Secrets of Early Retirement

[Neecy]

USAToday: Wes Moss reveals the secrets of happy retirement

Having a paid off house and income streams seem like the way to go. Now I have to figure where to settle down.

 

[aja8888]

USAToday: Wes Moss reveals the secrets of happy retirement

Having a paid off house and income streams seem like the way to go. Now I have to figure where to settle down.

It's generally where you have the paid off house for starters.

 

[samclem]

From the article:

Q: In the book there are 18 habits of happy retirees. Can you narrow your book down to three pieces of advice?


A: No. 1 is financial. Tackle your mortgage. It's such a critical component to all this. Happiness rises as years to pay off mortgage go down. Thus, tackling of the mortgage is really critical.

That's his top advice? Dumb. This is another book I won't need to read.

 

[Major Tom]

Having a paid off house and income streams seem like the way to go. Now I have to figure where to settle down.

Having an income stream that is sufficient to support your intended way of life is generally the way to go. That way of life may or may not include a paid-off house - it depends what you want in retirement.

 

[tuixiu]

yep own vs. rent has far too many variables for an edict like that

 

[ejman]

Actually, my take away is this :

"Q: So, who are the happy retirees?

A: Those are the people who retire earlier, at an earlier age and an earlier date than most people in America."

Ha! I knew it!

 

[daylatedollarshort]

It is too simplistic to just say pay off the mortgage, especially if you have a low interest, fixed rate mortgage rate and can make a higher after tax return elsewhere. Or a paid off house may not be the optimal use of your money if you live in a market where renting and investing has a higher ROI.

If houses cost $1M where you live but you could rent a nice house for $500 a month most people would go with renting.

In the last ten years many of our neighbors who bought at the peak have not even seen their houses keep up with inflation, especially after factoring in taxes, insurance and repairs.

 

[traineeinvestor]

The author said some things of value and some things where your milage may (and probably does) vary.

For me, paying off the mortgage was much like own v rent. Given how low interest rates are out here, we decided not to pay off our home mortgage (costing around 1% pa) and keep the money invested elswehere.

 

[Senator]

I paid off my mortgage and got a large Home Equity line. I can use it when I want or need it. I the past, I have used a smaller one for purchasing properties for cash.

The mortgage payoff saves ~$1400. That is quite of a savings, it can basically fund my 401K - even though I already find my to the max.

Most families spend ~30% of their income on housing. Paying off the mortgage is a large 'raise', and give a huge piece of mind.

 

[imoldernu]

Our retirement happiness came from understanding that it comes from maximizing the life we can afford, and not what others think.

Fifty six years of marriage and twenty five years of retirement, and money has never been a source of contention or unhappiness.

 

[JoeWras]

I'm dumb and happy. My goal was to pay off my mortgage early first -- before I even thought of ER. Did so, and that's when my retirement savings went into hyperdrive.

It wasn't all numbers. It was also peace of mind.

When it comes to the primary residence, another factor is "frequency of moving." Moving is not only costly, it tends to reset everything, including the mortgage treadmill. But I digress.

Mort - gage
Death - measure


Joe, "Dumb and happy since 2000"

 

[easysurfer]

I have no problem with numbers 1 or 2. But with number 3....

No. 3 is very important. Busier retirees are happier

I do kinda take issue with that as I'm happy just putzing around in retirement

 

[BTravlin]

Those income streams sound appealing, where do I sign up?

 

[MichaelB]

I do kinda take issue with that as I'm happy just putzing around in retirement

I think people, especially youngsters writing about retirement, seriously underestimate all that is needed to "just putz around". This is a serious and meaningful endeavor and deserves much more respect.

 

[Mulligan]

Having an income stream that is sufficient to support your intended way of life is generally the way to go. That way of life may or may not include a paid-off house - it depends what you want in retirement.

That is the sole reason I am retired....and yes the monthly mortgage payment will be occurring for 20 more years.


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[Mulligan]

I have no problem with numbers 1 or 2. But with number 3....



