Don't Forget About Your Later Years // Planning for Early AND Traditional Retirement -- make sure your planning includes planning for early retirement, and all the considerations that go into traditional retirement planninggearing up

Don’t Forget About Your Later Years // Planning for Early AND Traditional Retirement

We know as well as anyone how easy it is to get caught up in the excitement of early retirement — not just knowing that we’re nearing the end of our main careers, but also (I confess) a wee bit of smugness from feeling like we stumbled upon the secret sooner than most people do. I guarantee that when we get back from our final trip to our companies’ HQs in December, there will be some strutting and lots of high fiving in the ONL home. Probably some bad dancing (Mr. ONL) and bad singing (me) too.

And I will totally defend those celebrations, however goofy and embarrassing they will certainly be. But the excitement now, the celebration then, or even the thrill of those first few years of early retirement can’t be the main things we think about. Because life, if we’re lucky, still has many decades to have its way with us, and focusing only or mostly on the near-term decade or two increases our chances of facing challenges we could have pre-empted if we’d given them more attention earlier.

Put another way: It’s so much more fun to think about all the adventures that we’ll be able to go on in the next few years than it is to think about the waning years of our lives.

It’s also easy to think of early retirement as though it’s both distinct from traditional retirement and also totally enmeshed with it. Distinct in the sense of not having to worry as much about challenges that arise after a 30- or 40-year career, like higher divorce rates post retirement, struggles with finding a new identity, etc. (<– It’s debatable, by the way, whether early retirees truly dodge those challenges. I’m not so sure.) But enmeshed in the sense that we talk about the 4 percent rule as carrying us through both phases of retirement almost unquestionably, as though it’s a monolithic thing. (<– Also debatable whether this is sound logic. The Trinity Study that gave us the 4 percent “rule” only looked at whether money lasts 30 years, not 40+.) The truth could be entirely the opposite: that early retirement is not necessarily distinct when it comes to the challenges of leaving a career, but that it is distinct in terms of the type of financial and life planning that is required.

Bottom line: It’s crucial to ensure that your early retirement plan isn’t focused solely or primarily on the early part of your retirement, but instead encompasses both early retirement and traditional retirement. 

Don't Forget About Your Later Years // Planning for Early AND Traditional Retirement -- make sure your planning includes planning for early retirement, and all the considerations that go into traditional retirement planning

It’s no secret that I’m a rather fanatical planner, and have built a boatload of contingencies into our retirement plan. But even with all that thinking through of possible challenges that could arise, I have definitely been biased toward assuming that problems would pop up when we are still able-bodied and adaptable. (And before anyone scolds me for equating able-bodiedness and youth, I’m only talking about us specifically, and the health challenges we already know we have, as well as the bigger deal ones that could be on the horizon. We regularly get passed on trails by 70- and 80-somethings so firmly believe that age is just a number. But we are also realists about our own genes.)

For example: The contingency of selling our paid-off house to free up cash and moving into an RV? That’s great if we’re still spry, but a lot less so if we have any mobility challenges, can’t tolerate extreme temperatures or need in-home care. Realistically, that contingency plan has an expiration date, though we have no idea if that comes in a decade or five.

Realizing that much of our planning has a near-term and able-bodied bias was an important realization for us, and I suspect we’re far from alone in this. (How many folks have ever uttered the words, “If things don’t work out, I’ll just go back to work?” How about if you’re 80? Or disabled? Or society is just ageist as hell? Or it’s a recession with high unemployment, which is, oh yeah, when people are more likely to run out of money? Probably some early retirement bias in there.)

Fortunately, it’s easy to go through your retirement plan with an eye toward that early stage bias, once you know to look for it, and reassess whether you need to make some tweaks to ensure that future, older you can live as comfortably and worry-free as possible.

Considerations for the Traditional Part of Retirement That May Differ From Early Retirement

After you have that aha moment, and know to look for early phase bias in your retirement planning, there will be some things that jump out at you right away, and other pieces that are less intuitive. It’s worth spending time thinking about the particulars of your own plan, which will be heavily influenced by how long the early phase is. If your early retirement is at 55, you’re less likely to have as much of a bias in your plan as someone retiring at, say, 35.

