The title of this post was a comment left on a retirement article at Yahoo that generally pointed to our collective desire to retire in our early 60's not matching up with our collective financial reality. If you read a lot about personal finance then this has been ingrained. Average retirement account balances are in the very low six figures even for people who are getting close to what is thought of as "normal" retirement age. At the same time, corporate downsizing and poor health is forcing the hand of many people into retiring early, whether they are ready or not.
Cutting to the quick, if someone wants to retire and their income sources, probably Social Security, maybe a pension, and a hopefully sustainable amount from their accumulated savings, aren't enough then something will have to give. They either keep working in their career, take a post-retirement career where maybe they earn less but supplement their income or spend less money.
In past posts, we've talked downsizing into a smaller house and getting cash out of the trade. That is possible but I believe has become harder to do with the huge run up in housing prices. We've also talked about moving to a foreign country which I believe is now harder to do as the world is a little less stable. Ecuador has been very popular in this context but the stability has deteriorated in the last couple of years. Anyone interested in moving some place, I stand by my suggestion of not selling your house here in case you need to come back and renting it out for the income.
There was another comment that I really liked.
It framed some of my beliefs very well. Both vlad and Keith are expressing different aspects of independence. Owning your time, setting your own schedule might have to be the lens through which "retirement" is now viewed. Not fair and any other sentiment like that is probably correct but fair doesn't matter. There's no feel good coming to help people. As an ongoing theme here and paraphrasing Joe Moglia, no one will care more about our retirement than us.
So it is up to use to solve our own problem. My first introduction to this idea, and I've blogged about it 100 times, was moving to Walker more than 20 years ago and seeing people make their retirement work because they had to, they had no choice. From those observations, I know it can be done but it really is a lot of bottom up work to understand expenses now and in the future, figure out how to get to "retirement" with hopefully no debt, understand how engage with markets, understand basic personal finance or maybe not so basic as I am referring to Social Security and RMDs, a big one for me obviously is to dial in the health aspect of this by lifting weights and cutting carbohydrate consumption and figure out how to create an income stream to supplement SS, a pension maybe and accumulated savings.
Hopefully that doesn't come across as any kind of short cut, I don't think it is. Assuming that this is not the only finance reading you do, your level interest probably puts you in a better spot than most people. The combo of lifting weights and cutting carbs actually is a short cut. If you're overweight and you start today, the odds of you being down 20 pounds a month from now are very high. If you start lifting weights today, you'll have the biggest gains early on then slowly plateauing out to maintenance and incremental gains.
This is a challenge to solve and I think there is great life purpose to be had from figuring out a path to your individual desired outcome.
Because it's related, Yahoo had another article about Social Security, different from the one I mentioned the other day and it has the updated projections that mentioned but did not link to, that SS is now looking at a 17% cut now starting in 2035. I spelled out my thinking in that recent post but basically I think across the board cuts are very unlikely, means testing seems more plausible but that only future payees will be impacted like everyone born from 1975 onward maybe, those folks will be 60 in 2035. I would model out what impact a reduction would have on you as part of the work I described higher up.
One other thought that I didn't mention the other day but that I have mentioned before is that if they really do cut SS across the board-ish, one way to do it would be to eliminate spousal benefits, not survivor benefits, but spousal. As an example, the way it maps out for us is my age 70 amount (I plan to wait) is $4600, my wife would take it at 64, getting 50% or $1400 of what would have been my age 64 benefit. So we would not get her $1400 and if I died first, she would get the $4600.
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