A Happy Retirement: Making the Biggest Purchase of Your Life

Is Your Motivation Challenged When It Comes To Saving for Retirement?

I think everyone deep down hopes to one day have a happy retirement. But it seems that people have a problem saving for it. After all, it is a consumer driven society with lots to spend money on. To get started saving and stay motivated it’s time to rethink how we look at our retirement. Think of it as our life’s biggest purchase and just like any other purchase it will be limited by our available cash.

The bummer when buying your retirement is that unlike other big lifetime purchases like our education, home, car, etc., a decent and happy retirement can’t be financed. We simply cannot wait to the last-minute and plop down a 10% to 20% down payment and borrow the rest to get what we need or want. It takes assets.

The other happy retirement equation that needs answered is knowing the retirement basics, features and options we REALLY want to have. Our retirement features and options has costs associated to them just like any other large purchase we make. We have to complete some product (retirement lifestyle) research and save as much as we can to buy the retirement we want. If we don’t it’s simply settling for the retirement we end up with.

A Decent and Happy Retirement is Years in the Making – So is a Bad One

Surprisingly, although 80% of Americans work for employers offering some kind of retirement program, only 32% of these employees are saving for retirement

What are they waiting for?

A Happy Retirement: Making the Biggest Purchase of Your Life
Nope! Retirement money won’t come from heaven

OK I get it. Life happens, wages are stagnant, there are student loans, too many cool things to buy and do, etc. There are just too many reasons to ignore saving for retirement and put it off for later. Retirement is too far into the future to think about now. WRONG!

When it comes to saving for retirement, procrastination is our worst enemy. Saving something, even if it starts out as a small amount will be better than not saving anything. Especially when done earlier instead of later when time is on our side. It is a personal win-win with no downside. On the other hand not saving anything guarantees a worse retirement outcome.

Saving For Retirement is Putting Aside Money For YOUR Life’s Biggest Purchase.

You Do Want to Buy Something Nicer?

Nobody intentionally goes out to buy a bad education, house, car, or you name it. Who in their right mind would roll up to the grocery store cashier with only $25 to their name and $200 of needed groceries in the shopping cart. But when our money is short we do end up settling for what we can afford.

We have all had to settle a time or two for something either less than wanted, less than needed, or on the crappy side of things. Try doing that every day for the rest of your life.

There should be Social Security to help us with our retirement purchase. But it was never meant to be our retirement’s only source of funding. It would be very challenging to have a nice happy retirement purchased by Social Security alone. So ask yourself. Do you want to buy a crappy retirement? Are you OK with settling for a low quality of life over what might be decades?

Retirement is YOUR life that inevitably awaits you. Ignore or delay planning and saving for retirement all you want. It only hurts and limits you when it becomes your time to buy it. We can put retirement off for only so long.

We must rethink of it as our life’s biggest purchase and prioritize it as such. At some point everyone alive will have to buy a retirement. Either on their terms or not.

The Goal Should Be a Happy Retirement

Buying A Retirement You Will Want

Setting Your Retirement Base

Don’t let the numbers get in your way. We all hear the financial industry claims that we need to have enough to provide 80% (give or take) of our final income for retirement. Taking that number to get a retirement savings estimate would intimidate and demotivate any positive action for most folks. The big objective is to start saving something. You don’t have to set a savings goal to start. But eventually it is necessary to understand where you are and how you are doing.

Here’s what I did.

When buying something big there is always the base price. Then the cost rises when features or options are added. The same goes with our retirement.

The happy retirement base price is having our basic lifestyle costs covered. That being food, shelter, utilities, insurance, taxes, etc. The way I look at it is that not being able to cover these basics lifestyle needs is certainly a bad and unhappy retirement.

That base price can vary depending on where we live and other basic retirement lifestyle choices. Just like a big automotive purchase. Choosing a base Ford or Chevy will have a base cost or price before adding any features or options to it. We have to make sound retirement choices.

Setting Base Happy Retirement Goals

Figure out what your monthly budget will be to cover your basic needs. Use your current monthly basic costs. Then look at it for areas you will probably see reductions or increases and make adjustments. For example:

  • Staying put or moving somewhere cheaper.
  • Health Insurance. This is hard to figure given today’s political climate but assume it will be higher until Medicare kicks in.
  • Taxes. Probably lower than paying while working.
  • Transportation costs. No more commute may reduce the amount you will pay for fuel, maintenance, and insurance. More vacation road trips may cause this amount to break even or add to it.
  • What we are retiring to. Must-have activities of passion and interests that have costs associated to them. For example, hobbies and travel.

Set a realistic base model retirement estimate. Then do the math. Hopefully it is much less than the 80% of current salary. This will help set your base retirement purchase price and be used to set your base happy retirement savings goals.

Keep in mind that at some point social security will also be there to help pay those happy retirement basics. Get your Social Security estimate and plug that into your equation to reduce savings needs. Also subtract out any expected pension coming your way. ( I had to mention it even though unlikely today)

Based on the 4% retirement withdrawal model  you can simply take the yearly amount you estimate your savings will have to cover and multiply it by 25 to reach a retirement savings goal to shoot for. Remember that even if you don’t make your goal you are far better off than if you did nothing. Beat it and you have options. The future price of our happy retirement that we save for may vary as time goes on just like anything else. Make necessary adjustments.

Happy Retirement Features and Options

I love features and options but some are worth a lot more than others to me. I separated these out from my retirement savings calculations because I really don’t have to have costly add ons. Especially those that don’t really add anything to my happiness value. I would enjoy having some but I don’t need them to meet my basic happy retirement requirements. They are my wish list items that I used to set my highly optioned happy retirement savings goals. For example:

  • Travel. World travel wasn’t part of my base retirement but would be a nice-to-have if finances allowed.
  • Hobbies. For instance I have an active automotive hobby and would love to increase my participation which would mean more travel costs than my base happy retirement allows for.  
  • Sports. I always wanted to learn how to play golf but it does have costs to play.

Everyone’s valued options and features list is different. Just do a self assessment of things you enjoy doing now and wish to do in retirement. Figure out what the cost is. Then add it to your base retirement to calculate your highly optioned happy retirement estimate.

Consider Living Your Retirement Lifestyle Now

We decided to live our retirement lifestyle years before we retired early. We didn’t waste money on anything that didn’t meet our happiness values. This allowed us to reduce our monthly costs, pay off all debt, left more money to save, and gave us time to create a sustainable and enjoyable lifestyle.

In my case, our base retirement purchase number was more like 30% of our last salary. A lower base retirement lifestyle cost means needing less assets to pay for it.

When it Comes Time To Purchase Your Retirement

When the time comes to buy your retirement you will definitely get what you can pay for. Some get to choose when retirement is. For others it comes when they least expect it, ready or not. Hopefully there is enough assets to buy a happy retirement that covers all the required basics.

Having a successful retirement savings outcome increases the possibility of buying a retirement with valued features and options. As long as the base retirement is covered then being able to add from the wish list becomes an option. Limited only by what you can afford. Just like any other big purchase.

If a little short then anything saved will allow you to possibly fill the gap through cutting lifestyle costs or landing a part-time gig. That beats being far short with no money and few alternatives.

In Closing

It’s a consumerist world and culture that we live in. Buy this, buy that. This article is all about ending the procrastination and seriously getting started with saving for your life’s biggest purchase – YOUR retirement.

  • Motivate yourself by looking at retirement as something you want to buy for yourself, not just settle for.
  • Figure out how much you can dedicate to retirement saving.
  • Increase your retirement savings rate over time as conditions allow.

Never stop saving for the biggest purchase of your life. Saving anything is better than nothing. When the consumerist world calls your name and tempts you to stray from your retirement savings, remember that nobody else is going to buy you a happy retirement. Having a happy retirement is all on us to figure out and pay for ourselves.

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Some Early Retirement Observations

Seven Plus Years In Retirement: So Far, So Good. 