Here are some considerations to get you started:

Reassess your contingencies — Like my RV example, take some time to consider whether all of your contingencies work at every age, or whether they only work in the early phase of your retirement. If it’s the latter, what contingencies will take their place? And are those contingencies guaranteed to be there when you get to age 65 or beyond, or do they require major help from the markets to achieve? In our case, we recognize the RV contingency is off the table at a certain point, but we’ll have other contingencies that don’t expire (downsizing our house, selling our rental, moving into the rental and renting our primary home, etc.), so we feel okay here.

If you want life insurance, buy it ASAP — Not everyone in PF blogland likes life insurance, but you know our mantra: do what’s right for you, not what strangers on the internet espouse. If you know that having life insurance will help you sleep at night, buy it as soon as you possibly can, because the price goes up with every year you add to your age. (And, of course, only buy term life insurance, not whole or universal.) We have term life insurance that expires when we’re in our 50s, and we plan to keep paying for it until then, and then not renew. But again, that’s just us.

Keep an eye on long-term care insurance options — Polls show that almost no one thinks they’ll end up needing long-term care, but then plenty of us do. And long-term care can be massively expensive. It’s not something you should assume your standard 25x retirement budget can cover (it currently costs $90,000+ per year), and it’s definitely important to know that Medicare in the U.S. does not cover long-term care, either nursing home care or in-home care. The only way to get help with long-term care expenses is to become so poor that you qualify for Medicaid, assuming it still exists down the road, which requires in most states spending down essentially all of your assets. That’s a pretty lousy option of last resort. The obvious answer — long-tere care insurance — is also not a perfect solution, at least not currently. It’s expensive, it’s not always inflation-indexed to ensure it covers expenses at future rates, and the price goes up over time. We haven’t done enough research to make a recommendation on long-term care insurance — or to say whether we’ll buy it or not — but it’s worth understanding how it works and keeping an eye on the options in your state to decide if you want to build it into your planning. Note that, unlike with health care as long as the ACA stays in place, long-term care insurance IS allowed to turn you down for or exclude pre-existing conditions. This primer from AARP is helpful and comprehensive.

Think social support systems — I think this one is especially tough for FIRE types to think about. We are self-sufficient to the max, and probably derive some pride for that. So we don’t want to consider that we may one day need some help from family or close friends — but it’s true. The problem of “elder orphans” — seniors with no family or friends who can take them in when they can no longer live independently — is worsening, and is the reason why there is a shortage of nursing home beds. If you have kids or a large family nearby, you probably have less cause for concern here than folks like us who are child-free and come from smallish families. If you’re like us, it’s important to acknowledge that you’ll likely be on your own should the need for nursing home arise (and assuming there is space available and you can afford it — big ifs), and that there is nothing but upside from making an effort at every stage of life to expand your friend base, especially making younger friends.

Consider whether you can age in place, or may need to move — Will your home still work for you if your mobility is limited? Will the climate in the place where you live work if you’re less able-bodied? When we bought our house, we purposely insisted on having a bathroom and bedroom on the ground floor so that we wouldn’t have to use the stairs, but we were really thinking in terms of short-term injuries, not long-term mobility challenges. Likewise with our snow — we’ll have no business shoveling feet of mountain snow if our bodies are weaker. So we’ve accepted that, if we’re lucky enough to make it to advanced age, we will likely leave our two-story house in the mountains at some point down the road for a single-story place in a more temperate climate. You might want to ensure that your finances will allow for you to do the same, if need be.

Budget for less DIY — While some costs may decline with advancing age, make sure that you’re leaving room to pay for more help out of pocket in your later years. I can’t imagine letting a 90-year-old Mr. ONL get up on a 30-foot ladder to restain our house, or get into the crawl space to inspect the furnace. And if our eyesight goes, and we can’t see dirt very well, I sure as heck will want to hire someone to make sure we’re not unknowingly living in squalor. Those are things we will happily shell out for once things get tougher for us to do ourselves — but doing that means budgeting more.

