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Monday, February 13, 2017

When is it the right time to Retire?

(Source unknown)

I love to read blogs and this is a question and subject that I keep reading about.  If only I could create a career reading blogs  *hmmmm*  something to think about. 

One of my favorite blog as of late is a blog written about “FIRE”.  For those of you who might not be aware of this term (as I wasn’t until I started reading about it…imagine – I thought it was strike a match and light a fire) – it is an acronym for Financial Independence Retire Early.  If you are interested in reading more about this mindset – please check out the blog –  Our Next Life Blog

This blog is owned by a couple (she is in her 30s and he is in his early 40s) who have a goal to retire by the end of 2017.    WOW…is that not a great goal?  This blog talks in great detail about their preparation and planning to get to this magical point in their life.  They want to travel and enjoy life while they are still young enough to do so.  

Now – let me say – while I love the idea of retiring early – I am closer to retirement age than I am to “let’s retire early” age.  Nonetheless, this blog has really made me think about doing some serious planning for retirement.  I am the typical American, I have a job, I have a 401K, I have some money set aside as an emergency fund AND I also have a mortgage and credit card debt.  The financial independence part of FIRE is very appealing to me.  I want to take better control of my money as I look down the tunnel to retirement.  I want to be financially independent or as much so as I can be when I reach retirement age.  In order to do this, I must take a good hard look at the steps that I need to take to achieve this goal as I prepare to enter into financial independence/retirement:

     >   Pay off mortgage (only a few more years to mark this off the list) 

     >  Pay off consumer debt (credit card debt) – I have a daily/monthly plan.  I track my credit cards monthly, I have them ranked by balance, monthly finance charge and month/year of when I plan to pay them off.  Will share more of this in another post.

     >  No car payments – I AM THERE!!!!  

     >  Build a larger slush fund.  This fund is my “easy to go to money” for small expenditures that I did not budget for or might have surprised me.  I can use this slush fund for a class that I might want to take such as “Photography 101”  Right now – my goal is to have $3000 in my slush fund

     >  Continue to fund my “emergency fund” which will be used for those truly unexpected expenses.  Prime example of this is having to have the attic of my house completely stripped of all insulation due to “Rocky Raccoon” taking up residence in my attic.  This pinged me for almost $12,000.  If not for homeowner’s insurance and my portion of the deductible I would have had to use a credit card.  YAY for emergency funds.  Now to build this fund back up to before the Rocky episode.

     >  One other thing that I am planning to do is to begin living off the “estimated” amount that I would receive from social security each month.  A couple of reasons for this – it will allow me the confidence that I can live off the amount and it will also allow me to “bank” the amount of my monthly paycheck either into my slush fund or my emergency fund.

     >  I have a couple of pensions (very small amounts) that I will be eligible for when I turn 65 however I do not really want to depend on that as part of my monthly income for monthly expenses.  I would like to set that small amount aside for future travel plans during the retirement years.

     >  I would like to find a resource for “after retirement commences” income.  This is something that rather excites me.  An opportunity for something new that I can do and not feel the pressure of a demanding job.

Let me say – these steps could be used for those want to retire early or those who are looking at a traditional timeframe.  I am far from a financial guru but I do believe that if I can accomplish these steps I will truly be good and ready for retirement.

What are your plans to achieve retirement?  Are you ready for

                                                      (Source Unknown)


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