What advice does a 65 year old retiree have for a young early retiree?

[Enuff2Eat]

Dream is free. Wishful thinking for me to retire early now.

Anyhow, please give us your advice, share your experiences, mistake, things you wouldn't do it again, or anything you can think of so we can learn and mentally prepare to exit our working life.

Enuff

 

[mystang52]

Short and sweet:
Financial: Pay yourself first - automatic deductions for 401K/other retirement, designated emergency fund. Save for major expenses such as college for kids.
Consider separate sinking fund for other major expenses such as car replacement. General savings fund.

Non-financial: Enjoy life now - vacations, non-COVID-times dining out, plays, concerts, etc. if that's what you enjoy. Plan for ongoing activities during retirement.

And if you make mistakes along the way, you likely can't undo them so just learn and move on.

 

[stepford]

.

Non-financial: Enjoy life now

That is the biggest one. You'll never be younger than you are today. If you have active hobbies, enjoy them now. Health problems can start creeping up sooner than you think.

I'm 60, retired almost 5 years and now wish I'd gone a bit sooner. I was able to indulge my active hobbies fully for only about 3 of those retired years before age-related problems slowed me way down.

 

[Sunset]

Shun debt.
Buy used cars.
50% of marriages will fail -> could be yours, and 1/2 of retirement savings is gone...

 

[samm]

You'll never be younger than you are today. If you have active hobbies, enjoy them now. Health problems can start creeping up sooner than you think.

+10
Well said.

 

[pacergal]

--LBYM, or per Suzie O--Just because you can afford it, doesn't mean you should buy it..
--Save, Save, Save
--Understand your risk regarding your money. Have a good asset allocation that lets you sleep at night. I thought I did, but really didn't and have adjusted mine this past 12 months.
--Review your spending, over and over again. Go down the rabbit hole and make sure the numbers are accurate.
--Keep the fun in your life, stay connected with others. Enjoy each day, now and in the future.
--Plan and look forward to your retirement and what you will do with your time. Not every minute needs to be busy!
--Take care of your health, and plan for your aging.

 

[Enuff2Eat]

work 1 more year?

how do you really know when to quit? or you didn't have choice? or your spouse still working so it's easy to decide.

if you could.. would you work another year or retire a year earlier?

were you debts free? do you have more free time but afraid to spend like before?

 

[Rianne]

Trust your own happiness. I started feeling useless a few weeks back. Especially with this Covid thing. I was thinking “how am I contributing to the betterment of the world or society?” You know what? Take care of yourself. Be pleasant and kind to others. Enjoy your days to the best of your abilities. Accept what you cannot change and change what you can or the serenity prayer. Enjoy nature. Smile under your mask...it shows in your cheeks.

 

[target2019]

how do you really know when to quit? or you didn't have choice? or your spouse still working so it's easy to decide.

if you could.. would you work another year or retire a year earlier?

were you debts free? do you have more free time but afraid to spend like before?

It's more like putting a plan into place, not quitting.
I should have retired a year earlier.
Debt free. Spend is lower now. I can buy things that make me happy or make life easier.

 

[WestUniversity]

i am truly saddened by the number of people i know and have lost, that have died shortly after retirement or too soon into retirement. Gone, simply too young and simply too early. Try to balance saving for the future with living in the now. None of us are guaranteed tomorrow...

 

[kimcdougc]

Retired at the correct time. Have learned everything doesn't have to be done today. You can actually pace yourself. Debt free except for the house.

 

[Beststash]

Hindsight is 20/20

Think seriously about where you want to spend the rest of your life. Climate/Politics/ Family/Economics are all major and important considerations. I retired at 52 and I wish I had moved to an area that had a more moderate climate and more progressive thinking. Time goes so fast and as you get older it gets harder and harder to make a correction.

 

[Offgrid Organic Farmer]

I am not 65, yet. I am only 61. I have been retired for 19 years.

So long as you bring in more than how much you spend, who cares?

 

[BoodaGazelle]

Don’t put all of your money in tax-deferred accounts. Unless you have some type of company-paid health insurance, you will need to live on already-taxed money to keep your MAGI down for ACA subsidies.

 

[RAE]

- LBYM. Enjoy things in life that don't cost a lot of $$ (there are lots of them).
- shun debt like the plague. Do not carry any debt into retirement.
- avoid the trap of "consumerism". Don't buy stuff that you don't need (like a lot of people do). Prioritize the things that you truly value, and save your $$ for them.
- your health and fitness are more important than anything else. Take care of them now, and it will pay off as you age. All the money in the world won't matter much if you are unable to enjoy it in retirement due to poor health.

 

[ut2sua]

Dream is free. Wishful thinking for me to retire early now.

Anyhow, please give us your advice, share your experiences, mistake, things you wouldn't do it again, or anything you can think of so we can learn and mentally prepare to exit our working life.

