Retirement plan to support my "habit"
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mi000ke
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We have two fairly large owner's closets in our unit. We store our clothes, my diving equipment, nonperishable foods and liquors, toiletries, some special dishes and cooking implements we don't want to disappear, a computer printer, and that's about it. Takes about an hour to pack up. We have a deeded space in an underground parking garage. No problem leaving stuff in the garage - most of our neighbors do, and if renting they just let the renters use their paddleboards and kayaks. So far we have no toys in the garage, but we are looking into getting a kayak and would probably hang it from the wall. We lease a car while we are here and leave our space open for renters when we are gone.
jonhall
Contributor
My wife and I retired almost 6 years ago, me at age 57; my wife 56. Never really thought about retirement and how I would get by when and if the time came. I always say I lucked into it. When we first saw a financial advisor he told us we had done the right things all along. Who knew???
Following is a pared down version of the book I originally typed and deleted.
The path that unknowingly led to my unplanned, but happy retirement (with much detail left out)
* Had long careers in the teaching profession that had a pension and retirement fund tied to it.
* Saved/Invested as much money as we felt comfortable with in annuities, ira's, etc. Usually between 25-33% of salary.
* Made a regular house payment plus a full principal payment every month. Paid house off in half the time. Still in same house; made it what we wanted as opposed to moving to new home.
* Didn't buy anything unless we had the money for it. Pay off everything.
* Took pretty good care of bodies through exercise of some form. We both coached and wife taught elementary PE.
* Bought a timeshare at age 45 from relative. Good deal but then again, not so much, until we retired! It pays off now as we get multiple weeks out of the 1 week we own.
* Opened a Roth IRA in 2005 with a financial advisor who we now visit once a year. Wish they would have had these earlier in my working career and that I would have contributed to one when they became available.
* Made a detailed plan (spreadsheets galore) with budget and assets projecting what we would have after retiring. Have always kept track of finances.
Since retirement:
** Pension/teacher retirement fund makes big difference and a bit from the Roth, tax free. Have been preaching to son and his wife to invest/save to take place of pension.
* * At 62, because of how we structured our pensions, we took social security. Did all of the calculations of early versus waiting (love my spreadsheets.)
As far as diving:
* It wasn't until I was 43 that we got certified and took our first trip (for check out dives) out of the U.S.
* Started taking 1 week trips (once a year) out of the mainland U.S. to dive again after 7 year layoff. Four to St. Croix where relative lives. Cheap lodging. Also started traveling with friends which gave me a built in dive buddy (after my wife quit diving.)
* * Now taking two to three 2 week trips a year, with our friends, to locations we can dive. We either use 2 weeks with our timeshare, 2 weeks with their vacation club, or 1 week ours/1 week theirs. Good deal as the two weeks at a resort, forgetting the timeshare fees, costs us anywhere from $107 - $225 a couple. Still haven't done any diving anywhere in the U.S.
Hoping all future retirees can be as happy as I've been.
Following is a pared down version of the book I originally typed and deleted.
The path that unknowingly led to my unplanned, but happy retirement (with much detail left out)
* Had long careers in the teaching profession that had a pension and retirement fund tied to it.
* Saved/Invested as much money as we felt comfortable with in annuities, ira's, etc. Usually between 25-33% of salary.
* Made a regular house payment plus a full principal payment every month. Paid house off in half the time. Still in same house; made it what we wanted as opposed to moving to new home.
* Didn't buy anything unless we had the money for it. Pay off everything.
* Took pretty good care of bodies through exercise of some form. We both coached and wife taught elementary PE.
* Bought a timeshare at age 45 from relative. Good deal but then again, not so much, until we retired! It pays off now as we get multiple weeks out of the 1 week we own.
* Opened a Roth IRA in 2005 with a financial advisor who we now visit once a year. Wish they would have had these earlier in my working career and that I would have contributed to one when they became available.
* Made a detailed plan (spreadsheets galore) with budget and assets projecting what we would have after retiring. Have always kept track of finances.
Since retirement:
** Pension/teacher retirement fund makes big difference and a bit from the Roth, tax free. Have been preaching to son and his wife to invest/save to take place of pension.
* * At 62, because of how we structured our pensions, we took social security. Did all of the calculations of early versus waiting (love my spreadsheets.)
As far as diving:
* It wasn't until I was 43 that we got certified and took our first trip (for check out dives) out of the U.S.
* Started taking 1 week trips (once a year) out of the mainland U.S. to dive again after 7 year layoff. Four to St. Croix where relative lives. Cheap lodging. Also started traveling with friends which gave me a built in dive buddy (after my wife quit diving.)
* * Now taking two to three 2 week trips a year, with our friends, to locations we can dive. We either use 2 weeks with our timeshare, 2 weeks with their vacation club, or 1 week ours/1 week theirs. Good deal as the two weeks at a resort, forgetting the timeshare fees, costs us anywhere from $107 - $225 a couple. Still haven't done any diving anywhere in the U.S.
