Anyone Else Feel ER Slipping Away?

[Tekward]

Two years ago:

Good J*b - interesting, challenging, good variety, travel
Good security until an ER option at 55 with medical
Future Military pension at 60
Comfortable 401K - enough to bridge until pension
Goal to ER in 2012

Now:

Company bought out - uncertain future after closing, traveling much more
ER at 55 unknown
Questions of the impact of debt on government pensions.
Shrinking 401K


Now I'm reevaluating how much longer I will have to work - 2017? Anyone one else adjusting their view of the future?

 

[FIREd]

Maybe not slipping away, but I think it has become more challenging. It's kinda funny how my expectations have adjusted in the past 9 years. When I started saving for retirement in 2000, I expected 10% annual returns on my money. Then, I lowered my expectations to 8%. Now I use 3-4%. But we are lucky to have an income today which is much higher than what we could have ever imagined just a few years ago. This has allowed us to save more and compensate for lower return expectations. So our retirement date has not been affected very much so far. Of course we also expect no pension, no medical benefits and, at least for planning purposes, no social security.

So far the losses in the stock market have not set us back too much, perhaps 8 months or so. But, for our plan to work, we need to keep making good money for at least another 10 years (we are 35). Any lengthy period of unemployment between now and then could be a serious setback. That's my biggest fear. But if we can hold on another 5 years, we will be in a position to survive a long period of unemployment with only minimal damage to our long term goals. When we get there, I will be very relieved.

 

[ziggy29]

I think younger folks who started early and assumed little or nothing in the way of SS, pensions and health insurance assistance in retirement will do fine. It's the 40-somethings and 50-somethings watching their 401Ks shrink, their pensions frozen and/or their retiree health insurance taken away who are the most likely to be seeing the door to FIRE closing gradually. Unlike the 20-somethings who can see what's happening very early in life, these folks have an uphill battle making up for lost time.

I know that if I wasn't fortunate enough to assume little in the way of SS and pensions when I was in my 20s, retiring at all, let alone early, would seem like a pipe dream. But with little more than consistently pouring 10-15% of my pay (or more) into 401Ks and Roths since I was 22, despite the recent craptitude of the market I think we'll make it. Not as early as I hoped, but still more fortunate than many who didn't plan for retirement so young and aggressively.

 

[Arif]

I think ER is just like life. We can plan all we want but life has a way of forcing us to adapt and change plans. I was going to retire from the military but life changed that as well (for the better). Our goals might have shifted further out but we've got a lot more freedom than when we were in the Army.

 

[dex]

Generally speaking the younger the person is the less likely it is that they will be able to ER.
New taxes - to pay for programs and debt
Less Chance for advancement - boomers work longer
Slower GDP growth
Lower returns on investments

 

[NW-Bound]

Generally speaking the younger the person is the less likely it is that they will be able to ER.
New taxes - to pay for programs and debt
Less Chance for advancement - boomers work longer
Slower GDP growth
Lower returns on investments

How much longer until they revolt and declare war on the SS recipients, us baby boomers included?

A short time ago, I read about a rally by young people in Germany about the same thing. They were mad, and could take it no more.

 

[ziggy29]

How much longer until they revolt and declare war on the SS recipients, us baby boomers included?

A year before I'm eligible to collect. Mark the calendar -- 2026. Next question?

 

[NW-Bound]

I dunno! At your age of 43, I have a vague feeling that you will be joining the demonstration rally before 2026.

Heck, maybe I have to join the rally too.

 

[WhoDaresWins]

ER slipping away?

Answer: No, not really. But then, at age 54, I am within a few of years of my full state pension(could collect a lesser amount next year) and I have enough in savings and investments to tide me over until I could tap my personal retirement accounts at 59.5 and SS survivor benefits at 60. No debts. Two homes paid off. No dependents. I keep working for the health benefits(fully paid after a $100.00 per year deductible), my job is not terribly demanding, I count many of my co-workers as social friends and this includes my boss, I have generous vacation and sick leave time and, most importantly, I don't have a clear picture of how I want to spend a possible 30 or 40 years in retirement. I am getting lots of good ideas from people here, and it seems like it might be quite a pleasant prospect.

 

[CuppaJoe]

"Anyone Else Feel ER Slipping Away?" Yes, of course, tempus fugit, it's already Tuesday evening.

Oh, I get it, this is the Young Dreamers section. Should we add a poll to change the section to "The Young and the Hopeless"?

 

[harley]

I've got no pension, although I do have some health coverage benefit. The reason I stuck around long enough to get that was to have the guaranteed coverage, since we both have pre-existing conditions. But even though I'm 53 I have never counted on SS as a basis for my retirement. I figure anything I get is a bonus. These days I'm feeling like that was a good plan, because I suspect I'm going to pay most of anything I get out in increased taxes.

