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retirement age

Posted by gibby3000 (My Page) on
Thu, Sep 24, 09 at 23:44

I've been pondering retirement a bit more now that I'm over 50. I've read the retirement forum but doesn't seem to be too much activity over there so I thought I'd see what you all have to say about this.

I don't have a specific retirement date/age in mind. DH doesn't really aspire to retire at all though he's showing signs of changing his mind about that. For retirement financial planning purposes, you kind of need to know when you're going to retire and how much your expenses are going to be. I finally think I've gotten through the expenses exercise - at least in today's dollars. Now I'm pondering retirement age so wondering what others have done or are planning to do.

If you are retired, at what age did you retire? And did you have some type of defined benefit pension plan or were you responsible for your own retirement savings/investments? If pre-medicare age, what did you do for health insurance?

Likewise, same questions for people who haven't yet retired but have a retirement age in mind? What age and do you have defined benefit pension plan or going on your own savings - also what about insurance if you will be pre-medicare age?


Follow-Up Postings:

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RE: retirement age

We are facing the same questions. I will be 62 in a couple of weeks, and altho I haven't worked for a few years, I can start collecting SS, so I've been crunching the numbers. What I get now will go straight into the bank, and not affect our monthly budget, and if I wait until 66 to collect the full amount, I'll be 78 before I catch up.

I'd be afraid to have my DH (same age as me) stop work before Medicare kicks in. Seriously, the way health insurance premiums have skyrocketed, what you might be able to afford today may increase by 20 or 30 perfect or more in the next couple of years. And if you have something that needs treatment, the ins. companies are most likely to pull your coverage if you are a private client. Nope, we are hoping for Medicare to pitch in.

Our retirement accounts took a major hit last year, even tho we are way less than 40% in stocks. Our home equity, which had been looking like a nice nest egg has evaporated. We still have equity, just a fraction of what it once was.

It looks like DH will work until he's 70 or more, if all goes well. We only have SS and our savings.


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RE: retirement age

We both retired at fifty, and we are responsible for our retirement income, having no pension, just investments.
We pay for individual health insurance.
We've been doing fine for over ten years now, our net worth has more than doubled since our retirement.


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RE: retirement age

I am 58 and have been retired since 2006 (aging MIL came to live with us and helps with 1/3 of household expenses). I have a small IRA, about 45K. At age 65 will receive 3 pension/annuities from 3 companies I vested at, totaling about $1K/mo. Will take early Social Security at 62 because I fully expect they will bump the age eligibility upwards again to deal with SS deficits.

My DH will retire in 6 mos. at age 56 with a DBP of approx 84% of his salary, full retiree medical benefits. We will reduce that by about 11% by opting for full survivor benefits - if he dies, I will get the same check for the remainder of my life. He is not eligible for SS because his employer (a public agency) withdrew from SS 25 yrs ago and has a private contribution plan instead. Between company contributions and our smaller pot of payroll contributions, plus a nice 3x ROI over the last 25 yrs, it's a mid-six figure addition to the pension and other assets. To be honest, we could have done better and should have - started saving way too late and I didn't really study investing until about 10 yrs ago. Wish we'd had the Net available when I was twenty, that's all I can say!

Home equity took a hit but we have no mortgage, thus we could easily finance a seller and sell above the recent appraisal price we obtained. They had to follow FHA guidelines and compared our turnkey property to three foreclosure/short sales, which were the only recent sales of similar sized homes. THe appraiser even told us his appraisal was really too low compared to the other houses he had seen in our area, but c'est la vie. We don't plan to sell for another 5-10 yrs anyway.

Having watched the financial markets for 35 years, I've seen that what goes up, comes down; and then does it all over again! It's the nature of the beastie. So I watched the portfolio drop 48% in the recent six-month meltdown, then watched it jump up again before we decided not to be greedy, and took those profits from the equity portfolio. We are currently more in cash and bonds than we have ever been, waiting for another nice drop in the market to reinvest. The summer rally cut our losses from 48% to a much more palatable 15% Y2Y, and since my DH is still contributing I expect to see the portfolio recover nicely over the next 5-10 yrs. Down markets are like a discount sale on the funds, your dollar buys more shares and thus gives you a better $-cost-average.

