Why Don't More People Seek Earlier Retirement?

[Cookie78]

People at my work don't think about putting money aside for the future. They tell me comments like "We can die at any moment so we might as well spend everthing we have right now".

This is such a weird way to think. I agree that we could die at any moment, which is why I need to hurry up and retire! There's so much I want to do, who has time to spend their precious life working a grind?

I'm with you on this 1000%.

[The Happy Philosopher]

I think it's a combination of:

1) Identity: Many older people do not view life and work as two separate elements. I know a doctor, a good friend of mine who "retired" in 1995 with close to $4M in net worth, $3.1M in investable assets. He was 65. He continued working close to 40 hours a week (for him "part time") until he was physically unable to do so at the age of 80. I asked him why he did not go off and do whatever he wanted to at 65. He said he wanted to practice medicine and it was who he was. He had to be forced to give up work.

2) Fear: This has been brought up before on this thread, but many people in addition to fearing the loss of #1, are afraid of retirement because they have misconceptions about it and dont know how they would spend their time. I see this alot with professionals like doctors and lawyers that have worked a ton of hours over the years. They just never really developed outside interests. It's sad, but asking someone in their 60s or even 50s to suddenly change their focus is easier said than done. I look at it as a form of financial PTSD. With soldiers, when they have been in a war zone its difficult to come back to civilian life. Same thing with people who have worked non stop all those years. Its hard to drop those balls theyve been juggling without consequences.

3) Friction at home: I am a federal employee. There is a guy I work with who is 67. He was eligible to retire 10 years ago. He has one of the old sweet deal fed pensions that basically pays you 75-80% of your top 3 years of service *he is making close to $150k or maybe even more at this point for reference*. He has health care for life. I would assume he has a substantial 401k balance. Why does he keep coming into work? Turns out he hates his wife, and does not want to be home. I have a feeling some of these old timers who are still working just do it to get out of the house. This is also sad, but if you think about it at that age would you want to give half of your pension and belongings to a spouse you despise? I think many of us here would do it and cut bait. But if you have a different perspective on it (and probably enjoy some of the luxuries we arent into) maybe you wouldnt.

4) Guilt/Social pressure: We know about this one. The individual may feel guilty about giving up their job. Early retirement isnt done very often and carries negative connotations. Particularly for people raised in a different time when social mores were more rigorously enforced, this is a big deal. Its similar to why the silent generation has so few divorces compared to the boomers, Xers, or Gen Y. You just didnt do it.

5) Simplicity: Some people just do not have much gumption to do much other than follow their routine. To them, as long as they have a check, can come home and watch Pawn Stars and have a few beers with an occasional resort vacation, life is good. I dont really get this but its how theyre wired....

+1 excellent!
For many physicians their work is so tied to their identity the two are difficult to unwind. Im a big believer in part time work for physicians to transition to retirement but sadly this is difficult to find in many specialties. Residency training is traumatic and messes with your mind, kinda skews ones sense of what is normal.

[Metta]

Interesting.

I feel like it's much more common today, and in our society, than ever (people before saved at least some for the future -- sometimes, and other cultures/nations have higher savings rates than we do, even today).

Like, I wonder if there was a big marketing push with ads about "buy today cause you could die tomorrow" type messages or something.

I could be wrong on that feeling, of course, but looking at our savings rates versus our own historically and versus others' today, it's at all time lows, and I wonder why.

I don't think that people were less motivated to save than in the past because "tomorrow we die"  (after all, people who came of age in the fifties and sixties grew up thinking that they would all die an explosive, radioactive death). I think that people have lower savings rates than in the past because credit is so much easier to get these days. As an example, I couldn't get a credit card when I was a college student. No one would give me one. My mother couldn't get a charge card without my father's permission even in her thirties, even though she had a job, because it was difficult to find a financial institution that would trust a woman with her own money in the fifties and sixties.

The 80s, 90s, and on have seen an explosion in consumer credit availability that was previously unimaginable. Along with that comes the ability to buy things without having to save up for them.

[arebelspy]

Interesting.

I feel like it's much more common today, and in our society, than ever (people before saved at least some for the future -- sometimes, and other cultures/nations have higher savings rates than we do, even today).

Like, I wonder if there was a big marketing push with ads about "buy today cause you could die tomorrow" type messages or something.

I could be wrong on that feeling, of course, but looking at our savings rates versus our own historically and versus others' today, it's at all time lows, and I wonder why.

I don't think that people were less motivated to save than in the past because "tomorrow we die"  (after all, people who came of age in the fifties and sixties grew up thinking that they would all die an explosive, radioactive death). I think that people have lower savings rates than in the past because credit is so much easier to get these days. As an example, I couldn't get a credit card when I was a college student. No one would give me one. My mother couldn't get a charge card without my father's permission even in her thirties, even though she had a job, because it was difficult to find a financial institution that would trust a woman with her own money in the fifties and sixties.

The 80s, 90s, and on have seen an explosion in consumer credit availability that was previously unimaginable. Along with that comes the ability to buy things without having to save up for them.

That only explains so much though.  When we have negative savings rates, that explanation makes some sense (even though I think credit was totally available in the past as well - plenty of people declared bankruptcy two hundred years ago).  But in the past, someone could spend all they make, and have a 0% (or close) savings rate.  Yet they didn't.  Our savings rates today, even when positive, are lower than before.  Why?  Credit doesn't fully explain it, because there was always the ability, even without credit, to go to a 0% savings rate, yet people didn't.