Hoping all future retirees can be as happy as I've been.
JamesBon92007
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Sounds great to me! My original plan was to stop there for a while on my way down to Indonesia, presumably from Hawai'i. I'm no longer single and bohemian so my trip might be a little different than I had imagined.
It looks like my friend from Australia was right.
Let's say you house note is $1000/month and you are paying 5% interest. That is about $50/month or $600/year in interest. This is the average amount over the life of your mortgage. Considering the rule of 78 which loads your interest payments into the first part of your mortgage, the amount of interest diminishes yearly. With only 4 years left on your note you have passed the half-way point and are now paying more principal than interest. Over the next 4 years you will be paying $48,000 of which about $2,400 is interest. If you are in the 20% tax bracket you only will get about $120/year effective write off. Once you pay it off, you KEEP $1000 / month and are not giving anyone the interest. I realize the numbers seem like "no big deal" but why would pay $600 so you can save $120? Paying off your mortgage early ALWAYS puts more money in your pocket.
I over simplified the numbers and rounded in a couple of places, but the fact remains that the sooner you pay off your mortgage, the sooner you keep all of your money.
An earlier post said they wanted to die with none of the principle being paid. I guess they have no heirs or just have a different set of values than I do. I don't ever want to owe anyone anything again. Just my $.02
Cheers -
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[QUOTE="MargaritaMike, post: 8222649,
An earlier post said they wanted to die with none of the principle being paid. I guess they have no heirs or just have a different set of values than I do. I don't ever want to owe anyone anything again. Just my $.02
Cheers -[/QUOTE]
We have 2 adult kids a heirs. Yes, when the last of us 2 dies, the funds must be liquidated and Cap. gains paid for the kids to inherit (not so when one of us die--the funds just go into the other's name). Paying only interest on the loans insures the deductions against the cap. gains created by the investments. So since I borrowed a ton of money, that money in the funds has been allowed to grow over decades, with us being able to withdraw from them to pay the interest (about 15-20K yearly). When the last of us 2 dies, I'm not sure how it works, but think it's simply a matter of the heirs using the funds as collateral to re-aquire the interest only loans, and continue the plan as we did. Of course, we have been doing this during our retirement 22 years ago. Things are tightening up, so we're downsizing to a smaller house. We also have a million dollar life insurance policy with the 2 kids as beneficiaries should out financial plan not work out so well in the next few years.
You're talking small figures--1,000/month, 600 vs. 120, etc. It's difficult to get ahead when you have fewer investments but owe no interest deductible loans. I guess I have always favoured leveraging. Now, are situation has become tighter, because our pensions are tiny, and we have lived off the investments since age 42 (now almost 64). But, when I was working, of course all the withholding tax was taken out of my paycheque. So, even with the Cap. gains from the funds being taxable, the large deductible interest payments more than covered that most years especially considering the taxes already withheld on my paycheques.. This resulted in tax refunds, at time as much as 5, 6K, which would then be re-invested in more funds. Those were the days.....
An earlier post said they wanted to die with none of the principle being paid. I guess they have no heirs or just have a different set of values than I do. I don't ever want to owe anyone anything again. Just my $.02
Cheers -[/QUOTE]
We have 2 adult kids a heirs. Yes, when the last of us 2 dies, the funds must be liquidated and Cap. gains paid for the kids to inherit (not so when one of us die--the funds just go into the other's name). Paying only interest on the loans insures the deductions against the cap. gains created by the investments. So since I borrowed a ton of money, that money in the funds has been allowed to grow over decades, with us being able to withdraw from them to pay the interest (about 15-20K yearly). When the last of us 2 dies, I'm not sure how it works, but think it's simply a matter of the heirs using the funds as collateral to re-aquire the interest only loans, and continue the plan as we did. Of course, we have been doing this during our retirement 22 years ago. Things are tightening up, so we're downsizing to a smaller house. We also have a million dollar life insurance policy with the 2 kids as beneficiaries should out financial plan not work out so well in the next few years.
You're talking small figures--1,000/month, 600 vs. 120, etc. It's difficult to get ahead when you have fewer investments but owe no interest deductible loans. I guess I have always favoured leveraging. Now, are situation has become tighter, because our pensions are tiny, and we have lived off the investments since age 42 (now almost 64). But, when I was working, of course all the withholding tax was taken out of my paycheque. So, even with the Cap. gains from the funds being taxable, the large deductible interest payments more than covered that most years especially considering the taxes already withheld on my paycheques.. This resulted in tax refunds, at time as much as 5, 6K, which would then be re-invested in more funds. Those were the days.....
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ljpm
Contributor
When you retire, sell your house in Toronto. Buy a condo in Brockville. Buy a condo in somewhere nice and warm with great diving. Spend 6 month in Brockville diving the St. Lawrence and 6 months in the Caribbean, preferably someplace with great shore diving. And still get to keep your health care. As an added plus your retirement dollar my go farther depending on where you spend the winters.
scrane
Contributor
Marry someone with a good job and frugal habits.
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