Financial regrets 10+ years into early retirement?

[Austin704]

I’m planning to retire in 2019 at the relatively early age of 53 and as I work through the numbers a picture emerges of a secure, though not particularly extravagant, retirement. FIRECalc shows a 100% success rate for a 40 year retirement.

If I worked another 3-5 years I could add a margin of comfort to my retirement that would allow for more luxuries. But I’m really feeling done with work and want to get on with the next chapter...

My big fears are 1) not taking advantage of my peak earning years to stash away even more money and 2) reduced Soc Sec benefits because of early retirement. I worry that 10+ years in I will wish I had worked longer when I had the chance.

My question is for those who retired early during their peak earning years and are more than 10 years into retirement: Do you regret not having worked longer to lay in more money and maximize SS benefits? Any other financial regrets of cutting it short and leaving money on the table?

Thanks!

 

[HadEnuff]

While you wait for those answers, I'll give you an answer from someone who was in your position and decided to stay on and pad his retirement. I'm glad I did that. I didn't work 30 years so I could be poor. So I worked 40.

However, while at times I felt "really done with work", I didn't hate it. I was my own boss and had enough control over it to keep the work-fun balance where I could enjoy life.

Perhaps your work situation is making you miserable? I don't know. IF so, maybe you could find some sort of work that while not as lucrative as what you do now, would allow you to to not touch the nut for a while.
If you can afford to consider retirement, you can certainly afford a cut in pay that gives you more control over your life.

Just a thought. In the end, of course, only you can figure this stuff out. You might get answers like "no, man, I'm so glad I retired", but then you have to remember, they retired into a 10 year Bull Market....so they're good....but what if you don't get those kinds of returns? Their experiences don't mean squat to you, do they?

 

[Newventurer]

Have you run the SS calculator with projected earnings in the additional years you may decide to work? Depending on your history it may not make much difference.

I had 37 years of work history and even 9 years of zeros (retired early, no earnings) didn’t drop my number much.

 

[RAE]

We've had several threads over the years asking basically the same question that you are asking. I guess that's not surprising, since it is a concern most of us share as we approach retirement.

I retired at age 54 1/2 (9 years ago now). Sure, I could have worked 5-10 more years, and earned a bunch more money, but I wanted to retire when I was young enough, and healthy enough, to do all the things I dreamed of doing in retirement. I knew I would be okay financially (not for a super-luxurious retirement, but I didn't want/need that anyway). After 9 years, I have zero regrets. I have enjoyed these last 9 years immensely, and my health is still good enough to do the things I want to do. Part of the reason my health is still good is that I started paying more attention to health after I retired. Having more time to exercise, more time to grow, cook and eat a healthy diet, has made a huge difference for me.

With Firecalc giving you a 100% success rate for 40 years, I wouldn't worry too much about leaving money on the table. Sure, you could always stay working and make more $$, but you can't buy more time on this planet. Use your remaining time wisely............

 

[Austin704]

While you wait for those answers, I'll give you an answer from someone who was in your position and decided to stay on and pad his retirement. I'm glad I did that. I didn't work 30 years so I could be poor. So I worked 40.

However, while at times I felt "really done with work", I didn't hate it. I was my own boss and had enough control over it to keep the work-fun balance where I could enjoy life.

Perhaps your work situation is making you miserable? I don't know. IF so, maybe you could find some sort of work that while not as lucrative as what you do now, would allow you to to not touch the nut for a while.
If you can afford to consider retirement, you can certainly afford a cut in pay that gives you more control over your life.

Just a thought. In the end, of course, only you can figure this stuff out. You might get answers like "no, man, I'm so glad I retired", but then you have to remember, they retired into a 10 year Bull Market....so they're good....but what if you don't get those kinds of returns? Their experiences don't mean squat to you, do they?

Thanks for your perspective. I’m not miserable and I do have a great deal of control over my day-to-day work. I’ve thought about retiring now, taking a year or so off to really consider what interests me, and possibly returning to work doing something that is consistent with those interests, albeit at a lower salary.

At my age I don’t feel that it’s too late for an encore career, but the truth is I feel a bit like lazing around for awhile and just seeing where my interests take me. With some luck I may find something that brings in money and is fulfilling besides.

 

[Austin704]

Have you run the SS calculator with projected earnings in the additional years you may decide to work? Depending on your history it may not make much difference.

I had 37 years of work history and even 9 years of zeros (retired early, no earnings) didn’t drop my number much.

No, I haven’t. I have not included SS in planning my retirement and so my fear is probably somewhat misplaced; however, when 67 rolls around I may well find myself caring a great deal how much I will receive.