[Metta]

Interesting.

I feel like it's much more common today, and in our society, than ever (people before saved at least some for the future -- sometimes, and other cultures/nations have higher savings rates than we do, even today).

Like, I wonder if there was a big marketing push with ads about "buy today cause you could die tomorrow" type messages or something.

I could be wrong on that feeling, of course, but looking at our savings rates versus our own historically and versus others' today, it's at all time lows, and I wonder why.

I don't think that people were less motivated to save than in the past because "tomorrow we die"  (after all, people who came of age in the fifties and sixties grew up thinking that they would all die an explosive, radioactive death). I think that people have lower savings rates than in the past because credit is so much easier to get these days. As an example, I couldn't get a credit card when I was a college student. No one would give me one. My mother couldn't get a charge card without my father's permission even in her thirties, even though she had a job, because it was difficult to find a financial institution that would trust a woman with her own money in the fifties and sixties.

The 80s, 90s, and on have seen an explosion in consumer credit availability that was previously unimaginable. Along with that comes the ability to buy things without having to save up for them.

That only explains so much though.  When we have negative savings rates, that explanation makes some sense (even though I think credit was totally available in the past as well - plenty of people declared bankruptcy two hundred years ago).  But in the past, someone could spend all they make, and have a 0% (or close) savings rate.  Yet they didn't.  Our savings rates today, even when positive, are lower than before.  Why?  Credit doesn't fully explain it, because there was always the ability, even without credit, to go to a 0% savings rate, yet people didn't.

I actually think it does. Let's say that I'm a fashionable young woman in the 1920s and more than anything I want that beautiful outfit in the window of the local department store (and isn't it so exciting that our small city has a department store just like Carson, Pirie, Scott in Chicago! Don't we live in amazing times!). How am I going to get that outfit if it costs more than I make in a week? I save up for it or I put it on lay-away. If I save up for it, that money is counted as part of the national savings rate, even though I am going to spend it on a dress just as soon as I have the amount I need.

Fast switch to another fashionable young woman in 2015. She also wants a stylish dress. Unlike her predecessor the dress does not cost  more than a week's salary because the prices of textiles have plummeted since the 1920s. She doesn't pay cash for it and she doesn't need to save up for it. She puts it on her credit card. Even if she pays off her credit card promptly at the end of the month with money from her paycheck, it doesn't matter. It never appears in the national savings rate because she cycled it through debt instead of through a savings account.

Even if they spend the same percentage of their income on a dress, the way they spend it changes how it looks for the national savings rate. And if both of them lose their jobs before the end of the week when they first saw and wanted the dress? Well, our 1920s woman is crying in her soda pop but she still has the money she was saving for the dress. It's still part of her savings account. Our 2015 woman has a credit card bill.

[arebelspy]

Interesting.

Thanks for the thoughts.  I'm not 100% convinced, but what you said makes sense.

[Metta]

Interesting.

Thanks for the thoughts.  I'm not 100% convinced, but what you said makes sense.

Well, as it turns out, I'm not completely right. (Shocking!) My husband is a historian and this falls smack dab into his period and into one of his interests, so I asked him. He says that there are many causes and that good information on saving rates doesn't really exist until after the Great Depression and is the result of federal regulation of banks. Savings rates prior to that are just guesses.

Part of my argument (that it is related to the explosion of consumer credit) is correct. However, there are other factors. He points out that people who saved money in the 70s saw the value of their money evaporate as hyper-inflation (as high as 14% at times) destroyed the value of their savings. In this environment it was saner to buy something with current dollars than save the money in a savings account and be able to buy much less in the future.. He thinks that this impulse to spend was passed on to future generations.

Another factor is unemployment insurance. Prior to WWII factories would idle for weeks or months and workers had to have enough savings to get through these periods without work, which occurred frequently. These difficulties were reduced with the advent of unemployment insurance in the 1930s. However, the amount of unemployment insurance workers could count on wasn't very much and this didn't improve markedly until the 1960s. This eased the need to have as much savings.

Further he says that part of this is the national American character. We have always had lenient bankruptcy laws and the presence of the American frontier provided a way for people to escape their creditors. And we have always had a worse saving rates than other countries.

Let this be a lesson to you. Never ask a historian to simply agree that you are right and move on. :)

[tomsang]

Interesting.

I feel like it's much more common today, and in our society, than ever (people before saved at least some for the future -- sometimes, and other cultures/nations have higher savings rates than we do, even today).

Like, I wonder if there was a big marketing push with ads about "buy today cause you could die tomorrow" type messages or something.

I could be wrong on that feeling, of course, but looking at our savings rates versus our own historically and versus others' today, it's at all time lows, and I wonder why.

I don't think that people were less motivated to save than in the past because "tomorrow we die"  (after all, people who came of age in the fifties and sixties grew up thinking that they would all die an explosive, radioactive death). I think that people have lower savings rates than in the past because credit is so much easier to get these days. As an example, I couldn't get a credit card when I was a college student. No one would give me one. My mother couldn't get a charge card without my father's permission even in her thirties, even though she had a job, because it was difficult to find a financial institution that would trust a woman with her own money in the fifties and sixties.

The 80s, 90s, and on have seen an explosion in consumer credit availability that was previously unimaginable. Along with that comes the ability to buy things without having to save up for them.

That only explains so much though.  When we have negative savings rates, that explanation makes some sense (even though I think credit was totally available in the past as well - plenty of people declared bankruptcy two hundred years ago).  But in the past, someone could spend all they make, and have a 0% (or close) savings rate.  Yet they didn't.  Our savings rates today, even when positive, are lower than before.  Why?  Credit doesn't fully explain it, because there was always the ability, even without credit, to go to a 0% savings rate, yet people didn't.

For many years the government was actively marketing and selling war bonds.  It was your patriotic duty to buy bonds to fund the war(s).  This last go around with funding our wars we just put them on the credit card vs. having our population save to pay for the war.  Those coming out of the great depression were shell shocked and never wanted to go through that again so they were savers for their generation.  Their children picked up those habits.  As the paranoia dies down about starving to death and the government expands the various social nets from unemployment, Medicaid, debt forgiveness, and other programs the fear goes down. You couple that with great marketing to buy the latest iPhone with the stigma of being on food stamps, short selling your house, using unemployment or declaring bankruptcy almost non-existent the pocket books are opened.  And probably the biggest factor is the middle class is getting destroyed.  The rich don't need to save more and the poor can't save more.  Pre 1940 there was limited Social Security.  So today we are saving by paying into Social Security.  I am sure this in not included in the savings category, where pre 1940 you had to save for your own retirement and/or have a company fund your pension.  Thinking about it I would rather be homeless today than in 1940.  There are so many programs to get you back on your feet.

[deborah]

Those coming out of the great depression were shell shocked and never wanted to go through that again so they were savers for their generation.

However, my parents who were children during the depression, and anyone younger (all the baby boomers) had the following to contend with during the years when they were earning the most

People who saved money in the 70s saw the value of their money evaporate as hyper-inflation (as high as 14% (edited to note that when I bought my first house I paid 18% mortgage in the 80s) at times) destroyed the value of their savings. In this environment it was saner to buy something with current dollars than save the money in a savings account and be able to buy much less in the future..

And then...

The 80s, 90s, and on have seen an explosion in consumer credit availability that was previously unimaginable. Along with that comes the ability to buy things without having to save up for them.

So is it any wonder what spending patterns we see in the population?

[DoubleDown]

Agree with all of the above, and though I am definitely NOT in the media camp that is always publishing those "middle class just can't get ahead it's impossible everything costs so much the 1% are getting rich off the 99% so why even try" articles, I do believe overall wage stagnation as a trend the last 50 or so years probably has some influence. At a macro level, a lot of people are seeing their wages stay relatively flat, so if they don't change their spending habits, then savings will necessarily go down over time.

We also seem to have a much greater expectation these days of instant gratification and shorter attention spans. With information and so many things available so readily, there's an expectation that if you want something, you get it -- now. Why, back in my early days walking back and forth to school uphill both ways and in the snow, if you couldn't remember some piece of trivia, you had to hope your friends/family knew the answer, or you had to look it up at the library or in the encyclopedia. We didn't have that fancy Google or anything like it. And Mom or Dad cashed their pay checks at the long line at the bank on Friday afternoon, because the banks were closed all weekend, dagnabbit.

[DoubleDown]

I think that people have lower savings rates than in the past because credit is so much easier to get these days.

Completely agree. I recall as a kid that I almost never saw adults pay for anything with a credit card. It was always cash or a check, and the idea of carrying a credit card balance (or of that even existing) was pretty foreign. I'd think one probably had to work pretty hard to get in too much debt trouble paying for regular expenses back then, and I'd bet most bankruptcies/etc. were more closely tied to business failures or more extreme cases.

[Landlord2015]

I think this thread to much focus on people that for mental reasons don't want to quit their job or love to work.

I don't love to work.. Hell I would retire in a second if I thought I would have enough money etc.

I would like to know what passive income people think is enough to retire? Of course that is huge difference and what annoys me is that food is so annoying expensive in my country Finland Europe... and I don't like to buy cheap stuff and I hate cooking.

I do like to spend...I dont care a shit about car... but I like to travel abroad, I want to spend money on lots of things.. I like to have huge TV, stuff etc.  I don't want to live a low profile life and say that I am that retired man who retired due to live with very low enjoyment and living costs.

[sol]

I think this thread to much focus on people that for mental reasons don't want to quit their job or love to work.

I don't love to work.. Hell I would retire in a second if I thought I would have enough money etc.

I would like to know what passive income people think is enough to retire? Of course that is huge difference and what annoys me is that food is so annoying expensive in my country Finland Europe... and I don't like to buy cheap stuff and I hate cooking.

I do like to spend...I dont care a shit about car... but I like to travel abroad, I want to spend money on lots of things.. I like to have huge TV, stuff etc.  I don't want to live a low profile life and say that I am that retired man who retired due to live with very low enjoyment and living costs.

Let me see if I understand this post correctly.  This person desires A) to have all manner of expensive things, and B) to not have to work for any of them.

Methinks this is not the forum for you, my friend. 

[Landlord2015]

I think this thread to much focus on people that for mental reasons don't want to quit their job or love to work.

I don't love to work.. Hell I would retire in a second if I thought I would have enough money etc.

I would like to know what passive income people think is enough to retire? Of course that is huge difference and what annoys me is that food is so annoying expensive in my country Finland Europe... and I don't like to buy cheap stuff and I hate cooking.

I do like to spend...I dont care a shit about car... but I like to travel abroad, I want to spend money on lots of things.. I like to have huge TV, stuff etc.  I don't want to live a low profile life and say that I am that retired man who retired due to live with very low enjoyment and living costs.

Let me see if I understand this post correctly.  This person desires A) to have all manner of expensive things, and B) to not have to work for any of them.

Methinks this is not the forum for you, my friend.

I woke up then as for fun browse forums and read this. I did say that I don't care to own a car. I do have a driving license though and very rarely drive, but it is more like if someone asks me to drive them for a favor.

Car is in my country much more expensive then in USA. You have really cheap fuel prices and car prices. In fact if talking about cars in Finland then new cars in Finland have very high tax from government and thus belongs to the most expensive in whole Europe.

Nasty comment of you saying this whole forum does not belong to me. Lol maybe you are like Sol in the movie Doomsday(2008). Please in future try to judge less people who belongs to the forum.

As for enjoying travels I usually go for 2-3 star hotel and even rarely hostel, but not 5 star hotels. Enjoying does not mean that I need a car or super luxury. Now I can spend a lot of money on women(example I pay for dinner and I don't need to explain everything lol) and partying when on holiday though, but as for travel(flight, boat trip, train or bus) and where I sleep I look for what is cheap or affordable with little budget.

I usually don't like to party, but in southern(and eastern) Europe alcohol is usually cheaper then in my country. I have never traveled outside of Europe, but my plan is to in future years to travel also outside Europe...

[Retired To Win]

... I would retire in a second if I thought I would have enough money etc... and I don't like to buy cheap stuff and I hate cooking.

I do like to spend... I like to travel abroad, I want to spend money on lots of things.. I like to have huge TV, stuff etc.  I don't want to live a low profile life and say that I am that retired man who retired due to live with very low enjoyment and living costs.

You are trapped by some very erroneous conclusions and assumptions.  One: STUFF is not what makes one happy.  Two: Keeping one's living costs low does not mean one is limited to, in your words, "very low enjoyment."

You need to seriously rethink the mental connection you are making between consumption and satisfaction.

Good luck.

[BarkyardBQ]

Agree with all of the above, and though I am definitely NOT in the media camp that is always publishing those "middle class just can't get ahead it's impossible everything costs so much the 1% are getting rich off the 99% so why even try" articles, I do believe overall wage stagnation as a trend the last 50 or so years probably has some influence. At a macro level, a lot of people are seeing their wages stay relatively flat, so if they don't change their spending habits, then savings will necessarily go down over time.

Public employee here... haven't had a raise since the recession... haven't experienced inflation either... so why do people keep talking about wage stagnation? If wages have gone up 0% and inflation is 0%, what has changed? The recession and post recession mentality seems to be that unless people are regularly getting more income they cannot survive, except 2% bi-yearly COLA raises barely keep pace with inflation. Raises satisfy an emotional fix, not a mathematical reality. What's disappointing is the number of people and families who had to live on 1 income or less during the recession, regained employment and immediately started spending again. There should be an entire population of people from the last 7 years trying to save 25% of their income to weather the next crisis and it's just not happening. Corporations are now holding on to ridiculous cash reserves to be able to sustain themselves during the next crisis, but the population isn't keeping up. Income = Things, and this is the constant mentality that drives people to spend all they earn++. One poster said, people used to save to buy things, because credit was harder to acquire... now it's easier to acquire so everyone spends before they have it and lives to pay it off, this was on NPR this morning...

http://www.marketplace.org/topics/your-money/my-biggest-financial-lesson/david-brancaccio-wants-you-consult-your-future-self

NPR yesterday
http://www.npr.org/2015/03/25/394328003/oakland-kids-get-a-raise-from-the-new-minimum-wage

That's a lot of pain for only $9 an hour. Today it's still hard work, but now Alicia is making $12.25 instead.

"When I worked 56 hours my check was about $480," she remembers...
...estimates she'd make about $170 more every two weeks. Laughing with a dreamy look in her eyes, Alicia says that for her the extra money could mean a few new toys..."I'd buy an iPhone 6," she laughs. "I couldn't buy that before, but I'd definitely buy that now."

[arebelspy]

Public employee here... haven't had a raise since the recession... haven't experienced inflation either... so why do people keep talking about wage stagnation? If wages have gone up 0% and inflation is 0%, what has changed

Nothing.. but people complain about not having a rising standard of living.  They want wages rising in real terms.  So even if it was 3% raise, 3% inflation, they wouldn't be happy.  Of course you want as much as you can.  But people complain a lot about it.

[BarkyardBQ]

Public employee here... haven't had a raise since the recession... haven't experienced inflation either... so why do people keep talking about wage stagnation? If wages have gone up 0% and inflation is 0%, what has changed

Nothing.. but people complain about not having a rising standard of living.  They want wages rising in real terms.  So even if it was 3% raise, 3% inflation, they wouldn't be happy.  Of course you want as much as you can.  But people complain a lot about it.

Exactly. People don't pay attention to the inflation part, they just see the extra on their paycheck and get all excited, never minding that groceries, gas, and utilities started costing a few bucks more too. That 3% raise on the average income equates to an extra meal at Applebee's each month for most people. :/

[Landlord2015]

... I would retire in a second if I thought I would have enough money etc... and I don't like to buy cheap stuff and I hate cooking.

I do like to spend... I like to travel abroad, I want to spend money on lots of things.. I like to have huge TV, stuff etc.  I don't want to live a low profile life and say that I am that retired man who retired due to live with very low enjoyment and living costs.

