on the fence about retirement date

[shanti]

and need some advice!

i'm having a very difficult time deciding whether to retire at the end of the year or not. i'm currently working and will be receiving a defined benefit retirement after i turn 55 at the end of 2010. my pay is good, but i'm increasingly daydreaming about NOT working. my income will be cut in half (a little less actually). all grown kids out of the house by then (2 boomerang kids have been with me the last year off and on).

i can pay my bills with my retirement income, and plan to cut out a lot of fat, but it will be tight. the good thing is that i will get a small yearly COLA, and i plan to take the early SS at age 62. but i'll have to get by for 7 years until it kicks in.

i'll never make the money again that i make now as i'm at the top of my classification. i need to decide by september 1.

money/peace of mind, money/peace of mind, what to do?!?

[elleng]

1. Think about what you'll do with your time, retired

and without much $ for flights of fancy, etc.

(I'm bored as heck.)

[shanti]

5. that has been figured into the equation

i'm a knitter/spinner, and have been stockpiling yarn and fiber for about 3 years, so will not lack for things to do. i have no partner, but i enjoy my solitude, so being alone doesn't worry me. BUT i do have 4 sons, 2 in southern cali (i'm in northern cali), as well as other extended family, so will be visiting at least a couple times a year. it's not too far, but retirement does take any kind of long distance travel out of the picture...life is a series of choices!

[Vincardog]

2. Retire and move to Ecuador. Live like a king on half the money.

[shanti]

6. might do that

if i had a partner, but don't know if being so far from my family is the best thing for a single elderly woman. maybe mexico?

[Vincardog]

20. elderly not yet 55 Please. Check out airfares. I have plans to head down in January to get ESL

certified and check it out.

[shanti]

21. i don't consider myself "elderly" just yet

:) but i'm thinking of the future when i will be.

[Vincardog]

23. Then consider retiring to a country where they respect age and are not embarrassed by it.

[shanti]

24. uruguay?

that seems like a nice, stable country.

[costaricalawyer]

27. Retire in Costa Rica

Hello
My name is Giovanna Barrantes. I'm a Lic Attorney in San Jose Costa Rica. One can retire here in Costa Rica for $1,500 a month. That would mean having no debts.
Costa Rica is very pro expats from the US.
You can become a resident in Costa Rica if you can show an income from the States.
The flying time from most cities in the US is less than four hours.

[Warpy]

3. Think about that SS. Every quarter you work with even a 1% raise on paper

is a year you make that reduced SS go up. The second thing to consider is health care. It's tight for most people even with a pension and early SS for the 3 years before they can get Medicare, a cruel provision that doesn't respect the reality most of us find at 55 when we lose our insurance for the last time. Remember, corporations have been slashing retirement health bennies first.

Also consider how soon your home will be paid off or what rents are doing in your area if you're renting. You can also think of those rooms the boomerang kids go to as possible rental income if push comes to shove.

Still, if you've got a full set of interests outside work and the possibility of doing something part time to add to the kitty so you can afford cuts in healthcare bennies, you might well consider it.

[shanti]

7. hadn't thought of the insurance piece

PERS covers my health insurance until SS kicks in, but is it 62 or 65? are you saying that if i start getting SS at age 62, i'll have to pay for my own medical insurance for those three years? that is definitely something to think about! i could probably tough it out for the three years on my pension (and COLAS) though if push came to shove.

i've thought about getting my notary license so that i can bring in some income, but don't know how lucrative it is anymore. i knew someone who was making more off of her mobile notary service than she was when she was working fulltime for the county (as a manager)....

can't really rent out my spare bedroom as my house is very small and i crave my privacy. will still be paying my mortgage until i'm 80 (!), but it isn't that much. i've considered selling it though, and renting someplace out in the country for cheap. i'm in the suburbs, but would love to live on some land in the country....

[dixiegrrrrl]

18. Medicare does not kick in till age 65.

For what it is worth, we made our early retirement decision under the "old rules":
Retire early, have enough money to live on till the Soc. Sec. funds kick in at age 62, move to a cheaper place,
maybe out in the country, live there for 20 years or so, sell the place,
move into a smaller place if needed.

The thinking was that getting early Soc. Sec. at age 62 would, over the long run,
with COLA increases, keep us ok.
And we were both at the top of our earnings peak.
Suze Orhman touted this plan, for god's sake. In 2004.

Well, the "new rules" came along in '08. No more COLA.
And I do not think there will be any COLA for anyone for a long time.
In fact, I don't think there will be Soc. Sec. for anyone under 55.
And reselling the house is not looking good for some time to come.

