Retire early to hunt more?

[Mule3006Elk]

Hunt More Now and Retire Later

I think it's interesting to think about your question in reverse. I'm 35 and really enjoy spending time with my kid, the outdoors, etc. As my career progresses and seems to require more hours and stress, I think is it worth trying to work less now or not be as gung-ho with trying to get promotions etc. so that I can spend more timing hunting/fishing now, with the assumption that I may not be able to retire until later in life? The thought being that I can sit at a desk at age 70 the same as I could at age 35, unlike my grandpa who couldn't work at the coal mine or Ford plant at 70 the same as he could at 35.

With families, things might come up later in life like needing to take care of parents or a spouse that gets sick that may require you to be home more then you would expect and not allow you to enjoy the outdoors as much as you had hoped.

This isn't very realistic and I don't know if I have the cajones to actually try this but thought I'd post it.

Good points.
Climbing the ladder when it sacrifices your family time yields emptiness.
You don't want to look back, regardless of the financial situation, and realize you short changed your wife and kids.
Very astute to have the presence of mind to think about these things now versus well down the road.
I have a good buddy who climbed the ladder hard sacrificing his family. He reached his goal but has A LOT of regrets. You only get one chance to enjoy the kids when they're young. He missed a lot of it.

 

[Sytes]

A good read regarding retirement.

"If you’re counting on Social Security to fund your post-retirement life, be aware that Social Security is only guaranteed to be funded through 2035, according to Business Insider, after which time it may only be three-quarters funded. That means that people already taking money from it may see a drop in payments, and new retirees may have trouble getting any money at all."

Jaw-Dropping Stats About the State of Retirement in America

Many Americans spend their lives working hard and dreaming of the day they can finally retire. But planning for retirement requires more than dreaming — it means being strategic and focused on...

finance.yahoo.com

 

[Benfromalbuquerque]

A good read regarding retirement.

"If you’re counting on Social Security to fund your post-retirement life, be aware that Social Security is only guaranteed to be funded through 2035, according to Business Insider, after which time it may only be three-quarters funded. That means that people already taking money from it may see a drop in payments, and new retirees may have trouble getting any money at all."

Jaw-Dropping Stats About the State of Retirement in America

Many Americans spend their lives working hard and dreaming of the day they can finally retire. But planning for retirement requires more than dreaming — it means being strategic and focused on...

finance.yahoo.com

This sort of BIG FEAR comes around every so often and I recollect hearing about it during middle school in the ‘90s. Yes, it is true that if Congress does nothing by 2035, benefit will reduce. However, angry old people vote and represent a huge portion of the loud constituency. Yes, we should all establish retirement income streams separate from SSI and God willing be able to live off that alone. SSI was created out of a hardship that America should never revisit and I have faith that Congress will do the right thing.

 

[Slate]

This sort of BIG FEAR comes around every so often and I recollect hearing about it during middle school in the ‘90s. Yes, it is true that if Congress does nothing by 2035, benefit will reduce. However, angry old people vote and represent a huge portion of the loud constituency. Yes, we should all establish retirement income streams separate from SSI and God willing be able to live off that alone. SSI was created out of a hardship that America should never revisit and I have faith that Congress will do the right thing.

I agree been hearing the same since I was a child and I’m 47. It would suck if you had to live off of it

 

[Sytes]

It's quite interesting about 2035. However, there's far more interesting info within, such as the length of life change since the 90's...

It covers many topics beyond my single quote portion.

 

[VikingsGuy]

A good read regarding retirement.

"If you’re counting on Social Security to fund your post-retirement life, be aware that Social Security is only guaranteed to be funded through 2035, according to Business Insider, after which time it may only be three-quarters funded. That means that people already taking money from it may see a drop in payments, and new retirees may have trouble getting any money at all."

