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Old 01-09-2013, 09:22 AM   #21
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All I can say is start making your plans now. I elt the same way at your age and saved my pennies. I am pushing 40 now and climbing the cube walls, but at least I have been accumulating capital and at some point I will walk away from this nonsense and do something better with my life.
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Old 01-09-2013, 09:24 AM   #22
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I have never heard of a pension that can be drawn at age 38.
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Old 01-09-2013, 09:26 AM   #23
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Compared to the real "geezers", I am young and should feel young. Too bad I don't feel it. Perhaps all those long working hours finally show their effects.

So, I have also been reading about people who goof off early in their 20s and 30s to have some fun. They will have to go back to work eventually, as many of them already did. It may cost them the time they could have worked to build up their savings, so they may have to work longer now. But then, they also are used to unconventional lifestyles, and do not have the needs of conventional people like myself. So, they may still be able to retire early.

Many different paths through life, and one has to chose his own.
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Old 01-09-2013, 09:26 AM   #24
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This feeling may be because of my surroundings. Dad is self employed and takes off when he feels like it, mon works part time, sister doesn't work for no good reason, two cousins live at home off their parents and barely work... Maybe in jealous a little bit. I watch all these people around me enjoying all the extra hours home from work, and they seem to be doing alright, why am I working so much?
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Old 01-09-2013, 09:26 AM   #25
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People talk about how expensive kids are... I'm not sure I completely agree.
1) Food - Our grocery budget is $600 a month, and the kids easily take half that each month. $300 invested each month for 18 years at 8% return = $131,220.88...and that's just for groceries! That amount is what I'll have less in retirement.

2) Dental, vision, and other medical - We pay extra for insurance because we have a family. My daughter's orthodontia cost over $10,000 out of pocket for us because she needed everything under the sun, early wisdom teeth extraction and a minor surgery. Son's out of pocket was about half that. - $15,000.

3) Athletics - We live in a pay to play school district. My daughter is a three-sport athlete which is $150 per sport per year ($450). My son is in middle school and currently only a two-sport athlete, but he will be a three-sport athlete and perhaps even a four-sport athlete when he enters high school ($300 a year now and perhaps $600 a year in high school). We also have to give money to the boosters for each sport which is another $30 per sport (that's another $150 right now). On top of all that, we buy sweats for cross country and track and then they have to buy the uniform top. Then, this past fall, my daughter had a serious running injury that after insurance ended up costing us $1,000 out of pocket. Oh, and there's the time my son broke his thumb doing a backflip on our couch. Conservatively this will end up being $6,000 by the time they are done with high school.

4) Band - Both my kids are in band. Trumpets and clarinets are expensive not just to buy but also to maintain. Giving money to the band boosters is expensive. Only because my daughter is able to use my wife's old clarinet (which cost $300 to overhaul), we're probably about $1500 into instruments and reeds for the clarinet.

5) Lost wages - My wife was a stay at home mom for more than 14 years. She left a $47,000 a year job at the beginning of that with big raises likely to come. $47,000 a year (not giving her a raise) times 14 = $658,000. Conservatively I'll up that to $700,000. Let's say we invested HALF that amount for the last 14 years ($25,000 per year for 14 years). At 8% return, that's $580,373, and that would take us up just to today for me at age 46. Let's now not add to that and see what that turns into by the time I'm 60 when I want to retire - $1,778,097.74.

6) Bigger house. Could be a wash as we could easily spend the same for a house. Does cost more to heat and cool this bigger house, but I'll keep this as a wash. Though, we did pick a house in a great school system and we pay big taxes for that...we would likely not have done so if we didn't have children.

7) Family summer pool membership for $500 that we wouldn't have gotten otherwise and then diving team for my son for another $100. All told this will end up being about $8,000.

8) Clothes for them. No way to even calculate this, but I'll say easily $10,000 total for them both over the course of 18 years. $10,000

9) Gifts at birthdays and Christmas. $100 on average for each kid for both Christmas and birthday (and it's probably a little more when adding in the birthday parties we had for them when they were younger). That's $7,200.

10) Cell phones for the family. Our family plan costs about $200 a month, so $100 a month of that is for the kids...actually I'll be very conservative here and say that if we didn't have kids maybe we'd get unlimited everything and pay just $40 less per month than we do now. They haven't had cell phones the whole time, but I can see paying for them through college for them both, so that's about $4,800 difference.

11) My daughter just turned 16. We will be getting a used car for her to use soon. That's perhaps $4,000. The big cost though is the insurance we will have to pay. I'll just add $3,000 to that cost, but it will likely be more.

12) Vacations cost more. Over 18 years for both of them, easily we will have spent $5,000 more than we would with just the two of us, and that's being conservative.

