Ask the Readers: Why Are YOU Saving for Retirement? Print
Friday, 23rd October 2009 (by J.D.)This article is about Ask the Readers, Planning, Retirement
As I shared yesterday afternoon, although I believe National Save for Retirement Week is important, I find the topic dreadfully dull when stretched out for a week of blog posts. Lesson learned.
Still, I don’t think all retirement discussions have to induce snores or tears. In fact, when you think about it, retirement — especially early retirement — ought to be something to celebrate. When a person has managed to save and make smart choices, they have a chance to opt out of the rat race and pursue the things they really love.
(Note that some people, such as my wife, are fortunate to work at jobs they love in the first place. They’re already doing something they really love.)
Rather than talk more about the numbers or the various types of retirement plans, I thought it would be fun to have a chatty open discussion about our actual plans for the future. Each of us has a different vision of what we’d do if we didn’t have to work, a different reason for saving. I want to know what you intend to do once you’ve reached that pot of gold at the end of the rainbow.
I’ll go first.
I don’t actually envision my retired life being much different than it is right now. I’d still write — I’d just do less of it. For the past few years, I’ve spent 60-80 hours a week writing. That’s too much.
I got to spend most of September writing just 20 hours per week. With the rest of my time, I worked in the yard, walked around the neighborhood, and read comic books. I have to tell you, that’s ideal. That’s what I want daily life to be like in retirement. And I want to be able to spend several weeks per year traveling with Kris, visiting countries all around the world.
That, my friends, is my ideal retirement.
What about you? What do you see yourself doing in retirement? What does retirement mean to you?

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October 23rd, 2009 at 7:24 am
I like to think of retirement as Benjamin Franklin did. He talked about the kids leaving the home and getting married. He talked about leisure but not idleness. I would like to live comfortably without extravagances, but be able to pursue anything that I deem to be worthwhile and do good for family, friends, and mankind.
October 23rd, 2009 at 7:42 am
I think we need a new word for our goal. For me “retirement” generates images of ending a career, beginning leisure time, blue hair and winnebagos. Why not set a goal of a new phase of productivity in the arena of one’s heart’s desire, being fulfilled AND busy most days - with the financial freedom to pursue one’s passions and live fully. And why wait until “retirement age” to do this? Readers of this blog are well on the way to financial independence - why wait until an arbitrary age to start pursuing one’s passion and living one’s dream? For me, living - and working - the dream is the motivation for pursuing financial freedom.
October 23rd, 2009 at 7:58 am
The sooner I can retire the sooner I can avoid paying Social Security Tax
October 23rd, 2009 at 8:00 am
I would like to live comfortably on the coast and close to family. Currently working towards my CFA I hope to continue investing and researching at my leisure. As well, I would like to stay active in running; while I doubt I will do anything competitive at retirement age I would like to focus on staying fit. Lastly, I would like to work on my cooking skills as it is something I really enjoy and host dinners for friends and family.
October 23rd, 2009 at 8:01 am
My retirement plans are already set. I absolutely LOVE travel and plan to travel the world–and see every country at least once. I would live only on what I carry with me. I would shed most of my possessions and hit the open road. I would arrive in a country and make it a point to stay the length of my visa. I want to see, smell, taste, and enjoy all the cultures I can. Some would say I am obsessed with travel. They are probably right!
I also think I would need some extended time of rest so I am considering the idea of eventually buying a place in another (cheaper) country on the beach. If I ever wanted a break from the road I could go there for a while with my own place and relax on the beach with a margarita. I could also come back stateside and stay with family and friends for a while too. Being a traveler makes things very flexible!
I would also have side projects that I could do over the internet and/or while traveling. My travel blog would certainly be one of them and I also like photography so I would spend time working on that hobby. I also see myself possibly doing some volunteer work as I go as my way of giving back once I retire. Maybe even write a book about my travels if I got the ambition and time to do it. I find with travel that you can certainly over-plan everything and then it becomes work. Just go where the road takes you! It’s about the journey not the destination.
If travel was not an option for some reason or another I would take my idea of owning a place on a foreign beach and open a bar/cafe too. It would occupy my time and in my mind be fun. Maybe I could even make more money!
I am sure as I go along in life circumstances and priorities may change and will alter this plan accordingly. I do know if I retired today I would be on the next plane out and take it from there. I am passionate about travel and do it every chance I get!
- Bobby
October 23rd, 2009 at 8:06 am
I save because my parents never had to. My dad’s spent 35+ years at one company; the same company that my grandfather spent 35+ years with. (I even spent a couple summers interning there). Although my parents have some “extra retirement” money set aside in various IRAs/401ks, it was never intended to be their bread & butter during retirement. Then came program-changes… With monthly out-of-pocket expenses skyrocketing for retirees. After 35+ years of working towards a “defined pension,” the lawyers have found a way to change all of the terms on everyone. Seeing my parents worried about retirement gives me motivation to max out my retirement savings.
October 23rd, 2009 at 8:07 am
My current goal is to be ready to semi-retire by 40 and am right on track. I am looking to switch careers right now, but assuming that I can quickly get back to my current earning level, I will be able to sustain myself very comfortably on just $20,000 a year in “semi-retirement.”
Right now it’s looking very doable but there’s no way to know what life is going to throw at me in the future. If I find something to do for 80 hours a week that excites me, I have no qualms about leveraging that till the day I’m completely incapacitated.
Truth be told, I don’t really want to retire. I want work that breathes life into me. However, the pragmatist in me still plans for the worst case scenario.
October 23rd, 2009 at 8:11 am
I think retirement will be spending more time the way we do when we have a free day: building things, visiting family, camping, writing, traveling, taking and sharing pictures, helping people, and caring for animals.
My grandfather-in-law has been retired for over 20 years, and he volunteers 3-4 days a week, is active in his church, works out at the gym every weekday, takes several trips with his wife every year and spends time with his children, grandchildren and great-grandchildren. He has a full and happy life, which I think is contributing to how well he’s aged. That’s just the kind of retirement I want to aim for.
Come to think of it, his whole family was happy he retired because it meant they’d all get to spend more time with him. I want to build a life like that - to know people are glad I’m around.
October 23rd, 2009 at 8:12 am
I agree with some of the posts I’ve read - no rocking chair for me.
My current job (minor plug: The North Carolina Center for Creative Retirement) has given me a greater insight to what retirement can be like. Before my current job and before reading GetRichSlowly, I only worried about 3 things in retirement: money, money, money
While I still think about the financial part, I know it is only part of having a great retirement.
Mike Honeycutt
http://www.ncccr.com
October 23rd, 2009 at 8:12 am
I guess the reason I’ve started my retirement fund (this week, in fact!) is a little hazier than yours, JD. I just don’t want to end up like my parents; through a combination of bad luck and bad choices, they’re financially insecure and their relationship has suffered as a result. I think they’ll still land on their feet, but I never want my personal life to be miserable because I didn’t think ahead enough.
When I retire, I want to be able to sleep in if I want to, visit my family as much as I’d like, and travel to new places. I’d also like the time to be involved even more deeply in my community and have the financial security to give a significant chunk of my time to others without worry.
October 23rd, 2009 at 8:14 am
Balance.
Spending 10-12 hours a day preparing for work/working/commuting as most people do doesn’t leave enough adequate time for spouse, kids, house, sleep, exercise, charity, alternative pursuits, and pure leisure time, so many of those get left behind and I think my life is somewhat less fulfilling because of it.
This is why instead of taking 40 years to save enough to quit working, I’ve chosen to take more like 10 agressive saving years to get to the point of working much less and achieving this balance. This does require the dual planning of saving and finding/creating a working situation that will allow the reduced hours.
