Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next
Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5068  
Subject: Re: A FIRE idea that may evolve into a plan Date: 10/10/2009 2:15 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
...It's true my savings are not what they should be....

Actually you are doing great for your age and being single with no kids. Probably within the top few percent of people in your situation.

The problem is that retiring early, even if you work part time, makes it much more difficult financially because;

1) You have increased health are costs without an employers insurance policy. Even if you can find affordable insurance now, it might be very expensive by the time you are 60.
2) You will have a lower social security, pension payment, and employer 401k contributions.
3) You will likely invest more conservatively once you retire and will likely get a lower return which will give you less growth.
4) You will have more years to fund retirement if your part time work doesn’t cover your costs.
5) Likewise, the additional years in retirement make it more likely that you will happen to be living on your retirement saving during a bad bear market.
6) When you are retired some of your expenses for things like travel, classes, hobbies, etc may increase more than you expect.

There will always be some financial risk in retiring early but people often overlook the possibility that if they don’t retire early then they may not actually live to retire. Unfortunately I know several people who have died recently that were just a few years short of retiring. For couples this risk is mitigated by the higher probability that at least one of them will live to a ripe old age and need the retirement money but for a single person there can be a greater chance of dying relatively young than outliving their money.

This link is overly simplistic but it will give you an idea of what the chances are that you won’t live to be a certain age.

https://personal.vanguard.com/us/planningeducation/retiremen...

From what you have said cutting back to part time work in your early 50’s sounds plausible to me if you plan well and are aggress in saving and living a frugal but fulfilling lifestyle.

Greg
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Macro Economics

The Future, or What's Left of It
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