Personal Finance Topics / Retirement Investing
No. of Recommendations: 16
I retired at the end of 2017
Haven't missed work for a minute, except for the daily interactions my work brought me with colleagues who were substantially brighter and more interesting to talk to than what I have found since being released back into gen pop. But the intensive workload of my 20s and 30s was less tenable as I neared 60.
Basically, the two answers to why I retired on the early side are 1) because I wanted to and 2) because I could.
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I've done an annual household balance sheet for over thirty years, but the most important to me now is the period since I retired.
Bottom line as of three days ago: nominally, we're worth just over 25% than on the day I retired. In that period, the CPI has gone up a little under 26%. So: tied.
Add to this the fact that these last years were the pre-Medicare, pre-Social Security period, which when claimed are projected to decrease annual pressure on the retirement accounts by around 10% and 20% respectively.
(Add further an enormous one-time discretionary purchase - a private jet card - when in peak pandemic, our eldest told us we needed to meet his live-in girlfriend soon as he was planning to propose later that year. Two thousand miles away. It was great -- she is indeed now our DIL, and their new house is twenty miles from here -- but those stars will never align again.)
So, seven-plus years from my last paycheck I'm as confident as one can be in this world that DS and I will run out the thread in reasonable comfort. Meanwhile, we're doing all the traveling we want (not much); buying all the books (me) and fabric (spouse) we want; and filling the grocery cart without regarding the price, mostly. Every year brings a new gadget or two (last year it was a real backup generator, and a 2022 Rivian to replace my 1995 4Runner). Plus, each year brings some kind of an extrabudgetary disaster, whether it be an enormous oak limb taking out part of the front veranda, or an exploding spleen in a middle-aged rescue dog on a Friday afternoon -- which are no fun to handle, but do-able.
And even after the $$$$ terminal care years, there's a high likelihood that we'll be leaving our progeny enough to see them through a career-limiting illness and their kids' educations. Enough, say, to do "anything but not nothing", as the man says.
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For the purposes of this board, the biggest thing I've learned is that it is not only psychologically difficult to go from retirement-saver to retirement-spender, but working out how much to withdraw from what grove and when so as to maximize ACA benefits, and to minimize (this year, next year, five years from now) IRMAA, state and federal taxes is a nuisance. A nuisance whose details become more complicated while I simultaneously become get less interested in dealing with each year. So, while our peri-retirement CFPs aren't cheap, for at least for the next few years it continues to seem like value received.
And I haven't missed my professional identity for a second. Nor -- as near as I can tell -- have my wife, family, friends or dogs.
YMMV, but from here each morning is still the first day of vacation.
--sutton
No. of Recommendations: 4
Sutton, thank you much for the encouraging missive. You left out one other extrabudgetary disaster - the '22 bear market. Getting through that without feeling pressure to go back to work part time is an accomplishment.
I am committed to starting to retire, 4 1/2 years early, this year - like you, no one will miss my professional identity. Although, the last year or so has been the most enjoyable/tolerable out of the last 9 years. So, I want to.
Can I, responsibly, is the question. Unlike a lot of #humblebraggers online, I don't have $2, $5 or $10M and a paid off house and a 13 years future RMD tax worry. But I calculate that we have "enough" - in combination with the increasingly rare corporate pension from 27 years of service to 1 company and 2 SSs - to cover our expenses and afford a couple of good trips a year (not Rayvt level ;-). DD is beyond post-graduate work. The Monte Carlos say 95%+ or "you'll be ok even with significantly below historical average returns".
My awesomely detailed plan is "take the 6 good weather months off, do something to cover ACA health insurance expense in the winters until Medicare, and figure out what would be fun to do."
FC
No. of Recommendations: 8
thank you much for the encouraging missive. You left out one other extrabudgetary disaster - the '22 bear market. Getting through that without feeling pressure to go back to work part time is an accomplishment
Thank you for the kind words.
As far as the '22 bear market was concerned: we really didn't do too much at the time but sit there. (We did forego the Jan 2023 inflation adjustment, which was a bit painful. IIRC, 2022 CPI was the high-water mark @ 7.5% +/-)
A big part of the aplomb was the experience that comes with age. I remembered market meltdowns as far back as the October 1987 ~22% drop. At the time, I was still in training and my financial concerns were more with meeting the rent payment than anything to do with Wall Street, but I did mark that many of the mid-career physicians I was training under were tense.
