How does one invest for pre-retirement?

[sherylgray]

Life Insurance

I hope it is not the goal for people to work until they are 59 1/2 to draw on their retirement accounts.

Let's say I want to retire at 50, and do not want to draw on my retirement portfolio until 65.

How do I prepare for income between 50 and 65?

All opinions welcomed.

To plan or prepare for income between 50 and 65, do consult a professional or an established insurance company which can lead you to the right direction.

[Nika]

Originally Posted by mrpaseo View Post
I hope it is not the goal for people to work until they are 59 1/2 to draw on their retirement accounts.

Let's say I want to retire at 50, and do not want to draw on my retirement portfolio until 65.

How do I prepare for income between 50 and 65?

All opinions welcomed.

By learning a language of a cheaper country where you would like to live for 5 years. Some place where decent medical care is an option in a neighboring country.

[mrpaseo]

Is that 7% after inflation? I think most income stream calculators tend to be overly optimistic because they don't consider the effects of inflation and our government's monetary policy. I think 3-4% as a real rate of return on the overall stock market to be a more conservative number.

Pre-tax, figuring post tax about $400... Actually, with just my retirement income, our tax bracket would be pretty low. As $400 a month and we should be able to do some traveling (this is what we are planning for many of these years).

[mrpaseo]

To plan or prepare for income between 50 and 65, do consult a professional or an established insurance company which can lead you to the right direction.

Yes... Or I could save myself some money and do the research myself. Of course I have other venues that I use to do research, this is a financial forum, a place I go to get opinions (I did ask for opinions) which gives me ideas to research.

I have been doing my own retirement investing my entire life by doing research and getting opinions (And then researching those opinions), as for the portfolio that I put together, I had a "Professional" look at it and she said she would not make any changes, it looks great to earn 8% average (Given the funds and classes that I am holding). My only downfall is the amount I have been saving, I am a bit behind. That said, we live well below our means and we are making up ground quickly.

For example, with our contributions and the funds value, our portfolio has gone from $76,905.99 on 1 May to $89,846.14 yesterday. That's a raise in our retirement portfolio of $12,940.15 in just about 11 weeks.

I'm sure some of that inflation will burst with some sort of correction in the future but we are set to commit $1520 per month to our retirement portfolio regardless of how it goes. If the market drops, everything goes on sale and we buy more shares.

My point to all this is, the only answer to investing is not "Seek professional advice". If we would just learn to take our future into our own hands and did the research and learned a little about how to properly manage our own currency, then we can save some money and know what our currency is actually doing and how we can make it work for us instead of paying someone else for their opinions as to what I should do with my hard earned currency.

[mrpaseo]

By learning a language of a cheaper country where you would like to live for 5 years. Some place where decent medical care is an option in a neighboring country.

As it stands I have tricare for life and I don't know enough about the world to live in a different country.

[mrpaseo]

To plan or prepare for income between 50 and 65, do consult a professional or an established insurance company which can lead you to the right direction.

I think I understand it now, you must be a CPA of some sort, someone that works in the management field of others investment portfolios. You sign up for random financial websites and your best advice is to go seek professional advice. I believe it's called job security.

Am I close?

[mrpaseo]

I plan to retire as early as possible. Hopefully it will be before I can access my 401K and my Roth.

I have a taxable account that I regularily contribute to. I can access that anytime without penalty.

Also, I plan to have all debt paid off as early as possible.

Finally, I will most likely semi retire 10 years or so before I can access my retirement accounts.

A combination of having a large taxable account to draw from, having no debt, and working part time should allow me to "retire" early.

This is where I am at.

We have a retirement portfolio that we contribute to.
We are starting pre-retirement accounts (taxable accounts) next month, but we have some Precious Metals and cash on hand to cover us in an emergency.
Debt is about paid off, only HELOC left and that will be paid off prior to us being 50.
We'll see what the future holds with part time jobs.

Thank you for your reply.

[ktmarvels]

Despite the responses here to the contrary, many people retire early and much younger than the 50 you are quoting. Having your pension puts you in a much better situation financially than others would be. Some websites that are about early retirement are http://earlyretirementextreme.com and http://www.mrmoneymustache.com. I read MMM pretty regularly and I admit that he speaks peripherally about his early retirement. I've never really got into ERE, but maybe it will still help you. Now that I'm typing this I also remember coming across one written from someone who was just living off of his military retirement, I can't remember the name. So there are resources out there.

However, I too have been wondering the best way to invest and withdrawal money between when I stop having an income coming in and being able to touch my retirement accounts. Invest for dividends? The general stock market? A savings account? How much to keep liquid? A month, a week, a year? Many things to think about.

