Let's talk about retirement

[PunkInDrublic]

i retired really young. Overall while there are things I miss about working, at the end of the day. "work is a four letter word." I will say that best month were working (cause of making the world a better place and such) but my worst month being retired is way better than my worst months working.

How long did it take to get use to not having to do anything and not having a schedule to follow?

 

[KayleePond]

I just want to add that every person that I know who is retired is FAR busier now than they were when they were working! This has been true across the board for all retirees that I know, which really surprised me!

In my experience, most retired people get involved in hobbies or clubs/social groups, and just kind of throw themselves into it. Often it will lead to other groups/activities that they take part in and suddenly they're super busy. It's pretty awesome! I think it's natural to worry a bit about what you might do or about being bored, but there are so many things that you can take part in and if you really like something it can really take up a lot of your time. It seems like the healthiest way to go about it, to me. I think that you could get stuck hanging out on the couch watching TV or in the house all of the time, but if you find things to do with your time you'll probably realize pretty quickly that you have a full schedule. I could imagine going camping or fishing a lot, but personal hobbies would definitely require some amount of personal motivation and drive. A social group with regular meetings would probably be a good place to start because I wouldn't have to plan anything, it would just be a part of my schedule and there would be people there who expected to see me.

Anyway, that's just what I've seen of retirement! Makes me feel good about it!

I just need to make sure I get my ducks in a row and do all the adult-like responsible stuff I'm supposed to in order to be able to get there someday! I appreciate the advice people have given in this thread!

 

[pg240]

I took early retirement in late May and am about to start looking for a part-time job. I'm doing some volunteering but I need more to do to keep my days full. Not blessed with hobbies that really interest me, and I like to stay busy. Doing a lot of reading, walking and spending time with family. But I guess retirement just isn't my cup of tea. Hoping to find something in the 15- to 20-hour a week range. Don't need the money. Just need that anchor to the outside world, I guess. I'm content, happy and healthy. Just find myself wanting more. I suppose I should add that it was my wife's idea that I retire! Wouldn't have bothered me to keep working.

 

[Empress Mika]

I'd love to retire early! I want to play video games and do a lot of yoga and watch a lot of good anime/kdrama/tv shows. I don't know when I can or want to retire because I really enjoy what I do on MFC (I'll still probably be on MFC, even after I retire). I suppose it'll depend on how well my investments do. All good thoughts *.*!

 

[PunkInDrublic]

I took early retirement in late May and am about to start looking for a part-time job. I'm doing some volunteering but I need more to do to keep my days full. Not blessed with hobbies that really interest me, and I like to stay busy. .

Yeah, same here. Very few hobbies and the ones I do have, ehh, not the best way to be spending lots of time.

I'd love to retire early! I want to play video games and do a lot of yoga and watch a lot of good anime/kdrama/tv shows. I don't know when I can or want to retire because I really enjoy what I do on MFC (I'll still probably be on MFC, even after I retire). I suppose it'll depend on how well my investments do. All good thoughts *.*!

I do kinda just want to take a few years off to play video games and catch up on shows and make it to the few places I haven't been able to see but it will be weird to have no structure or need to be anywhere.

 

[JubalCobb]

anyone have any experience with robo-advisers like wealthfront and betterment?
trying to decide whether to open a roth ira with one of them or go with vanguard and do it myself.

 

[HiGirlsRHot]

anyone have any experience with robo-advisers like wealthfront and betterment?
trying to decide whether to open a roth ira with one of them or go with vanguard and do it myself.

I don't have experience with Wealthfront, forum consensus is that you'll get essentially the service at betterment with lower fees.

Betterment vs Vanguard is more interesting question. I spent a fair amount researching Betterment. I ultimately didn't end up using them, but I like their approach. I especially like their automatic tax harvesting, which is something I do manually and I'd love to be able not to worry about it. So if you are looking at setting up a taxable investment where you invest say monthly I think betterment is a good choice for a roboadivser. However, if you simply setting up an Roth IRA which you basically fund a couple of times a year than you'll likely save money with Vanguard.