Jaw-Dropping Stats About the State of Retirement in America

Many Americans spend their lives working hard and dreaming of the day they can finally retire. But planning for retirement requires more than dreaming — it means being strategic and focused on...

finance.yahoo.com

If SS and/or public pensions are your only retirement income I doubt much will change over the next 35 years - too much political capital behind those programs to have them vary much from current expectations. They will change around the edges, moving to CPI adjustments instead of wage inflation adjustments, 100% taxable instead of 80%, GenZ full retirement at 69 instead of 67 for GenX, etc. But for folks with private pensions, 401k, roths, normal IRAs, and other saved assets, their reality is driven almost entirely by long-term performance of inflation, taxes and wall street returns. You have to guess all 3 right to get even close to what the expected income will be.

If I say 2.5% average inflation, 6% market return, 30% effective tax rate my wife and I will have a very different income stream than if it is 2% inflation 9% market return, 25% effective tax rate. Or 4% inflation, 3% growth, 40% effective tax rate. All are possibilities, all have comparable real-world examples in the last 100 years. So, plan, save, make reasonable estimates, and hope for the best - because unless your retirement lifestyle is fully funded by SS + public pension, it could be a wild ride (up or down, your guess is as good as mine). I have a spreadsheet that tracks all this stuff for my wife and I, and using historical ranges and current "expert" estimates I can get outcomes that have us broke at 75, or at 85 or leaving way too much to the grandkids at 100. So we plan conservatively and let hope attend to the grandkid's windfall - if there is one.

 

[Gr8bawana]

This sort of BIG FEAR comes around every so often and I recollect hearing about it during middle school in the ‘90s. Yes, it is true that if Congress does nothing by 2035, benefit will reduce. However, angry old people vote and represent a huge portion of the loud constituency. Yes, we should all establish retirement income streams separate from SSI and God willing be able to live off that alone. SSI was created out of a hardship that America should never revisit and I have faith that Congress will do the right thing.

The BIG FEAR is that the GOP keep trying to privatize social security over and over every time they control the Whitehouse.
That would truly be the end of SS.

If the problem is solvency, why would Bush advocate taking money out of Social Security to put it in private accounts? That would make the solvency problem worse, a fact even Federal Reserve Chair Alan Greenspan, the Republican economic superstar, acknowledges.

So what’s the motive for such a major overhaul? What constituency has been clamoring for Social Security privatization — an issue that was on no one’s mind a year ago, and was barely mentioned in the election campaign?

The answer: The campaign was generated by an alliance of right-wing thinkers and top-tier bankers that have waged a two-and-a-half-decade-long campaign to undermine Social Security.

 

[VikingsGuy]

The BIG FEAR is that the GOP keep trying to privatize social security over and over every time they control the Whitehouse.
That would truly be the end of SS.

If the problem is solvency, why would Bush advocate taking money out of Social Security to put it in private accounts? That would make the solvency problem worse, a fact even Federal Reserve Chair Alan Greenspan, the Republican economic superstar, acknowledges.

So what’s the motive for such a major overhaul? What constituency has been clamoring for Social Security privatization — an issue that was on no one’s mind a year ago, and was barely mentioned in the election campaign?

The answer: The campaign was generated by an alliance of right-wing thinkers and top-tier bankers that have waged a two-and-a-half-decade-long campaign to undermine Social Security.

The real solution is to admit that SS is now, and has always been, a social welfare program (a worthy one at that - nobody wants to see the elderly homeless or hungry). But hiding from ourselves the truth that our SS withholdings do not go into a savings account somewhere to be invested on your behalf, but rather your withholdings pay for current retirees, and future retirees will be paid for by the withholding of future workers makes it very hard to decide the most prudent future path given the dramatic demographic and economic changes since its original inception.

Demographics, life expectancies, inflation, % of citizens in the workforce, etc drive solvency predictions, but they are just predictions about whether our current SS tax rate will be sufficient in the future to fund the same inflation adjusted payments to retirees in the future. They are not about whether "saved funds" have been squandered or misused.

