Easing into Retirement from a financial perspective

[Mountain trapper]

One of the critical things that I feel must be done prior to retirement is get out of debt, all debts. Although there are times when you can use the debt to your advantage. For example, when I bought my tractor, after I retired, I took advantage of the zero percentage rate. Then paid it off a couple years later. Same with vehicles. I've been buying only new vehicles since 1984 and all on special low finance rates. I always paid them off early. We own a large piece of property. Since we took advantage of the agriculture exemption our property taxes are very low. Our financial advisor keeps us in the zero income tax rate. She also has money set aside aside to start replacing our vehicles in 2026.
I retired from work at 57, I'm now 67. I started taking SS at 64. Last year my wife started receiving one pension from a former employer. At 65 she'll start SS and get another pension.
My plans for retirement started when I was still a teenager. I was never interested in college so I took a job where I could learn a skill that would be in demand everywhere. I bought my first home at 19. The rest, as they say, is history. My goals have never changed in all these years.

 

[elkhound]

I like your planning based on "time in" retirement, but the longer one works the shorter that times becomes. The average life expectancy is 85, to be conservative plan on living till 90. So if you retire at 55 you need to plan to cover 35 years in retirement, if you retire at 65 then 25 years would be a safe bet. If you keep working until 70, then you only need to cover 20 years.

From a money perspective the longer you work the more money you have in retirement. But from a health perspective, if you work longer you may not get to enjoy the fruits of your labors.

in my searching average male life expectancy is u.s. is from 74 to 76 years depending on year you look at.....never seen it above that.

women live longer average from my searching

 

[Amish Heart]

in my searching average male life expectancy is u.s. is from 74 to 76 years depending on year you look at.....never seen it above that.

women live longer average from my searching

Yes, we do, and I find that amazing, really. Except for my Uncle Melvin. He turned 101 on Jan 5th. But grandma's cousin Edna lived to 104. Got news a few days ago that the sister of my Uncle Glenn passed. Her name was Fern, and she turned 101 last October. She was a cool lady.
I do see many more lady widows in our area. There's even a few groups for them. They keep each other busy, and that's a good thing. My favorite cousin has been dragged to a few things, but she said it's not for her, her family keeps her busy. There's a few widowed amish men around that I know of that are in late 70's, early 80's, just dying to find another wife, a younger wife. I suspect it's more someone to clean up after them and cook for them, as that responsibility would go to the man's adult daughter if there is one, or a daughter in law. And wow, she'd be looking after two homes at that point.

 

[elkhound]

another thing is when one spouse is a spender while other is a saver and the saver dies first or early so spender starts spending like theres no tomorrow...ugghhhhh !! then spender is left with just his/her monthly income and they spent the nest egg.

 

[sonya123]

another thing is when one spouse is a spender while other is a saver and the saver dies first or early so spender starts spending like theres no tomorrow...ugghhhhh !! then spender is left with just his/her monthly income and they spent the nest egg.

lol that sounds like a personal problem ( of the spender)

 

[sonya123]

so what is the minimum ( current , not if we get Argentina style inflation) amount of monthly income you could live on in retirement? Approx? Just curious

 

[Mountain trapper]

so what is the minimum ( current , not if we get Argentina style inflation) amount of monthly income you could live on in retirement? Approx? Just curious

For us we could get by on about $8,000 per month. But some months we spend much more, like when we're buying equipment, hay, livestock, tires etc.

 

[Amish Heart]

Are you counting current reoccurring bills like heat(firewood), propane, electricity, insurances, house payments, medical bills, car pmts, taxes all that stuff... or SHTF bills where those would be different?

 

[zoomzoom]

For us we could get by on about $8,000 per month.

Are you counting current reoccurring bills like heat(firewood), propane, electricity, insurances, house payments, medical bills, car pmts, taxes all that stuff... or SHTF bills where those would be different?

I think that's about our number as well but I don't honestly know what the Mrs. spends. Since before we got married (over 30 years ago), we decided to keep our finances separate.

Yes, that amount includes taxes, utilities, insurance...

 

[Mountain trapper]

Are you counting current reoccurring bills like heat(firewood), propane, electricity, insurances, house payments, medical bills, car pmts, taxes all that stuff... or SHTF bills where those would be different?

For us those expenses are separate. We don't have house or car payments, and since I'm on Medicare we have very little medical expenses. The insurance, vehicle and equipment repairs and taxes come out of a different fund so it doesn't affect our monthly income. Much of our monthly income goes back in to savings, and when it grows enough we buy another CD.

 

[elkhound]

lol that sounds like a personal problem ( of the spender)

i couldnt be bound to a spend thrift daily...it just be to much conflict of lifestyles for either to be happy.

 

[UrbanHunter]

Our expenses run about $3,500/month now, I don't think it would change much in retirement.

 

[Mountain trapper]

Our expenses run about $3,500/month now, I don't think it would change much in retirement.

Exactly. That's what the "expert" retirement planners try to convince people with. When I was planning our retirement I had planned that our expenses would actually go up in retirement, and it has.

 

[sonya123]

Reading @sonya123 's post reminds me of the need for households to communicate the plans and to make honest assessments of the needs. I know guys who retired early (because the didn't want to work), but didn't plan for medical insurance and other expenses, their wives ended up working to get the medical insurance that they needed. The one big got-ya that people often over look is that most retirement income comes with tax exposure that can throw your plans off the track.

yes, the medical insurance is a huge issue. We already don't have homeowner insurance but not having medical insurance of some sort is too much of a risk even for me. At least if our house burns down we don't have any debt.
Glad we are living in a state you can get medicaid.

