When should you retire? Life expectancy vs work expectancy

[Jalapeñomel]

Jan 16, 2024 10:41:41 GMT -5 fortnightlily said:

Decoupling health insurance from employment would be huge. But yes, expecting people to just work nonstop and hoard every dollar until they're in their mid-60s+ to finally have the time and maybe the funds to pursue travel, hobbies, or part-time vocations is bullcrap.

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

[wise_rita]

This is a completely hypothetical thought experiment. What is the percentage of Americans who can't afford to retire AT ALL? I don't know, but I bet it's significant.

I can't imagine an America where the retirement age will be RAISED, not lowered.

Retirement is for the wealthy. Working until you physically can't anymore is the norm.

[kadams767]

I think this article in the WSJ recently is a really interesting not-quite-counterpoint to the NYTimes one. I thought it gave a clearer picture of what retirement really means and looks like for a lot of people.

www.wsj.com/personal-finance/retirement-only-social-security-benefits-america-a3a706e0?st=s5h12ujfyc8naug&reflink=desktopwebshare_permalink

[neverfstop]

Jan 16, 2024 11:31:25 GMT -5 wise_rita said:

This is a completely hypothetical thought experiment. What is the percentage of Americans who can't afford to retire AT ALL? I don't know, but I bet it's significant.

I can't imagine an America where the retirement age will be RAISED, not lowered.

Retirement is for the wealthy. Working until you physically can't anymore is the norm.

I can't read the article linked above without subscribing, but I caught this headline:

Many Americans reach retirement with almost no savings. No 401(k). Few investments. And almost no income aside from a monthly Social Security check.



Roughly one in seven Social Security recipients ages 65 and older depend on their benefits for nearly all their income, according to an AARP analysis. Unable to maintain the lifestyle of their working years, they trim their already trim budgets, move into smaller homes, or rely on the kindness of relatives to get by.

[shauni27]

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

Jan 16, 2024 10:41:41 GMT -5 fortnightlily said:

Decoupling health insurance from employment would be huge. But yes, expecting people to just work nonstop and hoard every dollar until they're in their mid-60s+ to finally have the time and maybe the funds to pursue travel, hobbies, or part-time vocations is bullcrap.

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

I really have never thought of this but you are right. Since I was 25 I started putting in a decent amount towards my 401K. I have increased it minimally each year since then and whenever I meet with the retirement team(s) at my work, they tell me I am in great shape for my retirement at the age of 60.

We still take at least one week long vacation per year now, travel locally for long weekends, treat ourselves to meals out, indulgences etc., but it always feel like we are pinching pennies to survive. If we did not contribute so much to our 401Ks things now would be a lot easier, financially.

[shauni27]

Jan 16, 2024 12:13:04 GMT -5 neverfstop said:

Jan 16, 2024 11:31:25 GMT -5 wise_rita said:

This is a completely hypothetical thought experiment. What is the percentage of Americans who can't afford to retire AT ALL? I don't know, but I bet it's significant.

I can't imagine an America where the retirement age will be RAISED, not lowered.

Retirement is for the wealthy. Working until you physically can't anymore is the norm.

I can't read the article linked above without subscribing, but I caught this headline:

Many Americans reach retirement with almost no savings. No 401(k). Few investments. And almost no income aside from a monthly Social Security check.



Roughly one in seven Social Security recipients ages 65 and older depend on their benefits for nearly all their income, according to an AARP analysis. Unable to maintain the lifestyle of their working years, they trim their already trim budgets, move into smaller homes, or rely on the kindness of relatives to get by.

PDQ, but this is my mom. When my dad suddenly passed, she and my dad were both collecting social security and both working 2 days a week. They had minimal savings and zero retirement. After he passed, my mom stopped working and receives my father's social security benefits and other than that, she gets some death benefits from my dad as his part time work was for the federal govt. 

I asked why they never put money into a 401K but she explained that they did, but had to cash them out to pay for insane medical expenses (my father lost a leg and my mother had both brain cancer with two life saving surgeries and open heart surgery) that were not fully covered by their insurance I guess.

[dontlook]

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

Jan 16, 2024 10:41:41 GMT -5 fortnightlily said:

Decoupling health insurance from employment would be huge. But yes, expecting people to just work nonstop and hoard every dollar until they're in their mid-60s+ to finally have the time and maybe the funds to pursue travel, hobbies, or part-time vocations is bullcrap.

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

@@@@
We are telling our kids to save aggressively early, but with the caveat that this means they should be able to pull back from saving so hard earlier. H (I SAH) has been maxing retirement since 22. At age 40 he could pull back to save almost nothing and we should have enough to retire (allegedly ). I just want them to focus on getting some money put away so it can earn interest. Our plan is to pull back on savings and use sone of that money to travel while we can enjoy it with our kids. We actually have money and time to take nice vacations now vs when we were broke 22 year old kids.