October 23rd, 2009 at 8:16 am
I was unemployed for 16 weeks and 20 weeks in the years 2000 and 2001. It was SO awesome. I didn’t have a lot of committed expenses (paid-for car, rent was ~600/month the first year, and $350/month the second year, no other debt), so unemployment insurance was totally enough to get by on.
I found my natural sleep rhythms, read the paper, had lunch with friends, and puttered a lot. If I were going to be not-working forever I’d have to build in some sort of structure, but the ability to just do anything I want whenever I want will be so so so so great. I still have about thirty years to go though!
October 23rd, 2009 at 8:22 am
- Work part time at a fishing/hunting/outdoors shop to get a discount on those supplies
- Fish/hunt/hike/be outdoors
- Travel a lot
- Be with family non-stop
- Be comfortable financially
October 23rd, 2009 at 8:35 am
Freedom pure and simple.
-Rick
October 23rd, 2009 at 8:39 am
My wife and I would like to move to the Central Coast California wine country when we retire. Hopefully I will get a chance to get involved with making some wine, at least on a small scale at our home, and she wants to work in one of the area’s tasting rooms taking her pay in wine not cash!
Mostly what we want to do is save enough to be sure we are not a burden to anyone, our kids if we ever have any or our nieces and nephews.
October 23rd, 2009 at 8:44 am
I save in a retirement account because I figure it’ll eventually be useful to have the money. I don’t have any particular plans for it. I’m 28, I haven’t spent a lot of time thinking about it, to be honest.
I’d be ok if it wasn’t that different from my life now: Live by the beach, go surfing in the mornings, ride my bike in the afternoons, write some software in between, visit a new country a couple times a year.
I’d be perfectly happy with that as a “retirement”, but I haven’t made any plans. That’s pretty much how I live my live everyday already, why wait till I’m 65?
October 23rd, 2009 at 8:47 am
I love my job, but I’m inclined to think that by age 60 or so, I will have had enough of it and be ready to move on to something else!
Myself, I have a passion for music that I don’t get to indulge as much as I would like. So I definitely see myself spending time on voice lessons, noodling around on my guitar, maybe learning a bit of piano…
I also hope to travel regularly. Right now I love the back-country and roughing it, but I’m figuring that by that point in my life I will be more into comfy hotel beds and instead go see other countries and experience other cultures.
My husband dreams of retiring to the country and having a hobby farm, so I imagine that will figure into my retirement as well.
October 23rd, 2009 at 8:52 am
Retirement to me is an enigma. I don’t foresee it happening in my future, ever, no matter how positive I try to be about it. I make far too little, and even though I save like crazy, I only have enough saved up for about 3 years of “retirement”, and that’s 3 years of living very frugally and very close to the poverty line.
I don’t have any family of my own (ie, no husband, no boyfriend or kids), so no help there. I see myself alone, working whatever job I can find in my older years, for as long as I physically can, until I can no longer physically do it, then using my savings to keep me out of the homeless shelter for as long as possible. I know that sounds bleak, but given my low earning potential (and the sorry state of social security), this seems to be the most likely outcome. (I’ll be going back to college next year to learn a new career to see if I can’t change that outcome a little.)
October 23rd, 2009 at 8:52 am
I might continue to work all my life. I don’t know, but I think the thing that makes having enough saved for retirement so great is the fact that even if you work you don’t HAVE to. You’re doing it just to have something to do. What makes jobs miserable is the knowledge that even when things suck you have to continue to work. You HAVE to get up every day early in the morning and head to the office. If you don’t then you’re not going to be able to pay for your food, house, electricity, etc.
October 23rd, 2009 at 8:55 am
Having started saving for retirement late in the game & knowing that I’m genetically wired with a longevity gene (barring accidental death) my retirement will not be early & will in all likelihood be modest. Still, I look forward to ditching the alarm clock that currently rings even before my dogs think it’s time to get up! I look forward to long walks with the dogs, going to the gym after the mass of workers have cleared out, reading all the books I don’t have time to read nowadays, & impromptu excursions because it’s too beautiful a day to waste. I look forward to more creative time in my studio, of which the by products will also supplement my retirement. Some volunteering will be a part of my retirement. I really look forward to taking extended learning courses / field trips at a significant senior discount through my local community college seniors programs. Oh, yes - going to the grocery store on weekday mornings when it’s quiet, and taking advantage of early bird specials.
October 23rd, 2009 at 8:56 am
You all have some lovely visions of retirement! I’m inspired.
My dream is to travel, volunteer, and spend time with family. While I would love to still work, and hopefully in my current career, I am preparing for the fact that I may not be able to do so. We hear far too often reports of people forced into retirement due to illness, layoffs or because they’ve just become too expensive for their employer.
October 23rd, 2009 at 9:00 am
As a few other readers have expressed, I have no intentions of retiring. My life is a migrating series of interests, and right now what I do is lucrative enough that I can have a small surplus; I save this because someday what I am doing may require additional funds. Even though I intend to work until I die, savings simply means more freedom (in a sense), and so I do it.
October 23rd, 2009 at 9:09 am
I haven’t thought much about how I’ll spend my retirement - I’ve been too busy thinking about my husband’s. He’s 18 years older than I am, so he’ll retire first. I work (as a civilian) for the military, which opens up all kinds of travel possibilities - I can do 3-5 year rotations in the UK, Germany, Italy (and a few others). By then, I figure it’ll be time to settle close to my step-son, and remind all of my nieces and nephews (and probably some great nieces/nephews by then) why I’m their favorite relative. There’s 20 of them - 10 on each side - so I’m thinking that will keep me busy. Luckily, we’re already saving for it.
October 23rd, 2009 at 9:17 am
I see myself with CHOICES. That’s why I save, that’s why I budget, and that’s why I plan.
My grandmother was widowed at 75, and she had SS and $20K in the bank. No house, no pension. She spent her last 8 years moving between her three daughters, and having no choices because she had no way to pay for anything.
My dream retirement? Two small houses, one winter, one summer. The winter house somewhere like Key West or the USVI. The summer house somewhere on a lake. We’ll read, we’ll walk, we’ll cook, we’ll barbecue, we’ll have family to visit, and we’ll travel to see friends and family. Nothing fancy, but definitely fulfulling.
October 23rd, 2009 at 9:19 am
I would love to travel — while I’m still mobile enough to walk around. (I’m kind of kidding, kind of not.)
I’d like to live in a house that’s paid off. I’d like to be able to volunteer, and to become better at home repair.
Lastly, I want to live somewhere warm. I love Chicago, but winters here are BRUTAL. Spring, summer, and fall — great. But the other five months of the year… no thanks.
October 23rd, 2009 at 9:22 am
I am 28 and would love to retire by 60, if not earlier. I’m able to save and invest a decent amount of my income, but I could do better. I’m not counting on the guy who’s likely to become my future husband, my parents, the govt., or the places where I work to take care of me in my old age; I really just need to rely on myself and make sure that I retire when I want to.
I see myself owning my house outright (I do not want to worry about a mortgage when I’m in my old age), traveling, spending time with family and friends, volunteering, and learning new languages when I’m retired. I would probably work part-time too if I ever felt bored.
October 23rd, 2009 at 9:22 am
Retirement is hard for me to imagine because on my side of the family everyone worked until they were unable (illness/loss of job, etc). Last year my dad at 74 was forced to stop working after he lost his business, my mom at 65 is still working. I do keep a journal for all the ideas I can’t get to. If I could find a way to do everything, both full time job, family and my hobbies of writing and art, then I would keep on doing that till I am unable to as well. If not, fantasize about having a part-time job that brings in enough money and more time for personal projects.
