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Hey guys,
Just wondering if there's a board for people who have retired early? I feel that's a bit different than retiring at full retirement age.

I retired early 2 and half years ago. Things are going better than I even expected and I wanted to share what I've learned.

Peace,
Dana
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Just wondering if there's a board for people who have retired early?

Perhaps - https://boards.fool.com/retire-early-campfire-112992.aspx
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Retire early campfire once was very into early retirement. It has become extremely political and split into liberal and conservative branches.

Retirement investing is probably the best place to discuss early retirement.

I retired at age 53 and would be delighted to discuss experiences. I think we still have quite a few who retired from the dot com boom.

Ask away.
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I would love some help on this subject, I'm at the point of being able to jump into the retire early realm. My biggest hangup is health insurance! I new it was expensive but this is an eye opener. Could I afford it? Yes. But I'm looking for a smart way to do it. I'm considering being self employed with one of my hobbies for a little extra cash and maybe it would help me get a better self employed insurance rate..??

Will my capitol gains from investments interfere with the rates?

Will incorporating shield self employment from capitol gains?

Would love advice on this or where to find it. I'm reading lots of articles trying to get my head wrapped around it.

Another thing I'm curious about is the best way to protect your money/investments. Do you do a type of trust fund.

Chris.
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Chris,

Those are questions only a lawyer and/or a CPA should answer for you.

Peace,
Dana
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Rule Your Retirement is TMF's premium service that deals with retirement. I haven't been a participant in years, but think they are still around. They do make investment recommendations, but I think they are pretty conservative.

TMF did an online short course on retirement planning over 10 years ago. I helped with that and could try to point you in the right direction.

They had a spreadsheet to fill out to plan your retirement. Essentially you collect all your sources of income and compare that with expected expenses. From that you calculate what your investment income needs to be and how much to save to create the needed assets. If the numbers fit, fine. If not than cost reduction (moving to a smaller home, or less expensive city, etc) or part time job can fit in.

Yes, the cost of health insurance was the big surprise. I retired from a company that as part of their early retirement plan allowed me to participate in their group health insurance plan. It was inexpensive in my 50s, but costs skyrocketed at age 60. And eventually the company capped its part of the premium paid at $3K, which made it worse. Retirees who had multiple plans to choose from (as from a spouse or multiple employers) picked the cheapest meaning those in the plan had no other choice and tended to be users of expensive health care and willing to pay high premiums. Ouch, ouch.

Medicare is a good deal. Some say it is possible to keep earnings down so your qualify for subsidies from Obama Care. That is worth looking into.

Medicare has extra charges for high income. Those penalties do include income from capital gains and tax free bonds. I don't know about other plans.

I don't know about incorporation. The tax board might be a good place to ask.

People used to use trust funds mostly for protection from federal estate taxes. Now that the exemption is raised to $11+MM, most of us don't need that kind of protection. And those over that number can certainly afford expert assistance. Trusts are most often used to protect inheritance for children from a previous marriage. I know there are many other uses of trusts, but I know little about that part. You might find suggestions on the Estate Planning discussion board.

To reduce income for various purposes, charitable giving can be used. Charitable Remainder Trusts allow you to donate significant sums to reduce total assets, claim the tax deduction and receive (taxable) income from the trust.

Distribution of assets to your heirs is another way. Gift tax limits apply, but trusts might play a role.
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I retired at age 53 and would be delighted to discuss experiences. I think we still have quite a few who retired from the dot com boom.

Ask away.


Thanks Paul. I was just interested in sharing mostly so I'll drop this here and if anyone else wants to join in, please do. I'd love to hear it.

So I planned to retire early (saving, investing, frugality, etc.) but where as I originally planned to have a nice cushion before retiring, I decided instead to retire with the bare minimum, which basically meant maintaining the lifestyle I had while working (no frills). Not really the most fun option but I decided my sanity and health were worth it. So far it's been totally the right move for me. My portfolio has continued to grow despite taking money out of it every month. Blows my mind.

Some things I learned/did.

I was really really frugal the first couple of years. If I could go without it, I did.

I had a plan B to go back to work if things got bad. I guess if they had, right now I'd be an "essential worker" somewhere. Not sure that would have been the greatest but I was prepared to do it.

I've spent money on new hobbies which was a small unexpected/unplanned expense but....

I've saved money on gas, clothes, eating out, etc which was more than I had expected. Stress from work can be expensive.

I'm so glad I decided to retire early because I've had a few years to myself and now... not so much. I am caring for my elderly parents who aren't doing the greatest but I'm glad I am able to with no worries. Lots of trips to the grocery store and doctor for them. I could not have been in the position to help them if I had not planned to retire early.

And the investing part. I think I've gotten even better now that every dollar really matters to me. Most of my investments are long term winners but I have a small amount (10-20%) that I devote to new stuff now and then. The tax gains from being a seller rather than a buyer really puts a new spin on how you invest. I don't want to have to pay short term gains because I chose poorly. Basically I try to stick with things I know I can stick with.

