Anyone ever consider if ER is worth it?

[daylatedollarshort]

Actually, I wish I would have saved more and retired even earlier. I really like being retired. We didn't save so much that we couldn't go out to eat or take vacations. Going out to eat for us usually meant affordable Chinese or Mexican food and vacations were driving vacations along the coast or good value package trips to Hawaii.

Check out some of the happiness studies that are out now, especially on Tedtalks. Most of the factors that really make people happy like enjoying music, going out dancing, being out in nature and having strong social connections don't have to be expensive.

 

[mh]

Some of it depends on your occupation. I was a software programmer / Engineer and it was very clear that while I was having fun in my thirties, Once 50 rolled around I would stand a real chance of tiring of the profession or being booted in whatever round of lay-off that might happen at some time in later in my career as one of the higher earners , probably at a time where I would want not want to move etc. my brother is a teacher and he has a nice vacation every year in the summer. I doubt he will retire until sometime after 65. No reason why he should. The district he’s in poses little risk of his job going away.

 

[tmm99]

I'm glad I saved enough to be able to retire at 55. I actually have a bigger discretionary spending budget now than before my retirement, so I feel like I'm splurging more. Some of my friends said they wanted to spend the money while they were young and didn't save as much, but I'm glad I did. It was like a penny-pinching game and I didn't feel deprived. Now that I have the freedom to spend a little more, I don't want to go back to the accumulation phase of penny-pinching again though, but so far, I don't have to as the market has been very kind since my retirement.

 

[nativenewenglander]

We've always been big savers, but I've recently started considering whether it's worth it or not. We are in our early 30s, have $250k saved for retirement in a mix of accounts, and no debt other than a 15-year mortgage (14 years left). Two kids (1 and 10). We have about $45k in our emergency fund.

My wife only works part-time weekends so she can care for our 1-year old. I currently max out my 401k, HSA, and push hard to max out my Roth and my wife's spousal Roth. Plus $1-2k/year in a 529. We even managed to squeeze $6k into a new taxable account that we opened last year.

Sometimes I'm tempted just to say "screw it" and reduce my 401k contribution to the match minimum, max out the HSA, put less money in Roths, and refinance to a 30-year mortgage. That would free up probably an extra $1500-2000/month which would increase our QOL by an insane amount - 2 nice vacations a year, a new car, less stress when eating out or dealing with unexpected expenses. All without any debt. Maybe I could even cut back to 80% time until my 1 year old is off to pre-school.

Chances are we'd still have a lot of money left over.

There's always the thought in the back of my mind that maybe the stock market will encounter a Japan-like situation, or health issues crop up just as we're getting ready to retire. It would suck to think that we spent our prime years scrimping for nothing.

Anyone else have any doubts like mine?

Thanks for your time.

What are your goals?
My dad always told us his goals for my mother and he for their retirement.
Dad always said work hard and save when you're young as you have time for your money to grow over time and you have boundless energy when younger. He always gave examples of others that didn't save or lived for the day and had nothing to live on when they were older.
We set a set of achievable goals for ourselves which we exceeded.
As others have said you have to find a balance.
Saving now does mean giving up a little living in the present, but they pay dividends later.

 

[Gumby]

Moderation in all things, my friend. It occurred to me many times over the years that I could scrimp and save more now, so that I could retire earlier to a life of further scrimping and saving. But why would I want to live like that? I wanted to enjoy my life, both in the present and in the future. So we took nice (even if infrequent) vacations, bought things we needed and wanted, got a nice house and fixed it up, went out to eat, etc. But we didn't go overboard or spend wastefully. We worked and saved and invested and eventually retired at 60/58. We enjoyed our life along the way and we're sure enjoying it now.

Let me also say that you are doing admirably well for your age. When I turned 33, I had no income, didn't own a house and had a net worth of just about zero.

 

[marko]

Moderation in all things, my friend. It occurred to me many times over the years that I could scrimp and save more now, so that I could retire earlier to a life of further scrimping and saving. But why would I want to live like that? I wanted to enjoy my life, both in the present and in the future. So we took nice (even if infrequent) vacations, bought things we needed and wanted, got a nice house and fixed it up, went out to eat, etc. But we didn't go overboard or spend wastefully. We worked and saved and invested and eventually retired at 60/58. We enjoyed our life along the way and we're sure enjoying it now.