October 23rd, 2009 at 9:25 am
Retirement is a silly concept really. I don’t want to do any of the things other people seem to do in retirement, especially not at the expense of enjoying life now. I’ve already changed careers twice, and I’m sure I’ll do it a few more times. I save as much as I can, in case of health problems, but I already balance work, life, volunteering, and travel as best I can to get maximum value now. When I have enough saved maybe I’ll work less, or maybe I’ll work for a non-profit I admire. But maybe I’ll be doing something I love and won’t want to slow down. I know from periods of unemployment that without a job or other commitment to pull me up and out the door, I become a useless slug and spend all my time sleeping and watching tv. That’s no way to live.
October 23rd, 2009 at 9:29 am
I just started reading “Die Broke” and I’m wondering if especially those of you who don’t plan to retire are thinking that “retirement” as it has been marketed is more of a fantasy than a probable reality for most of us?
October 23rd, 2009 at 9:40 am
I hate to be so arrogant, but I feel I’m doing exactly what I’ll be doing in retirement. I travel when I want; I take days off when I want. The added bonus is that I make a lot of money each month via working and freelance. The only thing that will change in retirement is that I will be much older and the child will be grown.
I have always manage to get what I wanted in life thanks to planning and not living far above my income. My income has always been higher than my expenses, partly because I’m not a big fan of debt. When you have the basics: a mortgage note and utilities, your income will always be higher. Add major debt, your income will suffer. Regardless of the fluctuations with my income, I always had some type of cash cushion to manage the droughts.
October 23rd, 2009 at 9:50 am
Just to think about it, retirement is advertised about freedom and doing what we like. But it wasn’t always like that. The concept of retirement is quite new, and very few humans, in it’s whole history, have ever benefited from it.
Back in university, my canadian politics and policy teacher once mentionned that the reason behind the suggested age of retirement being 65 years was purely based on statistics. Back at the beginning of the 20th century, men usually died when they were 66 years old. Hence, they “enjoy” their last year. Of course, I doubt that they had any money or quality of life, or much of a health to benefit from.
But today, we have better life conditions. We have fully functional washrooms, sewers, fresh water at the turn of a knob, etc… Heck, if we take care of ourselves, we can easily live to our 80th birthday.
So, retirement, that new concept that my ancestors never benefited from, what will I do with it? Probably give a hand to my kids, raising the grand-children, participating in various community activities, raising money for the schools, and STILL working part-time. When I feel like doing it, probably take a hike to a nice forest, or around a lake.
Cheers!
P.S. : J.D., you might want to inquire into the psychology of retirement. Federal public servants in Canada can enroll, if they want, into retirement preperation classes. My mother did, and the psychological aspect of staying home and not going to work is hurting a lot of good people, and sometimes hinder some good couples.
October 23rd, 2009 at 9:52 am
My goal in retirement is to simply have more time to pursue the things I’m interested in. I’m interested in so many things that I just don’t have time to get to them all while working. I’d like to travel more with my husband, I’d like to do more with photography, learn how to do stained glass, the list goes on.
I save now so that I can get to all of these things as soon as possible.
October 23rd, 2009 at 9:53 am
I can’t imagine retirement right now, but I save anyways
It’s hard to imagine what the world will be like in 35 years.
My goals are to live comfortably, ethically and independently. If I don’t get to travel the world or enjoy “the finer things in life” — that’s okay too. I have no doubt my friends, family, volunteering and hobbies will keep me pretty busy!
October 23rd, 2009 at 9:56 am
I want to become a national sports columnist. I can spend most of my time watching sports and researching sports, which is how I spend my time anyway. The only actual “work” that I would be doing is the act of writing, which even that I enjoy for the most part.
The day I get that job is the day I’m retired in my mind. It’s a job that I can do until the day I die.
Other than that, I hope to one day have enough money earned / saved to own land in Texas to hunt and fish as I see fit. That’s the good life.
October 23rd, 2009 at 9:56 am
I really enjoying what I’m doing now - teaching piano and voice, working as a freelance web designer, editing video. As well I’ve got big plans for the future. It’s hard to think that someday I’ll want to “retire”. But I’ve come to understand that as we age our priorities and enjoyments change. Right now I love backpacking and ‘roughing it’… someday though I may prefer a nice hotel room by the beach.
Saving for retirement then is not because I’m dissatisfied with life now, but because I recognize that someday I, not life, may change. Then having that money set aside will allow me the freedom to pursue interests without needing to compromise with financial profit as well as provide the capability to help “youngsters” pursue their dreams.
October 23rd, 2009 at 9:58 am
Our retirement savings have been put on hold for a bit while we build up our emergency fund, BUT our goals for it have been to protect us in the future.
While a lifestyle during retirement is something to think about - my main motivation is the story of my two grandmothers. One had sufficient retirement savings and had the money to afford the dignified care she received at the end of her life.
The other did not, and wound up in a spiral of significant debt compounded by medical problems, which sent her further into debt, that we only found out about after the fact. We had to sell everything she owned and she now lives in a Medicare facility where she is not treated with dignity and her few meager worldly possessions get stolen by facility staff.
End-of-life and nursing care is HIGHLY expensive, and we are only projected to live longer. I want to have enough money that I can be cared for with dignity and not place a financial burden on my family at the end of my life.
October 23rd, 2009 at 10:05 am
“End-of-life and nursing care is HIGHLY expensive, and we are only projected to live longer. I want to have enough money that I can be cared for with dignity and not place a financial burden on my family at the end of my life.”
AMEN!
I actually have fears of outliving my money. I do very well saving money and plan on a low key retirement, but with people living longer and longer . . . scary.
October 23rd, 2009 at 10:12 am
Kristen and Laura bring up an interesting point. I forgot that I had intended to write about this subject during National Save for Retirement Week.
We recently attended a barbecue. At the gathering, I spoke with a woman I’m barely acquainted with (though we share many of the same friends). Among other things, she runs an adult foster home. (Is that the right term?) She hosts several senior citizens near the end of their life.
When they come to her, they pay their way. She doesn’t charge unreasonable rates, and the people are happy to pay. Some of her tenants die while living in her home and they have money left over. But others run out of money. My acquaintance isn’t willing to kick these folks out on the street, so she keeps them on. Apparently there’s some sort of state subsidy when she does this, but it’s not nearly as much as she wants/needs to cover her costs.
Anyhow, I thought it was an interesting story that highlighted two things: 1. The dangers of outliving your retirement income and 2. Another intersection of psychology/emotions and money.
October 23rd, 2009 at 10:12 am
This is such a great discussion, because you have to know the WHY before you can settle on a HOW!
My vision is of a modest house with about an acre of land, so I can have a real garden, a few fruit trees, and some chickens … no more than an hour from water (lake, river, ocean, I don’t care) and no more than two hours from a big-enough city to have good medical services … near enough to a small town to bike or walk … the small town big enough to draw students to my yoga and dance classes, and for me to host a monthly social dance! Oh yes, and preferably in wine country!
Like another commenter above, family history + statistics indicate I’m going to live well into my 90s. Without children, I need to be in a community where I can make friends who will look out for me. But I hope that DH and I can get our travel bug out while we’re still working, so we can be content at home when the income and energy levels go down.
October 23rd, 2009 at 10:15 am
I save for retirement because life is too short to work all your life!
At 40 years old, I want to have the ability to walk away if I want to.
It’s all about freedom, b/c as off now, I have every I could ask for, except for the freedom to do whatever I want.
FS
October 23rd, 2009 at 10:17 am
@ #17 Lesley - If you have time, pls read my guest post on Wise Bread entitled “Knowing When To Walk Away - Financial Planning for An Unknown Future.”
Essentially, I believe one should set a retirement AGE not a monetary value and walk away.
Enjoy!
October 23rd, 2009 at 10:19 am
Although my retirement is a long way off (I’m only 25), I’m already saving for my retirement. I would rather skimp and save now, when I’ve got youth and health on my side, than later.
