What is Your Retirement Strategy?

Here are the various retirement strategies I can think of:

• One day you quit work completely (usually around 65) -- living on savings, Social Security, or a combination of both. This is the type of retirement most people think of when someone says they are retiring.
• You work as long as you can, retiring only when you are forced to for health reasons. You scrape by on Social Security. Unfortunately, this is the retirement most people are facing today.
• You save like crazy and retire early (without working -- though you could volunteer, etc.) It's a "dream" -- 45 to 50 (or younger/bit older) and enough money left to keep you going for the rest of your life!
• You ease into retirement with early semi-retirement -- keeping expenses low (so you can still save a bundle) but still working at least a portion of each week. 40 hours per week becomes 32 hours, then 24 hours, then 10 hours (or something similar.)

Did I miss any? I'm sure I did (you can mix and match when you retire, how you live, what you do in retirement, etc. almost to infinity). But these seem like the most common to me.

Notice the key ingredient in the "happy" outcomes (the first one and #3 and #4) is saving as much as you can. In most things financial, and retirement especially, savings gives you a lot more options, better options, and more flexibility. Let's hear it for saving money! :-)

I'm thinking the early semi-retirement is the most likely option for me. If I wanted to roll the dice a bit, I think I could probably retire completely in a few years (five or so.) But I'd prefer to be conservative. So what if I start to take early semi-retirement in three years, work a few extra years, then ease right into full retirement (where I could spend my days volunteering, full of hobbies, etc.) if I want? Yes, this is the option that best suits me at this point in my life.

How about you? What are your plans for retiring?

Comments

[Rae]

I’m hoping for something like 4, although even "early" retirement is probably a good 20 years off for me. I can’t imagine wanting to NOT do some sort of work, but that doesn’t necessarily mean that it’d be good paying work, just something I love doing at that point in my life for 10-20 hours a week.

[texashaze]

I'm planning on a combo of 1 and 4. Maybe semi-retiring in my late 50's or very early 60's.

[Money Reasons]

I'm all for early semi-retirement, or at least a career change doing something new that I also have an interest in!

Somewhere, in the back of my head, I'm actually hoping the career change will be something that I love doing and I'll even make more money at it than my current day job now...

We'll see!

[Elle]

I'm for a semi-retirement. I think I would enjoy working on a part time schedule during my retirement years.

[Old Limey]

I was planning on retiring in the Spring of 1993 just after my pension would bump up another notch but in the Fall of 1992 my company came out with a plan called SIRP (Salaried Incentive Retirement Plan) that offered 1 week's pay for every year of service. I had been with them for 32 years so I took their offer and retired at age 58, as did many of my colleagues. The 32 week's pay was enough to retire all of our debt. Now that the Cold War was over and the USSR had been broken up defense contracts were drying up and the company needed to downsize.

I spent my first year working on our home, taking care of all the jobs that I had wanted to do but was too busy at work to get them done. My wife soon retired, the kids had already left home, and we were free to do even more travelling. There's an "Age" window for many of the most adventurous trips that require lots of nasty shots. We had already completed most of the difficult ones on our list to places like Africa, China, Indonesia, South America, Eastern Turkey, and (the best of all) a high altitude trek in Nepal to the Annapurna mountain range, but retirement allowed us to take 2 or 3 easier overseas trips/year for a while. As we got older it eventually dropped to one/year, and in 2010 we made our very last one on account of my wife's health issues and the difficulty of visiting certain countries - Egypt was one that we missed. With all of the extra airport security issues and the many overseas airports that now have more flights than their facilities were designed for, really long trips half way around the world can be very exhausting when you are 76 and 77 - business class helps - but it's still pretty arduous. Airline cabins are also incubators for many infections that other passengers may have.

To those not yet retired, make sure that if you retire early that you can bridge the gap until you are able to join the fast growing band of us that are on expensive entitlement programs like Social Security and Medicare. For example, our 2011 health care costs us just $291/month for both of us on my ex employer's group insurance Medicare Advantage plan at the best clinic in the San Francisco Bay Area. In 2010 it was $222/month and in 2009 it was $163/month, so plan on increasing healthcare costs especially if you aren't in a group plan. My wife also has a nice pension as a retired teacher (that increases every year) and her SS check is 50% of the one I get. My pension is fixed and for the last two years SS has not increased.

[Beth]

I'm hoping to go the semi-retirement route. I think I would get bored easily if I retired early and having a career I could scale back up would make a great hedge against financial misfortune/disaster.

[Rod Ferguson]

#3 for me, although my target age range is 53-55.

@Old limey - I've been to Egypt, did the Pyramids tours, went to Alexandria and Cairo, etc. Honestly, you aren't missing much; Turkey was a better visit than Egypt was for me (the food alone in Egpyt was enough to make me not want to return).

[Rockbell]

Hope to get to Old Limey status in 2.5 years. 62 ears old, Pension,health care bridge to Medicare,Post Medicare Heath Insurance No debt, Kids gone, fully self insured medical and LT Care. Will ladder Social Security to maximize benefits post age 70. 37 years down and 897 days to go!

[Alotta Lettuce]

I'm going to be honest an air a major ignorance on my part: I'm 32 years old, and until quite recently (maybe a year ago), I thought that the goal in regards to retirement was to save $X amount of dollars and then spend THAT MONEY when you retire, essentially hoping to run out of money around the time that you die.

Turns out, that's not the way to do it at all! Smart people save $X amount of dollars and live off the INTEREST that money accrues for the rest of their life - never touching the principle at all.

[Bogey]

As I have recently discussed over on my blog, a friend and I are currenty in the process of putting a real estate partnership together. I already own one rental property myself. We are looking to start acquiring properties immediately, with the end goal of "retiring" and managing this properties full time somehwere between 45 to 50 years old. We are both 26 currently.

If we have all our personal debts paid by that time, the income from our properties should supplement us enough until we can start tapping retirement funds.

It'd be nice to be able to do this in the 35 to 40 year old range. I guess we'll have to wait and see what happens. Investing in real estate is very capital intensive. That is the on;y thing preventing more rapid growth at this point.

Bogey

[Stephen]

I've taken a different approach to retirement: mini-retirements every few years. I'm currently 26, and after working for 4 years in the high-tech industry, I'm on a break and traveling around the world until my disposable savings runs out, so a year or year and a half. After that, I'll go back and work for some time (until I once again have enough money saved up), and go travel, or spend time with my family, or pursue a hobby in depth some more. With my experience and in my industry, it's been easy for me to find a job I enjoy and pays well and I'm not concerned with finding a new job when I return home.

I was making enough money and was living cheaply enough to fully fund a 401k and Roth IRA for 4 years, as well as saving almost 30% of my income per year. I guess I could continue to do this and retire and 40, but who knows what my life will be like then. I currently have the health, energy, and passion to travel full-time, so why should I wait until the future to do the things that I really want to do now? I could have a family, poor health, an injury, or the necessity of staying near home to help take care of my parents and family that would prevent me from traveling. Or I could be dead.

I know this isn't for everyone, and may seem like a foolish thing to do for some people, but it has worked for me and I'm happier than I've ever been in my life.

[KevinC]

I am currently 47 and plan on retiring at 54 (maybe 52). That is the year my son will graduate college. I will have 30 years in a state pension fund and expect that my retirement take home pay will be about what it is currently (I have used a very conservative extrapolation of my current salary to determine salary 5-7 years down the road). However, my retirement will not include health insurance, so I plan to continue working part-time to cover health insurance and maybe a little extra for fun. This would be my plan until social security and medicare kick in (if they still exist!).

[Tyler]

marry into FMFs family and live out the rest of my days in comfort.

[FMF]

Tyler --

I think my daughter is a bit young for you! ;-)

[Chris Parsons @ Small Business Dreams]

Retirement is boring. If I have passions that I want to pursue, I'll make a business out of it and continue to work until I'm physically unable.

I don't plan to retire. If you own your own business, you don't ever have to retire - you can just be less involved.

[W A G]

There is no way, that we as a nation, can keep spending the way we are at the federal and state levels and survive economically. I am in sales and retired 4 1/2 years ago. I keep in contact with the old horses in the stables that I used to call on. These old relationships are invaluable as a source of retirement income. Good luck to you young guys out there. Your going to need it.

