Retirement question.

[wolfsong]

After 26 years in the restaurant business and 20 years with the Dept. of Corrections, I'm ready to pull the trigger and call it a career(s). I turned 62 this past March. I've consulted with the SSA regarding those 26 restaurant years and with CALPERS in regards to the last 20. Turns out I'll actually be clearing a little more in retirement than what I'm clearing now while working. Okay. Sounds good.

But I have a question for those who have gone there before me. Did you have a fear of being on a "fixed income" knowing that what you get is what you get and that's all? Right now, I can make buckets of "extra" cash by wortking overtime, working holidays, cashing in vacation time etc. That all comes to a screeching halt upon retiring. Not having that safety net scares me. Did any of you have those fears? If so, how did you deal with it? The fear of a futture somewhat unknown is weighing on my decision of when to pull the trigger. I have no other investments to fall back on. I can definitely cover my monthly needs on my retirement checks, but... a small part of me screams DON'T DO IT!

Any advice?

 

[Fox Mike]

When I decided to retire I ask myself one question. Can I live on what I will be making and still pay my bills and have a little left over. I now draw a military retirement, a Civil Service retirement, and Social Security. The wife is also retired from teaching and draws her retirement as well as Social Security. We decided, way back when I first thought of retirement, that we wouldn't spend more than we could pay off monthly unless it was an emergency. So far it has worked out well.

 

[Bear Paw Jack]

I pulled the trigger at 62 as well. I didn’t plan as well as you did.
I think I’d talk to SSA and find out at what age you would max out Social Security , and I’d continue to work until then and put away a rainy day fund as high as you can. I think you will be surprised how much you will be leaving on the table just with SS, and doesn’t Cal pay on the highest 2 or 3 years? Try to figure out away to create another stream of income or two.
I still worry. Over the years things will continue to go up in price. That’s when you will need the extra money from SS.
The older you get, if you decide to go back to work, the harder it is to find work.
Good luck, it’s a tough decision. Read the book, Retire Inspired, by Chris Hogan.

 

[gramps]

I retired at age 64. Thanks to my second divorce, my 200,000 in 401k ended up being only 20k, that now at age 68 is less than 10k. I didn’t fear, still don’t. If I need food I live on 33 acres of which 8 acres is pasture and grows greens, blackberries, walnuts, hickory, nuts, rabbits, squirrels, deer and turkey. I should be able to survive even without putting in a garden, which I plan to do. I do work at a low paying (about a third of my hourly wage as a nurse), non-stressful, job. Good luck!
gramps

 

[Pat-inCO]

My first suggestion is to have your house paid for. If you are not there yet,
do a reasonable forecast to see when you can have it paid off.

At the same time, make sure your credit cards are at zero each month,
and car payments are zero.

With no house payment (other than taxes and insurance) and no car
payments, you can "get by" with very little. But then again, since you are
in CA, I can't even guess what your taxes are.

Was I scared when I got out? Ding-Dang betcha!

Working once out: You will lose one half of what you make, IF it is above
a certain amount per year (varies with the individual) UNTIL you are age
65 (that may be about to change to 67 - check on it). After that, you will
not lose any unless you go over (I think) $50K/yr. Once again, check to
see what changes have happened to SS.

BE PREPARED!
You will suddenly find that you have NO spare time! 8)
Anyone that needs help will call on you (because you are retired
and have all that spare time).

Spare time: BE SURE you plan on what you are going to do/work-on.
In the group I was in we lost over 40% to inactivity, in the first two years.
Those that were busy with things they liked or wanted to do are still
bothering other people. ( :roll: - :wink: )

 

[Mobuck]

Well,I didn't have the option of making "buckets of extra cash". If I did make something extra, it went to the kids or maybe a hunting trip. For most of the last decade of my career, I was exempt from with holding tax due to contributions to my handicapped Son. Right before I retired, I lost this exemption due to a mistake in tax preparation so my retirement got a big hit from with holding taxes. I also pay 100% of our health Insurance from my annuity which is a big hit because my employer had been paying approx 75% of that cost.
I found it difficult to adjust to the 50% drop in monthly income and ended up working part time jobs. It took about 5 years to get above board and start burying cash in the back yard.
Most folks won't have those expenses I had but it's something to consider.
What to do? HMMM, not a problem for me. How to slow down? BIG PROBLEM for me. I have approx 1200 acres of farm land to work and/or manage in partnership with my older Son. I also have 2 part time jobs as a private contractor with Federal agencies. One is "on call" so I keep a "go bag" packed at all times. The other is on my own schedule which works out well with the farm work. Both are paid time and mileage from my door--also a winner.
There are jobs available which may suit the older, experienced folks. Just be careful you don't get back into more work than you want at a lower pay rate than you had before retiring.