I’m currently working at a job I love (healthcare worker), but I can’t imagine doing it forever. It’s just too physical. Most of my co-workers either have to take early retirement (~55) or move into management.
My dream retirement is a little 4 seasons cottage somewhere quiet. Ideally with birds to watch, fishing, and lots of trees. A bunkhouse for guests and a big kitchen so that I can host dinners for extended family and friends.
October 23rd, 2009 at 10:27 am
I’m confident my fiance and I will have enough money in the bank in 40 years (I’m 30, she’s 28) to fully retire, if I so choose. The only reason I’d do it, though, is to travel. My job’s great, pays well, has normal hours (I don’t do more than 50 in a week), and is something I’m interested in. I’m in no hurry to leave… especially considering I get 4 weeks of paid leave each year.
October 23rd, 2009 at 10:35 am
@E (#28):
“I know from periods of unemployment that without a job or other commitment to pull me up and out the door, I become a useless slug and spend all my time sleeping and watching tv. That’s no way to live.”
That’s a great point, E. Reading through these comments, I noticed all the lofty intentions so many people have. Travel the world, learn piano, grow a garden, volunteer, go to the gym, etc. Sadly, reality is much different. I’ve witnessed this first hand with my father.
When people retire, they do indeed have all those great intentions. But at the beginning, they end up just vegging. They spend their days sleeping in and watching TV, telling themselves they’ll get started on all those great things “someday.”
Then weeks turn into months, and they suddenly realize that the world is going on without them. That job that made them feel so important has been filled by someone else, and the company is trucking along just fine. They start to wonder if they were ever really that important after all. They wonder what the heck the point of any of this is, if the world doesn’t need them. They remember that they had a list of things they intended to do, just like all the commenters here have said, yet they haven’t actually done any of them. Throughout their whole life, they believed that the only reason they weren’t traveling/learning a foreign language/going to the gym regularly/etc. was because their job was sucking up all their free time, and if they retired, they’d get to do all those things. But after retiring, and being faced with the reality that they’re NOT doing those things, they’re forced to acknowledge that it wasn’t their job holding them back - it was themselves. They’re just not really that motivated. The job was a convenient scapegoat that allowed them to preserve their self-esteem. Absent the job, the only remaining explanation is their own apathy.
Understandably, this has a strong, negative psychological effect on the retiree. They can fall into depression, their marriage suffers, and they end up going back to work, if only to feel like they have a purpose again. This is EXACTLY what happened to my father, and it’s happened to countless other people. It’s not often discussed, but I think it’s an enormous issue that deserves far more attention than it gets. I’m optimistic that with the Boomer generation about to experience this for themselves, we’ll finally see a spotlight focused on it.
October 23rd, 2009 at 10:42 am
Wow, that’s a really interesting comment (#43) by Kevin. My parents are both retired, and they’ve never been the most ambitious people in the world, so I don’t know that they thought they were going to sail the seven seas after they hung it up.
That said, I do detect a sense of malaise recently — especially from my dad. Kevin’s post gives me something to talk about with him, to see if it hits a nerve. Maybe he needs to set a goal (learn how to speak Italian? master that new-fangled internet thingee?) to give him a reason to attack the day, rather than be as passive as he’s been lately. Thanks for the insight, Kevin.
October 23rd, 2009 at 10:48 am
Maybe it’s not fair since I already reached that goal 10 years ago, but what I learned that was a eye opening relief, was that savings or assets matter very little if you don’t have cash flow. In the end, that’s what determines what you have to work with on a daily basis. I worked on my skills at earning online and now I have all the cash flow I need to visit my grandkids all over the country and take trips to nice condos just to kick back a few times a year.
October 23rd, 2009 at 10:53 am
The reason I started saving was a result of research about what “should be done” by a beginning professional … it felt like the responsible thing to do. The reason I started saving more was boggleheads (http://www.bogleheads.org/) personalized recommendations in the forums based on assumptions about my retirement needs from rules of thumb.
Retirement means I get to stay in my field (criminal law) and focus my activity - not work anymore - on cases which will develop and progress the law on a bigger scale … along with plenty more time for my hobbies, for sleep, and to help my friends and family. And not dressing up as often - I miss my sweatshirts and jeans! Plus, when I walk around in hammer pants everyone will just think “oh, that poor senile old man” instead of “where did that weirdo even find those pants? Didn’t they burn them all before 2000?”
But in the big picture I really like my job - it’s not something I look forward to “finishing” or leaving. I have a chance to make a terrifying and unjust world much less frightening and unfair for people harshly judged by at their lowest moments by oppressive rules formed by political convenience and irrational fears.
Also, the dream of never again needing to wake up to my cell phone alarm playing James Brown “Get up offa that thing” is a huge motivator!
October 23rd, 2009 at 11:01 am
I guess I agree with the thought that retirement is to final. My husband and I say “our next life” begins in 8 years when our youngest child graduates from high school. I have always loved Bed and Breakfasts and in my “next life” I plan to own one somewhere out of the city I currently reside in, preferably in the mountains somewhere. I envision us doing this for the rest of our lives, but we may discover something new that we want to do. I hope our careful planning from the tips and techniques JD shares here will afford us the opportunity to take advantage of whatever crazy things life throws us and maybe start a whole “new life” after the B&B.
JD: RE: #36, #37, and #38: An interesting topic to explore further is Long Term Care Insurance. I work for the Alzheimer’s Association and regularly talk to families who are in the situation of Kristen’s grandmother who did not have enough for her long term care. My grandparents were smart enough to get long term care insurance shortly after my grandfather retired. Even though he spent almost 5 years in a private Alzheimer’s care unit before passing away, the LTC insurance helped cover most expenses so that my grandmother is still doing well financially and is not a burden to anyone in the family.
October 23rd, 2009 at 11:46 am
I imagine my life in retirement to be as follows.
Get up at 8am, instead of 7am which I do now.
Work out in the morning or mid-day, instead of in the evening (which I do now due to my work schedule).
Work an average of 20 hours a week at something I enjoy. Either contract work in my current field, or something new.
Take a class in something that interests me. French, photography, swing dance, whatever.
Cook much more often than I do now.
Take two long trips each year (3-4 weeks each), plus smaller 3-4 day trips when the mood hits.
Do all of the above while maintaining my current quality of life in terms of where I live, access to health insurance, etc.
October 23rd, 2009 at 11:48 am
I would like to ‘retire’ in my early 40s (~15 years). The version in my head involves a small ranch and taking in foster kids, or maybe having one of those ‘world’s strictest parents’ gigs and having people who can’t handle their kids send them to me. I want to make a difference in the world by pointing kids at a crossroads in the right direction.
I haven’t worked out any details, and the vision may change to something completely different by the time it happens.
October 23rd, 2009 at 11:52 am
My wife and I plan to buy an RV and travel all across the U.S. when we retire. We are both currently 28 and have $198,000 in 401k and IRA accounts.
October 23rd, 2009 at 12:06 pm
I dislike my job, it seems to disrespect me. They have made some changes I’m not onboard with over the last 19 years. I can matter-of-factly point out things they ought or ought not be doing. My points stand up as facts but it doesn’t do any good. However, I get to leave in 4 months and a week.
If I quit working then I would have $19,600 a year and a little inflation cola. If I work some more, and put away some more I get to raise that number. Working now is optional not a bondage thing because I’ve gotten out of debt, and have the defined benefit of $19.6k. I am hoping this optional element facilitates me finding a job I can shine at. Good for me and good for them if it can go this way.
Being in this position instead of harried-scared-stuck is what I’d call financially secure, but my number is definately on the modest end. I have every intention on working and raising my number. There are several things I want to do to protect myself against inflation, illness, long-term care bills, before I would claim financial peace.