I’m just back from a short four-day Colorado mountain vacation. It was nice to just let go, relax, and count my blessings. The best part was all the laughs. It has me happily reflecting on the past 7 years of my early retirement and taking note of some early retirement observations.

As good as things are now, I can remember before retiring all the fears and questions that I had. Studying and planning can only do so much. At some point we have to jump in and either sink or swim. With anything we do there can be surprises.

Here Are a Few of My Early Retirement Observations


I will start with money because that is what most people are concerned about when retiring early. Will it last? Will it be enough? I think that captures most basic initial concerns. All those warnings that the first 10 years are critical for long-term success are enough to cause anyone pause.

When I first retired EOY  2009 the market was down. Then it slowly climbed up to record highs. In late 2015 it took another dump. Now it is even higher. That’s just in the last 7+ years. Maybe it’s the next 3 years that makeup the critical first 10 that will make or break my retirement funding chances. I doubt it but if it tanks I will deal with it.

My Early Retirement Observations – I am beyond sweating about money now. It isn’t that I have a massive portfolio, it’s just enough. But the experience of living off of my portfolio and seeing the value of diversification has me a believer. Sure, it can still hit the fan. But that is why I keep a bucket of cash to live off of when another financial downturn occurs. I still argue with my CFP about how much should be in there but that is another conversation. We do balance each other out.

We use a kind of hybrid 4% withdrawal rate. When the market dove recently we just effortlessly reduced some spending. Down-market conditions can bring bargains. We took advantage of some Hawaiian travel discounts offered then (we had budgeted and saved for years for a return trip to HI). That said, having a realistic budget and sticking to a financial plan has been the ticket for my early retirement success. So far, so good.

Working In Retirement

I had always intended to retire early and often. Not everyone intends to retire and then go back to doing something they always wanted to do for pay. But many folks do and it was kind of my main thing for many years. Before retirement number one I was constantly warned about the challenges of being age 50+ and landing an opportunity. I now look back at my encore career and other retirement gigs and have to smile.

My Early Retirement Observations – When it came to working in retirement there were some challenges but nothing insurmountable. Working in retirement was better and more rewarding than expected. I was picky and stuck to my guns which flipped the whole working dynamic. Working in these conditions can be fun. The big surprise is that as rewarding as it was I have no desire to jump into another paying gig. I think it’s because I have checked off all the boxes of things I wanted to learn, try, and do.

I have had many chances to get back in the game and have simply said no thanks. I have no idea what will happen next in this aspect. I believe the key is to just stay open to opportunities so I will be able to recognize them. When something comes along that’s aligned with my interests and passions then I’ll just give it review and consideration. I will know it when I see it. I’ll just keep doing my thing and If none come my way then no worries. So far, so good.

Other People

When you don’t have constant proximity to people then relationships come and go depending on the effort made to stay close. It’s easy when you are all shackled together in the rat race. I look back at the past 7 years and am amazed at how my social circle has grown and shrunk. Some faces and names fall off while others are added.

My Early Retirement Observations – I have found that it’s easier to put effort into keeping good relationships where both parties are willing to stay connected. Especially when there are still common interests and our place in life are closer together. I used to worry about it but now I get it. I am the one who jumped the rat race ship that was our main common tie. I have no doubt that we will reconnect as time goes on. Many of my old friends and rat race comrade’s lives will become closer in sync . As far as my social circle and the people in my life are concerned- So far, so good.

Appearance – Clothes, Shoes, and my Curly Hair

Early Retirement Observations
Frank, my favorite monster. T-Shirt

I always saw articles where you can adjust your clothes budget down once you retire. Amen to that. In my case it is way down. I look in my closet and actually have T-Shirts, a couple Polo Shirts, Aloha Shirts and a few of Flannel Shirts for winter hanging there. As for footwear, I haven’t bought anything but athletic shoes and flip-flops since retiring. My work/dress shoes get so little use that they will out last me. I also seem to go a long time between haircuts. I think it is part my non-conformance attitude about society and life. I just go in for a cut when it bothers me. That can take 6 months.

My Early Retirement Observations – We held onto clothes we don’t wear anymore or need for way too long. I just took 100 pounds of our good clothes to Good Will. I think once we retired that we weren’t sure what we would need. I laugh at all the time we wasted looking at them in the closet and just not paying attention. I did wear some when in my encore career so it hasn’t been 7 years of clothes hoarding but still way too long. Better late than never, the closet has a lot of room now. So far, so good.

Retirement Hobbies, Interests, and Passions

I am amazed how some things have cooled while new things have appeared out of nowhere. Mostly what was once a big hot deal in my life is now only warm. I have to believe that it is only natural. As new things come into play, aging, and getting better at this retirement thing I see my priorities shifting. My interest now focuses even more on family and health, both physical and mental.

My Early Retirement Observations – Some of my budgeted spending for things has dropped substantially as my interests and passions have cooled. I didn’t expect that, or at least not to this extent. I still do most of the things I had planned to do in retirement but after the first sprint years I now have a marathon pace. Just part of the early retirement experience and I’m continually getting better at it. So far, so good.

Health insurance – The Talk of the Town

Everyone is talking about health insurance. Will they or won’t they. When I retired I did it with a retirement medical insurance benefit. It cost $470 in 2009 when I first retired. Now I pay $970 for a much higher co-pay plan. The company I retired from was bought a few years back and the new company hasn’t said yet whether they will still allow us retirees to continue buying into their group employee plan. Health insurance has been my biggest budgetary item in retirement.

My Early Retirement Observations – Just like everything else there are no absolutes and I have to roll with the waves. I always thought the ACA was an awesome early retirement alternative. If I lost my first career retirement health benefit it would be a financially painless move to the ACA. However we don’t know what is in the cards right now because of F’n politics.

But if there is one thing I have learned from my 7 year early retirement experience is that I would rather do anything than be forced back into employment servitude. I feel comfortable knowing that I will do just as I have been doing. Figure it out and stay living my life on my terms while using the personal finance smarts that got me here. So far, so good.

Last Words

One of the things that made me laugh while on my short vacation was a T-Shirt sold in all the gift shops.

Calm Down

You’re Just High

(Mountain Town Name, Colorado, Elevation XX,XXX)

I guess that “Calm Down” could apply to anyone who is thinking about retiring soon and is worrying. Or anyone who has retired and still getting some experience living the early retirement life. Especially with all the health insurance issues being up in the air. Don’t get me started on some’s Social Security and Medicare gutting ideas.

Those issues aren’t the last that will show up in our retirement. We deal with things when they become more clear.

My biggest early retirement observation is that being high on the financial achievement of early retirement means never wanting to come down. But hey, we got here and the same smarts used to get here will be used to stay here. Just stay calm, stick to our plan, and work things out.

That is exactly what I remind myself about. I’ve got 7 years of early retirement to look back on and I’ve learned plenty from them. So far, so good.

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Retire Early and Often: A 7 Step Plan for Scoring a Successful Encore Career

If I was able to retire early and have a successful encore career then you can too.

When I retired early from a long career at the age of 51 it was late 2009. Unemployment was high and the economy was low. It took having a plan of action for a successful encore career to happen for me.

People have many reasons for wanting a retirement job or starting an encore career. There are obvious social and financial benefits. For me there were some things I really wanted to learn more about and experience. Getting paid to do it was the frosting on the cake.

Successful Encore CareerI had always planned to retire early and often.   I needed to set aside my decades long engineer persona and all of its associated all-consuming obligation. My wish was to spend more of my time doing things closer aligned with my passions and interests.

I didn’t need to return to work. What I wanted to do was cherry-pick opportunities that concentrated on the skills I enjoyed using. I was and still am grateful for all that the earlier version of me and my career gave me. But I needed to move-on and reinvent myself  to living a more passion-driven lifestyle.

I’d like to share my seven-step strategy for landing a successful encore career.

