When Will You Retire?

Joel recently ran across an article –‘I’ll Never Retire’: Americans Break Record for Working Past 65.   There are more retirement age people (over 65) working now than ever, the most since the 1960’s, before there was medicare. Is this a good thing?

There are good things about working such as the money, the social interaction with others, and the satisfaction of a job well done. I think if you choose to work it can be good for you. But, if you would rather retire but must keep working, then you have lost your option to choose.

According to the article, almost half of the seniors said they were working because they needed the money. About 60% of people have no retirement savings. (see another article – the-rich-have-you-beat-in-retirement-too)  42% of workers don’t have access to a work sponsored retirement plan and even those who do don’t always use it. As you would expect, lower income workers save less. It’s hard to put money aside for retirement when you are struggling to make ends meet today. Even those who did manage to save often were hard hit by the recent recession, losing much of their savings and much of the equity in their homes.

So, in real numbers, how much money should you have for retirement? According to this article from Forbes, “you need enough saved to be able to meet your annual expenses in year one of retirement by withdrawing 4 percent of your nest egg. We can reverse the math. Being able to withdraw 4 percent in year one means having 25 times your annual spending invested for retirement. Assuming $100,000 in annual spending, you’ll need a cool $2.5 million stashed away. But if you can slash your retirement spending in half, and live on $50,000, you’ll only need $1.25 million.”

Only $1.25 million! Of course social security and pensions will decrease the numbers further, as will a cheaper lifestyle but it still sounds daunting. How much do you have to put away for how many years to get to your recommended number, and how many of us have actually been able to do that? Not me, for sure.

So, if the money isn’t there, what is the other option? Decrease spending! Unfortunately for us, if we stayed in the US, that would have meant moving to a place we would not prefer, and seriously cutting back on everything. Or, working longer, or most likely both of the above. I was so burned out I don’t think I would have been worth much if I had worked another 10 years. I doubt I would have the health and stamina to do a fraction of the things I’m enjoying now.

I know, many of the world’s people would love to have only these problems. We are not starving, being shot at, or fleeing for our lives in an overcrowded boat. Still though, this is a real problem for many in their later years adding worry, stress, and unhappiness to their lives. I don’t think it’s going to get better in the near future either as more and more baby boomers reach retirement age without savings, or with inadequate savings. Add to this the possibility of another downturn in the economy, major health expenses, or other unforeseen problems, and the picture gets even darker. It’s hard times for too many of our bothers and sisters up there.

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About Kris Cunningham

We live in David, Chiriqui Provence, Republic of Panama! This blog is about some of our experiences in our new country.
This entry was posted in cost of living, Miscellaneous. Bookmark the permalink.

20 Responses to When Will You Retire?

  1. RJ says:

    Hi Chris:
    Thanks for your thoughts on this subject which is looming large in the minds of many of us of a certain age. I am one of those sill working past retirement age – I just turned 68 – and its no small thing to find work that pays more than minimum wage due to the rampant age discrimination that exists in the workplace today. I hope to work until I am at least 70 to max out my Social Security. I currently live in Southern California – Los Angeles to be exact – and I am well aware that I will not be able to afford to continue living here in retirement. In fact its unlikely I will be able to afford to live anywhere in North America with the small amount of income Social Security will allow me. I have been researching alternatives for several years and I have determined that Panama is my likely retirement destination, which is why I follow your blog. As much as I enjoy reading about the flora and fauna there and hearing about your daring bicycle adventures, of particular interest to me are articles about the real cost of living there, the various potential destinations there, as well as the real facts of daily life. (Is tap water potable? Are there times when the water does not run?) , I most value any of the things you post regarding the immigration process and attendant costs, the accessibility of healthcare, and the pros and cons of various cities and towns. Mucho thanks for helping to smooth the transition.
    RJ

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  2. Carole says:

    We just officially retired as of Dec. the first step was to sell our shop, which we did. Now we have to start liquidating our assets. Our only concern now is relocating 4 dogs. We will visit Panama again to reinforce our decision to retire there. We now live in st. Croix and thought it would be our retirement home,not realizing the cost of living here. Our social security checks are not enough for our monthly expenses. In order to live we are digging into our savings. The health care is not good here. One of the reasons we are considering Panama, plus we have the worry of a hurricane. Insurance is too expensive so we dropped it after a few yrs of $7,000 a year. We know Panama has no hurricanes, one less thing to worry about.

