4 Replies Latest reply on Jan 26, 2010 7:05 AM by cdenehy

    when to retire



      I am 57 years old now, so in 5 years I can get early SS. I don't know if I will want to retire then or not, but I definitely want to have the option. I think I would get about $1,000 a month from SS, which obviously is not enough to live on. I do not own a house. I am trying to have $500,000 saved before I even think about retiring, or semi-retiring. I realize that isn't very much these days, but that is the best I can do without winning a lottery or suddenly inheriting a fortune (both highly unlikely).

      I live pretty simply and don't spend a lot on luxuries. I wouldn't mind doing some kind of part-time work while retired, if necessary. And if I had to I could move to someplace less expensive.

      Does this sound at all practical? I don't mind working, but I would like to be free of the need to have a full time job with a good salary. That's what I have now, which is great, but I don't like having my life depend on it. Even though I have great work experience, I have to worry about age discrimination.

      So does my 5 year plan sound at all reasonable?



        • Re: when to retire

          Honestly, you need to talk to a professional financial planner. Note the exact term, you want someone who falls into the classification of Registered Investment Advisors, the only planners allowed to do true "financial planning". This would be someone with 1 of the 3 titles that are RIAs with fiduciary responsibility to clients, meaning they are required to put the client's financial interests before any other. Those titles are: Certified Financial Planner, Chartered Financial Consultant, or a CPA with Personal Financial Specialist (PFS) designation.

          Sometimes pension fund managers will arrange low-cost or even free consultations with a registered advisor for company employees, so check this first. Otherwise, you should find an RIA who works on an hourly basis.

          To determine whether you can retire early would take more analysis of your personal financial details than you should be posting in a public forum. There are many issues to address, especially if you will need to purchase medical insurance. Working part-time is not always an option, and is very dependent upon your health holding up. Once you leave the workforce, it is often much more difficult to re-enter it than one would expect.

          I hope you are able to retire early - I did so and have enjoyed it - but in comparing notes with other retired friends, the more financial "strings" you have to your retirement "bow", the more and better options one has. Even living in lower-cost areas, one can only cut down expenses by so much. You do not want to underestimate retirement expenses, and get caught in a bind.

          Good luck to you, and I hope everything works out.

            • Re: when to retire

              Thanks for advising a paid for financial planner rather than someone who "sells" stocks, bonds, mutual funds.

              With the mess of the past two years with banks and funds, and loosing my job at 63, now my husband loosing his also, with no prospects in sight for an above minimum wage job, I, too feel like the last questioner. What I am learning is that you do your best, spend as little as necessary and hope you make good decisions. Having NO DEBT at all including house and car makes it easier to live on little. I am very grateful that in a year I will get social security and so will my husband. If we sell our house, live frugally, may be able to survive into our 90's on social security.

              I am so jealous of people who had government jobs with health insurance and retirement! I am so grateful for having a father and father in law who worked for the gov. and gave us an inheritance. The little I have with TIAF CREFF would have been gone in a year!

              Listening to Dave Ramsey on TV and Suze Orman both have helped us not be too depressed about the recession.

                • Re: when to retire

                  Well, speaking as the spouse of one of those who is eligible for a true defined benefit pension and retiree health benefits, I can tell you that I think my DH earned every penny of it. While I bounced from job to job, picking the companies and bosses I wanted to work for and leaving for more interesting pastures whenever I wished, my DH suffered under the typical bureaucratic, incompetent, hidebound bosses with co-workers who wouldn't pull their own weight - after all, in a union everybody gets paid the same, you don't earn any extra $$ for doing a better than average job - for forty years!

                  The stroke he suffered at age 50 was due to high blood pressure, brought on by such a stressful working environment. The only consolation has been that finally for the last four years, his current boss appreciates him and actually takes advantage of his knowledge and skills. It's the first time he's really enjoyed going to work in the morning. That's a sad thing to say, because I always loved where I worked, I just didn't get a lot of benefits out of it. Salary, yes, but not the pension or medical.

                  It's simply the truth that when one is young, one doesn't think about retirement and retiree benefits - it seems like too far in the future. But time flies by before you know it, and unless you have planned wisely, it's too late to play 'catch-up.' In such case, you only have 2 options: work longer and save more, or severely reduce expenses.

                    • Re: when to retire
                      I have a agree, and add an additional caveat. Don't assume you'll both live forever. My spouse and I were actively planning our retirement, bought our little piece of country to build our dream home on, and thought we had everything planned for. Then he died of liver cancer at 58. Now I have to work as long as I can to put money away for a single funded retirement (yes, I did get most of his pension funds, but not without an ugly fight with his children). I never planned to end up a widow. Now everything has changed.