Second Act, Here I Come

My 7 Step Plan for Scoring a Successful Encore Career

Phase one of my plan started with taking some time off to decompress and enjoy some alarm clock freedom. Phase one had it’s unique importance. It’s where I could mentally shed decades of institutional career-driven conditioning. That and embrace the new life to be lived on my terms. Phase two is where the 7 step encore career actions came into full play.

Step 1: It’s All About and Not About Money

Have Your Financial House in Order

Obviously my retiring early meant having a good handle on my finances and lifestyle cost. In my case my early retirement funding paid for my primary living expenses. This allowed me to remove money from the retirement job decision process. With money off the table I can ask myself whether I would really want to pursue an opportunity. That question is a tool I use in what I describe as “retiring well”. 

Even if lifestyle funding isn’t at 100% for the long-term, knowing where we are financially removes any job search desperation. I believe part of my encore career success was the lack of financial desperation in my opportunity selection process. I Chose well. It was at no time salary driven. I also believe having a lack of financial desperation helps in the interview process.

Encore career success isn’t just about money. It’s about scoring an opportunity aligned with our values, passions, and what we are interested in doing now.  What I did was focus on the opportunity first. I then only negotiated an appropriate salary after being offered the position.

Step 2: What Floats Your Boat?

Identify Your Passions and Interests

I asked myself, what do I want? The whole idea is picking the right encore career opportunity.  I began with a self-assessment of my passions and interests. There were specific industry and positions I wanted to pursue.

I then listed my relevant payable skills and divided them into 2 columns. Those I enjoy doing and those that I don’t. I only targeted opportunities that tilted heavily to the payable skills I enjoyed using. There will always be a need to do the things from the less desired payable skills column. The encore career idea I embraced was to limit my exposure to the non-enjoyed column skills as much as possible through purposeful opportunity targeting.

Step 3: What’s Your Story?

Be Able to Enthusiastically Answer the “Your Story” Question

The question can come in many forms. Tell me about yourself. Why did you retire? Why are you interested in doing XYZ? That’s when understanding my story became important. In my story I am the protagonist. I am more than a chronological list of my experiences. My resume certainly lays out that professional experience and accomplishments list. I didn’t want to just roll through that boring narrative when given the opportunity to tell my story.

Choosing an encore career path different from one’s first long career can be challenging. Instead of my early retirement and subsequent search for a new opportunity looking like I’m some kind of unpredictable, undependable flake. I wanted my story to be about coherent transition. My story is about all my experiences and discovering what I am really good at, love doing, and what I have passion for. It shows how I am pursuing opportunities that are on a logical path forward to grow and be productive in those areas. It’s why I should be seen as an asset and not someone making a nonsensical disconnected jump.

What I found necessary for encore career success is telling my story by adding emotion and interest to the chronological history. I used feelings to set myself apart by adding how I felt during certain milestones or personal discoveries. I also emphasized the impact it had on me, the business, and/or others. My belief in my story is projected out when telling it.

Step 4: Keep Growing

Add New Skills that are Aligned with Your Early Retirement and Encore Career Goals

I am very curious and that is a big part of my early retirement. I’m always exploring new concepts and adding new skills. I had many interests that went in different directions when I was looking at opportunities. Even though I was targeting opportunities based on what I loved doing, the job ads listed things I had never done or wasn’t as proficient at doing.

I took free classes that were offered at my library. It was a gardening class and had nothing to do with my eventual encore career. It was about other encore avenues I was exploring. I also did volunteer work in what was another path unrelated to my eventual encore career. Although they did not result in an encore career the experience was still rewarding and helped me in other ways.

I did sit for a few sessions with a friend of mine who was an Excel and SQL-pro. He tutored me on advanced spreadsheet and database query skills. They were skills aligned with my targeted technical encore interests. Those skill learning sessions were directly related to my eventual coveted retirement job. There are many ways to learn new skills.   

When we keep growing in areas of our interest and passions it makes our early retirement fuller and only improves our chances for starting a successful encore career.

Step 5: Practice Makes Perfect

Test the Waters and Yourself

I actually started interviewing a year before I retired from my first career. At that time (2008) job opportunities were limited due to the deepening recession. Doing it gave me practice. Job interviewing is like a game or dance. The better we are the more likely we are to stand out. It’s something we get better at the more we do it. Our resume facts are the same. But it’s all about feeling and acting more natural and comfortable in the role of self-promotion and being judged.

I also did some volunteer work and a side hustle. The volunteer work was very physical and allowed me to test my interest and passion for the outdoor recreation industry. For the side hustle I was a private consultant. It was a contract related to telecom litigation and paid extremely well. I was able to explore my self-employment path in an area I thought I enjoyed from my long career. In both of these examples I decided the experience showed me that they weren’t exactly what I wanted to do in my retirement.

The volunteer work was too physical for my 50ish old body and I couldn’t easily keep up with my younger team members. I had to set aside that targeted path and honor my limitations. The other was too close to my first career. Requiring heavy use of skills I preferred to limit using going forward regardless of how much it paid. However it did bring to view how much I really loved some of the other skills I had to use. The experiences fine-tuned and narrowed my focus to the space where my eventual encore career lived.

Step 6: Get Off Your Island

Stay Connected To and Keep Expanding Your Network

After retiring it’s easy to withdraw from our professional connections. Our focus happily changes and the last thing we want is to stay connected to anything associated to the past grind. That withdrawal is what I allowed during my first phase of my early retirement (career mindset decompression). It was a time I concentrated on building my social circle. I began reconnecting to my professional circle in phase 2. I did this by email. No big drawn out dialog. Just reconnecting and reminding them of my retire early and often plans that many thought was crazy or funny when I mentioned it during my pre-retirement years.

I also expanded my network using LinkedIn. There were many people who had left my orbit over the years that I had worked with and respected. I reconnected and mentioned my intentions when appropriate. What all of this did was lock-in what I was going to do. It gets the word out but more than that it made me accountable to myself. I then started mentioning to my social circle that I was always open to the right opportunity. Retiring early and often became a great conversation topic at social events when others discussed work matters.

My successful encore career came out of LinkedIn. An email came to me asking if I would be interested in talking about an opportunity. Using social networks like LinkedIn is a necessary tool but it is important to go beyond them. Through face to face social conversation I met executives and other key connections to add to my network. Just by talking about what I did and what I wanted to now do.

Step 7: Throw Your Name Into the Hat

Post Your Resume Online and Talk to Everyone

I did what everyone does. I started searching for opportunities that were posted online or in the newspaper. Unfortunately applying for those openings and getting a call back during those times had a very low success rate. Hopefully things are better for that now. I did successfully get a lot of contact from simply having my resume posted online and viewable to recruiters. I have used Snag-A-Job, Monster, CareerBuilder, Dice and InDeed.

Obviously not all targeted jobs use recruiters to fill positions. If you have no network connections for a foot in the door, then the good old-fashioned way of going on site or to their online portal and applying is the only way to get your resume in front of someone. My stepped down retirement jobs came that way. The resume posting sites I mentioned above allow you to directly apply your posted resume to job listings. 

A key tip is to talk to everyone you can. Even when they are calling or emailing about a position that you know upfront you wouldn’t be interested in. Don’t just ignore them. Have fun and learn what’s going on. It is easier talking with them when you don’t want the job. I would return their calls/emails and ask for more details. After listening to their pitch I then would explain why I didn’t feel it was a good fit and what it was I was looking for. I would be totally honest. I would also share the name and contact details of anyone else I knew that was looking for an opportunity in that field. What this did was create a certain rapport and a new professional connection. I still get contacted from many of them even after removing my online resume over 5 years ago.

In Closing

I believe that retirement is the absence of NEEDING to work, not the absence of working. That doesn’t mean I will always do paid work or even look for new opportunities. But when I do it is something I really WANT to do. Parts of all seven of these steps came fully into play for me to score my encore career. They will again if I choose to do another opportunity.

