Waiting to retire until some "artificial" date

[OnIslandTime]

I thought that the topic about people not running the numbers was going to be about this subject. I see a lot of people not running the numbers about their retirement...they are waiting until some date that is not/will not be their decision.

For example, I work with a 65-yo person who plans to work to 70, "because his social security will be the biggest then". Just looking (from the outside) at his work history (many years technical work at high pay at megacorp), his life style (kids grown and established for years, no high dollar hobbies, no travel, house probably paid for), his retirement plans (wants to putter around at home), I'm guessing he could retire today and live out his dream retirement. He, however, is driven to work until what I consider an artificial deadline; he speaks of it as if only an idiot would do it any other way. So while he obviously understands numbers, I don't believe he has ever run the numbers for his actual situation.

I confess, that we always wanted to retire early, but we always kind of went at it by salting away money and looking to see if we were ready...that is, until we got closer and we bought the place we are planning to retire to. I wonder if it is because we are looking at it as retiring "to" something rather than retiring "from" something, that drives us to run the numbers recently.

I've pointed several people at this forum and firecalc and had some come back and tell me they were closer than they thought. Actually, I believe that everybody who has actually taken a look (i.e., they ran the numbers) has discovered they can retire sooner than they thought.

I understand that many people believe they have to work until their health forces them out of it, but I think even many of those folks could probably retire and enjoy some years of freedom, but they don't know how to run the numbers and figure it out. The good news is that today many of these people may be in better shape than they know because they may have some pension money and social security and a bit of IRA/401k money. With the disappearance of pensions and the likely future social security haircut, in the future many in our consumerist culture will probably not be so lucky.

Sadly, I think too many people are scared of math itself and scared of money math specifically and just sort of bumble along letting the "system" tell them what they can afford and when they can retire. Or maybe the "system" keeps letting them buy stuff and they know they are just barely getting by on their paycheck and anything less wouldn't work.

This forum and firecalc are very helpful, because folks can get educated and run the numbers in private (don't have to let a financial person/broker dig around in your business or try to sell you something). I will continue sending folks to these powerful resources.

Anyway, I'm not sure what the point of this rambling message is other than wouldn't it be nice if somewhere along the way everybody learned how to deal with money...besides just spending it as quick as you get it.

[omni550]

Last year I dated a guy just like this. He's a single (never-married) engineer with no kids. He's an LBYM type. He lives in a nice paid-for house, drives a nice paid-for car, and doesn't have any expensive hobbies. His interests are crossword puzzles, politics, and golf. He kept telling me he was planning on working until 70. I suggested he take a look at firecalc. He did and called me excitedly with the good news. But he's still planning on working until 70. I don't get it.


omni

[travelover]

Many have no idea what their real expenses are now or will be in retirement. Others don't really want to retire and use notions like maximum SS to put off seriously considering retirement.

That's OK. SS needs the money and the stores are too crowded midweek for me, anyway.

[Sunset]

I find it amazing when I went to school, the only money education we got was from the gym teacher who explained in great detail why buying a house now was a lot better than saving up for it and paying cash.
I used that little knowledge to buy my first property after I was on the job for 6 months.

But nobody explained about stocks, bonds, 401K's, etc...... thank goodness there was a library.

[rayinpenn]

Believe or not retirement isn’t solely about money. I’m working 4 days a week because it keeps me busy and I enjoy the challenge. At 63 If I had to drag an oil hose 30 yards to the fill cap in 15 degree weather I’m sure I’d be retired. For all too many work is simply all they know. There is one certainty - deferring the end of the accumulation phase never hurt the pile.

Funny thing Firecalc or any predictive financial simulation software are not perfect. They’ll tell you what the outcome is 95% of the time what they won’t tell you is what will happen that other 5%. Some exceptionally smart people learned that lesson in 2009.

Consider this well healed individuals don’t need anything but simple math to know they have enough. You live a simple life and lived on a salary of 90 grand and have 5 million in the retirement pot - 5 million divided by 30 years = $167k a year. Or if you prefer 4% would be $200k. Either way more then enough.

[brucethebroker]

Quote:

Originally Posted by omni550 Last year I dated a guy just like this. He's a single (never-married) engineer with no kids. He's an LBYM type. He lives in a nice paid-for house, drives a nice paid-for car, and doesn't have any expensive hobbies. His interests are crossword puzzles, politics, and golf. He kept telling me he was planning on working until 70. I suggested he take a look at firecalc. He did and called me excitedly with the good news. But he's still planning on working until 70. I don't get it. omni

I do.

Before the real estate meltdown, I could not believe two friends who retired as soon as they hit early SS at 62. At that time, I loved my career (selling houses), loved the flexibility, loved the people I worked with, had built up a nice business/cash flow machine over 12 years and was making really good money. 6 months later, my business was totally destroyed by the great recession (in my case, great depression). 5 years later, I eagerly grabbed early SS (62), which with PT work, turned my financial life around. (Now, I am enjoying my "new normal", and would not go back to full time work).

BUT, if my career had not imploded, I would also be happily working each day, and looking to age 70 or beyond to retire.

[braumeister]

As I see it, some people want to retire early and some don't. it's that simple. Each attitude has a variety of reasons to support it. We're all different.

