Early Retirement - New Normal

[M Paquette]

No pension, no medical. "Retiring" from my last employer, as in much of the high-tech industry, is exactly like quitting the job. No benefits at all, aside from no longer having to go to work. Generally folks in the office are nicer about retirements than quitting, so there's that.

 

[REWahoo]

No pension, no medical. "Retiring" from my last employer, as in much of the high-tech industry, is exactly like quitting the job. No benefits at all, aside from no longer having to go to work. Generally folks in the office are nicer about retirements than quitting, so there's that.

+1

Only difference in quitting vs. retiring at my employer was on the last day of work quitters didn't get free coffee, punch and cake in the cafeteria.

 

[PatrickA5]

I quit my job at megacorp (after 29 years) in 2008 at age 50. I've never considered myself FIREd since my DW was still working, but that is going to change next month since her company shut down the office in our town. And, I still work part-time during tax season to bring in a few extra bucks. But, starting in March, I guess we can say we're pretty much ER'd at 55.

So, no pension, no retiree healthcare, no inheritance, married w/3 kids - one in college, one 14. We had steady employment in good jobs, no layoffs. Basically 3 decades of 401Ks and other savings did the trick. No debt, college saved up for, paid off house. I can't really say we were overly LBYM, but we did mangage to save money and pay off debts. We're still spending way more than we should be - but that's going to end real soon.

Having said that, DW is already saying she might go back to work full time and she has the contacts to do so if she wants. Not me. I'll never go back to full time work - unless I have to.

 

[Meadbh]

How many of you early retired without having owned a business, no pension, no health care benefits in retirement, no inheritence. Basically the new normal. A job, and LBYM. (And Children.....)

I have a professional corporation, no pension, have access to healthcare, had an inheritance about 7 years before RE, which was actually the catalyst that motivated me to get serious about it.

 

[NW-Bound]

No pension, no benefits here for either DW or myself. Left megacorp to become part-owner of a small business, and another start-up when I was 40.

The business initially generated enough revenue to pay everybody the same salary we could have gotten at megacorps, sans 401k matching and incentives like ESOP. Then, we fell in hard times when the tech world crumbled in 2000, and there were no money left after all business expenses, and we worked without pay for about 2 years before throwing in the towel.

The other start-up never got up to the point where it could generate positive cash flow, and when there was no fresh money coming in from investors, it folded.

So, I would have been a lot better staying with megacorp. DW retired at age of 50, while I did consulting for nearly 10 years before retiring for real last year. Children all grown, and college costs all paid for. Got 2 homes, and a 7-figure portfolio, all from savings, and investing.

Factors that helped: LBYM, buying a house which was a bit oversized initially then staying in it instead of upgrading (no cost associated with selling, moving, etc...), staying married, children going to local state university, staying gainfully employed up until we decided to leave megacorps on our own cognizance, two incomes (good but not outrageous), no loss of pay due to illness or unemployment periods early in our working life.

Factors that were less than favorable: investing too conservatively during the great bull market of 1980-2000, leaving the cushy job at megacorp which could have gotten me a pension and a fatter 401k due to matching, loss of pay for a couple of years, erratic income in the last 10 years (but the goof-off periods between intermittent work were so rewarding mentally, spiritually, physically, if not financially, I would not change a thing).

 

[Disappointed]

+1

However, I was a pretty well paid sr exec, but lived a relatively simple life in my working years, compared to my peers (i.e., L-way-BYM). Saved a load in the last 10-12 years.

R

+1

Will be retiring this summer, that will be approximately 40 years of employment with this one company. Starting in 1973 as a part time job while attending college.


Mp

 

[Ronstar]

I have no pension, DW will have one when she retires in 2013 unless she pulls a "one more year"
Had inheritance 20 years ago that I used to buy our vacant lot before building.
Was a part business owner (15% ownership max) for 20 years ending 12/31/2012
DW (58) and I (57) both have health insurance under DW's work policy until medicare.
Relying 60% on 401k's and IRA's, 20% on taxable investments/ real estate, and 20% on Dw's pension and our combined SS.

 

[carnivalday]

Not retired yet, but will hopefully in a few years. Have worked all my life, no pension, hopefully a little social security. Have been investing in dividend stocks for years with an eye on retiring on dividends. Working diligently on paying off debt, credit cards nearly done, then just a mortgage. Have never made a lot of money, so I won't need a lot of money. I have incorporated the mortgage payment into the bills I will need to cover, so if I can get that done before I pull the plug, so much the better. I can't wait.

 

[youbet]

With many of the post, the are many folks who have retirement income or benefits that are no longer "normal" for most folks. This would include pensions, health care benefits in retirement, and inheritance.

How many of you early retired without having owned a business, no pension, no health care benefits in retirement, no inheritence. Basically the new normal. A job, and LBYM. (And Children.....)

Having just skimmed through the entire thread, it doesn't appear that the new "normal" has fully hit all that many of our retirees here. Most everyone has some sort of pension, employer retiree health care, stock options, inheritance, working spouse, etc. There seem to be few doing it exclusively on a FIRE portfolio and SS. I think most of those folks are still working.

Us? About 50/50 past employer retirement benefits / FIRE portfolio. We rely on our FIRE portfolio enough to probably get the feel for what it must be like for the folks who fully rely on it but understand that with 50% of our budget covered from pension/SS, we'll never completely "get it."

