.74 to calculate the reduction in taking early social security. You can see the maximum amount here: https://www.ssa.gov/oact/cola/examplemax.html
No, because you can’t pack it into 15 years—there’s a limit (approaching $130,000/year) to how much of your earned income is subjected to the social security tax.

EddyB
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Re: How young is too young to retire.

Post by EddyB » Thu Oct 12, 2017 9:40 pm

No—35 years. 35 years at the max soc. sec. tax would get you the max (available) soc. sec. payment. But search here for discussions of “the second bend point” to see that beyond about half that tax level, the benefit increase is fairly modest.

forkhorn
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Re: How young is too young to retire.

Post by forkhorn » Thu Oct 12, 2017 10:08 pm

PhysicianOnFIRE wrote:
Thu Oct 12, 2017 4:49 pm
I would stop thinking of your goal as early retirement, but instead frame it as achieving financial independence (FI). That might make more sense and sound more appealing to you and particularly your wife.

FI means that, yes, you have enough money to retire, but retirement is just one of many options. You can work part-time. You can take a lower paying but more meaningful position. You can try an entirely different career. You can take an indefinite sabbatical and travel the world. Still have kids at home? Take them along -- how many kids get an experience like that?

There are plenty of places online where you'll find plenty of people talking about FI if you want to take a deeper dive. The FI subreddit is very active with dozens of discussions happening daily.

To answer the question, there's no right or wrong age to retire, but there is a right and wrong amount of money to have -- it sounds like you're well versed in that aspect and will be in good shape. And of course, as others have mentioned, have some specific plans and goals that you'll be working towards as an early retiree if you choose that route.

:beer
-PoF
+1. The other thing to remember is not to put too much planning into retiring 20 years in the future, because no matter what assumptions you make now, they will be completely off in 20 years. At 50, you may no longer even want to retire and may have a completely different set of goals. So just work on saving money to give your future self more options. As it becomes more a real possibility financially, then reevaluate whether you still want to "retire".

knick17
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Re: How young is too young to retire.

Post by knick17 » Thu Oct 12, 2017 11:05 pm

I think as soon as you have enough money! Enough saving for the rest of your life, some investment for some money to come around and that is pretty much it...no>?

CnC
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Re: How young is too young to retire.

Post by CnC » Fri Oct 13, 2017 8:48 am

forkhorn wrote:
Thu Oct 12, 2017 10:08 pm
PhysicianOnFIRE wrote:
Thu Oct 12, 2017 4:49 pm
I would stop thinking of your goal as early retirement, but instead frame it as achieving financial independence (FI). That might make more sense and sound more appealing to you and particularly your wife.

FI means that, yes, you have enough money to retire, but retirement is just one of many options. You can work part-time. You can take a lower paying but more meaningful position. You can try an entirely different career. You can take an indefinite sabbatical and travel the world. Still have kids at home? Take them along -- how many kids get an experience like that?

There are plenty of places online where you'll find plenty of people talking about FI if you want to take a deeper dive. The FI subreddit is very active with dozens of discussions happening daily.

To answer the question, there's no right or wrong age to retire, but there is a right and wrong amount of money to have -- it sounds like you're well versed in that aspect and will be in good shape. And of course, as others have mentioned, have some specific plans and goals that you'll be working towards as an early retiree if you choose that route.

:beer
-PoF
+1. The other thing to remember is not to put too much planning into retiring 20 years in the future, because no matter what assumptions you make now, they will be completely off in 20 years. At 50, you may no longer even want to retire and may have a completely different set of goals. So just work on saving money to give your future self more options. As it becomes more a real possibility financially, then reevaluate whether you still want to "retire".
Perhaps for some people but my life is and has always been set up to go "according to plan" planned get full-time real job then get married pay off house have kids all with approximate ages and in a set order. Some matched perfectly some little less so but it gives me great piece of mind to have specific goals and timeframes to shoot for. I would be unhappy not knowing what I had planned next. It is just who I am.

As far as not wanting to stop working, I don't see that being possible, work has always been a means to an end. As my dad always said "You work to live you done live to work"

As I said I may do things for fun, or if it's good compensation for a limited time. But I never see my self taking a lower paying job and working every day.

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Hyperborea
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Re: How young is too young to retire.

Post by Hyperborea » Fri Oct 13, 2017 10:22 am

Don't leave everything until tomorrow whether you are retiring early or not. Take some of those vacations, don't save getting back into shape, take up some sort of hobby while you are still working. You don't know if you are going to make it to retirement, this will make your life enjoyable now, and you will already have some of the habits and patterns set up for retirement when it comes. The hobby can also give you a social circle when you retire.

flyingaway
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Re: How young is too young to retire.

