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Do any of you who retired early have thoughts on what you did or should have done?

I have been cogitating on the idea of retiring early for a very long time. I recently had a some kind of health problem that has resulted in minor, but permanent, vision loss. Awaiting more tests on that.
I feel like my body is telling me to quit immediately before my quality of life declines any more. But, I’m mentally having trouble letting go of my salary and employer insurance, and switching from a money saver to a money spender.

FIREcalc tells me that I should be fine. I’m 57 years old, have no debt, and am disturbingly frugal. I’m not even sure what I’m asking here, so throw whatever thoughts you have at me.

We retired at 58.

We spoke to a couple of advisors that we met through dinners they held.
One said "You don't need me, you are doing fine."
The other said, "Yes, you can afford to retire."

I did figures on the back of an envelope one lazy Saturday afternoon while she was taking a nap.

Figured what our usable income that we were living on was. Paycheck minus taxes minus FICA minus company health insurance minus 401K & IRA contributions PLUS what post-retirement, pre-medicare company health insurance would cost. The things that will all drop off when I quit, plus the one that will be added.

Then compared that with 4% of our total investment & retirement portfolio.
Realizing that you can take 401K at 55, and IRA at 59 1/2, and SS at 62. And company pension at any time.

If the 2nd number is more than the 1st number, you are gold.
We were, so I told my boss that if there was a layoff coming, I volunteer.

Do NOT NOT NOT retire on a shoestring. Make sure the 2nd number is comfortably higher than the 1st.
OTOH, you don't want to expire at your desk waiting for One More Year.


Switching from savings mode to spending mode can be mentally difficult.

Our income tax was surprisingly low the first few years. Went up later, though.

As the previous poster said make sure you think you have enough. The last few years have shown how inflation can really hurt you. Simple fast food meals are way up, groceries, etc. I retired about 16 months ago and am pondering an offer to return to work. I think I have enough and don't need to but I kind of want to go back east for a while to be with an older relative that I was close to and this would cover those expenses and give us a nice bump in savings.

One thing to be careful of is health care. I'm able to keep mine throughout the rest of my life, if I couldn't I'm not sure how much I would trust various market health plans.

I'm also having issues with spending money since I'm not used to no money coming in. I do get a COLA pension but the pension isn't close to covering our expenses. So it is mostly living off savings. We have no debt but expenses do add up especially medical, utilities, insurance (which has gone way up), and food.

I'm probably stupid for considering going back for 6-12 months since it is highly likely the money will out last me and time is precious but I have to admit to being bored.

It isn't an easy decision for many. Good luck.

Even if you're really sure you have enough financially on which to retire--as a great American philosopher once said, It's tough to make predictions, especially about the future, and it may be that your vision problems suggest growing medical expenses--a problem you might encounter is changing your mind about retiring after you've done so.

I retired at about your age, and then I decided I'd rather work, just in a different career field. I picked up all five of Cisco's baby certifications in networking, and found I couldn't get a job in networking--I was too old to be hired on as a beginner. I switched "career fields" again, and now I write. It's a good thing I really was, so far, the financially independent part of FIRE; I couldn't live on the royalties. Now I write mostly to leave something behind for my grandkids.

Eric Hines

Thanks, everyone.

My job is likely directly contributing to my vision loss in the form of ophthalmic migraines triggered by hypertension. I feel like I need to quit the job in order to save my eyesight. Or else I will lose my eyesight and be forced to quit. My ophthalmologist didn’t seem too concerned after my last visit. However, the neurologist, to whom I was referred by the ophthalmologist, seems somewhat concerned.

My expenses for last year, an unusual year in which I spent money like a drunken sailor, were about 2.5% of my net worth. My cloudy sky scenario is one where COBRA or ACA plan premiums, plus hitting the out of pocket maximum, adds $20k to my expenses. Still safe, according to FireCalc.

The scenario where I would be in trouble is one where I would need to be placed in an assisted living facility, max out healthcare expenses, get denied SSA disability, etc. I might get in trouble there.

FWIW

I also had a few unsubtle warning signs from my body that enough was enough before I retired at not-quite-58.

Plus, I'd always wanted to retire early, in large part because mine was such a high bandwidth job that my choices were binary: a) continue to do the job or b) do any, some, all of the million other things I'd been deferring for years.

Six-plus years of retirement in, I still wake up every day like it's the first day of summer vacation as a kid. The days overflow with stuff I want to do (none of which earns any money). Hours I've been bored: zero.

Financially, we're doing fine. As of the end of last year, using my retirement date as a baseline, our nominal net worth was up around 18%. (There was also a one-time pandemic-related extraordinary expense in 2020 which was a lot of fun but didn't do the bottom line any favors).

Cumulative CPI since my retirement date, however was more like 21%, so purchasing power over the six years was down three percent or so. Knee-jerk: ruh-roh

But, that's all pre-SS, pre-Medicare. Within 12 months, we'll both be on Medicare and one of us will be taking SS. In five years, we'll add my SS. The first will decrease our portfolio withdrawals by 20%; the second, another 20%. In perpetuity.

