Can you retire early?

Dear Bloggers,

First of all let me say sorry that I had you readers waiting but my body was together with my mind more inspired by getting the flu. And of course there was no chance to get sick according to my common sense. So I had a bit of a struggle to get to work this week and therefor I negletected my readers a bit.

This weeks blog I will spend on retirement. I have quite a few colleagues who are in their 60’s and will be retiring in a few years. At this moment the talks are about raising the age that you will get on a state pension. I just have my visions about retiring on 55 years of age. When I calculated what that would cost me I was pretty surprised about the outcome. Early retirement can seem so appealing that you don't consider the details. Take a close look at the personal and financial factors first, and then decide whether early retirement is right for you.



Take this job and …

Everyone, at one point or another, has had this thought. If you're working to support yourself, you've undoubtedly daydreamed about early retirement. This vision may come to mind once a year, once a week, or once an hour, depending upon how you feel about your job and career.

The thought of early retirement has always been tempting for workers, but it's all the more tempting now that our view of retirement has changed from a few decades ago. We no longer see retirement as a time when our productive life is over, when we spend our remaining years reminiscing about the past. Now, retirement is viewed as the time when we finally get to enjoy all the things we would love to do, if only we didn't have to work.



The problem with early retirement is that it's often so appealing that it becomes easy to make the decision before you really consider the ramifications. And if you do leap before you look, you may be leaping to an early financial death.

Will you run out of money?

Many experts estimate that a huge percentage of future retirees will have to cut their expenses dramatically once they stop working if they want to make sure they don't go broke. The real answer to the question, "Can I retire early?" is: "Of course you can, but you may run out of money."



Questions to ask yourself are:

Is retiring early too risky?

How to make your money last in early retirement?

How to get yourself a dream job ... at age 55.

How can I avoid common retirement mistakes?

How can I retire on a wounded portfolio?

If that happens, the best scenario would be running out of money while you were still able to work, but chances are you would get a mediocre job at best. The worst circumstance would be going broke when you're no longer able to work, so your only options are to live on whatever monthly benefits you have (such as Social Security and a pension) or to turn to your children or other relatives for help.

When thinking about retiring early, there are two issues to consider:

· Can I afford to retire early?

· Do I really want to retire early?

Depending on how well your day went at work today, or how your career is progressing in general, you might think the second question is absurd. But if you look at how long you will be retired, you might want to rethink that second question.

The reality is that if you retire early, you may be "retired" for as long as you were in the working world. Based on actuarial tables of how long Americans actually live, if you retire at age 55, you can expect to live to age 83. If you retire at 65, you get another year's reprieve to age 84. And if you keep working until age 70, you're expected to live to age 86. Couple that with the fact that if you're married, one of you is likely to outlive the other by four to six years or longer, and you can see how early retirement requires serious financial planning.


Plan for how long you expect to live

To be practical and conservative in your financial planning, you should probably tack three or four more years onto these "average" death ages. If your relatives tend to live into their 90s, you had better add on a few more years. You also could try the Life Expectancy Calculator to get a better idea of your longevity.

Some of those later years may not be as active as the early ones, but they will be just as expensive thanks to medical costs. The only good news about living to 100 is that if you own a life insurance policy, you're usually considered actuarially dead by that time. That means you'll get the full death benefit while you're still alive and kicking (although you might not be kicking very high).




6 smart rules of retiring early

The new retirement model has demands of its own. Here's how to make sure you can cut back sooner -- without being destitute by age 87.

If you assume you'll enjoy at least an average life span, taking early retirement at age 55 or 60 means you have 30 years or so of retirement ahead of you. That's a long time without a paycheck or a structured schedule.

Now, don't think I'm trying to talk you out of your dreams. I'm not. What I am trying to get you to do is to think about what it will take and what it will mean.

Before you allow yourself the luxury of daydreaming about what you would do with all those years of free time, look at the numbers first and see whether you can afford to retire early.

Inflation is our enemy

There are three financial factors to consider:

· How much do you expect to have in monthly retirement income? This would include any money from a traditional pension plan, Social Security or other sources. Many people don't realize that even if they retire at 55 or 60, the earliest they can start receiving Social Security is at 62. And if you start then, the benefits are no more than 80% of what they would be if you waited until "normal" retirement age (currently age 65 or older). Many people choose to defer their Social Security benefits for as long as possible to increase the monthly benefits. Before you make this decision, ask your accountant or financial planner to help you calculate whether to start taking benefits at age 62 or to defer. Usually you're better off starting at age 62 even though the benefits are less. Why? You get extra payments that you can invest in the interim.

