Author Topic: Why Don't More People Seek Earlier Retirement?  (Read 152297 times)

arebelspy

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #400 on: February 22, 2016, 03:22:16 PM »
That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!
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Re: Why Don't More People Seek Earlier Retirement?
« Reply #401 on: February 22, 2016, 03:30:20 PM »
That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!

Haha!   No - the rowhouse was 775k.  Our salary is close to 400k with 50k of it being in the form of deferred comp stock. 

Sadly my husband wants to attend bschool which will cost 100k of our own money.  After paying for this (not using loans) we should then be able to build a nice nest egg, I hope.

flyingaway

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #402 on: February 22, 2016, 04:35:28 PM »
I have no doubt that MMM's message is adorable. But some fans carry it away too much. Let me give you a hypothetic example to illustrate my points.

A person worked at a county library made about $30,000 a year and decided he wanted to FIRE. So he cut his expenses to the bone, say, $10,000 a year, by living in a very deprived life. He finally FIRED and is bragging it on this forum.

But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life. So he decided that he will be volunteering at the library, doing the same work that he was paid to do before, for free. Only this time he feels happy.

So, the guy worked hard, figured out how to pare away all the unnecessary stuff from his life, and now he's happy doing what he's doing every day.  Which part of this hypothetical example is bad?

That he could be doing the same thing and get paid for it.

I'm still not following.  When he wasn't financially independent and was getting paid for the job, he didn't like it.  Is the argument that it's better to be unhappy with more money than you need rather than happy living just within your means?

By doing his job for free, one person who needs the job will probably be unemployed.

trashmanz

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #403 on: February 22, 2016, 04:48:52 PM »
I have no doubt that MMM's message is adorable. But some fans carry it away too much. Let me give you a hypothetic example to illustrate my points.

A person worked at a county library made about $30,000 a year and decided he wanted to FIRE. So he cut his expenses to the bone, say, $10,000 a year, by living in a very deprived life. He finally FIRED and is bragging it on this forum.

But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life. So he decided that he will be volunteering at the library, doing the same work that he was paid to do before, for free. Only this time he feels happy.

So, the guy worked hard, figured out how to pare away all the unnecessary stuff from his life, and now he's happy doing what he's doing every day.  Which part of this hypothetical example is bad?

That he could be doing the same thing and get paid for it.

I'm still not following.  When he wasn't financially independent and was getting paid for the job, he didn't like it.  Is the argument that it's better to be unhappy with more money than you need rather than happy living just within your means?

By doing his job for free, one person who needs the job will probably be unemployed.

Or they will be doing something else that is productive and adding to the overall economy.  How to say for sure either way?  Theoretically if they can do the job better than him then they would get the job and he would have to do something else.  Otherwise they will find a spot in a position where they can contribute. 

pbkmaine

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #404 on: February 22, 2016, 05:11:19 PM »

That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!

Haha!   No - the rowhouse was 775k.  Our salary is close to 400k with 50k of it being in the form of deferred comp stock. 

Sadly my husband wants to attend bschool which will cost 100k of our own money.  After paying for this (not using loans) we should then be able to build a nice nest egg, I hope.

With compensation like this, why on earth does he want to go to B-School? Does he plan to be a Baker Scholar at Harvard and then work for McKinsey?

GuitarStv

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #405 on: February 22, 2016, 05:21:00 PM »
I have no doubt that MMM's message is adorable. But some fans carry it away too much. Let me give you a hypothetic example to illustrate my points.

A person worked at a county library made about $30,000 a year and decided he wanted to FIRE. So he cut his expenses to the bone, say, $10,000 a year, by living in a very deprived life. He finally FIRED and is bragging it on this forum.
onsidering that the job he is now working for free was a public sector one it either means less money being taken from the public to pay an employee, or
But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life. So he decided that he will be volunteering at the library, doing the same work that he was paid to do before, for free. Only this time he feels happy.

So, the guy worked hard, figured out how to pare away all the unnecessary stuff from his life, and now he's happy doing what he's doing every day.  Which part of this hypothetical example is bad?

That he could be doing the same thing and get paid for it.

I'm still not following.  When he wasn't financially independent and was getting paid for the job, he didn't like it.  Is the argument that it's better to be unhappy with more money than you need rather than happy living just within your means?

By doing his job for free, one person who needs the job will probably be unemployed.