 

[Free To Canoe]

With many of the post, the are many folks who have retirement income or benefits that are no longer "normal" for most folks. This would include pensions, health care benefits in retirement, and inheritance.

How many of you early retired without having owned a business, no pension, no health care benefits in retirement, no inheritence. Basically the new normal. A job, and LBYM....

DW and I did it the way you describe with the additional bumpy road of many layoffs/job searches/relocations. Had good luck with DW and with our health. ERed at 53.

 

[imoldernu]

77th year, 24th year of retirement at age 53.
Spent pension $ on my own business. Closed 3 years later upon retiring. A wash.
$8,000 inheritance from MIL.
Now, Medicare and Social Security and savings.

Life story:http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

 

[rkser]

<Hand goes up...>



+ 1

 

[ERhoosier]

No pension, no health care, no social security, never owned a business either (unless you count being a partner in a law firm). LBYM was important. Having two incomes for some years helped. Having DW 100% on the same page as me was absolutely essential.

+1... or at least darn close.

 

[Shanky]

Most of the respondents to this topic had a small pension, or owned a business, or had an inheritance, or had no kids. It still seems the numbers of folks with none of the above are under-represented.

 

[ShortInSeattle]

Most of the respondents to this topic had a small pension, or owned a business, or had an inheritance, or had no kids. It still seems the numbers of folks with none of the above are under-represented.

True. Not all of those things guarantee an advantage though. I own a business and would make more money as an employee. A 10k inheritance won't make you wealthy....

 

[melion]

How many of you early retired without having owned a business, no pension, no health care benefits in retirement, no inheritence. Basically the new normal. A job, and LBYM. (And Children.....)

+1.

All of the above (and with 3 young children). I benefited from several back-to-back expat postings which helped on the saving side.

 

[Malcolm2]

At 55, plan to retire this year from a large org. Lucky to have pension and medical for both of us which will replace our current take home. Have saved for 35 years from the ground up to 7 figures in the tax deferred accounts, don't plan to touch those until 60+.

M

 

[okapi]

Small pension will start collecting next year.No healthcare,pay for my own.Always tried to max out 401k + IRAs.Was a workaholic.Worked huge amounts of overtime for my last 20yrs. Now glad I did but payed a price.Glad I got a severance package when I did.Was pretty burnt out.When asked what I did in my 30s+40s I really don"t have much of an answer cause I was at work most of the time.Some people thought my wife was a widow.Like I said thank God I saved what I did or I would be screwed now.Everything happens for a reason.Funny how now at 54 some folks think your lazy if you don"t work,but never said anything when I was working 70 hour weeks.Not important anyway.

 

[Maenad]

We're still ~7 years away from retirement, with no pensions or health insurance coming, and we're assuming no SS in ~30 years when we get to that age.

I wanted to say we're doing it all with LBYM, but that's not entirely true. My parents gave me their house, which we remodeled, and will eventually sell off to pay for a different place. I don't count the house as part of our NW though, since we'll just trade-in until we end up in a Continuing Care Community of some kind.

 

[NW-Bound]

From the latest Census data, people should feel fortunate to retire at all, let alone early. Consider the following numbers.

* In 1990, 21.8% of people in the age group of 65-69 were still working. It was 30.8% in 2010.

* Including all people above 65, 12.1% of people were working in 1990. In 2010, 16.1%.

Conclusion: It's getting harder to retire, let alone ER.

 

[okapi]

The sad thing about NWs stats are that people HAVE to work at that age.It also clogs up the job wheel.Less openings for younger folk.Not sure what solution would work.

 

[Alan]

The sad thing about NWs stats are that people HAVE to work at that age.It also clogs up the job wheel.Less openings for younger folk.Not sure what solution would work.

Looks like a similar thing happening in the UK. From the Office of National Statistics, the number of people over the age of 65 still in work doubled between 2001 and 2010.

 

[Keim]

Those numbers are disturbing. But lets not forget the larger societal trend known as Baby Boomers that has come of retirement agre in that timeframe. Our population has noticeably grayed in that time period.

 

[Major Tom]

How many of you early retired without having owned a business, no pension, no health care benefits in retirement, no inheritence. Basically the new normal. A job, and LBYM. (And Children.....)

I did receive an inheritance a couple of years ago, which was about 25% of the value of my portfolio at the time. It gave me a significant boost and made the difference between working a part-time job in ER, and not working one.

Other than that, I received no pension or healthcare benefits from my former employer. My retirement consists of personal savings, an inheritance, and SS (in the future.)

Although my signature says that I am ESR, my part-time gig is so minor as to be almost insignificant. It amounts to less than a week of work a year and pays about a grand, which buys me a few extra radio goodies for my ham radio hobby.

 

[ziggy29]

Looks like a similar thing happening in the UK. From the Office of National Statistics, the number of people over the age of 65 still in work doubled between 2001 and 2010.

This points to one of the dangers of raising the retirement age. Though it makes both economic and demographic sense in many ways to raise the SS and Medicare age to (say) 70, you'd certainly lose some of the cost savings to higher unemployment, Medicaid and food stamp costs for folks aged 65-70 because you are adding to the ranks of job seekers without increasing the number of jobs and who are not yet eligible for old-age benefits.