Now that I’m in my second early retirement I look back at all of my retirement work opportunities far more fondly than my first career. I believe that’s because they were all on my terms and aligned with what I valued doing. Doing what I wanted to do for as long as I wanted them in my life.  

There is nothing special about me. We all have our own unique skill-sets and experiences. I hope by sharing my approach for scoring a successful encore career that it inspires you to see a way to set your own retirement job strategy into motion.

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My Backdoor Early Retirement: Loving the Loophole

I consider what I’ve done a Backdoor Early Retirement. It took a backdoor approach to exit the rat race long before age 59 ½. I took control of the things that I could and then went for a little loophole to avoid IRA early withdrawal penalties. Almost all of my early retirement funding is from my tax advantaged retirement accounts. I would have never been able to retire early under traditional retirement standards and rules. Paying 10% penalties every year would kill my and anyone’s long-term retirement funding chances.

Backdoor Early RetirementWithout using the backdoor early retirement approach I would have missed out on the past 7.5 years of my rat race escape. I wouldn’t trade the freedom I’ve experienced and all I have done in my early retirement for nothing.

There are reasons why there is a 10% early withdrawal penalty for taking money out of our retirement accounts before age 59 ½. Some are thought-out logical government attempts to discourage us from prematurely spending down retirement savings. More or less protecting us from ourselves. They have the authority to do this. We are given a tax break through deferred taxation on the amounts of our contributions and investment gains. That said, although legal and allowed, the 72t backdoor early retirement approach I took requires careful thought and planning.  

Why I Call the SEPP IRA 72t a Backdoor Early Retirement Approach

To me “backdoor” simply means another way in, out, or through other than the more visible front-door. Early retirement bucks the traditional work and retirement norms. There are specific ages associated to standard penalty free retirement savings withdrawals (age 59 ½), our beginning Social Security payments (ages 62-70), and receiving Medicare health coverage (age 65). Retiring before these dates requires careful consideration and in my case the use of the IRS rule 72t, an exception  to the standard (above) front-door retirement age guidelines.   

That is why I call what I have done and continue to do a backdoor early retirement.

My Backdoor Early Retirement Funding Approach

How I Got Here and How It Has Worked Out

Money-wise my early retirement was/is only possible through use of this rule 72t IRS exception that some may call a tax/penalty loophole. Many people don’t know about it. Some of those who do know about it wonder whether it’s a safe route to take. I am sure some caution is advised but It has certainly worked for me.

I was at an obvious early retirement disadvantage. 85% of my portfolio was in IRAs and I was a long way from age 59 1/2. My non retirement account assets couldn’t cover my early retirement funding needs for very long and I had no other source of early retirement income.

That is why I took advantage of the IRS SEPP 72t exception.  It’s a backdoor rule where one can establish Substantially Equal Periodic Payments (SEPP) based on IRS guidelines and avoid the 10% early withdrawal penalties. The rules are strict and crossing them results in penalties back to the first withdrawal. I recommend the free 72t calculator that I used in my early retirement planning at 72t.net

The 72t.net calculator will give you an idea of how the 72t calculations figure out and allow you to play with different numbers. I have more on another page about this subject of using your 401K and IRA to fund your early retirement without an early withdrawal penalty

How my SEPP 72t IRA Sits Today-

In February 2010 I dedicated $665K to my SEPP IRA. You cannot add to this SEPP 72t IRA later on if it gets into trouble during a major market meltdown. Rotten market conditions or not, once started it must continue 72t payments until the required end or you suffer the 10% penalty all the way back to day one. It was decided best to invest my SEPP 72t IRA conservatively for income.

Note: You can make one 72t payout method change to the “minimum distribution” to save your account if necessary. That is an option if your finances will allow for a major retirement income reduction.

Because the amount is locked up for 5 years or age 59 ½ (whichever is longer) it is wise not to allocate all of your funds in a SEPP IRA for 72t. Having other accounts to access if needed is a good way to go. I invest for growth in my other IRA and Roth funds.

My May 31, 2017 statement shows the SEPP 72t IRA value at $595K. It’s down $70K from it’s start but has paid out $244K during the 7 years 3 months of early retirement monthly income to me. My 72t payments will continue for 6 more months until the end of 2017. That’s when I reach the age of 59 1/2. Even though the account is less than what I initially invested, as far as I am concerned this 72t backdoor early retirement funding approach is a success. That’s just how real life goes in investing. $70K for 7.6 years of early retirement is a good deal. Although this SEPP 72t IRA is a little down my other untouched IRAs/Roths are substantially higher since my retirement.

Today’s 72t Drawback

I retired early at the age of 51 in December 2009. I started my SEPP 72t payments in February 2010. At that time the approved 72t calculation interest rate was set at around 3.5%. Today (June 2017) it appears to be at 2.55%. What that means is that at today’s 72t approved interest rate it would take more money dedicated to the SEPP IRA to generate the same monthly retirement income/check I am now getting.

A low-interest rate environment is certainly a challenge to this backdoor early retirement approach. However one must assume that Interest rates will eventually rise. A strategy to use would be to establish one SEPP 72t IRA now and use other penalty free funds to supplement any income shortfalls. Then plan to later start a second SEPP 72t account once interest rates do go up. You can have multiple SEPP 72t IRAs working independently to fund your early retirement.

There is one good thing about being forced to use a low interest 72t calculation for your early retirement 72t income. It reduces the chance of exhausting your SEPP 72t IRA through taking too high of a set withdrawal amount from it. In my case the interest rates dropped after I began my 72t causing investment interest income to also drop.

Of course this backdoor is closed if such low approved interest rates makes it so there isn’t enough in your portfolio to dedicate to a SEPP 72t IRA and meet your specific funding needs.

Last Words on this Backdoor Early Retirement Approach

Deciding to use SEPP 72t as a backdoor early retirement funding approach can be a little tricky. I had mine set up by the CFP that I had worked with for many years. They also manage my SEPP 72t and the rest of my portfolio. I receive a monthly deposit from my CFP firm.

Seek assistance through a trusted CFP, where your portfolio is held, or tax professional.  

There are certainly other backdoor early retirement funding approaches that can be taken. Like building Roth ladders, backdoor Roth strategies, having enough non-retirement account funds available, retirement side hustles, and passive income strategies.

Research and find the approach that will work best for your unique situation. My backdoor early retirement funding strategy has worked very well for me. I hope my sharing this gives you ideas for your own approach to pursue.

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What You Need to Know About Your Finances before You Hit 60


Know About Your Finances by age 60

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Retirement. What was once little more than a word, a concept that didn’t really matter much to us when we were young is now of vital importance. As we get older and as retirement age gets closer and closer, we begin to realize that every financial decision we have made in the past has brought us to this point in time.

For some of us, this will be a gratifying feeling because we know we’ve made most of the right decisions along the way, and for others, it will be terrifying because we haven’t taken this whole retirement business quite as seriously is we should have done. No matter which camp you fall into, if you’re under 60, you still have time to make some real changes that will make a difference to your quality of life during retirement.

Here are some important things you need to know right now if you want to make your retirement the best it can be:

How Much Longer You’re Expected to Work

If you want to know how much cash you’ll have to play with and what you’ll need to do between now and retirement to make things better for yourself and your family, you need to know when you’re expected to retire. On average, current Americans retirees quit work at the age of 65, but new retirees have been getting older and older in the past few years, with approximately 37 percent of all workers saying that they are likely to work past 65.

For many, working longer is a good option as it enables them to build up more savings for retirement, but if you work in a` very physically demanding job, or have health issues, it might just not be possible. Whatever your circumstances, you have to honestly appraise your ability to work and then take a close look at your finances to see what can be done.

