Crossroads- Retirement and cruise or continue to work?

[jdscott3]

In a similar position

I am in a very similar position, I'm 58 and everything is paid for and I've just put in notice that I'm retiring at the end of the year. Kids are out of college and working and it looks like medical insurance will be one of my largest expenses at maybe 26K until I'm 65 (medicare will help then). My wife likes to cruise but I realize this can change any minute. Health is a big deal, my wife had a stroke 5 years ago and is almost totally recovered, but it really showed me how tenuous life is. My back is in rough shape as I was born with severe scoliosis, although I can cruise well now, it will progressively get worse. Cruising is not why I'm retiring, but it's going to be alot of what I do. Too many folks die young, life expectency is an average number, which means many die younger and older that that number. My boss just died unexpectidly at 55. I for the most part like my job (I'm a chemist) and I may work as a consultant, but I also really want to cruise the inside passage with no deadline. I really look forward to simply decided what I am going to do with my time. That's freedom to me, and I really don't want to be afraid to exercise it.
Good luck whatever you decide.

 

[RT Firefly]

Greetings,
Welcome aboard. Old chemists never die. They just fail to react...

 

[MYTraveler]

As I have approached retirement age, I also struggle with the question of how much is enough.

After taking a few months off from being in the clinic this summer (thanks to my doctor from the sailboat!) I found that I didn't miss it too much. I enjoyed not having to get up at the break of dawn to get to the clinic. And by taking my wife to Trawler Fest, I think she was able to see several boats that were nice enough that she wouldn't mind spending time on them. The big question is will she/I/both of us get bored and decide cruising isn't what we thought it would be. For those reasons, I hope to get a boat after selling off some real estate holdings, and keep it in a marina at the beach and start by taking weekend or week long excursions on the boat. Both to get experience handling it and to learn everything we need to know before heading off somewhere.

Now, the search begins for a boat that checks all the boxes while I am still working for another 2 years. I have decided it will take that long to plan my exit from my practice, and divest myself of real estate.

As to leaving a large inheritance, a friend posted something a year or so ago that was supposedly attributed to the Pope, I think. It more or less said that we should not worry about leaving a lot of wealth to our kids, as there is great value in working for what we have in life.

Well, this went on for far too long. If anyone read all of it, I hope it resonates with you. How much is enough? Depends on the lifestyle you wish to live. It will vary for each of us. I think calculating a budget that is reasonable would be the start for me.

Cheers to all,
Mark

You comments resonate with me. Here are my thoughts:
1. I, too, worry about being bored in retirement. I semi-retired about 20 years ago, but quickly found that going to work was the most consistently fun then I did. So, I went back to full time (= 50 hours / week, though probably only 40 in the "office") and don't regret it. In fairness, however, I am the kind of guy who can't really relax until about day 4 of a vacation, and doing some work every day during my semi-retirement really prevented me from getting into the relaxed mode. Perhaps I would have better enjoyed full-time retirement. But, as it is, I am afraid to retire. I do not envy the lifestyle of any of my retired friends.

2. If your kids have lived in the lap of luxury, I think it is a little unfair to expect them to be entirely self-sufficient, especially when they are just starting out. On the other hand, for some kids, the expectation of significant support / inheritance is demotivating. I have seen plenty of examples of parents with substantial means not getting the balance right. And then there is the practical problem of spending your money so that you exactly run out on the last day. Short of buying annuities (which I would never do), it really can't be done. So, my thought is that if the cost of your lifestyle is 8% - 10% of your net worth, and if your assets produce good cash flow, then personally I would not worry about dipping into principal, particularly not for someone who retires at 60+.

 

[cardude01]

So, my thought is that if the cost of your lifestyle is 8% - 10% of your net worth, and if your assets produce good cash flow, then personally I would not worry about dipping into principal, particularly not for someone who retires at 60+.