Keep learning, and understand down-the-road financial issues like annuities and RMDs — The early retirement community talks fairly little about traditional retirement financial products like annuities, but they are worth understanding before you get to traditional retirement. While we wouldn’t want our money locked up in a fixed income tool right now, because that limits our future growth potential, we’d absolutely consider forking over a chunk of cash for some income certainty in retirement. Required minimum distributions (RMDs) from tax-advantaged accounts are talked about much more, but most often in a fearful sense. We’re working on a more detailed post about them to come this fall, but perhaps a better way to think of all of this is: accept that you will likely never be able to put your finances entirely on autopilot. Some continual learning will always be necessary to ensure that you’re stretching your money as far as it can go, within reason.

Explore health care options — In writing about health care for early retirees, I have perhaps been too cavalier in portraying Medicare as this magical panacea that covers everything and keeps costs low. Sadly, this isn’t quite the case. While the prescription drug benefit added with Medicare Part D has helped a lot of seniors keep their costs down, the average couple will still spend $260,000 in health care costs from age 65 on, in today’s dollars. Costs are likely to be even higher for retirees whose portfolios do well, given that much of Medicare is income-adjusted. If you’re like us and you’re more than two decades away from qualifying for Medicare, there’s not much point in researching every detail of it, because a lot could change. But knowing the deal can help inspire you to set aside a bit more than you might otherwise think you need to cover those still-hefty health care costs in retirement. You might also take a look at other options like health care tourism, moving abroad entirely, or less drastic options like Medicare supplements and replacement plans. Plus, with so much in flux with the ACA, it’s just good sense to budget more for health care in your pre-Medicare years than you otherwise might. Those costs have the potential to be huge, too.

Leave a big financial cushion for all the stuff you can’t predict — No doubt a big reason that many of us focus on the near term retirement questions are that those factors are relatively knowable. We can know roughly what a car costs nowadays, what rent costs, what groceries cost, what health insurance costs. Now go a few decades down the road, and it’s essentially impossible to guess what things might cost or what might be different. Health care could be free to everyone — or it could cost a blinding sum to have even the most basic care. Food could stay cheap — or it could get outrageously expensive if climate change impacts agriculture as much as some predictions say it will. Talking about retirement several decades from now is an exercise in unknown unknowns, and that’s awfully hard to budget for. To be safe, it’s never a bad thing to allocate more of your assets for your later years, and to leave enough flexibility in your plan that you can move if you need to or otherwise change some things up to allow yourself to flourish as things change.

How are you thinking about your traditional retirement?

Do you have anything different in your plan for the latter part of your retirement as opposed to the early phase? We’d love to know! Anything here that you now want to go back and reassess? Anybody else out there who’s like us and wants to hoard as much as possible for those later years? Let’s discuss in the comments!

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84 replies »

  1. This is an excellent article. There are many factors to consider as you get older. I read a lot of early retirement blogs and I don’t hear a lot about spending in later years. I am approaching 55. My plan is to retire at 60. Your needs can change drastically in your later years . The main thing, as you noted, is dealing with healthcare. I have family and friends who are in their late 50s and early 60s who are experiencing severe medical issues. Even with a well planned retirement, there are so many factors that can derail the best laid plans. Thank you for bringing these issues to light. When you’re younger, you don’t often think that far into the future. However, the future will be here sooner than you think. Thanks!

    • Thank you! So glad to know this stuff rings true for you as you witness loved ones face the challenges that come a bit later!

      • I talk about this with my MIL all the time as she is 61 and looking to fully retire in the next year or so (she dropped down to 60% time a few years ago to help care for our son so she is already “half” retired now). They have a paid off house, my FIL will have a pension, and have saved a ton of their income for a long time as they are naturally frugal. Even so, their biggest concern is healthcare costs and why they haven’t yet pulled the plug and fully retired even though they would really like to.

      • Man, I hate hearing stories like that. You’d think being 61, a good saver and having a pension would qualify as “more than prepared.” But the health care uncertainty right now is next level. :-(

      • That’s a big part of how we see it — guaranteed legacy if we don’t make it to old age!