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    • After living in FL I appreciate the lack of hurricanes too! I hope this works out for you and you can have a good life that you can afford more easily. It’s a huge relief not to worry about covering the bills every month.

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    • Anonymous says:

      Hi Carole, I’m Bill Moore and I live in Potrerillos Abajo. I had a wisdom tooth pulled today and a crown removed and recemented. 1 1/4 hours in the chair with the endodontist: $50.
      My wife tore her rotator cuff and had arthroscopic repair a month ago. Total cost just over $14,000. With our insurance our cost was just under $5000. My annual visit to an ophthalmologist for mild glaucoma: $30. Teeth cleaning with a general dentist: $30. A semiannual visit with my internist for blood pressure:$50, so I fired him as that was the “Gringo Price” and found another for much less.
      All these prices are in the private healthcare system. You could get it for 10-20 cents on the dollar if you used the public government supported (“social security”) system. It has nothing to do with social security as we know it in the States.
      We have a high deductible because, except for something major, it is cheaper to pay routine stuff out of pocket.
      We would led be happy to correspond with you further about any other questions you may have about Panama or to meet with you when you come for your next visit.
      Also, when we came here from the States, we brought in two dogs, so we are familiar with how to do that, too.
      About hurricanes: we got stranded on St. John’s during Lennie and we knew it hit your island much worse.
      Well, good luck with your planning, and, as I said, we would love to help you any way we can!
      Bill and Elizabeth Moore
      moowil8@aol.com
      elizmoore88@aol.com
      Viber +50762672005
      What’s App +50762672005

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      • Wow thanks for your generous offer for my blog followers! 🙂

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      • Carole says:

        Hello Bill and Elizabeth, thanks for your offer. We are going to David, Puerto Armuelles and Bocos del Toro next month. We wanted to see some other cities to see if they would work for us. We will be in David for 4 days. How long have you lived in Panama, do you speak Spanish, if not, is it hard for you to get around. Do you miss the states at all?

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  3. Great report Kris! Sad that there are so many people that cannot afford to retire and that do not realize there are a lot of other counties where you can live on SS benefits. I took a Social Security work shop before we left the US and a lot of the information you have shared here was covered in the work shop. It was unbiased information and to us a no brainer. Take it at 62!

    http://www.fool.com/investing/general/2015/11/23/3-reasons-to-take-social-security-benefits-at-62.aspx

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    • RJ says:

      Easy to say “Take it at 62” when waiting until age 70 will increase your Social Security payments by 60% if you wait (compared to age 62). For those of us who will only have that income to live on, a 60% difference will be a BIG difference. I’ll wait thanks.

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    • I could have held out for more money… well no I couldn’t. I was too fried even at 60 and thankful for the savings to tide me over until I reached 62. This time is a huge gift, and I’m more than willing to live on less to enjoy it now. As for other people, not everyone is suited to move to another country. We’ve seen enough people come here and have it not work out. A lot of them, unfortunately, are going to have a real struggle in their later years. I’ve met lots of them in my work as a home health nurse, as you can imagine and its sad.

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      • RJ says:

        I am lucky that even at 68 I am in pretty good health and I have a good energy. I see others my age who haven’t taken care of themselves who look more like my parents than my contemporaries. Taking care of ourselves is a choice we make everyday. I have not lived a pristine life – far from it. But I am now reaping the benefits of having taken care of myself.
        Yes I have seen – and saved – all of your posts pertinent to moving to Panama, the cost of living there, immigration lawyers, etc. Mucho thanks for all of them. As I get closer to making the move – sometime in the next few years – I may reach out to you for updates on the current situation there re cost of living, immigration, etc.. My biggest fear is that as more and more boomers realize they cannot make it on Social Security alone that they will begin to look offshore, driving the cost of living in places like Panama up and out of reach for people like me. Nothing I can do about that.
        Thanks again,
        RJ

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        • Oh good, and you are welcome to contact me anytime.
          We also think about the rising cost of living in general, and related to an influx of more expats. If they start having direct flights to David from the US it could be a serious concern. But, there are other options, cheaper places in Panama, and cheaper countries. This is one reason I want to explore more of Central America. Who knows what could happen in the next decade or two and it’s always good to have backup plans.