Or they will be doing something else that is productive and adding to the overall economy.  How to say for sure either way?  Theoretically if they can do the job better than him then they would get the job and he would have to do something else.  Otherwise they will find a spot in a position where they can contribute.

He worked in a library for a pretty low wage to begin with.  That means that either:
- A job that he had filled before is now going to be worked for free . . . for public benefit.
- The library can afford to hire another person to help out . . . for public benefit.

That's a win for us, a win for him.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #406 on: February 22, 2016, 06:02:05 PM »

That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!

Haha!   No - the rowhouse was 775k.  Our salary is close to 400k with 50k of it being in the form of deferred comp stock. 

Sadly my husband wants to attend bschool which will cost 100k of our own money.  After paying for this (not using loans) we should then be able to build a nice nest egg, I hope.

With compensation like this, why on earth does he want to go to B-School? Does he plan to be a Baker Scholar at Harvard and then work for McKinsey?

I think it's for his ego.  It's extremely frustrating.  He already makes over half of our 400k income.  He seems to think it will open up more doors.  The problem is that I think it's hard to find jobs paying more than his current salary/bonus.  He does seem willing to make the financial sacrifices to not take on loans...but still! 

pbkmaine

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #407 on: February 22, 2016, 06:05:15 PM »
Well, unless he gets into Harvard, Stanford or Wharton and finishes in the top 10% of his class, I doubt he'll be better off.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #408 on: February 22, 2016, 06:09:29 PM »
Well, unless he gets into Harvard, Stanford or Wharton and finishes in the top 10% of his class, I doubt he'll be better off.

He is going to a top program.  But I agree he probably won't be better off. 

arebelspy

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #409 on: February 23, 2016, 01:12:43 AM »
I have no doubt that MMM's message is adorable. But some fans carry it away too much. Let me give you a hypothetic example to illustrate my points.

A person worked at a county library made about $30,000 a year and decided he wanted to FIRE. So he cut his expenses to the bone, say, $10,000 a year, by living in a very deprived life. He finally FIRED and is bragging it on this forum.

But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life. So he decided that he will be volunteering at the library, doing the same work that he was paid to do before, for free. Only this time he feels happy.
Why do you assume their lives were deprived? Maybe they were living exactly how they wanted to live and saving $20k/year was just a side benefit because they had no need or desire to spend more than they did. Some of us live amazing and fulfilling lives in HCOL areas on lower incomes and can assure you we are not deprived at all.

This is another flaw, in addition to the ones pointed out above.

One more, as well:
Quote
But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life.

1) Citation?  I don't recall MMM ever saying that, or anything close to it.  Just putting words in his mouth?
2) If he quit the library job, presumably that wasn't fulfilling anymore.  If he DOES want to volunteer, maybe he can try some other opportunities.  Maybe he'll work at a soup kitchen, or help the elderly, or read to school children.

There were so many problems (8?) with this hypothetic [sic], it made my head spin.  :)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
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shelivesthedream

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #410 on: February 23, 2016, 01:48:21 AM »
Good point. Though this would make more sense in context, if we knew how much money you were making annually.

I enjoy my job.  I have a good work/life balance.  Each year I work I'm earning more money and contributing to my pension.  I for the most part like the people I work with and find the work very interesting.  I make around 175k and should receive a good 15k bump next year.  I'm only 32. I could easily retire and life off of my husband's salary but why would I?  There isn't anything I feel I'm missing out on by going to work.  If anything I think it would be a very dumb move to give up the future earnings potential!

...from previous page.

It's a joke, y'all...

arebelspy

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #411 on: February 23, 2016, 01:56:31 AM »
It's a joke, y'all...

Ah, she was joking about her salary.

Well when we find out what it really is, everything will make more sense.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #412 on: February 23, 2016, 06:51:26 AM »
It's a joke, y'all...

Ah, she was joking about her salary.

Well when we find out what it really is, everything will make more sense.

I can assure you it's not a joke.  I work for a government agency that isn't held to the GS scale.  I'm also fairly senior for my age given my previous job experience.  My husband is in a sales role. 

Basenji

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #413 on: February 23, 2016, 07:24:48 AM »
My job is extremely interesting and I interact with some of the most powerful people in the world.

The most powerful people in the world?!? Golly, wow, tell us more.

Can't.  I can say that I really enjoy my job and there's so much flexibility.  I also get to travel to some pretty cool places. 