 

[Achigan]

You’ll take a hit on your SSA $ by retiring this young, well over %10 I think. I took a %6 hit by starting to draw 1 year early, while still working. That extra income finished off the last of our debts. Credit cards and car payments are gone, home was paid off years ago. While not flush with cash, we’re comfy.

 

[Big Old Boy]

I retired at 62 but also now receive 100% VA disability and my ssi the wife also has ssi and disability. We are comfortable but not rich though we did buy a new home with a 30 year mortgage just last year, our kids can sell it when we go to meet the lord. My only complaint is that now we never get a day off.

 

[Kevin]

Well I’m not retired, but as Mobuck mentioned, what happens with medical insurance if you no longer work? Do you have to take out your own insurance policy like someone who’s self employed?

 

[hittman]

Wolfie, I'm not there yet but will be 60 in June and am seriously thinking about these things. Your fears / concerns are the same as mine and I'd guess the same as everybody who is a logical thinker.

The difference between me taking Social Security at 62 v. 66 years 10 months is about $800.00 a month. I know people who have taken their SS early and some late. Some are happy with their decision and some are not.

For me ..... I will need to find work after retirement. I know the new will wear off having nothing to do pretty darn quick. The good thing (I hope) is that I can be selective about a part time job, the pay, the hours, the obligations, etc.

Best of luck to you in whatever and however you decide to make the change.

 

[Bull Barrel]

If you are younger than 65, yes. Once 65 you are eligible for Medicare.
If you draw ss early you take a hit on your monthly check but in the long run you get more $ as a rule of thumb. But if you still work and draw as for every two dollars you earn over approximately $17k they take a buck. And they do it by not issuing checks at the beginning of the year.

 

[GunnyGene]

Be aware that Medicare will likely take some out of your SS check. How much depends on what your post retirement income is. For me it's $135/month, plus another $135 out of my wife's SS. And your SS is taxable, again depending on your income. You should look into that.

 

[Mobuck]

I took an early out @ age 56 in order to help Son finish his college degree. With nearly 30 years service, I only took a slight discount in my Civil Service annuity which was basically offset by no longer having spend $$ driving to work. I would have had to work at least 5 more years to make any increase in my payback so I just bailed out.
I'd paid nearly nothing into Social Security but over the last 8 years, I've contributed enough to have SS begin to add up. At this time, my SS doesn't pay much of the MediCare.

 

[contender]

Lots of good advice above.

Miss Penny & I have been discussing the same stuff,, as we are both 60. And,, we have some friends who have retired at 62 & all,, or are medically retired. Most of the folks we know didn't have a second retirement (like FM above) income,, or other things to use as well.
Miss Penny took a job last July,, that was a very good jump in pay,, and she plans on staying in the work force until she can max it out,,, AS LONG AS HER HEALTH ALLOWS IT.!!! By then,, all our bills will be nothing more than basic utility types etc. Maybe a car or truck payment. The loan we took out to build the addition will be paid off etc.
But,,, many of the people we know who retired at 62 or are medically retired have found it was NOT easy to even survive. Medical insurance or medicaid costs,,, reductions in your SS retirement if you work another job & make over X amount etc. I have a guy helping me some who is retired,, and he struggles to make ends meet on SS.

Medical issues,, can & will affect a lot of things as we age. I'd suggest you continue to work, as long as you can,, for not only the extra SS,, but for health reasons. BUT,,,, every person's situation is different,, and you need to do a lot of studying before making a decision.

 

[Dave P.]