You are trapped by some very erroneous conclusions and assumptions.  One: STUFF is not what makes one happy.  Two: Keeping one's living costs low does not mean one is limited to, in your words, "very low enjoyment."

You need to seriously rethink the mental connection you are making between consumption and satisfaction.

Good luck.

Another one that tries to lecture on philosophical lifestyle. Yes I do know that wife and family can give happiness but I don't have a wife at least yet. However I am a great thinker that beautiful has to to do with looks and there will come a day realistically where your wife is not so beautiful anymore and old. Now you can be friend with anyone including old people... so I am not saying that old couple should take divorce...

Ironic you sound like a left wing politician from my country and you are from USA. I already posted how I don't own car and how I do travels...

I have two very clear things that keep me from retiring... debt A and debt B both for investment apartments... it would be a great relief if either one would be payed off.

I did ask for number what amount of passive income people think one should have for retiring? There is no correct answer it is subjective, but I am curious what other thinks is ok?

Please no philosophical comments like money does not make you happy whatever I do know that lack of money makes most people unhappy in the long term.

[Wupper]

Let me see if I understand this post correctly.  This person desires A) to have all manner of expensive things, and B) to not have to work for any of them.

Methinks this is not the forum for you, my friend.

Or they could just be a liberal?

[Landlord2015]

Let me see if I understand this post correctly.  This person desires A) to have all manner of expensive things, and B) to not have to work for any of them.

Methinks this is not the forum for you, my friend.

Or they could just be a liberal?

Yes liberal sounds great. Freedom to do what you want. I did not mean do nothing I would still be landlord. There is also great freedom if you become entrepreneur thought the risks are great also...

[arebelspy]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Also, just FYI, the random bolding makes it sorta hard to read.

I did ask for number what amount of passive income people think one should have for retiring? There is no correct answer it is subjective, but I am curious what other thinks is ok?

That clearly depends on the individual and how much they need.

Somewhere between 5k and 50k seems reasonable to me.  Maybe 20% higher (70k) if you absolutely have to be in a high COL and don't have a paid off domicile.

[Landlord2015]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Also, just FYI, the random bolding makes it sorta hard to read.

I did ask for number what amount of passive income people think one should have for retiring? There is no correct answer it is subjective, but I am curious what other thinks is ok?

That clearly depends on the individual and how much they need.

Somewhere between 5k and 50k seems reasonable to me.  Maybe 20% higher (70k) if you absolutely have to be in a high COL and don't have a paid off domicile.

Ok finally a good response to me thanks...
Well so minimum is 5k/month passive income? That is tough sounds like I need to become entreprenur or increase the real estate a lot... because we are talking about net income and you pay very little tax in USA compared to my country.

Here is the thing I could buy from abroad and rent it but of course there are lots of challenges to be a landlord for a apartment that is abroad. I do know that the Norway people since everything is expensive in Norway first buy apartment in Norway and then they usually buy at least one apartment abroad...

Norway people belong to the richest in Europe as average...

[deborah]

A year, not a month.

[Landlord2015]

Somewhere between 5k and 50k seems reasonable to me.  Maybe 20% higher (70k) if you absolutely have to be in a high COL and don't have a paid off domicile.

Ok/year got it ...
5k-70k/year= 416.67/month- 5833.33/month

Hmm it has to do with expenses this mortgage A and B are sucking my income...

However 416.67? Hell no I want more way more and if I would remove my debts A and B... you can multiply 416.67 with a number to get my passive income...

I am plagued with nasty tax in Finland(Europe) tax is brutal 30%but tax is taken after all reductions first of apartment cost is reduced from the gross income.

Hmm for me to be satisfied? I would say 2000 net income/month means... 24000 passive income/year would indeed be great to retire with... and I have still a bit to climb to reach that passive income... and there are my 2 mortgage debts... but my debts go down...

[arebelspy]

Somewhere between 5k and 50k seems reasonable to me.  Maybe 20% higher (70k) if you absolutely have to be in a high COL and don't have a paid off domicile.

Ok/year got it ...
5k-70k/year= 416.67/month- 5833.33/month

Hmm it has to do with expenses this mortgage A and B are sucking my income...

However 416.67? Hell no I want more way more and if I would remove my debts A and B... you can multiply 416.67 with a number to get my passive income...

I am plagued with nasty tax in Finland(Europe) tax is brutal 30%but tax is taken after all reductions first of apartment cost is reduced from the gross income.

Hmm for me to be satisfied? I would say 2000 net income/month means... 24000 passive income/year would indeed be great to retire with... and I have still a way to climb to reach that...

Yup.  Like I said, each person chooses what's right for them.  For me, your 2k/mo. income is not nearly enough for my FIRE plans.  It is what I spend currently (and passed a few years ago where I called myself "FI"), but I want double that for FIRE, personally.

On the other hand, some folks over at ERE spend maybe $500/mo.

Roughly: 5-15k/yr is ERE level, 15-40k/yr is MMM level, 40-80k is E-R.org level, and 80k+ is Bogleheads level.  You'll have outliers at each of those places, but that's where the bulk of participants fall, IME.

[Landlord2015]

Somewhere between 5k and 50k seems reasonable to me.  Maybe 20% higher (70k) if you absolutely have to be in a high COL and don't have a paid off domicile.

Ok/year got it ...
5k-70k/year= 416.67/month- 5833.33/month

Hmm it has to do with expenses this mortgage A and B are sucking my income...