    • I can’t speak for their situation. But, I do know that on some (not all) life insurance policies, if the insured becomes terminally ill, a percentage of the policy can be redeemed prior to death. I worked with a women who was diagnosed with ALS that progressed very quickly, and was able to get 50% of her life insurance policies in advance. This enabled her to get a mobility van, renovate their home to be wheelchair accessible, pay off medical bills, and generally have a better “end of life” experience (vacations, time with family), without spending down the assets that her husband would have after she was gone.

    • This is totally a “what do you value?” question, and won’t apply to everyone! In our case, we view it as monetary comfort to the spouse left behind, or if we both go together, then it’s a sizeable charitable legacy. It will also do things like pay for college for nieces and nephews, ensure our parents have good care as they age, etc. But the main thing is that we’re willing to live a certain way while together, but if either one had to live solo, we’d want that one to be able to do more stuff to help counterbalance the loneliness. I fully get that not everyone would find that worth paying for, but we do. (Also, we bought the policies when we NEEDED life insurance, so wouldn’t buy new policies now. But they are cheap, so it feels worth it to keep them.)

  2. I FIREd at 52 so I’m one of those people who has thought about early and traditional retirement.

    We have 2 sons so part of our plan for traditional retirement is to live near at least one of them. I’m not saying we expect them to take care of us but we do expect them to at least watch over us. The problem is Mrs. Freaky Frugal and I have no idea where they’ll end up living. One is an officer in the Army and the other is in grad school.

    To maximize our mobility, we decided to downsize out of our home in the burbs and rent a downtown Philly apartment. We always wanted to live downtown anyway. And now we can easily move with very little notice or fuss.

    • I think you’re smart to be thinking about all of this stuff this way! And to stay flexible and mobile for now, until it’s clearer where your sons might end up settling.

  3. Well done, this post raises a bunch of issues the mainstream FIRE dogma just pretends don’t exist.

    You just need to visit the local post office or shopping centre to realise there are far more crotchety old timers than 80 year olds blitzing past you on a challenging mountain trail. Sure we all hope to be the old mountain goat, but the law of averages suggest most of us won’t be.

    Some of us will be fortunate enough to wake up dead one morning, after a long healthy fully lived life. The rest will likely be joining the crew in the chemo clinic or nursing home at some point, for potentially a long drawn out and expensive period of time.

    I for one want to know I’ve got a big pile of wealth set aside to cover that (likely) eventuality. If I don’t need it then my kids get a nice inheritance.

    This is probably my biggest issue with the unquestioning repetition of the “4% rule” approach in the PF blogosphere, by the time that capital runs out the early retiree is likely too old to be able to meaningfully do anything about it.

    I’m all for enjoying life while you’re still young enough and mobile enough, but I am concerned that many will pull the trigger too early on too smaller a net worth, and spend their dotage regretting it.

    • Agree with all of this! I do think many folks will regret not saving more, but that regret won’t come until it’s too late to do much. (I also think there is an unquestioning belief in the solvency of Social Security in the U.S. as a “bailout” in later years, and I think that’s dangerous — chose not to even take that on in this post because that would be 5000 words all on its own!) ;-)

  4. I think it is unwise and unfair to depend on friends and family to be your “back-up nursing home.” I am currently facing an extreme case of this situation, and no one in the support system of friends and family can support the person in need of home care.

    An elderly family member of mine is currently facing the possibility of being trapped in her house and bedridden. She is morbidly obese (as in 450-500 lbs.), and is only able to climb up and down the two stairs in and out of her ranch style home if 2-3 people (excessively) help her. She lives with her husband who is doing all the house maintenance, but she is getting to be too much work for him.
    He has his own health challenges. To add to this, she has a hoarding and spending habit that has made the house they have difficult to navigate and is slowly draining her accounts.

    The morbidly obese family member recently went in for a knee surgery consultation, and the doctor said he wouldn’t give her one until she lost 100 lbs. She thinks the doctor isn’t giving her the surgery because she is fat. My family and I know it is because she has multiple other health issues as a result of being overweight that make having a surgery extremely risky for her, and would make recovery difficult. We all know that it is the weight that is causing her health issues and fixing the symptoms will not cure the underlying health issues. We tried to gently convey this to her, but she is still looking for a doctor that will give her the surgery anyway. She says it would be more difficult and risky to lose weight than to get knee replacement surgeries on both knees.