13) College - Fortunately my daughter has already scored high enough on the practice ACT and SAT that she took as a sophomore to easily get a full academic ride to several state school here in Ohio (they have published criteria), and she will duplicate that when she takes the tests for real next year as a junior, but she might go elsewhere as she doesn't necessarily want to go to those schools. My son performs similarly in school and could do that as well, and he has an outside shot at getting an athletic scholarship too. We've always said some of the burden of college will be on them either through their own working or loans in addition to any scholarships they might receive. I figure we could be lucky enough to get out of it with just paying about $20,000 total for both kids (and I think we're luckier than most with the likely scholarships they will get).

I could go on and on and on (summer camps, allowance, money here and there for all kinds of things). Fortunately for me, I realized this early on and decided to have children anyway, and they are worth every penny and then some. If I add up all that (which was all arrived at conservatively and didn't include everything) and don't count investing any of that, that's roughly $783,093. If I invest even just a portion of my wife's lost income, then we are over $2,000,000. Yes, some don't stay a stay at home mom that long, but then you need to factor in paying for childcare, and again, I didn't include everything nor did I invest all that money from the time it would start to be spent. A normal family with decent but not great professional-level income (two college-educated people making typical college-level salaries to the tune of over $100,000 per year total for both but under $150,000) can easily be out $2,000,000-$3,000,000 over the course of cradle to college graduation for a couple of kids if investing all the money spent on them including any lost wages for a stay at home parent.

You can find all sorts of estimates out there ranging from $300,000 (not including college) to over $2,000,000, but since I'm an investor, my amount is easily on the upper end.

Since "a lot" is subjective, that can't be considered "a lot" just generally, but to me that's a lot.
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Old 01-09-2013, 09:27 AM   #26
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Planning for retirement while you are young is great but you are going to have to w*rk for a long time to achieve it. I think you need to find a job that motivates you to come to w*rk. Just liking your job is not doing it for you. Find something that is meaningful to you; or with people you like; or the flexibility you need; or hours that are better for you. Do you have hobbies or interests that can turn into paying w*rk or will give you a clue as to something else you would like to do?
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Old 01-09-2013, 09:32 AM   #27
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I have never heard of a pension that can be drawn at age 38.
They allow you to draw at any age, but put a penalty on the withdrawal. I don't know if that number includes the penalty, but I figure it's too early to worry about that. I'll look into it closer to the time I want to quit. The rules could change b then anyhow.
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Old 01-09-2013, 09:46 AM   #28
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Planning for retirement while you are young is great but you are going to have to w*rk for a long time to achieve it. I think you need to find a job that motivates you to come to w*rk. Just liking your job is not doing it for you. Find something that is meaningful to you; or with people you like; or the flexibility you need; or hours that are better for you. Do you have hobbies or interests that can turn into paying w*rk or will give you a clue as to something else you would like to do?
Skiing is a lot of fun, I thought maybe a ski instructor. That seems like more of an early semi retirement job. Around here I could only work 4 months of the year. And the way this weather is going, maybe not at all.

Tennis is cool, nowhere good enough o be a pro.

Gardening is nice, but wouldn't want to do it all day. Just a small side hobby.

Playing video games... Not a job.

I enjoy cooking, but only when I get to eat the finished product. Worked in a kitchen for a little, too stressful.

Managing money is interesting. Not sure where I could take that. Probably the biggest prospect.

Visiting friends and family. Not work. And beyond that I don't really have time for anything else outside of work. Wish I had more time to take on more hobbies! This is why I have to quit working, so I can find more hobbies!
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Old 01-09-2013, 10:31 AM   #29
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The odds of you doing a fun job for another decade and retiring are not very high. Fun jobs don't pay much. Most people that succeed at ER have to have a high income and live beneath their means, save and invest for several decades to do it.

You have said that you are barely paying the bills now. You will have to have an income that is higher than your outgo to save and invest. To do it by age 38 will require a large differential.

There is no possibility I could have done it by age 38. And I worked at a pretty high paying job.
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Old 01-09-2013, 11:16 AM   #30
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I think you dislike for work does not mean you can semi retire at 38 unless you have a very solid plan. I wouldn't think of semi retiring I just keep working until you accumulate maybe 3 or 4,000,000 dollars. Retirement is balancing your time your health and your resources which means money. I'm not sure how your health is, but it seems to me that you have too much time, you're very vague in your descriptions and you seem like someone who is still trying to find themselves. Please provide some figures and plans so we can better assess your feeling wrt to life and working.
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Old 01-09-2013, 11:18 AM   #31
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I have never heard of a pension that can be drawn at age 38.
I have a coworker who's drawing a pension in his 30's. And a bunch in their 40's and 50's who are also doing this.