We will draw no more than 3% of our portfolio annually. Between DH's pension and benefits, my MIL sharing expenses, and a modest drawdown on the portfolio, we expect to be able to have a comfortable if not lavish retirement (which even in the best situation, we would never have had the latter, having opted for careers that were solid but not spectacular, preferring to have time together rather than the highest possible paycheck).

At the age of 62 I'll take SS, which even with a reduced benefit will help offset any inflationary bite. At age 65 my pensions will kick in, giving us another nudge.

Because my DH has a pension and benefits, life insurance is not necessary once he retires. I, in contrast, have $750K in life insurance to offset my smaller retirement savings and unassignable pensions. This is a level term policy and will run off at age 70. By that time I expect we will sell the house which will free up additional cash - how much, we have no idea but we shall see if the local RE market has recovered by then.

You might ask, why so much insurance? I got the policy before I stopped working. It was intended for income replacement as well as estate protection (not estate tax protection, which we don't need). If I die there is a cost to my DH even if I'm not working, as I manage everything: house, garden, finances, purchases, planning (including for MIL). Being a term policy, the cost is very modest and I consider it well worth the protection. In a payout, DH can do a 5% annual withdrawal rate of the proceeds which will give him sufficient income to get into even the nicest senior living condo in our area.

We both have long-term care policies, tax-qualified. They are 90-day elimination, compound inflation-adjusted daily benefit, unlimited period (e.g., benefits are paid forever, basically). Policies are modest in cost as we got them in our late 40's. Carrier is partnered with DH's pension fund (biggest pension fund in the US) so we are pretty sure those benefits will be there when we need them. As we have no children and little family (my DH is an only child) I deemed this to be a necessary risk mitigation for our financial security. (Can you tell I worked for a well-known insurance company as an admin asst for 13 yrs, LOL?)


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RE: retirement age

I am currently 62 and still working.
I had some health issues this past spring (high blood pressure and cholesterol) and looked into retirement finance at that time & didn't like the numbers.
My mortgage is set to pay out about the time I reach 65 and if all goes as I hope I expect to retire about then.

There is no defined benefit plan from any of my employers. To my annoyance my union gave one away in 1974 on the grounds that nobody stayed around long enough to vest it.
I have a tax deferred retirement savings plan to which my employers have matched my contributions up to a percentage of my income. Until the meltdown about a year ago that retirement plan was looking comfortable. As I am in Canada the details of that plan are probably not relevant to you. I wasn't greatly concerned about the drop in the paper value of that account until some stocks used the crisis as a reason to cut dividend payouts. That has certainly rattled me.

I also have a couple of whole life to 65 insurance plans which should pay out to me at the age of 65.
I can also expect an inheritance from my mother who is now 96.
There is also a government pension plan, which increases the longer I put off collecting it.
After retirement I will have to pay for medical insurance but in Canada that isn't the big issue it is in the U.S.


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RE: retirement age

Interesting to hear from our Canadian neighbors, isn't it? People who are so against healthcare reform might think twice if they honestly compared the various foreign nationalized health services to what we struggle with in the US. It tells you something when one of the major healthcare insurers is starting to pay for its patients to fly outside the US for healthcare that is equivalent in quality to the US hospitals yet costs thousands less.

My MIL travels regularly to Canada to visit her family, all of whom live in either Edmonton or Vancouver. She has used their clinics on occasion for mild illnesses. It's amazing to us, who have the top-rated HMO in the US, how easy it was for her, when our own doctor struggles to find time to fit us into her schedule. Use of medical practitioners to take the routine care burden off doctors and help with the loads of paperwork, is almost non-existent here in the US.

It's really a shame how crippled our health system is. It's a shock for many people flirting with the idea of early retirement, to find out how much comprehensive healthcare insurance actually costs. I often tease my DH that if I die he would have no trouble finding someone else - all he need do is put in the line "retiree medical benefits and assignable pension" and he'd be deluged with offers...a cute joke except that sadly, it's absolutely true. (And he's a cutie, too, to make it even easier, LOL)


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RE: retirement age

Okay now, let's not go OT into healthcare reform here. I'll segue back on topic with the following. I was just talking to some friends who retired pre-medicare age. They're very happy with their health coverage and do not mind paying $13K per year for it. I think some people do prefer to have control over the $ they spend on insurance coverage rather than paying additional tax and being unsure what they will see in return for the tax contribution. Kind of like Social Security in the U.S. - where you pay in but not sure what you'll actually get out of it.