Lots of theoretical ways to fill this gap, but the current way isn't that great if you really look at it. Frankly, giving the Federal "General Budget" "loans" at 2% to cover up large present general budget deficits is not a great solution. It would have been better if some of those receipts could have been invested and gotten 7-10% market returns all these years. Frankly, our current SS keeps people dependent on their government, hides government overspending now, and keeps the average Joe out of a market that has made investors money every single decade of the last 100 years.

I do not suggest there are easy answers or that full privatization would work - but rather we need to start by being honest about what the program is (and has always been) and from there discuss what it should be for the needs of a very different future.

 

[406dn]

Frankly, our current SS keeps people dependent on their government, hides government overspending now, and keeps the average Joe out of a market that has made investors money every single decade of the last 100 years.

I do not suggest there are easy answers or that full privatization would work - but rather we need to start by being honest about what the program is (and has always been) and from there discuss what it should be for the needs of a very different future.

No one, including Uncle Sam is keeping anyone out of the market. IF the ONLY money one could save is what their SS withholding is,, the last place they should put that money into is the stock market. Maybe after a good number of years, they could, but their first need is to have a cushion to weather life's storms.

Social Security was never meant or promised to cover every retirement expense. It is meant to be a floor, to keep seniors out of poverty.

I would agree that most everyone should save additional money for their retirement, and the market is one of the best places there is to put money to work.

 

[VikingsGuy]

No one, including Uncle Sam is keeping anyone out of the market. IF the ONLY money one could save is what their SS withholding is,, the last place they should put that money into is the stock market. Maybe after a good number of years, they could, but their first need is to have a cushion to weather life's storms.

SS is costing the average employee 12.4% of their annual pre-tax income. At that savings rate in a properly balanced age-indexed fund would provide an amazing retirement nest egg for folks if they actually did the math (over a million dollars using conservative estimates for somebody making $40k a year). A balanced low-cost market fund with an eye to the future is exactly where the average person should be putting their money. Money markets, bank savings and CDs are nearly worthless in current markets. Real estate is super risky. Saving cash under the mattress loses money every year to inflation. If by markets you mean buying XYZ Co cuz your brother-in-law says it's hot, or jumping in and out of the market every month as it goes up and down I agree it is a disaster. But if the average person picks an age balanced index low-load fund and blindly saves every pay period and doesn't look at it for 30 years - it will be a winner undoubtedly.

And then we could move to a lesser tax on the middle, upper-middle and upper incomes that could fund a retirement means-tested program for the folks who truly were unable to work enough to save on their own.

SS has been a godsend for many, but in the aggregate, it has been bad for the majority of workers.

As for expectations - since the median 65 yr old has less than $55,000 saved (excl home equity) it appears that they are expecting SS to be the almost exclusive retirement budget. (of course pensions are mixed in there too)

 

[Benfromalbuquerque]

I appreciate the discourse here and do like to have alternative opinions broadening our collective minds. SSI is a massive govt pension that pays out to the recipients dependent upon income today and projected funding of future income. It’s not a personal account with which we can do as we wish. And I’m just fine with that. My taxes partially pay the County snowplow and the Army, but I understand that I do not have personal access to either. It is a socialist construct by which we all collectively benefit.

Say we got this guy, we’ll call him Dan. Dan is a veteran, retired USPS, and widower. Dan lives in a rent-controlled one bedroom efficiency and uses County transport to get his groceries and to the Elks lodge. Dan doesn’t drive anymore. Dan’s kids are busy with their own lives and don’t have to fund Dan’s retirement due to the government retirement and subsidized government programs (housing, medical, transportation). Dan has a good life and I don’t want to take that away from him.

 

[VikingsGuy]

I appreciate the discourse here and do like to have alternative opinions broadening our collective minds. SSI is a massive govt pension that pays out to the recipients dependent upon income today and projected funding of future income. It’s not a personal account with which we can do as we wish. And I’m just fine with that. My taxes partially pay the County snowplow and the Army, but I understand that I do not have personal access to either. It is a socialist construct by which we all collectively benefit.