So I agree that we shouldn’t sacrifice life now for some glorious retirement, but being financially savvy early in life could improve things later in life but before retirement.

[scm1011]

Jan 16, 2024 12:21:34 GMT -5 dontlook said:

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

@@@@
We are telling our kids to save aggressively early, but with the caveat that this means they should be able to pull back from saving so hard earlier. H (I SAH) has been maxing retirement since 22. At age 40 he could pull back to save almost nothing and we should have enough to retire (allegedly ). I just want them to focus on getting some money put away so it can earn interest. Our plan is to pull back on savings and use sone of that money to travel while we can enjoy it with our kids. We actually have money and time to take nice vacations now vs when we were broke 22 year old kids.

So I agree that we shouldn’t sacrifice life now for some glorious retirement, but being financially savvy early in life could improve things later in life but before retirement.

This is awesome and ideal but maxing out retirement savings at 22 is completely unrealistic for most people. At 22 I was making maybe 30k? Maxing out would have been the majority of my take home pay

[macmars45]

dontlook that's a great sentiment for those that can do so. I'm going to guess lots more people are like my H and me. Barely making ends meet with crappy paying jobs and a huge mountain of student debt at 22. We were married at 23 & 24. By the time we were 27 & 28 we finally got some wiggle room to be able to save a bit. By 34 & 35 we were doing well. That was 11/12 years after we got married though. So we couldn't afford to save aggressively while young unless we didn't want to pay rent or eat. *shrug*

[dontlook]

I should have added that I realize that’s not going to work for everyone. When I starting working I made $40,000 a year and saving 3% for retirement was a huge battle. I suppose my point was that maybe it doesn’t have to be live now or later. Save what you can early because time is the biggest factor with accruing interest. I think we end up discussing everything in a binary when they can be room to do a little bit of the middle.

[abs]

Jan 16, 2024 12:41:54 GMT -5 scm1011 said:

Jan 16, 2024 12:21:34 GMT -5 dontlook said:

@@@@
We are telling our kids to save aggressively early, but with the caveat that this means they should be able to pull back from saving so hard earlier. H (I SAH) has been maxing retirement since 22. At age 40 he could pull back to save almost nothing and we should have enough to retire (allegedly ). I just want them to focus on getting some money put away so it can earn interest. Our plan is to pull back on savings and use sone of that money to travel while we can enjoy it with our kids. We actually have money and time to take nice vacations now vs when we were broke 22 year old kids.

So I agree that we shouldn’t sacrifice life now for some glorious retirement, but being financially savvy early in life could improve things later in life but before retirement.

This is awesome and ideal but maxing out retirement savings at 22 is completely unrealistic for most people. At 22 I was making maybe 30k? Maxing out would have been the majority of my take home pay

Yeah my first job out of college paid me like 23k a year. I put in zero towards my 401k because every penny was going towards rent , gas, and food.

Basically there just has to be a better way. College kids shouldn’t start their adult lives in debt. Those ready to retire should have some safety nets. Like we are being set up for failure from the beginning.

[mcmel]

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

Jan 16, 2024 10:41:41 GMT -5 fortnightlily said:

Decoupling health insurance from employment would be huge. But yes, expecting people to just work nonstop and hoard every dollar until they're in their mid-60s+ to finally have the time and maybe the funds to pursue travel, hobbies, or part-time vocations is bullcrap.

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

I’ve seen so many people die right before or right after retiring. I watched my dad talk about pinching every penny and putting it towards retirement just to watch him pass away before he ever enjoyed even 1 single day of it. Ever since then I just can’t, in good faith, ever say that I’m holding off on something for retirement. So many people become ill, disabled, die and don’t have the ability to do all the traveling that they dreamed of. I’m putting money away- a good chunk but not maxing anything out- and am traveling now instead.

[fortnightlily]

My parents don't even have major health problems, but as much as they talked about how they'd travel in retirement, they've talked about more trips than they've actually taken. They've taken two. Then the pandemic years have scared them off going international, plus their comfort zones have shrunk and they don't want to do anything that isn't a direct flight, or a less-than-3-star hotel, or requires too much walking or driving, and yet they balk at the price of everything. So yes, retirement is wasted on the old But they are still convinced (and likely rightly so) that they will need all that money they stored up over their careers for medical and caregiving costs in their final years. Which is depressing as hell.

[ssmjlm]

Let's also not forget those that can't save for retirement because they're paying off student loans.

[lillaguma]

After seeing the enormous financial drain of my grandmother needing to go into memory care I have realized that is what we are saving for, not for fun-retirement. Which is so depressing. There has been a lot of Alzheimer's on both sides of my family and I assume that I may have to help take care of my parents through it, and possibly end up that way myself.