Though I have no DFB with my company (and never have) I do have some kind of retiree health benefits at age 55 that I didn't pay much attention to previously. I'm now getting more info on that. It could be a huge incentive to make sure I stay with the company until age 55.


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RE: retirement age

I want to add that DH loves his work, and can't imagine not doing it. No substantial hobbies other than household and yard puttering. He'll probably work longer than 70, if it's possible.

Right now, we are fine, and the company he works for is doing okay. But given the past year, we worry about things every quarter, when they've had lay-offs and cutbacks. This is the first quarter that he hasn't had to lay off anyone.

This all means that we are a lot more uncertain about future retirement than what we worked for and had planned a few years ago.


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RE: retirement age

16 years ago, I suggested we re-finance our mortgage to a 15 year term. At the time, we were also able to reduce our interest rate by 2.25% We had been in our house 1 year and my DH was concerned about his employment, but after talking it over, we agreed. (we were very fortunate as the company didn't require anything but a new appraisal in closing costs)

Today, we are very grateful to have the house paid off. DH's workplace closed this year. We were fortunate to receive some severance and a staying bonus. He would have continued working if it hadn't closed.

DH turned 62 this year. He is going to draw SS benefits starting next year. This year would have been lost to too much income and taxes. We have a 401k to roll over - scary with the stock market rocky, safety first here.

We worked towards having no debts. I quit work a few years before my mom had a stroke, and was able to bring her to our home. After she passed, I remained at home, instead of going back to work. We live in a very small town and pay was not worth the hours of work. Unfortunately, my work history did not include any pensions, etc. I will draw SS in 2011.

As noticed above the loss of a few dollars a month by drawing SS early would take 11-14 years to make up by waiting for the full amount.

We will probably go with COBRA for a while and research other companies and policies. Living in small town has benefits especially with getting in to see our doctor quickly.

Basically, we planned for retirement, reduced our living expenses where we could, and discuss our options. We are doing okay. I am an artist and spare time is spent on that. DH likes football and baseball and watches that in his spare time. We share indoor and outdoor chores. We just returned from a trip to visit my MIL (85). We rented a cabin near the lake so we could bring her out to fish. She loved that!! We enjoyed it too. Plan for the future, live for today, trust in God.


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RE: retirement age

Hi Gibby,

I'm nearly 57, frugal, obsessive and 'pretired' (working part time, flexible hours on my terms for as many more years as I choose). DH is considering an early retirement option from federal employment this summer when he turns 56. He may choose to keep working.

Say we both quit. Long way to SS from here but we have it covered. I think. House is paid for. No debt.

We can both use my health insurance whenever I declare myself retired from my former 20 yr civil service job and start to draw a reduced early pension. (covers 18% of our income need) The health insurance perk was the only reason I hung in there at the end.

For 4 years we will burn through my main retirement account and cash to get to 100% of the income we need. The more we/I work the less we burn, but I have 4-5 years funds earmarked and ready. I have figured in taxes and inflation.

Then at 60 DH starts his pension (for 41% of our income need) with a second health insurance option, my pension continues (for 18%) and I start my SS early (for 11% - supposed to be more like 18% but I am anticipating a cut or means testing or something). That gets us to 70% of what we need. For the rest we will draw down IRAs (for 10%) and DH's main retirement account (for 20%). There is wiggle room in there: we can still work some or use other savings. At some point when rates are good, we plan to annuitize a chunk (1/3?) of DH's account to fix that last 20% income stream. If annuity terms stay poor, we will just do annual withdrawals of <3% to come up with the last 20% of income we need.

Right about when the IRAs run out in 10 years, DH will be 70 and start to draw his SS (supposedly for 35%, shall we guess closer to 25%?). The total from there on is 115%. More than we need. And if we actually get what the annual SS statement promises, we'll be at 132%. Way more than we need. In theory anyways.

The plan is rock solid with more than a couple safety layers of assets we could tap if we had to (for wacko inflation, uncovered medical or family needs, whatever). I've tracked every penny for a decade, so I am sure of our income needs. We weathered the market's gyrations pretty well due to good diversification and low expectations. And we could always scale back easily if we had to. I know my way around Goodwill.