When the Best Time to Trigger Social Security Is

Another thing that you need to know as you approach the age of 60 is when you should start claiming social security benefits. So many Americans trigger this benefit at the wrong time and end up with too little money to support them at the end of their lives. The best time to trigger Social Security is as far from now as possible. You see, the longer you delay claiming them between the ages of 62 and 70, the amount you’re due rises between 6 and 8 percent, which means you’ll be entitled to quite a bit more if you can hold out. I know this won’t be possible for everyone, and any future changes to the benefit might make things different, but right now, working longer or living off savings and private pensions until you hit 70 is the smart choice for most.

How Much of Your Income is Guaranteed

For many retirees, their Social Security will be the only guaranteed source of income they’ll get, but if you have any traditional company pensions, there is a good chance that you will be entitled to other sources of guaranteed lifetime income. You can find out if this is the case by talking to Human Resources and asking them to provide you with a statement for the benefits and pensions you’re due.

Once you know what you’re likely to be entitled to, you can start looking at your expenses to see if you’ll have enough to live on or if you’ll need to start saving more. You might also consider buying an annuity, which will give you a fixed income throughout your retirement. This is an increasingly popular option, which has helped countless retirees to better manage their money after leaving work.

What Your Safe Withdrawal Rate Is

 what you need to know about 401k

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If you’re not lucky enough to have a guaranteed lifetime income, and you’re going to have to make the cash in your 401(k) last as long as possible throughout your retirement, now is the perfect time to sit down and work out how much money you can safely withdraw each year, so that you don’t completely drain your account. This isn’t always easy because you don’t exactly know how long you’ll live, but if you work on the basis that you’ll live another 30 years after retirement, that should give you a good place to start.

A common way of managing the 401(k) used by many retirees is to withdraw no more than 4 percent of the balance each year. This is the best way to increase your odds of not running out of cash in that 30-year period after retirement, but it’s not a guarantee, and many financial experts are now recommending that this figure is dropped to 3 percent annually.

When to Concentrate on Paying Off Debts

When you’re planning for expenses in advance, not only do you need to know how much money you’ll have coming in, but you also need to know how much debt you’re likely to have. More and more people are retiring while still in debt, and this really isn’t ideal because it drains so much of their precious retirement income needlessly.

If you don’t want to be like them, you need to work out when is the right time to work on paying off your debts. If you’re fast approaching 60, that time is probably now. Start by paying off your most important and expensive debts, like mortgages, overpaying if you can, and then work your way down to smaller debts, which won’t change or mess with your future security quite so much.

Whether You Can Afford to Stop Paying Life Insurance

Most young people with their own families take on term life insurance policies because they are more affordable and because they will normally expire when they are no longer needed. If you are approaching 60, it’s the perfect time to take a look at your life insurance policy and determine whether you need to extend it, switch it with another policy or let it lapse completely.

A lot of people don’t want to let their life insurance lapse because they’ve been paying for it for so many years, but the thing is, a life insurance policy isn’t like a savings account, and that money hasn’t been building up – you’ve just been paying for the right to get a large payout for your family should you pass away before your time. If your children are now living their own self-sufficient lives, your mortgage is paid off, and you don’t need to worry about money in your retirement, there is a good chance that you can let that life insurance policy go and save the monthly cost for your retirement. Just be sure to talk it through with your family first.

Your Possible Future Medical Bills

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In recent years, a lot of retirees have gotten into serious financial difficulties because they have not properly considered any future medical expenses they could be expected to pay. Retiree health benefits are just not as common as they once were and because we all seem to be living longer, medical problems are pretty much a given for most retirees, which means that it’s probably sensible to look at purchasing a good medical insurance policy to see you through your twilight years, and that means you need to account for the premiums in your retirement financial planning.

Are you approaching 60? Have you been thinking more about your retirement? What plans have you put into place?

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How Adopting the Smart Home Revolution Can Save You Time and Money

How Adopting the Smart Home Revolution Can Save You Time and Money

The word revolution means different things to different people and depending on your personal perspective it may be good or bad – that’s just human nature. Even a revolution in technology that’s meant to make our lives easier can be a scary prospect for some. That’s definitely true when it comes to the rise of the smart home and everything that comes with it. It’s our position that the increased use of smart home technology should be embraced with open arms as there really is nothing to fear and a lot to be gained. Smart home technology can save you both time and money as long as it’s set up properly and being used to its full potential. Below you’ll find the reasons we’re convinced the smart home is good for families at all stages of the life cycle.

Why a Smart Thermostat Will Reduce Your Heating Bill

Until recently the idea of a thermostat that could actually help the home owner save money would have seemed like a myth right up there with the Unicorn. Sure they kept your home warm, but it was never an even heat on all levels and it wasn’t unusual for one level to be uncomfortably warm while temperatures were downright frigid on another. Enter the smart thermostat from companies such as Nest. This ingenious little device can sense your presence and turn up the heat accordingly – when no one’s home it can automatically turn itself down to minimal levels. This type of self-adjusting thermostat can potentially save you between 10 and 12% per year. For the average family that’s typically somewhere between $150 and $300 in your pocket. You can also use an app to access the Nest thermostat remotely to make manual adjustments if you know you’ll be arriving home soon.

Shedding Some Light on Your Electricity Bills

It isn’t just a smart thermostat that can save you considerable amounts of money off your energy bills each month. There are all kinds of smart technologies that have the potential to save you a lot of money in the long run – a great example is the Philips Hue smart light bulb. These bulbs can actually learn your behaviour over time. They are connected to your home Wi-Fi network and they can be controlled through it. Eventually the system learns when you typically go to bed and it will turn off lights automatically behind you. These smart light bulbs can also sense when you enter a room unexpectedly and raise the lights accordingly. It’s estimated that the average household spends as much as 12% of their electricity bill on lighting and this type of system can easily cut that bill in half. That may only be between $50 and $100 per year, but in today’s challenging economy every penny counts.

Remoted Doorbell Convenience

If you’ve ever had the displeasure to miss the delivery person when they show up with a package you’ve been waiting on for weeks you share my pain. A few years ago I was waiting on a new laptop to arrive and while I had a general idea when it was going to show up I didn’t know the exact day for sure. Not surprisingly it showed up while I was away one day. I ended up having to drive to the delivery company’s central depot a few miles away to pick up my package. This cost me a lot of time that could have been better spent on other things. There might not have been an easy answer to my problem then, but there certainly is now. With a video doorbell you can see who’s at the door and interact with them using its built-in camera and microphone from anywhere in the world.

A Lock that Saves Time

When you combine one of the video doorbells we just mentioned with a smart lock system you can easily make sure that package gets into your home safely and securely. A smart door lock such as the Schlage Connect can be used to control and allow access to your home remotely using an app. This can be used to let that delivery person in to drop your package off so you don’t have to pick it up, to

let the grandkids in the house so you don’t have to rush home, or just to check if you remembered to lock the door. All of these scenarios would have cost you precious time in the past, but with this new door lock technology those problems are a thing of the past.

Worth the Upgrades

The products we’ve talked about above can save you both time and money as part of your smart home. With these smart devices there may be a bit of cost upfront, but the overall savings are considerable. If you haven’t already started building your smart home you should get stared today.

Note: This is a guest post by Joseph Mack from smarthomeSAGE, a blog that analyzes the impact that smart home technology has on home life.

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What are the Best US States to Retire in?

Deciding Where to Live in Retirement: The 10 States Retirees are Really Moving to.

Like many retirees I have considered making a retirement move to somewhere with a little less winter and a little more summer. My wish list aside, doing a search on the best US States to Retire in comes up with as many variations as there are opinions and wish list attributes. With all the different search outcomes I find it to be an interesting twist to see a list of the best US States for retirement based on where retirees are actually moving to.

I always believed that what people really do and how/why they do it is a good indicator of what makes the grade or to be one of the best States to relocate to in retirement. To me it’s no different from checking personal product reviews before buying something. I think it has a value that is different from results based on theory or survey answers as to what makes a good retirement relocation consideration.