It was 11k a month for her, that adds up so quickly. And my grandpa was still alive and doing well, so needed money going forward- it wasn't like it was time to just empty out everything they had, he still needed to be able to live.

[underwaterrhymes]

Jan 16, 2024 12:21:34 GMT -5 dontlook said:

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

@@@@
We are telling our kids to save aggressively early, but with the caveat that this means they should be able to pull back from saving so hard earlier. H (I SAH) has been maxing retirement since 22. At age 40 he could pull back to save almost nothing and we should have enough to retire (allegedly ). I just want them to focus on getting some money put away so it can earn interest. Our plan is to pull back on savings and use sone of that money to travel while we can enjoy it with our kids. We actually have money and time to take nice vacations now vs when we were broke 22 year old kids.

So I agree that we shouldn’t sacrifice life now for some glorious retirement, but being financially savvy early in life could improve things later in life but before retirement.

I know you later clarified, but to add to the discussion, I’m 49 years old and up until I turned 41, I made less than $50,000 a year. (I’m in the nonprofit sector, which is notorious for underpaying staff.)

In the past 7 years, I have managed to come close to doubling that (although not quite), but up until recently, saving for retirement was not my priority (eating and paying rent/mortgage was) and so I just didn’t.

Actually retiring was not something I thought I could achieve for a long time and a lot depends on how the next 15 years go.

It’s ridiculous that capitalism outweighs people and that people have to make such hard choices about eating, paying bills, having heat, or being able to survive in old age or if they have a disability.

[macmars45]

lillaguma yep. On both sides of my family the women live very long lives with dementia for the last few decades. In memory care needing round the clock help. My grandma is there now and has been for 5ish years already.

[dontlook]

Jan 16, 2024 14:15:18 GMT -5 underwaterrhymes said:

Jan 16, 2024 12:21:34 GMT -5 dontlook said:

@@@@
We are telling our kids to save aggressively early, but with the caveat that this means they should be able to pull back from saving so hard earlier. H (I SAH) has been maxing retirement since 22. At age 40 he could pull back to save almost nothing and we should have enough to retire (allegedly ). I just want them to focus on getting some money put away so it can earn interest. Our plan is to pull back on savings and use sone of that money to travel while we can enjoy it with our kids. We actually have money and time to take nice vacations now vs when we were broke 22 year old kids.

So I agree that we shouldn’t sacrifice life now for some glorious retirement, but being financially savvy early in life could improve things later in life but before retirement.

I know you later clarified, but to add to the discussion, I’m 49 years old and up until I turned 41, I made less than $50,000 a year. (I’m in the nonprofit sector, which is notorious for underpaying staff.)

In the past 7 years, I have managed to come close to doubling that (although not quite), but up until recently, saving for retirement was not my priority (eating and paying rent/mortgage was) and so I just didn’t.

Actually retiring was not something I thought I could achieve for a long time and a lot depends on how the next 15 years go.

It’s ridiculous that capitalism outweighs people and that people have to make such hard choices about eating, paying bills, having heat, or being able to survive in old age or if they have a disability.

As a former nonprofit employee I completely understand. I would like to edit my first post again, but I’ll leave it. I should have started by saying I think it’s all utter bullshit, the whole system. If I didn’t get married young to a person that had 0 college loans my life would look a lot different. I recognize how unfair it is that so many young people (myself included) start out behind because we are just trying to live.
We’ve tried to strike a balance between living now and saving for later but I understand everybody can’t make that choice.

[wanderingback]

Will read the article later!

But yeah it’s an utter crapshoot and no one knows what the future holds. I think I’ve struck a good balance, ha. I’m behind on retirement and I could save more if I tried harder but then I wouldn’t enjoy life as much now. That’s why I took time off from med school to live abroad cause I didn’t know when that would present that again, but of course that meant I graduated 2 years later, will take 2 years longer to pay off loans, etc. But yolo!

My grandmother is 106 and my grandfather died at 93 and was healthy until the end. Both of my parents are almost 70 and both healthy and active so I do hope I can be healthy and active if I make it to that age, but I absolutely do not want to do nothing now with the hopes of saving all my dollars for an unknown future.

[mrsukyankee]

Jan 16, 2024 13:21:47 GMT -5 ssmjlm said:

Let's also not forget those that can't save for retirement because they're paying off student loans.

And if you combine that with making next to nothing when you are in your 20s...ugh.

[zelda25]

I always assumed I would have to work well into my 70s; we were late to being able to save aggressively for retirement. Now I've been diagnosed with ALS and obviously will not make it to retirement age, so the question now becomes do I retire now and fully enjoy the time I have left? I qualify for disability, which will not fully replace my income, and I can take my 401k without the early withdrawal penalty, so it's tempting (I can still work, I just don't want to, LOL). On the other hand, I want to leave H with as much as possible.