Enuff

OP, I am still far from 65, but can share a few things...
It is a fairly difficult task involving LBYM. Most FIREd folks are millionaires, many are multi-millionaires, but they spent $ as if that pile of $ doesn't belong to them (that is the difficult part that many young people have problem with).
By asking this question, you are already half way there however. I would be very happy if my kids ask me this same question. For a personal experience, years ago, I resisted buying a new car (only after making that exact mistake a few years earlier - I learned my lesson early) before buying my first condo (otherwise, I would not have qualified for my first mortgage), and that started things in the right track for me. I drive a luxury car now, but I can afford to pay it off before driving it home. I do agree with others in this tread, however, that don't try so hard to save $ that you forget to enjoy living your current life.

 

[Enuff2Eat]

OP, I am still far from 65, but can share a few things...
It is a fairly difficult task involving LBYM. Most FIREd folks are millionaires, many are multi-millionaires, but they spent $ as if that pile of $ doesn't belong to them (that is the difficult part that many young people have problem with).
By asking this question, you are already half way there however. I would be very happy if my kids ask me this same question. For a personal experience, years ago, I resisted buying a new car (only after making that exact mistake a few years earlier - I learned my lesson early) before buying my first condo (otherwise, I would not have qualified for my first mortgage), and that started things in the right track for me. I drive a luxury car now, but I can afford to pay it off before driving it home. I do agree with others in this tread, however, that don't try so hard to save $ that you forget to enjoy living your current life.

thank you all. Excellent advice. I am planning, thinking, dreaming, getting rid of debts. Will live off after-tax money for awhile before dipping into 401k.

Biggest concern is kids. They will always need help here or there.

 

[OldShooter]

The short version: Fear inflation!

The longer version: If you ER, probably the actuaries will give you a life-remaining number like 30 years. Maybe more. And, for round numbers, assume that today you need $100K of income. Using inflation rates: Recent history 2%, 100 year history 3+%, and 40 year history 4+% to project that $100K need, we get:

2% $183,000/year needed in year-30 dollars to support the same spending level.

3% $249,000

4% $340,000
​

I think we all tend to be quite myopic about future inflation. IMO for many of us it is the biggest risk to our lifestyles that we face.

 

[ut2sua]

Be pleasant and kind to others.

Yes. We need more of the above during this time. Thanks for making my day Rianne.

 

[Gallaher]

Invest in stocks

 

[Offgrid Organic Farmer]

Don’t put all of your money in tax-deferred accounts.

hmm, I do not know about all that. My money is totally in tax-shelters.

I have not paid into Income Taxation since 1985, paying taxes would ruin me.

Invest in stocks

Or else invest in something that pays better and keeps you sheltered from taxes.

 

[OldShooter]

... invest in something that pays better and keeps you sheltered from taxes.

Sounds great! What is this "something" that pays better than stocks? I would like some too.

(Note that the y-axis is logarithmic. Stocks beat bonds roughly 80x.)​

 

[Willers]

I'm not quite 60, but have been retired for a while so I'll offer my 2 cents anyway

Many quote LBYM, but our test on spending was always whether or not looking back in a year I'd likely be happy I spent the money. Spend your money on things that will result in lasting happiness and skip those that don't. Do this and you'll likely have the best of both worlds; plenty of savings and fulfilling experiences along the way.

There were years that we lived close to or at our means because we knew were in a special time in life that wouldn't last (location, friends, active age). Other years we didn't have the need to spend even 50% of our income.

It all comes down to using money in a way that makes you happy. I'm a car guy. I've bought numerous cars. Some have been smart financial moves, some terrible, but I don't regret any of them.

Money is just a tool...

 

[Gumby]

Make a plan to retire early. Spell out when will you retire and how will you put the financial and non-financial pieces in place to achieve that goal. Then, work to that plan. Although you don't need to slavishly adhere to it and can make necessary revisions if events push you off course, you are far more likely to put yourself in the position to retire early if you have a plan than if you don't. (and also more likely to avoid the One More Year syndrome)

Sounds great! What is this "something" that pays better than stocks? I would like some too.

Lucky for you, I have available, for my friends only, the third tranche of a synthetic CDO that employs Bolivian coca futures as the reference security. It is denominated in Bitcoin. I'm sure you will agree that the substantial return is well worth the negligible risk.

 

[Offgrid Organic Farmer]

Sounds great! What is this "something" that pays better than stocks? I would like some too.

I began investing in Rental Real Estate in 1985. The last year that I paid into Income Taxation.

The tax-sheltering of Rental Real Estate sheltered my salary income until I retired at 42, in 2001.

I have been enjoying my retirement the past 19 years, kind of wondering what it is going to be like when I reach SS age.

In 2016, we bought another Rental Real Estate property, so far it is paying 13%. We do not have this one setup for the tax-sheltering, as my pension income is so low that we no longer need the tax sheltering.