Post by flyingaway » Fri Oct 13, 2017 11:35 am

It depends. Those princes and princesses and those with trust funds are born into retirement.

For most people, make and save money to get financial independence and see if you want to retire.

MoonOrb
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Re: How young is too young to retire.

Post by MoonOrb » Fri Oct 13, 2017 11:47 am

Pajamas wrote:
Thu Oct 12, 2017 2:09 pm
It may help you and your wife to think in terms of being financially independent rather than in terms of working or retiring as they can be completely separate. Once you are financially independent, you don't have to exchange your time and effort for money, but you can if you want to. It's not hard to find things to do and those things may be more meaningful and satisfying than whatever it is that you do to get money now. On the other hand, some people like their work and keep doing it full- or part-time. Being financially independent gives you choices and freedom.
Yes, you're not facing a binary choice between "never working again after 50-x" or "never working again after 50." Instead you're giving yourself options: do you or your spouse want to work less? Do you or your spouse want to work more, but in a completely different career? Do you or your spouse want to devote your time to projects that you may find personally worthwhile but are not financially rewarding? Do you want to have more children later in life?

Do you want to stop working for a period of time and travel, focus on creative projects, spend time with aging family members or your children?

These are the choices you can make when you become increasingly financially independent.

The more literal answer to your question is, yes, there is an age that is too young for retirement: an age at which your accumulated assets cannot sustain you in reasonable security for the rest of your life. The paradox is that you will have more certainty as you age because you will have increasingly more certainty about your assets and life expectancy and will be relying gradually less on assumptions about these things. You will, of course, always have some uncertainty and will need to rely on some assumptions.

This dilemma will probably take care of itself because something unexpected will happen: you will make decisions about your future that alter its direction (one of you goes back to school, there's a divorce, you have additional children, you move to a more expensive city for a different job, etc. Or, things will be more clear because of factors outside of your control: a serious health concern emerges, a job loss, a natural disaster, this endless bull market dissolves and the US is the Japan of the 1990s-2000s, etc.

So in the meantime you can keep living beneath your means and stick to a disciplined investing plan and not worry about this for another decade or so when your options will be much clearer.

TravelforFun
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Re: How young is too young to retire.

Post by TravelforFun » Fri Oct 13, 2017 8:03 pm

I stopped working full time when I realized 3% of my investment can take care of my annual expenses and the probability of me running out of money is very low regardless of how long we live.

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Watty
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Re: How young is too young to retire.

Post by Watty » Fri Oct 13, 2017 9:29 pm

On the "How does Social Security work?" question there is a short book that was written by a poster here that I found useful.

https://www.amazon.com/Social-Security- ... ade+simple
PhysicianOnFIRE wrote:
Thu Oct 12, 2017 4:49 pm
I would stop thinking of your goal as early retirement, but instead frame it as achieving financial independence (FI). That might make more sense and sound more appealing to you and particularly your wife.
+1

Once you reach the point where you have as much money as you need then the question becomes; "Should I keep going into work just so that I can leave a larger estate someday?" For some people the answer may actually be yes since they want to leave more to their family or some cause they support, or they just enjoy the job.

privateer79
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Re: How young is too young to retire.

Post by privateer79 » Fri Oct 13, 2017 9:46 pm

IMO I want to work until the kiddos are out of the house and off to college... I think seeing parents work is a good role-modeling thing for the kids, to instil a bit of a work ethic. Also it would seem awkward to hang around the house all day (or pursue leisure activities) while they go off to school each day. (in all honesty I probably wouldn't become some super volunteer, and regardless wouldn't want to inflict full time helicopter parenting on the kids either)

now that said, if in the interim I suddenly hated my job or got fired, I wouldn't be too panicked about taking time off or finding a new gig...

and as long as I find work intellectually stimulating and engaging, whats wrong with going a little bit past the F.I. goal line?

mega317
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Re: How young is too young to retire.

Post by mega317 » Fri Oct 13, 2017 11:31 pm

privateer79 wrote:
Fri Oct 13, 2017 9:46 pm
I think seeing parents work is a good role-modeling thing for the kids, to instil a bit of a work ethic.
We see this opinion a lot on the forum. I don't see any reason to doubt it. But I always wonder about the opposite. If parents retire early might the kids worry their inheritance is being spent and realize they need to take care of their own finances?

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