 

[JubalCobb]

definately a lot of a things to consider.
I am looking at opening a regular investment account in addition to a roth ira.
Maybe rolling my last company 403b/401a into a IRA.

wealthfront is smart to try to suck in the investor with the first 10k being fee free. (15k if you use invite a friend, and it looks like their mint advertisement also offers the same if I click through that). While the max for a roth ira per year is currently 5500, that will add up. I dont think most people will bother moving as they cross the 15k threshold.

if I"m picking investments, I think I'm sticking with them for a long time. But I'd still like to rebalance. A blog post (granted its from Jan 2014) says vanguard doesn't auto-rebalance. I guess I dont need that, but I hope the interface allows it to be done easily. My Fidelity Brokerage link account requires me to do a LOT of math to figure out how much from each individual fund should be sold to cash, then come back the next day to make the purchases. It sucks, I guess that's part of why I'm open to this type of management.

off to do more reading.
thanks for the help

 

[BasicBasic]

I "retired" when I was 35, although I think of it as simply "making money without working" since my income shifted from a job to investments I made in the distant past. After 15 years of not working, I have to say it's been a sweet ride. I never expected it to be a long term thing btw; I thought I'd take a couple years off to travel and enjoy my wealth. Then I realized that my net worth was increasing year after year and this is in fact, a workable lifestyle. I'm a wealthy backpacker who's been all over the world but you'd think I was just a regular guy if you met me. The biggest downsides; I developed a minimalist lifestyle that I can't snap out of despite my wealth. There are also no weekends for holidays anymore. Everyday is like a weekend day in my old life.

Not to get into it too deep, websites like money moustache and early retirement extreme can lay out how to pull this off.
One of my attractions to webcamming is that this is an ideal moneymaker for the early retirement. A focused model with good cash flow could bank serious seed money and turn each of those dollars into virtual workers that don't eat, sleep or go on strike. Invest in things people will always use or require (soap, healthcare) or that cheap people will always spend money on. It's possible!

Regarding keeping myself busy... I love that the internet was invented about the time I stopped working. It's an endless form of inexpensive entertainment and information when I'm not on the road.

 

[PunkInDrublic]

^Yo, love the name and avatar, funny stuff. Are you like, for reals basic tho? No hate or judgment on my part if so. Not really bothered by you and never cared for the ban a basic type games. Just curious how fun can it really be if you aren't spending and do you ever kinda feel bad about it?

 

[Zoomer]

From what I believe, ISA's are just high interest savings accounts. What are 401Ks?

ISA's aren't just a high interest savings account - they're far more than that

Whilst they offer "high" interest (in quotes as at the moment nothing really offers high interest!) the neat part is... the interest is tax free. That's forever - until you remove it.
Every year you have an allowance - it's currently £15,000, which you can put into an ISA. Basically tax sheltered savings. If you put 15k per year in, then after 10 years you'd have 150,000. However, due to interest you may actually have 180,000 or something... and each year the interest generated would be ~ 3%, which is £5,000... which isn't taxed (usually taxed at 40% I think?). So the next year your ISA would be £185,000, and the year after £190,300...etc.

Furthermore, ISA's aren't just about cash savings - mine are held in a stocks and shares ISA. The risks are greater (you may get back less than you invested) but the rewards can be greater too (18 months after investing £25,000 - it's now worth £29,000). Furthermore, dividends for high dividend paying companies can far outstrip interest and dividends within an ISA are tax free again. Right now, mine is currently reinvesting dividends back into shares, which means my 'portfolio' is growing nicely (hence the actual increase in investment). The best performing fund last year hit 18.9% interest effectively (that's with dividends reinvested) and is by Neil Woodford.

You'll hear in the news about ISA allowance around March time - that's because the financial year is April and you can invest £15,000 each year between April/March. I invested all the money by using £10,900 in March 2013 and £14,900 in June 2014 (two different financial years, despite only being a few months apart).

ISA's aren't for short term though - it's a long term investment. You get a £15,000 allowance per year, but if you took the money out you can't "put it back" again. You'd have to use your allowance instead. However, you can transfer from one ISA to another without issue (if it was paying too little interest and better options are available).

You don't need much - you can put as little as you like in. Some are treated like savings accounts and will deposit £25 per month into your ISA. The important part is starting the investment, not the amount you can put into it!

 

[BasicBasic]

^Yo, love the name and avatar, funny stuff. Are you like, for reals basic tho? No hate or judgment on my part if so. Not really bothered by you and never cared for the ban a basic type games. Just curious how fun can it really be if you aren't spending and do you ever kinda feel bad about it?

