Sometimes circumstances intervene. For example, during the Dot-Com bust, my retirement portfolio dropped in value to less than $9,000. Because of additional circumstances I later found myself starting over at age 57. The good news was because I had been a saver, I had no debt. But I had no house or retirement savings, either. I'd say it is never too late to start. As for "Impulsiveness" and "procrastination" I recall this sage advice "Look before you leap" and "He who hesitates is lost". Pick your poison, LOL. I did successfully start over; I did save sufficiently for an excellent retirement. It did require discipline, setting realistic priorities and goals (Including alternative plan), practicing balance, and the making of numerous and sometimes difficult decisions. There were sacrifices to be made. I'd suggest that flexibility although not mentioned, is a very useful approach. BTW no pension, but I do have a 401(k), SEP IRA, Roth IRA and other savings.
As they say, "Any plan is generally better than no plan". I went into phased (partial retirement) in my 70s. I used the downloadable social security benefit calculator to play "what if" games. As noted, excessive earnings can reduce SS benefits. I continued to work and save via a Roth-IRA. The partial retirement allowed me to do things I couldn't previously because I had an intense career. It also gave me an opportunity to slowly decompress. We began RVing in 2013, for example. I do maintain a cash stash, mainly to avoid selling stock in a down market. With current interest rates, MM funds are attractive compared to bonds. However, my i-Bonds delay taxes. Excess income from my RMD is saved and re-invested. A loophole allows me to gift charitably from my retirement accounts before calculating the annual RMD if I am so inclined. We do have LTC insurance. It has taken a few years, but G and I are both comfortable with our life as retirees. I run my numbers about once a year, using several different calculators, including Firecalc.com. Good luck and enjoy!
Developing realistic expectations is very helpful and then do the things to make these a reality. Failure is to be expected, particularly if one pushes the envelope. The important thing is to learn about oneself and to continue. If life were a running race, it is okay to slow down when one hits a wall, but never, ever stop. I learned that walking from time to time is okay.
I'd add that I've been a tenant multiple times and dealing with some of the landlords wasn't fun. A lack of repairs was a continual problem. Poor HVAC, plumbing problems and other issues, too. "Don't hang pictures" and other rules meant we were renting a storage space filled with our furniture. As others have commented, it's a lifestyle choice and I never considered a home or condo (there are some excellent opportunities) to be an investment. Perhaps owning is a forced savings plan. As for prices, etc. "all real estate is local".I never purchased with an intent of owning for less than 10 years; I determined a break-even and budgeted accordingly. I left anything I purchased in better condition when I sold it than when I found it. In my opinion one must budget and practice preventative maintenance. Decorating is not maintenance.
While homes are currently expensive, we've dealt with high prices and high interest rates in the past. One significant difference was a lack of other debt. I purchased my first home in 1978. Prices in my area were increasing at a rate faster than I could save, so I purchased something smaller and a fixer-upper. As I recall the mortgage rate with my 20% down was about 9.5%. Over the next few years I put in a lot of "sweat equity". A "construction" balloon loan I had in 1984 spiked at about 20% interest; the banks weren't offering second mortgages. Ouch!
As for spending, I'm using #2, 3 and 4. I'm carrying cash so I avoid selling in down markets, I use RMD mandates as the floor and I've been increasing my withdrawals toward that 5% number. Both I and my spouse have saved, she's a few years away from RMDs and we both have Long Term Care insurance. Our portfolios are pretty much on auto pilot. Using Monte Carlo analysis we have a 99% success rate to the younger's age 99.
Another good article. FWIW, I've been following and enjoying your articles for decades, going back to your print column at the WSJ. Sad to read of your health issue. We share one thing. In 2022 I became gravely ill, was diagnosed with a rare, inoperable 4th stage cancer with an about 15% survival rate. After two years of intense treatments, I'm stable. Best wishes.
