We already have ideas on what we want to pick up more at that age, like working full time for a non-profit / charity organisation who in general couldn’t afford persons with our skill set, so actual retirement will have to wait longer .

After a bit of thought, I think “downshifting” does work in a couple of different ways.

1) The natural tendency is to think that downshifting means slowing down, which is what people associate with retirement.
2) If it actually means changing your job to something that is more meaningful to you, the term also works. Downshifting when driving a standard transmission means putting it in lower gear so that you can accelerate faster. So you may be downshifting to be more productive, which I think is pretty cool.

Cheers,

Just run the numbers. Use a spreadsheet, figure out the various cash flows, put in some conservative estimates for interest rates (or just download any of the dozens of free spreadsheet solutions out there for pretty much any financial decision) and voila!

My husband and I are both 28, and we laugh every time we hear this one. No, we won’t receive Social Security, even though we’ve both been paying into it since we were teenagers.

I’ll be interested to see what you write about it, but I simply don’t believe it… and I can’t think of one of my peers who expects SS to still be around when we’re retirement age. Call us bitter.

Retirement to me is not about wavering and doing nothing. To me its about pursuing my life passions without going to work for THE MAN. My passions are writing, drawing, graphic design, spending time with friends, family, & volunteering. I also like to travel occasionally.

I don’t get the person who wrote that he sees red flags when people maximize their account, if a person maximizes their account for 40-50-60-70 years of their work years, what’s wrong with that?

My parents are able to retire because they didn’t have debt & have always been money savvy. They don’t have to worry about downsizing because they’ve always been money savvy and no they’re not miserable. They didn’t go crazy with their money in retirement either. If you make financial decisions throughout your life then you don’t have to worry about downsizing your lifestyle.

It must be possible to save for retirement because my parents did it and so have other savvy people. Seriously how much stuff can a person own, even if you have a family, you don’t need to buy entire department stores for your family.

There must be balance and boundaries there somewhere, where your family feels like they have their basic wants, basic needs, and occasional luxuries met without feeling deprived.

Most people don’t even use most of what they buy, most of us buy too much stuff. If Americans could only cut down in their spending then we can find out that hey we can retire earlier or we can even retire at all and not have to work ourselves to an early grave. Just saying.

Tools like Quicken (planner) & ESPlanner are great for long term planning and answering the “what if” questions. For 20 years they (or tools like them) have kept me sane through the ups and downs. (See hubpages.com/hub/Quicken-Is-A-Great-Project-Management-Tool for specific examples).

I hope that I can work a long time, but I won’t mind if “work” is something other than reporting to a company 5 days a week.

I’m sort of with Tyler at this point. My hub and I each contribute 6% to our 401ks, but at 29 and living in an expensive city, any more than that would slow down our process of saving up a down payment (which is already at a crawl).

This happened with my parents – my mother’s family was generally long-lived and her parents died at 96 and 101. My father’s family was more mixed in longevity and his parents died at 62 and 73. So they chose the survivor-benefit pension option. My father is now 80 and healthy (still hiking!); my mother died at 75. You just never know… It took us a few months to realize & to fill out the paper work, but his pension payment is now higher than it used to be.

http://matterhornassetmanagement.com/2010/08/16/there-will-be-no-double-dip/

I’m in a similar situation. Husband is 8 years older and has a measurable pension – while mine is miniscule. I’ve entered shorter life spans for him in those calculators that let you do that and noted no survivor benefit. I’m not sure if the T rowe Price or the motley fool one lets you do that.

Also if he hasn’t already taken his pension, check to see about survivor benefits. My husband took a somewhat smaller pension so that I would get a survivor benefit. This may be an option for you as well.

Another thing that I do is keep a spreadsheet with expenses and calculate how they’d be different when one retires, when both retire – and finally for me alone (fewer ball game tickets, one car, and half as many theater tickets…). Then I can play with those numbers alone along with the reduced pension. Also you may get his level of social security (rather than your spousal or perhaps lower amount on your own).

The age difference is a complication for a lot of things related to retirement and it seems to be rarely discussed.

Just what do you Mean by That?

Just because the Government puts limits on PreTax contributions to retirement account, that is not all there is to Retirement Investing.

Maxing out the 401K/IRA/ROUTH are the BARE minimum you should do cause if that that’s all you are doing for retirement you will be in for a big surprise latter in life.

I have been at those IRS Maximums for 25 years now and still have another 15 years to go before thinking about retirement.

I cofounded a startup that hasn’t monetized yet. I put about 50 hours a week into it on top of my other job, plus the daily work in my life. If I was “retired”, I could put more focus on the startup and get it launched quicker.