· How much in assets will you have accumulated by retirement? These include retirement plans that don't have the fixed-income payout of pension plans (such as 401(k) plans, profit-sharing plans, Individual Retirement Accounts, etc.). You also may have other sources, such as an inheritance or the profits from selling your house for a less expensive one.

· How much will you spend? Planners recommend that you estimate your retirement expenses to be about 80% of those you incurred before retirement, but many people want to keep the same standard of living and replace work-related expenses with travel, entertainment and other new costs.



The dreaded inflation factor

Don't forget about the effect of inflation as you consider your days in the RV rolling down Highway 1 in south Florida. What looks like a hefty retirement income at age 55 or 60 may be near the poverty line by the time you're 70 or 75. For example, let's assume that inflation increases at 3% a year. If you retire today at age 55 on a yearly income of € 40.000,- you'd need € 72.000,- by the time you're 75 to maintain your standard of living. At age 80, or 25 years after you retire, you'll need € 83.800,-. And look at the difference a mere 1 percentage point change in average inflation makes: If that 3% inflation rate actually averages 4%, you'll need € 87.600,- at age 75 and € 106.000,- at age 80.

First, when you estimate your expenses, put in a 5% fudge-factor. In other words, assume that your expenses will be 5% more than you anticipate.

Assume an inflation rate of at least 4%. Long-term, it has averaged about 3% but over the last 20 years it has been closer to 6%.

Start planning now, which usually means slashing your budget so that you can sock away every dollar you can. (This is good advice anyway, whether you plan to retire early or not).

Remember that the earlier you retire, the longer your retirement portfolio is going to have to work for you. So just because you're planning to retire doesn't mean you need to move more money into conservative, lower-yielding, fixed-income investments. (Remember that all of your income doesn't need to be from dividends and interest; it is perfectly acceptable to take some capital gains, too.)

If you retire at 55 or 60, you will probably (hopefully!) need a substantial part of that money in 20 to 30 years, so a good portion of your funds should be invested in the stock market.

Finally, and this is critical, see a competent, experienced financial planner every couple of years to run the numbers for you or to double-check your own numbers. The planner can serve as a sounding board to give you a second opinion about your retirement strategy and investment allocations.

The new retirement model has demands of its own. Here's how to make sure you can cut back sooner -- without being destitute by age 87.

Now what do you do?

If, after doing this "number crunching," you find that you can retire early, the burning issue becomes what will you do with your time. When you're exhausted from work, the possibility of day after day stretching by with no required attendance anywhere sounds delightful, but this can get old very quickly. When you start making a financial plan to retire early, start planning what you're going to do with your time when that day comes. Even the best made plans can change; many an early retiree has returned to work because she cannot stand the thought of not working for the rest of her life.

At a time when most people can't afford to retire and maintain their standards of living, taking the chance of retiring early is a big risk. However, if you start planning early in life, do your homework and understand that you're likely to be around for the next 20 to 40 years and your money needs to be, too, early retirement may be for you. The only downside from a social perspective is the envy of everyone else you know who would give anything to be in your early retirement shoes.

The Old Sailor,

Whoohooo spring has arrived

Dear Bloggers,

The spring of the year is a favorite season for many people, and it is certainly easy to understand why this is so. The spring is when the earth comes back to life slowly after a long and cold winter, and it is in the spring when the first flowers begin to bloom and the green world begins to return after its winter slumber.

The power of spring and its regenerative effects are evidenced by the fact that every major religion includes a major holiday in the spring season. From Passover to Easter, it seems that every culture marks spring with a celebration of renewal and new life. It is easy to understand how in times past ancient cultures were overjoyed by the power of spring and the beauty of new life.



The spring is an important season for many hobbies, including of course gardening. For the gardener, the spring is one of the most pleasant times in the garden. The spring is the time when the bulbs that were carefully planted in the fall begin to grow and blossom, and the spring is when the first seedlings are carefully nestled in the garden. There is no doubt that the spring is one of the most beautiful, and most colorful, of all seasons for the gardener. And yes it is time to get the garden furniture oiled and get the lawnmower ready for it’s job.



