UnThreaded | Threaded | Whole Thread (54) | Ignore Thread Prev | Next
Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1498  
Subject: Re: Others with un-retirement? Your ratio? Date: 10/26/2007 8:29 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
I 'retired' at 52.5...well, actually took a buyout package of a year's salary and years medical paid....so I guess you could say I became 'retired' at 53.5.....

THen, since I had been 'laid off', I did collect unemployment for a few months......

My decision to retire was based upon a conversation I had at work with a co-worker. One day we were talking about what it would take to retire.

There were some on-line planners (not there today) that allowed you to run all sorts of scenarios, allowing you to input annual returns, expected inflation, etc. It didn't use the 4% rule, but had it's own set of tables. You could enter Social Security and when you would take it, and other pensions.

It dawned upon me that at that time, I could retire and safely withdraw more than I was making each year by working. As I discussed relative levels with co-worker, he commented that "If you can earn the same by being retired as you are working, why are you working just to pay Uncle Sam with the money you'll earn for the next 10 years? Why would you be working for 'free'?

He had a point. If I had enough assets to retire, and have the same income (actually more since I wouldn't be paying SS taxes) and wouldn't be saving 15-25% of my paycheck for 'retirement savings'......

Why should I work just to accumulate more assets that Uncle Sam would tax at 55% when I die?

If I didn't need the money to live on (and maintain my same standard of lving), I was merely putting in hours to earn money that Uncle Sam would tax away, and my heirs would get. It would literally do me no good.

Now, I suppose I just could have not retired, and tried to spend 30-40% more each year while working, but I didn't 'need' or really 'want' a fancier car. I didn't have the time to take fancier vacations, and the ones I took were nice. I don't need $300 or $500/night hotel accommodations to feel 'pampered' - and don't even like fawning service people. I simply don't have 'expensive tastes' and they aren't my bag.

So when I figured that I would be working primarily for the benefit of Uncle Sam...and my relatives years down the road...I figured it was time to get out of the deteriorating telecom business.

That turned out to be wise decision because my company laid off 50% of the people in my department with almost no severance pay (2-6 weeks) vs my package a year earlier. I would have worked a year - instead I got paid for nearly all of it for 'not working'.

Now, I take about a 2.5% withdrawal rate. I could take more, but simply don' t enjoy spending more. I live in a nice suburban house, just bought a new car.....have zero debt. Travel wherever I feel like it. And don't buy gadgets just to keep up with the Jones. I don't need a 72 inch plasma..there isn't enough to watch on TV anyway. But I could easily buy one.

I would feel comfy at a 4% withdrawal rate. Next year I start on SS, so I'll have another grand a month more to spend. I'll have to work at it.

t.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (54) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Value Hounds

Considerable Headwinds for Profire Energy?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement