Be great to have the mortgage paid.. I have about 6 years to go on that plus two car payments (one will be done in April), the other in 3 years..I drive about 35,000 miles a year.. so having a car that is in good shape is important..CC paid off every month even though it hurts plenty some times.. reality is reality..
How many years did you all project out for living during retirement ? I plan to retire when I am 70. I am project 30 years to be on the safe side. I am modeling 8% return on investments until I retire, because of the rmd (required minimum distribution) at age 70.5. Thank goodness for those catchup contributions, lol.
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You are Da' Man to be getting an 8% return in today's market....
For accumulation phase the returns have been pretty good if you were dollar cost averaging during the bear market of 2008/2009. That is how I was able to recover the money and more than I spent for a life time in the hobby (90K), lol.
I'm 65 and am hoping to retire in two more years.
The investment plan I use (Permanent Portfolio ) has an average return of 9% and has been holding pretty steady at that.
To decide when I can retire however I am using the 4% Safe Withdrawal Rate and this formula .....
Retire when 4% of Current Net Worth + Annual Social Security Payments >= Current Spending
I don't see much point in projecting things out to the end of your life because 1.) You don't know when it is and 2.) Shit Happens
As for hobbying, I've been spending quite a bit lately with the thinking I'm going to give it up when I retire. But then again maybe I'll work until 70 like you just so I'll have enough to keep going.
I am not using social security payments in my planning. I am in that age range where we can't get full benefits until 67. Social security was only intended for the truly poor who never had savings and investments. By the time I retire they might say "Well you were smart to enough to invest no social security payments". If they don't tax me out, I guess I can use social security to hobby with at that age, lol.
and then get your SS payments.
8o)
I think you are right that SS was designed to keep senior citizens out of poverty (actually it was intended to buy the votes of senior citizens by FDR's own admission) but to placate Republicans who might want to repeal it in the future (kind of like Obamacare now), it was set up to look and act somewhat like a government pension plan. It is currently projected that benefits can be paid at current levels until the years 2033-2037 due to the trust fund making up the deficit and if nothing is done after that and the system reverts to pay-as-you go, it is estimated that it will still pay 70% of benefits so I wouldn't discount it completely, especially if you just want to think of it only as the hobbying part of your retirement budget
Social Security was never intended only for the truly poor -- it was intended for everyone so that everyone would have a stake in it and the more well to do wouldn't be able to repeal it. With our "progressive" tax system, theoretically more well-off seniors would pay back more of it.
Why I cut back.. I just turned 65 a few months ago... I stopped (we'll see about that) as I started going into my current employers 401k and getting a distribution when I ran out of money because of hobbying.. not good..
My current return on conservative investments is 6.33% (I just checked today).. I have several other annuties that I put old plans into that guarentee a return of 7%.. and a lifetime income of 6.2% of total value between that & SS.. without "extra expenses" I would be OK I guess.. Because of my expectation of needing extra money.. I have a plan..
I have clients that I enjoy working with.. so when I slow down, I will retain about 6 (out of the 40 or so that I have now) that are my larger clients.. From them, I expect to earn an extra $50,000 or so a year for as long as I can stand it.. a fellow I work with is almost 80 .. so it's up to me.. I slowed way down right now, because my "plan" has not been approved or finalized by management.. Until then I am being cautious.. Because I have slowed down forthe last 12 months, I am not running around and finding new income.. and my compensation, based upon current clients ,is designed so that I HAVE to get new customers to have extra money.. so something had to give.. so, I decided I had my fun for awhile until I was sure about what I would have and how much I needed to live.. My genetics dictate a very long life.. so I have to be careful.. no one dies before 100 it seems.
That is a good point you make about life expectancy. The IRS has projections on the table based on your age, and it seems like is close to 30 years now, it is 27.2 years. I am using taxable investment income to hobby with now. Capital gains and income distributions I get on a regular basis. That allows me to save to the max (lowering adjusted gross income) and hobby with stock market gains.
I had a high pressure, high stress, high level corporate job. Didn't particularly like it but it was very lucrative. My org made its numbers, but for two years in a row they trended down. I understood the culture so when I received the "tap on the shoulder" I wasn't surprised.
The wife and I had been planning what we wanted to do with the rest of our lives, so the timing was great. Perhaps subconsciously I had been setting myself up to get the axe. I took about six months to get back in shape and get my health back.
In my case I received three years of pay. A very nice pension and retirement bennies package. We then sold both our homes, cars and 90% of our stuff. Took a year off and traveled around the world. Six continents, 38 countries and about 76,000 miles.