If I were to quit my job I would simply have to entertain myself at home because my husband needs to stay in our current city for his job.  I already feel like I have plenty of time at home.  I have every other Friday off and five weeks of vacation a year. 

My plan is to take the earliest retirement under my pension which is in my early 50s.  I will get 60 percent of my last year's salary for life. 
I hope that you never have to retire. You sound like a relative of mine who rubs shoulders with the rich and famous all the time because he is a personal chef at one of these really really expensive places that only the very rich can go to. As a result, he feels important, and gets all these opportunities. When he retires, he will lose everything that is of value to him.

I think you're misinterpreting what I am saying.  I simply really enjoy my job and the people I work with.  I get to help shape policy in the US. I'm not a chef nor do I think I'm important because of those I work with. 

I laughed so hard at "I'm not a chef" that my dogs got alarmed. Thanks for making my morning.

Giro

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #414 on: February 23, 2016, 07:39:44 AM »
This is one area where the military is actually ahead of civilians.

You retire at 38 years old and they pay you 50k a year for the rest of your life and give you free health care and provide stupid cheap health care for your family.

Now, 50k is about half of what you've been earning, but it's a darn good start to part-time work, side jobs, etc.  And then it's a nice platform to start thinking....hell, I don't even need a job. 


Bertram

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #415 on: February 23, 2016, 08:06:26 AM »
Sometimes I wonder if people even know why they are still working. You ask them and they come up with paltry excuse after the other.

Inertia! It's why habits and goals are so important in designing how we want to live. Humans have super strong autopilot settings that always seem to kick in automatically. It takes conscious effort, courage and smarts to make a plan that deviates from the norm and what we are used to, and even more to stick to it and turn it into reality. And given that most people spend a lot of time, effort and courage to get to the point where they have a stable, well paying job, some interesting hobbies and what not, it's simply that they want to enjoy where they are at, kick back and relax on autopilot; not worry about change again.

A mindset that embraces, even longs for change is worth a lot, especially in todays times. But these kind of minds are few and far between. Even here you see how many people have difficulty of switching from accumulation mode to FIRE mode.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #416 on: February 23, 2016, 08:22:41 AM »
Sometimes I wonder if people even know why they are still working. You ask them and they come up with paltry excuse after the other.

Inertia! It's why habits and goals are so important in designing how we want to live. Humans have super strong autopilot settings that always seem to kick in automatically. It takes conscious effort, courage and smarts to make a plan that deviates from the norm and what we are used to, and even more to stick to it and turn it into reality. And given that most people spend a lot of time, effort and courage to get to the point where they have a stable, well paying job, some interesting hobbies and what not, it's simply that they want to enjoy where they are at, kick back and relax on autopilot; not worry about change again.

A mindset that embraces, even longs for change is worth a lot, especially in todays times. But these kind of minds are few and far between. Even here you see how many people have difficulty of switching from accumulation mode to FIRE mode.

I know in my case I worked long and hard to get where I am.  Now that I have a high paying job I enjoy with plenty of time off I'm not going to give that up.  So for me it's not inertia but that I'm finally reaping the rewards from hard work in years past.  I've also reached a point in my career where I'm actually making decisions and the work is not just interesting but varied.  No day is the same and it involves some fantastic travel.  I also have the opportunity to work overseas in the future as part of a work exchange program. 

tomsang

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #417 on: February 23, 2016, 08:55:30 AM »
This is one area where the military is actually ahead of civilians.

You retire at 38 years old and they pay you 50k a year for the rest of your life and give you free health care and provide stupid cheap health care for your family.

Now, 50k is about half of what you've been earning, but it's a darn good start to part-time work, side jobs, etc.  And then it's a nice platform to start thinking....hell, I don't even need a job.

I don't know anything about military retirement, but I did read an article on Yahoo today that was saying that it was more like half of that or less. 

2lazy2retire

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #418 on: February 23, 2016, 09:11:57 AM »

That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!

Haha!   No - the rowhouse was 775k.  Our salary is close to 400k with 50k of it being in the form of deferred comp stock. 

Sadly my husband wants to attend bschool which will cost 100k of our own money.  After paying for this (not using loans) we should then be able to build a nice nest egg, I hope.

With compensation like this, why on earth does he want to go to B-School? Does he plan to be a Baker Scholar at Harvard and then work for McKinsey?