Reality made a HUGE shift in 2008, the safety net is being shredded, more and more doctors are abandoning Medicare
even as monthly Medicare premiums are rising.

Fortunately, we did a smart move and got all of our retirement funds out of Lehman and AIG
before they went tits up.
That is one advantage to a portable versus company owned retirement system.

Our second smart move was to have a healthy savings account, in a safe place.
We built that up for the 5 years prior to retirement, AND got totally out of debt,
cut our living standard and expenses to the bone.
And we decided to NOT move to the country , but to a small town, which cut down on gas,
is closer to the Dr. and to neighbors, in case of any social problems.

All this took planning, paper and pencil and calculator and lots of "what if..."
worse case scenario thinking.


Now. seeing the way things are going, we are building a chicken house, expanding the garden,
planning for what if" all over again.



My advice: plan as if YOU are the only source of income. Anything beyond that will be gravy.
And use your job to squirrel away as much money as possible as a cushion.
Bird in the hand and all that.

[virgogal]

4. Do not retire---work as long as you can I retired at 62 and it

was great for a couple of years but then it became tedious.

I have been involved in charity work and am involved in several clubs but not having a defined committment is very difficult.

And yes,the money would be great too.

Biggest mistake I ever made.

[elleng]

8. Agreed, but mine was 'involuntary.'

[Warpy]

11. It depends on what your interests outside work are.

While there are times I miss the structure and social contact of a job, I know that too many people out there need the money too badly for me to take one out of self indulgence. I don't need the money, at all.

I "retired" to several years of poverty when I got too sick to work and was stonewalled on SSD. I inherited solvency, but I still can't get health insurance until Medicare kicks in, which means barebones care for a potentially fatal disease.

The reform bill did nothing for people like me since insurance companies won't cover pre existing conditions even if they're forced to write overpriced policies for people who have them.

However, I'm an avid fiber crafter, everything from buying the wool right off the critter's back to weaving or knitting the final product. A job might cut into my fiber time, and that would be a nuisance. Between the computer and the studio, my days are quite full.

Know yourself, and be sure to find some bliss outside of work by the time you're 50, or you're going to find yourself flailing around afterward.

[shanti]

13. we're on the same page, warpy

with the hobbies ;-) i just want to spin, knit, and dye.

[pengillian101]

29. Sell your hobby crafts online :-)

http://www.etsy.com/how_selling_works.php

[tularetom]

9. Are you in PERS? My advice is retire ASAP

I think there is going to be a big giant raid on PERS funding. For a couple of reasons. First, some pretty bad abuses of the system (spiking etc) have gotten a lot of publicity lately and local elected officials are looking for any possible means of curbing them. Taxpayers are pissed about it too. Second, and maybe this is just a result of some retirees rigging the system, it's become apparent even to some of us retirees that the present parameters are not sustainable (3% @ 50 for safety personnel, 2.7% @ 55 for others) and even Democratic state legislators realize they dropped the ball by approving these levels at the height of the dot com boom. Several 1937 Act counties have had to borrow money to meet their ongoing pension obligations by selling bonds and a few agencies are either contemplating or have filed bankruptcy.

I think it's indefensible for someone to retire and immediately draw a higher salary than they did before retirement but that's exactly what has happened. And it can't continue. So if you are thinking about retirement, I'd say act now and lock in what you've got. I don't know how they can legally go back on the contracts they have with current employees but I'm sure they can find a way.

FWIW, I've been retired since Jan 2001. And my monthly PERS benefit is currently about 75% of what I was making at the time I retired. So I'm not one of the fat cats.

[shanti]

14. mine

will be 2.%5 at 55, but with only 21 years in, my check will be just 45% of pay. i had coworkers getting what you do though, and they're doing ok, but that's after 38 years.

i'm waiting to see who wins this next election to make my final decision. if Nutmeg gets in, i'm out of here for sure!!! i don't want to work under her. it's been bad enough under GAS, the stress is unbelievable. my savings are gone since i've been furloughed. :(

[enough]

10. My father retired at 62 (younger than I am now).

He had all kinds of things he wanted to do and had experience and preparation for: woodworking, tennis, orchard and grapes, winemaking, etc., etc.

But somehow after just a couple of years it all started to seem less interesting to him, even though he had plenty of time and plenty of money. Soon he was in a low-level depression that lasted for about 15 years, at which point he set out on the long and very sad Alzheimer's road.

I personally don't plan to retire (self-employed) even if I could afford to, which I can't.