We have no debts, paid cash for a place in Chicagos River north area. Not oweing any money and starting over has been an amazing cleansing experience.
You do need to find things to do. Besides working out and volunteering I work 20 hours a week in retail. Kind of fun to be around younger people.
8% is an unrealistic goal. That's about the average of the U.S. markets as we went from a frontier republic to the worlds economic super power. I use 5%. People tend to remember the great years, 2013 and 14, while forgetting the bad ones., 2007, 2008.
IMHO, if you have investments in the markets, you should take SS as soon as you are eliigible. That way you are not spending down monies that have potential for gains, larger than the amount of your SS check.
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It's important to have a plan and not let hobby spending bankrupt us. We have to be smart and even in old(er) age think with our heads. I HOPE I'll have the wisdom to cut back as necessary when I retire (I'm planning for age 70, less than 3 yrs from now).
Sexual death often comes a lot sooner than age 100 even if physical death is kept at bay... maybe getting out of the hobby, God forbid, will help compensate for the added medical expenses.
retire when you are ready and if you are thinking about it, you are ready. Go into retirement with the mortgage paid off (if possible) and minimal cc debt. You will find you spend about 75-80% of what you once did when you had a full-time job. No suits, dress shirts, ties, etc. to purchase. Less spent on gas also.
Once the RMD kicks in, you will have plenty of extra cash; I know, you can go re-invest it in other areas.
I hobby less now only because I no longer travel as much for business and can get away less to play. As long as my equipment works, I plan on using it.
Be great to have the mortgage paid.. I have about 6 years to go on that plus two car payments (one will be done in April), the other in 3 years..I drive about 35,000 miles a year.. so having a car that is in good shape is important..CC paid off every month even though it hurts plenty some times.. reality is reality..
Steph,
I'm slow..what is KK? Curious.. & does it feel good?
Mostly on account of hating to wake up before the sun is up in the winter.
For those who are retired, a question?
Is it hard to find stuff to do every day?
I find that I have enough to do on weekends, but on 3 day weekends I just sort of mope around on that 3rd day.
Thanks goodness for You Tube.
I've been semi retired for 7 years. i work pt about 25 hrs per month on avg. i must say i never have to look for something to do. i have 7 grandkids, play golf, get to the gyn 5 days per week. sometimes i need some down time. i try to make hobby appts for 1.5hrs or more.
This is a good question Mr. Fisher and I have asked it myself many times since I don't have many other "hobbies" except for the "hobby".
I do have one and that's cycling which currently I go for 20-mile rides on the weekend. So I figure what I'll plan on is doing that every day to start off and then after my ride figure out what I'll do next.
Looking forward to what that might be even though I have no clue. Life is an adventure (or else you put a bullet in your head).
Not at all. I spend at least 5-6 days/week at the gym. Now I do the household responsibilities during the week (pay bills, fix this or that) rather than on weekends. Spend lots of time with the grandchildren, watch sports and other shows on TV without regard to doing work stuff at home in the evenings and also read a lot.
I also work part-time to help fund P4P.
I mean, don't tell me, lol, but if it's something you can do a little bit of? When I want something over budget I work a pinch more.
OR, you could designate a portion of your portfolio to hobby. It might change your risk tolerance so you can bump up your earnings a bit. So back into today's dollars enough to pay for, in perpetuity,... a visit a month, for example. Then play with the numbers- will you risk half of your sex for a chance at twice a month?
When a proposition has a built-in, natural motivator, use the hell out of it to make more. Spending less is just stressful. My two cents. 
I've got enough to last at least 20 years in retirement. But my plan is to take it all out one day, call up about 10 girls, get a bunch of coke and have a heart attack boiling them.
The only way I know about in the present economy is to let social security build up from age 66 to 70, which it does at 8% a year (2/3% per month). I have no idea how many years past 70 I will be able to continue to work,but at least I will have maxed out social security. Another advantage is that the RMD does not kick in as long as I continue to work.
I've been putting amounts created in prior 401k's and defined benefit plans (my company has been sold 4 times since 1999, each new owner has a new plan).. into annuties.. They have come a long way and are not the tough vehicles they used to be. I just plunked a good amount into a new one.. I got a 7% bonus on top of my amount and a guarenteed interest rate of over 7% . After a year I can withdraw up to 10% of the total value as income.. If I only take out 6%, they guarentee a lifetime income of that amount and the principal stays intact for my heirs.The annuity market is a moving target.. new plans are introduced and existing offerings change.. I have one that just matured (it had an 8 year term) so I took it from one company and into another.. got the &5 bonus on topof my principal.. and the biggest rap against them has been that the investment is stuck for a number of years.. that's old news and no longer valid..
