Average Age of Retirement Rising

[Big_Hitter]

ACA will absolutely put downward pressure on the average age of early retirements

 

[W2R]

Does anyone here think the ACA will put downward pressure on the average age of retirement because people don't have to work until medicare age (or at least 63.5 like my dad did, using COBRA to bridge him to 65 and medicare)? I know this has been discussed in this forum before.

Sure! Also, that used to be quite a problem even for those of us with retiree medical insurance as part of our benefits package, to be used during the years before Medicare kicks in.

I know that personally I was FI and could have retired at 59 instead of 61, if I could have had reasonably priced medical insurance at that time. Instead I had to wait until I could officially retire and become eligible for retiree medical insurance. I would have retired two years earlier if I hadn't been caught in that trap.

 

[hakuna matata]

That would be about right based on most of the people I know in my age range, at least that is when they are saying they will retire. A couple of them have said 65, and then a few have said they can't afford to retire.

My wife and I are working to bring that number down, as we both will retire this fall at age 55.

 

[photoguy]

Does anyone here think the ACA will put downward pressure on the average age of retirement because people don't have to work until medicare age (or at least 63.5 like my dad did, using COBRA to bridge him to 65 and medicare)? I know this has been discussed in this forum before.

We fired this year and I don't think we would have been able to without ACA's guaranteed issue. I probably would have been able to get a high deductible plan (never get sick) but I think my wife has too many pre-existing conditions.

Alternatively I guess we could have moved to Canada or had her work a part time job only for insurance (I think it would have been easier for her to find part time work).

 

[2B]

ACA will absolutely put downward pressure on the average age of early retirements

The cost of my COBRA is not much different that what I'd pay for a Bronze ACA policy unless I specifically reduce IRA rollovers to my Roth to get the subsidy. My COBRA has a lower deductible but a higher max OOP if something serious happens. Texas had a High Risk Pool before the ACA that was very similar to a Bronze ACA plan. Anyone could sign up for this to maintain their insurance but you couldn't let your insurance lapse. From my standpoint the ACA has made no difference.

I realize some states restricted access to their high risk pools so then the ACA would be a biggie.

 

[Big_Hitter]

Managing MAGI is the key. Also, it depends on the cost of COBRA and pre-existing conditions.

I believe we have tens if not hundreds of thousands in "job lock" (for health care coverage) that will be soon leaving the workforce.

Oh, how is H-town these days? I used to live in the 77018 until 2011.

 

[Free To Canoe]

I retired last Friday at 56 so that should help lower the average a little......

Congrats!

 

[diehard1997]

I retired last year at the age of 38. For the record, my wife doesn't work.

So far, it's been the best decision I my life.


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[Accidental Retiree]

misfire

 

[WannabeRetired]

I retired last year at the age of 38. For the record, my wife doesn't work.

So far, it's been the best decision I my life.


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Would you mind divulging how you did it at such an early age?

 

[diehard1997]

Would you mind divulging how you did it at such an early age?

Absolutely. I started a software consulting company in the mid-nineties and worked ridiculous hours for many years. As I knew the pace was not sustainable I saved an average of 60% of my income (on good years much more). I was close to FI in 2010 but then found a buyer for my business in 2011. This created a huge FI safety net given my spending never jumped with the income (expenses around 65-75K per year). I worked for the acquiring company for almost two years then retired. I have a wife and 9 year old daughter plus a commercial building I own/manage so I stay pretty busy. I'm just glad I'm still not working those crazy hours!


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[2B]

Managing MAGI is the key. Also, it depends on the cost of COBRA and pre-existing conditions.

I believe we have tens if not hundreds of thousands in "job lock" (for health care coverage) that will be soon leaving the workforce.

Oh, how is H-town these days? I used to live in the 77018 until 2011.

Houston is booming. The Harris County Appraisal District is just giddy over jacking up everyone's property values. The freeways continue to be expanded and are still jammed. Toll road construction is connecting sections of business and residential neighborhoods that weren't even imagined a decade ago.

 

[REWahoo]

Houston is booming.

+1

In the spring our grandsons were playing in a baseball tournament in Houston. We wanted to take our RV over for the weekend but couldn't find a vacancy at any RV park in the area. I checked every park within a 20 mile radius of the tournament and they were all booked - not just for the weekend, but for the remainder of 2014...