^^^ All of this. One must find a way to thread the needle.

I've often mentioned here that my brother was 3 months away from RE when he suffered a massive stroke. Now, his great excitement of his day is when we take him out for dinner. We often say--and console ourselves--that "at least he had a good time when he could".

I had a classmate who, at 17 decided he wasn't going to get married until he became independently wealthy. Over the years he turned down some really nice, gorgeous, solid ladies--and likely a nice life--with that goal in mind; he's FI now at age 68...and still single.

 

[Fishingmn]

We chose (as I'm sure many on here did) to enjoy the journey along the way and were perfectly content with retiring in our 50's. That meant saving 20-25% of our income each year instead of more aggressive plans.

This allowed us to keep the 15 year mortgage, travel somewhat, save to pay for kids college and never feel like we were missing out on things we really wanted to do.

I was always more interested in the FI than the RE.

It didn't hurt that we have been blessed with good stock market returns for the most part. That may be less assured in the next 30 years but who knows.

 

[JoeWras]

Our LBYM mostly consisted of staying in one house (over 30 years now) and keeping all cars past 10 years, usually longer. We did not feel deprived. Sure a new car would have been "nice", but it wasn't deprivation.

We took a vacation every year. Many were driving vacations to all the wonderful places the USA has to offer. Again, did not feel deprived.

 

[athena53]

For my late husband and me it was a matter of priorities. He was 15 years older so we knew better than to postpone all the fun stuff till I retired. Travel was our biggest splurge but we used a lot of loyalty program rewards since I frequently traveled on business, and I did a lot of research to maximize the rewards through various promotions. We bought modest cars and drove them till they were no longer reliable and bought less house than we could afford because we didn't care about those. I had a respectable business wardrobe but our casual clothes were mostly jeans and freebie T-shirts.

At 61 I got tired of the toxic politics and quit; he died a little over a year later. I really think we got the balance right. I have wonderful memories of all the places we went together but my finances are solid. I see widows in my church who have to sell the house after losing their husbands because they can't afford to stay there on Survivor SS. I just came back from a magnificent trip to Hawaii last month and right now my passport is at the Bolivian embassy with my visa application- part of a trip I'm taking to the Galapagos in March. I've been driven my entire adult life by a fear of being old and poor and, at 67, I'm pretty sure that the "poor" part isn't going to happen. So- yes, it was absolutely worth it.

 

[Tree-dweller]

Nothing in life is certain except uncertainty.

You’re 75 years old, healthy, and reviewing your financial situation. Which would you prefer?

A. You find that you’re running out of money.

B. You find that you’ve saved more money than you really need.
​

."

We’re fortunate that “B” is true for us, at least at this moment in retirement, but still have a decade or so to hit 75, so...will it still be true then? Now that we have years of “Blow that Dough“ options ahead of us, I find fewer temptations now than I probably would have in my youth; you know, the fun stuff that might have caused us to be running out of money at 75. Our adult kids are education debt free because of our particular priorities and that gives us great satisfaction, but I do sometimes look back wistfully at other expensive youthful experiences we opted out of years ago.

 

[tsoispf]

reduce my 401k contribution to the match minimum, max out the HSA, put less money in Roths, and refinance

That's basically what we did and I was able to retire at 55 this year. I wouldn't go hog wild. Moderation is the key IMO. I guarantee "future self" will appreciate what "past self" did to make FI and RE possible.

 

[imoldernu]

Sorry, no advice, but your post triggered memories.

Jeanie and I graduated college in 1958, at age 22. Four boys in five years, kept us both busy, as I was working about 65 hours/week (retail catalog store manager). During that time, between the Army, and four job relocations, we moved four times, and after two years on Martha's Vineyard, we settled in and bought a house in Falmouth Mass. As I recall, my salary was about $150/week. Jeanie helped out by minding other neighbor children.

I'm not sure we thought much about money, much less retirement. A different time, a different era.

In 1966 a move from store manager for Sears, to District Manager for Montgomery Ward. A big boost in salary to $15,000/yr. Sold first house, and bought the second in Greenfield Mass. Though my hours away from home were extensive... sometimes 80+/week, we made every last minute at home count... camping, snowmobiling (out of my back yard), and visiting every important landmark in 100 miles. My dearest jeanie was a princess all through these times... working at the local schools, and part time at a boutique.