I'm 65.. and will be 66 (obviously) in 9 months.. Then I can take my SS with no penalty for outside income so I can work plus get the SS (double dip).. The next 9 months will be tough .. but I figure when I get the ability to double dip.. I can then dip my wick with the extra money.. 
...son, any idiot can die broke. The trick is to die owing a million dollars! But did I take his sage advice?? NO I did not. Instead I made excellent money management decisions and have retired earlier this year with more money than I'll probably ever spend at the rate I'm going, Hobbying included. What a waste! I need to spend more money on girlz and see if at the very least I can die broke.
As for the OP's remark about 8%, I think he meant an 8% withdrawal rate, not an 8% return on investment, which, as noted, is hard to get in today's market.
As for Social Security, you should start taking it as early as possible, age 62. All advice to the contrary is a scam! Do the math! the money you'll miss in all the years leading up to 67, or 70 is not worth the extra amount you will get at those ages. It will take many, many years to break even let alone get more dollars.
Agree about SS.. I don't take mine until 66 because of the $1 penalty for every $2 of income until then.. but I tell folks not to wait if they are not working.. you break even usually about 83 or something like that.. I would rather have the $$ now when I can enjoy them..
As for the OP's remark about 8%, I think he meant an 8% withdrawal rate, not an 8% return on investment, which, as noted, is hard to get in today's market.
As for Social Security, you should start taking it as early as possible, age 62. All advice to the contrary is a scam! Do the math! the money you'll miss in all the years leading up to 67, or 70 is not worth the extra amount you will get at those ages. It will take many, many years to break even let alone get more dollars.
I have to disagree with the statement that advice to delay taking SS is a scam. It is an individual decision. You have to consider your financial status as well as your potential longevity. If I remember correctly, it is around the age of 80 that the break even point is reached. Also SS receives an inflation adjustment.
the age of 70. Get the $ while you can and if you don't need it to live on, invest it. At least if you kick the bucket early your heirs will get it rather than the gov't keep it.
I'll report back in a few years and let you know how it's going.
If you take SS at 62, and you don't qualify for medi-care until 65, how does one pay for medical insurance? Where is that cost figured in?
Your particular situation will of course determine your best course of action. I was looking at SS as a stand alone program, not including any other things. From that standpoint, you are more likely to have a financial advantage if you start drawing SS at age 62. The government knows this! They win if you delay SS.
The withdrawal rate should not be more than 4% a year.
Depends on the type of investing. If your in the accumulation phase dollar cost averaging it might be greater. If you take some risks, like investing in small cap index the average annualized returns are 10%.
Also if you take into account dividends reinvested it is more than 8%.. From October 1929 to October 2014. The average return of s&p 500 is 5.461%, with dividends reinvested it is 9.588%.
http://dqydj.net/sp-500-return-calculator/
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you always have to ask yourself 2 questions at retirement age..
"Will i outlive my money?"
or "Will my money outlive me?'
if you answered yes to the former..you should hobby very wisely if at all..
I'm weighing in late on this having just returned from a very enjoyable time spent with the grandkids out-of-state. I'm fast approaching 65 with nearly 3 years under my belt retired. First off, I would have continued working until 65 had I not been eligible for an employer sponsored retiree health care benefit. I took SS at 62, calculating a break even payout of age 77 (current U.S. male life expectancy) had I waited for full SS at age 66. I reduced my monthly nut considerably going into retirement: Reduced my housing costs by 30% by relocating. Transportation expense way down without the work commute, plus reduced driving should have the low mileage reliable car I own last 20+ years. Cook at home more, so the food bill is way down. The tax burden is way down as I'm no longer contributing to SS and Medicare with payroll deductions. I'm in a lower tax bracket with a smaller gross and live in a tax friendly state that doesn't tax SS. My retirement tax burden is 2-3% of gross vs. 30-35% while working. So bottom line: my net retirement spendable is nearly identical to my net working spendable. That allows me to pretty much do what I want, when I want, within the boundaries of my spending ability. My retirement income is a mixed bag of SS, pensions paid out as fixed lifetime annuities, and withdrawals from a couple of retirement funds that I have control of (currently about 4.6% withdrawal rate, with returns besting that). With growing equity in my home, and retirement accounts growth out pacing withdrawals, my net worth has grown since I retired. I wouldn't trade owning 100% of my time for anything. Life is good; I have no desire to work, nor do I need to. Do I get bored? What's that old saying? The worst day fishing is better than the best day working. I projected out 30+ years when planning retirement, but one can never know for sure how the economy will go in the short term or the long term. So far so good....