How did you decide when to retire?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Joined: Mon Sep 24, 2018 3:48 am

Re: How did you decide when to retire?

Post by TraveLife » Mon Sep 24, 2018 4:10 am

My decision to retire was made for me in the form of a buyout. In 2016, at the age of 62, after having worked for the same company for nearly 40 years, I was no longer needed. They had to eliminate one of our office staff. I was the oldest person in the office, so I was offered a VERY generous buyout. Essentially, I was paid around one year’s salary, they paid our health insurance for 6 months, and since it was considered a permanent layoff, I was eligible to collect PA Unemployment Compensation for 6 months.

Thankfully, I was a rabid saver and investor for many years. We currently hold a $1.3 M portfolio ($800K in IRAs / $500k in taxable). My wife collects SS and works par time, totaling $33k per year. In 2017 we liquidated enough funds to cash to live on well into 2020. I was able to get an ACA gold plan beginning this year for $234/ mo. I am not yet collecting SS, so our living expenses come out of the cash reserves in our taxable portfolio.

So far, everything has gone well, and according to plan. We are able to travel freely and finally enjoy life! Expenses are low, no debt, 2 late model cars are paid off. In retrospect, I could have retired earlier. But—I just wanted a few extra years to build up our nest egg. How much is enough? I’m VERY glad the decision to retire was made for me!


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Re: How did you decide when to retire?

Post by chw » Mon Sep 24, 2018 5:33 am

I had a soft target when I was trying to go based on when my youngest child graduated college- assuming the math worked in our favor to be able to retire. A few years before the target date, I started tracking household expenses, and then estimated how that could change in retirement- the biggest challenge was modeling medical expenses since I was targeting 58 as a retirement date (DW was working PT, and planning to retire around whenever I decided to go). As others have mentioned, you need to have a handle on what you expect your expenses to be entering retirement (in addition to cash flows).

Like you, I was earning near my peak income for my current career when I retired. However, I was finding the stress of the workload of the job and a long daily commute, were taking a toll in small ways with my health that I felt could be easily reversed if I pulled the plug. The pay and benefits were hard to walk away from, but my DW and I have always lived modestly, and it turned out our savings at retirement could provide us with a confortabke retirement beyond our expectations. Life is short, and gets shorter with each passing year- we wanted to enjoy some of that life while our health and mobility allowed us to, in spite of the potential income left behind by retiring early.

In the end, it's a personal decision, but I would encourage you to seek a way to retire now given your age and the stressful nature of your job- only if you take a hard look at your expenses to assure your expected income can cover them. If there is an income shortfall, perhaps you could work part time in a less stressful job until you hit age 70 and take SS. Best wishes on your planning, and hopefully retirement in the near future.

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Re: How did you decide when to retire?

Post by dknightd » Mon Sep 24, 2018 6:38 am

BarbBrooklyn wrote:
Mon Sep 24, 2018 3:58 am
OP here; I REALLY appreciate all the sage advice compiled here!
I'm retiring December 1. I'll let you know how it goes. So far, it feels like a two ton elephant has been lifted from my shoulders.


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Re: How did you decide when to retire?

Post by 3feetpete » Mon Sep 24, 2018 4:56 pm

I retired at 65. I was planning to go to 66 (my full retirement age) but a year before that, the company I was working for was bought. I didn't see a place for myself in the new company so I pulled the plug a year early. Wife and I have no debt and have substantial savings in 401k's and IRA's. Calculations performed on FIRECALC showed no chance of running out of money. I'm not planning to take SS until 70 so we are living off of IRA's. I've been taking all stock and bond dividends in cash and selling stock funds every few months to fund the retirement. And yet with the good stock market our portfolio has actually increased since I retired. In the event of a stock market collapse I will send bond funds of which I have enough to get us well past 70. At 70 SS will cover most of our needs. I don't miss work a bit.

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Re: How did you decide when to retire?

Post by CFLonFarm » Mon Sep 24, 2018 7:02 pm

I retired at age 66 to allow time to visit grandchildren while they are still children. My financial goals had been met several years prior. If not for the grandchildren I might likely have worked until age 70 simply out of habit and pride. Old habits are hard to work being one of them.

The best comment I received when considering retirement several years earlier was, " you will know when it is time".

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