All that said, losing salary still scares the cramp out of me.

I'll probably keep working.



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RE: retirement age

Hi Celtic - nice to hear from you! You always seem to have everything so together!


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RE: retirement age

Interesting thread.

I'm 44 and my husband is 50. I hate to admit that I am just now really thinking about retirement and am open to any advice you all care to give.

Me:

Employed full-time with excellent health coverage (also cover my husband and child).

Employer Defined Pension Plan (not great, but hey).

Approx. $175,000 in profit sharing retirement plan.

No real savings to speak of.

Husband:

Employed full-time (good salary, uses my medical).

Will have pension from former employer approx. $2,500/mo., starting at age 65. Less if taken early.

Approx. $20,000 in 401K (new job).

Combined:

We have 22 years left on a $210,000 mortgage.

One car payment (I'll need a new car soon).

No other debt.

13 year old child.

I feel that we are really far behind. I've been considering refinancing to a 15 yr. mortgage. Our current rate is 5.875. Like I said, I'd appreciate any input and/or suggestions. Thanks

tlbb


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RE: retirement age

Thanks Gibby. Many a day I do not feel at all like I 'have it together'. Though I am more stable than when I was living in a car for while in my 20s...maybe that's where my bag lady fears come from.

tlbb, you are not in bad shape at all. We did not focus intently on saving until about 12 years ago. Once retirement becomes a real goal, it becomes easier to squeeze out the maximum savings.

My advice would be to get yourself Quicken or some other tracking system and begin to log your spending. Several reasons: you will learn where the money is going, what you really need and where you might save more. Huge help in planning.

Read about investing and about finances in general. Educate yourself. The informatiom is out there and it is free but invaluable.

To change your thinking about money, read Your Money or Your Life. Helps you think of the cost of things in terms of your time and your spirit. Transformative.

RE the mortgage, there is argument for and against paying the mortgage early. Pro 30 year argument comes down to increased flexibility and control (and risk) if you earmark extra money for the the house but invest it yourself, then pay the house off later. That requires discipline and the brains and stomach for investing. The 15 year conversely forces you to build equity along the way with the risk that being locked into a higher mortgage payment could backfire if you lose income. Me, I opted for a 15 year and paid that off early. I didn't care that I could have greater flexibility and potentially more money the other route. I wanted the structure. I wanted to commit to owning my house ASAP. Worked for me.

Good luck to you!


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RE: retirement age

tlbb - don't feel bad - I didn't start paying much attention to this topic until I hit 50. we have always saved and been financially responsible but I didn't really start thinking about when am I going to retire, what kind of lifestyle do I want to have in retirement and how much money do I need.

I second Celticmoon's recommendation about Quicken or something like that. I have been using Quicken for 18 years and I know my financial situation very well. Once I understood the concept of net worth and started tracking that in Quicken, it really had an impact on how I spend money - and DH buys into that idea too - which is good because he's more of a spender than me.

I also subscribe to Celticmoon's mortgage philosophy and paid mine off too with a 15 year loan - and resisting the temptation to buy a bigger, more expensive house. We refinanced to get a lower rate and a shorter term - going from a 30 to a 15 - never taking cash out to do things that didn't increase our net worth (actually we never took cash out). When DH got laid off at one point we were so close to paying it off that we just paid it in full and eliminated that payment - a big plus when we were down to one income. Being an unsophisticated investor and not trusting my money to anyone else, paying off the mortgage sooner was preferable to me.

Do you have some emergency savings besides retirement funds? If not that is probably an important priority to start with.


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RE: retirement age

This is an interesting topic, and a challenging subject to get your arms around, at least for me. In my opinion it's somewhat difficult to find that perfect balance as it pertains to saving for retirement and enjoying life today. As we know there are no guarantees for a tomorrow.

My husband and I try to stash a good percentage of our income into our 401K and savings. We're in our mid 50's. But I sometimes wonder if we should spend just a little bit more on a real life "adventure" today.

I've lost 2 cousins recently, one in his late 40's (heart attack) and the other in her early 50's (car accident). Maybe that's why it's hard for me, and why I really appreciate the discussion here.

Celticmoon, I would love to read the book you suggested. When I look it up at the library, however, there are 5 different authors. Do you know who wrote the book?

Thanks much!


