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6 Signs You Are Ready to RE
Old 06-01-2013, 09:47 AM   #1
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6 Signs You Are Ready to RE

Nothing earth-shattering. Just a common-sense list.

6 Signs That You Are Ready To Retire Early | Bankrate.com

I would add a #7: The thought of another day in the asylum makes you want to blow your brains out, and you hate yourself for mortgaging your integrity and allowing yourself to be so dehumanized.

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Old 06-01-2013, 10:23 AM   #2
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I think these are good items to check off before retiring (at least partly because I can check them off...we like to be validated dont we. ). But, nothing new in here that's not already discussed on the forum on a regular basis. I'm always looking for new knowledge, and found none in this article.

I would also note that point #6 would be a lot more useful with something more specific (than the 4% rule) on how much of a loss to protect against. There's a lot out there that could be summarized and included in this item.

As a personal example on this point, as I evaluate our FIRE status (we're FI but not yet RE), I analyze what a 40% S&P drop would do to our portfolio and use that when evaluating AA and products like SPIAs, etc.
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Old 06-01-2013, 11:56 AM   #3
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Not a bad list, but I would point out that almost everything about it is money-focused, and there is little or no attention given to psychological, social, or spiritual issues. Five of the six points are about money, and only the first point is about something else (and really only one paragraph there, with the rest of that point moving quickly to the issue of "do you have enough money").

I know money's important, but I wish they'd spent a little more time on the other issues. For instance:

- Are you ready to structure your leisure time by yourself rather than have a job do it for you?

- Are you ready to say goodbye to whatever emotional/psychological benefits you get out of work?

- How will you spend all that free time?

- Work provides a sense of meaning and purpose for a lot of people. How will you replace that?

- Work provides a lot of social connections for people. How will you replace that?

- Do you know where you will live?

- If you are married, is your DW/DH ready to spend a lot more time with you, and you with them?

- Are you ready to deal with people's questions about why you're retiring early? How about feelings of jealousy or guilt or whatnot?

- Do you have a plan for when and how to give notice? Are you prepared to deal with whatever fallout there might be at the workplace, when you announce your retirement?

And yeah, I agree with you, Onward, knowing your ready also has a lot to do with whether you feel satisfied vs. demoralized on the job.

- Are you having fun at work? Is it still interesting to you? Do you enjoy your work, or are you sick and tired of it?


I've probably forgotten a few, but you get my point. There are a lot of factors in knowing when you're ready to pull the plug; money is just the most obvious.
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Old 06-01-2013, 11:59 AM   #4
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Sigh...it still has in it:

Quote:
One gauge of whether or not you are ready to retire is the amount you have saved as a multiple of your income. According to Fidelity Investments, you should have saved at least eight times your pre-retirement income by age 67 to ensure a secure retirement. If you want to retire earlier than that, you should probably shoot for more.
The last few years before DH retired and I semi-retired we had a high income. If we needed to have 8 times that he wouldn't have retired 3 years ago. The thing is that 3 years later we are living on about 1/3 of what our pre-retirement income was (and that is higher than it will be later as we have one child in college and another in late high school).
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Old 06-01-2013, 12:03 PM   #5
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Any retirement article that quotes how many times or what percent of your INCOME you have to save is immediately suspect. As most who post on here know but perhaps newbies may not-PRE RETIREMENT INCOME has Zero correlation with post retirement savings needs. How much PRE retirement And Expected POST RETIREMENT SPENDING is the sole determinant of retirement savings needs.
Those pushing these income related formulae are either ignorant or purposefully misleading people to keep them working longer to feed the financial industry beast.
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Old 06-01-2013, 01:40 PM   #6
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Sigh...it still has in it:

"One gauge of whether or not you are ready to retire is the amount you have saved as a multiple of your income. According to Fidelity Investments, you should have saved at least eight times your pre-retirement income by age 67 to ensure a secure retirement. If you want to retire earlier than that, you should probably shoot for more."

The last few years before DH retired and I semi-retired we had a high income. If we needed to have 8 times that he wouldn't have retired 3 years ago. The thing is that 3 years later we are living on about 1/3 of what our pre-retirement income was (and that is higher than it will be later as we have one child in college and another in late high school).
I saw this too and scratched my head. I also cut my pay not once but twice in my last years of working. This begs the quesiton as to which "pre-retirement income" should I use, the full-time, half-time, or 1/3-time hours I worked?
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Old 06-01-2013, 03:40 PM   #7
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Originally Posted by ER Eddie View Post
Not a bad list, but I would point out that almost everything about it is money-focused, and there is little or no attention given to psychological, social, or spiritual issues. Five of the six points are about money, and only the first point is about something else (and really only one paragraph there, with the rest of that point moving quickly to the issue of "do you have enough money").
In all fairness, the website is "bankrate.com" so I don't expect as much attention to the "psychological, social, or spiritual issues."