I’m in my very early 30s and I think retirement is a tremendously important question, especially for someone young. Far more important than buying a home and much more expensive than having children. I’ve felt that way gee, since I graduated from college and maxed out my IRA at 3K for the year.

I like being able to live life as a journey precisely because my future is taken care of. And current me is constantly happily surprised with decisions that previous me made in terms of money. I will not have to give things up in the future and I will be able to have unimagined freedom, some of which I have been enjoying now, in my early 30s. All because I started caring about future me 10 some years ago.

LOVE the retirement articles. Keep ‘em coming.

Re: the word “retirement”– not well-defined anywhere (as discussed in previous retirement article)… but now I’m more interested in Financial Independence. Still, I understand that by far the majority of Americans will be in a situation that requires drawing down Social Security and downshifting, either because they want to or because they have to.

Much more relevant questions to me personally are things like:
“When will you be able to buy a home?”
“When will you be able to have children?”

The home question is especially relevant to me — retirement advice is almost always directed toward people who already own homes. What if you’re trying to save $100,000 so that you can put 20% down on a home? What if you’re saving 20% of your income every month, but only 1/4 of that goes towards a retirement account, and the rest goes in the home down-payment fund? Will you tell me 5% is inadequate retirement savings? Can you tell me how on earth I’m supposed to save $100,000 *without* doing something like this?

I’m sick of retirement — there are more pressing issues. If life is a journey, then asking about retirement is like asking me what I’m going to do when I get home at the end of my trip. I don’t know, nor do I really care — I’ll worry about that on the plane flight home. In the meantime, I’d like to enjoy my journey.

One last thing to point out is that I simplified the above analysis by ignoring taxes. In real life, depending upon what type of account your savings are in (Roth, traditional IRA, or taxable), you’ll likely have to pull out more than $X per year to provide $X in after-tax money to spend. Exactly how much more depends on your tax bracket.

I’m not saying that people with purpose will automatically lack balance. It seems to me that people with great purpose often have better balance, because they have a focal point around which they can balance.

So perhaps the trick is not to seek the happy medium, but rather to focus on the goal. Maybe a bit like riding a bike: keep your eyes on where you want to go and the balancing will take care of itself.

I understand your argument against the notion of retirement, but what word would you use in its place? Is downshifting good? For many people, retirement is a goal. And it’s what the rest of the world uses to describe “life after work”. I’m not opposed to using a different word, but I just don’t know which word to use…

The typical rule of thumb for how much you can safely take each year from a portfolio is 4%.

So to use that rule, let’s say (ignoring taxes for the moment) that you need $40,000 of income per year if your husband passes away. Subtract from $40,000 however much you’re expecting social security to pay — thereby giving you the amount of income you need to provide each year from your investments. Then divide that number by 0.04 to get a ballpark figure for how much you’d need saved to be “safe” if your husband passes before you.

Of course, as you get further into retirement, that 4% number grows. (Reason being that an 85 year-old can obviously withdraw a greater percentage of her portfolio per year than a 60 year-old can without having to worry about outlasting her money.)

Alternatively, if you feel that that a 4% withdrawal rate won’t be high enough to provide the income you need, you may want to consider annuitizing a portion of your portfolio. (I’ve written a bit more about that topic here, in case it’s helpful.)

I think we agree on the main principles.
1. Yes, I agree that saving is necessary.
2. This comes down to the definition of retirement. To be a bit pedantic, I would say the case of Doug Short is not one of retirement. He just changed his job.
3. She can’t get a job, but she created her own. Kudos to her!

What I’m asking you to do is to stop using the word ‘retirement’ because of its connotations with a sense of finishing the journey and stopping productive work. Continue to encourage to save, but save for other purposes:
- to get out of debt
- to build a bit of a safety net
- to change jobs

But don’t save for retirement! It’s not worth it.

Your ideal only works if your “life purpose” is one that can be monetized. If not (and I expect for a lot of people it is not) then people need alternative funding for their dreams – that is their retirement savings.

A few comments:

1. I agree that retirement isn’t the best idea for many people. In fact, I wrote about it here: http://www.getrichslowly.org/blog/2009/07/16/what-if-you-dont-plan-to-retire-save-anyhow/.

2. That said, I know plenty of people who have retired and absolutely love it. For example, Doug Short, who spends his new free time operating this successful site: http://dshort.com/. Put another way, if retirement is such a bad idea, why do most people in their 60s and older do it?

3. The woman profiled in this article would agree with you: http://moneywatch.bnet.com/saving-money/blog/devil-details/unemployed-at-83-retirement-is-dead/2018/. Unfortunately, she also can’t get a job. I hope she’s built up enough savings over the years.