I think it's for his ego.  It's extremely frustrating.  He already makes over half of our 400k income.  He seems to think it will open up more doors.  The problem is that I think it's hard to find jobs paying more than his current salary/bonus.  He does seem willing to make the financial sacrifices to not take on loans...but still!


"I think its his ego" - Never, maybe you don't like he earns more than you

https://www.youtube.com/watch?v=hcxs-CH4kG0

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #419 on: February 23, 2016, 09:17:43 AM »

That was a typo!  I meant three quarters of a million dollars.

Okay, that is a good annual salary.  Making 750k/yr, you should be able to save the 12 million you need in only a decade or so!

Haha!   No - the rowhouse was 775k.  Our salary is close to 400k with 50k of it being in the form of deferred comp stock. 

Sadly my husband wants to attend bschool which will cost 100k of our own money.  After paying for this (not using loans) we should then be able to build a nice nest egg, I hope.

With compensation like this, why on earth does he want to go to B-School? Does he plan to be a Baker Scholar at Harvard and then work for McKinsey?

I think it's for his ego.  It's extremely frustrating.  He already makes over half of our 400k income.  He seems to think it will open up more doors.  The problem is that I think it's hard to find jobs paying more than his current salary/bonus.  He does seem willing to make the financial sacrifices to not take on loans...but still!


"I think its his ego" - Never, maybe you don't like he earns more than you

https://www.youtube.com/watch?v=hcxs-CH4kG0

Nope.  I'm more than happy for him to earn as much money as he can!  We have joint finances and we are a team. Hence, my salary is also going to send him to bschool.  I'm just a bit hesitant because there are so many articles and studies showing the investment doesn't necessarily pay off.  The reason I think it's about his ego is that he's very into brand name things, including schools. Most of his close friends went to fancy bschools and I think that he's felt left out.  Even his own manager has told him that an mba won't really matter.  Regardless, he has supported my decisions and I will support his. 

mak1277

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #420 on: February 23, 2016, 09:50:44 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

2lazy2retire

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #421 on: February 23, 2016, 09:57:09 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

What about the neighbors??

https://www.youtube.com/watch?v=8cTj--MjC7k

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #422 on: February 23, 2016, 09:59:32 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

Right but they are condos and most have high monthly fees.  Also if you look back at the sales history many of the sellers aren't making a profit when tthey sell.  We already have a condo as a rental property so a condo wasn't an option for us.

Regardless, I think 600k is a lot of money for a condo that's max 1000 sq feet.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #423 on: February 23, 2016, 10:05:54 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

I did a search on Redfin and there are six two bedroom condos under 600k for sale in DuPont.  So the majority of condos are well over 600k.  The average square footage for the ones under 600k looks to be around 750 square feet.  There's one unit that's 1200 but it looks to be a first floor unit with very little light. 

Which is why we bought a rowhouse. 

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #424 on: February 23, 2016, 10:10:42 AM »
I forgot to mention that most of the 45 units you mention are one bedrooms.  That's not an option for most people with a family.  Sure, you can make it work but given our income there's no reason to have a family in a one bedroom 500k unit.  I just don't think that's a good financial  decision for many reasons, including the high cost of ownership and tax to close on a place in DC.  We made sure to purchase a home we can stay in for ten years, has parking and we can send kids to public school. 

2lazy2retire

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #425 on: February 23, 2016, 10:21:30 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

I did a search on Redfin and there are six two bedroom condos under 600k for sale in DuPont.  So the majority of condos are well over 600k.  The average square footage for the ones under 600k looks to be around 750 square feet.  There's one unit that's 1200 but it looks to be a first floor unit with very little light. 

Which is why we bought a rowhouse.

Assuming you earn at least the median household income for DC metro ( 90K ) you should be comfortable with the townhouse purchase?

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #426 on: February 23, 2016, 10:36:52 AM »
I suppose we could afford closer to a 2 million dollar home but it still wouldn't be that amazing of a house

I suppose if all of society were like you then very few would retire early.  And yes I have relatives in D.C. I know the cost of housing, and still find this statement to be crazy talk.

I don't think we know how much think makes yet, but I agree you don't need $1 million for a starter home in DC.  I live in SF and still find these type of comments ridiculous (although it's true that SF proper and Palo Alto, etc are now ridiculous, but there are still many highly commutable options under $1 million)

It's true you don't have to spend 1mm.   It is possible to find a rowhouse under 1mm, which we did, but it's either in a bad neighborhood or is extremely small/one bathroom.  The other option is to more outside of DC and deal with the commute.  We chose a smaller and older place in a walkable neighborhood.  Regardless, we spent a quarter of a million dollars and have one bathroom.