I think it is a decent list and probably validates most of our decisions to FIRE. As for the 8X savings requirement, I'm thinking that they are not considering pensions. I think nearly of us well exceed that in net worth+SS+pensions.
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Old 06-01-2013, 03:58 PM   #8
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While having paid off your mortgage would free up money to save, invest, or spend in other ways, I don't agree that it is a prerequisite for retiring. What difference, from a monthly budget perspective, between paying rent or paying a mortgage? It's still monthly housing costs. Even with a paid-off mortgage, there are still taxes and insurance to consider.
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Old 06-01-2013, 06:11 PM   #9
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In all fairness, the website is "bankrate.com" so I don't expect as much attention to the "psychological, social, or spiritual issues."
I suppose. I just find those sort of articles rather limited. More to life than money.
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Old 06-01-2013, 11:45 PM   #10
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In no particular order:
1. Saved just about enough $ to decide to RE. I didn't need much $. I have always lived with simple tastes.
2. My health was suffering. I suspected it was from work-related stress. Was on some 3 prescriptions near the end. Yuk! Didn't like some of the reactions. (After I ER'd 3 years ago this month, about 3 or so months afterward, my health improved greatly, and I got off ALL meds. Today, I remain Rx-free. Oh so happy about that!)
3. Got really tired of the politics, head-games, drama at my last job. (Before THAT job--which paid quite well, I had a job where I really liked the folks I w*rked with, but paid less. Oh well.)
4. Life is too short. People my age were getting quite ill or dropping dead.
5. Got FUN projects I'd rather do than going to w*rk everyday.
6. Wanting "Everyday to be a Saturday!" after seeing folks sitting back, enjoying their day, sipping coffee at a sidewalk table, as I drove to my next appointment, envying their easy idleness.
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Old 06-02-2013, 05:41 AM   #11
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Originally Posted by ER Eddie View Post

I know money's important, but I wish they'd spent a little more time on the other issues. For instance:

- Are you ready to structure your leisure time by yourself rather than have a job do it for you?
You must work for the government.
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Old 06-02-2013, 06:38 AM   #12
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You must work for the government.
+1
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Old 06-02-2013, 08:59 AM   #13
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The x% of pre-retirement income meme fits right in with folks who don't care what an item costs, only what the monthly payment is...
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Old 06-02-2013, 09:25 AM   #14
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Originally Posted by Birdie Num Nums View Post
In no particular order:
1. Saved just about enough $ to decide to RE. I didn't need much $. I have always lived with simple tastes.
2. My health was suffering. I suspected it was from work-related stress. Was on some 3 prescriptions near the end. Yuk! Didn't like some of the reactions. (After I ER'd 3 years ago this month, about 3 or so months afterward, my health improved greatly, and I got off ALL meds. Today, I remain Rx-free. Oh so happy about that!)
3. Got really tired of the politics, head-games, drama at my last job. (Before THAT job--which paid quite well, I had a job where I really liked the folks I w*rked with, but paid less. Oh well.)
4. Life is too short. People my age were getting quite ill or dropping dead.
5. Got FUN projects I'd rather do than going to w*rk everyday.
6. Wanting "Everyday to be a Saturday!" after seeing folks sitting back, enjoying their day, sipping coffee at a sidewalk table, as I drove to my next appointment, envying their easy idleness.
Yeah, that's what I'm talking about. Those kind of considerations. The job's impact on your health, how high your BS bucket is filled, how much time you suppose you have left to live, things that you'd rather be doing, envy of those who have that much leisure... Good examples.
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Old 06-02-2013, 09:34 AM   #15
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You must work for the government.
That came out wrong. You know what I mean.
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Old 06-02-2013, 10:32 AM   #16
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I think they should add one more
- You participate in the early-retirement.org forums regularly.
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Old 06-02-2013, 04:23 PM   #17
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I suppose. I just find those sort of articles rather limited. More to life than money.
Sure, but if you were trying to figure out if you were financially OK to retire, would you want to wade through a discussion of one's proper place in the universe?

Ha
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Old 06-02-2013, 05:55 PM   #18
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From the article:
Quote:
One gauge of whether or not you are ready to retire is the amount you have saved as a multiple of your income. According to Fidelity Investments, you should have saved at least eight times your pre-retirement income by age 67 to ensure a secure retirement. If you want to retire earlier than that, you should probably shoot for more.
No mention of pensions or social security. Duh.
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Old 06-02-2013, 11:25 PM   #19
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Sure, but if you were trying to figure out if you were financially OK to retire, would you want to wade through a discussion of one's proper place in the universe?
Well, yeah, if I were only interested in money, I'd be only interested in a discussion of money. But the article wasn't titled that way, and it began by discussing emotional readiness ... then went on to talk only about money. I guess I find that superficial. I shouldn't be surprised, though. These "Six signs of ..." articles are everywhere, cranked out a dime a dozen. It's probably a good fit for bankrate.com, as Beryl pointed out.
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Old 06-03-2013, 01:59 PM   #20
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I think #2 is critical. For about a decade prior to ER, I had an excellent opportunity to budget my personal expenses, either by taking a small salary or paying myself corporate dividends. I found I could live on ~$55,000 per annum. Now that I am ER, I have laid out a detailed budget and do monthly accounting. Other than income taxes (which vary with investment income, NOT with my spending) and loans (new car, mortgages on rental properties) my personal expenses have been well within my pre-RE estimates. In fact I just completed my accounting for May and I am substantially under budget despite a trip to Hawaii. That said, June will be an expensive month, with auto insurance and property taxes. Nevertheless I am confident that I can keep lifestyle expenses within my annual budget unless there is some catastrophe. Borrowing expenses will decline over time.
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