What is considered “Early” vs. “Late” Retirement?

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iim7V7IM7
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What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

I have been reading BH Guide to Investing and also reviewing Vanguard’s Target Retirement fund models and I see some differences in investment strategy and it caused me to wonder what is “early” vs. “late” retirement?

Most people suggest not planning around an actuarial table that might suggest 20 years past a 65 year old retirement age, but to use a 30 year de-accumulation plan out of caution given improvements in medical care. I see BH Guide to Investing has early retirement with a 40/60 asset allocation and late retirement with a suggested 20/80 asset allocation.

Aside from differing international allocations in stocks and bonds, Vanguard Target retirement funds have a 50/50 asset allocation at 65 that tapers to a 30/70 buy age 72 (or + 7 years past the target date). They remain static from year 7 post target date still retain a global investment strategy beyond that point.

QUESTIONS:

While it may differ from individual to individual based on retirement age, general health what is “early” vs. “late” retirement?

Can someone direct me to a post that covers rational for and against Vanguard’s proposed international allocations in stocks and bonds?
tibbitts
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Re: What is considered “Early” vs. “Late” Retirement?

Post by tibbitts »

For me my employer defined it: I disproportionately lost benefits (pension amounts) by retiring early, ten months before age 62. After age 62 I would have proportionately lost benefits until age 70.
Last edited by tibbitts on Fri Nov 26, 2021 8:54 am, edited 1 time in total.
jebmke
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Re: What is considered “Early” vs. “Late” Retirement?

Post by jebmke »

"Early retirement" is when you are retired and most of your friends and colleagues are still working.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by sailaway »

As you can see, it depends on what you are looking at. DH could retire at 55 from megacorp, but that just means he would retain his RSUs through vesting and be able to take partial distributions to take advantage of the rule of 55. Many still refer to that age as early retirement, though, as witnessed by a recent high profile retirement.

The important thing is you make plans for your circumstances. Make sure you understand actuarial tables for your demographic, rather than just looking at life expectancy.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by livesoft »

FRA = full retirement age is defined by the SSA and other government entities.

So "early" is technically before FRA and "late" is after FRA. Ha! Ha!
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dbr
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

I can't help with Vanguard rationale, I would suggest early vs late retirement is defined by cutpoints in age for how various benefits and tax criteria are handled:

1. Age 55 for retirement accounts.

2. Age 62 to start SS and age 70 to top out SS. FRA age for SS which varies.

3. Age 65 to start Medicare.

4. Pension age qualifications, sometimes age 50, age 55, early retire formulas (for me age 55-61 was the early retire penalty phase), etc. Sometimes pension criteria are years served rather than an age.
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AnnetteLouisan
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Re: What is considered “Early” vs. “Late” Retirement?

Post by AnnetteLouisan »

My employer defines early retirement as 57.
SS uses 62.
It really depends what you do. Athletes and ballet- 42 is old.
My parents are in their mid 80s and still run their own businesses.
Retiring late seems to be anything in the 70s.
I’m 54 and 57/58 would be early for me.
30s and 40s is very early.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Grogs »

dbr wrote: Fri Nov 26, 2021 9:14 am I can't help with Vanguard rationale, I would suggest early vs late retirement is defined by cutpoints in age for how various benefits and tax criteria are handled:

1. Age 55 for retirement accounts.

2. Age 62 to start SS and age 70 to top out SS. FRA age for SS which varies.

3. Age 65 to start Medicare.

4. Pension age qualifications, sometimes age 50, age 55, early retire formulas (for me age 55-61 was the early retire penalty phase), etc. Sometimes pension criteria are years served rather than an age.
Don't forget 59.5 for penalty-free IRA distributions.