The key word of course here is “consideration“.

There are a lot of factors that must come into any retirement moving decision. The study I latched on to is one where United Van Lines used actual retiree move data to come up with the list of 10 best US States to Retire in.

What are the Best US States to Retire in?

Since United Van Lines is in the moving business it makes sense that this data shows what retirees on the move value today in where they want to live. It does give a glimpse at why these states came into the top 10. Knowing what these states share allows us to open our own thinking to what factors make for a smart retirement move. Or at least what retirees on the move are valuing. Any of us that are interested in making a retirement move can then see if we are on the right track.

There are a couple of surprises in their study results.

It’s not all sunshine and recreation although that still appears to be a popular factor. That is if it meets the other details that seems to be prevalent.

I have actually spent time in 6 of the 10 best states that the United Van Line’s study shows retirees moving to. I can agree that they could be an attractive destination based on my limited experience. Or at least worth consideration and more research if I had no set ideas on where I wanted to land.

The 10 Best US States to Retire in: Where Retirees are Moving to

The United Van Lines’ 40th Annual National Movers Study for the most part shows that retirees are moving to states that offer what is seen as a financial bump. That being a little help by way of friendly retirement tax policies. I’m not too surprised since many of today’s retiree’s need to be concerned with their long-term retirement financing. Lower taxes would certainly help to smooth out rising “living” costs. Especially when considering the ever climbing cost of health care. What was a surprise is that some of the retiree destinations are snowy winter-prone states. It just goes to show – different strokes for different folks.

Here are the 10 Best US States to Retire in:

1. Delaware

Delaware comes in as number 1 and it seems that this is where retirees move who want a lower cost east coast retirement. All that and proximity to several major cities and the Atlantic coastline. Delaware evidently offers both the east coast lifestyle many retirees want and some attractive state tax benefits.

  • Delaware doesn’t tax Social Security benefits.
  • It has significant pension deductions.
  • Delaware income taxes are capped at 6.6%.
 2. Florida

It was no surprise that Florida is in the top of this list. When you think about retirement locations it’s the first thought-of destination. Florida has a lot of affordable living and recreation to offer. Having 1,250 golf courses and 663 miles of beachfront is an attractive retirement draw. And then their income taxes, oh wait, what income taxes?

  • Florida doesn’t tax Social Security benefits.
  • There is no state income tax.
  • Retirement income isn’t taxed.
3. Nevada

Nevada is certainly a well-known low-tax haven for retirees. That and if you are into it, gambling, golf, and entertainment easily comes to mind as why retirees are moving to Nevada.

  • There is no state income tax.
  • Broad Social Security and pension exemptions.
  • Nevada has no state inheritance or estate taxes.
4. South Carolina

At #4 South Carolina wasn’t a big surprise to me. I think warm weather, recreation and laid back southern living when I think about South Carolina. But I didn’t know about their retiree attracting low taxes.

  • South Carolina has one of the lowest state tax rates in the US.
  • South Carolina doesn’t tax Social Security benefits.
  • Retirement income has many money-saving tax exemptions.
5. Arizona

Along with Florida, Arizona is always recognized as a place retirees love to move to. More summer (a lot more) and little if no cold winters in most of it. You certainly can still find snow if you want it (think Flagstaff). Recreation is something that is a huge draw but there appears to also be a financial factor.

  • Arizona doesn’t tax Social Security benefits.
  • Seniors enjoy property tax breaks.
  • Arizona has no state inheritance or estate taxes.
6. New Mexico

New Mexico is known as the “Land of Enchantment”. Recreation is again something that draws retirees there. From hiking and mountain-biking to winter sports like skiing and snowboarding to summer time water sports.

  • New Mexico has lower state sales tax rates.
  • New Mexico retirees enjoy an $8,000 exemption on their retirement income taxes.
  • For those age 65 and older there are also tax rebates.
7. Idaho

Idaho making the list was a surprise to me. I always considered it a best kept secret for what it has to offer. Known for its spuds, Idaho happens to offer a very scenic state with plenty of recreation and if city life is what you want Boise offers all that retirees want. Once homeowners reach age 65 they can apply for an Idaho state offered temporary property tax deferral program.

  • Idaho doesn’t tax Social Security benefits.
  • No state sales tax for prescription drugs.
  • Qualifying people enjoy retirement benefits deductions.
8. Montana

When I think about Montana I think wide blue skies. I also think about its vast unspoiled areas and it’s beauty. If getting away from the crowd is your thing then Montana fits the bill. Montana does tax Social Security payments and your other retirement income

  • Montana has no state sales tax.
  • There are some retirement income exemptions offered.
  • Montana does have some tax breaks and property tax assistance for seniors.
9. Maine

Maine makes the list even with all of its snowy winters. Maybe because it also has over 200 miles of coastline to make up for it (I kid). Retirees who want 4 real seasons can enjoy warm summers and cold winters. New England’s northernmost state is a scenic retirement destination.  

  • Maine doesn’t tax Social Security benefits.
  • There are some pension-income exemptions available.
  • No state sales tax for prescription drugs and food.
10. New Hampshire

Known as the “Granite State”, New Hampshire is where you can see plenty of picturesque barns and farmhouses. It definitely offers a certain kind of New England retiree lifestyle. New Hampshire does have highish property taxes and it does tax your interest and dividends, but…..

  • New Hampshire has no income tax.
  • There is no state sales tax.
  • Retirement income is not taxed in New Hampshire.

Final Words on the best US States to Retire in

As I said, you can get a lot of different answers when searching for the best US States to retire in. Everyone has a different wish list and value different perks to make a place attractive for retirement. Fact is, for many retirees none of the above matters if the primary desire is to be close to family. But I thought I would share these results. I had posted a few weeks ago 8 money-saving places to retire abroad and thought this would be an appropriate companion article.

This list provided by actual retiree move data is interesting. However, it is at a “state” level and each of these states offer entirely different lifestyle options depending on where in the state you target. Some even have different weather within the state’s footprint (less winter more summer, vise versa). More research would be needed to get to that perfect retirement location and there is a lot to consider other than financial

From what I see, what sticks out is that many retirees are interested in state tax relief and recreation opportunities. Even when snow is involved. I hope you find this study’s results interesting. It is obviously limited to retirees who have hired a moving service and may not represent all retirees. But I still think it is interesting and has value.

As far as my retirement relocation thoughts: My wife and I have already decided to stay put in Colorado and living with our 4 seasons. Seasons that includes snowy winters. All because we value staying close to our kids and grand-kids above all else. But if I were to make a retirement move…..

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Broke Family Member’s Long Term Care Can Be Your Retirement Shock

Saving for a decent retirement is tough enough. Financially planning for our old age adds a lot of overhead to the numbers. But did you know that in some cases a family member’s long term care can become your retirement shock?

There are many people who couldn’t or wouldn’t save for retirement. Some of them may even be a family member or two. Many people have no plan for their old age nor any needed long term care. The issue of extended family’s long term care becoming our legal financial obligation just came to light for us.

We are now navigating the tricky issues around the sudden need for long term care for a parent. I thought it important to share what we have discovered.

First some numbers: According to what was found in the 2016 Genworth study, the national median nursing home cost for a semi-private room is $6,844 a month. 

Our situation: Where our parent lives the nursing home care happens to be $5,000 a month. She has $3,500 a month in Social Security and Pension income. That leaves a $1,500 a month shortfall that has to be paid from her other assets. Once all her assets are exhausted then State Medicaid can be applied for.

That is when things can become your own retirement shock to deal with. Fortunately our parent isn’t broke. Not yet anyway. Medicaid or our financial assistance won’t be needed or involved for a little while.

