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Regardless of our pecuniary status (real, perceived, or postured), your list offers insights before retiring. As so many of the consequence are unsettling, and we likely wish to retain a positive vibe here, I'll desist from elaborating.... but do note, that much of what is termed as financial issues, is really just psychological. The distinction between generating and income and spending-down assets, is psychological. So is a feeling of being poor, despite having millions. So is the distinction between costs of renting vs. owning. And so on.
In sum, how does one psychologically prepare for retirement? It's not trivial. One supposes that Tuborg was and is successful, in large measure because he was psychologically prepared. One does not need to look far, to find examples of objectively wealthy people, who aren't so prepared. Then there's the FIRE community, where many adherents aren't wealthy at all, yet claim to be psychologically prepared. Are they? When does one know?
You raise a key point. Were we psychologically prepared to retire. My wife was and I became.
We are that two pension, two SS, two tax sheltered lots of home equity stereotype retiree.
It was all there on paper with specific dollar amounts at a given age and our control of picking when to apply. We chose late 59 1/2.
The curve was it was January 1, 2008. Became scary at first with the market crash. We had sold our home as the market began to decline. Had we waited we would have taken a major hit. A little sooner and it would have been at peak. So that worked out.
We did 62/70 with SS as planned. Used the wife's aged 62 SS to buy a second home.
In short we had a financially good retirement laid out for us unless we got snake bitten.
There were a few snake bites, but we were more than able to ignore the venom.
Now at 75 we are on a cruise control of sort. Mindful of our health with me having a recent scare.
I remember the sage advice of those older than us in similar financial circumstances that we followed. Others in similar did and didn't. Those that did are golden, those that didn't it varies.
So yes a good plan ready to be implemented helps make you psychologically ready.
Working in retirement is optional, having the money to live comfortably and safely may be not.
Again, retirement is a state of mind independent of whether you are working. It is the ability to decide how to spend your time after a certain age independent of finances being the decider.
All of our discussions about finances and how much you need in reality are probably frivolous. In reality it isn’t what you talked about having/needed when 60.
What matters is what you actuality have/need at 75. Inflation has been a gut check of our conversations a decade ago!
You can also flip this around.
Plenty of people who are healthy, mobile, etc., at 60, are much less so at 75. Spending habits change. A healthy 60 year old can go on a cross-country or international trip. Many people are not doing that in their 70s.
My girlfriend's uncle and aunt are 74 - turning 75 this year. She's quite limited in what she can do. They have a stair lift to get from the upper and lower levels of their home. They did go on two trips to Europe last year, but everything has to be planned for to account for her limited mobility.
Fifteen years ago, none of that care would have to be taken. People are probably much more like to stay at home more often at 75 than at 60. A lot of discretionary spending probably changes.
Regardless of our pecuniary status (real, perceived, or postured), your list offers insights before retiring. As so many of the consequence are unsettling, and we likely wish to retain a positive vibe here, I'll desist from elaborating.... but do note, that much of what is termed as financial issues, is really just psychological. The distinction between generating and income and spending-down assets, is psychological. So is a feeling of being poor, despite having millions. So is the distinction between costs of renting vs. owning. And so on.
In sum, how does one psychologically prepare for retirement? It's not trivial. One supposes that Tuborg was and is successful, in large measure because he was psychologically prepared. One does not need to look far, to find examples of objectively wealthy people, who aren't so prepared. Then there's the FIRE community, where many adherents aren't wealthy at all, yet claim to be psychologically prepared. Are they? When does one know?
I grew up in a household that included the grandmother whom I loved more than anyone in the world, and who basically raised me. She rarely left home, didn't need to go anywhere or do anything - she just read newspapers and books all the time, and was a very cool person. In her, I had a model of retirement since my early age, and I had wanted to retire and be like her since I was aged... ooh, I'd say around 6 :-). I have been psychologically prepared for retirement for a looooong time (even though I was in a very identity-defining profession - but retirement is very much an identity too, at least for me).
I grew up in a household that included the grandmother whom I loved more than anyone in the world, and who basically raised me. She rarely left home, didn't need to go anywhere or do anything - she just read newspapers and books all the time, and was a very cool person. In her, I had a model of retirement since my early age, and I had wanted to retire and be like her since I was aged... ooh, I'd say around 6 :-). I have been psychologically prepared for retirement for a looooong time (even though I was in a very identity-defining profession - but retirement is very much an identity too, at least for me).
Reminds me of my life. My grandmother lived downstairs from us. currently I have an elderly MIL living with us (wife and I retired) and we go out only when we need or want to.
My wife and I are lucky. Things just worked out for us. I cannot say we had to undertake any real comprehensive retirement planning.
Same for me (us). With no mortgage debt, a comparatively small federal pension and two SS payments (one at 62, one at 63) is more than enough to support the lifestyle we choose... which is pretty much the same as when we working. Barring any catastrophic medical problems, we won't touch any 401k $$ until they make us.
???
Multiple myeloma was not a death sentence 20 years ago. It is a highly variable malignancy in terms of aggressiveness, always has been. There have always been (many) long-lived cases of myeloma. even when I was a student >40 years ago. Treatment of all hematologic malignancies has improved in the past 30+ years since 1990, and not even that much for myeloma as for some others. Experimental drugs sometimes pan out as useful, and sometimes don't. Is one more year of life worth $1M? Not to me, not at my age.
