How many of you can RE now, but are saving to raise your std of living?

[tryan]

I'm concerned that even if I buy medical insurance today, it might go up so fast that it harms my standard of living in a few years.

When we applied for healthcare we learned the younger the better ... even had to apply in DW name to get the best rate (she's younger). As far as the "might go up" ... that'll always exist: today, in two years, in 20 years ...

One thing FOR SURE, your rate will be ALOT higher with bunch of pre-existing conditions ... the longer you wait, the higher the risk. IMHO.

 

[Surfdaddy]

Regarding health insurance, can you get policies (similar to flat term life) that guarantee rates for some period? Or even guarantee rate of increase?

I envision a nightmare scenario where I retire, and say, my insurance for family of 4 is $10K/year. I then start having heart trouble, need a bypass surgery. Insurance pays their part, but then my $10K/year goes to $30K/year! Or can they cancel me at any time?

(I have no heart problems, just considering possible scenarios )

 

[scrinch]

I've got a wife, kids of 18, 15, and 11, and a house with no mortgage. I set a target many years ago, saved over the years, and then recently got a severance package and achieved the target. Part of the package was reasonably priced health insurance until Medicare kicks in. I'm now working on contract for the same company and find myself asking the "Am I really ready for this at 47?" and "Was the target I set really high enough?" questions. I hope that a year from now I can say that I was simply in a transition period, but right now it feels like very uncertain times. After 22 years working for the man, as ashamed as I am to admit it, the prospect of no man seems a little frightening.

 

[2B]

This is a great thread.  I love the buckets analogy.

I decided about a month ago I could ER today.  I started with the forum asking about the possibility of taking 6% (Guyton article) and have read ESRBob's book amongst many others.  My decision was that DW and I could get by on our assets and pathetic pension (change jobs a few times and you don't get much).  Our lifestyle would be crimped at current levels but we could control spending.

Why not ER now?  DW is dealing with her parents.  One is in a nursing home and the other should be.  Trying to keep up with the one that isn't is worse for her than a full time job and it keeps us from doing much of anything.  There's no point in ERing if we're not going to be able to go and do. Also, having to go to work is the best excuse to not get sucked into the elder care. 

I also just got a new job that's still on the interesting and fun side.  The BS bucket is currently empty.  I've been around the track a few times so I know it will eventually start to fill.  Maybe the timing will be right soon.  FIL will be "resolved" and the BS bucket becomes noticeable at the same time.  In the meantime, every month I work increases my annual retirement income by $900.

 

[rs0460a]

every month I work increases my annual retirement income by $900.

Sorry, but I don't understand. Assuming the 4% withdrawl rate (my target) are you saying you are contributing $22.5K to your retirement "fund" every month?

- Ron

 

[shorttimer]

rs0460. I am not sure if this is what 2b meant, but in my case every month I work we save max in retirement plans, save outside of retirement plans, we don't touch what we have and our social security contributions go in. Not touching what we have and watching it grow has become more significant than what we put in. In our case, we don't increase $900 annual income per month but we do have a significant increase in our yearly annual retirement income when you add everything together. DH also gets a pension contribution, which we are crossing our fingers does not get frozen. He will get something at least after almost 30 years.

 

[2B]

shorttimer has it almost perfectly. Where my increase comes from is the reduced amount needed to offset SS since I'm getting closer to "retirement," more personal savings (but not $22K), slightly higher private pension because I wait to draw on it longer but, most significantly, my portfolio is projected to grow without me taking any withdraws.

Because of my mix of income streams, I am assuming a 5% withdrawl rate from my "residual" portfolio after annuitizing (in laddered CDs and bonds) for SS and paying off the house. If there is a "crash," I could substantially cut spending and survive without becoming a Wal Mart greeter living on only SS and pension.

 

[rs0460a]

without becoming a Wal Mart greeter living on only SS and pension.

Then what are U going to do all day?

- Ron

 

[tryan]

Or can they cancel me at any time?

This is illegal .... fortunately.

Insurance pays their part, but then my $10K/year goes to $30K/year!

This is legal ... unfortunately.

 

[scott]

This topic really hits home. There's a running joke in my family - I'm always saying to the wife, "3 more years, honey, and we won't have to worry no matter what happens". I've been saying that for maybe 7 years.