I hope you are not saying it’s possible to live off a portfolio at an 8-10% withdrawal rate, because that’s not going to work. Maybe 4%, and even the “4% rule” is questionable with future returns forecasted to be possibly lower than people people are accustomed to.

https://en.m.wikipedia.org/wiki/Trinity_study

 

[MYTraveler]

I hope you are not saying it’s possible to live off a portfolio at an 8-10% withdrawal rate, because that’s not going to work. Maybe 4%, and even the “4% rule” is questionable with future returns forecasted to be possibly lower than people people are accustomed to.

https://en.m.wikipedia.org/wiki/Trinity_study

No, not saying that. I am saying for a 60 year old with an expensive lifestyle, it would be near impossible to exhaust the principal. That said, I do think it is very possible to get better than an 8 - 10% after tax return, over the long run, for people with sophistication, judgment and access to non-public investments. But that becomes a lot like being an investment manager, which is a little inconsistent with retirement. My personal intention, if / when I retire, is to sell most everything that requires management (including individual stocks) and to invest that in a few index funds.

 

[frndrfoe]

If your kids are pretty much on their own and heading for success anything you leave them will be a nice bump, if they are not it will evaporate seemingly overnight and not make a difference in the long run. Many lottery winners are no better off for winning a one time jackpot.
That may sound grim but my inheritance was modest and really didn't make much of a difference in my life. I would rather my parents had more rest and didn't go to the grave working.

 

[cardude01]

I’m not arguing with you, but here’s a Monte Carlo run of possible scenarios of someone drawing 8% per year from a 2 million dollar portfolio. By year 10 some of the possible scenarios have the portfolio at zero, and by year 16 over half have the portfolio at zero. So a 50% failure possibility. So yeah, it could be done, but the odds aren’t great.

 

[MYTraveler]

I’m not arguing with you, but here’s a Monte Carlo run of possible scenarios of someone drawing 8% per year from a 2 million dollar portfolio. By year 10 some of the possible scenarios have the portfolio at zero, and by year 16 over half have the portfolio at zero. So a 50% failure possibility. So yeah, it could be done, but the odds aren’t great.

View attachment 81887

I will have to look at that when I have more time, but it seems to show the removal of a fixed constant amount, which is not what I am thinking -- I am thinking take 10% of principal (as it changes from year to year) in good years, 8% in bad. In that way, it will never get to zero. Also, my thoughts work better to a larger portfolio. So, my thinking (which pertains to most aspects of my lifestyle) is that substantial expenditures need only last for 15 years, or so. I am also wondering what average return they model, and with how much volatility -- as I mentioned above, some people can easily outperform returns available on public stocks & bonds.

 

[cardude01]

Yeah sorry, it was based on 75% in low cost stock index funds and 25% in bond funds.

 

[Wxx3]

This is easy. All those that say "go for it" don't have any of your risk or responsibilities so that response is easy for them. The key point you made was "there would be nothing left for the kids". I believe you have a certain responsibility to your children to provide a little security for them, even if they are financially on the right track. If I were you, I would commit to a healthy life style that involves lots of exercise so if you did retire in 3 - 5 years you will be more fit than you are now with lots of years ahead of you. By that time your kids will also have a modest trust in their back pocket and you won't have to live with any regret for not providing better for kids and grand kids. You'll probably need a few years anyway to get ready for long term, long distance cruising. Everybody likes to live by the aphorism carpe diem and that's a nice notion but not so wise when it's at the expense of practical considerations.

I'm rarely this opinionated about such a personal issue but you did ask. Best of luck with whatever choice you make.

Cheers, Jeff

Maybe you should read what people wrote before making a comment like "talk is cheap".

There are a ton of heart felt comments here, one in particular, right before yours.

Most everyone on this forum have made life changing decisions one way or another, and have been candid in their responses.

 

[ranger58sb]

2. If your kids have lived in the lap of luxury, I think it is a little unfair to expect them to be entirely self-sufficient, especially when they are just starting out. On the other hand, for some kids, the expectation of significant support / inheritance is demotivating. I have seen plenty of examples of parents with substantial means not getting the balance right.