[mrpaseo]

Despite the responses here to the contrary, many people retire early and much younger than the 50 you are quoting. Having your pension puts you in a much better situation financially than others would be. Some websites that are about early retirement are http://earlyretirementextreme.com and http://www.mrmoneymustache.com. I read MMM pretty regularly and I admit that he speaks peripherally about his early retirement. I've never really got into ERE, but maybe it will still help you. Now that I'm typing this I also remember coming across one written from someone who was just living off of his military retirement, I can't remember the name. So there are resources out there.

However, I too have been wondering the best way to invest and withdrawal money between when I stop having an income coming in and being able to touch my retirement accounts. Invest for dividends? The general stock market? A savings account? How much to keep liquid? A month, a week, a year? Many things to think about.

I appreciate the links and your response. DisenySteve offered a good fund, Vanguard STAR. I have decided to start with this account (I will open it next month). I plan on having maybe three mutual funds but this one will do fine for now. I also have and will continue to build my Precious Metals holding (Currently 2.06% of my net worth) and will ensure my Emergency fund is larger than normal (Current goal is $9,000 but will probably have $15,000 cash available when we both stop working).

Thanks again.

[shaggy]

I agree, currently we pay $12 for a routine visit and $30 for an Emergency room visit. There is a co-pay of $12 on medications (I get mine free on post but there are some meds that require a co-pay) and I believe there are different costs for different meds though at this time we do not require any additional meds that cost).

I don't know how much you really want advice or opinions, because based on your previous responses you seem to have it all figured out (I don't mean that to sound sarcastic, but it seems you've put a lot of thought into this).

I will only point out that it seems as though you think your expenses will always stay where they are now, and some (particularly health care) is likely to skyrocket and it can do so well before medicare age (assuming you are in the USA). None of us knows what kinds of medications or treatments we'll need as we age.

My Ex-husband was in good health until age 53, when serious congenital neurological issues came to light. He spent many months hospitalized in a neuro-ICU, had several craniotomies, spent 2 months in a rehab facility ... and he's not eligible for Social Security Disability Insurance because he left the workforce too young.

My point in all of this is to plan for the worst case scenario.

[mrpaseo]

I don't know how much you really want advice or opinions, because based on your previous responses you seem to have it all figured out (I don't mean that to sound sarcastic, but it seems you've put a lot of thought into this).

I will only point out that it seems as though you think your expenses will always stay where they are now, and some (particularly health care) is likely to skyrocket and it can do so well before medicare age (assuming you are in the USA). None of us knows what kinds of medications or treatments we'll need as we age.

My Ex-husband was in good health until age 53, when serious congenital neurological issues came to light. He spent many months hospitalized in a neuro-ICU, had several craniotomies, spent 2 months in a rehab facility ... and he's not eligible for Social Security Disability Insurance because he left the workforce too young.

My point in all of this is to plan for the worst case scenario.

No worries, I have been thinking about this since I was 23 (Currently 40) so yes, I have had a lot of time to think things through. That said, I am always trying to research and refine the future.

You do bring up a good point and I do need to do more research for our future health options. Thank you.

[~bs]

I appreciate the links and your response. DisenySteve offered a good fund, Vanguard STAR. I have decided to start with this account (I will open it next month). I plan on having maybe three mutual funds but this one will do fine for now. I also have and will continue to build my Precious Metals holding (Currently 2.06% of my net worth) and will ensure my Emergency fund is larger than normal (Current goal is $9,000 but will probably have $15,000 cash available when we both stop working).

Thanks again.

There's a forum called FIRE that's pretty much dedicated to early retirement.

[snafu]

Kudos for having thought out this next phase of your life. I'm guessing you're busy with household tasks and plans that were put off due to time constraints. I believe retirement can get boring and suggest you examine your skill sets and how they fit to part time/self employment/volunteer work should you wish earnings or more socialization. I've observed it's incredibly important to be proactive with healthy activities.

Retirement seems to be divided into 3 stages which are roughly those newly retired, phase two whose focus is family, friends, travel and new experiences. Phase 3 seems to be over 80 y/o with health issues which requires adjustments like moving to a condo/smaller accommodation or even some level of [expensive] assisted living at the farthest end of the spectrum.

A lot of our tourists and programs for tourists seem targeted to those 70 - 80 y/o. You didn't mention where you'd like to travel but I hope 'sticker shock' doesn't require any curtailment of that plan. What do you see as the focus of your travel? I've always imagined American military to have deployed all over the world. Europe is G-D awful expensive just now and the gov't is holding down the value of the dollar against other currencies.

[97guns]

i retired 4 years ago when i was 39, my income portfolio is rental property, been working great