October 23rd, 2009 at 12:07 pm
I’ll hit “retirement age” about the time New York floods out, Iowa becomes a desert, and all my surviving relatives will want to move in with me. There will be no Social Security, and my 401k will be worth zero (though my taxes will still be trying to bail out industries taht are “too big to fail”). No one my age (35) is going to jet around the world or buy a house on the beach in retirement. Hell, we’ll all be subsistence farmers - you never retire from that.
So I’m spending the next 30 years paying off my land, improving the soil, and building a root cellar. Y’all can come over for dinner.
October 23rd, 2009 at 12:11 pm
2 words sum it up for me: FREEDOM and CHOICES.
Retirement, by the traditional definition, is so far off for me (34 now) it’s hard to say what I’ll be like, or what the world will be like by then. So I’m saving now to have better options in the future.
I prefer not to wait until 65 to live my life though, so I’m doing most of what I want to do presently while trying to balance with work commitments. I definitely see myself volunteering, traveling with my wife and kids and reading a lot more. I have 29 more states to see, so that is something to shoot for.
October 23rd, 2009 at 12:25 pm
Also, I failed to say that everyone should enjoy their lives even before retirement. My father in law worked and saved for retirement only to get sick. He’s confined to his home now and has no real quality of life.
October 23rd, 2009 at 12:45 pm
An active retirement would be the best for me. I am also a writer and would happily continue doing that for some cash in hand, perhaps 16-20 hours a week. Plus a little bit of radio work or something like that and I would be professionally fulfilled. I’d also like to extend my volunteer activities. At the moment I am trying to get involved in a local film festival on a volunteer basis (free film tickets and great people!).
But its a long ways off. I am 32. My partner at 45 is closer than I am but I figure if he wants to retire soon then I can happily work for another 12-14 years until its my turn! May-Sept relationships bring some very interesting flexibility and unthoughtof freedom when it comes down to it!
October 23rd, 2009 at 1:01 pm
I save so I don’t have to eat cat food when I’m 80.
..Or become one of those people on the news that dies during a heat wave or cold spell because I can’t afford the utility bill.
I’ve been around people who’s only income was their social security check and it’s not pretty. Even the most basic of tasks, like washing your clothes or turning on the stove are luxuries. My mom had a tenant that would spend all day heating a tin of beans by sitting them on-top of the pilot light on the stove. His apartment was always dark because he didn’t have enough money to turn on the lights. As a child I remembered him as a frail bag of bones and someone I never wanted to become.
These posts have lovely dreams, goals and bucket list wishes. The reality is that for many in retirement, they are struggling just to survive. I wish everyone who has a retirement balance of $0 could meet someone like the man I described. The poor guy’s been dead for over 30 years but his sad life is still burned in my brain.
October 23rd, 2009 at 1:43 pm
Hi JD
A very timely post, as my wife and I were recently discussing this topic. We are still many years away from the traditional retirement age (20 and 15 years, respectively). Interestingly, we are both re-assessing our career directions at the moment.
I have begun to take steps to transition into a new career, one which would allow me to work as long as I’m able. I could see myself working well past 65, as this new field is one that would be very fulfilling. I wouldn’t see it as “work” as it’s something I’ve dabbled in for many years “on the side.” We are now in a position where we can afford a temporary reduction in income today, which will put a dent in our retirement savings, with the expectation that I’ll continue to earn income for many years after I turn 65.
The new field will also give me greater flexibility as to how I spend my time, since it is not in a traditional office environment. I hope to improve my work-life balance (more travel, more golf!), although that may have to wait for a couple of years until I have the new business well established. I’ll also continue to do volunteer work.
Likewise, my wife has no plans to retire. She would go crazy not having something meaningful to do, so she will continue to work and volunteer as well. She’s also keen to travel more.
As another poster has mentioned, the concept of “retirement” is relatively new. It certainly has some appeal if your job is physically demanding or not particularly satisfying, or if you sacrificed work-life balance. But if you are in good health, love what you do, and can strike the right balance, “retirement” seems unappealing. Like Warren Buffet, I hope to “tap dance to work every day” for many years after I turn 65!
JS
October 23rd, 2009 at 1:50 pm
@ JD (#38):
It’s interesting that you bring up the topic of end-of-life care. Over the past two years, our grandmother has been under two sides of that system.
During the first year, she had a personal caregiver at her home. It was a mistake. Not until the very end did we find out that the caregiver had used our grandmother’s home to house her nephew (or grandson?) while he was attending school near the home. Furthermore, the caregiver had opened a high speed internet bill under our grandmother’s identity and paid with our grandmother’s money. Fortunately, we had been cautious enough to have our grandmother’s mail forwarded to our home so I saw the bill. I notified my parents who were out of the country (the reason for the caregiver) and confronted the caregiver. She told me the reason for the high speed internet was for her nephew/grandson. As you can tell, we were all shocked at this news. The caregiver was fired. But it only gets worse. After my sisters and I examined our grandmother’s home and finances, we discovered that the caregiver had stolen precious items (jewelry, etc.) and somehow gotten a couple hundred dollars out of our grandmother’s bank account. Again, fortunately, early on we had arranged for almost all of our grandmother’s money to be in accounts that only we knew about. The caregiver had moved out of the country and was never heard from again.
Next, our grandmother went to a retirement home facility (if you are wondering why she is not living with us this is because her health is not very good and needs health professionals to watch over her 24/7). We are very glad this arrangement turned out better than we imagined. The facility is run by people we know and trust. I had spoken with some of the staff, very nice people. The cost was well within the amount our grandmother could afford. Also she now has a roommate who also happens to have worked in a similar career field (they are getting along nicely
).
Learning from this whole process, my words of advice are:
1. Make absolutely certain that you would trust these caregivers and facilities. Even the smallest suspicions and details should be taken very seriously.
2. Prepare yourself. A great book I found was “Taking Care of Aging Family Members” by Wendy Lustbader and Nancy R. Hoodyman.
3. Having finances organized is really important. In our case, this prevented our grandmother from losing her life savings.
October 23rd, 2009 at 1:55 pm
My take on ‘retirement’ is a little different since I already took mine - in the form of staying home with the kiddos for 14 years. I can work two, three jobs (I’ll be almost 50 when the youngest turns 18) IF I have to once they are up and out but I can NEVER turn back time to be with them when they needed me most.
October 23rd, 2009 at 1:56 pm
Why? Simple really. I hope we live that long.
October 23rd, 2009 at 1:59 pm
My reason is very simple: I don’t want to have to work until the day I die.
I’d also like to buy nice sweaters to keep me warm during the cold winters.
October 23rd, 2009 at 2:03 pm
I retired when I was 51 (3 years ago) and my husband is still working. Fortunately we were in London and I had a fantastic time - learned to blog, quilt, travel write; lost 20 pounds; travelled; visited many
museums and UK sights; walked the entire Thames with my husband - section by section and by public transportation; visited friends and family, etc. There just aren’t enough hours in the day. Even now that I am back in Houston, I am getting into “over-programmed” mode again. When I was working, it was impossible to compete without dedicating 130% which left me little time and energy to do anything else. Now I know there is a whole new world out there — so many things to learn and do. We always lived below our means with the intent of being able to leave our jobs if ever we wanted to. I love retirement but my husband is not sure retirement will ever suit him. He is worried that he will spend his entire retirement in front of the TV - but I think once he is well rested he will appreciate and take advantage of the opportunities to do something different. Time will tell.
October 23rd, 2009 at 2:15 pm
My husband and I will both inherit money (but when?! Could be tomorrow, could be 15 years from now (we’re both 45). It’s nice to have in the back of our minds but we don’t count our chickens. Who knows what can happen?
We want to buy some property in the wine country and open a European style inn, with a garden and vineyard. (We know what kind of work it involves, we own a restaurant
It’s been a dream for a while and the more we save the sooner we can start our next adventure.