Just using that as a springboard for an oblique comment:

I see generational "erosion" in self-sufficiency, as parents try to make their kid's lives better than their own.

There are probably other factors at work, too -- of course -- but I think one symptom I've noticed in reading is 20-30 year olds still living with their parents, or at least still living largely on their parents' dime.

-Chris

 

[cardude01]

There could be some erosion in self sufficiency, but IMO one of the big reasons you see kids living back at home is because it’s gotten harder to get started and get ahead. Back in our day we had stronger unions and better blue collar jobs, cheaper college education so we didn’t have to bury ourselves in student loan debt, less global competition for jobs, and healthcare we could actually afford.

https://humbledollar.com/2018/09/lucky-one/

 

[jdscott3]

Big difference now is the cost of college, I think we can thank our bloated liberal college admin and professors, other than college cost I don't see the kids have it any worse. There is a big shortage right now for skilled labor, welders, CNC, controll specialists, even forklift and truck drivers. I graduated from high school in Northern MI 78, at the height of a recession that seemed to go on in Michigan forever. I worked maintenence and painting jobs for 10 years putting myself through college graduating in 88. If young adults today would delay gratification, not buy a new truck as soon as they get credit, and treat every job as if they will be there forever, they will have the same chances we had. Of course health and ability to learn are important now as they were then.

 

[cardude01]

Great point. Too many of the current crop of young folks have been conditioned to believe they need a four year college degree to get ahead. As you point out that’s not always the case.

Financial literacy and delayed gratification also very important.

 

[Nightsky]

One thing to consider is the age of your children. Assuming you live long enough to have enjoyed years of cruising after your retirement, and you still have money left over at the time of you and your spouses death, then your money will more likely be padding your children's own retirement. How responsible do you feel for that?

 

[dhays]

One thing to consider is the age of your children. Assuming you live long enough to have enjoyed years of cruising after your retirement, and you still have money left over at the time of you and your spouses death, then your money will more likely be padding your children's own retirement. How responsible do you feel for that?

I don’t mind padding my kids retirement if I end up dying earlier than expected or my investments do better than expected. The other option is to help out my grandkids. If I end up with more $$ than I need and my grandkids still haven’t completed their education a 529 is a great option. It expands the options open to the grandkids and helps the kids at the same time.

There is also charitable giving. I already give a healthy amount of my income away, and if I end up with extra when I die, then there are places that can make good use of it.

 

[Heron]

The last dollar on the last day.....My Dad's mantra and he almost made it. I didn't expect his money, and my kids don't expect mine. If you raised your kids well, they'll be fine and make their own way. If not, well you can be wracked with that guilt and plan on leaving them YOUR retirement dollars. My kids are gonna be fine, with or without any money that may be left in my estate...

 

[jeffnick]

The last dollar on the last day.....My Dad's mantra and he almost made it. I didn't expect his money, and my kids don't expect mine. If you raised your kids well, they'll be fine and make their own way. If not, well you can be wracked with that guilt and plan on leaving them YOUR retirement dollars. My kids are gonna be fine, with or without any money that may be left in my estate...

Just enough left to tip the nurse on the way out.

 

[Pack Mule]

The timing of of this thread is right on. My updated Social Security payout schedule came in the mail today. When I went home for lunch today Joy informed me that I was going to need to work full time until I’m 70 or she could look for something in the basement to disable me with .

 

[Irish Rambler]

All I can say is to go 'SKI-ING' and spend the kids inheritance. That's what mine told me.
My wife came on like a tornado, all hot and wet and she left like a feckin tornado, emptied the bank and took the roof.
I was penniless but in good health and damned if I'd be put down.
Back on my feet with a successful business behind me and sat down for a chat one evening with the we'ans.
I told them I'd given them my working life to have the very best of family life and the highest education.
I'd worked hard to make a new successful business and now its my time.
They simply said we love you dad, its always been your dream, so go for it.
We as a family have never looked back.

