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Old 05-06-2010, 07:33 PM   #41
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I'm no expert on reverse mortgages, but I believe that you need to be 62 years old and I would think you can't get all of your equity out that way. And the younger you are when you start, the smaller percentage you can get. You also need to decide whether you want to leave anything to your heirs. And, as a final consideration, you may not be able to stay in the house until you die. If you have a reverse mortgage and need to move to assisted living at some point, you may be forced to sell the house to pay the mortgage balance.

In my own plans, I assign zero value to the house. A sale or a reverse mortgage is an emergency backup plan, but not part of my calculations.
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Old 05-06-2010, 07:35 PM   #42
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question
if you had to chose between having lots of free time between age 50-70 or being broke between ages 70-90
which would you chose
sorry if question is morbid
Sounds like a recipe to strap your kid to have to support you in your old age or feel guilty as hell over not... or not
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Old 05-06-2010, 07:43 PM   #43
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I certainly would not want to do that.
It just seems there is soo much effort in being financially secure in the last few years of life.Perhaps a few ,perhaps 20. I ve known many people in the past few months alone who passed away in their 70 s.
Isnt part of the ideal of early retirement in enjoying our vitality.
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Old 05-06-2010, 07:50 PM   #44
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I certainly would not want to do that.
It just seems there is soo much effort in being financially secure in the last few years of life.Perhaps a few ,perhaps 20. I ve known many people in the past few months alone who passed away in their 70 s.
Isnt part of the ideal of early retirement in enjoying our vitality.
Wish I had a crystal ball on this one. I am convinced that DW and I will die with way too much money, but that is a chance I'm willing to take versus being strapped in later life.

YMMV...
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Old 05-06-2010, 08:34 PM   #45
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It just seems there is soo much effort in being financially secure in the last few years of life.Perhaps a few ,perhaps 20. I ve known many people in the past few months alone who passed away in their 70 s.
Isnt part of the ideal of early retirement in enjoying our vitality.
You raise a difficult question.

Everyone sees the risk and negatives of retiring (early or not) and then running out of money before death, particularly running out of money while still able to live on your own, etc.

I do think it is easier to focus on that very visible risk than you think about the risks and negatives of not retiring earlier. If I had waited until I was, say, 60 to retire and had more money as a result many people would see no downside in that and would feel that working until 60 to have a better chance of ensuring that I don't run out of money at 85 is not just a fair trade off...it is one that is almost risk free.

And, yet...someone that I worked with, close to my age, seemingly in good health only a few weeks ago, died today quite suddenly and tragically. You see something like that and the risk of waiting to retire seems very real.

Very few of us will live to be 90 years old. Yet we spend so much time planning on having enough money for when we are 90 to 95. There is no doubt that this often does result in delayed retirements or perhaps withdrawal rates that are too low when newly retired.

Having said that, it is easy in your 50s (I'm 56) to not want to worry that much about the possibility that I'll run out of money at 90. Yet, if you were 85 or 90 and ran out of money then that would not be pleasant.

I think a balance is needed. I also think that most retirement calculators assume you retire and take your SWR your first year and then don't vary it except for inflation. In real life, if money is being depleted too quickly I think most would consider working part time and/or lowering the withdrawal rate.
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Old 05-06-2010, 08:49 PM   #46
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i believe as a reverse mortage banks have option to pay you a lump sum in full and allow you to live there until you die,,,that in addition to 1.2 mm current and hopefully skillfully invested
Your mind is made up; just go on and do whatever it is you want to do.
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Old 05-06-2010, 08:50 PM   #47
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thanks for a honest answer. At what age did you retire? I think you appreciate my thoughts about enjoying life while we can too.Is that correct?
We would like to live to 100,but how much vitality will have past 80 anyway. I dont want to be poor nor leave my daughter burdened. But it s not certain either way,we re talking odds. One poster on the morningstar site retired at 48 ,3 pre college age children and only 650,000. He s now in his 60 s ,all children went to college.,just happened he invested well and market was a bull for several years.
But working part time seems to be the answer.
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Old 05-06-2010, 11:28 PM   #48
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thanks for a honest answer. At what age did you retire?
I just retired last week. I am 56. Actually I started out planning to entirely retire, but when I gave notice I was asked to continue working 1 day a week basically doing the things that I most enjoy doing at work. So it was easy for me to decide to continue working part time on that basis. My DH will be retiring in the summer at age 62. We still have adolescents in the house so there is a risk. Having the option of part time work does help.
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Old 05-07-2010, 08:05 AM   #49
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sounds great and CONGRATS!!!!!!
What amount of money do you think is absolutely necassary to have ( i know there are varying circumstances) ?
I know many people who work,3 or 2 days a week and they really like it. Stay a little involved but have the free time we crave.
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Old 05-07-2010, 02:39 PM   #50
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Katsmeow
sounds great and CONGRATS!!!!!!
What amount of money do you think is absolutely necassary to have ( i know there are varying circumstances) ?
I know many people who work,3 or 2 days a week and they really like it. Stay a little involved but have the free time we crave.
In some of the previous posts you don't seem to have a good handle on
what you think your expenses will really be.

You might want to consider calculating your planned SWR.
and then try living on that for 6 months or better , a year.
I'm doing it by putting my projected SWR ( / 2) in my checking
account at 6 month intervals and paying for everything by credit card,
check, or atm withdrawl from said checking acct. (mostly credit card)
Then every month, i mull over the credit card bill and my checking acct
stmt from the credit union.

If you are feeling a little 'deprived' during that
time span, then maybe you should reconsider. I'm performing that little
experiment now, (at the 6 month mark). so far, so good in my case.
It does seem to be giving me a bit more confidence about pulling
the trigger within the next year / year and a half.
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Old 05-07-2010, 09:13 PM   #51
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question
if you had to chose between having lots of free time between age 50-70 or being broke between ages 70-90
which would you chose
sorry if question is morbid
Nice approach, though I think the wording should be "having no free time between 50 and 70 or being broke between 70 and 90".

My dad retired at 64 and died at 75, he maybe should have retired sooner. But, my mom went on to be very much alive to 95, and I'm sure she was happier because she didn't have to worry a lot about money.

If I were in your shoes, that 2 year old daughter would be a strong pull to get out of the paid workforce. It wouldn't be just "free time", it would be "time to raise my kid". If I thought I had a good shot at going back part time at something decent after she's in school, I'm pretty sure I'd be looking for the buyer for the business. But that's my personality.
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Old 05-07-2010, 09:16 PM   #52
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Thank you. That is very much on my mind. Work makes one tired too. I want to have time and energy with her.
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Old 05-07-2010, 10:38 PM   #53
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Katsmeow
sounds great and CONGRATS!!!!!!
What amount of money do you think is absolutely necassary to have ( i know there are varying circumstances) ?
.
I do think it is so variable that you can't generalize. Part of it is personal preference. That is, I have a much higher computer budget than most people because I like high end gaming computers. But my travel budget is a lot lower than others.

In your case, you need to think about a couple of factors. First, is health insurance? What is it going to cost for health insurance for you and your daughter? Even if healthy now, you don't know what will happen in future.

Costs related to raising your daughter. We have had some very expensive costs related to our children. One of my sons needed to attend an expensive therapeutic school. It was very helpful for him (he starts college in the fall) but it and other needs of his were really quite crushingly expensive. And when he was two I had no clue that those needs would be there.

The point is that children are well unpredictable. It is much easier to model your future spending needs than it is to know what they will be related to your child.
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