Early Retirement Will Bankrupt Your Dreams, Here’s Why

[skyking1]

thanks all who read this, good on you for taking one for the team. Your summaries I value much higher than any clickbaity fear mongering drivel

 

[ivinsfan]

I worked in an industry that was downsizing for 25 plus years and still is.

One thing that surprised me was employees in the mid-late fifties who were completely unprepared financially and emotionally for termination when their positions became redundant.

For some strange reason, in the midst of years of downsizing, they somehow thought they were immune to it or that the company would be 'loyal' to them.

It was as though they were no paying attention to reality. The smart ones read the tea leaves, kept their ears to the ground, and were always networking and on the lookout for new opportunities. They invariable had updated resumes at the ready and some semblance of a go forward plan.

I don't disagree but obviously if you planned on working to 65 and have to fund 10 extra years of retirement you need more money. Maybe you had kids in school and 2 years of house payments left and when that expense went away you can make a big jump to retirement savings in 10 years.

 

[daylatedollarshort]

To counteract these kinds of articles, I often post on the younger ER forums on Reddit and tell them how great retirement is and how much less we need to get by now with the kids grown, no job or commute costs, less income taxes, no more need to save for retirement, more time to cook from scratch, etc.

 

[ls99]

https://www.entrepreneur.com/article/425080

Wow according to this article you had all better get back to work as of yesterday!

They cover all the fear tactics and end with this one you live longer if you work till 66...However, Bloomberg summarized the correlation between early retirement and early death as “striking” when citing another study.

Well it has not succeeded in bankrupting anything my case. Best thing I did career wise.

 

[youbet]

https://www.entrepreneur.com/article/425080

Wow according to this article you had all better get back to work as of yesterday!

They cover all the fear tactics and end with this one you live longer if you work till 66...However, Bloomberg summarized the correlation between early retirement and early death as “striking” when citing another study.

Yes, just another article written by folks who want to exploit us. By now, everyone that participates on this forum is aware that we were wrong to ever work at all. Every minute we spent earning income was wasted and we were fools to do so. Folks still working need to stand in front of the mirror and ask themselves why.

 

[marko]

Seriously though, many people don't get to decide when they'll retire. I was more or less thrown into RE involuntarily at age 52 (long story) but thankfully had enough wherewithal to do so.

People plan to retire around age 65 but what they should be doing is planning for losing their job around 50 and being unable to overcome age discrimination among other obstacles. If you can go further it's all gravy.

 

[Markola]

I’ll take everyone’s word for it and skip it, because I try to be wary of retirement articles by whom I assume are broke journalists, probably viewing the topic through their own lens. I like this forum because it consists of many people actually making it happen.

 

[foxfirev5]

Seriously though, many people don't get to decide when they'll retire. I was more or less thrown into RE involuntarily at age 52 (long story) but thankfully had enough wherewithal to do so.

People plan to retire around age 65 but what they should be doing is planning for losing their job around 50 and being unable to overcome age discrimination among other obstacles. If you can go further it's all gravy.

Excellent point that is currently overlooked. I got caught in the Jack Welch forced ranking BS at age 58. I hung on and retired a day before my 60th birthday. Still leaves a bad taste. However I won the game. I was fortunate (lucky) to have more than my boss, a director, had in the good old 401k. He lamented how everyone had lost a significant amount in the great financial crisis. I politely told him you only lost if you sold. I guess all the home office boys had the wrong advisor. One guy even showed up unannounced at my door last year, from 300 miles away, to see if it was true.

Karma is a bitch.

 

[Koolau]

I'll have to say, my BFF (the one who is half a mil in debt at 77) took an early out from megacorp (same one I w*rked at). So he left at 51. He has struggled his entire retirement to make ends meet BUT it's because he spends more than he takes in. His actual income is about the same as mine when you count 2 SS and a couple of modest pensions. Only difference is I retired with significant savings which he did not (due to "robbing" his 401(k) every time it hit 20K or so.)

He drove school bus for several years. Pretty decent money at $63/day. He lives much better than I do if that means spending. He's got the new cars, toys, race car, new house, trips to FL, etc. etc. But he struggles. He has to constantly juggle what he will pay and what he will put off. He would have gone bankrupt but he did one of those CC write downs. As soon as he did that, he started getting CC offers! Now, he's back to several CCs maxed out. I just don't get it but it's his way of life. SO, the article applies to BFF - but he ain't buyin' it! YMMV

 

[CaptTom]

Great article! Keep the young 'uns working in fear! Somebody's got to pay in to the system, and it sure ain't me!

 

[Koolau]

Great article! Keep the young 'uns working in fear! Somebody's got to pay in to the system, and it sure ain't me!

Right! My MC share keeps going up! And someone needs to pay for my SS inflation adjustment.

 

[zaqxsw]

I'll be retired 11 yrs. this August. If I ever would have known that my liquid NetWorth would be doubled by now, plus a newer home +$200k over my home before retirement, fully paid off 3 months after buying it, I would have never had the concerns I did for the first 1-2 yrs. Mainly around high 4 figure monthly medical insurance bills. Of course, that insurance never paid for anything...

