Hi, Imoldernu:
I read many, if not all, of your posts, and appreciate your stories based on real-life experience. Based on my reading, your retirement at 53 seemed to be involuntary and you were not as confident at that time as you are now. I am glad everything worked out nicely for you.
Since we are talking about building safety nets, which are something that we might (and could) do before we actually retire. So, given your situations at 53, if you had choices and proper opportunities, would you work for a few more years to build a better buffer?
(For a full disclosure, I am 53 now. If I lost my job now, I would not look for a new job, and would try to make my numbers work as you did.)
Good questions... Actually, my choice was made in 1986... My company (Montgomery Ward) was in the process of divesting from the catalog business. I literally worked myself out of a job, being responsible to close 2400 catalog stores and desks. I could have stayed on, moving to the retail division, which lasted another 5 years, but it was not in the area of my expertise, and, in effect, a different business altogether. Instead, went into business for myself, making the decision to retire three years later after cancer, at the time I was expanding and taking on some long term debt for a new location and buying extensive equipment. I couldn't stand the thought of leaving DW with that kind of debt.
About "confidence"... honestly, not so much... at least not as far as the money being enough to stay retired for the rest of my life. At age 53, my safety cushion was the ability to go back to work, even if at a lower salary.
So we looked at what we had, and did our calculations based on the years between age 53, and Social Security at age 62. We figured we had enough to make it if we cut our expenses. (Living in our Woodhaven campground in a Park Model, was supposed to be a
sacrifice, but it turned out to be wonderful, living among others our age, and a busy social life. Total cost... membership, all utilities, taxes and insurance less than $2500/yr.)
So then SS kicked in @ 62 for about $23k/yr... and then three more years, Medicare, which meant another $8k/yr less in expenses.
I guess that this type of calculating was the way our confidence increased. While I think Firecalc is an excellent tool for planning, we approached the future with many, many spreadsheets to include a projected annual budget all the way up to age 75 (at the time). That included when we'd sell our house, out projected car expenses, cost of travel (very little at the time), when to move from the campground, to FL, and later, when to buy a home to keep one spouse safe (medicaid) in the case of nursing home asset depletion. We figured the reduced cost of travel, eating out, and entertainment that came from buying into our FL over 55 community. The spreadsheet plan was nitpicking, but the "nits" added up, and provided a way to double check.
Would we have worked as few more years for a $$$ buffer? In retrospect,
no. The amount we would have been able to "put by for the future" would not have been enough to be worth staying in our more expensive location and at the
then cost of living. Always kept a check on the safety zone.
Could things have gone wrong? Sure!... and some things did, but never a catastrophe. Of course, had we had a situation like my friend Bob... things would have been different. Five years in a nursing home with Alzheimer's would cost nearly a half million dollars today. We weren't in that price range.
I would never go back. the years of happiness that we've had could not be bought with money.