I will look for the calculator and plug in my numbers. You may be right—may not matter much. Thank you.

 

[Ready]

I would not want to retire unless I had 100% success rate at a spending level that I thought would be very enjoyable, with lost of padding for unexpected expenses. That's a lot of time to be retired and worrying about spending every penny.

So if your normal run rate annual expenses are around $60K, I would likely not feel comfortable unless I was good for 100% success at something around $90K. That's just me though, and I'm pretty conservative. You will have to judge your own comfort level.

 

[Austin704]

We've had several threads over the years asking basically the same question that you are asking. I guess that's not surprising, since it is a concern most of us share as we approach retirement.

I retired at age 54 1/2 (9 years ago now). Sure, I could have worked 5-10 more years, and earned a bunch more money, but I wanted to retire when I was young enough, and healthy enough, to do all the things I dreamed of doing in retirement. I knew I would be okay financially (not for a super-luxurious retirement, but I didn't want/need that anyway). After 9 years, I have zero regrets. I have enjoyed these last 9 years immensely, and my health is still good enough to do the things I want to do. Part of the reason my health is still good is that I started paying more attention to health after I retired. Having more time to exercise, more time to grow, cook and eat a healthy diet, has made a huge difference for me.

With Firecalc giving you a 100% success rate for 40 years, I wouldn't worry too much about leaving money on the table. Sure, you could always stay working and make more $$, but you can't buy more time on this planet. Use your remaining time wisely............

Thank you for the reply even though variations of these questions have been asked before! When I think about retiring next year I envision just what you are describing... Financially secure, not super-luxurious, but plenty for a good life. Having time to focus on the things that matter to me, one of those being my health. It’s nice to hear that you are 9 years in and not looking back with regret. I think I’d have more regrets working too long, but padding the fund is also very appealing to me. Did you ever go back to work in retirement?

 

[scrabbler1]

I’m planning to retire in 2019 at the relatively early age of 53 and as I work through the numbers a picture emerges of a secure, though not particularly extravagant, retirement. FIRECalc shows a 100% success rate for a 40 year retirement.

If I worked another 3-5 years I could add a margin of comfort to my retirement that would allow for more luxuries. But I’m really feeling done with work and want to get on with the next chapter...

My big fears are 1) not taking advantage of my peak earning years to stash away even more money and 2) reduced Soc Sec benefits because of early retirement. I worry that 10+ years in I will wish I had worked longer when I had the chance.

My question is for those who retired early during their peak earning years and are more than 10 years into retirement: Do you regret not having worked longer to lay in more money and maximize SS benefits? Any other financial regrets of cutting it short and leaving money on the table?

Thanks!

I retired 10 years ago at age 45. I had worked for 23 years, the first 16 full-time followed by 7 more part-time (at the same company). I surely did not regret working the way I did. Working those 7 years part-time was crucial because it allowed me to remain employed while the company's stock price zoomed upward, even though I was accumulating very few additional shares at that point.

My ER plan was split into 2 parts. The first part is getting me from age 45 to age ~60 using only my taxable portfolio. This is the tougher part of my plan because I have unfettered access to only 2/3 of my portfolio. My plan has always been to use the dividend income to cover my expenses, but if I had to dip into principal that was okay. So far, 10 years into this part of my ER plan, not only have I not had to dip into principal, but the principal has grown handsomely.

The second part of my ER plan is the far easier one. Starting at age ~60, the first of my "reinforcements" arrive. They include (1) unfettered access to my rollover IRA, (2) my frozen company pension, and (3) Social Security. With the help of Fidelity's RIP program, I see how my longer-term financial picture only improves beyond age ~60.

Furthermore, because I am barely in the highest SS "bend point" (15% of average indexed wages), working longer would barely increase my SS benefits. If I kept working (part-time) for enough years to fill in all those zero-wage years, my monthly SS benefit would rise maybe 10%, not at all worth the trouble to work any more years.

The company's stock price has exploded even more since 2008 although it took a few years to rebound from the 2008-09 recession. Still, there is no way in hell I would have worked longer just to cash out more from the stock.

 

[marko]

I was 52 when I RE'd, though I didn't have much choice in the matter. Best thing I ever did.

You say you have a 100% success rate for 40 years. To me that implies a bit of extra margin for a bit more 'extravagance' than you're planning. Unless you're really risk averse, you might try and see what a 95% (or 90%?) success brings in the form of extra cash. A small PT job could also fill those holes.

You say "I worry that 10+ years in I will wish I had worked longer when I had the chance." Personally, 10 years after I RE'd I had no more intention of working again than going to the moon and despite having had a job I loved (workaholic), seldom even thought about my old job.

