Posted on 03/28/2018 6:52:51 AM PDT by SeekAndFind
Countless workers dream of retiring early and reaping the benefits that come with it. But many folks don't pursue that objective, either because they're too scared to take the leap or are worried that they're not financially ready. Both are valid lines of thinking, but the problem is that the longer you wait to retire, the longer you'll miss out on the lifestyle you really want. If you've been on the fence about early retirement, here are a few good reasons to take the plunge.
Americans certainly aren't strangers to hard work. Collectively, we tend to forgo vacation time, put in long hours, and sacrifice our work-life balance to prove our worthiness on the job. If that's been your routine for the past, say, 40 years, and your savings will suffice in allowing you to pay the bills, then it's about time for you to call it quits.
Now most seniors are told that they can safely expect to withdraw 4% of their retirement savings each year and not risk running out of money. If you're retiring earlier than the average senior, however, then you'll need to adjust that withdrawal rate downward. But if your nest egg is healthy enough, that may not be a problem.
Imagine you're looking at a $2 million nest egg. If we apply a fairly conservative 2% annual withdrawal rate, you'd start out with $40,000 of income. Now, that alone may not be enough to live on, but if you're married and both you and your spouse can start collecting Social Security, that might add another $40,000 to the pot. Suddenly, you're looking at $80,000, and that changes the picture tremendously. Furthermore, if you have another source of income, like a rental property or side business you plan to pursue, then you have even less to worry about moneywise.
Of course, not everybody is in a solid financial position to retire early. But if you've done a good job of saving, then frankly, you've earned the right to leave the workforce ahead of schedule. And you shouldn't feel guilty about that in the slightest.
Though studies have shown that retirement increases the risk of suffering from depression, working full-time might harm your health in other ways. If you have an office job, being sedentary for the bulk of the day could put you at risk for musculoskeletal disorders, obesity, diabetes, and heart disease, to name a few.
Furthermore, the majority of U.S. workers today don't get an adequate amount of sleep, which, over time, can increase your risk of early mortality. And if your job stresses you out more often than not, you could increase your chances of heart disease, anxiety, and, yes, depression.
Now if you happen to love your job and find that it serves as an outlet for being active, then that's reason enough to stay. But if you're among the 52% of Americans who identify as being unhappy at work, you may want to make your exit sooner rather than later.
The average 65-year-old man today will live until 84.3, while the average 65-year-old woman will live until 86.6. But will you make it to your mid-80s or beyond? Maybe. The fact of the matter is that you just don't know, and that's reason enough to retire as soon as you're able. Even if your health is great at present, it's impossible to say when things might start to deteriorate. Heck, you could walk out the door tomorrow and get hit by a bus, and suddenly, there go your retirement plans.
Of course, this isn't to say that you should be scared to leave the house, and looking both ways before venturing out into the road will reduce your risk of the aforementioned scenario. The point, however, is that none of us have a crystal ball to tell us how much time we have left on this planet, so if retirement is something you've been eager to experience for a long time, you might as well go for it.
Though early retirement isn't for everyone, if it's something you want, then march into your manager's office, submit your two weeks' notice, and get ready to pursue the lifestyle you deserve. Chances are, it'll end up being the best decision you ever make in your lifetime.
Ive retired early and for me the most important thing, something that these guys never seem to say is buy a house and get it paid for. Do not go into retirement with a mortgage or rent. It is almost always a persons biggest monthly expense. Its amazing how much less income I need now that Im not workiing
I retired from fed civil service at 56. Best thing I ever did. Fed taxes are almost twice as mortgage for me.
Just make damned sure that you have a meaningful work in the form of a hobby or hobbies. If you come home, sit on your ass and watch TV, you probably wont last more than 18 months!
I am busier now, three years into retirement, woodworking, restoring Old Arn, gardening and just plain having fun!
Plan for retirement. You are a worker and your body needs a fun job!
I seriously don’t care. Due to my earlier, lackluster job record, I doubt that I can retire earlier than age 70.5, when my 401(k) disbursements kick in and my SS benefits can be maximized (if that’s still around).
At the risk of stating the obvious - the best reason is so you can do what you want to do in the last portion of your life. The first portion is spent learning how to do things. The middle portion is spent doing them and saving money so you don’t have to do them forever. Then comes the payoff - the freedom to spent the 24 hours in each day however you feel like spending them. The ultimate freedom!