Remaining a basic on MFC is the best fit for me for a variety of reasons. It limits me enough but still lets me observe from the sidelines. If I wanted to buy, I certainly could.
No, I don't feel bad. I use a thousand things for free on the internet (including this forum) and "freemium" is an established and effective business model.
My original intent when joining this forum was to document my adventures on the MFC site and I might start working on that again as a project because it would be an interesting read.

 

[BritneySiren]

I'm not sure that I'll ever be able to retire... I haven't even begun to learn anything that will yeild me much of an income baring a miracle. Today's a new day though, maybe today the magical money tree will drop dollars and cheese cake (cause cheese cake is ambrosia and the Hercules and xena series' got that way wrong... jello no special!)

 

[Empress Mika]

I do kinda just want to take a few years off to play video games and catch up on shows and make it to the few places I haven't been able to see but it will be weird to have no structure or need to be anywhere.

That's what I love most about my current life, even as a cam girl... no structure (unless I give it structure) or need to be anywhere, hehe. I'd love for that to continue, even in retired life ^_^

 

[TacoBelle]

ISA's aren't just a high interest savings account - they're far more than that

ISAs sound like a pretty good investment. I had never heard of them before, so I googled. It seems that the majority of sites offering/discussing them are based in the UK. Does anyone know if they are offered in the US, or what the closest thing to it would be for us?

 

[caireen]

I'm a student now so I barely consider myself ~in the workforce~ but with the economy, my current financial situation (as in, no retirement savings other than the automatic paycheque deductions which probably have a total amount of a couple grand maximum), and the uncertainty of the future, I assume I'll be working until I'm quite old. Unless you wanna get married Punk and I'll retire with you Hopefully my arts degree will lead to many prosperous career options (......nobody tell me otherwise) so I'll be able to retire when I want to and not have to keep working forever just because I need to. I'm not super knowledgeable about how Canada Pension Plan works, just that I keep hearing that it might not exist by the time I'm old? I should probably think more about it or start planning a bit, but I haven't really.

My parents were able to retire relatively young with good pensions and savings, so they basically just travel a lot, and have taken up hobbies like gardening more and learning instruments. My mom is always busy hanging out with her other retired friends or biking all over the city, pretty sure she has more friends than I do, haha. I'm really happy that she was able to retire at an age where she's young and healthy enough to enjoy herself, and if my retirement looks anything like hers, I'd be stoked.

Not sure how old and whatever you are, but if I was financially ready to retire but not sure about it, I'd probably just quit whatever job and try doing something else. Like for example maybe I'd write a novel or do some kind of low-paying work that I really liked. I'd probably volunteer at least, just to make sure I had incentive to get up and outside every once in a while. Maybe take interesting courses or something. Probably I'd get bored if I had idle hands so I think I'd want to be productive in some way, whether it's working part-time, volunteering, etc. Or I'd just retire and spend my time reading all the books I feel too busy to read

I just took a class about CPP and though there are a lot of doomsday-type arguments about CPP disappearing there is no actual economic reason that aging baby boomers will bankrupt us or anything like that (according to many analysts). I feel like since so many people pay into CPP it would cause HUGE upset if it was cancelled. Also, CPP payments are pretty low- the max you can receive monthly is just over $1000. If your annual income isn't too high you can also receive Old Age Security (OAS) but the payments max out around $550-600 I think.

I think many people in our parents' generation and above had decent private pension plans through their jobs, but more than CPP disappearing we should be concerned about the fact that new employees are rarely receiving good private pension plans through their jobs. So for us I think RRSPs and other investments are going to be important. If you can afford to, it doesn't hurt to start putting a little money into an RRSP or tax-free savings account now (or look into other investments!). The cool thing about RRSPs is you can withdraw some of them to buy your first home without being taxed on that income (you have 15 years to put the money back into the RRSP).

Edit: this is about Canadian stuff. Haha.

 

[BasicBasic]

Legal tax sheltering or deferal is a key feature of building wealth. Understanding taxes and working toward the smallest tax bite is vital.