Personally I would say anything between 59.5 to 70 is "normal" retirement age. Hard to get more specific since there are so many moving parts that affect each individual differently.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

In the BH book, it outlines a life cycle of asset allocation:

A young investor - 80/20
A middle aged investor - 60/40
An investor in early retirement - 40/60
An investor in late retirement - 20/80

In Rick Ferri’s All About Asset Allocation, he outlines a life cycle of ranges based on a variety of factors:

Early Savers - 80/20 to 60/40
Mid Life Accumulators - 70/30 to 50/50
Transitional Retirees - 70/30 to 30/70
Mature Retires - 60/40 to 20/80

“Early Retirement” or “Transitional Retirees” vs. “Late” or “Mature” retirees is what I am trying to understand. Vanguard obviously uses + 7 years post retirement target date to arrive at a final 30/70 asset allocation. I am trying to understand within the BH approach across a 30 year de-accumulation plan when is “late” or “mature” retiree for someone retiring at 65 years old?
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Re: What is considered “Early” vs. “Late” Retirement?

Post by stan1 »

The beauty of the English language is that you get to apply it in creative ways.

Some people use "early retirement" as a euphonism for being laid off in their 50s and unable to find another job that pays similarly. Likewise "late retirement" might mean that a single grandmother is raising her grandchildren alone and has to work until she is 70 to support them.

To end on a positive note, an early retirement can mean that someone has amassed a large amount of assets in their 40s and chooses to stop working. Or a late retirement might mean that someone in their 70s really loves their job and wants to keep working.

Then there's the group who view retirement as stopping work at something they don't like to take a job they do like. I think that's a stretch of the English definition of retirement that most people would recognize, but its not illegal to abuse the English language.

In short do what's right for you. Individuals often do not fit into rule of thumb situations.
Last edited by stan1 on Fri Nov 26, 2021 9:30 am, edited 1 time in total.
dbr
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

Grogs wrote: Fri Nov 26, 2021 9:22 am
dbr wrote: Fri Nov 26, 2021 9:14 am I can't help with Vanguard rationale, I would suggest early vs late retirement is defined by cutpoints in age for how various benefits and tax criteria are handled:

1. Age 55 for retirement accounts.

2. Age 62 to start SS and age 70 to top out SS. FRA age for SS which varies.

3. Age 65 to start Medicare.

4. Pension age qualifications, sometimes age 50, age 55, early retire formulas (for me age 55-61 was the early retire penalty phase), etc. Sometimes pension criteria are years served rather than an age.
Don't forget 59.5 for penalty-free IRA distributions.

Personally I would say anything between 59.5 to 70 is "normal" retirement age. Hard to get more specific since there are so many moving parts that affect each individual differently.
Yes, and I also forgot 71.5 or whatever it is for RMDs.

But the point is there are a lot of specific ages baked into rules and regulations that probably guide financial considerations for retirement.
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iim7V7IM7
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

sailaway wrote: Fri Nov 26, 2021 9:09 am As you can see, it depends on what you are looking at. DH could retire at 55 from megacorp, but that just means he would retain his RSUs through vesting and be able to take partial distributions to take advantage of the rule of 55. Many still refer to that age as early retirement, though, as witnessed by a recent high profile retirement.

The important thing is you make plans for your circumstances. Make sure you understand actuarial tables for your demographic, rather than just looking at life expectancy.
Looking at recent demographic based actuarial tables, for my demographic ( 60 year old male and female) it is 21.7 years (male) and 24.7 years (female) or ages 82 and 85 respectively. If we retire at age 65, that means 16.7 years and 19.7 years which is well under the the 30 year planning target (age 95). I do realize that these statistics are point estimates for a 50th percentile and a 30 year plan like accounts for 2 SDs around those point estimates.

Based on other people’s posts, I think that they are right and Vanguard uses age 72 based on RMD requirements.
dbr
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

BH approach is not actually specific as to age related asset allocation. The BH approach says "Never take too much or too little risk." Those asset allocations are meant to reflect risk according to stock/bond ratio and are meant to suggest that one take more risk when young and less risk when old. To boil it down to a table like that is an illustration that I don't think should be taken literally. I really hate that kind of writing. But also note how wide the ranges are that Rick Ferri has for older investors. I agree with that and flat out don't agree with the BH book.