What happens is that the vision of how we could live/how much we need to live keeps shifting. Although how we actually live doesn't change. It's not that 2 more years of work and saving wouldn't make us more secure, it's that I worry about giving up the possibility to raise our standard of living - if we want to. Making the decision to RE means that were locked in to how we live today - which is totally comfortable for us TODAY. But I worry that we'll feel differently in the future.

I don't want or need to live better (we live quite well actually). I think it is just fear of change (and giving up job related status).

Ranger

 

[scrinch]

I don't want or need to live better (we live quite well actually). I think it is just fear of change (and giving up job related status).

Exactly! Hopefully just a transitory (but not ten year transitory) feeling.

 

[retire@40]

There's a running joke in my family - I'm always saying to the wife, "3 more years, honey, and we won't have to worry no matter what happens".  I've been saying that for maybe 7 years.

Reminds me of a quote in The Godfather II...

Kay: It made me think of what you once told me: "In five years the Corleone family will be completely legitimate." That was seven years ago.

Michael Corleone: I know. I'm trying, darling.

 

[2B]

Then what are U going to do all day?

Hopefully, I won't be looking for a real job. That's something I really do have to think about. This week I created a computer program to modify pump operating curves based on higher viscosity feeds. It wasn't anything fancy but I felt good about getting it done. I'm getting back into more technical work which I always enjoyed but got away from when I went "manager." I think becoming a manager was a big mistake except for the money. Looking back it probably wasn't all that much extra money anyway.

 

[Alan]

I've just been reading this thread and it certainly resounds with me.  In 4 years, at 55, I can retire on full benefits, but I could quit now, and work at something a lot less stressful.  DD is graduated, married and working, DS should graduate in a few months, we have no debt, no mortgage, a million $ portfolio so what keeps me at work?? 

a) the BS is flowing in faster than ever but it is a lot easier to handle simply knowing that I could walk out any time - and they know it.

b) DW and I are both extremely fit and come from families with mostly long-lived relatives, so we really feel we need to plan for long lives.

c) I don't care about the company or the management team, but I have a lot of people I work with and who work for me that I really like and don't want to let them down.

d) Uncertainty, fear of the unknown, etc.

So I plan for what jobs I might do if I leave, watch my portfolio grow, and run financial models every month to assure myself I'm in good shape financially as well as physically.  DW RE'd 2 years ago and we sold the big house and moved to a great apartment so I have more time outside of work to "play".

... and I sort of hope that the day of reckoning is forced on me so I can tell them to stuff it.

 

[rogersteciak]

I will never fully retire because I will always be doing something to keep me busy.  Since I'm an entrepreneur, money is the way I use to keep score, so much of what I will be doing for the rest of my life will generate income of one kind or another.

But I have taken "early semi-retirement" now so that my time is my own.  I have enough portfolio income that I don't have to worry anymore about earned income (i.e., having a job).  But the more diverse my income base becomes, the less pressure there is on any particular investment to pay my expenses.

 

[sgeeeee]

I will never fully retire because I will always be doing something to keep me busy.

  Hi Roger. Nothing wrong with deciding to keep working, but the implication of this sentence is that if you are not working to produce income, you aren't busy. That's a pretty narrow view of life and personal values.

Since I'm an entrepreneur, money is the way I use to keep score, so much of what I will be doing for the rest of my life will generate income of one kind or another.

Nothing wrong with that if it works for you, but don't expect applause for stating that you value income generation above anything else people might find to do with their time.

 

[rogersteciak]

  Hi Roger.  Nothing wrong with deciding to keep working, but the implication of this sentence is that if you are not working to produce income, you aren't busy.  That's a pretty narrow view of life and personal values. 

Nothing wrong with that if it works for you, but don't expect applause for stating that you value income generation above anything else people might find to do with their time.   

Those are good points.  Realize that it's my value system and what I want to do.  Other people may have different uses for their 168 hours of time every week and that is their business.  I'm not expecting applause from anyone because I don't care what others think about what I do with my time.  I can only live the life that's right for me.  Bill Gates and Warren Buffet could have retired a long time ago, yet they have continued to work even though they don't have to work anymore.  I'm the same way and I like having the choice to work or not work now.  I choose to continue to work and use the income I generate as a means of keeping score on myself.

