Yeah, I think the $30k a year seems difficult, and he admits he didn’t make that goal but was at about $40k a year. And I was a bit confused because I don’t know if that covered his wife – he mentioned at one point that she had her own money.
And while I think 37 is awfully young to retire, it’s certainly within reason to take off a year or so and enjoy life, and then get back in the workforce and perhaps do something completely different that he found more rewarding than his previous job.
I don’t mean that living without having to go to work is being poor, sorry, I mean that him living without having to go to work is just roleplaying being poor.
Real poor people have the same or more issues and still need to go to work.
He mentions that it was planned as 30k for himself and that his (original) wife had a similar amount of money saved and similar spending. Thinking of things as a 2 person family on 60k is very doable although it helps a lot to get out of the Boston area.
I don’t see the criticism that he didn’t plan for his wife leaving him unless you assume that he was fooling himself. It sounds like she was happy to make the switch and happy for at least a couple of years. He was pretty open to working with her on trying to figure out what she wanted. I can give him a pass for having communication fall apart during a fairly big medical issue and medical related changes in his life. It is another of the many reasons why RE is tougher the earlier you do it but doesn’t feel like a failure that is specific to him.
I mentally make a distinction between being poor and being broke. In my mind when used to describe a lifestyle broke is privileged poor. Spending like you are poor but having resources (monetary, skills, and connections) to avoid or overcome the worst issues of being poor. It is more or less the common lifestyle of the extreme FIRE guys.
Am I the only one here who actually did retire before 40? I was 38 in 2013 when I quit my full-time job. I guess you could call it partial retirement since I do some volunteer work, but it’s very partial - nothing for long stretches and when it is active I average less than 5 hours a week. I’ve written about how and why I did it.
Now, I totally understand that I’m not the average bear in the woods here. I’m single, no kids, no desire to change either situation. I have cultivated no seriously expensive hobbies, have the mathematical mindset that allows for understanding financial planning, and a natural instinct toward risk management. For instance, part of my plan is an emergency fund that I could live off for a year if for some reason I needed to go find a job, to give me time to search and if needed re-tool skills. And I fill my time quite nicely with access to a public library and the Internet without any inclination toward boredom.
Still, even if I’m an outlier, I think my example shows that retiring early is feasible. Like anything else, if you go into it without a plan, you’ll probably fail. If your plan is incomplete and/or circumstances change dramatically, you’ll have to adjust. But it’s not a completely harebrained idea.
Thanks for posting (or reposting as the case may be) your blog posts. Your why post is similar to some of my thoughts as a 50 year old teacher. I’ve found that switching to international teaching has been enough of a change to push off some of the early retirement thoughts but it is still coming.
I’m in the opposite camp here. At age 64 I still enjoy my job and hope to keep at it until I’m 75 or so. Of course I realize that could change depending on my Heath and energy but so far so good.
This is the camp I want to be in.
Of course to do this, I don’t want to be work 60 hour weeks, and I want to be able to take frequent vacations.
I’m 64 and still enjoy my job and the stimulation that brings. But I can definitely see the appeal of being retired. Or maybe just severely curtailing my work hours.
One consideration for me is that our company has just been purchased by a much larger company. We really like the healthcare plan we’re on and I’m concerned that if we switch we will end up with something that’s much worse. I realize Medicare starts at 65 but it’s that transition between now and then (granted, it’s only a year) is what I want to smooth out.
Typing that out makes me consider that I am worried too much about this one relatively small issue and maybe I should not make that the primary consideration for retirement. Food for thought.
Health care/health insurance is NOT a “relatively small issue.” It is arguably the single most important consideration in deciding when you can retire, because health care costs a LOT, and gets more expensive as you age. The sort of standard rubric you see is that your health care costs in the last 6 months of your life are typically more than you paid in total up to that point.
I know that even if my wife keeps working for now (5 years younger than me), going on her health insurance is going to cost me around $400/month. I am not looking forward to that.
It’s one big reason why I decided to live overseas when I retired early. Health care is good and cheap here, and the national health insurance program is a reasonable catastrophic care policy to fall back on at a very low cost. I pay less than $100 per month for the two of us.
Do you have a spare bedroom?
Go to youtube and look for Americans who retired / moved abroad, you won’t lack for videos talking about healthcare quality and costs in country x or y.
We do, but it is (deliberately) unfurnished lol.