A better approach to risk is to read Larry Swedroe for need/ability/willingness to take risk. That means that asset allocation should be a thoughtful conclusion reached by each individual according to their own objectives and situation.

Some considerations that might apply:

1. Safe withdrawal rate studies tend to indicate that the safest asset allocation to sustain maximal withdrawals during retirement is about 60/40.

2. Older investors may be motivated to maximize wealth and have no problem with income. Even 100/0 is sensible in a case like that.

3. The biggest problem with high stock allocations is willingness to take risk meaning the psychological ability to not panic and sell during a market downturn. Putting a young investor who does not have psychological tolerance in a high stock allocation would be a mistake. Of course that begs the question that maybe such an investor should learn to tolerate volatility.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by balbrec2 »

Just my two cents but since so many rely on SS at least in part for their
retirement income, anything prior to 62 is early retirement and anything after 70 is late retirement.
For those with substantial retirement assets and relying less on SS, change 62 to 59.5.
Again, just my two cents.

cheers
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

For us…

Retirement, medicare and full pension age = 65
Full SSI benefits = 67
Required RMD age = 72
Actuarial ages are + 16.7 and 19.7 years post retirement
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Ron »

Grogs wrote: Fri Nov 26, 2021 9:22 amPersonally I would say anything between 59.5 to 70 is "normal" retirement age. Hard to get more specific since there are so many moving parts that affect each individual differently.
I retired at age 59 and 4 months. I guess that makes me an early retiree! :oops:

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Re: What is considered “Early” vs. “Late” Retirement?

Post by LittleMaggieMae »

I think the divide "Early" vs "Late" is centered about how many years are traditionally are spent in "retirement" which seems to be 25 years. I think the 25 years gets used because that goes with the rules of thumb for a 4% withdrawal rate and to have 25 times your expenses in retirement savings before retiring. So, how long you think you will live.

I think the divide between "Early" vs "Late" also centers around when Medicare kicks in - at age 65.

I think there is another divide between "early" vs "Late" based on WHEN someone reaches their Social Security Full Retirement Age.
I know quite a few people who are convinced they MUST work until they reach their FRA date even though they could start to plan to be done working well before that date. (as in people in their 30's and 40's and 50's who might not really need to work til their FRA - but rather just assume they can't retire until they get there. )

When reading articles or hearing views on line about "retirement" - you do need to ask yourself "what definition of retirement age is the author using?"

My personal definition of early retirement is any age before 65 (or when Medicare kicks in) when a person is no longer working and/or doesn't need a pay check. I also like to replace "early retirement" with Financial Independence - when you aren't using any of the 'government safety net programs' to help finance your lifestyle.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Mike Scott »

Defining Early vs Late is pretty arbitrary and individual. I think your question is really getting more at the question "how long do resources have to last after I stop working and how might my risk profile potentially change and what do I want to do about it?"

Vanguard publishes many papers on their website to document their rationale for all sorts of things including international allocations.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Kenkat »

Using the classic definitions in most people’s minds, I would say anytime before 65 would be considered “early” retirement and working past 65 would be considered “late” retirement. In spite of the fact that the social security full retirement age has moved towards 67, I think the magic “65” number is in most people’s minds.

I am planning to retire next year at 58. Some people think this is early but I look around and see a lot of people my age already retired. I also see posts here on the forum of people in their 30s and 40s who want to retire early. All of this leads me to think “why in the heck am I still working if I don’t need to”?
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

Mike Scott wrote: Fri Nov 26, 2021 10:27 am Defining Early vs Late is pretty arbitrary and individual. I think your question is really getting more at the question "how long do resources have to last after I stop working and how might my risk profile potentially change and what do I want to do about it?"