However 416.67? Hell no I want more way more and if I would remove my debts A and B... you can multiply 416.67 with a number to get my passive income...

I am plagued with nasty tax in Finland(Europe) tax is brutal 30%but tax is taken after all reductions first of apartment cost is reduced from the gross income.

Hmm for me to be satisfied? I would say 2000 net income/month means... 24000 passive income/year would indeed be great to retire with... and I have still a way to climb to reach that...

Yup.  Like I said, each person chooses what's right for them.  For me, your 2k/mo. income is not nearly enough for my FIRE plans.  It is what I spend currently (and passed a few years ago where I called myself "FI"), but I want double that for FIRE, personally.

On the other hand, some folks over at ERE spend maybe $500/mo.

Roughly: 5-15k/yr is ERE level, 15-40k/yr is MMM level, 40-80k is E-R.org level, and 80k+ is Bogleheads level.  You'll have outliers at each of those places, but that's where the bulk of participants fall, IME.

Ah ok nice you sound like very cool and capitalist.

However one more thing... I don't need/want a car. I do pay 65 euro/month or 780 euro/year for a buscard and yes sometimes I make long distance travels. However
my 24k/year passive income goal was without any car costs. If I would have a car in my country then I would want to have much more then 24k/year passive income...

[arebelspy]

I won't have a car, but I will have a wife and (eventually) child(ren), and we're planning on traveling the world full time.

As I said, each person's situation is different, and will dictate their spending levels.

Just FYI, most around here don't do the passive income per month thing (that's popular on blogs and is 80% BS, IMO), but do a 4% WR based on a portfolio of paper assets.

I am in the "stream of income" camp (owning rental properties), but we're in the minority here.

Ah ok nice you sound like very cool and capitalist.

Hahaha.  Added to the Business Card Ideas thread!

http://forum.mrmoneymustache.com/off-topic/business-card-ideas/

[deborah]

Well I live in Australia, and my elderly, frail parents live 7.5 hours drive away, so I definitely need a car, but I manage easily on 24k/year.

[Landlord2015]

Well I live in Australia, and my elderly, frail parents live 7.5 hours drive away, so I definitely need a car, but I manage easily on 24k/year.

Ok... yeah my brothers family use a car and they live in the woods so to speak... though 10 km to a fairly big city. People spend what they want/need on.... and I have driven with car fast.... funny that I still like Fast and Furious movies:)

I won't have a car, but I will have a wife and (eventually) child(ren), and we're planning on traveling the world full time.

As I said, each person's situation is different, and will dictate their spending levels.

Just FYI, most around here don't do the passive income per month thing (that's popular on blogs and is 80% BS, IMO), but do a 4% WR based on a portfolio of paper assets.

I am in the "stream of income" camp (owning rental properties), but we're in the minority here.

Ah ok nice you sound like very cool and capitalist.

Hahaha.  Added to the Business Card Ideas thread!

http://forum.mrmoneymustache.com/off-topic/business-card-ideas/

Ok lovely another landlord... yeah we are minority got it.

Wife is absolutely in my plans... children? Well if children comes I think I need to adjust my budget accordingly I forgot them my bad:)

[Retired To Win]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Thanks, Arebelspy.  Mustachianism IS a philosophy.  Enough said.

[Landlord2015]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Thanks, Arebelspy.  Mustachianism IS a philosophy.  Enough said.

Lol this is a place where people get financial advice. However do as you want if you think these texts are a religion or your life philosophy whatever lol. For me this is mainly a place to discuss economy and possibly get financial advice.

Back to topic...
24k means 2000/month hmm I still need to increase amount of apartments that I rent to other people or become some kind of passive entrepreneur or investor to get that amount of passive income. If I get one more renting apartment I come pretty close to that amount... unfortunately have debt about 179k totally so can not invest now it has to be postponed for future a bit.

[dragoncar]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Thanks, Arebelspy.  Mustachianism IS a philosophy.  Enough said.

Lol you never learn do you? This is not a religion or philosophy place. This is a place where people get financial advice.

Back to topic...
24k means 2000/month hmm I still need to increase amount of apartments that I rent to other people or become some kind of passive entrepreneur or investor to get that amount of passive income. If I get one more renting apartment I come pretty close to that amount... unfortunately have debt about 179k totally so can not invest now it has to be postponed for future a bit.

Wait, this isn't a dog grooming website?

[Landlord2015]

Please no philosophical comments like money does not make you happy whatever

Again, you may want to reconsider what sol and RTW said -- you're going to have a lot of headbutting on this forum with your attitude, as you're in the vast minority, and if you are having trouble taking their comments without feeling hurt, you're in for a tough time.  We facepunch around here.  Just a friendly warning. :)

Thanks, Arebelspy.  Mustachianism IS a philosophy.  Enough said.

Lol you never learn do you? This is not a religion or philosophy place. This is a place where people get financial advice.

Back to topic...
24k means 2000/month hmm I still need to increase amount of apartments that I rent to other people or become some kind of passive entrepreneur or investor to get that amount of passive income. If I get one more renting apartment I come pretty close to that amount... unfortunately have debt about 179k totally so can not invest now it has to be postponed for future a bit.

Wait, this isn't a dog grooming website?

Eh you lost me? I am fairly new to this place, but have not noticed about dogs... I like Werewolf movies. Perhaps I am wolf that can never be tamed:)

[arebelspy]

Wait, this isn't a dog grooming website?

Today the song "Who let the dogs out" totally should have been playing as I read various posts on the forums.