October 23rd, 2009 at 2:20 pm
I knew that starting a retirement account was a very good idea but what actually got the ball rolling for me at what when I learned I could pull a loan without penalties against my 401k.
It’s horrible but I actually started so that I could spend money I don’t have yet.
Luckily I’m smart with my money and when you’re in your 20s you can’t always by a new car on cash. But rather than get a bank loan I can now use my 401k as the bank and get the loan from my future self. Except for a $35 transaction fee I lose nothing, plus all the interest accrued (which is at a much better rate than the bank) goes back into my 401k.
It’s hard to convince people in their 20s and 30s to start their 401k. But if you look at it for non-retirement benefits many people find it much more appealing.
I know alot of older investors say you shouldn’t steal from your future self for short term gains, but I think they forgot what it’s like to live pay check to paycheck, single, at 23k/yr. My 401k may have to spend 12 months with less money in it but it gets me a safe car to get me to work and back. Plus I found having 50% of your 401k out of the market is GREAT when the market makes the biggest plunge since the great depression.
October 23rd, 2009 at 2:30 pm
Sandy L makes a great point-Social Security alone is living in poverty-so those depending on it for the future will be sorely disappointed.
I think the greatest advantage of having a retirement nest-egg is just the freedom, and cushion it provides-which allows one to make choices.
I am lucky in that I enjoy my profession and will continue in it as long as I am able.
I also have recently added a fulfilling part-time career teaching and writing about personal finance to a small niche-nurses. I find the thank-you’s and notes of appreciation to be payment enough for the effort required. Don’t expect any financial reward, but it is fun.
October 23rd, 2009 at 2:30 pm
(Note that some people, such as my wife, are fortunate to work at jobs they love in the first place. They’re already doing something they really love.)
That’s all I want out of my life, to be honest. I want to write and race and take pictures and live a fast life with fast cars. That’s my dream, and that’s what I’m working on every day! (Oh, but I’ll have a “practical” skill set being a CFP, which I want to use to teach PF classes to adults & kids. Just in case.)
Edit: This is what I want my life to be like, this is my primary motivation: http://mrmaloney.com/mr_maloney/SHSdocs/fish_tale.html
October 23rd, 2009 at 4:00 pm
@JD #38, my mother-in-law is in such a place. It’s wonderful; just like home, except she has caring professionals present all the time. My grandmother is in a senior community which includes all levels of living from “independent” to Alzheimers’ care. She is independent, and keeps VERY busy with the various classes, clubs, and social activities offered. That’s a major motivator for my “retirement” savings. MIL has an excellent pension which includes health care, excellent insurance, and a sizeable inheritance. Gramma sold her home at the peak of the market in a super-hot neighborhood, and has always invested well. We can’t count on any of that, so if I want that kind of life-after-80, I need to save that kind of money myself.
Other than money, I don’t save anything for retirement. If there’s something I want to do, I do it. My husband is 16 yrs older than me, so if I wait till I reach retirement age to do something, I’ll likely do it alone. The only thing that keeps me from doing certain things that I want to do is that there are so many OTHER things I want to do first!
October 23rd, 2009 at 4:29 pm
Great question. I’m about 10 years from retirement, and have been saving diligently for a long time. But I hadn’t thought much about what retirement would actually look like until lately, and I find myself thinking about it a lot. And it kind of freaks me out because it’s pretty hazy. Which makes me realize I haven’t been saving for an exact picture of retirement (like an RV trip or a farm in France) but rather a set of emerging values. Values that I want more time in, like nature, a sense of community, creativity. And although I do love my work, I’m uncertain if I’ll want to continue. In the third act of my life I want to leave space for parts of me to emerge that are perhaps still hidden. Because I’m absolutely convinced that what we know about ourselves at 20 or 30 or 40 is different from what we know about ourselves down the road.
October 23rd, 2009 at 5:54 pm
I think of it more as investing for financial independence rather than investing for retirement. I just want the freedom and piece of mind to call my own shots. If I don’t feel like waking up until 9am … then I won’t. If I don’t feel like working… then I won’t… If I do… I do. You get the picture.
October 23rd, 2009 at 6:04 pm
I think one of the key phrases in your post was “REASON for saving” (my emphasis). I’ve argued here before that retirement planning starts with setting goals. But not just with setting financial goals. How much money you need depends on your vision for the rest of your life. Do you want to travel the world? Winter in Florida? Or, is your dream to devote the rest of your life to your kids and grandkids that live around the corner? Do you want to live in a big house, or do you want to downsize? etc…. That’s why all of my retirement planning posts link to my series on personal strategic planning — to help people decide what they really want to do with the rest of their lives.
After spending 30 years in the corporate rat race, one of my key priorities was to simply take it easy. I want to continue to travel, but I only take a really big trip once every year or two. And, of course, I want to spend more time with family and friends. But, even in retirement, keeping active mentally is very important to me. I see myself continuing to do what I’m doing — sharing with my readers some of things I’ve learned in my career about planning (and the analysis that you have to do in order to plan well).
Now that I think about it, it sounds an awful lot like J.D.’s vision — except for the comic books….
October 23rd, 2009 at 6:52 pm
@ Emily- we have the house and the land- there is nothing that can replace it.
Retirement for us means my husband will finally begin creating things out of wood and I will sell those things for him.
I don’t see much tv watching in that future.
That future begins in about…15 months!
@Kevin- sounds like your father needed some help in retirement. Many people fall into depression and need a boost to get going again. My dad had poetry meetings at their house twice a week and read at the local elementary school. He also did house visits for the lower income people. Of course both mom and dad were the “sage on stage”, we often came to them for advice…they had a great retirement (Dad passes away after 30 years of retirement and Mom still lives on- an internet junkie- visiting grandchildren virtually!)
October 23rd, 2009 at 10:16 pm
To me, retirement means complete freedom from financial pressures for good. People often ask the question, “what would you do if money was no object?” Instead of asking the question, you get to live it.
October 24th, 2009 at 12:53 am
I’m disillusioned with the idea of retirement. Why am I saving money to be spent between ages 65 and 85+ when I’ll just sit on my butt watching soaps and being old? I’m already temporarily retired now at age 26. I’ve been unemployed for a year and it’s taken me awhile but I’m now taking two career-advancing courses, volunteering a bit (not as much as I’d like), and reading a whole lot (yay). Oh, and watching soaps in my pjs till mid-afternoon. I’m not waiting till I’m retired to travel; I’ve been to Europe 3 times in the last 2 years. And best of all, I’ve learned I can easily live on 30k/year (the amount of my unemployment and half my salary).
October 24th, 2009 at 2:22 am
I’m 41, and I’m already retired. My idea of retirement is “doing what you enjoy, and getting paid for it.” That is precisely what I’m doing right now as a coffee shop owner. (However, I do worry about my health - how long can I possibly keep this up?)
Basically, I think that retirement is all about doing what you love, and being surrounded by people you love. It’s not about being rich in the usual sense of the word. It’s about being loved!
October 24th, 2009 at 3:44 am
I don’t think I’m ever going to stop working. When I have reached my ultimate financial goal, I think the most is that I would cut down my work time and do more of other leisure stuff. I just can’t imagine myself not working at all.
And I think that’s because I’m slowly progressing towards doing something that I truly enjoy, so I’m confident I’ll be able to make good money doing what I enjoy that I don’t think I ever want a full retirement. Unless of course I’m too weak or sick to work anymore.
Cheers~
Mark
October 24th, 2009 at 4:22 am
I spent about 2 months a little while ago between jobs and I found myself getting mildly depressed - going to work everyday and achieving “goals” i.e. finishing projects etc is very satisfying so I don’t think I would want to do nothing in retirement.
I think retirement for me would be living in a house near the beach and having a few side projects going that take up 3-4 days per week (such as volunteering). The rest of the time would be spent in typical retirement mode - pottering in the garden, reading and (hopefully) having a few grandkids to play with.