Vanguard publishes many papers on their website to document their rationale for all sorts of things including international allocations.
Yes, that is absolutely the point. I think the table presented by Rick Ferri is more practical than the highly artificial specification in the BH book.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

Kenkat wrote: Fri Nov 26, 2021 10:51 am Using the classic definitions in most people’s minds, I would say anytime before 65 would be considered “early” retirement and working past 65 would be considered “late” retirement. In spite of the fact that the social security full retirement age has moved towards 67, I think the magic “65” number is in most people’s minds.

I am planning to retire next year at 58. Some people think this is early but I look around and see a lot of people my age already retired. I also see posts here on the forum of people in their 30s and 40s who want to retire early. All of this leads me to think “why in the heck am I still working if I don’t need to”?
I suppose someone can find somewhere an actual tabulation of the retired population by age and divide that up into percentiles. Some very early retirements might not mean what they say, for example inherited wealth or retired professional sports stars.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Kenkat »

dbr wrote: Fri Nov 26, 2021 10:53 am
Kenkat wrote: Fri Nov 26, 2021 10:51 am Using the classic definitions in most people’s minds, I would say anytime before 65 would be considered “early” retirement and working past 65 would be considered “late” retirement. In spite of the fact that the social security full retirement age has moved towards 67, I think the magic “65” number is in most people’s minds.

I am planning to retire next year at 58. Some people think this is early but I look around and see a lot of people my age already retired. I also see posts here on the forum of people in their 30s and 40s who want to retire early. All of this leads me to think “why in the heck am I still working if I don’t need to”?
I suppose someone can find somewhere an actual tabulation of the retired population by age and divide that up into percentiles. Some very early retirements might not mean what they say, for example inherited wealth or retired professional sports stars.
If you google “average retirement age in us”, it comes back with a variety of numbers but 61, 62 seem to be common numbers cited.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by stan1 »

People who have pensions would say that retiring when eligible to take the pension is "on time" no matter what their age is.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by UpperNwGuy »

stan1 wrote: Fri Nov 26, 2021 11:25 am People who have pensions would say that retiring when eligible to take the pension is "on time" no matter what their age is.
Being eligible to take the pension often means a lower pension than if you continue working for a few more years. That was certainly true in my case. I was eligible at 55, but I worked until 61.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by stan1 »

UpperNwGuy wrote: Fri Nov 26, 2021 11:40 am
stan1 wrote: Fri Nov 26, 2021 11:25 am People who have pensions would say that retiring when eligible to take the pension is "on time" no matter what their age is.
Being eligible to take the pension often means a lower pension than if you continue working for a few more years. That was certainly true in my case. I was eligible at 55, but I worked until 61.
Well using that rationale taking SS before age 70 is "early".
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Re: What is considered “Early” vs. “Late” Retirement?

Post by EnjoyIt »

jebmke wrote: Fri Nov 26, 2021 8:54 am "Early retirement" is when you are retired and most of your friends and colleagues are still working.
I think this is the best answer.
Early retirement is defined by your surroundings.
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59Gibson
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Re: What is considered “Early” vs. “Late” Retirement?

Post by 59Gibson »

The FIRE blogs such as MMM would probably classify age 25 as early and 35 late.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Eagle33 »

iim7V7IM7 wrote: Fri Nov 26, 2021 9:49 am For us…

Retirement, medicare and full pension age = 65
Full SSI benefits = 67
Required RMD age = 72
Actuarial ages are + 16.7 and 19.7 years post retirement
Did you mean SS or SSA? SSI = Supplemental Security Income
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Re: What is considered “Early” vs. “Late” Retirement?

Post by HomerJ »

59.5 - you can pull from IRA/401k
62 - Social Security
65 - Medicare
72 - RMDs

So "normal" retirement age is somewhere between 59.5 and 72.

If you retire before 59.5, I would say you are retiring "early". If you retire after 72, I would say you are retiring "late".
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Re: What is considered “Early” vs. “Late” Retirement?