Then why you say a starter home is $1 million???

Anyways, assuming you make over $100k, a quarter million is a pretty slick deal in DC

That was a typo!  I meant three quarters of a million dollars.

There are currently 45 homes for sale in DuPont Circle (per redfin.com)....only 14 are priced in excess of $600k.

I did a search on Redfin and there are six two bedroom condos under 600k for sale in DuPont.  So the majority of condos are well over 600k.  The average square footage for the ones under 600k looks to be around 750 square feet.  There's one unit that's 1200 but it looks to be a first floor unit with very little light. 

Which is why we bought a rowhouse.

Assuming you earn at least the median household income for DC metro ( 90K ) you should be comfortable with the townhouse purchase?

Yes but most median income wouldn't be able to purchase a rowhouse in the district.  The least expensive ones you'll find in a decent area are in the 600s and small.  Yes, you can find some for 400-500 but they are in neighborhoods where you'll arguably be risking your safety when walking to the metro and public schools will be horrible.   Keep in mind a rowhouse is not the same thing as a townhouse.  They are simply homes from the 1920s or so that are attached.  There isn't an hoa.  It is considered a SFH for sale/mortgage purposes.

Earning 90k means you'll most likely have a long commute from Virginia. 

Bertram

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #427 on: February 23, 2016, 11:21:21 AM »
We had a discussion on military retirement pay on this thread (page 3 I think). And yes, enlisted retirement pay is much less than officer retirement pay and usually not in the $50k range unless you are very senior enlisted and have a lot of years in. But in any case getting a bunch of money and benefits for life at age 38 is a sweet deal if you can deal with a military career that long. Statisticly most don't.

Hey, that sounds a lot like a tontine actually. I guess in that case a higher payout can work out, but one should not go in with the expectation that one will automatically benefit from it (as the overall system set up explicitly in such a way that only a small percentage will reach the payout).

Giro

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #428 on: February 23, 2016, 11:58:06 AM »
We had a discussion on military retirement pay on this thread (page 3 I think). And yes, enlisted retirement pay is much less than officer retirement pay and usually not in the $50k range unless you are very senior enlisted and have a lot of years in. But in any case getting a bunch of money and benefits for life at age 38 is a sweet deal if you can deal with a military career that long. Statisticly most don't.

Hey, that sounds a lot like a tontine actually. I guess in that case a higher payout can work out, but one should not go in with the expectation that one will automatically benefit from it (as the overall system set up explicitly in such a way that only a small percentage will reach the payout).
It can be a lot but if you look at the 2016 military pay an E-6 with 20 years in gets a base pay of approx $3500/month so retirement pay will be about half of that. An E-9 with 20 will probably get $2500/ month in retirement pay.  A butt load of money from my POV but not $50k. But the medical benefits are very nice - and all at 38 "if" you can do the 20. Of course if you get out before that you get nothing at all.

My husband's retirement is 50k.  I was using an actual example. 

CanuckExpat

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #429 on: February 23, 2016, 12:48:06 PM »
Don't feed the troll people..


"If you spend a great deal of your time pretending to be an asshole to get a reaction from people...you aren't pretending. You are an asshole."

chetmanly

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #430 on: February 23, 2016, 01:24:30 PM »
If you retire at 67 and live to 85, you have 18 years left to live in post-job freedom.  Find a way to cut the job cord at 58 and you boost that by 50% to 27 years of job-free adult life.  So why don't more people at least shoot for that?  Why doesn't the prospect of living free longer matter more?

It just seems to me that 58 can't be that hard.  Kids grown and out of school, and all that.  Fifty-eight doesn't sound extreme at all.

So why does the majority of people settle for so much less free life?  What do you think?  And what lit the fire in your belly to retire earlier?

This is why I was not shooting for it. I had no idea it was even possible. I came across MMM and didn't believe II could do it. Then I ran the math and discovered I could semi retire in 2027 and completely retire in 2039, or hang in there for three to five additional years and completely retire in 2030 to 2035, I would be in my early 50's at that time. Craziness.

My Dad is 63 and could easily retire now. Even brags about it. But he is "Still looking" for serious work. Why? Who the hell knows. Maybe the extra 120k per year will make a big difference for him in his twilight years.