Although I hope I can travel afford to travel in retirement it isn’t that high of a priority. I’m 25 and travel overseas for extended periods frequently so maybe I would spend retirement seeing all those smaller places closer to home (Australia) and get all the bright lights/big cities out of the way whilst I’m young.
October 24th, 2009 at 5:01 am
This is something I’ve thought about a lot. I tend to agree with #70 - I’m more interested in achieving financial independence than planning for retirement. For one thing, I have my own business, so don’t have a fixed retirement date in mind. My aim is basically to get to the point where I can live off the income from my investments ASAP (although that will probably be a while yet). At that point I may or may not decide to carry on with my business - I enjoy it, but it will be nice to have the choice, and not to *have* to do it for the income - I guess that reaching that stage will be my equivalent of retiring. I’ll then spend much more time doing the things I already do for fun (music, painting etc), and I might do a bit of volunteering too, but I’m not waiting to do anything - as another commenter mentioned, the only thing I’m saving for the future is money.
So if/when I stop work, I’ll just be living as I am now, but with more financial security and more leisure time. I certainly won’t be bored or depressed, as I’m used to being self-motivated and structuring my own time. The freedom aspect is what appeals to me most - I can’t predict exactly what I’ll want to do in 10 or 20 or more years time, but it will be great to just wake up every day and know that I can do anything I feel like, while knowing that everything is ok money-wise - to me, that’s the essence of having financial freedom.
October 24th, 2009 at 5:23 am
For me retirement is first about getting rid of the financial requirement for working. Freedom from having to do something because you need the paycheck.
Second, I hope to do some of the things I don’t have time for now, like learning to race motorcycles. I recently spent a day with my son with those that like to run around the track and had a great time. It was great to meet these folks, a whole new group of people that like to enjoy life. There are lots of groups like this that I’ve been exposed to in life but haven’t had the time or $$ to pursue more time with them.
October 24th, 2009 at 5:23 am
My goal is to be able to make enough money writing about personal finance issues that I will be able to spend my remaining days exploring and writing about topics that are unlikely to bring in any money.
Specifically, I would like to explore in great depth why some people believe in God and others do not. I’d like to take out the stuffiness and contentiousness that often mars (in my view) discussions of these issues and converse with people about the paradoxes that I see (I believe that many who say that they do not believe act in such ways as to evidence belief while many who say that they do believe act in such ways as to evidence non-belief).
Rob
October 24th, 2009 at 6:57 am
My “retirement” plan is actually to transition to working 20 hours a week and spend my spare time pursuing hobbies and volunteering.
Most jobs I’ve had are fun in small quantities, but 35-40 hours a week kills me. I end up feeling frustrated with my work, and too burnt out to enjoy other activities. (How people work 60-80 hours a week baffles me!)
With some aggressive saving and creativity about alternate streams of income, I’m hoping to make this reality sooner than later.
It’s interesting to see how many others also describe part-time work as their ideal retirement.
October 24th, 2009 at 7:10 am
re: #65 kerensky97
I was hoping a financial person would reply to your comment, but no one has, so I’ll tackle it. There is probably much more on the subject, so hopefully others will chime in.
The drawbacks to borrowing against your 401k are huge and not well publicized.
First and foremost is psychological: If you leave or lose your job, you generally must pay the money back within a very short time period, usually 30-60 days. Talk about feeling indentured!
Second, there is usually a set payback schedule. You can make regular payments (usually deducted from your paycheck) OR pay it all off, but you generally cannot pay ahead.
Third, you withdraw your own pre-tax dollars, repay with post-tax dollars and get taxed again when you finally withdraw the money in retirement.
Fourth, your money does not work for you when it’s out of the market, so you lose out on potential tax-deferred gains as well. I checked my 401k yesterday. The gains this year have more than made up for last year’s losses and I have not done anything potentially disastrous (or taxable) with my nest egg.
Finally, if disaster does strike and you cannot repay, the taxes and penalties are horrendous, especially of you’re not 55. That’s a loss you are never likely to recoup.
I borrowed 6K from my 401k as a “bridge” between buying my second home and selling my first. While my second home doubled in value in four years and I realized a huge, tax-deferred profit, I still consider it the worst mistake of my financial life. Why? I hadn’t bargained on how trapped I would feel while the loan was outstanding. I couldn’t even think of a job change (or loss) and I couldn’t prepay the loan! After nine months of misery, I finally scraped together enough to pay the damn thing off and have never looked back. Mind you, I’m a believer in “good” debt, but not debt that is, in effect, “call-able”. They don’t tell you most of this when you call the Benefits office about a withdrawal.
There are many other reasons not to touch your retirement funds, but these are the biggies.
In conclusion, Never, NEVER borrow from your 401k!!
October 24th, 2009 at 7:28 am
Rationally, because I hope to live a long life. Truthfully, because my Dad has always told me too.
October 24th, 2009 at 8:20 am
I’m surprised nobody has mentioned fear!
I save for retirement because I am afraid of finding myself ill or injured and broke in old age. My husband and sister are both artists. Although they work hard and contribute to society, they often have little-to-no income and haven’t paid much into Social Security over the years either. As far as I can tell, they have no retirement plans of their own, so I am planning for them as well as for myself.
So my motivation to save is that I have not just one, but three people who are very likely going to depend on what I have managed to save over the years. This is a terrifying thought. As long as I am healthy I believe I will be working. I don’t expect to “retire” officially until I’m in my seventies, since I don’t want to start dipping into my savings until I really need to (I come from long-lived stock). I expect my “retirement” to happen when I am no longer physically or mentally fit enough to earn a living.
Then, unless things change, we will be all depending on the 10% of my income I’ve always saved to provide a roof over my head and enough to eat. I don’t expect to do a lot of traveling or expensive activities, but I hope I will be healthy enough to continue writing, reading, and gardening, which are my hobbies today. Medical care, I do not expect to be able to afford. When my time comes, it’ll come. I try to take good care of my health now in hopes of forestalling too much in the way of chronic illnesses, since I do not expect to be able to afford to manage them medically.
All of that sounds grim, but in fact I imagine my husband, my sister, and I as jolly old folks, living in a tidy little house full of books, cats, and amazing artwork, drinking a little home-made wine from time to time. Spending time with friends, cooking simple meals, and having lively and hilarious conversations thanks to the hearing-aid technology developed for all the rock-n-roll-damaged baby boomers in the generation before us. I believe that we are learning to be emotionally strong enough to handle the inevitable hardships that we will face in an old age without much money to soften the blows.
So that’s why I’m saving for retirement - so I never have to hear that my sister has died in a homeless shelter, while knowing I don’t even have the money to attend her funeral.
October 24th, 2009 at 8:38 am
“For the past few years, I’ve spent 60-80 hours a week writing.”
I hate it when people throw out fake numbers like this. As an attorney who actually has to keep track of work by the minute in order to bill clients, I know what it means to work 80 hours. That’s 11.5 hours a day, 7 days a week. Do you really write (and you didn’t say work, you said write) that much every day, or does that include surfing the web, checking your email, making a sandwich, etc etc? If so, please don’t belittle those of us who actually do work that hard by claiming that you’re pulling 80 hour weeks.
October 24th, 2009 at 8:59 am
I want to retire as soon as possible, and just make extra money doing exactly what I already love doing, which is giving psychic readings and helping people with hypnosis. But I want to do it living in an apartment in Istanbul! I want to live there and die there, having mastered Turkish to the point of complete fluency, plus having learned to read and comprehend old Ottoman poetry.
Ideally, I’d also like to do some teaching, but that starts to feel like work a little too quickly, so I probably won’t push too hard for those types of gigs.