You should run the SS calculator; I suspect you'll not see a big difference in your benefit by hanging it up at 53 vs 65. I didn't but YMMV.

Good luck!

 

[daylatedollarshort]

Not quite ten years yet, but I regret not retiring sooner. With more time to for easy cost saving activities like price shopping, not having to hire out as much, making the house more energy efficient and cooking from scratch, we're living better than I thought we would be on less spending.

 

[friar1610]

My situation was a bit different from yours. I retired from the military so a pension and health care were part of the deal. I had a couple of good paying jobs in the private sector after military retirement that allowed me to sock away a lot for eventual full retirement. I went through the same thing you're going through - work a few more years - perhaps as many as 5 - and boost the nest egg significantly or punch out earlier? (In my case earlier was 58 when I had "almost" reached my dollar goal.) I opted not to continue working, retired and found it easier to get along financially than I had projected with all my spreadsheets. So, looking back after 10 years my only regret (and a mild one at that) is that I didn't retire sooner.

I'll be the first to acknowledge that the certainty of a pension contributes mightily to my ability to regret not retiring earlier.

 

[Austin704]

I retired 10 years ago at age 45. I had worked for 23 years, the first 16 full-time followed by 7 more part-time (at the same company). I surely did not regret working the way I did. Working those 7 years part-time was crucial because it allowed me to remain employed while the company's stock price zoomed upward, even though I was accumulating very few additional shares at that point.

My ER plan was split into 2 parts. The first part is getting me from age 45 to age ~60 using only my taxable portfolio. This is the tougher part of my plan because I have unfettered access to only 2/3 of my portfolio. My plan has always been to use the dividend income to cover my expenses, but if I had to dip into principal that was okay. So far, 10 years into this part of my ER plan, not only have I not had to dip into principal, but the principal has grown handsomely.

The second part of my ER plan is the far easier one. Starting at age ~60, the first of my "reinforcements" arrive. They include (1) unfettered access to my rollover IRA, (2) my frozen company pension, and (3) Social Security. With the help of Fidelity's RIP program, I see how my longer-term financial picture only improves beyond age ~60.

Furthermore, because I am barely in the highest SS "bend point" (15% of average indexed wages), working longer would barely increase my SS benefits. If I kept working (part-time) for enough years to fill in all those zero-wage years, my monthly SS benefit would rise maybe 10%, not at all worth the trouble to work any more years.

The company's stock price has exploded even more since 2008 although it took a few years to rebound from the 2008-09 recession. Still, there is no way in hell I would have worked longer just to cash out more from the stock.

Sounds like a plan well conceived and well executed! I need to dig into the SS piece a bit more. I really have very little insight into the “bend points” or other nuances of the program—thanks for your perspective!

 

[rodi]

I enjoyed my job - but not the corporate politics... I retired 4 years ago and haven't looked back. Yes, there are trade offs: we don't fly first class, I didn't buy my kid a car when he got his license (but he uses one of ours when he needs to), we still watch our spending and cut back when we notice we've been spending more.

That said - I don't feel deprived. I live a very comfortable life in a high cost of living area. We travel, we go out, we have a good life. And not working makes me much happier than when I had to go to work everyday.

 

[Austin704]

I would not want to retire unless I had 100% success rate at a spending level that I thought would be very enjoyable, with lost of padding for unexpected expenses. That's a lot of time to be retired and worrying about spending every penny.



So if your normal run rate annual expenses are around $60K, I would likely not feel comfortable unless I was good for 100% success at something around $90K. That's just me though, and I'm pretty conservative. You will have to judge your own comfort level.

Yes, I can see how that would be desirable. I’ve tracked my actual expense for a year and added 15% for FIRECalc and assumed that my lifestyle won’t change much—comfortable and with enough for travel and some luxuries but not living the high life. Since FIRECalc increases expenses over time by inflation, I assume my expenses in later years are, in absolute terms, considerably higher than they are in year 1.

I’ve also built a spreadsheet that pretty much confirms that I’ll be a lot better off in my 60s and 70s than I am today, assuming inflation doesn’t get crazy, the stock market returns something between 5-7% and I don’t suffer a catastrophic health condition that depletes my portfolio—all of which could happen, thus my hand-wringing over working longer.

 

[Austin704]

Not quite ten years yet, but I regret not retiring sooner. With more time to for easy cost saving activities like price shopping, not having to hire out as much, making the house more energy efficient and cooking from scratch, we're living better than I thought we would be on less spending.