Post by kleiner »

One more dimension to consider - retirement happens when you actually start drawing on your savings or pension. In my case, I am retired in the sense that I am no longer working but my wife is still working. We will not have to touch our savings until she decides to actually retire too.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by BarbBrooklyn »

iim7V7IM7 wrote: Fri Nov 26, 2021 8:50 am I have been reading BH Guide to Investing and also reviewing Vanguard’s Target Retirement fund models and I see some differences in investment strategy and it caused me to wonder what is “early” vs. “late” retirement?

Most people suggest not planning around an actuarial table that might suggest 20 years past a 65 year old retirement age, but to use a 30 year de-accumulation plan out of caution given improvements in medical care. I see BH Guide to Investing has early retirement with a 40/60 asset allocation and late retirement with a suggested 20/80 asset allocation.

Aside from differing international allocations in stocks and bonds, Vanguard Target retirement funds have a 50/50 asset allocation at 65 that tapers to a 30/70 buy age 72 (or + 7 years past the target date). They remain static from year 7 post target date still retain a global investment strategy beyond that point.

QUESTIONS:

While it may differ from individual to individual based on retirement age, general health what is “early” vs. “late” retirement?

Can someone direct me to a post that covers rational for and against Vanguard’s proposed international allocations in stocks and bonds?
Are you asking about early vs, late vis a vis the age at which you retire or with regard to what phase of retirement you are in (I read the question as pertaining to the latter)?
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Ramjet »

In my own head I have always thought of traditional retirement age is when someone can collect social security and before that it early
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

You are correct, I was referring to the later.

For example, if we retire with me at 65 and my domestic partner at 66 we are at an age where we qualify for medicare and full pension benefits. Our full benefit SSI ages are both 67 and our IRA RMD age is < 72. I was looking retirement during a deaccumulation phase as a continued ramp down of our asset allocation and in reference materials (BH retirement, Rick Ferri etc.) they refer to late or mature retirees. Looking at Vanguard Target Date Funds they reach a steady asset allocation of 30/70 + 7-years post retirement target date. This aligns with mandatory RMD age. This does make sense in that all benefits such as medicare, pensions, SSI and IRA RMDs are in place.

I was thinking with a 30 year deaccumulation plan that treating 7 years as transitional or early retirement and 23 years (should we be so lucky!) as late or mature retirement seemed odd. I was perhaps naively thinking, starting retirement with a 50/50 asset allocation and tapering down to 40/60, 30/70 over a longer, more proportionate time period (not 7 years). Hence my question.
BarbBrooklyn wrote: Sat Nov 27, 2021 6:14 am
iim7V7IM7 wrote: Fri Nov 26, 2021 8:50 am I have been reading BH Guide to Investing and also reviewing Vanguard’s Target Retirement fund models and I see some differences in investment strategy and it caused me to wonder what is “early” vs. “late” retirement?

Most people suggest not planning around an actuarial table that might suggest 20 years past a 65 year old retirement age, but to use a 30 year de-accumulation plan out of caution given improvements in medical care. I see BH Guide to Investing has early retirement with a 40/60 asset allocation and late retirement with a suggested 20/80 asset allocation.

Aside from differing international allocations in stocks and bonds, Vanguard Target retirement funds have a 50/50 asset allocation at 65 that tapers to a 30/70 buy age 72 (or + 7 years past the target date). They remain static from year 7 post target date still retain a global investment strategy beyond that point.

QUESTIONS:

While it may differ from individual to individual based on retirement age, general health what is “early” vs. “late” retirement?

Can someone direct me to a post that covers rational for and against Vanguard’s proposed international allocations in stocks and bonds?
Are you asking about early vs, late vis a vis the age at which you retire or with regard to what phase of retirement you are in (I read the question as pertaining to the latter)?
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

I meant social security…
Eagle33 wrote: Fri Nov 26, 2021 10:40 pm
iim7V7IM7 wrote: Fri Nov 26, 2021 9:49 am For us…

Retirement, medicare and full pension age = 65
Full SSI benefits = 67
Required RMD age = 72
Actuarial ages are + 16.7 and 19.7 years post retirement
Did you mean SS or SSA? SSI = Supplemental Security Income
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Re: What is considered “Early” vs. “Late” Retirement?