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RE: retirement age

Thanks for the responses.

I have to admit that I'm intimidated about investing. I know nothing about the stock market or what investment vehicles would be best for me.

I know I should find a financial adviser, but even that worries me! Will I get good advice? Will someone take advantage of me? Etc...

I don't want to come across as unintelligent, I'm just being honest. I'm pretty conservative with my money (obviously) and I think I'd be more comfortable investing in something I have a better understanding of, like real estate.

Also, I totally see kaelkriver's point. I wouldn't want to get so concerned about my retirement that I miss out on things now.

Any feedback on refinancing my mortgage? If I were to get a 15 yr. fixed, what are the rates like now? Do brokers have access to different products than what I can find myself?

Thanks again.


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RE: retirement age

tlbb - you are sounding more and more like me! I too did not know much about investments and didn't like the idea of using a financial advisor - many of whom are sales people. I did a lot of reading (and listening to some radio investment programs) on my own to get an understanding of the fundamentals before I finally started working with a planner. When I say a lot I'm talking about a couple years. People here were very helpful. The more you read and listen to different resources the more you start to see that there are some fundamental approaches to investing that are consistent across the different resources. One of the best things I've learned is trusting my gut - like if it sounds too good to be true don't go there - or not being comfortable with what's motivating the person who's giving me advice (sales commission) or just not wanting to put too many eggs in one basket or wanting to proceed with caution. One guy actually tried to convince me to invest my emergency savings and get a HELOC to use in emergencies - what an idiot.

I interveiwed quite a few people before I finally settled on one referred to me by my CPA. He is a fee based CFP - I just pay for however many hours he spends with me. I don't buy any investments through him and he does not charge me a % of my portfolio. At first I just worked with him to get some advice on where to invest a "windfall" of cash I came into - knowing I had plenty of emergency reserves and really needed to do something longer term with this money. Once I met with him though and he looked at my 401K funds, and some other stuff I realized how helpful he could be - and how negligent I'd been for years. I meet with him twice a year now and it is well worth the $ since I am still no expert and also don't have the time to do everything on my own. I do make my own trades and handle all my stuff myself - he just gives me advice on what to do.

The only thing I know about mortgages right now is that it's much more involved than the last time I did anything with one - lots of proof of income, etc. The last time we refinanced our second home the only thing they needed proof on was that we owned our primary residence free and clear - apparently that was too unbelievable to accept without proof.


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RE: retirement age

I don't have a copy of Your Money Or Your Life at hand. I have bought I don't know how many copies, but keep loaning them or giving them away. I think the original was in 1992 by Joe Dominguez (now deceased) and Vicki Robin. You can find that for under $1 used on Amazan. It is now in its third revision with updates on things like the investing advice and the new coauthor is Monique Tilford.

And I see the subtitle is "Transforming you relationship with money". Ha. I didn't realize that when I posted saying it is "transformative". It is. I haven't made a puchase in years where I haven't considered their ideas, e.g. would I give up 5 hours of my life for these shoes?

It was very helpful 10 years ago when I needed to get a grip on spending. I have taken it maybe too far in the frugalista direction though. Now I need to work on getting more comfortable with spending. My country needs me!


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RE: retirement age

Thanks for jumping back in Celticmoon, I have the book on order.


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RE: retirement age

Thanks for a great post gibby. I consider this forum a great resource.

celticmoon, thanks for the book recommendation, I'll definitely get a copy.

I would also like to thank all the knowledgeable contributors of this forum. This is a great place to not only get financial advice, but to also be privy to some really intelligent and thoughtful discussions on a variety of topics.

tlbb


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RE: retirement age

This is a great forum and wonderful advice is given here! I am learning a lot!

Gibby - can I be nosey and ask what your planner charges per hour? Or if you know a range? And how many hours per year are you using? (You can tell me this is none of my business and I will fully respect that.)


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RE: retirement age

Christine - I can't remember everything exactly but I know I met with him the first time - no charge. The number of hours he's spent on my stuff since then has varied depending on what I want done. The second meeting he went through a thorough assessment of our overall financial situation covering many areas of our life and finances. He reviewed our IRA funds and recommended some changes. We had horribly underperforming Fidelity funds and they had been for many years because we didn't really know what we were choosing in our 401K. Oh well - water under the bridge as they say. He also gave me some advice on where to invest my after tax cash windfall since that's what really prompted me to go there in the first place. I can't remember how much that meeting cost but it was capped with kind of a fixed fee - we could spend as much time as we wanted there talking to him and not charged beyond the fixed amount.

