As I get closer a few things I used to hear from retirees are now becoming clearer to me. Things such as inflation being tough on many retirees since their income doesn’t go up as much as inflation causes prices to rise.
Or my uncle (80, and a very good investor) telling me you should set up a stream of money to cover your expenses and not rely on the stock market. I did part of this with some MYGAs to cover the first 4-5 years. Sure inflation is chewing up some of this right now but at least I’m not losing to inflation and another 20% in the market.
Housing. Personally I think the best way to do this would be to buy a house in your 30s and have it paid off by retirement and it greatly reduces your expenses. I was set for that but ended up selling the house and will now have to pay an inflated price (likely) for a place to live. Fortunately I can still afford a nice place somewhere (helps not to be tired to a work commute any longer) but not the ideal situation IMO. And sorry, I just don’t see renting in retirement as a smart solution, I’d like to have my costs fixed in retirement and rents aren’t in your control and moving is painful at any age and more so 60+.
Depending on health and offers I might work another 6-12 months passed my initial plans just to have a larger buffer. An extra year, even at 32 hrs a week, probably saves me at least $100K or more. Since I’ve only been married about a year, I’m still working out our expenses, fortunately not high but clearly going up with inflation.
The current downturn has been painful but I was a bit lucky in that I tend to have a decent amount of cash and in this case had even more cash due to moving money around to try and consolidate my accounts. So I probably have more of a 40% cash/60% stocks at most. Obviously the cash is losing to inflation but I can hopefully deploy that to pick up some stocks at good prices in the near future.
Things definitely change the closer you get to retirement since the amount you save in a year is much less than what you can lose in the moderate drop in the market. And for many employment can be tougher with some companies definitely avoiding older folks but I’m pretty lucky in that area.
I’m also lucky in that I can get health insurance at 60 and that is one less “game” to play and then use it in conjunction with medicare.
Looking back I’ll honestly list a few things I’ve done in my life investing wise:
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Enjoy my money: During my life I did a number of ski trips and later Europe vacation instead of maxing out retirement accounts. No regrets at all. Honestly have no bucket list at all.
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Buy houses (often small or fixer uppers) in nice neighborhoods. Made all but my first one (in bad area, oops) easy sales and saved a bunch with corporations picking up 4 sales.
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Don’t go all in on anything. Kept me from possibly making a fortune when certain investments looked great (i.e., real estate in 2008-2011) but also avoided any disasters in investments.
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Biggest mistake is trying to stick with a downtown and then panicking near the bottom and missing the rebound. Definitely did this previously, lesson learned.
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Didn’t chase the money with jobs. I’ve always taken jobs where I mostly enjoyed the work, kept hours to 40 a week and enjoyed my personal life. A few rough years and I can relate to those stuck in bad situations, a bad job can ruin your entire life including your health. And I never had to deal with layoffs, firings, bad performance reviews. A combination of skill and observing how things work at companies.
I was lucky that my father took care of my college expenses and my goal was to finish school in 4 years and never have to rely on anyone else for anything. Thankfully I was able to do that and never had to ask for money from family, friends, etc. Fortunately I had no major health issues.
I’ll re-evaluate things later this fall and decide whether I will retire completely or take a contracting position (if I can find one that interests me) for 6-12 months.
Good luck everyone. Sadly life goes all too quickly, especially for some.