Giro

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #431 on: February 23, 2016, 01:27:03 PM »
We had a discussion on military retirement pay on this thread (page 3 I think). And yes, enlisted retirement pay is much less than officer retirement pay and usually not in the $50k range unless you are very senior enlisted and have a lot of years in. But in any case getting a bunch of money and benefits for life at age 38 is a sweet deal if you can deal with a military career that long. Statisticly most don't.

Hey, that sounds a lot like a tontine actually. I guess in that case a higher payout can work out, but one should not go in with the expectation that one will automatically benefit from it (as the overall system set up explicitly in such a way that only a small percentage will reach the payout).
It can be a lot but if you look at the 2016 military pay an E-6 with 20 years in gets a base pay of approx $3500/month so retirement pay will be about half of that. An E-9 with 20 will probably get $2500/ month in retirement pay.  A butt load of money from my POV but not $50k. But the medical benefits are very nice - and all at 38 "if" you can do the 20. Of course if you get out before that you get nothing at all.

My husband's retirement is 50k.  I was using an actual example.
If I recall your DH was an officer and yeah they do get almost double compared to an enlisted person with the same amount of years - especially if they are higher ranking.

true.  But I would think most folks on this board hold degrees, so it wouldn't be a stretch to awesome officers vs. enlisted.  it's also much more likely to retire as an officer.  They tend to hold onto the folks that they trained and educated.


dragoncar

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #432 on: February 23, 2016, 01:51:14 PM »

 I get to help shape policy in the US. 

You may get disillusioned with this in the future unless you actually become one of these "most powerful people in the world."  Or maybe you work for the illuminati in which case you really do get to set the national agenda

BTW, not having an HOA just means you have to pay for maintenance expenses as they occur rather than amortized monthly.  A small building HOA will not he particularly inefficient with funds, particularly if you are on the board.

Think

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #433 on: February 23, 2016, 01:58:59 PM »

 I get to help shape policy in the US. 

You may get disillusioned with this in the future unless you actually become one of these "most powerful people in the world."  Or maybe you work for the illuminati in which case you really do get to set the national agenda

BTW, not having an HOA just means you have to pay for maintenance expenses as they occur rather than amortized monthly.  A small building HOA will not he particularly inefficient with funds, particularly if you are on the board.

Yes, I may very well get tired of my job.  That's why we live off of one salary.  I think with the pension in my early 50s it will be hard to walk away though.  It also comes with healthcare, which I assume my husband could use to retire early.

That's true about an HOA but I prefer having control over the maintenance of my home.  I like being able to choose what work to do and who is doing the work.  There are many people who aren't fans of an HOA and there's a reason.   I think it's a lot easier to vote for some type of repair or improvement when you're using someone else's money.

Giro

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #434 on: February 23, 2016, 02:07:32 PM »

well they do train and educate enlisted people too and spend a large amount if money on them. The fact that they offer some huge reenlistment bonuses for many enlisted MOS' probably means they have a high retention value.

In any case, whether higher or lower income, a military pension can be a sweet deal depending on how well the trade offs are in terms of quality of life while in for each person. That varies greatly.
[/quote]

Could be that the enlisted folks have higher retention overall.  I've no idea.  There are certainly far greater enlisted folks than there are officers.  For the past 10 years that I've worked in DoD, I've heard more folks being forced out that were enlisted than officers.  I also work with a lot of retired officers and very few retired enlisted folks.  But, my experience is a teeny tiny percentage of the military. 

And I do agree that how bad the 20 years were for you, is extremely varied and could be a an amazing quality of life or a not-so-amazing quality of life.  My husband was never in combat or even in a combat zone at any point in his career. 


MrsPete

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #435 on: February 28, 2016, 05:11:34 PM »
I have no doubt that MMM's message is adorable. But some fans carry it away too much. Let me give you a hypothetic example to illustrate my points.

A person worked at a county library made about $30,000 a year and decided he wanted to FIRE. So he cut his expenses to the bone, say, $10,000 a year, by living in a very deprived life. He finally FIRED and is bragging it on this forum.

But according to MMM, you should do some volunteering things after FIRE, otherwise you are not living a noble life. So he decided that he will be volunteering at the library, doing the same work that he was paid to do before, for free. Only this time he feels happy.
I'm a teacher.  After I retire, I'm interested in continuing to sponsor a book club at school -- and perhaps I'll do a similar club for middle schoolers as well.  You could say that this'll be doing my current job for free. 