 

[MichaelB]

+1

In the spring our grandsons were playing in a baseball tournament in Houston. We wanted to take our RV over for the weekend but couldn't find a vacancy at any RV park in the area. I checked every park within a 20 mile radius of the tournament and they were all booked - not just for the weekend, but for the remainder of 2014...

Not just Houston, either. I've noticed a steady increase in RVs on the highways over the past few years. Not sure it is back to '07 levels yet but it sure has recovered from '09 - '10.

 

[REWahoo]

I've noticed a steady increase in RVs on the highways over the past few years. Not sure it is back to '07 levels yet but it sure has recovered from '09 - '10.

Boomers blowing their kid's inheritances out the tailpipe.

 

[MichaelB]

Boomers blowing their kid's inheritances out the tailpipe.

Doesn't bother me any. I'm happy to see the RVs and the auto carriers in full force on the highways. Same with all the freight train traffic here in the Chicago area. Besides, it's better for the grandkids - more job openings.

 

[2B]

+1

In the spring our grandsons were playing in a baseball tournament in Houston. We wanted to take our RV over for the weekend but couldn't find a vacancy at any RV park in the area. I checked every park within a 20 mile radius of the tournament and they were all booked - not just for the weekend, but for the remainder of 2014...

Every time I see one of the heart jerk news stories about someone not being able to find a job I just want to reach out and slap them. If you don't have a job in Houston, it's because you don't want one.

 

[Jay_Gatsby]

Every time I see one of the heart jerk news stories about someone not being able to find a job I just want to reach out and slap them. If you don't have a job in Houston, it's because you don't want one.

Not to derail the thread, but this is often the case in many areas of the country. If there isn't a job where you are, then MOVE where there are jobs.

As for the average age of retirement, I agree that it likely crept upwards due to the recession and hesitancy on the part of Baby Boomers to retire (once bitten, twice shy). The problem, as others have pointed out, is that this creates a career ceiling for Gen X. This cascades down to Gen Y, which wants the jobs currently held by Gen X.

So what are Gen X and Gen Y to do? Many seem to be migrating to companies that aren't top-heavy with Baby Boomers, or in some cases, starting their own companies. This effect may be amplified in coming years by the portability of ACA healthcare insurance. This "road not taken" approach not only satisfies the career track advancement desired by Gen X and Y, but catapults them into positions and compensation they might never have received had they "waited their turn" behind Baby Boomers.

 

[Big_Hitter]

So what are Gen X and Gen Y to do?

They will find it nearly impossible or extremely difficult to retire without defined benefit income. After the boomers retire, they will be in high demand and will be attracted to companies that offer rich defined benefit plans.

It is impossible in any other retirement design to make up for lost ground as quickly as can be done in a defined benefit plan.

Just my prediction...

 

[38Chevy454]

Late to the party here, but I intend to at least offer my lower age contribution to beat the age 62 retirement by 10 years or possibly more.

 

[Big_Hitter]

At one point, my main goal in life was to be retired longer than I worked.

This requires two things, a long life span and an early retirement age.

 

[Alan]

ACA will absolutely put downward pressure on the average age of early retirements

+1
I would have retired 2 years either but took on a re-location to another State to work on projects until I qualified for retiree health insurance.

 

[NW-Bound]

Geezers spending money is voluntary wealth redistribution. If they hoard money, then we would have to confiscate some via taxes, then it would not be fun for everybody. I have been doing my share to stimulate the construction business with projects on both my homes. Heh heh heh...

 

[Jay_Gatsby]

They will find it nearly impossible or extremely difficult to retire without defined benefit income. After the boomers retire, they will be in high demand and will be attracted to companies that offer rich defined benefit plans.

It is impossible in any other retirement design to make up for lost ground as quickly as can be done in a defined benefit plan.

Just my prediction...

Somehow I doubt employers are going to offer defined benefit plans, having migrated away from them over the past 20+ years. That said, because Gen X is smaller than the Baby Boomers and Gen Y, there may very well be a shortage of employees with the requisite experience. This may lead to many employers offering healthier compensation packages for such workers.

 

[Big_Hitter]

If structured properly, DB plans can be a huge attraction/retention tool with little risk.

The 415b limit can be accrued over 10 years, the annual 415c limit is a pittance in comparison.

If I had my choice I would take tax-qualified deferred comp over straight income every time.