Be that as it may, my ER is here to stay. I'm still toying with the idea of a part time job at Barnes and Noble, but that is for the book perk as opposed to the income.

I think even in the future ER will be doable for the small minority. Just like it has always been. There has never been a big bunch of FIREd people around. Whatever obstacles arise, the truly dedicated slacker will overcome them and find a way.

Office Space:
Lawrence: Well what about you now? what would you do [if you had a million dollars]?
Peter Gibbons: Besides two chicks at the same time?
Lawrence: Well yeah.
Peter Gibbons: Nothing.
Lawrence: Nothing, huh?
Peter Gibbons: I'd relax, I would sit on my ass all day, I would do nothing.
Lawrence: Well you don't need a million dollars to do nothing, man. Just take a look at my cousin, he's broke, don't do ****.

 

[ziggy29]

Oh, I get it, this is the Young Dreamers section. Should we add a poll to change the section to "The Young and the Hopeless"?

Possibly so. I think there's good reason for people who are too young to rely on SS and pensions to feel like the rules have changed.

 

[Meadbh]

Anyone one else adjusting their view of the future?

Of course. I had been vizualizing 8% returns and easy street in 2012. Now, reaching my comfort zone will probably take at least several years longer. I never had a pension, so that's no different. Now I'm more actively managing my net worth.

 

[NW-Bound]

Now, reaching my comfort zone will probably take at least several years longer.

Time to redefine the comfort zone?

To the optimist, the glass is half full.
To the pessimist, the glass is half empty.
To the engineer, the glass is twice as big as it needs to be. - Anon​

 

[Khan]

Time to redefine the comfort zone?

To the optimist, the glass is half full.
To the pessimist, the glass is half empty.
To the engineer, the glass is twice as big as it needs to be. - Anon​

To the cynic: Who the heck took the half glass?

 

[MovingtotheCove]

Slipping .... yes. Evaporating...no. Adjust even more than planned in the area of spending less and maximizing earnings now. Investments will recover....how far and how fast? Will it mean more years of toiling away...most likely. Stay within our means. Save, save, and save. Hope for a few good returns again in the future and stop the bleeding of investments soon. Health care...#1 topic for many. Over 5 years ago with no pre-existing issues we took out private health plan. High deductible with HSA to build up to cover deductibles and to have tax advantage. Good move. No issues to date. Only once did we hit deductible but put in maximum to HSA each year and pulled out of pocket back each year. Working as planned for the most part. Coverage isn't great but good enough. Biggest issue is only have $2M per person maximum and by today's numbers wish we had $5M max per person. Having the freedom to have coverage not tied to an employer is great. Portable and nationwide and move wherever we want in USA. Another downside is very poor Int'l coverage but with money being tighter no overseas travel plans of significance right now. Why won't this carry us and work toward ER in the next 3 to 4 year? If the premiums explode for some reason then we might be in trouble....if ER in age 57 to 58 range quite a gap to age 65. As long as they don't cancel coverage for all policyholders and keep premiums such that we can pay the bills should help us achieve ER depsite economic mess. Again, health care independence was our KEY #1 strategy to having ER become reality. Saving money with base level Long Term Care coverage was our KEY #2 strategy. Economy hasn't derailed us but could delay or require PT work for a number of years.

 

[Bimmerbill]

I'm still cautiously optimistic at age 42. ER option from fed job is at 56, full retirement at 60. My national guard pension and healthcare will kick in at age 60 (in 2026). Small pension ($600 mo), but healthcare may be worth something, I guess, unless we have national health care by then.

A lot can change between now and then (health wise, job wise, etc). So, I try to prepare the best I can and will really have to run numbers 10 years out? Then 5, etc.

 

[Jay_Gatsby]

Generally speaking the younger the person is the less likely it is that they will be able to ER.
New taxes - to pay for programs and debt
Less Chance for advancement - boomers work longer
Slower GDP growth
Lower returns on investments

Exactly. So what do we do about it? Focus even more intently on FIRE than ever. Until they institute a "wealth tax," those who continue to LBYM will remain on track for FIRE. In fact, I'd say that Young Dreamers who are earning big money in their 30s and early-40s should downshift their earnings when the government tax man starts to take too much from each paycheck. The early money should continue to grow, leaving a nice pile for FIRE. Alternatively, starting one's own business is a good way to put away a pile of cash pre-tax (through a SEP IRA), as well as write off a ton of expenses. This may only work for those who are entreprenurial-minded, but still....

 

[dex]

Exactly. So what do we do about it?

Good points.
I would add as a mind exercise and perspective the following:

What would you do if you were in the waning years of:
USSR
Britain at the end of the Victorian era
Britain or Italy in the 60s & 70s with 90% income taxes

The points are:
The USA is an empire in decline more financial and social turmoil are in the future. When is the only question.