I aim to meet or exceed my dad’s accomplishment of spending more years retired than I did working. You can always adjust your lifestyle to require less money but you can never adjust the amount of time you have left on the planet. Simple facts.
In May, I’ll have been retired for 10 years, and Hubby for 5 years. Never one single regret. Never a Sunday evening when you don’t thank God that you don’t have to go to work in the morning!!
Wife and I saved from our paychecks, bonuses and investments since the mid 70s.
We’re both retired but I still have a small tank car biz and she gets a stipend from serving on a public board.
We thought we would start drawing down on savings three or four years ago but have instead allowed our savings to compound in bonds and the like.
David: Oh, God. I guess this was my fault. Thats what Im thinking. Maybe I just didnt explain the nest egg well enough. If you had understood
you know, its a very sacred thing the nest egg, and if youd understood the Nest Egg Principle, as we will now call it in the first of many lectures that you will have to get, because if we are to ever acquire another nest egg, we both have to understand what it means. The egg is a protector, like a god, and we sit under the nest egg
and we are protected by it. Without it? No protection! Want me to go on? It pours rain. Hey, the rain drops on the egg and falls off the side. Without the egg? Wet! Its over. But you didnt understand it and thats why were where we are.
Linda: I understood the nest egg.
David: Oh, please. Do me a favor. Dont use the word. You may not use that word. Its off limits to you! Only those in this house who understand nest egg may use it! And dont use any part of it, either. Dont use nest. Dont use egg. Youre out in the forest you can point, The bird lives in a round stick. And and and you have things over easy with toast!
My father worked at Douglas Aircraft for 38 years, retired at 64, and had a massive stroke nine months later. He was dead four years after that. I am 60 now. I never want to retire. Of course I cant financially anyway, but at my funeral Ill be banging on the casket lid yelling Let me out, Ive got work to do.
THANK YOU for that post. I’ve been wracking my brain for a couple weeks trying to think of the movie where “nest egg” was one of the themes. There it is!
Great movie, “Lost in America”.
I had been volunteering at our local hospital since we retired, and my fellow volunteers, as well as the staff, have been a tremendous source of support for me in my loss. I love the work, and the hospital staff love us volunteers as well. I also have my church family, and my swimming pool buddies at the local rec center. I am truly blessed.
If you are really worried, you can live in retirement only only part of your income and save cash.
I am retired, and I am only spending about 60% of my income. This gives you a huge cash cushion.
I always said that I was going to retire at 55 and go teach. So I did. I spent the years between 55 and 62 substitute teaching middle school and high school. It was very rewarding (though not financially) and I got to work when I wanted too.
Now at 72 I do exactly what I want to do and really enjoy life. I worked hard, saved and invested. Now I enjoy the fruits of that labor. Life is good.
My husband retired on Halloween 2017...I’ve never retired...just quit an official job in about 1991...instead, as I told a co-worker I got politically involved and am just a busy type person...plus I moved wherever the Hub was transferred, or where he went on projects. NOW, with his retirement it seems we are BUSIER than ever. BUT, it means we get to spend today, WEDNESDAY on a “Snow Day” with the grand and great grandchildren.
#2 was the reason I retired early.
If I had tried to work until official retirement, I’d have been dead.
“Why assume a “withdrawal rate?” What about investing the $2 million in a diversified portfolio that earns, say, 4% annually? Won’t that give you $80,000 without withdrawing any principle at all?”
Lots of articles on the 4% strategy. This strategy does assume a historical rate of return. The idea is to maximize the amount of revenue to spend in retirement and that requires spending down the portfolio. Lot’s of assumptions built into the 4%. It’s probably the most common strategy advanced by retirement planners.
The 4% strategy is based upon simulations of the expected return and upon a 90% probability of not outliving your portfolio. It’s a very conservative strategy.
My husband retired at 62, and I am SO glad he did! He died suddenly 2 years later.
It’s a good strategy, but where do you find the 2 million lying around? No wonder Defined Benefit union plans are collapsing, multiply 2 million by the thousands on retirement in any given plan and one can easily illustrate the underfunding.
-PJ
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