Finance and Economics > Investing and Saving

“I’m going to work until I die”

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David in MN:
I don't know. I'm on the fence. I feel bad but part of me screams, "dude, you retired with $5k in the bank?"

I do agree we should have a hard look at managed funds. Each one needs a magnifying glass. What's the load? Are you paying the dividends? Are there oddball fees?

I was particularly struck by the lady lamenting her $2k retirement account that was at one point $40k. As if she could live out her life with $40k.

The level of financial ignorance in this country is amazing. No pension, no IRA, no 401(k), no 403b, no savings and I'll be fine?

I plan to work until I die. My wife plans to work until I hit my number at which point she will read books and do family things. But we have a plan. Do these retirees even consult an advisor?

Smurf Hunter:

--- Quote from: David in MN on October 05, 2017, 05:50:32 PM ---
I plan to work until I die. My wife plans to work until I hit my number at which point she will read books and do family things. But we have a plan. Do these retirees even consult an advisor?

--- End quote ---

About a decade ago we paid an attorney for some estate planning and he commented I was under insured.  I've got overlapping term life insurance policies and a token amount for free from my employer.  Between then it pays a bit more than 10 years gross income.  I don't need my family to live like royalty, but they can pay off the mortgage, car and college tuition and coast for a few years easily.  After that they can get their own jobs if they need more :)

fritz_monroe:

--- Quote from: LvsChant on October 05, 2017, 04:39:56 PM ---Actually... I find work pretty fulfilling and plan to do some type of work probably forever.

--- End quote ---
Me too, but I believe what is meant is that I'm going to HAVE TO work until I die.

I'm pretty sure that even if I won a large amount of money that made it so I didn't need to work anymore, I'd still work in some way.

David in MN:

--- Quote from: Smurf Hunter on October 05, 2017, 06:09:55 PM ---About a decade ago we paid an attorney for some estate planning and he commented I was under insured.  I've got overlapping term life insurance policies and a token amount for free from my employer.  Between then it pays a bit more than 10 years gross income.  I don't need my family to live like royalty, but they can pay off the mortgage, car and college tuition and coast for a few years easily.  After that they can get their own jobs if they need more :)



--- End quote ---

My planner told us we were both over-insured. Um, no. My wife has a stable engineering job that basically pays the bills and more importantly gets us insurance. I am an independent investor with a couple side hustles. In short, neither of us are replaceable. I'm more replaceable because my wife could turn it over to the advisor but she loses the stay at home parent. But I've squandered going back to my engineering degree.

She's a breadwinner and I'm a 1950s housewife who yields high return and does the home repair and runs a couple businesses. They are both hard roles to replace.

NWPilgrim:
The worst thing is being forced into doing something you don't want to do, just to survive.  So it is good to have Plan A and Plan B for not having to work and be able to fully retire.

HOWEVER! A couple of other things to consider:

1)  Plan to stay ACTIVE until you die.  That may mean continue working full or part time in a physically active job, and/or regular disciplined exercise, and/or frequent recreational activities.  Being at 63 my conclusion from the downward slope is: when you stop moving you start dying, so KEEP MOVING, friend!

2)  Obscene medical and long-term care costs can drain the largest retirement fund.  Keep insured but rules can change, insurance companies can go belly up, and you can't predict what your last years will be like.  So have a plan for how you will handle medical costs in your later years.  What you decide at 60 may be entirely different at 75, 85, 95.  For instance, my Dad had a heart valve replace when he was late 70s.  Kind of borderline whether that made sense but he was always in great physical shape so he went for it.  He never fully recovered.  Turns out he was already suffering early Parkinson's (undiagnosed) and the heart trouble accelerated it and 6 months after the heart valve operation he was having difficulty walking (stiff legs, balance).  He slowly decline to wheelchair and then bed bound and after several years of exhausting minute-to-minute care from my mom he passed away.  At the end pretty much everything had shut down--except his heart was beating strong!  Not a pretty scenario the last couple of weeks and that strong heart just kept him conscious through it all.  Even with great insurance it drained a lot of their savings.

3) Early dementia can also lead to devastating financial decision errors that wipe out savings.  Have a plan for giving up control and who will take over and by what means.  Having trusted offspring helps a bunch in this regard.  Even in a great family it is shocking to see vultures start to circle the savings/inheritance long before the last breath is out.  A family trust might be one option.  Or financial accounts with one or two offspring as co-owners.

4) No external entity is 100% safe for holding your retirement funds.  I have seen relatives wiped out because their company retirement fund went bankrupt the year before they were going to retire.  I consulted at a utility owned by Enron just at the time they went belly up.  A lot of friends had their entire retirement fund wiped out (it was all forced invested into Enron stock!).  In 2008 we saw brokerage firm using customer funds to cover internal "investments" in high risk trades (highly illegal but it happened anyway).  Have a retirement plan that does not depend on one source of holdings.

Considering all of these risk factors I think it is wise to plan to keep working beyond normal retirement age.  You might start withdrawing retire funds at some point, but consider staying in the work force in some manner.  If you are in your 60s and bail out of the work force for a couple of years, good luck with getting right back into it unless you have a very special skill not dependent on age, or you can restart a small business, etc.  You might want to use this as an opportunity to get into a line of work you never would have as a career but would be fun to do with less overhead costs.

Part of retirement planning should be to be totally out of debt before you retire if not already.  Make sure that house is paid off, you have good, reliable vehicle(s) that will last many years, no credit cards outstanding, etc.  We saw several acquaintances that retired with a heavily mortgaged house and either having to sell and move into very small apartment or go back to career work.

Often a well planned retirement can go just as anticipated and life is good.  But any one of these risk factors can and do crop up and can destroy everything if there is no contingency plan as well.

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