My point is that your health is your wealth, if its gone your bucked, no matter how much money you have in the bank.
When you retire you don't need to be in all the clubs, have the latest gizmo, new car etc.
Less is More.
You have but one life so live it.

 

[Irish Rambler]

Sorry to hog the post.
When I went to Ireland I had a fiver in my pocket, I'd given all my army savings to my brother who lived on the home farm to buy a tractor, truck etc etc etc.
If you've been keeping your kids in the high manner to which they have been accustomed you will find they have no real appreciation of the value of money as in work and reward.
Because they'll have no sense of value of money they will get in difficulties, DO NOT pull them out of the brown sticky stuff, but guide them, where they went wrong and how to put it right.
It may seem hard but its the best lesson they'll ever learn.
Remember there are no pockets on a shroud.

 

[BandB]

Wifey B: Take all this thread with a grain of salt. Well, perhaps an entire container of it. Everyone has good intentions but no one can put themselves in your situation and most importantly in your head. We can't think like you or feel like you. We can attempt to have empathy but that's it.

What would a good counselor do? They'd ask you questions and have you give them your thoughts which they would then play back to you. But they would never advise you what you should do. They'd simply help you think through it and facilitate you deciding.

So consider all our responses like that. But ultimately, you havee to make a choice based on your values and goals and what makes you happiest. If you're going to feel guilty about not leaving money for your kids then no one else can tell you it's not important. They can only say it wasn't important to them.

We retired early. We were in a position to do so due to some extremely good luck. My hubby's boss at first was in disbelief as he's still working away at 88 years old but his work is his favorite hobby, outside of perhaps bridge. Then he thought for a second of us and quickly said "I can see you two doing it. You're just crazy enough to do so and never look back." Yes, he did use the word "crazy" in referring to us as he knows us well. He also makes fun of the fact that starting a small hobby business went crazy and grew for us.

But that shows too that you don't know when you make any decision what will happen in the future. I knew hubby had to have some business hobby. He knew I had to have some involvement with education. Our "parents", the ones we adopted as such, sold their hotel about three years ago and they and our "sister" and "brother-in-law" consulted and were going to just buy a small hotel or something. Nothing was ever quite right and they didn't do anything. They just bought three hotels, one much larger than the one they had for decades and they're just back in their own little heaven. They missed the guests but didn't like working for others. See, we retired happily but they just weren't as happy retired.

The OP has good knowledge of where he is and stands. Now must just figure out where it all leads and follow some combination of mind and heart. Best of luck doing so. Also, no decision is irreversible. If you decide not to retire now doesn't mean next year is the same. If you do retire, doesn't mean you can't go back to some type work.

 

[cardude01]

Irish: “Your health is your wealth”

I like that a lot. I’m not old yet at 53 and still in decent shape, but I can feel it coming every once and a while. Sometimes things hurt that never did before.

 

[Lou_tribal]

Sorry to hog the post.
When I went to Ireland I had a fiver in my pocket, I'd given all my army savings to my brother who lived on the home farm to buy a tractor, truck etc etc etc.
If you've been keeping your kids in the high manner to which they have been accustomed you will find they have no real appreciation of the value of money as in work and reward.
Because they'll have no sense of value of money they will get in difficulties, DO NOT pull them out of the brown sticky stuff, but guide them, where they went wrong and how to put it right.
It may seem hard but its the best lesson they'll ever learn.
Remember there are no pockets on a shroud.

Slight thread drift ahead...
Hope you went ok through bad weather your area. Looks like last day has been a hell of a day in Narbonne area.

L

 

[RT Firefly]

Greetings,
115 posts now. Perhaps it's time to simply...