Things have gone well lately but with a cash back up, a few bad years should be doable too. In a few years I'll be eligible for SS which I'll probably hold off on till full retirement age.

Peace,
Dana
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"My biggest hangup is health insurance! I new it was expensive but this is an eye opener."

I retired early.My total SS check per month did not even cover my wife's health insurance premium.Good thing SS was only a supplement to my savings.
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Isn't that Campfire Board a right-wing version of the Retire Early Liberal Edition?

I believe there used to be just one Retire Early Board -- then politics divided them.

culcha
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Isn't that Campfire Board a right-wing version of the Retire Early Liberal Edition?

I believe there used to be just one Retire Early Board -- then politics divided them.

culcha


Yes. Originally there was only "Retire Early". I believe it was started by intercst. The board became a group discussion of right-wing politics, so intercst started "Retire Early Liberal Edition". Both boars continue to exist today.I don't know about the Campfire, but early retirement is not often mentioned on RELE.

CNC
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I can really understand about sanity and health being a reason to retire with just enough. My husband and I did the same thing a year ago. Really, it was his sanity that was in jeopardy. So far, it looks like we did the right thing, but it is a little more nerve racking this way. We too are saving more, especially since the pandemic, and are watching our portfolio continue to grow.

We have always been mostly totally invested in TMF stock recommendations, but now that we're retired we've moved some of our portfolio into dividend paying stocks. I never thought I would be doing that, but I can see how it helps, especially with peace of mind.

Where do you get the small amount to invest in new stuff? Do you have to sell stuff to do it. That is one thing I miss - being able to buy new recommendations (or add to old ones).

Happy Retirement!
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Chris,

If you can manage your income to be less than 4x the "poverty" level, the ACA is a good tool for getting health care insurance. The best rates are those with high deductibles - basically catastrophic coverage.

The caveat though is that if you mis-calculate your AGI, you have to pay in the full coverage. I was about to get coverage for my spouse and I for $99/month which was less that I paid while working or during Medicare.

Worth looking into and understand the nuances of the ACA.

Paul
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Hi SandyCastle (love that name!)

The 10-20% I invest in new stuff has always been there. I just trade in this portion of my portfolio. If a new recommendation comes along that interests me, I compare it to what I have and either don't buy it (more often than not) or trade one of my other "new" holdings.

Peace,
Dana
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"Where do you get the small amount to invest in new stuff? Do you have to sell stuff to do it. "

You can take some of your dividends & instead of re-purchasing more of that stock, have it go into a money market fund to use for new investments.
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It’s a good idea to cover your basic living expenses to avoid being forced to sell in a down market. Social Security, pension, or even dividend stocks can do that. The traditional recommendation is to keep five years of minimum living expenses in a laddered maturity bond portfolio. Then you are covered in a down market. You keep most assets in equities for maximum return and to keep up with inflation. But sell a portion each year to replace the maturing 5 yr bond. Deferring that sale if the market is down.

If your retirement assets are minimal, covering living expenses is more important. If your plan successfully weathers a market downturn, it builds your confidence that you will be ok.

The ideal for tax purposes is to keep everything in stocks and pay taxes only on the amount you spend.

Living frugally while you are saving for retirement pays you three ways. You have more to save, you adapt a style that fits with retirement, and you reduce your savings target.

As to funds to invest. My system involves following about 250 stocks monthly. Owning about 30. Selling the under achievers each month and buying the then current winners. See my Caps portfolio for current holdings.

Deciding what to sell is influenced by the tax bill. I have an annual capital gains budget that provides some latitude. But it’s easiest to unload losers or those with small gains. Except in the IRA of course.
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"Isn't that Campfire Board a right-wing version of the Retire Early Liberal Edition?

I believe there used to be just one Retire Early Board -- then politics divided them.

culcha

Yes. Originally there was only "Retire Early". I believe it was started by intercst. The board became a group discussion of right-wing politics, so intercst started "Retire Early Liberal Edition". Both boars continue to exist today.I don't know about the Campfire, but early retirement is not often mentioned on RELE.

CNC "

**********************************************************************************

Both boards have a distressing tendency to get into long threads about what should be
a "safe withdrawal rate" and how 4% is too conservative or no longer valid for various
reasons.
Both boards have recurring political posts about how terrible the "other side" of the
political aisle is and also go into long diatribes about traitors amongst the political
loyalists. And every so often both boards have really interesting posts about all sorts
of topics - retirement, life, and yes even a political discussion or two.

Howie52
You just have to recognize that some posters just cannot leave politics aside and have
topics where they just do not want to hear anything but their own dogma.

Sometimes you just scan a thread and decide there is no value for the upset. Both boards
are best read with a fifth of bourbon or gin handy. I have to avoid beer as it causes me
to have fewer inhibitions - I think because I tend to drink beer faster.
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Getting back to the original topic:

My DH retired in 1995 when he was 51. He passed away in 2015 at age 71.