[Monique1]

16. I am retired but

I am not bored, there are many things to do. The problem is when I retired I had a sufficient amount of money to live on monthly, pension and SS. Now my rent is way higher, my electricity costs higher, insurance higher, and my health insurance has doubled and I am digging into my savings. Let's not forget the cost of food either. You might want to think about increases that will affect your living style. When I had sufficient amount of money when I retired - they stopped increases in my pension and SS, you might want to consider this also. Just something to think about.

I love retirement, I enjoy time with my grandchildren, and I love doing what I want and I also enjoy being by myself but if money does not increase, you are in trouble.

[Monique1]

17. I forgot to mention I retired at 62

[Sherman A1]

12. In this economy I would just hold on to what you have

I would suspect you can make the decision again next year.

I would take vacations to look at possible retirement locations and of course to give yourself time to refresh as they are intended to do.

Figure out what your hobbies may be for retirement and start planning, but I don't think I would jump at 55 unless you are very comfortable.

[Uben]

15. Financial security is the main thing.....

.....I had the good fortune to be able to retire at age 45, ten yrs ago. The deciding factor in my case was the fact that my wife got breast cancer, and we had no idea how much longer we would have together. So, every day was a bonus! After ten yrs and no recurrence and no signs of the cancer since, we are happier than either of us have ever been. We don't live large or take swanky vacations, don't buy new cars, we just enjoy the life we are handed.
I've seen too many friends retire and die a couple of years later, never getting to enjoy the years they had saved for for so long.
At 55, I have seen ten great years of retirement with a woman I love dearly. Who could ask for more? I could die tomorrow a happy man with no regrets. As long as you think you have enough to retire on, I'd do it. You are not guaranteed tomorrow! The biggest threat to financial security these days is medicals bills. Even with insurance, a bout with cancer or some other disease can cost hundreds of thousands of dollars........I know! I was fortunate to have insurance and enough income to cover the costs, but most would be forced to declare bankruptcy. And, as you know, 55 yrs old is not the prime age employers are looking for, so you will have to expect much lower wages if you are forced back into the workforce.

I don't care if I have to work in a damned coal mine til I'm 90, the last ten years have been worth it! The males in my family have not weathered well. All have died before age 63, meaning none of them saw a day of retirement. I have 10 yrs already! It's all bonus from here on out. Good luck with your decision.

[doc03]

19. I was offered a buyout at 55 back in 2003, It sounds like you may

be in a position similar to mine. I wanted to retire but my income would only have been around $1500 a month after paying on health insurance. My home was paid for and I had a new vehicle at the time and a few thousand in my IRA. I could have made it but I wouldn't have had the money to enjoy anything. On my 61st birthday I was laid off and had a year of practice on retirement. When I became 62 this April I retired, I could have bumped someone out of another plant and returned to work but after a year off there was no way. When I look back I am glad I didn't take the buyout. After working 6 more years I earned another $600 a month on my pension, continued to contribute to my 401k so I have a pretty nice nest egg now and built up my SS benefits a good bit. The company offered us fully paid health insurance until age 65 if we left early so I took it. I don't get it how anyone could be bored, I don't know how I ever found the time to work. I would say hold on until you are 62 then go for it. You know at 55 you could live another 30 or more years and what income you have now will get eaten up pretty bad over that much time unless you have COLA on your pension. The COLA they pay on SS is totally meaningless because what they give you in COLA they take back for Medicare.

[shanti]

22. actually i do

have a COLA on my pension. not much, about 2%, but it's better than a poke in the eye with a sharp stick. it doesn't kick in until 2 calendar years after the retirement date.

but you have some good advice there. if i wait until 62, i'd have a good retirement with the added years of work. it's a major decision!

[quiller4]

25. I retired at 55 three years after my spouse retired at 57. I've

never been sorry that i/we retired early but we live on a tighter budget than we had planned because our iinsurance costs have increased so much.

I wouldn't do anything differently. I don't mind shopping for some things second hand neither does it bother me that our 2 vehicles are 10 and 15 years old.

We are both in better health than we were when we were working. I love the volunteer wokr that I do and find it satisfying. Our dog truly enjoys having his people around 24-7.

Had we not sold a home and land and paid cash for a doublewide just before retiring, we might not have been able to swing this but it has been a great decision for the two of us.

[donco]

26. I retired early (62 )

went back to college and took a few courses, still bored wish I had worked a few more years.

[2Design]

28. take some trips while still employed and INSURED then decide - yes that is next week

it is costly to maintain on small income - costs are way higher on everything than you think -