Through all of this my kids grew up morally and empathetically... which worked out later as they all went through college.

As I was continually promoted, we ended up living in on the border of Mass, Vermont, and New Hampshire, Almost every Spring, Summer and Fall weekend was spent camping in New England and the Adirondaks.. Sometimes with just a few of the kids, other times, with Boy Scout troops, and occasionally with teen church groups. All Seven of the Chain of Lakes and two trips to the Canadian Boundary Waters.

And... do you know?
Hardly ever thought about money. We just lived within our means. Retirement? Are you kidding? At age 37 the thought never crossed our minds. We were just too busy living and loving our lives.

 

[Closet_Gamer]

+1 on all of the "balance" advice.

Suggestions:

1) Pick a few specific things that you and your better half would really like and fund those rather than just "QOL". A generic "QOL" approach is likely to lead to endless lifestyle creep.

2) Do that by taking 100% of your next raise and letting it drop through to spending...so don't slow down just down speed up. After next year, split each raise 50/50 between lifestyle and savings.

3) Imagine the least fun thing you do at work each year. (For me, its budget season. Just freaking kill me.) Now ask yourself if you really want to do that 30 more times or if, just maybe, after about 20 more times you will want the freedom to say "F this" and walk out.

Never underestimate the value of #3.

My $0.02.

 

[pjigar]

Balance. I think lot of young dreamers on blogosphere are propelling the extreme frugality. Ignore those. Don't sacrifice today but don't jeopardize the future either. We had a 30 year mortgage until I was over 35. We saved smaller percent of our income early on simply because income was smaller and "homestead expenses" were more. We saved more money as our income grew. Stay disciplined but don't deprive yourself of happiness. Speaking of happiness: A good read "Happy Money".

 

[Badger]

We chose (as I'm sure many on here did) to enjoy the journey along the way and were perfectly content with retiring in our 50's. That meant saving 20-25% of our income each year instead of more aggressive plans.

This allowed us to keep the 15 year mortgage, travel somewhat, save to pay for kids college and never feel like we were missing out on things we really wanted to do.

I was always more interested in the FI than the RE.

It didn't hurt that we have been blessed with good stock market returns for the most part. That may be less assured in the next 30 years but who knows.

+1
We were frugal but that was because we didn't have much desire for expensive things or activities and what we did like did not cost much. ER for us was just a couple of years before SS would kick in. My wife retired earlier than I. I wanted to make sure we were FI with money left over for her, the kids, and donations. It also helped to have about 3 months vacation a year at a job we enjoyed. There was plenty of national and international travel. So we just socked away the money after paying off the mortgage and saving up for what we might want instead of borrowing.



Cheers!

 

[marko]

We all know someone with this story:
My close co-worker was able to RE and wanted to RE. His FA urged him to work 2 more years and 'he'd be so much better off'.

You know what happened next: pancreatic cancer and he died, getting only 9 months of retirement. He was outraged.

The point: plan well, but there are no guarantees that all your sacrifice for tomorrow will be worth it.

 

[nancyfrank232]

We all know someone with this story:
My close co-worker was able to RE and wanted to RE. His FA urged him to work 2 more years and 'he'd be so much better off'.

You know what happened next: pancreatic cancer and he died, getting only 9 months of retirement. He was outraged.

The point: plan well, but there are no guarantees that all your sacrifice for tomorrow will be worth it.

If my FA can convince me to postpone RE, I didn’t want it bad enough

 

[marko]

If my FA can convince me to postpone RE, I didn’t want it bad enough

Well, the poor devil was not a sophisticated investor/money type person. He just did what was suggested to him and for him, I suppose it made sense to him at the time.

He wanted to RE but his job wasn't stressful and he thought he had 30 years ahead of him.

 

[Teacher Terry]

I think you should free up a little more money for fun. Some people never make it to old age. There’s a balance between the 2 extremes.

 

[pacergal]

Sorry, no advice, but your post triggered memories.

