I am realizing I am atypical here

[Lukim]

I am definitely atypical here.

I am a boomer (age 56).

I got to a stage of FI about 6 years ago - but I still continue to work (basically full time).

I am frugal in somethings (eg, I don't have a flashy car, travel business class or wear designer suits), but seem to freely spend money on other things (I like to live in a nice place, send my children to private schools).  I estimate in retirement, I would spend about US$140,000 a year).

So although I am atypical, I do like to learn from others and read what others are doing to get the most out of their lives.

[okonumiyaki]

45 year old here.  3.2 million USD in savings, but for various reasons, no pension or property, as have been on expat contracts just about whole working life.

FI, if we moved, but my wife is not keen to move...  Oh well.

One thing that I am cautious on is inflation - e.g.prices for a specific thing I was looking at are up 49% since 2004, annual average of 3.4%.  Inflation proofing the future is very expensive.

My father ER'ed at 51, and he is my inspiration - heck, he built a DIY indexed link gilt ladder almost 30 years ago that still is in place for my mother.  They were always frugal - my mother called up yesterday annoyed that one of her investment trusts was moving to a 0.5% annual fee, so she is switching to a provider that is flat fee... 

[coppertop]

In reading through and seeing that most people who post here are maxing their 401(k)'s at $18,000, I realize to my chagrin that I am an "old person" here (at age 59).  Are there no 'oldster' mustachians?  Are the Baby Boomers either so rich or so clueless that they don't need to learn and practice these principles too?  I look around at work and realize that we have people who have been slaving here for 40 years or more who are beyond full retirement age and still have to work to survive.  It's depressing.  I, myself, am hoping to be out of here by age 62 at the very latest.  I will do it sooner if I can.

Sorry if this is obvious to everyone else, but what is the point you are making about maxing out 401Ks and age?  Do "old people" not max out their 401Ks?

The people I know IRL don't.  I prepare payroll and I know what everyone makes and how old they are ... and very few of them max out their 401(k)'s.  I am one of the few here who do ... and I am not one of the highly-compensated professionals; I am a plebe.  I find it amazing that people making several hundred thousand a year don't take advantage of that tax benefit.

[Metta]

In reading through and seeing that most people who post here are maxing their 401(k)'s at $18,000, I realize to my chagrin that I am an "old person" here (at age 59).  Are there no 'oldster' mustachians?  Are the Baby Boomers either so rich or so clueless that they don't need to learn and practice these principles too?  I look around at work and realize that we have people who have been slaving here for 40 years or more who are beyond full retirement age and still have to work to survive.  It's depressing.  I, myself, am hoping to be out of here by age 62 at the very latest.  I will do it sooner if I can.

Sorry if this is obvious to everyone else, but what is the point you are making about maxing out 401Ks and age?  Do "old people" not max out their 401Ks?

The people I know IRL don't.  I prepare payroll and I know what everyone makes and how old they are ... and very few of them max out their 401(k)'s.  I am one of the few here who do ... and I am not one of the highly-compensated professionals; I am a plebe.  I find it amazing that people making several hundred thousand a year don't take advantage of that tax benefit.

I suppose you are right. For years my husband and I believed that we were behind everyone else because we made less than everyone we knew for most of our lives. Sometimes a lot less. Now that people know that we have enough to allow us to retire soon, people have started talking with me about their situations. I've been astonished at how many of them do not max out their 401Ks. Even more astonished at how many do not even put in money to the meager amount of the company match or who think that getting to the company match is "maxing out" their 401K.

Any idea why this is the case? Particularly for employees who are paid well?  (It is pretty obvious why the poor do not max their 401Ks.)

[Midas]

42, FIRED in 2014, never ever maxed out my 401k. I even knew I should but felt like I didn't want to lock away THAT much money. 

I made the mistake of not maxing it out because of fears of my money being "locked away" and about the 10% early withdrawal penalty.

But, doing the math on it, even with only a few years of compounding the extra money you didn't pay in taxes for someone in a 25%+ tax bracket moving to a lower tax bracket in early retirement handily wins out even WITH taking the 10% penalty. You also aren't paying capital gains tax on the dividends while it grows in the account.

It's even better when you realize you can make this one of the last accounts you draw down, and for some they can just leave it alone until the 10% penalty goes away.