First decide how old you'll be when you die.
After you've picked that date things get easier to
work out.
For me drawing at 62 vs. 66 and 6 months like most the washout
falls at about 79 years old, not including interest on
the money I'd pull for the 4.5 years between 62 and 66.5.
I'm going to start drawing at 62 and take the roughly $17k I can
still earn till I reach full retirement age. ( I'm self employed )
I want at least some of MY money back that they took
before I die.
If I live to be 100.....I made the wrong choice.
Dave

 

[bogus bill]

Everyone has different circumstances and obligations AND luck. All of our past lives are different. The end result is all of us get by somehow. I haven't read of anyone starving to death in this country yet. I think we all can agree it`s best to retire with no house or car payments. Medical insurance is the first biggy. In my case I had two huge surprises. First was I was into risky stocks in my 401K that I converted to IRA`s. Retired January of 2,000. April I lost about a third of my IRA in the big market crash. I was divorced and thought I never would marry again but I did less than four years later plus buried a girl friend in between. The biggest one was without checking I moved out of state where my medical insurance was no longer a HMO but a PPO and that was a HUGE increase. I did 35 years at Lockheed. Today I have to add about $400 a month to my Lockheed retirement check just for our medical insurance!!!! The first five years or so it wasn't a factor! Another guy that worked where I did also done the same thing. His wife got cancer and it ended up he had to sell out and move back to California just for that factor.
The short of it is to check out all the factors you can before you pull you plug. If you still think you can retire, you probably can. I just looked at the inflation calculator. Today it takes $1,492.77 to buy what a $1,000 did when I retired. That will make your eyes water! God gets us through.

 

[375supermag]

Hi...
I retired last summer at age 63...three bouts of cancer and a couple of strokes convinced me there was more to life than working.

My wife still works...she is 5-6 years younger than I am. I am on her insurance but I pay the premium and still have a mortgage.
Paid off my car loan before retiring.

I have Social Security and a nice pension and a second smaller pension that will kick in once I turn 65 in November.

I am not wealthy by any means but have enough disposable income to finance my hunting and shooting as well as purchase books for my military history and paleontology research.

I probably eat out too much and spend too much time and money it gunshops and gun auctions but as my wife says... I spent my whole life supporting others and it is my turn to do what I want.

 

[ronto]

Don't worry...be happy!

 

[Pat-inCO]

First decide how old you'll be when you die.

Good point that I forgot to mention.
I took SS as soon as I could get it. I ran the calculator and it told me that,
for me, I had to live to 77 before I would "break even" (the difference in
what I receive now to the larger amount of waiting to start receiving). If I
die before I turn 77 then I got more money than I would have by waiting.

You do not HAVE to take medicare, if you don't want to, AND are willing
to pay a fairly sizeable penalty. Look closely at your anticipated medical
costs vs the non medicare insurance you have (or don't have, as the case
may be). That will probably make the decision for you. :wink:

 

[RolandDeschain]

Wolfie - You will be fine - go ahead and retire. If at some point you find you need a little extra cash you can always go pick up a part time security job somewhere.

Just relax - you won the race-go ahead and have all the fun you can while you are still able to enjoy it. 8)

 

[bogus bill]

I cant understand why anyone would even begin to think of passing up medicare. It`s something like $100 a month for me. We are paying something like $1,200 a month for my seventeen year younger wife!!

 

[Big Old Boy]

I did not take Medicare being 100% disabled veteran I do everything through the VA so it made no sense to me the person at the SSI. Office Told me most disabled veterans don’t take Medicare.

 

[pete44ru]

My first suggestion is to have your house paid for.

At the same time, make sure your credit cards are at zero each month,
and car payments are zero.

With no house payment (other than taxes and insurance) and no car payments, you can "get by" with very little.

Working once out (retired): You will lose one half of what you make, IF it is above a certain amount per year (varies with the individual) UNTIL you are age 65 (that may be about to change to 67 - check on it).
After that, you will not lose any unless you go over (I think) $50K/yr.

Once again, check to see what changes have happened to SS.

This.

I set myself up by first moving all my pension funds (401k's, etc) over to IRA's, which I shop around monthly for the highest returns regardless of the length of term - over age 59, there's no penalty for early withdrawal's/roll-over's.

Once we turned 70-1/2, both my wife & I were required (by law) to draw down on our IRA's each year - which is a figure/amount figured out by the financial institution's actuary's.
We have the financial institution automatically deposit these distributions into a savings account, as a hedge against out property taxes.

After we retired, by adjusting our lifestyle ( like foregoing new vehicles & expensive vacations), my wife & I get along very nicely on both of our corporate pensions & social security.

Retiring @ 62 didn't cause me much concern, as I've always thought of money as green paper - If I need more, I do whatever to get it.