It's weird how there's relative calm for weeks and then in a day all kinds of .. interesting posters.  :)

[Landlord2015]

Wait, this isn't a dog grooming website?

Today the song "Who let the dogs out" totally should have been playing as I read various posts on the forums.

It's weird how there's relative calm for weeks and then in a day all kinds of .. interesting posters.  :)

I howl at the moon as a Werewolf:). I like this youtube video:
https://www.youtube.com/watch?v=j-qQ_brIsfY

Anyway the politicians discuss possible law changes for my country in election discussions... there might come HUGE changes in law in my country for 2016.
My country Finland(Europe) is not even near so capitalist as USA. However if these changes become true which I suspect they will become in year 2016 then my country takes a big step towards capitalism in 2016.

That means that in 2016 I might decide to become an entrepreneur, but these possible law changes have not yet been decided and it will take months before I know possible law changes. I have done my country's mandatory(must do!) military service and I like Action and Horror movies! You need to be fairly bold to become entrepreneur!

It is funny that Sweden that is Finlands neighbor in west have more socialistic laws/culture then Finland. If these new laws become true in Finland then the difference will be very clear between Finland and Sweden.

Do I like the possible future 2016 year capitalist law changes? Well it is neutral the changes are both good and bad in my opinion.

[Retired To Win]

... I don't need/want a car. I do pay 65 euro/month or 780 euro/year for a buscard and yes sometimes I make long distance travels. However my 24k/year passive income goal was without any car costs. If I would have a car in my country then I would want to have much more then 24k/year passive income...

Something I found very helpful in determining how much passive income I needed was to separate the amount I needed for basic living expenses from the amount I wanted for optional discretionary spending (like travel).  This gave me a minimum "bucket" I could function with for expenses and a sort of open-ended "spigot" for fun stuff.  It was easier to see the finish line that way.

[HappyMargo]

Something I found very helpful in determining how much passive income I needed was to separate the amount I needed for basic living expenses from the amount I wanted for optional discretionary spending (like travel).  This gave me a minimum "bucket" I could function with for expenses and a sort of open-ended "spigot" for fun stuff.  It was easier to see the finish line that way.

Thank you for this suggestion.
I've just started a new category for tracking my YTD passive income.  This additional attention to detail (& splitting the category into *needs* and *fun*) will come in handy when my FIRE actually happens.

Seeing when I have enough to cover basic needs, plus some optional extra for travel/ restaurant meal/ dinner theatre with friends will help me reign in OMY syndrome   

[Retired To Win]

Something I found very helpful in determining how much passive income I needed was to separate the amount I needed for basic living expenses from the amount I wanted for optional discretionary spending (like travel).  This gave me a minimum "bucket" I could function with for expenses and a sort of open-ended "spigot" for fun stuff.  It was easier to see the finish line that way.

Thank you for this suggestion.

I've just started a new category for tracking my YTD passive income.  This additional attention to detail (& splitting the category into *needs* and *fun*) will come in handy when my FIRE actually happens.

Seeing when I have enough to cover basic needs, plus some optional extra for travel/ restaurant meal/ dinner theatre with friends will help me reign in OMY syndrome

You're welcome, Margo.  Truth be told, that approach certainly helped me a lot.  And it snapped me out of a close call with OMY syndrome.

[Landlord2015]

... I don't need/want a car. I do pay 65 euro/month or 780 euro/year for a buscard and yes sometimes I make long distance travels. However my 24k/year passive income goal was without any car costs. If I would have a car in my country then I would want to have much more then 24k/year passive income...

Something I found very helpful in determining how much passive income I needed was to separate the amount I needed for basic living expenses from the amount I wanted for optional discretionary spending (like travel).  This gave me a minimum "bucket" I could function with for expenses and a sort of open-ended "spigot" for fun stuff.  It was easier to see the finish line that way.

Ok for once something we agree on.. I do think long distance travels i.e go holiday abroad belongs to those not needed. I do not travel every year abroad.

However it is amazing I am happy there is new cheap bus in my country called Onnibus...

Example
Travel from Turku city to Helsinki city back and fort cost about about 55 euro maybe with normal bus.

With Onnibus it costs usually between 11-13 euro though you book in advance so on some holidays like Eastern it can be temporary more expensive.

This Onnibus bus system is very new in my country I don't know but either they started their operation in year 2013 or 2014.

The only downside with Onnibus are that you need to book Online to get really cheap, they don't accept cash payments on the bus though they do accept creditcards for example I have a Mastercard. Please note that if you pay with credit card price can be double... you get the huge discount with Online prepaid tickets.
Another downside Onnibus does not travel to small towns or stop at those places and their range and travels does not even nearly cover whole my country Finland.

However my investments apartments are all in the capitol are more or less near Helsinki and I live near Turku my self so excellent for me as landlord and I also have friends in the capitol area.

[Retired To Win]

I'm not dissatisfied with my job.

With all due respect, that's an answer to the wrong question, i.e. "are you dissatisfied with your job?"

How about this question: "is commuting to and doing your job the most satisfying thing you can think of doing with your time?"

NOW let's see...

[Cassie]

As a good friend once told me"You will know when you are ready to leave work."  She was right. The answer is different for everyone.

[mtn]

I'm not dissatisfied with my job.

With all due respect, that's an answer to the wrong question, i.e. "are you dissatisfied with your job?"

How about this question: "is commuting to and doing your job the most satisfying thing you can think of doing with your time?"