[Ginger]

My plan is to get rental properties which will allow me to live our the income from that. I guess that would be semi-retirement? I also plan to save between 1-4 million in addition just in case the rental thing does not work. I am 25 with my first duplex, looking for my second but I only have about $9000 in my 401k/IRAs so I need to beef that up.

[Jan]

We chose plan 5. One (or more) retired through federal systems or military and has a retirement check. Our children are following our example. The first years of "retirement" are iffy since you can be recalled to service at any moment until the age of 60 (which can and does happen). After 60 medical continues until 65- with medicare. And don't whine. The salaries- in those days- were much smaller in the government and military. My sister and her husband put in as many hours as we did in the 20 years and have several million in the bank to show for it. Frugal living, investing and enjoying retirement on the cheap.
Yes, AllottaLettuce- you can live off your investment returns- or you can live off a combination of pension, interest and principle. Those who choose to live high lifestyles will go through their money quickly....my in laws made it to 83- they started with $250,000 and ended with about $70,000. They knew what was and what was not important:>)

[Matt]

Goal is 59 1/2 and that is 11 years from now.

What happens in those 11 years depends on how I will retire. I still like what I do but I am not sure an employer would keep me at 1/2 time. My current employer didn't for some who did semi retire.

I might do my artwork or woodwork or combination of alot of different things.

You can have plans and stratigies but a simple twist of fate can change it all.

[BD]

I've been saving like crazy, but since I make almost nothing, my savings are small. So I'll never be able to retire. I'll keep working until I can't work any more, and hope that what little I've saved will be enough. Social security most likely won't be around when this happens, or at least not in its current form. I'm pretty sure I'll end up homeless when I'm old, no matter how frugal I am, simply because I have no earning power (making less than $10,000 per year, every year of your life, doesn't allow you to save much.)

[Mike Hunt]

Most people view retirement as this:

http://www.despair.com/retirement.html

I've been saving as much as possible. Not sure if I will use this to retire early or keep looking for other jobs that are challenging and force me to learn more. It's good to have the 'insurance' of a walk away fund if the work environment gets too difficult.

-Mike

[Sunil from The Extra Money Blog]

I fall in a 5th kind of a plan, which is to start establishing multiple streams of income early and thus semi retiring early several times over time. saving and investing go without saying, and the route can be significantly expedited by turning on more "faucets" of income, particularly ones that are somewhat passive in nature to allow more freedom and flexibility.

[KH]

I'm looking at option 4 starting in about 18 years when I'm 68. I think I'd be bored doing nothing and I would enjoy teaching a bit without all the administration and research burdens of my current job (I'm a professor at a private medical college). Financially I should be OK but I'm still saving a lot because my kids are not yet through college and who knows how much that will ultimately cost.
As a retiree, I'll have a work pension (knocking on wood that the fund doesn't go bankrupt meanwhile), access to my workplace's medical plan, plus social security and other retirement accounts and investments.

One thing I probably won't do is marry my boyfriend even though I'm crazy about him--that marriage tax penalty would send us into stratospheric state and federal tax brackets! Oh well.

I'd like to do a little traveling and lots of outdoor recreation when I retire, including hiking and gardening, and I'd like to get back into my old artistic aspirations and do a lot of painting and see where that goes.

[carol]

I plan to retire around 65, take time off to assess. I'll volunteer, enjoy my hobbies, and perhaps work part time, flexible schedule. All in about 2.4 years. Home will be paid for, full pension (I still will pay a Medicare supplement, no debt. One thing I know for sure: I won't be sitting around; places to go and things to do and people to be with. I'm leaving my options open....

[Bad_Brad]

A variation on the last bullet point is this ...

When I was 22 years old, I used to think, "You know, if money was no object, I would be a teacher and coach basketball. Those are my passions. Unfortunately, money is an object. Guess I'll get my MBA."

So I have a job now that is allowing me to make a lot of money, but I'm not that passionate about it. But, when I quit in my mid 40's (about 10 years from now), I will have enough money that money will no longer be an object. And I will pursue my passions of teaching and coaching. For a lot less money. But I won't care - I would do that kind of work for free.

[kjaxx]

Retire w/ a military pension at 40ish. Work Dept of Defense (while receiving first retirement) and retire again at 60ish. Receive two retirements plus personal investments made along the way. Not counting on SS that would be a bonus when we get to that point.