Healthcare & medical costs can sometimes be worrisome, but I minimize that by shopping around for Rx's at various medication vendors (I got edjumicated on this when I found out that the $25 minimum my HMO charged me for Rx's that cost $5 elsewhere for a 90 day supply) - so my Rx's are split up among 4-5 different sources (like the VA, CVS, WallyWorld, etc).


Relax, don't fret so much - and, enjoy life w/o pressures.


.

 

[Heliman]

I retired at 64 1/2. That was 5+ years ago. My wife retired at the same time. When we retired, our mortgage was paid off and all bills with exception of a car payment and RV payment.

Our income consists of SS for both of us, a small pension from an earlier job and a 401k annuity. About 50k a year income and that meets are needs fine. According to my financial adviser I should be good until around 85 or so....

Because I take a medication that is free with patience assistance from the drug manufacturer, I can't take on more income. I would be disqualified from the assistance and would have to pay an annual $6k in copays.

Besides, I don't want to be obligated to a work schedule. I like to do things on the spur of the moment. Even at that I find sometimes there aren't enough days in the week to accomplish what I want to do.....

Good luck with your decision and enjoy life.....

Dave

 

[bogus bill]

That does make sense in that case.

 

[redhawker]

Wolfsong,
Did you factor in the Public Pension offset on your Soc. Security? I worked for public agencies most of my career and am drawing PERS, although I did work in the private sector too, which gave me enough quarters to draw SS. Because of the public pension offset I can only draw a portion of what I'd be entitled to without it. In my case, I get about 1/5 of what I'd get without the pension offset (your situation may vary though). I've found a lot of people weren't aware of this, I wasn't when I retired. If you didn't figure that in you might want to check it out before you pull the pin.

 

[Fox Mike]

You’ll take a hit on your SSA $ by retiring this young, well over %10 I think. I took a %6 hit by starting to draw 1 year early, while still working. That extra income finished off the last of our debts. Credit cards and car payments are gone, home was paid off years ago. While not flush with cash, we’re comfy.

I was asked by the clerk at the Social Security office if I wanted to delay taking my benefts till I reached 67. I told her I would if SS could GUARANTEE I would live to see 67. Needless to say I took my benefits at 65.

 

[kmoore]

Each of our retirements needs are all different. 99% percent of mine is government and all had SS withheld. I retired at 53, I am now 62 and will collect my 1st SS check in May. I still work and will continue. You can work while getting SS checks under the max age limit. The question I get is why did I retire so young. Well I was at full retire by number of years worked. Staying any longer would/could have added a little more money each year. It is based on the stock market, but really I was working for free health care benefits while risking am life daily. I pulled the plug, willing to pay for health care and take on a PT job with skills I had and are in demand. I have grossed much more than never before while working full time when you add my 3 retirement checks I get monthly and the PT job.
SS will explain all that. I can earn 1470 gross a month this year, that would be the same for you. Next year you have a yearly cap, not monthly, this year that cap is 17,600 gross. By cap I mean any more and SS will either stop SS checks, tax you 50% on any monies over what I listed, or lower your monthly check. I beleive it depends on how much you earn in your work. I am not sure why and which they choose to penalize you because I will not be going over any of the numbers I listed, I will not be affected. If you do wait til your full SS benefit age, there is no penalty on how much you make while working. Bottom line, you do not have to quit working while drawing any of your SS retirement money.
Only downside to in my case is that SS monies will continue to be taken from my pay checks. None of that money will ever be added to my SS benefits. My plan is to continue my PT job for 1 more year and than decide to work or not any longer.
The advice about getting your mortgage finished and vehicle payments is good. I almost had all that done with planning. I had a beach house, 3 vehicles, a fishing boat and RV paid off. My main home still has a mortgage. Remember those vehicles and toys might need to be replaced or sold off. Good luck with what ever you decide it can be a hard decision. Future money earned or paid through retirements showed me the light.

 

[Dave P.]

Kmoore,
Can you work as a independent contractor at PT and
avoid the SS hit?
Dave

 

[Mobuck]

"It`s something like $100 a month for me. We are paying something like $1,200 a month for my seventeen year younger wife!!"

Grouch Attack isn't 17 years younger than me but I still have to pay the full price for insurance for her coverage. When i changed to Medicare, my premiums didn't reduce as much as I expected. They just raised her premium about 50% of what they reduced mine.