After spending 3 months on this popular Indonesian island I have a good grasp of costs to live here. All of these numbers are just for a single retired man. No dog. No wife. No kids. Just me. Here we go with Bali cost of living… The cost to rent on this island, in popular areas, can be absolutely amazing low and can go up as high as “are you kidding me”. For example I booked a few hotel rooms, normally referred to as a “home stay”, for as little as 7 USD per night and this included breakfast!! I Read more…
Is an “early retirement” what you really want?
I think most people would be all ears if I sat down with them and told them that they could absolutely retire early and have an early retirement in a beautiful paradise for less money than they think possible. Even if they loved the jobs they were doing, the thought of retirement is enticing to most. However, it may be not for you. I happen to be really, really good at doing nothing. In fact I think I am an expert in this field. Seriously, so many people I know are NOT good at doing nothing. They get agitated and feel lost; if this sounds like you then an early retirement age or for that matter any full-time retirement may not be for you.
Besides being bored there is another more obvious factor. I remember my own dad telling me in his 70’s that “if he knew he was going to live this long he would have saved more money”. His words are spot on for many of us. Having enough money until “the end” is an important factor and sadly far too many people actually choose suicide over being poor in their old age.
You may well indeed have a government or private pension in place but with a small savings account things can get difficult fast. If you have to pay $5,000 USD for a medical issue then that may be a good portion of your savings. Gone, and very difficult to replace. Welcome to the world of “fixed income”. It is not possible to call your government office and request overtime or a pay increase for good job performance. If I could have, I would be earning top dollar for my performance of doing very little at all!
The irony of us Baby Boomers is that we all (most) want(ed) to retire at 55. However, we will live longer than our parents (hopefully) and thus the decades of being retired is much more than our parents ever had. So more money is needed and I think a more open mind to staying busy when retired. Early retirement means no “water cooler chat” no more office social events, no more office friends and for many it means not being part of something bigger than themselves.
Early retirement means having money for yourself and may still mean supporting children in some ways in college years or early family life of the kids. An early retirement may just mean “early” in the government pension sense. A “full retirement” means a higher pension pay (maybe 67 years old) each month as opposed to an early retirement (perhaps 62 years old) which means you have a penalty for each year before your full retirement. Each country has different rules and a very important step before pulling the trigger, on starting a government pension payout, is to check the rules where you live.
For me an early retirement at 60 was a no-brainer, I was all done with my great mechanical engineering career in medical devices of 35 years, I had few financial obligations and was quite content with a cool drink under a palm tree or a coffee on some sleepy town plaza. Your lifestyle and needs may be different so take it easy in thinking about this huge decision. Best of luck to you all.
I would love to hear from you on this topic, so please consider commenting in the box below. Cheers, John.
Turning 60, a Paradigm Shift
All my adult life have looked and felt younger than the year printed on my British birth certificate. Turning 40..no big deal.. 50.. now married with 3 children.. still no big deal.
Turning 60. Ok, now THIS is getting interesting.
By 60 both my parents were dead, my 2 best friends and a few more friends along the way had also passed. I was also divorced and needed a much smaller home. My life was downsizing big time and I embraced the changes.
Plus in my 60’s, people had begun RETIREMENT; a huge shift in the paradigm of my life and for millions of others. I am speaking of “others” that are/were fortunate enough to live in a country where private and government pensions are the norm. However many of my friends were constantly checking their 401k plans and using “retirement calculators” on a regular basis. Not me, what would be the point, I would just get depressed! So how was I going to fund my life after 60? Many think they have to work until they are dead. Many others think that they would rather work that do nothing.
This website is full of ideas on how to change your thinking of what you need and where you can live for far less and still enjoy a safe and happy life.
My income as an engineer probably maxed out around 2008 and went lower from that point. However since my needs were less, since I was divorced and living alone, I was doing OK.. but unlike the US government I could see that my current lifestyle back around 2010 was not sustainable with my future pension income and changes would have to be made. A huge shift was in the wind. But how? What? Where? So my search for the best place to retire, for me, was now my focus.