The spring is also a favorite time for home improvement projects that could not go forward while the weather was too cold. Whether it is a small project like cleaning up your driveway or a large project like building a new garage or storage shed, the spring is one of the best times to work at improving the value and livability of the home. In the spring, the weather is neither too hot nor too cold, and the homeowner has plenty of daylight in which to work. It is no wonder that the spring season is one of the busiest for home improvement stores and warehouses.



For the outdoor sports enthusiast, there is nothing like the coming of the spring season. For the fisherman, the coming of spring means the first day of trout season. For the biker, spring means that those favorite trails are no longer impassable due to snow, and for the horseback rider spring means being able to take a ride without being afraid of frozen soil. And of course spring means the opening of girl season, a joy for spectators and players alike. There is a lot of eye candy around when the sun is coming out. Enjoy the beautiful time of spring.

The Old Sailor,

Fibromyalgia and what it did to me

Dear Bloggers,

I was overthinking the times that Fibromyalgia was just coming into my life and I did have a pretty “normal” life. I was not a superman that did loads of sports I was just an average guy. From the age of 16 I got stiff fingers in the wintertime and I blamed it on the cold weather after a couple of years the stiffness of my fingers became a bit worse. It was not bathering me only working on the keyboard of my computer was hurting after a while. I had a good life and I was just a few years recovered after a nasty fall of the stairs which nearly killed me. After learning a lot of things again with help of my neurologist and a logopedist I could get back to work again. But then the first problems rose due to the costochondritis.



I was fairly active, working out regularly by riding my bicycle and going to the gym. I had just joined a Tae Kwon Do class and I was really enjoying myself. It happened very quickly – my wife was driving, we were heading towards the shop, shooting past the traffic in the other two lanes. Somehow my head could not follow and my hands just swelled up and almost immediately and the pain was atrocious! A trip to the doctor yielded no diagnosis. Still confused we left the doctors office but the pain was not fading. After a fw days I saw the doctor again in a pretty bad condition as also my legs gave up on me and the pain was heavier than before It was februari 2008.

I sometimes wonder if the woman who was the assistant of the rheumatologist ever thinks about the words she so carelessly spoke to me after I finally got out of the chair in the waiting area. "Well, It is hitting you hard as see how you get up and you’re walking like an old man." Does she think about where I might be today? Sure, she was a couple of years younger, and I wander if she was thinking could this happen to me as well in a couple of years. Question is if so did she also end up with chronic pain? Fibromyalgia has many different faces as some of us end up in a wheelchair using loads of medication, others like me have found a way to use step by step less medication and started working parttime in a less stressy job. Eventhough you still have bad days it does not effect your life so much anymore.

My doctor of internal diseases has tried everything. The cortisone shots were the worst. As the pain from my costochondritis was the worst and kept me from working. Six months later, I was still limping along using plenty painkillers and crying myself to sleep almost every night, tried a tense pulsing device which was working quite well in the beginning, still I was taking pain pills every four hours, defying the instructions to take them every eight hours. Finally, my doctor of internal diseases decided that the rheumatologist was the next step. I was 40 years old and preparing for my first long term sick leave, hoping to wipe away the pain and decrease the stress in my body. My job was my life and I could not imagine a life outside of the ship. There was still a lot of pressure on me as accepting this disease is not easy. I was pretty unhappy at the current time.



Getting Better

After three months of intensive and several therapies, I could barely walk for twenty minutes as the fatigue was taking over and I would fall into a deep sleep. I forgot everything even to pick up the kids from school, but the daily pain had been greatly diminished and I COULD walk without any painkillers. I didn't cry myself to sleep at night. A success story, if you asked me. I wasn't willing to settle for a live on the shore as the ship was my life, though. I went to the gym every day and walked on the treadmill – slowly at first and not for very long, but gradually worked my way up to running for five minutes. I felt great.

Still not enough, I was trying hard to get back into shape but during one of my bike rides my body fully gave up on me. Before the event, I had talked to my doctor about getting in motion as much as I could and get to talk to a dietician furthermore I talked to him about my inability to sleep and not feeling refreshed upon waking. He gave me some medication, which didn't seem to work very well. Not being the kind of person to complain about such things, I didn't go back to him about it.