[fields]

I'm so glad to see this post!  I'm 50 and just starting to save for retirement.  My partner and I need to save $300,000 over the next twelve years, I think.  We will both also get pensions.  I could stop working sooner but still need to pay off student loans--lots of them.  The thing that trips me up in planning is that our pensions will not be adjusted for inflation.  Sometimes I wonder if people just keep working because figuring stuff like that out is just too difficult. 

[Unique User]

45 here, so although born in the sixties I am officially too young to be a boomer.

Same here, proud to be part of the slacker generation!  DH is 53 and we have only had 401ks for the last 6 years for him and 3 for me, but try to max them and every other savings vehicle we can.  We spent several years working for ourselves in resort towns, but since we only worked six months out of the year we had lots of time to play.  We contributed to IRAs most years, but we made much much less than we do now (except for one year that we hit a jackpot) so didn't save as much.  We're playing catch up right now, but as soon as the kiddo's college is paid for, ~6 years, I'm done with full time work.  We both like working though, our hope is contract work here and there.  My calculations show we'll hit ~1.5M in six years so with working we'll have plenty of cushion. 

[iris lily]

Boomer here, age 60.

Really, I didn't have an exact FIRE plan, both DH and I just saved a lot of money because I wanted to be able to bail on our jobs if they became too annoying.

Last year I started to hate my job, so I am out in just a few weeks. We will have plenty of money but I will continue to worry about that because it's ingrained in my psyche.

I very much like the challenges of living simply and having frugal fun. It takes more imagination than participating in consumerist frenzy.

[capital]

My parents lived modestly but perfectly well, probably a product of relatively modest upbringings (my mother having been one of many children, my father having lost his factory worker father at 13). Then they lived a hippie-ish lifestyle in the 60s/70s, with food cooperatives and unsuccessful attempts at gentrification (they were in a city that Reaganomics vacuumed money out of, rather than seeing money dumped in as on the coasts). I grew up in the 90s in a nice, simple house that they never upgraded, we only ate out on special occasions, and we mostly took road-trip vacations. The least 'Mustachian' thing they did was driving to work, but they did so in modest cars they they have kept 10+ years, and made sure we lived in a neighborhood that was pretty walkable otherwise.

Neither of them are fully retired but they both started working only a few days a week while I was in college and they were in their 50s. I think they both work mostly because they find it meaningful and satisfying at this point. When telling us of estate planning, they said they have accumulated a very substantial retirement fund that they expect my sister and I to donate to charity if they were to somehow pass early.

[capital]

When we graduated high school it was into recession with bank failures, the S&L crisis, and threats to end social security and recommended cuts to just about every social safety net. We very much felt that we could never get the same generous retirement funds previous generations got and that we were on our own. By contrast, my husband's mother graduated into a time of great prosperity.

My husband and I will not struggle with our retirement. We straightened ourselves out in the 90s, got rid of mountains of debt, and began saving with a plan to retire when my husband hit 55. We have enough now to retire, five years early. And it's not because of generous employers. It is because we got the big things right, by living for years in small apartments with no car while investing 20% to 50% of what we made.

There have been recessions before, but the last 15 years of hard times have been different from anything seen since the 30s:

Obviously the same ol' formula of spend much less than you earn works, and it's easier to invest and good advice is easier to find. It's also easier to save and live modestly in a climate of austertiy. I'm also fortunate enough to be in an industry that pretty much ignored the recession and rebounded with tremendous speed.

But I also suspect a lot of us young folks that are stashing are doing so because our prosperity feels like it might just be a bit more tenuous, and the bottom's further down. Bob Shiller (of the home-price index) wrote an excellent piece on that today:
http://www.nytimes.com/2015/02/08/upshot/anxiety-and-interest-rates-how-uncertainty-is-weighing-on-us.html?smid=interbutt

[deborah]

What a wonderful misleading graph!

The fact that it is missing 46 lines means that the variation between the top and the bottom is very little.

[capital]

What a wonderful misleading graph!

The fact that it is missing 46 lines means that the variation between the top and the bottom is very little.

Janet provides us with many different ways to display said graph:
http://research.stlouisfed.org/fred2/series/MEHOINUSA672N

[MoNoGro]

Great thread!  Will be 52 in June. Thankfully I stumbled upon MMM 4 months ago when DW (54) kept asking when she could retire.  Wish we had saved more and spent less in our 30's and 40's, we'd be FI if we had.  We also got a late start on our family and have two busy teens to get through school. I suspect I'll be working for about 6 more years. 