Filial Responsibility Laws Might Cause Your Retirement Shock

At issue is what’s called Filial Responsibility. The State can try to recover amounts paid out for long term care from family members. There was even a recent case in Pennsylvania where the courts backed a private nursing home. They singled out and sued one child for $93K under the state’s Filial Responsibility laws for his mother’s care. Medicaid had been applied for but not yet granted before his mother left. 

There are 29 US States and the territory of Puerto Rico that have these Filial Responsibility Laws. Our parent happens to live in one.

The following States have their specific flavor of Filial Responsibility laws on their books:

Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia and West Virginia, and in the territory of Puerto Rico

Filial Responsibility isn’t limited to one’s parents either. The State laws where our extended family members reside applies to siblings too.

That was a surprise to me and nothing I planned for. It’s one thing to try to help out a parent. But extending that financial responsibility to siblings goes far beyond anything I considered in my retirement planning.

I happen to have one financially reckless sibling who also lives an unhealthy lifestyle. I am not thrilled to know that my sibling’s life choices could turn into my retirement shock down the road.

The State Filial Responsibility Law Where our Extended Family Resides Says the Following:

“Children shall first be called upon to support their parents, if they are of sufficient ability; if there are none of sufficient ability, the parents of such poor person shall be next called upon; if there are neither parents nor children, the brothers and sisters shall next be called upon; and if there are neither brothers nor sisters, the grandchildren of such poor person shall next be called upon, and then the grandparents.”

Some State’s filial responsibility laws can also impose both criminal and civil penalties for failing to support their parents.

Broke Family Member now your Retirement ShockThe takeaway from all of this is that these laws allow nursing homes, hospitals, governments and certain third parties the ability to file a lawsuit against family members. They have legal backing to go after a judgment. One that obligates a family member(s) to pay their parent’s, sibling’s, or grandparent’s bill.

In the above mentioned Pennsylvania case. The nursing home didn’t even have to bother including all children in their lawsuit.

The Good News and Bad News Regarding Filial Responsibility Enforcement

The Good News- The filial responsibility laws have thus far been rarely enforced by the States. From what I read it’s because it is very expensive to track down and begin a suit against relatives of a broke Medicaid recipient. Not only that but judicial systems are already overburdened and filial enforcement would add to that burden.

States with these laws don’t even agree with each other over aspects of the laws. For example in the area of “sufficient ability” to pay. Nor have they figured out how to go after family members who live in a different State that does not have filial responsibility laws on their books.

The Bad News- The times they are a changin. There seems to be an appetite in Washington to reduce federal Medicaid support to the States. State budgets are already strained. If federal cuts do occur or States develop huge budget shortfalls they may feel that they have no choice but to hunt down extended family members who haven’t stepped up to the plate for their filial responsibility qualified family members.   

Mitigating Filial Responsibility Risk: What To Do

I wish we had been more involved in our parent’s financial condition and future elder care issues. It is usually uncomfortable to bring this up with a parent. I know I have heard “none of your business” many times from my parents. Along with our love and concern for their care, with filial responsibility it is our business.

If luck prevails, the hope is always that an elderly parent or family member can stay functional and healthy enough to remain in their home with our help.  Arrangements can also be made to have them live with us or with a sibling.

My mother lives with my sister in an apartment built specifically for her in my sister’s home. My sister and mother find it is a mutually beneficial arrangement.  

However, luck doesn’t always prevail. There is always the risk of incapacitation.

My mother-in-law was functional at home with her children’s assistance. But a fall and subsequent stroke has ended that option and left as us all scrambling. Something like this happens out of the blue and then there is no going back.

Here is what we are working through. I hope my sharing this will help others realize that it has to be part of our own financial planning to avoid serious future retirement shock.

Look into your parent’s State Filial Responsibility Law

Look online and find out what is on the books. We all want to do what is best for our loved ones. Knowing this will both motivate us to get moving and use it as leverage to get cooperation from an elderly parent who prefers financial privacy.

We only found out about filial responsibility after the fact. It was a financial surprise during an already emotionally stressful time. We are lucky that our parent has the funds to cover the financial side for a while. It gives us some time to adjust our finances to prepare for when our assistance may be needed.

Go over all of their financial information

Siblings should decide who should act as the lead. That way it is done once and not by everyone concerned. Have your parent write down all account information and assets held. Home equity/mortgage information, beneficiary designations, signers on accounts, etc. This is something that should be done for spouses and may have already been completed. If so then make sure it is up to date.

We had done this last summer when she was considering moving into an assisted living center. She had concerns that the house was too much. But she wasn’t ready to make a huge move like that yet. At that time we were just figuring out if she could financially handle it. Although we looked at account signers, beneficiary designations, etc. in the event of need, we should have been more seriously considering long term care too. I wish we had insisted she make the move then. But we all live without knowledge of what is ahead. The whole hindsight thingy… Our thought was she will decide soon enough on her own.

Power Of Attorney (POA)

It is important to get a POA. This is necessary to cover any assets that may need to be sold if our parent becomes totally incapacitated.

We were told one was in place but it was confused with beneficiary designations or something else. We should have all communicated more clearly among the siblings instead of taking our elderly mother-in-law’s recollection. My mother-in-law’s home equity is a big percentage of her assets. However there is still a $100k mortgage. That means we have to somehow come up with a nursing home funding shortfall and her home mortgage/HOA/etc. All those payments will quickly deplete other accounts until we can sell the home. Getting a POA now will be a huge challenge. Working under a “Guardianship” condition is time-consuming and costly.

Consult with an experienced Estate Planning or Elder Law Attorney

Be sure to seek a lawyer in the State where your parent lives. Filial responsibility laws and processes can vary State by State. A little money spent ahead-of-need will save a lot of trouble later on. Get educated. Know what is needed to facilitate and handle all the difficult decisions and options once a health event incapacitates a loved one. Develop a strategy covering which assets to use first for long term care, how/when to sell any property, and Medicaid issues.

We missed doing this before it was needed and have now met with an elder law attorney after the fact. The first thing they needed was a list of all the assets. Fortunately we had that done. We now wait to get their advice on next steps. Fortunately one of my mother-in-law’s accounts has one of our siblings as a signer. Otherwise we would be handling all the current financial issues for house payments, utilities, HOA payments, nursing home, etc. ourselves until things can be worked out.

Last Words

We did a lot in our own retirement and old age planning to make sure we won’t be a burden to our children. We now have the retirement shock of knowing we may have to also include a plan to handle a parent’s or even a sibling’s long term care debt as our financial problem if things go wrong.

It is important to be ahead of need in these issues. The goal is to have a clear long term care support strategy in place. One that is ready to be used in the worst case scenario. That includes having all the necessary legal work done to gain access to assets in the case of incapacitation.

Even though filial responsibility law enforcement is not a high priority in most cases for States to pursue, it doesn’t mean they never will.

We should all care about our elderly loved ones to help provide for them. Caring for a parent’s long term care wasn’t a big highlight of our retirement planning. Now it will be.

Doing things right can avoid ever having to worry about filial responsibility laws telling us through the courts what we will be paying and causing us severe retirement shock. By having a plan it also makes sure we are optimizing all options in a strategic way to reduce overall cost and provide the best care.

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Early Retirement is a Mistake for Some People

But it doesn’t have to be terminal: What to lookout for.

Most people who retire early have their numbers figured out. But for some people their early retirement is a mistake. A mistake they will regret and claim they were seduced or duped by an early retirement illusion. Just because you can doesn’t mean you should retire early. At least not until you understand your own head and your early retirement “why”. People understand the importance of getting the early retirement math right. But many underestimate the mental side. Happiness happens between the ears.

A couple of recent conversations with early retirees claiming early retirement regret has reminded me of that. We have shared early retirement experiences but with different conclusions.

Even with all of my planning my early retirement messed with me a bit until I made the complete transition. But for others the transition doesn’t happen or happen fast enough because of what wasn’t seen as necessary to plan for.

Then there are those whose plan was spot-on but they didn’t see the signs of their pending problems. We have to recognize a problem before we can take positive corrective action.