NOW let's see...

This is the correct question, but don't forget that money does play into satisfaction. So I doubt there will be a change in his answer.

[Cassie]

$ is important to your retirement plans. Some people are happy to do so with little $ & don't want to travel, eat out, etc while others would not enjoy that type of life.  It is all about knowing what will make you happy.

[Retired To Win]

$ is important to your retirement plans. Some people are happy to do so with little $ & don't want to travel, eat out, etc while others would not enjoy that type of life.  It is all about knowing what will make you happy.

I really don't think it's so much traveling versus not, eating out versus not and so on.  I think it's more a case of where and how often to travel, how fancy and how often on the restaurants, etc.  And I also don't believe that the OMY crowd actually claims to be happy doing one more year.  The ones I've talked to sound like their prison sentence has been extended (again)!

[EscapeVelocity2020]

$ is important to your retirement plans. Some people are happy to do so with little $ & don't want to travel, eat out, etc while others would not enjoy that type of life.  It is all about knowing what will make you happy.

I really don't think it's so much traveling versus not, eating out versus not and so on.  I think it's more a case of where and how often to travel, how fancy and how often on the restaurants, etc.  And I also don't believe that the OMY crowd actually claims to be happy doing one more year.  The ones I've talked to sound like their prison sentence has been extended (again)!

I'm proudly doing OMY and I have no qualms with the situation.  I've done much harder jobs for less pay in the past.  And, being FI, I am OK with a layoff, but I am also not throwing in the towel at work.  My work/life balance is fine, I'm not a huge fan of being a stay-at-home-parent.  I have the rest of my life to be retired.  As long as I never have to return to work, I don't really care if I retire this year or 5 years from now, but in 5 years my kids go off to college, so I'm definitely pulling the plug and going in to spendy-international-traveler mode.  As a bonus, if I manage to work 5 more years, I'll be that much closer to Social Security and Medicare, and I can still probably transfer a substantial amount of my 401k into a Roth while living off after-tax investments.  I'll probably have to deal with RMD's under that 'worst case scenario', but that's the price you pay for having enjoyed life, and having a little extra!

[Daisy]

A coworker who took one of those sweet severance packages a couple of years ago just returned to work. I saw him in the hallway and thought he was just visiting the old workplace to say hi. He told me he just started back at work. I was - aghast. So I asked him if he came back part-time or as a contractor...thinking with his good financial situation he would be able to negotiate something like that. He said it all happened so fast he just accepted the offer and came back full time. I wanted to cry...

He's in his late 50s, pretty frugal, and had accepted a year's worth of salary in his severance package. He had run the numbers and thought everything was good.

However, this guy loves the technical work that he does. Even during his time off after leaving, he'd tell me he kept tinkering with stuff. He came back because his old group had a lot of attrition in the past year and actually called him and begged him to come back.

Some people just love what they do I guess. I don't fault him for that, but I would have tried for a more flexible schedule if I were him. He actually said he would have preferred that.

[Retired To Win]

I'm proudly doing OMY and I have no qualms with the situation.  I've done much harder jobs for less pay in the past.  And, being FI, I am OK with a layoff, but I am also not throwing in the towel at work.  My work/life balance is fine, I'm not a huge fan of being a stay-at-home-parent.  I have the rest of my life to be retired.  As long as I never have to return to work, I don't really care if I retire this year or 5 years from now, but in 5 years my kids go off to college, so I'm definitely pulling the plug and going in to spendy-international-traveler mode.  As a bonus, if I manage to work 5 more years, I'll be that much closer to Social Security and Medicare, and I can still probably transfer a substantial amount of my 401k into a Roth while living off after-tax investments.  I'll probably have to deal with RMD's under that 'worst case scenario', but that's the price you pay for having enjoyed life, and having a little extra!

Is it really OMY now when it sounds like getting your kids off to college in 5 years is a major milestone event for you that will then enable you to carry out big FIRE actions like selling off your house, ceasing savings for kids' college educations, etc?  You could retire one year from now as things stand? Or now, even?

[EscapeVelocity2020]

Don't want to derail this great thread with some obstreperous debate, but I could confidently sail through life without making another dime.  I just took issue that everyone doing OMY feels like they are in the 9th circle of hell.  Maybe I'd feel that way if I were in my 60's, but right now, in the oil patch especially, I'm surrounded by people that would give their all to hang on.  I wish we were all FI and 'struggling' with OMY herpes :).
(http://forum.mrmoneymustache.com/throw-down-the-gauntlet/class-of-2015/msg602958/#msg602958)

But I appreciate that this is an Early Retirement forum too, and as such OMY is the enemy, lest ER just become RR (regular retirement).  Someone else said it really well, ER may not be for everyone, but FI should be!  That is a sentiment I wholly support.

[Cassie]

I really don't think it's so much traveling versus not, eating out versus not and so on.  I think it's more a case of where and how often to travel, how fancy and how often on the restaurants, etc.  And I also don't believe that the OMY crowd actually claims to be happy doing one more year.  The ones I've talked to sound like their prison sentence has been extended (again)!
WE like to do nicer traveling then camping & we also like to go to Europe.  This year we are traveling in our motorhome for a month.  We would not be content without doing these things. On Saturdays we often go out to a nice dinner & show. Not mega expensive but not cheap either. Also as I have mentioned before consulting p.t. has left us mentally engaged & satisfied.  There is no one right way to do things.