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  4. Tim says:

    In the wake of the 2008 crash I faced involuntary early retirement due to my age. Men over 55 are almost unemployable in the tech sector. I worked out a way to stay in the US, live within my meager means, and more or less enjoy life. There are hardships.

    The trick is to find a place that allows you to live in poverty while also providing peace and safety. I don’t need access to sophisticated medical care so I continue to stay outside of, or on the fringes of, the system. It helps to have minimal plumbing, electrical and automotive maintenance skills: I do a lot of my own work.

    Did I participate in employer sponsored retirement plans? Yes! Three times. Each of those times, my employer, or the government, took action so as to legally confiscate my savings. The largest retirement plans have been in serious trouble over the last decade. I think we are at a pause in this ongoing disaster. The next, inevitable, bump will toss even more people off the wagon they thought they were safely riding.

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    • Ugh 😦 Unfortunately your story is all too common. We also had friends with silver in their hair who couldn’t find work no matter how long and hard they tried. In that case, even if you did it all right and saved, it could all be gone by the time you qualify for SS. And you, saving like you should and then losing it through no fault of yours? That’s terrible. We have found a trick that works for us, and I hope you are doing OK too. I think having a happy, peaceful life is even more important for your health than having access to sophisticated medical care. I was in that business and I think sometimes that help doesn’t help as much as we wish it did.

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  5. Some sobering thoughts, Kris. We opted for early retirement and moved to Nicaragua basically because we were stressed and burnt out in our jobs and ready for an adventure. Of course, we saved for retirement, but if we would have stayed in the states it NEVER would have been enough. We knew that we would eventually retire abroad, so we spent the past 15 years of our careers looking for a place abroad that met our simple needs. Like you, we took our pensions and social security as soon as we could get it because we needed to have proof of a lifetime income for residency. I have never regretted our decision.
    Thanks for this thought-provoking post.

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    • You are right. I never could have saved enough either. Now I am very thankful because if we didn’t need a cheaper place to live I would have missed this entire wonderful experience of living here! I wouldn’t have met you either, or visited Nicaragua or all the other great experiences that came with our move.

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  6. Sunni Morris says:

    Hmmm…very thought provoking. We were advised by our accountant to take our SS at age 62. I did but hubby waited until 66. It’s hard to live on SS alone, but you can always find a cheaper place to live (taxes, housing costs, etc) and still live pretty good. And we’re living in the US.

    We both decided to find a job PT so that we’d be able to do more and also to have the interaction with people. It took a while to get hired but we’re both working PT now and love it. The extra money has let us do things we wouldn’t be able to do otherwise and getting out of the house is also good for us. Working PT never killed anyone. And yes, Kris, I was so burned out with working just like you were, but I took twenty years off and can now see it with new eyes. I needed that break badly even though it did hurt my retirement. I still don’t regret it.

    On the guy waiting until 70 to retire, good luck. I hope your health holds out so you can enjoy retirement once you get there. Old age does set in no matter how good of care you take of yourself. There’s always genetic, inherited conditions to deal with. I’d rather enjoy myself while I have the health to do so. So I guess we all have to make our own decisions regarding this.

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    • Yes indeed, we all have to make the choices that we think will work the best for us. I’m glad you are enjoying your work so much. I can see how there could be a lot of benefits. I’m still on my 20 year break though 😀

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      • Sunni Morris says:

        I hear ya. I definitely needed twenty years to recover and be ready to enter the workforce again. 🙂

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