I do kinda take issue with that as I'm happy just putzing around in retirement

I will tell my GF when she returns from work what all I have completed during the day and her usual remark is... "So basically you did nothing".


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[travelover]

I will tell my GF when she returns from work what all I have completed during the day and her usual remark is... "So basically you did nothing".

Funny, when i was w*rking, at the end of the day I generally came to the same conclusion.

 

[aja8888]

I will tell my GF when she returns from work what all I have completed during the day and her usual remark is... "So basically you did nothing".


Sent from my iPad using Tapatalk

You could always say as a comeback "at least I didn't do anything wrong or manage to break anything".

On the paid off house comments. Yes it's cheaper to rent, and renting comes with risks and possible opportunity loss, but a paid off house has, in my opinion, some peace of mind and stability. Those are characteristics that can't easily be quantified.

 

[easysurfer]

I think people, especially youngsters writing about retirement, seriously underestimate all that is needed to "just putz around". This is a serious and meaningful endeavor and deserves much more respect.

I've got a brother who's also retired and on his social media, he's always posting about where he went out the eat, his fishing adventures, or hiking on a trail and looking and fancy fast cars. He's truly trying to enjoy the moment.

But when I see all the posts I think "that poor soul" ... I'm happy with my putzing.

 

[JoeWras]

You could always say as a comeback "at least I didn't do anything wrong or manage to break anything".

On the paid off house comments. Yes it's cheaper to rent, and renting comes with risks and possible opportunity loss, but a paid off house has, in my opinion, some peace of mind and stability. Those are characteristics that can't easily be quantified.

The paid off peace of mind works for me. However, I can see the other side of the coin too. At these historically low rates, there is opportunity. I can see why some people will carry a mortgage. Perhaps the positive calculations of opportunity cost of money give people a certain peace of mind too. That's fine. Just doesn't work for me.

 

[eta2020]

The paid off peace of mind works for me. However, I can see the other side of the coin too. At these historically low rates, there is opportunity. I can see why some people will carry a mortgage. Perhaps the positive calculations of opportunity cost of money give people a certain peace of mind too. That's fine. Just doesn't work for me.

Rates are expensive compared to CD rates that one can get.

Unless you plan to stay in house for 30 years (length of loan), which while wise thing to do...most people will not do.

I vote for pay of house ASAP.

 

[scrabbler1]

I'm dumb and happy. My goal was to pay off my mortgage early first -- before I even thought of ER. Did so, and that's when my retirement savings went into hyperdrive.

It wasn't all numbers. It was also peace of mind.

Same here. I paid down my mortgage in 1997 and 1998, taking some of the stock market's gains off the table as the interest rate on my 1-year ARM was rising.

This was a key step in greatly reducing my expenses so when I reduced my weekly hours worked in 2001 by nearly 50% it was not a big deal to cover those smaller expenses. That led to starting up my plans to ER.

My personal savings rate from 1998 to 2001 was huge, as my wage income was at its peak while my expenses were nice and low.

 

[easysurfer]

I paid off the mortgage awhile back. For me, it's the peace of mind knowing I own the roof over my head without any payments.

There is this Sunday morning radio program with the host saying to not pay off the mortgage as the freedom isn't really that free. For example, even with a paid off mortgage, there'd still be other home ownership expenses anyhow (taxes, repairs), so it's better to invest that money.

Still for me, I like knowing a mortgage payment is just one thing I don't have to worry about.

 

[Koolau]

Assuming Moss structured his research questions correctly, I see no reason to argue with his results - in general. But we know it's all about the individual. Anyone reading his book is free to pick "one from column A and 2 from column B." No surprise that "most" of his respondents felt best about paying off the mortgage and having lots of hobbies and three sources of income. But as individuals, we don't all fit into his averages on every point. No surprise since YMMV.

 

[daylatedollarshort]

We just run the numbers on everything. I have no emotional attachment to having a mortgage or not. We just key off maximizing net worth and after tax income with considerations for asset protection. In some states personal residences have a high degree of asset protection and in some states they do not.