The stories on this site have inspired me to rethink our lifestyle -- better late than never. Making several changes to stop the bleeding: taking lunch to work rather than eating out, ditching cable, moved several investments to Vanguard, and looking to fire my investment manager soon.  While I am convinced frugality is the right path, my family is a little slower to embrace the concept.  DW thought I was a little crazy, but I rode my bike 9 miles from work the other day (yes we should move closer, but that isn't going to happen any time soon). 

[deborah]

That is an even more misleading graph! The first should look like the attached (hopefully people can see it now!), which shows there is little movement.

[Metta]

There have been recessions before, but the last 15 years of hard times have been different from anything seen since the 30s:

Obviously the same ol' formula of spend much less than you earn works, and it's easier to invest and good advice is easier to find. It's also easier to save and live modestly in a climate of austertiy. I'm also fortunate enough to be in an industry that pretty much ignored the recession and rebounded with tremendous speed.

But I also suspect a lot of us young folks that are stashing are doing so because our prosperity feels like it might just be a bit more tenuous, and the bottom's further down. Bob Shiller (of the home-price index) wrote an excellent piece on that today:
http://www.nytimes.com/2015/02/08/upshot/anxiety-and-interest-rates-how-uncertainty-is-weighing-on-us.html?smid=interbutt

I agree with both your points that there have been recessions before and that the 2008-2009 recession was particularly bad and that we are seeing anemic, recovery with the gains very much to the monied classes. I'm a little miffed that you chose to illustrate your point that the recession we graduated into wasn't all that much compared to present by using a chart that left out the recession I was talking about. Here's a graph that covers a wider time span. See that big dip around 1980 (when I graduated) through about 1983? That's us.



So what does that mean? It means that we psychologically entered our adulthood seeing our financial fortunes limited and expected safety nets destroyed. We were not able to look into the future and say, "It's ok. This time is nowhere near as frightening as it will be in 2008."

In fact, the experience of having endured our own scary recession in 1980-1984, when we were of age to enter a shrinking workforce and seeing our parents losing their jobs at the same time, acted as a vaccination against the same type of despair when we hit the big recession in 2009. In addition we had worked our whole lives with the assumption that the good times would eventually end in devastating recession, so we prepared.

By contrast, my husband's mother and my parents came of age in a time of prosperity. The stagflation of the 70s and the recession of the 80s knocked them for a loop and they were not prepared. Well, I suppose my father was prepared. But he grew up during the Great Depression, an era so filled with economic hardship that subsequent generations cannot even imagine.

That's my point. Our experience is substantially different than those of older baby boomers. I seriously question the utility of generalizing about all of us in the same breath.

[chemgeek]

@ coppertop:

I think when compared to the forum "lurkers" you're probably not that atypical. I think a lot of people read here but do not comment. I'm only 27, and I feel out of place here sometimes. I went to grad school, didn't get married till 27, and we're not waiting till our 30's to have kids.I feel like my serious earning years just started. When I compare us to other people that post that they retired BEFORE they had kids I feel very, very behind.  It's discouraging sometimes, but I think recognizing that you've adjusted onto the right course is what is important.

[Daisy]

Not everybody "gets it" at the same point in their lives. Maybe the important thing is the amount of time after getting it and being able to FIRE.

Plus, with the advent of the internet and much greater information sharing, the young-uns these days can create blogs like this and share information and get a head start before many of us did.

I am in my mid-40s and will probably FIRE soon, this year or next. I had a mini-FIRE at the age of 42 after a layoff. It lasted about 5 months until an old employer called me back. I wasn't actively looking for work, so I'm not sure what would have happened if they hadn't called me.

In all honesty, I had a good stash then, but my costs were too high. I had calculations and spreadsheets going and had read some ER stuff, but hadn't learned about the 4% SWR or the Roth conversion pipeline. I was mostly invested in international funds after the 2008 scare, which did well for a few years but has been stagnant for the past two.

I think it would have been a disaster if I would have stayed FIRE then. Now I am armed with much better information so my next attempt should last quite a bit longer. ;-)

Now three years have passed since I returned to work and I am itching to get out soon. I have much lower costs and a more diversified investment portfolio. I have no pension so I've got to self-fund.

[mikefixac]

Old guy here. Shit, never thought I'd say that. Doesn't seem that long ago I was getting carded to get into a club.

I'm proud that so many young people are getting the message via MMM. They're more responsible, intelligent, and have more integrity than their peers. More here are vegan than the general pop.

Years ago I let my Sears credit card max out at $300 and did not pay them back for a few years. Because of that, I could not get credit. That was one of the best things that ever happened. Frugality had to be nurtured or I did not eat.