[RunningBum]

Quote:

Originally Posted by OnIslandTime Anyway, I'm not sure what the point of this rambling message is other than wouldn't it be nice if somewhere along the way everybody learned how to deal with money...besides just spending it as quick as you get it.

I've never really given it any thought, because it's not my business to tell people how to live their lives. If they want to have more stuff rather than retire early, that's their business. If they express an interest in retiring early, then I'll suggest things.

[jollystomper]

I have more than a few colleagues at Megacorp who have set their retirement date to when they become eligible for Medicare. Most have not done the numbers in detail but feel they can manage as long as healthcare insurance is "reasonable". Megacorp no longer provides retiree health insurance, and they are fearful of those expense unknowns before Medicare kicks in.

[Big_Hitter]

Quote:

Originally Posted by omni550 Last year I dated a guy just like this. He's a single (never-married) engineer with no kids. He's an LBYM type. He lives in a nice paid-for house, drives a nice paid-for car, and doesn't have any expensive hobbies. His interests are crossword puzzles, politics, and golf. He kept telling me he was planning on working until 70. I suggested he take a look at firecalc. He did and called me excitedly with the good news. But he's still planning on working until 70. I don't get it. omni

workaholic

[Sojourner]

Quote:

Originally Posted by OnIslandTime Sadly, I think too many people are scared of math itself and scared of money math specifically and just sort of bumble along letting the "system" tell them what they can afford and when they can retire. Or maybe the "system" keeps letting them buy stuff and they know they are just barely getting by on their paycheck and anything less wouldn't work.

The way I see it, most people have pretty limited long term planning skills when it comes to retirement and, really, just about every thing else. You see this in the way they eat, the way they spend and don't save, the way they have children, and in many other areas of their lifestyles. The person who says "I'm going to work until 70 because that's when my SS check will be biggest" is cut from generally the same cloth as the one who says "I'm gonna keep smoking 2 packs a day because I like it and, well, something's gonna kill me eventually anyway." Lack of analytical, long-term thinking and planning skills, IMHO. Very widespread in our society.

[JoeWras]

Quote:

Originally Posted by jollystomper I have more than a few colleagues at Megacorp who have set their retirement date to when they become eligible for Medicare. Most have not done the numbers in detail but feel they can manage as long as healthcare insurance is "reasonable". Megacorp no longer provides retiree health insurance, and they are fearful of those expense unknowns before Medicare kicks in.

Yes, sounds familiar. Many of them, however, are having the decision made for them before this date due to layoffs.

Some people just want to wait for it to happen to them. That's not always bad as long as you are prepared for it.

[MRG]

I remember a co-w*rker who insisted on 59.5. Even after I explained the rule of 55 to him, he was staying those last 4.5 years.

His DM had passed and DF was having issues. DF turned out to be terminal and he took a month off to be with DF.

When he came back to work the only thing his manager asked was what the guy was going to do to make up for the month delay the project took while the was off!

His manager received his 2 week notice that afternoon.

Sometimes we just need a kick to get our priorities straight.

[RunningBum]

Quote:

Originally Posted by MRG I remember a co-w*rker who insisted on 59.5. Even after I explained the rule of 55 to him, he was staying those last 4.5 years. His DM had passed and DF was having issues. DF turned out to be terminal and he took a month off to be with DF. When he came back to work the only thing his manager asked was what the guy was going to do to make up for the month delay the project took while the was off! His manager received his 2 week notice that afternoon. Sometimes we just need a kick to get our priorities straight.

I don't want to say it's a great story because the reasons were sad, but I'd have loved to see the manager's face!

[jollystomper]

Quote:

Originally Posted by JoeWras Some people just want to wait for it to happen to them. That's not always bad as long as you are prepared for it.

I agree, as that is my position. I am willing to hang around for the next layoff, and my manager is happy for that since it will make his job easier. He is also leaving me alone to work as I choose so I can't complain.

[Mdlerth]

Quote:

Originally Posted by MRG I remember a co-w*rker who insisted on 59.5. Even after I explained the rule of 55 to him, he was staying those last 4.5 years. His DM had passed and DF was having issues. DF turned out to be terminal and he took a month off to be with DF. When he came back to work the only thing his manager asked was what the guy was going to do to make up for the month delay the project took while the was off! His manager received his 2 week notice that afternoon. Sometimes we just need a kick to get our priorities straight.

What a fabulous story! It's going in my file of "insights into villainy". I write fiction in my spare time (I'll do it full time once I RE) and this anecdote is a pearl.

I could not agree more with your concluding statement.

[Sunset]

Quote:

Originally Posted by RunningBum I've never really given it any thought, because it's not my business to tell people how to live their lives. If they want to have more stuff rather than retire early, that's their business. If they express an interest in retiring early, then I'll suggest things.

I had the opposite thing, a woman in IT quit working at age 40, which would be fine, but she didn't have enough money saved. She was used to making 4->5 times the median family wage and getting a job as soon as applied.
I repeatedly told her about once per year that she should get a job.
So 15 years later she emails me to ask me what languages she should know to go back to programming, later she told me it was super hard trying to learn this new stuff, but regular jobs paid so little..

Now she is working for $25K /yr not in programming...

I don't normally tell folks to work or retire, but I will for friends if I think they are making a mistake, and they can correct me if I'm wrong.