Jeanie and I graduated college in 1958, at age 22. Four boys in five years, kept us both busy, as I was working about 65 hours/week (retail catalog store manager). During that time, between the Army, and four job relocations, we moved four times, and after two years on Martha's Vineyard, we settled in and bought a house in Falmouth Mass. As I recall, my salary was about $150/week. Jeanie helped out by minding other neighbor children.

I'm not sure we thought much about money, much less retirement. A different time, a different era.

In 1966 a move from store manager for Sears, to District Manager for Montgomery Ward. A big boost in salary to $15,000/yr. Sold first house, and bought the second in Greenfield Mass. Though my hours away from home were extensive... sometimes 80+/week, we made every last minute at home count... camping, snowmobiling (out of my back yard), and visiting every important landmark in 100 miles. My dearest jeanie was a princess all through these times... working at the local schools, and part time at a boutique.

Through all of this my kids grew up morally and empathetically... which worked out later as they all went through college.

As I was continually promoted, we ended up living in on the border of Mass, Vermont, and New Hampshire, Almost every Spring, Summer and Fall weekend was spent camping in New England and the Adirondaks.. Sometimes with just a few of the kids, other times, with Boy Scout troops, and occasionally with teen church groups. All Seven of the Chain of Lakes and two trips to the Canadian Boundary Waters.

And... do you know?
Hardly ever thought about money. We just lived within our means. Retirement? Are you kidding? At age 37 the thought never crossed our minds. We were just too busy living and loving our lives.

always love your stories and practical input!
We were much the same. Yes, we did put some money into retirement accounts, but mostly we were so busy with raising kids and daily life that I didn't think much of it. Always LBYM, but had enough to take vacations, most of the time to local campgrounds or a long weekend in a hotel at the beach, just enough to let the kids have fun and rejuvenate ourselves for back to work!
It wasn't until about age 55, that I started to really think about it, investigate, and put a plan together.
Retired at age 60, earlier than I thought we would when I was younger!

 

[24601NoMore]

Good advice up-thread to balance things out..

I worked with a guy at the last j*b that took the "screw it" approach and lived pretty large. Just before I told him I was doing ER at mid 50s, he was telling me how much he was enjoying driving his Porsche. (I drove a Jeep at that time by comparison. I "could" have probably also had a Porsche if I cared about such things [I don't], but to me that was a huge waste of $$ and I was happy socking it away for ER instead)..

He's still working, and we're roughly the same age. Very likely he not only has no plan for ER (or even retirement in general), but he sure has a nice Porsche. That said, I'm guessing that's not going to pay his bills when he finally no longer has regular paychecks coming in.

 

[dtbach]

Just as others have advised, find the right balance. You can save AND enjoy life now, just throttle the savings back a bit. Life is not a destination, it's a journey. You only go through it once on this planet, so try and enjoy it both along the way and in RE.

 

[NW-Bound]

Good advice up-thread to balance things out..

I worked with a guy at the last j*b that took the "screw it" approach and lived pretty large. Just before I told him I was doing ER at mid 50s, he was telling me how much he was enjoying driving his Porsche. (I drove a Jeep at that time by comparison. I "could" have probably also had a Porsche if I cared about such things [I don't], but to me that was a huge waste of $$ and I was happy socking it away for ER instead)..

He's still working, and we're roughly the same age. Very likely he not only has no plan for ER (or even retirement in general), but he sure has a nice Porsche. That said, I'm guessing that's not going to pay his bills when he finally no longer has regular paychecks coming in.

I knew a guy who made more than myself, and he is still working. He even talked about declaring bankruptcy, but the lawyer he consulted said that it would not be advisable because they would garnish his pay.

The mystery is that he had no fancy cars, no mansion, no expensive vacations. Where did that money go? Perhaps he or his wife was on drugs, but I did not think so. I believe it was just wasteful thoughtless spending and it all added up.

 

[nancyfrank232]

^ Nobody seems to like posting anecdotes about others who are doing better than they are. It’s always other people doing worse lol

Must be in our psyche to avoid feeling inadequate

 

[mickeyd]

Anyone else have any doubts like mine?

No I do not.
Your alternative is to live until retirement age (whatever that may be) and discover (realize) that you do not have enough funds saved/invested and you have few options to resolve the problem other than continue to w#rk and save, w#rk and save.