Plenty of people who are healthy, mobile, etc., at 60, are much less so at 75. Spending habits change. A healthy 60 year old can go on a cross-country or international trip. Many people are not doing that in their 70s.
My girlfriend's uncle and aunt are 74 - turning 75 this year. She's quite limited in what she can do. They have a stair lift to get from the upper and lower levels of their home. They did go on two trips to Europe last year, but everything has to be planned for to account for her limited mobility.
Fifteen years ago, none of that care would have to be taken. People are probably much more like to stay at home more often at 75 than at 60. A lot of discretionary spending probably changes.
I’ll be 74 this year. I’m in good health, active and love to travel. Most of my friends around my age are also active with few limitations. Most of us have led an active lifestyle, not sedentary throughout our working years. A few are sporting new knees and hips.
So there are many who still need funds for their “discretionary spending” and are not ready to just stay home and watch tv.
When I was dating [1980] a couple times I explained my vision of my future to the girl I was dating. My vision included living in a forest near a river with livestock and a big garden, doing as much 'off-grid' stuff as possible. Usually when I shared my vision with a girl, that was the least time she would date me. In 1981 I girl I dated, heard my vision and she liked it. She agreed to focus her energy with me toward attaining this goal. In 2007, I handed her the key to a house that I had built, on forest land with a river at our property line.
My pension is small, the best thing that my career provides to us is healthcare coverage.
I am an organic farmer, though most of what I grow is given away free.
We do not consume very much, most of what we do consume is stuff that we produce for ourselves. A large portion of what money we make is spent to help others.
In 2016 we bought a vacant commercial building that we converted into apartments where we provide housing for low-income and formerly homeless individuals.
Personally, I think you've achieved something very special. You accomplished your vision and you help other people as well. Your name may never be on a public monument, but the people you've helped will always remember your generosity and kindness. That's a pretty good legacy in my book.
I grew up in a household that included the grandmother whom I loved more than anyone in the world, and who basically raised me. She rarely left home, didn't need to go anywhere or do anything - she just read newspapers and books all the time, and was a very cool person. In her, I had a model of retirement since my early age, and I had wanted to retire and be like her since I was aged... ooh, I'd say around 6 :-). I have been psychologically prepared for retirement for a looooong time (even though I was in a very identity-defining profession - but retirement is very much an identity too, at least for me).
My mother always pestered me to get my nose out of a book and go outside and play. I did play outside with my sibs and other kids in the neighborhood, but there would come a time when I needed to withdraw and enjoy solitude. (That has never changed!) It got so I would come into the house, grab my book, and go into the woods behind the house where there were these viney bushes that formed a sort of tent. I would climb under one and sit and read for hours where no one could bother me.
What kind of mom tells her kid not to read so much? Well, as an adult, I realized that my father was an introvert and liked to read, and my mother wanted to go out more and do more, and she resented my father reading and took it as a rejection of her. Also, my mother had seven kids, both grandmothers lived with us at different times, my dad was disabled so there was a lot she had to do that he couldn't do, and she also had a disabled sister that she helped my grandmother with. Mom wanted to just sit and read, too, but she couldn't.
Until...she was in her 80s. All the people she had to do caregiving for were gone. She had freedom for the first time in her life, and what she did was not only serve as the mayor's representative on the library board in town, she took out a stack of books every week, sat in her recliner, and read every day. She often recommended books to me she knew I would like, such as Manhunt, the story of the tracking down of John Wilkes Booth. She read fiction and nonfiction, but she spend the last decade of her life reading, reading, and reading some more. She didn't like TV much beyond baseball and travel shows.
The week before she died in her sleep at 91, my mother called me and asked if I could find her some books because the library was closed due to COVID. I collected a dozen books between my own shelf and that of a friend and ran them up to her. I made us a cup of tea, and by the time I brought it to her, she was already several pages into one of them. Always with your nose in a book, Mom. If I'm granted some of the years you got, I want to spend those last ones just like you did. Without the dialysis, of course.
I find the demographic in this form to be mainly those who have pensions, comfortable savings, and social security--double income retirees. As a single retiree of 65, I try not to compare myself with those obviously doing a lot better than me.
I retired at 58, went back to work at 61, and retired again at 63 due to a health issue. My sentiments:
1. That it is not true for many that you are at a lower tax level in retirement, thus the myth of the pre tax trad 401K comes back to bite you.
2. You are penalized for investing and saving a comfortable income by increased IRMMA requirements.
3. The Medicare is not free. I did not realize Part B was not covered at all by payroll Medicare taxes.
4. Retirement leaves you floundering looking for things to do with your time. You must have some plans.
5. A lot of your identity is tied up in your career. When that is gone, it seems like you lost your purpose.
6. Frequent travel is not the answer, for you always have to return home to an empty house.
7. Not all annuities are bad.
8. You must be mentally prepared to spend down your assets, if you are a life time saver.
9. You need a steady reliable income if you are going to be a renter. A large amount of savings is not an income.
10. That I don't need millions of dollars to retire.
11. Being thrifty in retirement will benefit your heirs. So I know pay for business class when I fly. I deserve it.
12. Now that I am a renter, my expenses are fixed. I feel free. I love having the ability to move and have done it twice.
I'm 65 and have been retired for 13 years, I agree with all of these except 3, 4, 5, and 6, with which I very much disagree. I retired early and am very happy that I did. I see no scenario in which I would've returned to anything but a fun PT gig with some kind of perks beyond extra cash, which isn't needed.
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