Early Retirement is a Mistake If You Can’t Adjust Your Performance Driven Conditioning

Early Retirement is a Mistake for Some PeopleWe all begin our conditioning for performance and approval at a very young age. In school we push to get good grades. Then there is our decades in the rat race. Performance measurements, objectives, goals, etc. where we try to measure up and advance in some way. We compete with others whether we do so intentionally or not. Then we retire and it’s just us. All of our lifelong conditioning if left unrecognized, unchecked, or not planned for can turn anyone’s early retirement into a mistake.

For most of us this performance and approval based dynamic is the only life we have lived. Early retirees are usually very driven. It’s no wonder that retiring early before we are physically or mentally broken can lead to thinking our early retirement is a mistake. Our drive to succeed and perform doesn’t magically disappear when we walk off into the early retirement sunset. But it should change and we can change it.

How to Make Sure Early Retirement Won’t be a Regrettable Mistake

Some early retirees like the two I spoke with have feelings of dread that they made a big mistake. I admit that I felt a little of that too after the celebration of my early retirement faded. It only gets worse if not addressed. Going from being a hero to being a zero was how I felt it. For years I was the go-to guy for everything important. Then in a flash I was seen by the world as unemployed. I thought I had everything figured out and planned what I was retiring to.

My two pals claiming that their early retirement is a mistake also thought they covered everything. I feel that I was able to quickly make the transition. They are still trying to work things out.

Nobody wants to waste their priceless time on early retirement regret. There are things we can do so that retirement regret can be avoided, reversed, and/or managed.

Know Why You Want To Retire Early- What Are You Retiring To?

It’s something people forget to plan for. Retiring to something is overshadowed by what is being retired from. The celebration of ditching the rat race and everything that goes with decades of work obligation is wonderful. But the exuberance of a retirement based on what is being left behind is short-lived. Knowing what we are retiring to and identifying it as why we are retiring early is what helps us avoid early retirement regrets and feeling it was a mistake.

I have said it many times, nobody wants to or will enjoy retiring into a void. Leisure is great but our brains have been conditioned towards productivity. We have to replace the drudgery of unfulfilling work with things that we value to ensure long-term happiness.

First off make a plan to retire living a healthier and happier life and really think about what that means to you. Satisfy your brain’s conditioned need for goals and measurement with what it is that you want to do or accomplish. Is it a business venture? Maybe an encore career, stepped down job or volunteer work. Do you want to spend more time doing hobbies and activities that you enjoy?

I planned for what I was retiring to but there were some holes. My biggest miss was that I underestimated my social circle. I planned on having an active social life in my retirement. But after decades in a career I found that my circle of friends was exclusively work related. I felt it and then set upon a plan to meet new people. Recognize whatever it is that’s missing and plan to fix it. Don’t abandon early retirement and call it a mistake.

Recognize the Importance of Structure Your Brain Needs It

Our brain is conditioned to function under structure. It makes more sense to us when things start and finish at certain routine times. We should have planned scheduled timelines. They can be loose or rigid. It’s our call. But believe me, it is necessary. We feel better when in healthy and productive routines. Our routines then turn into healthy and productive habits.

Without this structure we can drift without accomplishment and our brain’s conditioning feels like we have wasted time. It can lead to things like anxiety, depression, and self destructive habits. All of which leads to classifying early retirement as a mistake.

I learned early on to introduce structure into my early retirement. I routinely exercise during certain daily timeframes, work on projects, socialize, etc. If I didn’t place some kind of timelines I would never routinely get to it. Not fulfilling what I wanted to retire to would be in the back of my mind always messing with my mellow.

Value Self-Approval : No Second Party Appraisal Rendered or Required

Some people’s brains value appraisal and feedback more than others but everyone understands when it’s missing. That pat on back for a job well done all ends with early retirement. It was a huge part of our conditioning from school grades to job performance reviews.

Understand the need to value self-approval for your early retirement. It starts with celebrating early retirement and continues with retiring well. Early retirement is a huge accomplishment in and of itself. Every month, fiscal quarter, and year of successfully living life on your terms in early retirement should be awarded with your own approval.  

After the first few months of early retirement I was aware that nobody but me really cared about my accomplishments. Everyone appreciates positive feedback. I soon learned that my happiness in early retirement is all the positive feedback that I need. When feeling other than happy then that is when self assessment is needed and corrective action taken.  

Last Words

There are many things from financial to the brain that can cause someone to claim their early retirement is a mistake. But it doesn’t have to stay or end that way.

One of the early retirees who claimed his early retirement was a mistake returned to the rat race at his old company. He is working 50 hours a week and is stressed out. But said the lack of forced structure in his retirement had him only looking forward to happy hour. He was drinking too much and over-eating. His Dr. told him he was headed for a heart attack. I am not sure jumping back into the performance driven stress-pool is the right answer. But I am certain he will retire again soon and make the necessary mental adjustments to feel good about his early retirement.

We can counter our lifetime of conditioning when it raises its ugly head. Another thing we can do to tame our brain’s performance driven conditioning in early retirement is recognize the important job we now have.

  • Portfolio Manager for the $XX-figure portfolio of a very important client.
  • Accounts Payable/Accounts Receivable Manager.
  • Leisure and Activity Program Director.
  • Project Manager.

The job is extremely flexible, fun, and rewarding. Best of all the boss is very appreciative.

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Save Money in Retirement with the Latest Solar Technology

Save Money in Retirement with the Latest Solar Technology











Solar energy is on the up. Technology is advancing further every year, making today’s solar panels more affordable while at the same time more efficient than ever before. Little wonder, then, that the solar energy industry now employs more than a quarter of a million people in the USA, and is growing faster than the overall US economy.

More than a million American homes have embraced the benefits of solar power and retirees are able to make massive savings on their energy bills. Here is why you should join them.

Invest in the future

Fossil fuels will not last forever, and it is up to us to leave the planet in the best possible condition for future generations. Solar energy is completely renewable and non-polluting. As far back as the 1930s, Thomas Edison commented to Henry Ford, “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

It might have taken longer for us to truly tackle the question of renewable energy than Edison hoped, but there is no doubt that we have finally “got with the program”. Solar industry jobs are increasing 17 times faster than the overall US economy and the latest data from the Solar Energy Industries Association (SEIA) shows year-on-year growth of around 100% in the solar market.

Save money

Just how much can you save by using solar energy? The exact answer does, of course, vary depending on where you live, as it is determined by the average amount of sunshine you enjoy and the policies in your home state relating to grants, rebates and so on. In general, however, the states that see less sunshine have tended to counter this deficiency by offering better cost incentives, so as a guideline, most people can see significant cost savings of at least $50 and often $100 per month.

Low maintenance

Solar panels require very little in the way of maintenance. Periodic cleaning keeps them at optimum efficiency, but otherwise it is a simple case of having them inspected and, where necessary, routine tasks such as antifreeze replacement every five years.

An investment for future generations

We have already raised the point of creating a better world for your children and grandchildren to inherit, but investing in solar provides a great inheritance in more financially pragmatic ways too. The truth is that if your home is fitted with solar panels, it has lower costs, and that makes it more valuable, particularly for those of us who are leisure freaks!

Research by Berkeley National Laboratory for the US Department of Energy concluded solar panels increased the value of a home by an average of $17,000, proving that solar is a sound investment for future generations in more ways than one.


Uncommon Friends: Life with Thomas Edison, Henry Ford, Harvey Firestone, Alexis Carrel, and Charles Lindbergh by James Newton

Article on https://understandsolar.com ‘How Much Do Solar Panels Save Me Over Time’

Article Contribution from freelance writer Jackie Edwards.

Now working as a full-time freelance writer, Jackie Edwards is also a busy mum of two small children. In any free time she has (which isn’t much) she likes to volunteer and do charity work and take the family greyhound Bertie for long walks.

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