Upshot: we'll be fine, almost to a certainty.

My surprises: how much medical care costs, even with the ACA. We've had a few high medical cost years, and last year was a record. Expensive (uninsured) dental work, expensive prescriptions, an eye surgery, plus a high-deductible ACA premium of over $1500/mo. It added up.

Getting back to certainty: there is no absolute safety this side of the grave. As near as I can tell, the only way to be absolutely certain you won't run out of money before you die is to work until Tuesday and die on Friday.

Also: the seeds of retirement security were sown in your 30s and 40s. Working an extra year, or three, in your late 50s will not move the needle dramatically.

Taking all in all, reading the FIRE literature, looking at simulations, realizing I'm a sentient actor who's perfectly capable of cutting expenses substantially if the need presents, I put the odds of a fiscally successful retirement in the ninety-five-plus percent range. Trying to boost that to the ninety-eight or ninety-nine percent-plus would be asymptotic, as in requiring many more years that I wanted to give. As the man said, you pay a high price for a cheery consensus.

(...and by that point, an earthquake, plague, asteroid, cancer may well have derailed the whole train anyway.)

One incontrovertible reality: I've had six-plus years of a wonderful retirement in which I and my family have our health, and I've been having a grand time doing whatever I want.

A brief note on longevity risk. Going back at least five generations: no male ancestors of mine, and no female in my wife's, has reached 90. Additionally, neither of us are free of significant health issues, so weighing it all up it seems very likely that both of us will be gone by our mid- to late-80s.

The risk of becoming disabled in that period is of course very high, but there is some glass to break if we need to. Downsizing would add seven figures to the available cash. And, while full-time care is extremely expensive, the median length of stay in an assisted care facility of any flavor (e.g. memory care) is around two years. We're not talking about forty years as a quadriplegic after a diving board accident; we're talking about two old people with preexisting medical issues and a family history not suggestive of longevity.

Circling back to your question: what should/could we have done differently?

Probably nothing, TBH. As a previous poster said, do NOT retire on a shoestring. And if the ACA is in the picture, having dispassionate, experienced fiduciary advice as regards income stream sources to maintain ACA eligibility (and later, IRMAA considerations) is worthwhile even if only a one-time consultation.

-- sutton

It's natural to be worried. We always worried about income and savings. If the calculators day you're ok, you probably are. Nothing is 100%. There could be scenarios that would wipe out everyone here. They just aren't very likely.

As Sutton said, it may be worth a consult with a fiduciary. ACA and irmaa are things to be aware of.

You may also be eligible for workman's comp of your issues resulted from your job. Worth a look.

You and us were in similar situations. We had some health scares, too. It drove home what another poster said: your health will be fine until it isn't, and then it's too late. Coming up two years retired. Don't regret it for a moment. Even a boring day retired is better than going to work. If you love your job, then you do. Maybe don't retire. I liked mine, but I prefer being retired, traveling, sleeping late if I want, puttering around the house or garden, etc. You have to decide that for you.

My main thought is I should have retired earlier. Work causes a certain amount of stress for everyone, even people who enjoy their jobs. Stress can contribute to hypertension. I wouldn't work for ten more minutes if I thought it might be contributing to my vision loss. I would rather live in a box and eat Alpo than lose my eyesight. So I'm going to depart a bit from those who say don't retire with too little. I would just make it happen. Especially if you think you are close enough anyway.

You didn't mention if you are including Social Security in your calculations. Many people don't. But you should because you are close enough to collecting it that the government would never change benefits for something like you (and me too). There would be riots. The only exception might be for people who have high incomes in retirement who could see increased taxes on their benefit, but in that case you are golden. Especially if you can wait until 70, SS is great backstop.

One thing that wasn't clear is if your 2.5% withdrawal rate of your net worth includes your house. It should be your liquid net worth, unless you have some way to access equity in your house by doing something downsizing. If it is 2.5% of your liquid net worth, then you retire at end of the day today.

One thing to keep in mind about FIREcalc and such is that in most scenarios you wind up filthy rich at the end of period.

I'm really late to this discussion but wanted to add that you need to have a goal in retirement. Saying "I'm sick of this job" is not a sufficient reason to retire. The goal can be anything from "here is my new career" to travel to babysitting grandchildren to volunteering to taking care of parents. But just retiring because you can seems like a recipe for disaster. I was able to retire at 53 but turned around and got into the lucrative (not!) position of ski instructor. I had a blast for 11 years finally learning to ski and hanging out with a very different workforce than I had during my real career. This also allowed me to do lots of travel while young enough to enjoy it. At this point I'm very active in a disaster response organization but still get to travel between operations. You're allowed (encouraged!) to change goals after retirement, but having no goals leads to sitting on the couch drinking at 10am, which is not a good long-term plan.

Rgds,
HH/Sean

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