Post by winterfan »

I always thought under 60 was early. My dad retired in his 70s and my FIL retired in his late 70s. I guess that's what I'm used to. My own husband is in his 60s and says he feels like he's 30, so he wants to keep working for a bit longer.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by JoeRetire »

I retired at 60. I considered that "Early" in the sense that it was "Earlier than I had originally planned". And it was "Early" in the sense of "Earlier than most of the people I know".

Obviously for some folks here, 60 would be "Late", since they have different plans and different expectations.

But the terms don't really have any meaning. They are just labels that people can use as they see fit.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by fortunefavored »

iim7V7IM7 wrote: Fri Nov 26, 2021 9:43 am
sailaway wrote: Fri Nov 26, 2021 9:09 am As you can see, it depends on what you are looking at. DH could retire at 55 from megacorp, but that just means he would retain his RSUs through vesting and be able to take partial distributions to take advantage of the rule of 55. Many still refer to that age as early retirement, though, as witnessed by a recent high profile retirement.

The important thing is you make plans for your circumstances. Make sure you understand actuarial tables for your demographic, rather than just looking at life expectancy.
Looking at recent demographic based actuarial tables, for my demographic ( 60 year old male and female) it is 21.7 years (male) and 24.7 years (female) or ages 82 and 85 respectively. If we retire at age 65, that means 16.7 years and 19.7 years which is well under the the 30 year planning target (age 95). I do realize that these statistics are point estimates for a 50th percentile and a 30 year plan like accounts for 2 SDs around those point estimates.

Based on other people’s posts, I think that they are right and Vanguard uses age 72 based on RMD requirements.
If you're married, you also need to consider the probability of one spouse living quite a bit longer (and shorter, unfortunately) this site illustrates it: https://www.longevityillustrator.org/

For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by TheNightsToCome »

iim7V7IM7 wrote: Fri Nov 26, 2021 9:43 am
sailaway wrote: Fri Nov 26, 2021 9:09 am As you can see, it depends on what you are looking at. DH could retire at 55 from megacorp, but that just means he would retain his RSUs through vesting and be able to take partial distributions to take advantage of the rule of 55. Many still refer to that age as early retirement, though, as witnessed by a recent high profile retirement.

The important thing is you make plans for your circumstances. Make sure you understand actuarial tables for your demographic, rather than just looking at life expectancy.
Looking at recent demographic based actuarial tables, for my demographic ( 60 year old male and female) it is 21.7 years (male) and 24.7 years (female) or ages 82 and 85 respectively. If we retire at age 65, that means 16.7 years and 19.7 years which is well under the the 30 year planning target (age 95). I do realize that these statistics are point estimates for a 50th percentile and a 30 year plan like accounts for 2 SDs around those point estimates.

Based on other people’s posts, I think that they are right and Vanguard uses age 72 based on RMD requirements.
Your relevant demographic includes income and education, among other factors. Have a look at these calculators:

https://www.longevityillustrator.org/Profile?m=1

https://apps.goldensoncenter.uconn.edu/HLEC/

https://www.blueprintincome.com/tools/l ... ll-i-live/
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JoeRetire
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Re: What is considered “Early” vs. “Late” Retirement?

Post by JoeRetire »

fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
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iim7V7IM7
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Re: What is considered “Early” vs. “Late” Retirement?

Post by iim7V7IM7 »

Thanks for these…

This estimate suggests a 30-year plan has a high probability of covering us. Looking at the OC curve (not shown), it suggests < 10% for both or < 20% for one of us exceeding 30-years.