Something Going On

The next weekend I jumped on the bike again together with my daughter but I had trouble to keep up with her and this was new to me. So I tried to catch up and yes I did, and I didn't let the strange fatigue hold me back this time. It had been long enough. I told myself I was just being lazy now. I pushed myself as hard as I could, but now, shin splints forced their way on me, and I would finish one kilometre screaming in pain, only a hot shower on my shins for an hour before the pain subsided. I'd go out again, going a little slower this time. Eventually, I'd give up, feeling like I'd just been to the whipping post. Exhausted and in pain, I'd climb back into the shower, telling myself that tomorrow would be another day.

Eventually, I had to admit to myself that I would not be able to ride a bike for a long journey again, and I set my sights on the half of the journey – eager and ready, mentally, at least. My body still tired easily and my muscles ached terribly after a workout. I pushed because I wasn't going to let the pain stop me.



As soon as I cleared the “finish line”, I squatted down and almost passed out. My muscles were "zinging." I had stopped and couldn't go any further.

An Answer to the Puzzle

The muscle aches and pain started not too long after that. I hadn't made a connection between all of my symptoms, so I hadn't told my doctor about all of them. Lack of refreshing sleep; dizziness, which I attributed low blood pressure; irritable bowel syndrome, something I'd always had; muscle fatigue, flu-like feelings on occasion; poor memory at times; all the symptoms were there. Finally, I read an article about fibromyalgia in a popular health magazine. It immediately clicked – this is what is wrong with me. I went back to my doctor with the article in hand and told him, "I think I have fibromyalgia." I was scared, but relieved when he said, "I think you're right."

He sent me to a rheumatologist, who confirmed the diagnosis in the spring of 2010.

Learning to Live with Fibromyalgia

It's been a long learning experience since my diagnosis. I'm amazed that I can feel perfectly normal one day and completely wasted the next. My wife is just starting to recognize when I feel poorly and what we shouldn't do on those days. Those are the days she generously makes my dinner and doesn't expect me to do more than sit in my chair and read. She used to bully me into saying, I am not complaining when I have pain, not understanding just how bad it was. I love her but hate her for not learning enough about how this affects me to look past how it affects her.

"I've tried all the new anti-inflammatory drugs, to no avail. I've learned that one sleep aid makes me hallucinate while another gives me bad nightmares. Yet another left me so drugged in the morning that it's amazing I was able to get out of bed. After all these trials I was pretty much a drug addict and I made some choices about what would be the best bearable medication. So I started to build things down and act a bit slower with less stress.

The phrase "overdoing it" has taken on a new meaning in my life. Washing the car by myself leaves me exhausted for two days. I can still run when I need to, but I suffer the consequences the rest of the day and into the next day. My days of running and biking trips are on major hold, if not permanently ended. My membership at the gym is frozen, but I've learned that Tai Chi does amazing things. Sometimes I have to convince myself that the pain I'll feel afterward isn't so bad, but it is worth it.



I've learned that my "fibro-fog" is just something I have to accept. If I think about it long enough, the word I'm looking for will come. If I write it down, I don't forget it. My free time is now given to caring for myself, my wife and my two daughters, without their strength and mercy, I would be much worse off.

I know eventually my doctor and I will hit upon the right combination of treatments that will allow me to lead a much more normal life. Until then, I glory in the good days and hunker down on the bad days. I know I'll get through them and only God knows what tomorrow will bring. It's not always good, but it's NEVER always bad. My pain pills are with me wherever I go, but that's not such a bad thing.

I've often wondered when and how I got fibromyalgia. Did the fall of the stairs accident a few years ago cause it? Did it just exacerbate symptoms that were already there? Was it the stress in my job on board? Or was it everything together? I'll never know. I've never slept well, even when I was a lot younger four hours of sleep a day was enough. Personally, I think I always had it and that, for some reason, something made it come to a flare up and it's been with me full force ever since. To me, it doesn't matter. My wife still struggles with that question, though.

I am pretty sure that things could have been worse for example that my brain did not get back to where it was after the fall of the stairs or that fall would have killed me. Or what if .......no, no stop it now. It all turned out pretty well for me.

I am thankfull daily for my wife, for my friends and, believe it or not, for my health. I can walk. I can talk. I can work. I can see. I can feel. I can hear. I can love. What more do I need?

The Old Sailor,