Can you the reader can relate to this? Was turning the earlier decades no big deal and 60 IS?! So, what are you going to do now? Literally, what are you going to do now? I contend that many, many people agonize over which big screen TV to buy or which car to buy and give little thought to the BIG things in their lives. Things such as where do you really want to live and enjoy the rest of your life and what is it you will actually be doing while not having to work? You do realize that we get a chance at TWO lives-in-one nowadays? My parents were dead at 69 and 78, enjoying about 10 years of actual retirement. Me, I am hoping to live until 92 (I will die on a Tuesday, not sure which one) which means a whopping 30 years of not having to work.. a thing called retirement.
The mortgage on my last marital home could have supported several hundred, thousands perhaps, people living in a village in a Third World Country. All we all need is to change our way of thinking. For me I am going to think about what I absolutely can not live without. That list will include a comfortable bed with nice linens, a bathroom, a comfy place to sit, good quality food, a few happy friends and a computer so that i can continue this website :). Things that would be nice to have: a kitchen, a patio and so forth. Then a list of things I do NOT want in this huge shift in the wind: a crime ridden area, a polluted area and so forth.
So I am one of the lucky ones. First off, I am ALIVE, second I have great health and third I have a pension to look forward to. How about you? How will you make plans for your “golden years”? Does using on of those “retirement calculators” make you ill? Please make a comment below and share with us all what thoughts you have on this topic of turning 60 and retirement.
I was never a good saver, I was careful with money and how I spent it, but saving for a rainy day, nope, I was not the best saver at all. I lived for the day mostly, spending huge amounts of money on travel especially to visit my family in England and Scotland, whilst i was living in Australia, USA or Mexico. I spent a ton of money on travel just for the fun of it all, this 40 years of experience helps me add credence to this website. Right?
I never gave retirement, the idea of not having to work but still getting an an income, much thought. I never stressed over it because somehow I just knew that all would be well, that “the Universe would supply me with what I need”. Yep I have actually believed this line of thought for about 20 years now and so what we receive in our life is related to what we think we are worth and think about. Did you ever read The Secret? This book covers what I just mentioned, which for me is an amazing gift that we all have if only we knew it! I digress…
So, rushing headfirst into 60 years old, I began getting statements from the USA Social Security Administration that informed me that if my income trend stays the same from 55 until when I retire then my pension payment was going to be about $1,800. A month! Woah…. and even MORE if I delayed retirement.
I always thought that the SSA, in the USA, pension was around $500 a month and you were such a loser and totally screwed if that is all you had to look forward to in your 60’s. But $1,800+ a month at the earliest possible retirement age of 62, now THIS gives me options. I think. To think, in my 20’s and 30’s I tried like heck to get that “FICA thing” removed from my paycheck deductions. So glad I wasn’t successful. That was my retirement fund and I WAS saving after all. Lucky me.
Many people are FORCED, thank goodness to pay a tax which funds their government pension, in the USA this is FICA tax. The more you earn the more you pay in tax and the more you receive back with this forced savings account with your government in Europe, USA et al. Unfortunately, the ceiling of how much you get back as an high income earner, pre-retiremnt is much lower than those with lower incomes. See this chart for an explanation:
For example, where I worked in the USA for 30+ years this chart shows a “replaced” retirement income from the government of about 33%. I wish!! Mine is around 25% of my pre-retirement income. Low income earners seem to be better off, but not necessarily, what they get back in the case of USA is 38%, but of their low pre-retirement income. Make sense?
So what does this mean for us all? Well, this is good news for low income earners prior to retirement. Because their lower income could only support a lower standard of living, they are more likely to be happier in their retired years with their government paycheck. High income earners that rely solely on a government pension, well, you will have the biggest adjustments to make. Not at all a horrible position but your attitude and acceptance of what must be, is paramount to enjoying your golden years. In expat communities in Ecuador, Mexico and Thailand there are many miserable expats, who are often complaining about their lives and how unlucky they are with love, money and health. I suggest they look around at the people who are indigenous to their new home country and count their blessings!!
A side note: If you are young and no where near retirement age, then do yourself and friends a favour: pay retirement tax! As it turns out I have many friends who were realtors, business owners and other self employed positions. They paid ZERO FICA, which means they have zero pension from the SSA (Social Security Administration). Assuming they have zero savings then what happens to them? Its not pretty at all.
So if you are pushing 60 and have worked most of your life in the USA or most European countries, you are probably not as bad off as you think. Be willing to make some changes and sort out your priorities and your Golden Years will be waaaay better than you ever could have ever imagined possible. I know mine are. So far.