Retirement Killers

[mickeyd]

A really fine article that lists a number of excellent points to ponder about retirement money choices. I'd refer this to someone who was considering ER, but still was not sure what to do.

You basically have two choices: You can be a master stock-picker like Warren Buffett or Peter Lynch and try to find the next Wal-Mart. Or you can broadly diversify your assets, mostly via low-cost index funds such as Vanguard Total Stock Market (VTSMX).

There are many types of investments and investment accounts, and they all have their own quirks when it comes to taxes. Not knowing all the rules can lead to too much taxation -- and less money for retirement.

Paying just 1% a year on a $100,000 portfolio over 20 years could result in your forking over more than that amount in fees. That's a hundred grand that could have been in your pocket

Before you decide to retire fully and permanently, discuss a phased or gradual retirement with your employer and/or business partners. Or the possibility of working on a project basis, allowing you to take several months off each year. Or maybe just a one-year sabbatical. Explore your options before you no longer have them.

http://finance.yahoo.com/focus-reti...Retirement-Killers?mod=retirement-preparation

 

[Milton]

Before you decide to retire fully and permanently, discuss a phased or gradual retirement with your employer and/or business partners. Or the possibility of working on a project basis, allowing you to take several months off each year. Or maybe just a one-year sabbatical. Explore your options before you no longer have them.

Great in theory, but often very difficult (if not impossible) to arrange in practice; especially if you work in a small business.

It could work if one is employed in the public sector. Otherwise, it's not gonna happen. Remember David Howard's experience in Lost in America.

 

[W2R]

If you work in the type of environment that favorably views requests such as taking a few months a year off, or retiring gradually, more power to you.

That surely wouldn't be favorable viewed at my workplace. None of the senior scientists or engineers have been permitted to go from full time to part time, and several have asked. None have ever "worked on a project basis, allowing them to take several months off each year". Not only would a request like that not be viewed favorably, it would, well, let's just say it would not be a smart thing to do.

It sure would be cool to work someplace that relaxed and laid back!! But hey, I'm just 21 months from ER and I like my job (as jobs go), so I'll stay where I am.

 

[haha]

You basically have two choices: You can be a master stock-picker like Warren Buffett or Peter Lynch and try to find the next Wal-Mart. Or you can broadly diversify your assets, mostly via low-cost index funds such as Vanguard Total Stock Market (VTSMX).

I believe this sets up a false dichotomy. There are actually many successful paths that one could follow, other than a broad market diversified fund or being a stock picking genius. The one stressed here is merely the easist to explain in an article, and the lowest risk from the POV of a paid asset manager.

People in the US and England have been retiring for at least 100 years on portfolios of dividend paying and dividend growing blue chips. Probably many of uis on this board have parents, grandparents, aunts and uncles who lived many years off mainly stock dividends, emphasizing REITs, utilities, tobaccos, large oil companies, etc. How many failures do we know of? How many close calls?

I wonder if 50 years from now VTSMX will have a similarly stellar record ?

Ha

 

[RunningBum]

I asked about part-time as a possibility for me and I'm told they'll consider it. But as I think about it, I suspect I'll still be stuck with the same amount of drudgery work, and it'll be a much higher % of my limited work time, leaving me a lot less time to do the more creative part of my job that I enjoy.

 

[LOL!]

I arranged to reduce my hours last summer. It's going to happen next month. In the meantime all my drudgery work got assigned to someone else. I am happy.

 

[CuppaJoe]

I arranged to reduce my hours last summer. It's going to happen next month. In the meantime all my drudgery work got assigned to someone else. I am happy.

Way to go! LOL!

I've been toying with that idea--keep the parts of the job that are hard to train, maybe come in for a couple of hours in the early evening and clean up whatever my replacement doesn't know how to do. I'm thinking that is sort of what I would do if on jury duty....

OTOH, I want to make a clean break and don't want to discuss leaving too soon, but rather to give minimal notice.

 

[Hillbilly]

Would like to suggest an adder to the list for those married......


Retirement Killer #10. Divorce, especially late in the game near retirement age or during retirement.

Seen this killer work very well.

Hillbilly

 

[yakers]

Nobody mentioned inflation?

 

[A854321]

Oh- yeah.....Divorce. I've seen two "out of the blue" divorces just after early retirement. One party walked off with half the assets. The other had a huge surprise.