In some regards young people need to be prepared to deal with what comes with decline.

 

[wolfbay]

Another concern is the increasing media coverage about the need for a VAT tax of 10-to 25%.If a national sales tax happened it would devalue my savings by 10 to 25%.Hopefully it won't happen but I think we'll be hearing more & more about it.European politicians love their VAT.

 

[FUEGO]

I'm still in the under 30 crowd. I definitely don't feel like ER is slipping away. If anything, these times are a really great buying opportunity for me to load up the portfolio. The net worth is probably back to an all time high after slipping for a few quarters. The portfolio value is close to an all time high. My plan has been to acquire a portfolio of a certain value and then call myself FI. We are still only ~1/4 to 1/3 the way there, but the first 1/4 is the hardest part. In good years, our investment income is/will be greater than earned income.

In addition, if some form of affordable guaranteed issue health insurance becomes available, that would significantly reduce my target portfolio value and years till FIRE. Overall, I'm thinking FIRE by 40 still has a good chance of happening for us.

Our household income is stagnant this year, and it looks like it may be another year minimum before we are able to increase our incomes. But I'm working on a little move from one professional career to another that may double or triple my salary in the next year or so and take off from there (in theory). So while right now, we are seeing incomes flat at what they have been for over a year, costs aren't really increasing and prices have generally decreased from a year ago.

 

[Batz]

I think younger folks who started early and assumed little or nothing in the way of SS, pensions and health insurance assistance in retirement will do fine. It's the 40-somethings and 50-somethings watching their 401Ks shrink, their pensions frozen and/or their retiree health insurance taken away who are the most likely to be seeing the door to FIRE closing gradually. Unlike the 20-somethings who can see what's happening very early in life, these folks have an uphill battle making up for lost time.

I know that if I wasn't fortunate enough to assume little in the way of SS and pensions when I was in my 20s, retiring at all, let alone early, would seem like a pipe dream. But with little more than consistently pouring 10-15% of my pay (or more) into 401Ks and Roths since I was 22, despite the recent craptitude of the market I think we'll make it. Not as early as I hoped, but still more fortunate than many who didn't plan for retirement so young and aggressively.

I fall in to the first category that Ziggy described. Personally, I feel pretty optimistic about what the future holds. Grant it, as a 32yr old, I have time on my side. I've always been very conservative in my planning, so my plans never included SS or any other type of government assistance. Like most people, I've seen a big decrease in my investment accounts, and that has been painful, but I also see great opportunity in the markets. I've upped my savings rate (maxed 401k/Roth) and gotten more aggressive then ever with my investments. I think we will push through the current recession and start to see our economy grow. Will see as much growth as before, who knows, but I think we are starting to turn the corner. There will certainly be some bumps along the way, but that's what makes life exciting. I will say this, if this current recession has taught me anything, it has really reinforced the need to have a good financial plan. I'm fortunate to have a good stable job that I like, as well as a good cash cushion in case of an emergency.

 

[harley]

Good points.
I would add as a mind exercise and perspective the following:

What would you do if you were in the waning years of:
USSR
Britain at the end of the Victorian era
Britain or Italy in the 60s & 70s with 90% income taxes

The points are:
The USA is an empire in decline more financial and social turmoil are in the future. When is the only question.

In some regards young people need to be prepared to deal with what comes with decline.

Relocate. I don't want to live in China, so I may miss the next empire. However, the Latino world should probably do OK too. I'm leaning towards Uruguay or Costa Rrrrrica!

 

[caninelover]

I feel more cautious about ER, but still hopeful. But these are nerve-wracking times. Actually, this economy has gotten me thinking about a few good lessons learned:
1. I'm glad I started saving young (25). So even if I hit some road bumps along the way, I feel like at least I got the nest egg off to a good start.
2. I am more mindful of keeping a proper asset allocation closer to retirement. I've read too many stories of near retirees that had way too much in stocks and watched it evaporate in the '08 meltdown.
3. I am very thankful for everything I do have. Even if it works out that I will need to adjust the timing of my retirement, I am far better off than most in this economy and I am grateful. If the worst thing that happens in my life is I have to w*rk a extra few years than planned...well, there are worse things.

Every time I start getting anxious, I take a few deep breaths and try and remember these things, especially # 3.

 

[Midpack]

I have no pension or retiree healthcare benefits, there will be more and more of us in the decades ahead IMO. SIRE is on it's last legs. I am certainly less optimistic, and I have moved my target date out two years. But that's not a bad thing for me, I am one of those Type A's that can't just sit and relax. The busier I am, the happier I am. So while I look forward to leaving the MegaCorp pressure cooker, I will still work at something, but it will be a job I take for the satisfaction instead of the money.