That’s a great insight. I’ve thought to myself a few times “I’ll bet I could whittle my expenses down quite a bit if I weren’t working all the time. Starting with my wardrobe of suits and dress shirts—which won’t be needed in retirement.”

 

[CyclingInvestor]

I retired at 48, 12 years ago from a job that paid fairly well and was very easy and stress free (programming). I have never regretted not working longer. The companies I invest in have very generously increased dividends (on which I live) over the years to the point where I could easily live on half of them if need be, while the years I would have lost to working would be irrecoverable.

 

[daylatedollarshort]

That’s a great insight. I’ve thought to myself a few times “I’ll bet I could whittle my expenses down quite a bit if I weren’t working all the time. Starting with my wardrobe of suits and dress shirts—which won’t be needed in retirement.”

Another poster here once called it the frugal game. This month I bought a Napa winery passport for two for ~30 wineries for $99 at Costco. Normally one winery averages $30 a tasting so with the passport that will be $3.33 instead of $60 a visit. Add in some fancy picnic items I have stockpiled from buying on closeout and a $20 seniors state parks pass, and we can have a nice outing wine tasting with a picnic at a state park for $5 plus gas. The longer we are retired the more deals we keep finding so over time our expenses tend to decrease except for categories we cannot control like health care.

 

[Sunset]

OP - The big issues are:
Cost of health care if you are not employed.
Where your money is located, if it's all in an IRA there is a penalty for withdrawals prior to 59.5.
Maybe you have those all figured out.

Another option is to continue to work, but take some really nice holidays (even using unpaid time off for extra weeks).
Working an extra year could be better than sitting in front of TV every day..

 

[Bamaman]

I hung it up 10 years ago at age 58 when MegaCorp decided to cut loose everyone 55 years of age or with 30 years service.

"My question is for those who retired early during their peak earning years and are more than 10 years into retirement:
Do you regret not having worked longer to lay in more money and maximize SS benefits? 36 1/2 years is long enough for anyone to work. I would have like to have been able to put off the start of Social Security past 62 years old, however it wasn't in the stars.
Any other financial regrets of cutting it short and leaving money on the table? I worked the stock market well and for a long time which left me comfortable enough.

 

[travelover]

That’s a great insight. I’ve thought to myself a few times “I’ll bet I could whittle my expenses down quite a bit if I weren’t working all the time. Starting with my wardrobe of suits and dress shirts—which won’t be needed in retirement.”

I also found that I was spending a lot of money to make myself feel better about dealing with the stress of the job, including expensive vacations. Twelve years in, I've found that I spend a lot less than I imagined.

 

[Focus]

I also retired at 53 (well, nearly 54). That was four years ago.

I also ran the retirement calculators like crazy to feel comfortable with pulling the trigger. (I haven't since.) Like others have mentioned, the impact on SS was a nonfactor because of the way they calculate the benefit amount.

I've found it best to think of the calculated amount with the 100% success rate as a maximum, and I don't check my spending more than once a year. My expenditures have varied considerably from year to year due to expenses related to health (sharp rises in premiums and cost of care), auto (replacing an old car that finally gave up the ghost), and home maintenance. As long as I stay at or under the calculated amount, despite large one-time expenses or costs that rise much faster than the official inflation rate, I feel OK.

As others have said, in retirement your spending will likely drop -- and so might some long-held hobbies. A few of my interests served solely as a counterbalance to the stresses of work. Once the work went away, so did those interests.

I'm glad I left my career when I did, on my own terms. I'm pretty sure my job would have disappeared in a couple of years anyway. And if I had waited longer, I would have missed the opportunity to pursue other things while still relatively young.

 

[brucethebroker]

Have you run the SS calculator with projected earnings in the additional years you may decide to work? Depending on your history it may not make much difference.

Yeah, that was my thought also. If you are a high earner, it might not make much difference either way. Soooo, take the break-retire early.

 

[brucethebroker]

I also found that I was spending a lot of money to make myself feel better about dealing with the stress of the job, including expensive vacations. Twelve years in, I've found that I spend a lot less than I imagined.

Yep. Lots of us spend less than before. Just having the time to shop online before making big ticket purchases makes a huge difference. And, fewer miles on the car (no commute). Fewer lunches out (if desired). Of course, a "work" wardrobe of shorts, T-shirts/sweatshirts (depending on the season!) and sneakers keeps costs down also....
Another biggie is no FICA taxes (on investment income)....

 

[DrRoy]

I RE'd at 57 and probably did work a couple years longer than I needed to. We are satisfied with our spending at less than 2% WR, and have flexibility to do extra things at less than 2.5%. It makes us feel very comfortable to be in that position.