I have a healthy portfolio managed by one of the good guys, so I'm blessed, unless the house is on fire, I take no money from those accounts for regular living expenses.

My monthly income is SS and VA disability and that's what I live on, and quite comfortably. My house is paid for as is my car. My trust owns the house, car and brokerage accounts. The state of Arkansas is very generous to totally disabled veterans and I still benefit from that...I pay no real estate taxes or personal property taxes.

As my Mother used to say "I just bubble along" and she did till age 99. I plan to also continue to "bubble along" as long as possible.

Kitty
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"Sometimes you just scan a thread and decide there is no value for the upset. Both boards
are best read with a fifth of bourbon or gin handy. I have to avoid beer as it causes me
to have fewer inhibitions - I think because I tend to drink beer faster."


Plus you have to keep getting up to pee more with beer.
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"Sometimes you just scan a thread and decide there is no value for the upset. Both boards
are best read with a fifth of bourbon or gin handy. I have to avoid beer as it causes me
to have fewer inhibitions - I think because I tend to drink beer faster."


I find RELE is mainly a social club, with discussions about getting old, a new recipe, a nice trip, or I have enjoyed a thread consisting (mostly) of an argument between an Arizonian and a Floridian about whose state is handling the corona virus most stupidly. (Each claims his state is the stupidest.) OK, there is a certain amount of Trump or McConnell bashing. Nothing wrong with that, now, is there?

CNC
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I have a healthy portfolio managed by one of the good guys, so I'm blessed, unless the house is on fire, I take no money from those accounts for regular living expenses.

My monthly income is SS and VA disability and that's what I live on, and quite comfortably.


Having a service-connected disability can improve one's financial outlook during retirement, particularly, if one's disability rating puts one in the VA's Priority Group 1 and their records accurately reflect one's service-connected disabilities. I only point this out as I discovered that my disability record was incomplete and had to go through a VA evaluation process to correct my records last year. I should have done it years ago instead of waiting until after I retired.

Like you I can easily live on my Social Security benefit and VA Disability Compensation. I don't need to withdraw any money from my IRA accounts to cover living expenses. The RMD withdrawals that the law requires me to take are deposited into a taxable investment account and invested for future needs. Unfortunately my wife unexpectedly died last year and the retirement funds are no longer needed to support her after my death. Our three children will receive the funds as an inheritance.

In addition to the monthly VA Disability Compensation, the other major VA benefit is medical care. Provided you live relatively close to VA medical facilities, the only medical insurance that you need is Medicare Part B. If you are in Priority Group 1 its questionable whether that is needed as all medical services and medications are provided at no cost to you.
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McCrockett: My VA disability is something called DIC. It is for spouses whose Veteran died from his/her service connected disabilities. My DH was rated 100% Permanent & Total before he died.

DIC is called Dependency & Indemnity Compensation. With few exceptions mine currently is $1340/.00 per month. It increases as does Social Security.

The 100% P & T gives spouses and children wonderful benefits, i.e. ChampVA. ChampVA is my secondary to Medicare, and my drugs are all free from the Meds by Mail program. If I have to but something quickly from a local pharmacy I pay 40% of the total.

I know a lot about the VA as I am a volunteer at the local VA Medical Center in Fayetteville AR. I serve as a concierge at the front desk of the main hospital. I have no way of knowing if we will every be summoned back, we all can only hope.

My condolences on the death of your wife.

Kitty
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I am not retired and am trying to get there as quickly as possible (being aggressive, but, hopefully not aggressively stupid).

I think the health care issue is worth about $40K per year in our budget as my wife is permanently disabled, but not classified as so.

If she were healthy, it would be a conversation about which country do we want to visit this month instead of which hospital is our followup at this month.

I believe tax rates are going to ratchet up very soon, now. This will be a consideration (maybe that replaces health care? - who knows?)

I'm almost 42. My wife is the same. We have saved very aggressively off of my relatively great career and 4 years of her working.

Those savings continue to blossom, but, that medical insurance ????.


23 years is a long time to be wrong...
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"I think the health care issue is worth about $40K per year in our budget as my wife is permanently disabled, but not classified as so.

I'm almost 42. My wife is the same. We have saved very aggressively off of my relatively great career and 4 years of her working. "

Have you looked into SS Disability for your wife? If she qualifies, after 2 years, she goes on Medicare......even at 42.


t.
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I've been rejected several times. We'll keep trying, but, I'm not holding my breath. She has a complex set of conditions that do not follow any specific listed condition (but, she's impaired all the same).

Thanks for the response.
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The Retirement Investing board is pretty good. Knowledgeable people and a fair number of retire early topics. Just ask and somebody will have an answer for you.

https://boards.fool.com/retirement-investing-100154.aspx?mid...
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Hi Dana,

You said you were taking care of your elderly parents. Just wanted to tell you there is a Motley Fool message board, "Taking Care of Parents." They are a good bunch of people over there and have helped me a lot. They discuss a full range of topics. Very helpful.

Footsox
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