Say we got this guy, we’ll call him Dan. Dan is a veteran, retired USPS, and widower. Dan lives in a rent-controlled one bedroom efficiency and uses County transport to get his groceries and to the Elks lodge. Dan doesn’t drive anymore. Dan’s kids are busy with their own lives and don’t have to fund Dan’s retirement due to the government retirement and subsidized government programs (housing, medical, transportation). Dan has a good life and I don’t want to take that away from him.

We should all want well for Dan. Reasonable folks can disagree on how to achieve that in a future we have yet to live. SS was designed when Dan could be expected to die before 70 after retiring at 65 and these funds for Dan were collected from a much larger percentage of expected workforce. I am not sure FDR would design SS this way if he knew Dan will likely live to 80 and the next gen labor pool was shrinking on a workforce percentage. Sometimes standing pat is not the safe choice. If you look at aging populations in Southern Europe the “guaranteed” government isn’t always guaranteed. But I do not claim to have all the answers - I just think we have to take a fresh look at viable options. Very few human constructs work for 100 years and SS is 85 now.

 

[AvidIndoorsman]

As for expectations - since the median 65 yr old has less than $55,000 saved (excl home equity) it appears that they are expecting SS to be the almost exclusive retirement budget. (of course pensions are mixed in there too)

I both totally believe that’s true and am utterly shocked.

 

[Sytes]

I am not sure FDR would design SS this way if he knew Dan will likely live to 80 and the next gen labor pool was shrinking on a workforce percentage.

FDR's Statement:

"We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.

This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future Administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness."

 

[Benfromalbuquerque]

Very few human constructs work for 100 years and SS is 85 now.

The American Experiment is going on 245 this July. We’ve come up with things to make it work better along the way.

 

[406dn]

SS is costing the average employee 12.4% of their annual pre-tax income. At that savings rate in a properly balanced age-indexed fund would provide an amazing retirement nest egg for folks if they actually did the math (over a million dollars using conservative estimates for somebody making $40k a year).

Half of that is the employer match. Also presently, the employer match is not considered taxable income. There is ZERO assurance that absent the government mandate that the employer match would find its way into an employee's check. Less likely than the political promise that the last round of tax cuts were going to bump average family incomes up by $4000 to $9000 dollars per year.

Also Social Security is a death and disability insurance program that provides a safety net of sorts to dependents and disabled.

I will agree that IF and it's a big if people saved diligently for their entire working career, there would be little need for Social Security. But, many people don't save squat for many different reasons.

Last but not least, there is no way to know if there was more capital chasing stocks that the returns would be the same as they have historically been.

 

[Sytes]

Few other key statistics from this article. Pretty staggering!

"Of the 47.8 million Americans ages 65 and older, the average income is only $38,515 dollars, according to the U.S. Census, and their average net worth is $170,516. With numbers like that, saving for retirement can be challenging."

A fun little Gallup Poll finding:

According to a Gallup poll study, when 18- to 29-year-olds were interviewed about retirement, younger people expressed optimism that they’ll be able to retire early, closer to their early 60s. However, once they hit 30, that optimism wanes, perhaps due to the realities of making a living catching up with them.

*********************

Back to interesting realities:

"Fortunately, Americans seem to be taking the possibility of a longer life to heart. According to a TD Ameritrade study, 81% of Americans are shifting assets in preparation for living longer than their ancestors did by reducing expenses, buying secured life insurance and maximizing their contributions to retirement plans.

On the opposite side of those who are planning ahead for a longer life, there’s a growing trend of Americans who are dipping into their retirement funds early. The TD Ameritrade survey showed that 44% of Americans ages 40 to 79 have taken money out of a retirement plan. While 46% of people 40 to 49 have done so, and 53% for people 70 to 79.