I've always had a good life, but if I knew about MMM, I could have retired long ago. In America I think it's almost too easy. MMM shows the way and with the discipline most can do it.

[coppertop]

I believe that these highly-paid professionals feel as if they 'deserve' a certain lifestyle because they went and got the advanced degree and their profession was once known as one that would lead to wealth.  Sadly for them, this is true no more.  A few years back, I went to a seminar with my boss that was held in the office of a financial management company.  One of the things I came away with is that doctors, in particular, appear to have a huge income, but they spend it all and then some ... student loans, expensive cars and houses, private school for the kids, European vacations.  They, and their spouses, seem to feel as if a certain lifestyle is automatically part of being a doctor.  I don't work for doctors, but the attitude is the same.  The old guys in my office pretty much do fine ... it's the younger ones, in their 50s and younger, who don't put much of anything into their retirement accounts and who are always complaining they don't make enough money.  You should have heard the weeping and gnashing of teeth when I handed around the W-2's this year.

[Kaspian]

Are the Baby Boomers either so rich or so clueless that they don't need to learn and practice these principles too?

I don't think it's the "rich" bit--I think the majority are in denial, walking around with blinders as big as cars.  We'll hear some proper screaming in the next few years when they realize they can no longer work due to health and have no savings.  Somehow, it'll be the government's fault.  Be prepared for taxes to go through the roof as politicians pander handouts to the glut.

[coppertop]

This is my generation, and I see the mistakes so many of them are making.  One friend drove me so batty that I no longer see her ... she'd be complaining that she'd never be able to retire one minute, and the next telling me about the new Frye boots she just bought.  There's definitely a disconnect for many between things they just have to have and the fact that they will be wage slaves until they drop dead at work.

[Cookie78]

Not everybody "gets it" at the same point in their lives. Maybe the important thing is the amount of time after getting it and being able to FIRE.

Plus, with the advent of the internet and much greater information sharing, the young-uns these days can create blogs like this and share information and get a head start before many of us did.

I wish I'd known about FIRE earlier too and I'm excitedly envious for everyone on this forum who have figured it out, especially those younger than me, or further ahead than me. It's inspiring envy, not negative envy!

I realized recently that even though FIRE wasn't on my radar until a few months ago I still made a lot of good choices in my past that have my "amount of time after getting it and being able to FIRE" much closer than it could be.
-Paid off my student loans ASAP (I know now that this wasn't the ideal option, but it was better than paying the minimum and spending the rest on crap)
-Bought two properties in 2008 and 2009 which have both appreciated and have been largely paid for by rental income.
-Got a job with a pension. Forced savings which I had no idea of the actual value until last night. Happily added 75k more than my estimated value to my net worth in one evening.
-Naturally frugal, never had car loan, not very spendypants.

I am thankful for these gifts I gave myself without even knowing why at the time. How that I'm focused and have an FI goal, I hope I can get there within the next 5 years.

[Bob W]

55 here

[firedup]

You may not realize that it used to be a lot more expensive to invest. Most people couldn't get 401K plans from employers. Getting information on mutual funds and putting enough of a stake together to get invested in one was hard, especially for those of us with low incomes. Investing in individual stocks was also expensive and difficult. All that has changed. You have a lot more going for you than we had when we started investing.

There has always been a movement toward simple living and frugality in the United States. It is part of the dialectic of our nation. Today there is MMM and ERE. When I poked my head out and looked around in the early 80s it was Voluntary Simplicity; in the 90s: Your Money or Your Life, and How to Survive Without a Salary (not to mention the Tightwad Gazette). In the 60s there was a massive DIY and simple living mass movement. We are all inheritors of the ideas from Walden Pond. The medium changes, but the message continues on. :)
[/quote]

Well said. We also were part of a generation where you got out of the house and got a job. It was not that normal to go to college so our climb in the workforce was harder and longer.

 I used to call my broker (Fidelity) on a public pay phone to make trades. I didn't have a home phone as it cost a fortune to call anyone I knew. And I'm only 52. A lot has changed in 35 years.

[PawPrint53]

I'm closing in on 62 and DH is almost 64. I no longer work, and he plans to quit soon. We decided to have a fun urban experience so he took a job in Seattle with a small startup after years at a megacorp. We save 40% of our income and could probably save more if we wanted to. We're planning on moving back to where we used to live, moving into one of our rental homes. With the job DH got a bunch of stock options that we hope will turn into something nice once the company goes public, but it would just be extra and not something we're counting on at all.