 

[Sarah in SC]

Good lord, A8, what could be a worse surprise than somebody walking off with half the assets--I shudder to think!

I hope to be able to work a plan with my boss to start taking chunks of time off, say a month or six weeks at a time, on a schedule opposite his, so that one of the two of us is always in the office. He wants to do a lot of travel as well, but his kids are small now, so he can't. But that is the plan, and if I can do that, then I may not actually retire for a while. My DH will be retiring in 5 years, but I'll need to be working at least another 3-5 years beyond that for comfort.

 

[Orchidflower]

Having been eldercaring an aged parent for the last 3 years has given me gobs of free time to reflect on past mistakes and goals for the future. I cannot emphasize enough how totally beneficial taking this time off has been for me: I was past burned out from overwork, never had the time to reflect much and feel re-energized now. Healthier even!
Granted, 3 years off so far is a tad tooooo much; but, for those without commitments or duties, a year off should do it. It really has made a huge difference to me in so many ways, and, had this parent not needed the assistance at the very time I was moving into a new endeavor (clever timing on the parent's part), I never would have taken the time off at all, but just kept working, working and more working.
Take the time off...reflect...and decide how you really want to live out the rest of your days. Worth every moment and so BENEFICIAL to your mental and physical health!

 

[haha]

Good lord, A8, what could be a worse surprise than somebody walking off with half the assets--I shudder to think!

LOL! Sarah, I guess you are joking here. But just in case, I'll name a few things that could be worse. And remember, from a man's POV, a half the marital assets split isn't half bad, as divorces go.

Non-Hodgkins lymphoma; pancreatic cancer; any cancer other than non-melanoma skin; heart arrythmia; aortic valve disease; intractable hypertension; stroke; MI; a serious illness of your wife or husband; illness or death of a child; stillbirth of a grandchild; tornado striking your home ...

Divorce sucks, and not only because it drains the coffers. It is hard on the soul too.

But, IMO it is one of life's lesser tragedies. If one can't survive divorce, he can't survive much.

Ha

 

[W2R]

Divorce sucks, and not only because it drains the coffers. It is hard on the soul too.

But, IMO it is one of life's lesser tragedies. If one can't survive divorce, he can't survive much.

It's not as bad as marriage can be, if it has gone bad.

When I divorced my ex, I had to give him the house, the furniture, the boat, and everything else (which wasn't much, but gee! I was eating off paper plates) to get him to agree to keep it out of court. If not, he probably would have got alimony since he was not working, and I'd still be on the hook. I kept a worn out K-car, a very old sofa to sleep on, my clothes, and books. My 50th birthday was right after that and I sure felt poor!

Still, life since that time has been better than I could possibly have imagined. It was pretty scary at first, but much better once a few months had passed and I never regretted my decision. It will be 10 years on the 25th of this month since our divorce was final.

 

[bosco]

Divorce sucks, and not only because it drains the coffers. It is hard on the soul too.

But, IMO it is one of life's lesser tragedies. If one can't survive divorce, he can't survive much.

Ha

I have to agree with this. My divorce was very difficult. Once the dust settled, however, I realized that I had waited about 8 years too long. I discovered that staying in a marriage "for the kids" didn't really help them. It took them to realize this, but ultimately they both did.

I had more energy, more happiness, and much less money. A more than fair trade. Although I wouldn't have believed it at the time.

 

[Marquette]

Sorry, I gotta say, every time I see this thread title...

Retirement Killers would be a good band name

So would the Eggplant Bandits

oh, and the Avacado Incident

sorry, had to get that out... carry on.

 

[Lsbcal]

... It was pretty scary at first, but much better once a few months had passed and I never regretted my decision. It will be 10 years on the 25th of this month since our divorce was final.

Not sure how we should congratulate you, perhaps happy freedom day aniversary ? I'm glad all of this worked out in the end for you!

 

[bigla]

I guess I was fortunate (and smart). I worked for NYS but was also in private practice as a psychotherapist. I left state service after 27+ (with pension eleigibility at 55) and then just worked my practice. At 52, I moved to SC and designed my practice so that I could be in SC for 8 days and then back to NYC for 6. Did that for 3+ years and then ER at 55. Of course I worked my assets off with 12-14 days for many years and the DW and I saved and invested wisely.
Larry

 

[Zoocat]

I have to agree with this. My divorce was very difficult. Once the dust settled, however, I realized that I had waited about 8 years too long. I discovered that staying in a marriage "for the kids" didn't really help them. It took them to realize this, but ultimately they both did.