 

[sgeeeee]

. . . I choose to continue to work and use the income I generate as a means of keeping score on myself.

Hope you win, I guess.

 

[Nords]

I choose to continue to work and use the income I generate as a means of keeping score on myself.

Welcome to the board, Roger, and nothing personal, but if that's the case then how does spending time on an ER discussion board benefit someone who doesn't plan to ER?

 

[modlair]

I'm somewhat of a newbie to this board, like Roger.

I'll speak up in his defense. I think there is a powerful demographic train coming that we're all aware of but we all have not embraced all of the consequences.

I'd venture to guess 80% of the people on this board are either on pensions or expect to be.

Well, Roger won't be, apparently. This is hugely important and I suspect the pension oriented folks cannot wrap their mindsets around this reality. He is taking care of himself and is wise in doing so.

There is another reality that will be hard to accept. I'd guess, controversially, that about 1/2 of the 80% who are pension folks are going to see those pensions disappear before they die -- either before they ever collect a penny or even after they start. Society is moving rapidly away from defined benefits and this will just as rapidly extend to government pensions. They are going to be slashed becuase there are not going to be enough workers to pay for them.

Worse, those few workers who will exist will be minorities. Their political caucuses will be outraged at paying into pension systems that fund almost exclusively white retirees.
They will have a very good point. Minorities don't live as long.

It looks inevitable to me. When it happens, a lot of old folks are going back to work. Roger is NOT taking an extreme position.

 

[Nords]

He is taking care of himself and is wise in doing so.

I'd save more money or cut back my living expenses.  I wouldn't default to the "Work for pay until I die" option.

 

[audreyh1]

I'd venture to guess 80% of the people on this board are either on pensions or expect to be. 

I kinda doubt that. Seems like many of the folks here have managed to accumulate assets sufficient for ER. But I don't have a poll to reference to prove otherwise.

Audrey

 

[2B]

I'd venture to guess 80% of the people on this board are either on pensions or expect to be. 

There is another reality that will be hard to accept.  I'd guess, controversially, that about 1/2 of the 80% who are pension folks are going to see those pensions disappear before they die -- either before they ever collect a penny or even after they start.  Society is moving rapidly away from defined benefits and this will just as rapidly extend to government pensions.  They are going to be slashed becuase there are not going to be enough workers to pay for them.

Worse, those few workers who will exist will be minorities.  Their political caucuses will be outraged at paying into pension systems that fund almost exclusively white retirees. 
They will have a very good point.  Minorities don't live as long.

Welcome to the board although I have to question why you are here too.

I suspect most of the people active on this board do not have a large part of their retirement funding based on a pension.  Except for the few govenment types who get COLAed every year, those of us that do receive one now know that our penion will disappear to inflation.

I wish I realized what a scam defined benefit pensions were sooner.  I would have started taking care of my own retirement sooner.

As far as who pays the taxes after I reduce mine, I expect the race of the taxed won't influence the IRS.  My experience they treat everyone like a criminal or a turnip destined to give blood.

I don't think "race baiting" belongs on this board.  Go hate somewhere else.

 

[modlair]

>>Worse, those few workers who will exist will be minorities. Their political caucuses will be outraged at paying into pension systems that fund almost exclusively white retirees.
They will have a very good point. Minorities don't live as long.
>>

>>I don't think "race baiting" belongs on this board. Go hate somewhere else.
>>

Oh heavens, that's not fair. This is a mathematical reality and there need be no agenda.

It is what it is and the results can be assessed on the basis of probability. Were I in a minority political caucus I would not want money extracted from my constituents paychecks to fund, exclusively and disproportionately, a different constituency from which my own contituents would likely always be excluded.

 

[astromeria]

We had a poll not too long ago on the percentage here collecting or expecting a pension of substance. IIRC, it was less than 80%--maybe 60%?

In our case, I have no pension coming, which didn't stop me from ER. My husband is supposed to collect $237/month at age 65, no COLA before or after, no survivorship, from BigCorp. If he stays in his college instructor job long enough (and assuming they don't change the rules), he'll collect another pension from our state, also very small. I don't count on either of them and typically ignore them in my planning (but an extra $500/month would be a very nice bonus).