Taking money out of a retirement plan early usually comes with financial penalties, so financial experts advise against this."

/side note: I take it this may be for the drama... Doesn't say how much $ though it shouldn't be touched... (I touched myself... a bit of my TSP. Get y'er Gaud Daum head oudda the gutter!)

**************************

"According to a TransAmerica Center survey, 77% of American workers are saving for retirement through employer-sponsored retirement plans as well as other options. The median age workers begin saving for retirement is 27. However, that leaves 33% of workers without any real retirement savings plan."

/side note: 1/3 of the working population. That's a bit eerie.

************************

"Despite 77% of Americans having retirement plans, many people just don’t have enough saved to actually fund their post-retirement life at the same level as their working years. In fact, for Americans between ages 55 and 64, the median retirement savings was just over $107,000, according to a 2017 report from the Government Accountability Office (GAO). The GAO notes that this amount, which may sound significant, would only translate into a $310 monthly payment, and only if it was invested in an inflation-protected annuity."

/side note: Not sure who in their right mind believes $107k is a fair amount for retirement... buttt, to each his/her own.

********************

"While it's nice to have a plan for retirement, sometimes life has other plans. The most common reasons for retirement are health and job shifts, according to the TD Ameritrade survey. Fifty percent of people retired before they would have liked for reasons including layoffs, caregiving responsibilities, an unexpected change in their financial situation and health issues."

/side note: An ATV accident away from disability, etc. "Blinded by the light"

********************

And their final piece of advice for this brief, yet interesting article:

"In order to keep living at or near your lifestyle while working, experts suggest that you need between $500,000 and $1 million saved in order to finance your retirement years. A hefty chunk of change that requires years to save up."

EDIT: But wait... There's more!

"The median cost per month for an assisted living facility is $4,051 and it’s more than double that for a nursing home. That doesn’t include other healthcare costs. This is why many older adults opt for long-term care insurance in their 60s."

Okay... Now the article's a wrap.

 

[Bob-WY]

People that are investing for retirement, do not have to match that income level, all other things being equal. Part of your salary is being invested, be it SS, 401K or independent methods, those are expenses you don't have to replace.

Anyone working with an advisor is most likely ignoring SS as an income stream. I know we are, but assuming it will be there it just makes those years "easier"

That said, more people are retiring younger, so not working/paying into SS as long, combined with people living longer and it puts a crimp on SS cash flow.

No CURRENT politician will do anything to remove SS except fund it more. My fear is they increase taxation on things like retirement funding outside SS, things like that will effect plans that are already in place. Other "ideas" that would worry me is some level of maximum income where you no longer get SS as you don't "need it".

 

[MarvB]

I always planned for retirement as if SS wasn’t going to be there; partly because years ago that was the typical mantra and more so as a retired govt employee I was subject to the WEP and knew my SS (even though I had the quartets to qualify) was gonna get hammered. I decided to go ahead and sign up last month and will be getting a whopping $371/month beg in Sept. My 66y10m full amount would have been about $1200 if not for the penalty. Should I sign up later for Medicare my monthly will be reduced by a min of another $148 (currently). All that being said, plan on taking care of yourself before “hoping” that Uncle will do it for you!

 

[VikingsGuy]

Other "ideas" that would worry me is some level of maximum income where you no longer get SS as you don't "need it".

My guess is it will be made "solvent" by one or more of the following obvious options - Removing (or at least raising) the maximum annual income subject to the SS payroll tax without a commensurate rise in future income received by those losing the cap, moving from Wage Inflation to CPI for annual increases, moving retirement draw age to 69 for Gen Z and beyond, finding some way to tax "passive unrealized" gains for those who live on investments instead of just those with traditional wage income, moving to 100% taxable instead of current 80% and means-testing for the "wealthy" (call it income over $350,000 in retirement). Increasing the % payroll tax or going means-tested to "welfare" levels seem off the table given the political cost involved in such considerations. But who knows.