 

[Bacchus]

I would never try to tell someone how to raise their kids, howver....
I am forever grateful that my parents taught us (3 brothers)...
A great work ethic
The power of saving and THEN spending the savings on whatever you choose
The importance of education and their willingness to help us gain an education... if we were also vested in the mission... shared costs and worked hard for good grades.
We never expected a free ride nor a sizable inheritance... we were all successful professionals (engineers) that earned a decent living, saved and are enjoying a comfortable retirement.

 

[Irish Rambler]

Thank you very much Lou for your kind thoughts.
We appreciate them immensely.
Its very bad in the region, fortunately we were not in the 'eye of the storm'.
The canal du Robine that passes through Narbonne crosses the river Aude about 15k's North of us, although there are guard gates to prevent the river flooding the canal some of it went around plus the surface water from the torrential rain and like everyone else we got major flooding.
Fortunately all the boaters worked together to ease the ropes both on our own boats and those which were unattended, some boats were nearly at 45' angle its a wonder the cleats didn't rip out.
It wasn't easy working waist deep in floodwater but the adrenalin kicks in and you find a kinda turbocharged inner strength.
Thankfully all the boats were saved from damage, as the floodwaters slowly subsided we were just as busy easing the boats back into the canal to prevent damage to the hulls from the fixed bollards.
The canal is still high but manageable so we've kept a watch for further flooding but the worst is over, now to get a well earned shower, hot meal and some sleep before we start the clean-up operation.
I'm not a guy to chew the altar rail but I didn't notice any atheists when the going got tough.
Just like here on TF, the community spirit of all the boaters working together shone through like a ray of sunshine to overcome adversities, it makes you feel humble and proud to have such friends.

p.s Who said retirement was boring ?
You've gotta be joking I've never been so busy I don't know how I ever found time to work !

 

[BruceK]

On retirement. There is an investor here who, with a partner, many years ago started a company selling vacuum cleaners,called Godfreys. It built up a network of branches and was an industry leader. Then it was sold to one of those corporate raiders who rip anything valuable out of it and resell it. They did,it became a public company,later it looked like going under,so the original owner made a bid for it, and I guess took it private again. Funny thing is, he`s 99 years old and living in a retirement home. And I`ll bet he gets it turning a dollar again.
A principal reason for Aussie parents and families (aka The Bank of Mum & Dad Ltd.) being asked for help is house prices. Although they have peaked and are edging lower, the average Australian price for a house is still mid $800s,and honestly that doesn`t buy you much in Sydney. Kids need help to get into property ownership, be it cash or (uhoh) guarantees. But they also expect to live the good life, nice cars,overseas holidays,smart clothes,jewellery,expensive restaurants and bars, etc, for many saving for a house is not a priority. So they either get help, or we develop a nation of renters rather than home owners. It can be viable economically not to own provided they invest in other ways but a lot of the time, Mum & Dad get tapped for help.

 

[Irish Rambler]

Your right on the nail there Bruce.
Unfortunately being Irish I have short arms and deep pockets and although I watch them like a hawk my we'ans know they have to fix cars not buy new ones, holidays for them are cheapies but they have way more fun than we have in a 5* foxhole !
Smart clothes, jewellery and expensive restaurants are only for very special occasions and not the norm, their first houses were virtually hovels but by renovating and trading up they have very nice houses now and they realize with hard work they make their own money apart from their daily work.
I freely admit to being 'Dads' bank, they have to pay it back with low (no)interest

 

[Simi 60]

.
A principal reason for Aussie parents and families (aka The Bank of Mum & Dad Ltd.) being asked for help is house prices. Although they have peaked and are edging lower, the average Australian price for a house is still mid $800s,and honestly that doesn`t buy you much in Sydney. .

Not quite

Its really only those who insist on staying in Sydney who have an issue.

If you come to Brisbane for example you can get a decent house with a $4 in front of it, heck, if you can live a 1 hour train ride from the Brisbane CBD in Ipswich which is a city in itself you can get them with a $2 in front.

If you go major regional I can sell you a house a few minutes walk from the CBD with a $1 in front of it.