I wanted to add that I suggest not using the word "retirement" too much. It's better to work towards financial independence rather than be considered retired when you are still young. It sounds like an elder term and in a way, more of a stigma than anything else. Early retirement sounds like suicide or getting fired. Many people consider traditional work as the norm and anything else, an outrage. It's best not to work against that sort of social programming.

It's best not to refer to yourself as unemployed either or appear to be unemployed. I now refer to myself as a private financial investor, which means I check my accounts on a regular basis and maintain a private client list (me). Professions involving money are impressive to people who don't know anything about finances and for the most part, I make it a point to be vague about being a PFI. "I'm just trying to survive on the slim percentages I get" would be my jest about being a PFI while showing my card. "But really it's all very dull, tell me more about your exciting life..."

I work from home, sitting in my livingroom wearing underwear and using a laptop computer. I buy and sell through the computer and can "work" from anywhere in the world, so jetting off to Colombia for the winter isn't difficult. Speaking of which, it's best not to say you are unemployed while chatting with immigration police upon arrival or worse, upon your return. Or retired, if you are under 60. Two words for you; secondary screening.

I'm not a lost cause though. The plan is to start a business this year and shift back into the workforce, besides being a PFI.

 

[HiGirlsRHot]

I just took a class about CPP and though there are a lot of doomsday-type arguments about CPP disappearing there is no actual economic reason that aging baby boomers will bankrupt us or anything like that (according to many analysts). I feel like since so many people pay into CPP it would cause HUGE upset if it was cancelled. Also, CPP payments are pretty low- the max you can receive monthly is just over $1000. If your annual income isn't too high you can also receive Old Age Security (OAS) but the payments max out around $550-600 I think.

I think many people in our parents' generation and above had decent private pension plans through their jobs, but more than CPP disappearing we should be concerned about the fact that new employees are rarely receiving good private pension plans through their jobs. So for us I think RRSPs and other investments are going to be important. If you can afford to, it doesn't hurt to start putting a little money into an RRSP or tax-free savings account now (or look into other investments!). The cool thing about RRSPs is you can withdraw some of them to buy your first home without being taxed on that income (you have 15 years to put the money back into the RRSP).

Edit: this is about Canadian stuff. Haha.

It is pretty much the same in the US with a couple exceptions. Social Security benefit tend to be higher $1200/month on average with higher earners getting over $2,000 at full retirement age. There are legitimate issues with both systems of running low on money as all the boomers retire and small number of Gen X and millennials support them. But running low on money doesn't mean people won't get anything and I think that's just as true for somebody 25 and 55. More likely the benefits will be means tested and full retirement ages will be pushed out until near 70, that assumes that Congress will act soon, slim chance.

It is pretty much a myth (at least in the US) that there ever was golden age of pensions. Pension for the most part were only offered by government and big employees and most people have always worked for small and medium companies. Secondly there were two steps to getting a pension, first you had to work for the minority of employers that offered them, then you had stick around long enough to vest in them. This often required 10 years to be eligible for anything and more often required a full 20 years to get a really substantial pension. Companies were pretty notorious for laying off older workers right before their pensions vest and even the military would fairly routinely either get rid of personal with 18 or 19 years (you need 20 years to collect military pension.) or give them awful assignments. My best estimate is less than 25% of US workers were fully vested in a pension plan.

Overall only 17% of seniors income comes from pensions (both private and public sectors) that's up considerable from the 1960s when 8% of their income came from pension.

The US equivalent of the RRSP is the IRA and Roth IRA. Essentially an IRA lets you save taxes today,and Roth IRA lets you save them tomorrow. The magic of both plans is they let your saving grow tax free this is huge deal saving you 15-45% (depending on your state and income level) My first IRA investment of $1,500 when I was 22 is now worth over $60,000. If I hadn't invested it an IRA it probably would have been worth only $15,000 the difference would have all the Federal, CA, and Hawaii taxes I would have paid. Interestingly enough that 45K is almost exactly as much as I've spent tipping camgirls the last 3 1/2 years.

I completely agree with BasicBasic the focus should be less on retirement especially for Camgirl who probably aren't going to do this for 20+years and more on saving money now so that you can be financial independent in the future. That gives you the freedom to do stuff that you love but doesn't well, handcrafting guitars, performing as a folk band, teaching business to kids in Central America,and an artist are all things people I know have done after achieving financial independence.