We got rid of our Verizon cell phone plan after reading the posts on cell phones. We've been a one-car family for the majority of our almost 34 years together. We've always lived within biking/walking distance of our workplaces. That served us well until my DH crashed and broke his hip. He has free bus pass now.

[Roadhog]

Another boomer here, age 55.   I found MMM a year ago and have transformed our lives.  Was sure that I could not retire before 60...now I know that 58 is the max I'll have to go and based on what I'm learning I hope to be FI before then.   Age has nothing to do with it.  I do wish there was something like MMM when I was in my 20's since I would not be working today if I had figured it out earlier.   I am currently loving my low information diet, bicycling, eating at home wonderful life.   Hope to lose the soul sucking corporate job soon.

[tomsang]

In reading through and seeing that most people who post here are maxing their 401(k)'s at $18,000, I realize to my chagrin that I am an "old person" here (at age 59).  Are there no 'oldster' mustachians?  Are the Baby Boomers either so rich or so clueless that they don't need to learn and practice these principles too?  I look around at work and realize that we have people who have been slaving here for 40 years or more who are beyond full retirement age and still have to work to survive.  It's depressing.  I, myself, am hoping to be out of here by age 62 at the very latest.  I will do it sooner if I can.

Sorry if this is obvious to everyone else, but what is the point you are making about maxing out 401Ks and age?  Do "old people" not max out their 401Ks?

Once you hit 50, then the 401k max is $24,000.  I took his comment to say that by people saying they max their 401k at $18,000 it is indicative that they are under 50.  He was feeling like he was a minority by being over 50.  Maybe I misread his comment. 

[RetiredAt63]

My name says it all - and I've been retired for 1.5 years.  Bliss.

I like the MMM blog and forum because people tend to be more generalist in their outlooks - lots of discussion on other topics as well as money.

I could have retired at 60, but instead made a job move into a 3 year contract that was an amazing 3 years.  Not at all sorry I postponed retirement by those 3 years.  I also could have retired even earlier if I hadn't had a very non-mustachian spouse (now ex-).  Many of the discussions about spouses with very different financial outlooks have resonated - and spenders can be very good at spending even when they have agreed to financial goals.  They live the phrase "It was too good a deal to pass up."

I can't speak for all early boomers, but having parents who lived through the Depression (born in 1915 and 1917) meant that in my family money was always treated carefully.  In my circle of friends, those whose parents were younger (i.e. no real memories of the Depression) seem to be bigger spenders, on average.

[Pigeon]

I'm 55 and not mustacian particularly but have always been frugal. I still have 2 kids to put through college and should retire around 62. I don't intend to have a fancy pants retirement but have concerns about old age, the cost of medical care, etc. So I've never aspired to ER particularly but like the idea of FI.

[HappyMargo]

Thank you for starting this thread!

I also found MMM & ERE late. Wish I'd started sooner, but am enjoying learning & implementing all I can at my ripe-old 50-ish age!
I've always been frugal & enjoy simple living just by my nature.  Unfortunately, I married a Spendy Pants!  But it's been 24 great years together & he has other sterling qualities, so I'll keep him! ;-)

Been working the math, spread sheets & calculators since jumping on board & I'll be fully FI in 5 years. I never understood this before & just assumed I'd be working full-time till 67 because that's what all my coworkers talk about.  Now I plan to continue working just enough to add more cushion to our savings for international travel. 

At 55, when fully FI, I plan to down-shift to per diem work & only pick up 2-3 shifts each week.  (I love my job as a surgical nurse.)  I'm also considering taking travel assignments to places in the US we'd like to check out/ visit.  So I could work 3 months, then take next 3 months off.  Rinse, repeat as I choose.

Finding MMM, ER & ERE has opened my eyes to so many new possibilities, that even though I joined the party late, I'm excited about my future! 

[aj_yooper]

I retired at 63 and my wife retired ten years earlier when she was 52 so I gained the benefits of her earlier retirement while I was still working.  I loved my job and it had frequent breaks, so it was not a struggle.  We have decent savings and some pensions and we were clever enough to pay off our house before my wife retired.  I like the MMM forum for its liveliness, but not it's occasional vitriol and moralizing, but reading about MMM was an eye opening experience for our household.  We probably would have retired much earlier if we knew what we know now.  We have optimized our budget more since MMM.  I have been on ER, but will have to check it out more.