HOWEVER, a big difference:  Book club will be twice a month after school, not 20 days a month starting before the crack of dawn.  Book club'll be made up of a small group of kids who are actually interested in reading the books and discussing them -- the kids who won't do the reading won't join the club.  I'll plan "lessons" but won't have to test or grade papers.  I won't have to deal with parents whose kids have failed (or worse, parents whose kids earned a B, but they're sure the kid really deserves an A+).  It'll be all the fun parts of my current job and none of the stuff I don't enjoy. 

I'd assume any retiree who volunteers in something similar to his or her previous job would say something similar.

coacheichenlaub

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #436 on: May 06, 2016, 11:47:51 AM »
GREAT answer.  Teaching offers a lot of "rewards" that most professions do not.

sun and sand

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #437 on: May 06, 2016, 12:36:46 PM »
Divorce.

ooeei

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #438 on: May 06, 2016, 01:32:29 PM »
I guess I always assumed that you retired at 65, and that if you made more money than you "needed" you got to spend the extra as your reward.  It never registered that you could spend the extra on your freedom before 65, although it seems obvious now. 

Kind of scary that I didn't realize that, makes me wonder what else I'm missing...

mizzourah2006

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #439 on: May 06, 2016, 02:32:22 PM »
IMO A lot of other people in this thread hit the nail on the head. People don't know how much money they need to retire. Without a number you have no goal, so you save what you can, which to most people is what is left over after you have consumed everything you want. The goal doesn't become a monetary value, but instead becomes an age value. I don't really see any people that are discussing early retirement just focusing on age. They are all focusing on a monetary level that will allow them to live the life they  want.

Much Fishing to Do

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #440 on: May 07, 2016, 06:28:01 AM »
It appears half the population has nothing saved and the vast majority have no chance of covering expenses without Social security...so the earliest age you can collect SS is the first age considered...and given the cost of health insurance for a 60 year old, reaching the age of Medicare also a cliff that allows retirement.  The population that is straddling some line where they could save a little harder and retire a little earlier seems tiny in comparison to this group where you just can't imagine retirement before SS & Medicare help.

EscapeVelocity2020

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #441 on: May 07, 2016, 08:48:44 AM »
It appears half the population has nothing saved and the vast majority have no chance of covering expenses without Social security...so the earliest age you can collect SS is the first age considered...and given the cost of health insurance for a 60 year old, reaching the age of Medicare also a cliff that allows retirement.  The population that is straddling some line where they could save a little harder and retire a little earlier seems tiny in comparison to this group where you just can't imagine retirement before SS & Medicare help.

Frustrating that threads get resurrected and rehashed.  Yes, the majority of the population were consumerist zombies.  The economy has moved on.  People are dropping out of the labor force in droves and now people actively want to drop out, this is the zeitgeist.
« Last Edit: May 07, 2016, 08:55:01 AM by EscapeVelocity2020 »

xyzzy

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #442 on: May 07, 2016, 10:26:58 AM »
There are many people who aren't fans of an HOA and there's a reason.   I think it's a lot easier to vote for some type of repair or improvement when you're using someone else's money.

I would second that, not being a fan of HOAs, having lived with one for >20 years. If you have a good one, great. But if not, your life will be negatively influenced as well as your investment and finances. And being on the board is no guarantee either. If you have sane, rational people on the board, great. But lots of people aren't, as unlikely as it sounds.

dragoncar

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #443 on: May 08, 2016, 09:53:42 PM »
It appears half the population has nothing saved and the vast majority have no chance of covering expenses without Social security...so the earliest age you can collect SS is the first age considered...and given the cost of health insurance for a 60 year old, reaching the age of Medicare also a cliff that allows retirement.  The population that is straddling some line where they could save a little harder and retire a little earlier seems tiny in comparison to this group where you just can't imagine retirement before SS & Medicare help.

Frustrating that threads get resurrected and rehashed.  Yes, the majority of the population were consumerist zombies.  The economy has moved on.  People are dropping out of the labor force in droves and now people actively want to drop out, this is the zeitgeist.

