How to Retire 35 Years Early
jrb451
10 years ago
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joyfulguy
10 years agoRelated Discussions
What will happen if I retire early?
Comments (1)You can get a statement from SS as to what your benefits will be when you retire. At 62 or at full term. I retired at 59 and took early SS at 62. I got and get only 1/2 of what I would have received if I had waited until 65 to take the SS. I think whatever you have built up stays in your account until you actually take the SS. It depends on whether you claim SS early or wait the full time. But give the office a call I found they were very helpful....See More35 year old teacher seeking solid retirement planning advice
Comments (15)I'm a teacher too, and I can give you some advice on some of these topics. I am 100% sure we're not in the same state because you make more money than I do (though I have 24 years experience). - First, you sound like you're doing very well for your age. You should pat yourself on the back for realizing the importance of saving and thinking about retirement well before most people your age. - I'll second the point about talking to your potential fiancée about finances ahead of time. Do not just assume it'll all work out. - Buying a house is a sound investment. I assume you'll sell your current paid-for house, so you'll have about 120K to put down on a new one -- excellent. Even if she brings little to the table for this project, the two of you should be able to knock out the borrowed 100K within five years (even if you have a baby soon). With no mortgage, you'll be amazed at how much easier it is to live comfortably and still save! - Do you have a savings account for a new car? Since yours is paid for, I suggest you begin paying a car payment into a savings account. Once you get yourself "a car ahead" (meaning that you're ready to buy a new car when you need it, so that you're not wasting money on interest), it's easy to STAY "a car ahead". - I have the impression she's a teacher too? If the two of you work at the same school, consider becoming a one-car family. We did it for several years (until I started teaching, and our schedules were completely incompatible), and it was a MONUMENTAL money saver for us. It was the single biggest thing that allowed us to get off to a good financial start in our 20s. - If you hate your job (I do at times, really, I do) but want to stay in the pension system, could you do something else within the school system? Could you be the tech guy? the athletic director? could you do something different as a state employee -- a possibility, if your pension systems are linked? - I don't think you need to think about life insurance at this moment. Not to be crass, but if you died today, would anyone be worse off financially? With no wife or children, probably not. Once you're married, you probably won't need it yet. If you were to die, your wife could use your pension pay-out and your other investments to pay off the modest house payment you anticipate taking out, and she'd still have her job to sustain her. You WILL need life insurance once you have a child. If you were to die and leave your wife with a toddler, she'd have years ahead of her in which she'd be a single parent, and although her salary would be enough to put food on the table and clothes on their backs, your life insurance would be there to educate the child in the future. The life insurance would also assure you that your wife would be able to take some time off work, and that she'd be able to put aside a good chunk for retirement. Remember, she too will need life insurance. If she left you with the toddler, you'd need the same help. - The two of you probably need disability insurance more than you need life insurance. Statistically, you are more likely to be disabled than to die young. And becoming disabled is the real nightmare scenario (from a financial standpoint). Consider: You're in an accident or you become sick. You cannot work, so your household income's slashed in half. Yet your medical bills are sky-high. Your wife is still working, but she's also doing ALL the housework and ALL the childcare AND is trying to help you with your physical therapy. She's burning through her sick days taking you to the doctor. THIS is the nightmare scenario: She's overworked, AND she can't take advantage of your life insurance. Avoid it by signing on for disability insurance. - Another thing you should do after you marry is to write wills. As a teacher, you probably have access to your an employee's credit union? They probably offer such services for a low price. - About your pension: Do you know the details for the pension in your state? In my state you're fully vested at 10 years (so, yeah, you'd be a fool to leave at 9.5 years), and you can collect a full pension at any age once you've put in 30 years. You can collect a reduced pension at 20 or 25 years, though the dollar amount is reduced, and you can't begin collecting until 65 (65?) if you don't put in the full 30 years. Once you find out the details for your own state, you can "run the numbers" and see when it makes sense for you to leave teaching. It might be sensible for you to aim for 20 years, then do something else -- but you have to get the facts, then do your homework. - How secure is your state's pension? This is public knowledge, so look into it. You do not want to put all your eggs into the "staying in teaching" basket, if your state's weak in the pension department. As the people in Detroit! - In my state the pension program (defined benefit program) is being exchanged for a defined contribution program. This has its pros and cons, but overall it means that the new, younger teachers aren't going to get a pension. Why does this matter to you? Because if you ever leave, then return to teaching, you'll come in under those new rules! - An above poster mentioned Social Security. In my state, teachers DO pay into SS, so I will