October 24th, 2009 at 9:08 am
Our needs and wants are minimal. Just want to be able to eat and pay bills when due. Whatever happens after the requirements are met, is a plus!
October 24th, 2009 at 9:15 am
Hola! I’m a 56 yr-old semi-retired scientist/executive writing this from BUENOS AIRES, Argentina. (Semi-retired means I still take on occasional small consulting gigs from my home in Raleigh,NC). Am 3 weeks into a 2-month “retirement test” here. Some folks consider this a near-ideal place for retirement.
My friends say/write I’m their hero coming here, but so far I must say it’s not all that it’s cracked up to be. Yes it’s cheaper here so one can live in a nice apartment, eat out every day/night, take tango and private Spanish lessons, visit free/cheap museums, and see ballets and concerts every week, all for about US$2000/month, more or less. The people are lovely, and it feels like Europe (specifically Madrid, complete with similar air-pollution).
However it’s a bit lonely and I miss my friends and family stateside. (I’m newly divorced with 4 kids in college/high_school, well taken care of with 529 plans.) So instead of permanent retirement here I’m now thinking about doing an annual 1-3 month stay, either here or any similar place with a developed-country lifestyle at a third-world price. I feel very lucky and thankful staying healthy while watching my kids grow and amassing a nice nest egg (can tap ~$5000/month). Main challenge now is to find a “soul-mate” to share it all with, but so far no such luck. (?Where to look?)
My (long-winded) point is this… people (family/friends/soul-mate), are more important than place, or money, or lifestyle. It’s all too easy to forget that. Chau
October 24th, 2009 at 9:25 am
Based on a similar question from a blog, I actually went a little over-board, but developed something wonderful.
I actually listed out every possible activity I would like to do during retirement, the amount of time each activity will take per day, per week, per month, per year (depending on if the activity was daily, weekly, monthly or annual). Then I put a low, high and average cost to it. I also put down whether the activity was highly likely, likely, casual, or maybe supposed to happen. This actually gave me the total cost I would need for retirement, BUT, it actually answered the question that you asked above.
I am under 50 right now, and I will keep refining this 2x per year to keep formulating more of it, to define my retirement a lot better. This continues with the theme of ‘designing my life’ and then ‘just making it happen’. There are lots of pleasure filled activities like vacation, walks, social-networking, card-and-board-games, yoga, restaurants, weekend-hotel-stays-with-grandkids, buying gifts for kids, etc. So, there is spontaneity planned inside these activities, and all of them are not listed as ‘must do’ either.
Future is unknown, but planning for future is my style and it has worked so far, since it removes the ‘unknown’.
Kenny
October 24th, 2009 at 10:15 am
I didn’t read every comment here, but I agree with many of the comments: retirement doesn’t mean sitting idly in a rocking chair with creaky joints. I like how ami at 40 days to change said:
I think we need a new word for our goal. For me “retirement” generates images of ending a career, beginning leisure time, blue hair and winnebagos.
I agree with this. Retirement needs to be redefined. I have way too much energy to do nothing. In reality, there are just too many interests to pursue. I’m one of those curious people who is constantly pursuing new things because of my incessant curiosity. I don’t see that ending when I’m 65 or 72.
Besides, I plan to live to 100. I’ll need to work far beyond that 65 or 72 year “retirement” deadline!
October 24th, 2009 at 11:41 am
Since my retirement is still uncertain–heck, I can’t even figure out what I want to do for the rest of my working life, much less retirement–I’ll continue to focus on saving for it, rather than planning it.
Great post
October 24th, 2009 at 12:32 pm
I’m saving excessively for retirement because I have shopping bag lady syndrome. My fear comes from watching the lives of several female relatives who live near or on the poverty level.
October 24th, 2009 at 2:05 pm
My ideal retirement would first of all be completely debt free. It would allow me to work part-time and still have plenty of time to volunteer regularly. Also, it would give me enough flexibility to take off for a month or two every year to go on a mission in another country. How motivating to actually write it down!
October 24th, 2009 at 3:05 pm
I’ve only recently started to ponder exactly what I want to do when I retire, assuming I live long enough. I jokingly tell friends that I am working for my wife’s retirement (she is 9 years younger and doesn’t work due to her medical conditions), so saving enough to care for my wife when I am gone is a lot of it.
But beyond that, if I actually reach a place where I can retire I think I’d mostly just want a comfortable chair, a stack of books, and a good light to read them by. No TV in the room or house would be a bonus, though my wife would argue against that. Perhaps a little travel to visit our nieces and nephew a couple times a year, but even then it would be modest (stay with relatives, don’t spend a lot).
I think I would be more than content to finish my days like that.
October 24th, 2009 at 3:12 pm
#88 Jim T: I would like to hear more about your adventures!
I really like that many of these dreams are simple and affordable–reading, volunteering, hanging out with family/friends.
October 24th, 2009 at 4:47 pm
I want to have the kind of retired life my 72-year old parents have. They invested well so they debt free and have plenty of money to do the things they love: travel to visit kids, tap dance (yes I’m serious), play in bands, golf, do church work, etc. They have their house and cars paid off and don’t own any money. That’s the kind of freedom I crave.
October 24th, 2009 at 8:00 pm
Fear. My parents never talked about money and never planned for their retirement. They believed more in living for the day and not saving for the future and I saw the many downs and few ups that type of life afforded them.
I don’t know exactly where I’ll be physically or mentally when it comes time in 30 years or so for me to retire. All I want is to live frugally, travel, study the things I’ve always had a passion for (literature, history, art) and be in good health. If it takes certain sacrifices on my part to have a better life down the line, so be it.
October 24th, 2009 at 9:08 pm
I’m not saving for retirement… I’m saving to ensure my lifestyle is not interupted if my earning power changes. I plan to work until I die or my health prevents me too, albeit maybe part-time or at another job. I just don’t see myself fully retired. I have a great life that allows me enough luxuries that I’m satisfied… and I don’t want to lose that to poor planning. I’ve had a few health scares, so I know it can all go away just like that. In that event, I want to make sure I can afford decent home care…
October 25th, 2009 at 12:55 am
I just want to stop working. I am soooooo sick of working!
Why did I save for retirement? So I won’t go hungry after I can no longer work.
Thanks to the economic crash and getting canned on the cusp of retirement (just as I had realized that I was not going to be able to retire when I planned but would have to stay on my job until age 70 to recover my losses), I now have little hope of ever quitting work. At this time, to cobble together enough to stay in my home, pay for five months of COBRA and then cover Medicare, and scrape up enough to eat will require working at three obscenely underpaid part-time jobs on average 15 hours a day, six to seven days a week. And yes, Eric, I do keep track of my time, pretty accurately. None of the golden moments I spend loafing in front of the soap operas eating bon-bons is counted in those 15-hour workdays. I don’t get paid $200 an hour to practice law, but that doesn’t change the fact that what fills my hours is work.
BTW, I am debt-free (thank god), except for a small share of a mortgage payment on a copurchased house. Taxes and insurance on my house and car require a monthly self-escrow; maintenance and utilities on a 1970s house are no joke; Medicare will cost 12 times what I’ve paid for health insurance on my job–it may even be higher than the discounted COBRA to which I’m entitled. Needs for food, clothing, water, and electricity will not drop in retirement. Cost for gas will go up, because I will have to drive to more than one worksite several times a week.
If my investments recover substantially in 2010 so that I can start taking a drawdown, then I might be able to quit working…or at least not work so hard. I certainly hope so!
On the other hand, I’m not holding my proverbial breath. Anyone wanna talk about the third-worldization of America? It’s here, and some of us who thought we were firmly ensconced in the middle class are already living it.
October 25th, 2009 at 3:02 am
I don’t want to retire as such, I’d just like to cut down working hours, have a job that i enjoy, a little money to travel and no so many money worries