And I'm about as conservative investor as you can find. The issue now is blowing that dough. Goes against what got us here. Becoming a bigger concern as we're really that lucky both kids in their 30's are better off than we were at their age!

Could have done it earlier but am happy I pulled the trigger when I did!

 

[Koolau]

I'll be retired 11 yrs. this August. If I ever would have known that my liquid NetWorth would be doubled by now, plus a newer home +$200k over my home before retirement, fully paid off 3 months after buying it, I would have never had the concerns I did for the first 1-2 yrs. Mainly around high 4 figure monthly medical insurance bills. Of course, that insurance never paid for anything...

And I'm about as conservative investor as you can find. The issue now is blowing that dough. Goes against what got us here. Becoming a bigger concern as we're really that lucky both kids in their 30's are better off than we were at their age!

Could have done it earlier but am happy I pulled the trigger when I did!

So glad you "wasted" your money on medical insurance. We've been using ours a lot lately. Trust me, wasting it is much better.

I'm trying to learn BTD from RobbieB but I'm a slow learner. Still, I am doing better. The only advantage of the current inflation is that it's turning me into a BTD proponent - you know, whenever I buy a couple of pounds of steak or fill my tank! YMMV

 

[albireo13]

But ….. but …. the CEO wants a fourth vacation property.
Keep working !!!!!

 

[retire202052]

Retired ten months ago at age 52 and never been happier.......managed to gain 12 pounds though ......need to work on that!

 

[RobLJ]

While I agree with most of the comments, I don't think the article is aimed at the vast majority of peeps here, who clear the list of caveats or concerns listed.
It is aimed at people who want to retire who aren't ready, so I don't think it is a bad article.

 

[swakyaby]

The article mentions that 2/3 of retirees say they have a lower standard of living than when they were working. It would be interesting to see what the percentage is in this group. I think the majority of members here probably enjoy a higher standard of living as retirees, just my guess.

 

[Dtail]

The article mentions that 2/3 of retirees say they have a lower standard of living than when they were working. It would be interesting to see what the percentage is in this group. I think the majority of members here probably enjoy a higher standard of living as retirees, just my guess.

Can be a little complex. We reduced our expenses by 60% in our prep for eventual retirement. So would be hard to classify whether we are living below our working years.

 

[Gumby]

The article mentions that 2/3 of retirees say they have a lower standard of living than when they were working. It would be interesting to see what the percentage is in this group. I think the majority of members here probably enjoy a higher standard of living as retirees, just my guess.

That was a sine qua non of our retirement planning - we must have the same or improved standard of living after retirement. We were willing to work as long as it took to ensure that.

 

[daylatedollarshort]

We reduced our expenses and increased our standard of living in retirement by optimizing all our expenses.

 

[cyber888]

Well, the article was addressing the average person with $200K+ in savings, and telling them to work 10 more years to 65 so that they can have $496K. So, he was address people who wanted to retire at 55 with only $200K+.

 

[JoeWras]

Yes, just another article written by folks who want to exploit us. By now, everyone that participates on this forum is aware that we were wrong to ever work at all. Every minute we spent earning income was wasted and we were fools to do so. Folks still working need to stand in front of the mirror and ask themselves why.

Well, that is the exact premise of the subreddit r/antiwork

 

[Koolau]

The article mentions that 2/3 of retirees say they have a lower standard of living than when they were working. It would be interesting to see what the percentage is in this group. I think the majority of members here probably enjoy a higher standard of living as retirees, just my guess.

I can't recall specifically anyone admitting to a lower standard of living in these pages. I could be wrong, so YMMV.

 

[CaptTom]

Can be a little complex. We reduced our expenses by 60% in our prep for eventual retirement. So would be hard to classify whether we are living below our working years.

Almost exactly what I was thinking. How do you define "standard of living"?

Is it how much you spend, how much you consume, how often you buy a new vehicle or stylish clothing? Whether you get your morning coffee from Starbucks instead of at home? Whether you "blow that dough" instead of looking for value in your purchases?

By that definition, my standard of living is a bit lower.

But compared to going to work every day, it sure doesn't feel lower!

 

[Magus]

Yeah, it is tough to define standard of living. For example, folks that highly value free time may consider it a higher standard of living even if their spend has to drop by 20%+ vs while working to retire. Plus stress from working.

If you look only at things you can buy in retirement vs pre-retirement its a bit easier to measure (but perhaps not accurate). My wife and I will cut back on some things in retirement the first few years just to be safe and get the hang of it since it'll be so early (42-43, well she's already 'retired' for 6 years). For example, we plan to go down to one vehicle (plus a golf cart) and just use Uber/lyft the very small # of times we really need another vehicle (or borrow one of our retired parents). I don't think that will change our standard of living at all, but we'll see when we get there.