Image
TheNightsToCome wrote: Sat Nov 27, 2021 7:49 am
iim7V7IM7 wrote: Fri Nov 26, 2021 9:43 am
sailaway wrote: Fri Nov 26, 2021 9:09 am As you can see, it depends on what you are looking at. DH could retire at 55 from megacorp, but that just means he would retain his RSUs through vesting and be able to take partial distributions to take advantage of the rule of 55. Many still refer to that age as early retirement, though, as witnessed by a recent high profile retirement.

The important thing is you make plans for your circumstances. Make sure you understand actuarial tables for your demographic, rather than just looking at life expectancy.
Looking at recent demographic based actuarial tables, for my demographic ( 60 year old male and female) it is 21.7 years (male) and 24.7 years (female) or ages 82 and 85 respectively. If we retire at age 65, that means 16.7 years and 19.7 years which is well under the the 30 year planning target (age 95). I do realize that these statistics are point estimates for a 50th percentile and a 30 year plan like accounts for 2 SDs around those point estimates.

Based on other people’s posts, I think that they are right and Vanguard uses age 72 based on RMD requirements.
Your relevant demographic includes income and education, among other factors. Have a look at these calculators:

https://www.longevityillustrator.org/Profile?m=1

https://apps.goldensoncenter.uconn.edu/HLEC/

https://www.blueprintincome.com/tools/l ... ll-i-live/
fortunefavored
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Re: What is considered “Early” vs. “Late” Retirement?

Post by fortunefavored »

JoeRetire wrote: Sat Nov 27, 2021 8:27 am
fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
No subsidies for us, and then high OOP costs.. so about 36% of our non-housing expenses are healthcare rising to 70% by 64. At 65 they will drop to 10-15%. In a few years we'll have to do the math on side income vs. subsidies, assuming the "soft" cliff gets made permanent.
Dottie57
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Dottie57 »

I’ve always thought of 65 as normal retirement. Anything before is early. Anything later is late. Rather outdated since SS FRA started changing to higher ages.
dbr
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

I see two tiers here. One is the before Medicare, before FRA retirement, say around 65.

The other is FIRE (Financial Independence Retire Early), probably before 55.

Late retirement would be to keep working past age 65.
dbr
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Re: What is considered “Early” vs. “Late” Retirement?

Post by dbr »

If you like offhand numerology, then taking an adult lifetime to extend from age 20 to age 90 and you want to be retired for more than half of it then you need to retire by age 55. If life is assumed to end at age 80, then you need to retire by age 50.
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CyclingDuo
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Re: What is considered “Early” vs. “Late” Retirement?

Post by CyclingDuo »

Dottie57 wrote: Sat Nov 27, 2021 10:13 am I’ve always thought of 65 as normal retirement. Anything before is early. Anything later is late. Rather outdated since SS FRA started changing to higher ages.
May not be so outdated, but time will tell if FRA continues to rise and if 70 becomes the new 65 in terms of retirement age. Or it simply gets back to what Germany initially began with in the 1880's when their social program used age 70 as retirement age until they changed it in 1916 to 65.

https://www.ssa.gov/history/age65.html
https://www.journalofaccountancy.com/is ... t-age.html
https://daily.jstor.org/why-retirement- ... ng-higher/

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
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Kenkat
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Kenkat »

fortunefavored wrote: Sat Nov 27, 2021 9:10 am
JoeRetire wrote: Sat Nov 27, 2021 8:27 am
fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
No subsidies for us, and then high OOP costs.. so about 36% of our non-housing expenses are healthcare rising to 70% by 64. At 65 they will drop to 10-15%. In a few years we'll have to do the math on side income vs. subsidies, assuming the "soft" cliff gets made permanent.
I don’t know your exact situation, but your numbers don’t sound right to me.

The family maximum out of pocket for an ACA plan is $17,400. A family of two can earn up to $68,960 and qualify for a subsidy; $104,800 for a family of four. These are 2021 numbers and for 2021 and 2022, the subsidy cliff is eliminated.