Comments:
Sometimes circumstances intervene. For example, during the Dot-Com bust, my retirement portfolio dropped in value to less than $9,000. Because of additional circumstances I later found myself starting over at age 57. The good news was because I had been a saver, I had no debt. But I had no house or retirement savings, either. I'd say it is never too late to start. As for "Impulsiveness" and "procrastination" I recall this sage advice "Look before you leap" and "He who hesitates is lost". Pick your poison, LOL. I did successfully start over; I did save sufficiently for an excellent retirement. It did require discipline, setting realistic priorities and goals (Including alternative plan), practicing balance, and the making of numerous and sometimes difficult decisions. There were sacrifices to be made. I'd suggest that flexibility although not mentioned, is a very useful approach. BTW no pension, but I do have a 401(k), SEP IRA, Roth IRA and other savings.
Post: The Que sera, sera retirement planning strategy.
Link to comment from January 13, 2025
As they say, "Any plan is generally better than no plan". I went into phased (partial retirement) in my 70s. I used the downloadable social security benefit calculator to play "what if" games. As noted, excessive earnings can reduce SS benefits. I continued to work and save via a Roth-IRA. The partial retirement allowed me to do things I couldn't previously because I had an intense career. It also gave me an opportunity to slowly decompress. We began RVing in 2013, for example. I do maintain a cash stash, mainly to avoid selling stock in a down market. With current interest rates, MM funds are attractive compared to bonds. However, my i-Bonds delay taxes. Excess income from my RMD is saved and re-invested. A loophole allows me to gift charitably from my retirement accounts before calculating the annual RMD if I am so inclined. We do have LTC insurance. It has taken a few years, but G and I are both comfortable with our life as retirees. I run my numbers about once a year, using several different calculators, including Firecalc.com. Good luck and enjoy!
Post: Retirement Realignment by Ken Cutler
Link to comment from January 13, 2025
Developing realistic expectations is very helpful and then do the things to make these a reality. Failure is to be expected, particularly if one pushes the envelope. The important thing is to learn about oneself and to continue. If life were a running race, it is okay to slow down when one hits a wall, but never, ever stop. I learned that walking from time to time is okay.
Post: Why We Struggle
Link to comment from January 11, 2025
I'd add that I've been a tenant multiple times and dealing with some of the landlords wasn't fun. A lack of repairs was a continual problem. Poor HVAC, plumbing problems and other issues, too. "Don't hang pictures" and other rules meant we were renting a storage space filled with our furniture. As others have commented, it's a lifestyle choice and I never considered a home or condo (there are some excellent opportunities) to be an investment. Perhaps owning is a forced savings plan. As for prices, etc. "all real estate is local".I never purchased with an intent of owning for less than 10 years; I determined a break-even and budgeted accordingly. I left anything I purchased in better condition when I sold it than when I found it. In my opinion one must budget and practice preventative maintenance. Decorating is not maintenance.
Post: Rent Forever?
Link to comment from January 11, 2025
While homes are currently expensive, we've dealt with high prices and high interest rates in the past. One significant difference was a lack of other debt. I purchased my first home in 1978. Prices in my area were increasing at a rate faster than I could save, so I purchased something smaller and a fixer-upper. As I recall the mortgage rate with my 20% down was about 9.5%. Over the next few years I put in a lot of "sweat equity". A "construction" balloon loan I had in 1984 spiked at about 20% interest; the banks weren't offering second mortgages. Ouch!
Post: Rent Forever?
Link to comment from January 11, 2025
I've held cash in Fidelity's FNSXX. 7-day yield as of 1/10/2025 4.34% https://fundresearch.fidelity.com/mutual-funds/summary/31607A109
Post: Fidelity Brokerage Cash Interest Rate Changes
Link to comment from January 11, 2025
As for spending, I'm using #2, 3 and 4. I'm carrying cash so I avoid selling in down markets, I use RMD mandates as the floor and I've been increasing my withdrawals toward that 5% number. Both I and my spouse have saved, she's a few years away from RMDs and we both have Long Term Care insurance. Our portfolios are pretty much on auto pilot. Using Monte Carlo analysis we have a 99% success rate to the younger's age 99.
Post: Spending It
Link to comment from January 11, 2025
Another good article. FWIW, I've been following and enjoying your articles for decades, going back to your print column at the WSJ. Sad to read of your health issue. We share one thing. In 2022 I became gravely ill, was diagnosed with a rare, inoperable 4th stage cancer with an about 15% survival rate. After two years of intense treatments, I'm stable. Best wishes.
Post: Spending It
Link to comment from January 11, 2025