Everything about this system sucks ass.

[hermione]

I think about the other side of this a lot. No one is retiring in my field. Which means we have a less adaptable workforce and not enough jobs for new grads. So people working forever not only sucks for those people, it’s terrible for progress within individual fields.

[aprilsails]

I work for an Ontario based branch of a Quebec based company, and I've been very impressed by the approach to retirement being taken by some of the senior partners in our Quebec offices. I think they have more of the French joie de vivre in them.

Many are retiring years earlier than I would have expected them to do so (early 60s if not late 50s) and then opting to consult to the company as reviewers or training resources. They pick which weeks they want to work and have been developing and running in house training programs for junior staff and then also doing peer reviews on major projects before they go out the door. It is an amazing resource for us and is really helping me drive forward my junior staff, while making space for new partners and management positions.

The partners from my branch are still working into their eighties because they are defined by their work. They love it, I know they do, but I feel as though they missed an opportunity to step back and enjoy their lives more. I don't idolize them at all at this point.

[aurora]

My uncle was starting to talk excitedly about everything he would do with his by-the-book retirement at age 65 when he died of a sudden heart attack at age 63. That was definitely an eye-opening lesson.

H and I are definitely saving, but are also taking time to do things now when we are healthy.

[heygrey]

My perspective on retirement is definitely skewed with some of our Canadian benefits. Not worrying about medical costs bankrupting us is a huge weight lifted. Our house will be paid off by the time we are 55 and property taxes can be deferred until the estate is sold after age 55. I know that we are incredibly lucky to have purchased a home before prices really went crazy in 2021. We couldn't afford to buy our own house now and our financial future would look entirely different without it.

H and I both have good pensions with our current employers. Neither of us love our jobs, but we're at a point where the salary, benefits, and work/life balance stop us from actively seeking different employment. We are saving for retirement, but also don't plan to completely retire until we are unable to work anymore. There are a lot of options in our area to shift to "fun" part time work and our goal is to do that in our 60s and have a balance of positive cash flow and time to relax.

We also focus on enjoying our life now. It doesn't always mean spending money (though sometimes it does), but mostly about creating a space we love and finding little pockets of joy in normal life. I refuse to kill myself now for the hypothetical enjoyment of a retirement.

[scm1011]

(((zelda25)))

[ssmjlm]

Jan 16, 2024 22:41:42 GMT -5 hermione said:

I think about the other side of this a lot. No one is retiring in my field. Which means we have a less adaptable workforce and not enough jobs for new grads. So people working forever not only sucks for those people, it’s terrible for progress within individual fields.

Interesting, we had a mass exodus of retirements during COVID because people didn't want to get on board with teleworking and new technologies for communicating.

Now we're all fighting for the same incoming workforce and once we get them trained, we're lucky to retain half.

A lot of younger kids don't get that while the entry salary for a fed isn't great (and should be higher,) there's a ton of benefits that eventually offset it, but they don't want to wait for that cost benefit to happen.

I get to keep my health insurance in retirement, I have a low management cost TSP, and a pension. Not to mention how quickly you can gain leave time after a couple years.

[sent]

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

"They" say this because the earlier you put your money into the stock market, the longer it has to grow, compound interest, etc. 

I was fortunate and had some money to spare for retirement savings since I started working at 24. I soon learned that retirement money is just play money in the stock market when I was 28 in 2008 and watched my retirement plummet. I moved my money over to cash. Another thing "they" say not to do. I felt like I couldn't trust anyone. I was saving for retirement in my 20s just like they had told me to do but my savings were evaporating and I didn't understand why. 

At that point, I was mad that I had spent all this energy in high school learning AP Calculus which I had never used since I left high school, yet I had no clue how the stock market worked. I was mad that retirement meant putting your money in the stock market and watching it go up and down over the next 5 decades. No one had bothered to explain this to me in my formal education yet saving for retirement is supposed to be such an important part of my existence as an American. 

[janegold]

zelda25, I missed your earlier posts - I'm so sorry to hear about your diagnosis. I love the idea of you taking early retirement/disability now if it's workable.

[Jalapeñomel]

Jan 17, 2024 8:05:48 GMT -5 sent said:

Jan 16, 2024 10:58:43 GMT -5 Jalapeñomel said:

I think about this a lot. Everyone tells young people to max out their retirement, save save save so they can retire.

But why? Is life infinitely better after 65? Should you not enjoy your life with your partner or friends or whomever while you’re young because you won’t be able to retire, but you may not be able to retire regardless?

"They" say this because the earlier you put your money into the stock market, the longer it has to grow, compound interest, etc. 

The point is that if you never retire, you never enjoy the money, so why scrimp and save if it will never come to fruition. Sure, if you have the privilege to save in your 20s, then none of this probably pertains to you, but I'd say a large swath of the population doesn't fall into this category.