Keep in mind that this is based on taxable income. If you have a taxable savings or a taxable brokerage account or a Roth IRA, you could take as much of that as your want to cover expenses with minimal impact to the subsidy calculation (you do have to be cognizant of capital gains). For example, you could take $60k out of an IRA or 401(k) and $60k out of taxable accounts or Roth and still qualify for a subsidy.

It would be worth running some ACA scenarios and/or planning to stash some after tax money somewhere depending on how long you have before you reach Medicare age.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by fortunefavored »

Kenkat wrote: Sat Nov 27, 2021 10:35 am
fortunefavored wrote: Sat Nov 27, 2021 9:10 am
JoeRetire wrote: Sat Nov 27, 2021 8:27 am
fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
No subsidies for us, and then high OOP costs.. so about 36% of our non-housing expenses are healthcare rising to 70% by 64. At 65 they will drop to 10-15%. In a few years we'll have to do the math on side income vs. subsidies, assuming the "soft" cliff gets made permanent.
I don’t know your exact situation, but your numbers don’t sound right to me.

The family maximum out of pocket for an ACA plan is $17,400. A family of two can earn up to $68,960 and qualify for a subsidy; $104,800 for a family of four. These are 2021 numbers and for 2021 and 2022, the subsidy cliff is eliminated.

Keep in mind that this is based on taxable income. If you have a taxable savings or a taxable brokerage account or a Roth IRA, you could take as much of that as your want to cover expenses with minimal impact to the subsidy calculation (you do have to be cognizant of capital gains). For example, you could take $60k out of an IRA or 401(k) and $60k out of taxable accounts or Roth and still qualify for a subsidy.

It would be worth running some ACA scenarios and/or planning to stash some after tax money somewhere depending on how long you have before you reach Medicare age.
It would require its own thread and not derail this one, but yes, we have a very large taxable account + a minor amount of side income, and we are only 2 people. We really have 3 phases planned: early years (4 to 6 years left, some side income) middle-years (no side income and possible optimization TBD) and then later post 65 years. We're currently late 40s.
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Re: What is considered “Early” vs. “Late” Retirement?

Post by HomerJ »

JoeRetire wrote: Sat Nov 27, 2021 8:27 am
fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
Do you actually use a lot of medical care? Does one of you have a chronic condition that requires a lot of doctor visits and/or drugs/infusions?
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JoeRetire
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Re: What is considered “Early” vs. “Late” Retirement?

Post by JoeRetire »

HomerJ wrote: Sat Nov 27, 2021 2:06 pm
JoeRetire wrote: Sat Nov 27, 2021 8:27 am
fortunefavored wrote: Sat Nov 27, 2021 7:15 am For me, anything before 65 is early simply due to the overwhelming cost of medical care. It is all I will think about until I turn 65, everything else is dwarfed.
Interesting.
With ACA plans and our lower income, we didn't find the cost of medical care overwhelming at all.
Do you actually use a lot of medical care? Does one of you have a chronic condition that requires a lot of doctor visits and/or drugs/infusions?
I had cancer 4 years ago. Along with a heart condition scare that turned out to be nothing.

I had a lot of tests initially. Then each exam/tests/infusion cycle cost over $26,000. Initially, I had them every two weeks, then every month, then every other month. For now, I have a clean bill of heath (other than twice a year checkups/tests).

I'm very, very thankful I had a terrific, inexpensive health insurance plan.

I am now on a Medicare Advantage plan. I currently don't consume a lot of medical care.
This isn't just my wallet. It's an organizer, a memory and an old friend.
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Wricha
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Re: What is considered “Early” vs. “Late” Retirement?

Post by Wricha »

I retired from “work” at 55 this felt a little bit early. (Was the right move for me could have left at 50) Continued to manage commercial real estate till I was 62. Then turned it over to management company, so fully retire at 62 which I would call an average retirement age. After 65, getting a little long in the tooth.
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