The last time I went I think the charge was for a total of four hours - some of it spent in the meeting - some of it spent reviewing my info before the meeting. He made some recommendations to allow me to take advantage of losses for tax purposes along with an overall review of my portfolio and reallocating a few things based on the current market.

He charges $200/hour which seems to be in line with other professionals I've used like CPAs and attorneys. I've been really pleased with the whole experience and I think it's money well spent. He very thoroughly explains everything and I've learned a lot.


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RE: retirement age

tlbb, one thing I didn't see was life insurance for the care of your child if something should happen to one of you. That may be included with your jobs. Term insurance on each of you wouldn't cost much.

Our savings/retirement funds were limited also. Lots of job layoffs due to plant downsizing and closings in the late 70's-80's. Relocating and other expenses ate up savings quickly. So we started late too. We chose to go to a 15 year because of our ages and knowing we wanted to stay in this house for the long term.

Btw, I also use Quicken to record our finances and expenses, it came with my computer. But before that I used a sheet of notebook paper lined into 13 columns (one for item and 12 months). That recorded mortgage, electricity, water, cable, insurance, etc. and exceptional charges were listed below those, i.e. putting in a fence, new washer, tv, etc. On the back of that page I listed amounts of groceries, cash and misc. It was easy to see if a payment had been made and to total up expenses per month. I liked seeing everything on one sheet of paper.

I agree with those who recommended a fee-paid CFP, who will be impartial with you. We met with one associated with our bank who was not fee-paid and his recommendations would have paid him 2K every year for 4 years from our funds. Needless to say we didn't go with his advice!


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RE: retirement age

Here's a kind of funny story - sort of off topic but calirose's comment about notebook paper reminded me of it. This will give you an idea about how much of a geek I am about my finances. DH and I got married when he still had one year of college left. I had just graduated and was working for $5.50 per hour in my chosen profession at that time (which has since changed). He worked part time - commissioned retail sales. When we were talking about getting married he wanted to make sure we could "afford" to. That led me to create our first budget - on notebook paper - which I still have. It had our total income at the top, all of our expenses (which were practically nothing), and included a small amount for savings. The funniest thing that we still chuckle about is that we had a line item for "beer". He was leaving the college boy party house and we both agreed it was essential to be able to afford to have friends over for a beer. Life was so simple back then!! Retirement was the furthest thing from out minds.


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RE: retirement age

Those were the "good ole days" gibby. LOL


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RE: retirement age

calirose, I didn't mention it, but we do have life insurance. My husband has a small whole life policy, and we each have a term policy. I wouldn't say it's cheap, though!

tlbb

p.s. I locked into a 15 yr. fixed/0 points at 4.375%. I used a broker that a friend recommended. Estimated closing costs are roughly $2,500 that I'll roll into the mortgage.


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RE: retirement age

I used to share an office with a woman who used a non-fee based financial planner. I guess he was good for them, since he did help them save enough to build their modest dream home. It just sounded weird to hear a woman in her mid-fifties call to "ask Jason" if she could have some money for a major purchase.

Anyway, when my DH unexpectedly received an offer for early retirement (he was actually 3 months short of the required 10 years, so did not expect the offer), we found ourselves in a hurry to decide whether to take it or not. I asked another co-worker if he knew a good fee-for-service financial planner. Turns out he did, but my office mate wanted to give me her Jason's number. I explained that I wanted a fee-based planner, not one who sold me investments and got his income by that means. My friend insisted that her planner was really free, and that he did not steer them to certain investments. I gave in and told her to ask Jason if he ever worked fee-based. The return answer was that there was NO SUCH THING as a fee-based planner! That truly scared me.

Turns out we figured it out on our own with research.

I, too, have learned a lot on this forum and feel lucky to have you all as a resource.


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RE: retirement age

Congrats tlbb-sounds like a great deal.