collect an SS check one day. You seem rather financially savvy, so I assume you know whether you've been paying into this or not. - I disagree with the above poster who says you're essentially screwed if you choose to have children AND want to retire at a reasonable age. The key is that you have to choose to live FRUGALLY. My husband and I are 48 and 51, and we have two college students. When we married, we had between us $200, college degrees and jobs, one car, and a brand-new mortgage. We chose to be frugal from the very beginning: We maxed out our 401Ks, even though it meant we couldn't afford vacations. We built an emergency fund, then started a savings account, putting away 1/4 of our after-taxes paychecks, even thought it meant we rarely ate out or bought new clothes. When our savings account grew, we started investing, even though it meant we had to remain a one-car family. Today we live in a house that's paid for, have significant investments, and are easily able to pay for our two college students' expenses -- they will graduate debt-free. My same-aged friends who wail that they can't afford their kids' college tuition don't like to hear that we buy used clothing, drive an 8-year old car, etc. The key is knowing the difference between needs and wants -- and being self-disciplined enough to stick to a budget. - Finally, I think you're off to a good start. If you and your wife are both about 10 years into teaching, then 20 years from now the two of you can expect the following: 1. You'll be about 55 years old, and as a person who can "see 55 from where she's standing", it's not "old" -- at 48, my knees hurt sometimes, but I can still hike all day and can pretty much still do whatever I want. 2. You'll live in a house that's paid for. 3. You'll have two teacher pensions. 4. You'll have teacher health insurance in retirement. 5. You'll have two Social Security checks. 6. You'll have the investments you've already begun. 7. If you have a child soon after your marriage, that child will be finishing college (and beginning to support himself) about the time you retire. You'll be able to have all these benefits AND you can work part-time (or seasonally) so you can avoid dipping into your investments too early. Though you're not earning big bucks now (or ever), you'll be well prepared for retirement. If the two of you put in a total of 60 years of teaching to earn these benefits, you'll have WORKED for every penny, but you'll have a comfortable retirement....See More"forced" early retirement
Comments (9)I'm sorry to hear about your husband's unexpected and involuntary change of plans re employment vs retirement. I have no personal experience in the situation you describe, but I had a long career in business. I'm really not sure what you're expected to hear for responses. You don't explain why you husband has delayed signing the severance agreement. They're typically not negotiable or subject to change. What is typical is that the terminated employee, especially one nearing retirement age, is asked to waive any right to sue, seek damages or compensation, etc., in return for the package that's offered. If you have questions about how any items of payment were calculated, ask the company for detail. Not for a rationale, but for a calculation. After 37 years with the union, I'll guess your husband has some union benefit entitlements too, and you should ask the union directly about those. You should understand that companies take actions like this all the time. Such decisions are usually blindly organizational matters and are only rarely personal. They don't always turn out to be good decisions but they're rarely changed. Once you get whatever information can be supplied, you'll have two choices - decline the offer, hire an attorney and sue them (this is a really bad idea most of the time) or sign and accept what was offered (this seems like the best choice from what you've explained). I recommend you not concern yourself with details about what the company has or hasn't done after moving forward with their decision to terminate your husband. What's done is done. Congratulations to you both on his long and successful career. It's time to move forward and make decisions for the next stage of your lives....See MoreEffective way to postpone your (perhaps early) retirement ...
Comments (8)Hi Glenda, Retirement, for most of us, at least ... ... goes on for a lot longer than it did for retirees in earlier generations. Remember the motto fo the Boy Scouts ... "Be prepared!". For my ex-, had it not been that she decided to take early retirement, it'd have been for less than a year, as she'd have retired at 65 ... and died at 66. Formerly head of food service in a substantial hospital (of the mental variety, where my Mom had once been an inmate) so having fed millions of people ... very ironically, it was colon cancer that did her in. She'd taken early retirement ten years earlier, when there was talk of closing her unit or a similar one about 20 miles away. She figured that taking the golden handshake would be preferable to settling for a severance package on her way out the door. And she'd had a ball during those 10 years ... including going in her RV to Florida just around Christmas, moving across to Texas and returning from there about mid-March ... and including going over to Arizona for a few winters when daughter lived there. Hey! Wait a minute! This story doesn't do anything to buttress my viewpoint, does it? Darn! Oh, well ... who can be consistent ... all of the time? ole joyful...See Morejoyfulguy
10 years agojrb451
10 years agojoyfulguy
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10 years agoconcretenprimroses
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9 years agoNicholas2014
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9 years agolast modified: 9 years agojoyfulguy
9 years agolast modified: 9 years ago
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