But it was a defined contribution pension, not a defined benefit.

This became an option to us because the (frozen) pension went with the other half of the company when our company split. That was recognized as a separation.

Unfortunately, the pension was also underfunded - so your choice was to take an annuity (no age restrictions) or 1/2 the lump sum & 1/2 the annuity.

My young coworker chose to do the pension.

He gets about $20/month. No penalties. Not enough to retire on, to say the least. But he'd rather get money now because he doesn't trust the former company nor PBGC protection.

If he'd waited till it was fully funded and rolled the lump sum equivalent - he'd have to roll it to an IRA or pay penalties.

(Fortunately, it became properly funded this past year - so I'll have to do the math to figure out lump sum or pension when I finally pull the trigger. For now I'm letting it ride. It's so small PBGC should cover it.)
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Old 01-09-2013, 11:33 AM   #32
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I think you dislike for work does not mean you can semi retire at 38 unless you have a very solid plan. I wouldn't think of semi retiring I just keep working until you accumulate maybe 3 or 4,000,000 dollars. Retirement is balancing your time your health and your resources which means money. I'm not sure how your health is, but it seems to me that you have too much time, you're very vague in your descriptions and you seem like someone who is still trying to find themselves. Please provide some figures and plans so we can better assess your feeling wrt to life and working.
Three or four million? I would still be working. But I'm not.
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Old 01-09-2013, 12:06 PM   #33
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This feeling may be because of my surroundings. Dad is self employed and takes off when he feels like it, mon works part time, sister doesn't work for no good reason, two cousins live at home off their parents and barely work... Maybe in jealous a little bit. I watch all these people around me enjoying all the extra hours home from work, and they seem to be doing alright, why am I working so much?
I get that. Perhaps one of your job search criteria could be a healthy amount of vacation time. Or you could look into self-employment like your Dad. The other thing is that your parents are much further into their careers, and your cousins are moochers. Not really fair comparisons to your situation.

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Old 01-09-2013, 02:38 PM   #34
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Three or four million? I would still be working. But I'm not.
Yeah, I don't think 3-4 million dollars is necessary to retire on, even if you're in your 30s. Assuming no debt at all including a paid for house that doesn't have crazy taxes, I would say minimum would be about a million dollars to retire 10 years from now in your 30s. That gives $40,000 if taking 4%. This is not without risk. Could take one big drop in the market to make a person go back to work for a few years.

Though he did say "semi-retire". If he had a million dollars to draw on and he and his wife could bring in $20,000 doing some part time work so that he could take 3% or less from the million dollar pile, that could work. Continuing to work, even part time at a low-paying job just adds to the Social Security amount later on too.
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Old 01-09-2013, 02:46 PM   #35
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If I was able to retire in my 30's I would rather take the chance that I might have to go back to work than the chance that I worked more years that I didn't need to.
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Old 01-09-2013, 05:04 PM   #36
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I left work at 43. When I worked fulltime, it was 4 days a week (long hours), with 11 weeks annual leave per annum. That was still too much of my time to be spent doing something I don't enjoy.

So I stopped. I did 4 shifts last year, and that was enough. Life's too short. The great thing about retiring early, is if it all goes wrong, you can get another job. If you wait til 55+ and it goes wrong, you're stuffed.

There are thousands of people doing jobs they love and enjoying life. Be one of them. If the job you love pays half what your current job does, half your expenses. There are ski instructors. Why can't it be you? 4 months in your country, then change hemispheres and 4 months in New Zealand for example. That leaves 4 months off work. Sorted
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Old 01-09-2013, 06:34 PM   #37
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If I was able to retire in my 30's I would rather take the chance that I might have to go back to work than the chance that I worked more years that I didn't need to.
Totally agree!

And I didn't really say retire, semi retire. I don't intend to completely quit at 38, but work part time doing something more enjoyable. Who knows, I may love it so much I never quit. For now, I need to work towards FI. The DW would work part time also. We would also intend to move somewhere with a lower cost of living as its fairly high where we are.
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Old 01-09-2013, 06:53 PM   #38
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Remember that Social Security is figured on 35 years earnings. If you succeed in retiring early you won't get much help from SS later.
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Old 01-09-2013, 06:56 PM   #39
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Remember that Social Security is figured on 35 years earnings. If you succeed in retiring early you won't get much help from SS later.
Depends. Benefits ramp up quickly then taper off in the later years, so not working a full 35 may not have much of an impact.
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Old 01-09-2013, 08:08 PM   #40
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Well at this point I've got 11 years in, 10 more would be 21, then say 8 years part time for a total of 29. I know it's not going to be amazing, but that's got to count for something, no? Assuming SS doesn't change drastically. I'm not really going to rely on SS, but if its there that would be nice.
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