But why male models?

talltexan

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #444 on: March 03, 2017, 08:13:46 AM »
Is that a zoolander reference? Am I resurrecting the thread just to confirm this zoolander reference? (from the guy whose parents will never retire)

dragoncar

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #445 on: March 03, 2017, 10:09:02 AM »
Is that a zoolander reference? Am I resurrecting the thread just to confirm this zoolander reference? (from the guy whose parents will never retire)

What is this a thread for elephants?

mtn

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #446 on: March 03, 2017, 10:38:18 AM »
Is that a zoolander reference? Am I resurrecting the thread just to confirm this zoolander reference? (from the guy whose parents will never retire)

What is this a thread for elephants?

Elephants? It was ants! What is this, a thread for for kids who can't remember movies and stuff?

Cooper62

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #447 on: March 03, 2017, 10:59:14 AM »
My parents lived paycheck to paycheck when I was growing up.  Credit card debt and seems like they were always making payments on everything.
Even when my brother or I wanted something we could make payments to our parents for it and they'd buy it for us.  Dad worked part time into his early 70s because he was bored at home and wanted something to do.  He always said to save in 401k to get the match.  So I saved enough to get the match.  So my early education was work until retiring at 65 and make payments on everything.  All was fine for sometime as I enjoyed my job for 20 years.  However after a merger the work environment is now super stressful I had a wake-up call.  Don't want to do this any longer than necessary and doing what I can to shave years off retirement age.  Since I'm in my late 40s won't be really early, but trying to get under 60 now or even sooner.  Need to figure out what to do about upcoming college expenses and make plans.  Good thing is we have no debt other than the mortgage, never upgraded our first house in low cost of living area so will be doable to shave years off retirement age.

Kiwi Fuzz

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #448 on: March 03, 2017, 11:10:34 AM »
For me it's culture (both familial and National), socioeconomic status of my parents/older siblings, political values, relationship choices and social/economic conditioning.

National Culture: New Zealand didn't have a private retirement system, that I'm aware of, until 2006 when they passed the KiwiSaver Act. I don't think I was aware of the idea of saving in general, or saving for retirement, in 2006 when I was 21 years old. Child poverty is a huge problem in NZ.

Familial Culture: Choosing a career for the sole motivation of optimizing your earning potential was basically considered wrong, or not considered at all, in my family of origin. Starving artist seemed to be considered the ideal. The only reference I ever heard to savings was that we, the children, once had savings accounts. Homeownership is unusual in my family. My mother doesn't believe in inheritance. She had 6 children (3 are my half siblings). Only one of my siblings broke the mold, working in finance and hating it, to become financially stable. He has a child and a wife with MS, though.

Political Values: This is pretty much linked to the family culture - wealth accumulation is only possible for the upper class and they are morally reprehensible for doing so. Unless you win the lottery. Obviously I don't feel this way any more.

Relationship Choices: I have never had a partner who paid 1/2 or more of the household expenses nor did 1/2 or more of the household work. I do not expect to ever do so. Deadbeat boyfriend from 16-23 y/o. Disabled husband from 24-onward (married at 26). I don't state this with bitterness - I am happily married - it's simply my reality due to the choices I have made (I'm not looking for pity). This added to the paycheck to paycheck mentality though I was starting to like the idea of an emergency fund after I married.

Social Conditioning: In NZ I never ever thought about retirement. I had a KiwiSaver account that took 3% of my income and I received tax rebate contributions from the government. I looked at it occasionally. Since moving to the USA at age 27 I have been constantly told I will never be able to retire. The very first time that it occurred to me that homeownership might be possible for me was when I heard of the Tiny House movement. Since finding MMM I am working on paying down debt (auto loan 0%) and planning to save for a (small but not tiny) 20% house down payment and eventually reach FI and RE with the goal of 45 y/o but I have my doubts if I can reach it. It's only 14 years away at this stage.

semiretired31

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Re: Why Don't More People Seek Earlier Retirement?
« Reply #449 on: March 03, 2017, 12:14:09 PM »
Most people just go with the conventional line of thinking. I remember hearing people bitch about never being able to retire when I started work. They would say things like "$1M, hell $2M, is just not enough to retire on these days."

Isn't it strange people complain about how they think they need soooooo much more than they actually do... then rather than working harder to hit a more hefty goal... they actually do even less to achieve it.

Actually no. I think there is a certain amount of lethargy when looking at a really difficult goal. Easier to just keep rolling with the punches. Realizing that early retirement or even semi retirement was an actual option was a game changer for me.