 

[sonya123]

Our expenses run about $3,500/month now, I don't think it would change much in retirement.

I have no idea what our non farm expenses average but I think we need to start keeping track of it
seems like every year we have at least one huge expense ( last year trip to Europe, expensive Ranger repair, year before expensive vehicle repairs plus bought a vehicle, year before bought son a vehicle) this sort of thing is what needs to stop .I think our every day expenses are pretty low. We pay property taxes , car insurance, electric ( but very little) , phones, garbage pickup, that;s it for bills, the rest is expenses for gas, food and other stuff, which isn't that much. The animals pay for themselves pretty much. Our biggest expense is transportation

 

[Supervisor42]

Exactly. That's what the "expert" retirement planners try to convince people with. When I was planning our retirement I had planned that our expenses would actually go up in retirement, and it has.

A decade ago when I was figuring my retirement, using their online 'calculator', I figured in 4% inflation per year, every year.
Back then, they would have thought I was looney using a number that high.
If you average the last 8 years, it comes out to about that.

 

[Cascadian]

I don't make $8000 monthly now. I just eat a little cat food now and then to get used to the flavor. On a positive note with the exception of a reasonable mortgage we are almost debt free.

 

[UrbanHunter]

I found this article about how much income you need to retire for each state:
https://www.cnbc.com/2023/10/11/how...html?msockid=3065a54ad97c61ac28e5b113d8bb6018

I compared it with my plans and it was within $5,000 per year of what my estimates were. How well does it match your figures?

 

[sonya123]

I found this article about how much income you need to retire for each state:
https://www.cnbc.com/2023/10/11/how...html?msockid=3065a54ad97c61ac28e5b113d8bb6018

I compared it with my plans and it was within $5,000 per year of what my estimates were. How well does it match your figures?

much less for us, probably around less than half. We make no profit on the farming so it is as if we were retired, well, very little profit, maybe a thousand $ a year or so.
Virginia has huge differences depending on where you live. Much cheaper where we live as compared to Fairfax county or something
Plus we have no debt of any kind. Maybe they have added in costs like rent or mortgages which we don't have

edit: one more thing, I think they got Florida about right! Just paying the electric bill was around $6000 a year when we lived there , probably more now.

 

[UrbanHunter]

much less for us, probably around less than half. We make no profit on the farming so it is as if we were retired, well, very little profit, maybe a thousand $ a year or so.
Virginia has huge differences depending on where you live. Much cheaper where we live as compared to Fairfax county or something
Plus we have no debt of any kind. Maybe they have added in costs like rent or mortgages which we don't have

Yours might be closer to West Virginia. But the point you make about your Farming is very enlightening, for us our food is about 12% of our expenditures, so living on a farm might lower your retirement costs.

 

[old tex]

We have a fiduciary advisor that manages our investments for us. He has finally convinced The Princess that she can finally retire. We will have to pay for health insurance for two years until she is eligible for Medicare.

We don't have any debt and live a simple life. Getting out of debt and staying debt free was critical in making retirement a reality for us.

Just my 2 cents.

Ben

We don't have any debt and live a simple life. Getting out of debt and staying debt free was critical in making retirement a reality for us.

First off Ben, I agree with everything you said. I would add to the above statement though. "Getting out of debt & staying debt free is critical for both building wealth & making retirement a reality for everyone.

I used to read people touting further education to improve (long term) their earning potential. Here's my radical thought on that statement. No matter what you do, you CAN NOT depend on controlling your income. People get fired, companies fold, new processes can make a job obsolete, stuff happens. So, you can't control your income. What you should be able to control is your living expenses. Simply put, if you don't spend it, you still got it. And if you "still got it" then you have options on what to do with "it". As for making more money, that's simple, stop paying interest. Interest eats up a huge percent of your income. Stop paying it & it's probably an automatic 10% raise.

 

[CrocDundee]

It's all a bit different for me. The fruits of being a single dad raising three boys into exceptional young men...has come home to roost. We have a large family property and all three are housing out here...and starting families. They all have careers...doing well. We're setting up a Glamping business for HIPCAMP. We started off with casual vanning...giving the client a nice spot...with electricity. They gotta be self-contained, however. We are currently setting up a 3/4 acre spot...a 1/4 mile away from any semblance of civilisation. Toilet, shower, sink with hot water...full kitchen, 8m x 9m undercover "hang out" with a hot tub...two tenting sites on concrete pads with corrugted roofing and electricity. A babbling brook winding by adjacent...freedom to bring horses...and dogs (there's a kennel)...over 100 acres to themselves besides the sculpted 3/4 acres. It's still being set up...and it's a real chore. We pick and shovelled a ditch...420 metres long...to get a water line and electricity to the site. The Gold Coast is a 40 mile drive...so...folks will be able to park their van in full security...unhook their puller...and see the sights. They can leave Fido, too. I'm working things out with some restaurants for them to "eat 'n go", too. Hipcamp advertises, books, gets the money and insures...for a 10% cut. One similar setup...maybe 50 miles from me...in a farther away area...never brings in less than $75K a year. All of us are musicians (I'm away from Oz recording in Nashville as I write this)...so there's a NICE recording studio at my house...so...we should pick up a lot of that clientele, too. We see the place will be GREAT for all of us! Screw the clients! Actually, my baby's just 31 and there's a big campout party going on this weekend out there. It's still summer and...crap...I guess I missed the perve on the 20-something gals skinny dippin'!!!!