Then, things got better.
After that was 2000, a year I remember more for taking 90% of my 401(K) and buying a single share of BRK.A with it than any reactive moves.
Things melted, and then they got better.
After that came the 2008 real estate derivatives bubble, which did concern me a bit given the recklessness it exposed of the bankers we depend upon to treat our fiat currency with appropriate respect, as well as the ensuing lack of consequences of their behavior.
But, things got better.
So I felt as comfortable as I could reasonably be in 2022 while watching my portfolio melt down 22% in a few months. We have the luxury of being able to shrink our day-to-day expenses significantly (at least for a number of months) without too much pain. No new gadgets, defer some maintenance, stick close to home.
And, things got better.
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My awesomely detailed plan is "take the 6 good weather months off, do something to cover ACA health insurance expense in the winters until Medicare, and figure out what would be fun to do."
My own detailed plan was to let the flywheel spin down for a couple of years - long enough to where I recognized the guy in the mirror - then come up with a plan from there.
Ooops, but then my MIL died after a short brutal illness and Mrs s and her siblings were left with what can only be described as a fusterc of a (small, distant) estate. As the months of all the paperwork fell to me, I added a few more months of slothfulness to the end of my self-imposed two-year sabbatical
...just in time for the arrival of Covid-19.
Ok, let's add a couple of more years of working on the property, reading, and not getting out much.
By that point, I found I had found what was fun to do: see the last sentence. The projects are unlimited. So are the books. And. I'm finally at the point where I no longer know reflexively what the time is within 5-10 minutes, as I did for at least the preceding thirty years. Heck, sometimes I'm even off by a day.
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As regards the ACA: I wasn't really sure what our health costs would be in the ACA years. Having routinely spent my life going >10 years between doctor visits (at least those that didn't involve stitches), I was unprepared for the numerous prescription bottles now on my sink. Between the high-deductible Silver premium, the deductibles, copays, and out-of-pocket maximums, there were years of health care expenses that rivaled what our sons' annual undergraduate expenses had been, at least those who went to a state university.
The only other bit of hard experience to share was the transition of a married couple from Obamacare to Medicare. We turn 65 in separate years, and the first of us transitioned to Mcare in mid-year.
Surprise! That meant the cancellation of the joint ACA policy and then reapplication for a single ACA policy for one, and enrollment on Medicare supplemental and Rx insurance for the other.
The result here was that those maneuvers reset to zero all of our copays and out-of-pocket deductibles for the year. So, the one inavoidable year with six months on a joint ACA policy followed by six months with one of us on Mcare and the other on Ocare resulted in annual out-of-pocket medical expenses that rivaled the year of my knee replacement.
The Monte Carlos say 95%+
I approached the whole thing from as many directions as I could find and ultimately decided once you get to that level of statistical certainty, then a) the next few percentage points are asymptotic and b) no one really knows anything to a >95% confidence level, at least in anything close to a complex system. The only thing I felt I knew to a certainty was if I were to work for another five years, by the time I retired I would be at least five years closer to being dead.
Besides, I was done with my job. Time to move on.
Good luck!
-- sutton
No. of Recommendations: 7
“The only thing I felt I knew to a certainty was if I were to work for another five years, by the time I retired I would be at least five years closer to being dead.
Besides, I was done with my job. Time to move on.”
Hear,Hear! Great posts sutton, as always. Thank you for sharing!
Your point reminds me of Andy then Red’s simple but profound realization in Shawshank:
“Get busy living, or get busy dying”
Agree with wise man Buffett, who said (even in his 30s) that wealth is really about the freedom and independence it offers. I saw my father pass away within a month, from no symptoms to passing, from an aggressive lymphoma a decade ago. That life experience (& the pandemic) facilitated my decision to retire mid-late 50s, nearly 3 years ago. It is so nice to enjoy that time with friends and loved ones, nature, travel, sport, slowly sipping on a hazelnut oat latte in obscurity or doing whatever is dear to your heart and supporting some causes dear to your heart along the journey.
Wishing health, happiness & peace to all for 2025 & beyond!