I had more energy, more happiness, and much less money. A more than fair trade. Although I wouldn't have believed it at the time.

I have to agree as well. Three years post divorce I'm coming around to see that staying in a disfunctional marraige is painful beyond many other awful situations. You can't put a price tag on happiness.

 

[Khan]

I have to agree as well. Three years post divorce I'm coming around to see that staying in a disfunctional marraige is painful beyond many other awful situations. You can't put a price tag on happiness.

People (including myself) often put a great deal of effort into 'saving' a marriage (or other relationship) because society tells us that failure of such is a terrible immoral event.

I was surprised and devastated by the filing for divorce; how much would I have been twisted and stunted by spending years attempting/pretending to be what my EX thought I should be?

 

[Notmuchlonger]

It's not as bad as marriage can be, if it has gone bad.

When I divorced my ex, I had to give him the house, the furniture, the boat, and everything else (which wasn't much, but gee! I was eating off paper plates) to get him to agree to keep it out of court. If not, he probably would have got alimony since he was not working, and I'd still be on the hook. I kept a worn out K-car, a very old sofa to sleep on, my clothes, and books. My 50th birthday was right after that and I sure felt poor!

Still, life since that time has been better than I could possibly have imagined. It was pretty scary at first, but much better once a few months had passed and I never regretted my decision. It will be 10 years on the 25th of this month since our divorce was final.

I love those kickass recovery stories. Good for you!

 

[SteveR]

LOL! Sarah, I guess you are joking here. But just in case, I'll name a few things that could be worse. And remember, from a man's POV, a half the marital assets split isn't half bad, as divorces go.

Non-Hodgkins lymphoma; pancreatic cancer; any cancer other than non-melanoma skin; heart arrythmia; aortic valve disease; intractable hypertension; stroke; MI; a serious illness of your wife or husband; illness or death of a child; stillbirth of a grandchild; tornado striking your home ...

Divorce sucks, and not only because it drains the coffers. It is hard on the soul too.

But, IMO it is one of life's lesser tragedies. If one can't survive divorce, he can't survive much.

Ha

Agree with this one. My divorce left a mark but one that eventually healed; both financially and emotionally.

The other stuff is far worse. There are several folks on the board that have gone through one or more of the above list. The Conan the Barbarian saying "that which does not kill us makes us stronger" is very true.

My late wife had lymphoma and died from septicemia. She also has a number of other serious health issues so our 10 year marriage was filled with many surgeries (both hers and mine) cancer center visits, medications, etc.

My current wife is now disabled due to "complications" from spinal surgery.

My divorce was a breeze by comparison.

"Life is like a box of chocolates....you never know what you're gonna get"

 

[toofrugalformycat]

Having been eldercaring an aged parent for the last 3 years has given me gobs of free time to reflect on past mistakes and goals for the future. I cannot emphasize enough how totally beneficial taking this time off has been for me: I was past burned out from overwork, never had the time to reflect much and feel re-energized now. Healthier even!
Granted, 3 years off so far is a tad tooooo much; but, for those without commitments or duties, a year off should do it. ......
Take the time off...reflect...and decide how you really want to live out the rest of your days. Worth every moment and so BENEFICIAL to your mental and physical health!

Amen, Orchidflower, 14 months off gave me my life back, too.

 

[TargaDave]

LOL! Sarah, I guess you are joking here. But just in case, I'll name a few things that could be worse.

Non-Hodgkins lymphoma; pancreatic cancer; any cancer other than non-melanoma skin; heart arrythmia; aortic valve disease; intractable hypertension; stroke; MI; a serious illness of your wife or husband; illness or death of a child; stillbirth of a grandchild; tornado striking your home ...
Ha

There's one that hits home. DW had a more rare form of non-Hodgkins lymphoma 6 years ago. It was a very treatable variation (thyroid lymphoma) and she's been clean since surgery and radiation, but it scared the bejesus out of us and made a lot of other issues seem petty.

Along the theme of this thread: most individual insurers won't go near her even with 5 1/2 clean post treatment years. Not surprising and an obvious RE stumbling bloc for us, but really just another petty issue compared to what really matters