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RE: retirement age

If you are retired, at what age did you retire?
I retired from the company where had had worked for 32 years when I was 54. I worked at other jobs after that for a few years.
And did you have some type of defined benefit pension plan or were you responsible for your own retirement savings/investments? I had a defined pension plan

If pre-medicare age, what did you do for health insurance? My retirement benefit included health insurance (a pretty basic, no whistles & bells plan, but I'm pretty healthy so it was all I needed)
The return answer was that there was NO SUCH THING as a fee-based planner! that simply isn't true. DH and I use a fee-based CFP(Certified Financial Planner). If you search this board for "financial planners" you can find some great threads on finding a good, fee-based planner.


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RE: retirement age

Grandma, I know there are fee-based planners, it just blew my mind that her financial planner either 1.) lied about there being fee-based planners or 2.) believed there were no fee-based planners. Could you imagine trusting your savings and investments to a man who would do either of those?


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RE: retirement age

Could you imagine trusting your savings and investments to a man who would do either of those?
No, I sure can't. It underscores the fact that whether one chooses to use a financial planner or do it themselves, there is no substitute for educating oneself...


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RE: retirement age

gibby: "Likewise, same questions for people who haven't yet retired but have a retirement age in mind? What age and do you have defined benefit pension plan or going on your own savings - also what about insurance if you will be pre-medicare age?"

I went to work for the federal government at age 22 and always planned to retire at the minimum retirement age of 55. However, now that I am older and wiser ;-) I have decided to quit working asap and start enjoying my retirement years now. Since I am in the middle of a couple of projects that will wind down by the end of the year, I am planning to retire on my 54th birthday at the beginning of February. The "penalty" for doing so is a reduction in my defined benefit pension of exactly $139/month, a fair price for an additional year of relaxation.

In answer to your other question, health benefits for federal retirees are exactly the same - in both cost and benefits - as active employees. Accordingly, my health insurance will not change upon retirement.


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RE: retirement age

Bethesdamadman,

I'm intrigued. (DH is a federal employee and we were bummed to have to adjust his early exit plan) I know you can draw full benefits at your 'minimum retirement age' (MRA) with 30 years service. Sounds like you plan to draw before your MRA, that your $139 would be a 5% one year reduction from the pension benefit you'd get at 55. Basdically you will 1)draw a year before your MRA and 2)not have to pay the employer share of insurance for that year?

I guess I'm asking how you get around the 'minimum' in that MRA. Are you an air traffic controller or one of those other exeptions?

Really curious. Forgive the hijack. And prying.


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RE: retirement age

celticmoon: "I guess I'm asking how you get around the 'minimum' in that MRA."

Our agency has Voluntary Early Retirement Authority (VERA) from OPM. That enables employees to retire at any age with 25 years of service, or after age 50 with a minimum of 20 years. The penalty for doing so under CSRS is 1/6 of 1% for every full month you are under 55. (Basically 2% per year.) My penalty of $139 is for 11 months or 1.8333% of my unreduced monthly annuity of $7,581.83. Just as an FYI, there is no age reduction for FERS employees who retire under a VERA.

In answer to your other question: no, I will not have to pay the agency portion of my health insurance. The amount paid is exactly the same for both employees and retirees. The only difference is that employees pay the premium with pre-tax money and retirees must pay the premium with after-tax money.


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RE: retirement age

Thanks for that clarification. VERA is not an option for DH.

Now back to our reguarly scheduled programming...


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RE: retirement age

Fascinating discussion, and timely for me, as I am trying to decide whether to retire. My wonderful boss left last month for a new job and they transferred in someone who is a total idiot.

We saw our financial advisor on Monday and he agrees that we can afford it. I am 61 and hubby is 49; he has eleven years before he can retire from his job (not Federal).

I have 29 years in the Fed government, so would get a defined pension and keep my health benefits. We have been saving at a good clip for the past 15 years (married for 17 years) but took a hit in the dot.com bust and again last year. Since the market went haywire, I've focused on paying off the mortgage. Have $18K left to pay. Right now, our investments are averaging 4%, so the mortgage paydown seemed like the better option. Expect to have it paid off by next year at the latest. (BTW, we don't include home equity in our "assets" because we would have to sell to obtain the value, and we love our location.)

My problem may be off-topic. I have no idea what I would do if I retired. We don't have kids and our parents are healthy. I have hobbies, but can't imagine staying home all day. Most of my friends are still working. You are lucky that your DH may be retiring soon.


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