Seriously, I’ve never used IESS (the national health insurance system) and I hear both good and horror stories about it, but it’s there as a backstop. Private health care is cheap: a doctor’s visit is $25-35 including all procedures performed during the visit. I know people who have had hospital stay surgeries (from hernia repair to a triple bypass) and the private costs ranged from $3000 to under $10,000. My doctor is great. He has no PA or tech assisting him. He takes my pulse, my BP, weighs me, listens to my chest, etc, himself, and enters everything into his system himself. He also will give advice by email for free; several times I’ve emailed him about something and he has replied by saying it sounds like X, don’t come in yet, just do Y and let me know how you feel.
Probably if I had to have surgery, I would go to the private hospitals a couple of blocks away and price it out, then have it done there and just pay. It would cost less than one year of premiums for insurance in the US.
Not trying to minimize healthcare, and I do realize it’s a big deal.
As for your guys stories, moving to a foreign country is a non-starter, as my wife won’t consider leaving family (heck, she won’t even consider moving out of state). My current health plan will cost $1000 per month to continue if I opt to use COBRA to keep it going until we hit Medicare. I currently pay $0 but I’ve planned for that cost, so as much as it might seem, it’s part of the budget. And then our Medigap plans (or whatever they’re called these days) is going to cost whatever it costs. No real way around it. However, that’s why I’ve been saving this money all these years!.
Yeah, I understand that. It was an easy decision for us because 1) I have not lived in the same state as my broader family since I left home, and 2) my son has not lived in the same state as me since he left home, and 3) C is an immigrant who left her entire family behind in South Africa 20 years ago. So moving to Ecuador didn’t really create much bigger distances for us. It’s not actually true that I can visit my parents as easily as I could if I still lived in Phoenix, but it is almost as easy. And C’s family isn’t any farther away than they would be if we were in Phoenix.
I will say the one thing people frequently fail to factor in to their overseas budget is the cost of return travel. Prior to Covid, we had been making one trip to the US each year, and one to South Africa each year. It isn’t cheap to do that. You can get reasonable airfares if you plan, but things like rental cars (and the associated insurance) are really expensive for any extensive visit.
Oddly, traveler’s health insurance for non-resident travel to the US is surprisingly affordable. I bought about 6 weeks of health insurance for us for about $100 per week. It was a plan with a $2000 deductible and a $5 million maximum benefit cap, so probably not compliant with the ACA as a permanent plan, but it’s less than $500 a month for two 60-yr-olds and it’s real coverage up to that maximum. And it’s renewable for up to 3 years total, though I don’t know how you can actually comply with the terms of the policy (you can’t be ‘residing’ in the US, you have to be visiting) and also use the policy for 3 years.
A little U.S. contrast: I wonder if those who advocate Medicare For All know that, in terms of user costs, it is nothing like other nation’s single payer or national health care systems. First of all, there is the choice between Original Medicare and Medicare Advantage. Advantage plans, which are heavily advertised on TV, are sold by private insurance companies. They can be cheaper than Original Medicare, but come with some important restrictions, the most important of which is that you’re tied to the insurance company’s provider network. Your physician may be in-network when you sign up, but out-of-network whe you need them. And Advantage plans often have no out-of-network benefit.
My wife and I chose Original Medicare, the government-run plan, because there is no network restriction. We can go to any provider that accepts Medicare. This turned out to be really important for me last year, as I was able to go to the Mayo Clinic for my spinal surgery and cancer treatment. However, Original Medicare is nothing like free health care. First, there is the Part B premium, which is based on your most recent income reported to the IRS. For my wife and me this year, the premium is $440/'month. (Part B is virtually all medical serivces. Part A is in-patient hospital services, such as nursing, room and board, supplies, etc.) Then there is the Part B deductible, which is $202/person for 2021.
Original Medicare pays only 80% of the total amount due the provider after the deductible. For this reason most folks who have original Medicare also have a Medicare Supplement plan. Depending on the plan level (cost), the Medicare Supplement plan pays some or all of the balance left after the deductible and the 80% payment. Depending on the plan level, there may or may not be a copayment. Considering the year I had in 2020, my wife and I were glad we chose the most expensive plan, which covers everything, the deductible, the entire 20% difference and no copays. That plan cost the two of us $5,000/yr.
This one of those knows.
Doesn’t Medicare have what amounts to a network, in the sense that a lot of providers refuse to take Medicare patients due to the poor reimbursement rates?
No, the universe of providers who refuse to accept Medicare is really rather small. For one thing, those providers have deliberately shut themselves off from about half the patient universe, so they tend to be small, boutique practices catering to the wealthy. Also some states make being a Medicare provider a licensure requirement.