    We love her and we only wish happiness and health for her…but if she doesn’t get these surgeries or doesn’t improve her overall health, a nursing home will be the only option. My family and I are not rich, and we can’t afford in-home care. We are a very small family, and have jobs and our own house to take care of. Making family house visits would be very difficult. We don’t have a house that can accommodate her. We have been trying to help her for years, but the decision to get help has to be hers. It is heartbreaking to watch this happen and be unable to get her the mental and physical treatments she needs.

    Perhaps some families would be able to take care of their loved ones when that level of care is necessary, but it is unrealistic to expect this outright. It is difficult enough to ensure your own financial future and wellness. Adding in ensuring the financial future and wellness of your entire family and all your friends is an impossible task.

    • I’m 38, with no children, and a partner who is 20 years my senior. For me, the friends and family relationship isn’t about having someone who can take care of me, so much as it is having people around me who can be honest with me. After all, I come from a long line of stubborn, independent, long-lived women. Who is going to be there to point out that I can’t handle living on my own anymore, and suggest a nursing home? Or to notice if dementia starts to set in? Who will be keeping in contact with me, to know if I’m injured, or sick?

      Even if you have children, you may not be able to depend on them for those things. But being childless has made me realize how important relationships are to your long-term health and well-being, and how important it is to constantly be nourishing or growing those relationships. Especially as you grow older.

      • I LOVE that way of thinking about it. We all need people who will tell us what’s up, and make sure we know when it’s time to stop trying to do everything ourselves.

    • Oh man, what a tough situation. Sending you positive vibes as you deal with your loved one’s health challenges! I agree that none of us truly CAN rely on others to take care of us, and it’s unfair to EXPECT it. But it’s also a time-honored tradition for younger relatives to help out aging ones, an option that the child-free among us won’t have. So just good to go into that with a clear-eyed view on things!

  5. I’m going to implant an Amazon Echo in your house to capture the bad dancing and singing. Did you know that there’s a hidden camera in them? ;-)

    I think of the 4% “rule” as just a guideline. You try it and see how it goes. I realize that defeats the purpose of trying to be certain about retirement. As “some bloggers” might say, there’s risk in everything.

    I looked into long-term care insurance a few years ago and my conclusion was that it is most likely not worth it. However, it’s like you say, very difficult to give a blanket recommendation on.

    It’s great that you mentioned annuities. I see them as a solution to most of the big questions you have for those later years. The problem, as I understand it, is that annuities often have tricky fine print and gotchas. If you can find a good one (probably one that that kicks in late like 85), maybe it will work. I haven’t looked into annuities myself because my wife’s military pension does the same thing.

    • Nooooooooooooooooooo!!!!!! No spy devices! ;-) (But seriously.)

      And YES, there is risk in absolutely everything. We don’t want to risk spending all our good years at work, so this is the equal and opposite risk we’re willing to assume instead.

      And yeah, if I’m still at this in 10 years, expect a post series on annuites. ;-)

  6. Now I need to go comment on my latest post – “nevermind, I will work 3 more years after my retirement date to pad our savings that much more…” :D

    We’ve thought about a lot of things for our empty nest time frame coinciding with our mid-50’s. We know we could be in Canyon Lake for a while and are planning to build a guest room with full bath so if Mrs. SSC’s mom comes to live with us she’ll have a spot.
    Of course, they’re set up really well and aren’t looking at that as a preferred option but just a possibility. Also, her grandmother lived independently until she passed away in her early 90’s, so who knows. Maybe we’ll just move into it later on to avoid the stairs, lol.

    We also know that after the kids move out – fingers crossed they move out and I don’t have to “move them out” – we plan on maybe relocating or doing a longer term rental in other parts of the country or maybe even living abroad for a while. So many options, who knows.

    With Mrs. SSC’s skin issues, we could also become one of the Lizard People and move out to the desert or some other place to escape the humidity. So many options in where life could take us. :)

    It’s great to be aware and prepare as much as you can, but you never know what curveballs you may get thrown your way.

    • All so true! And of course the flipside is being so afraid of the unknowns that you keep working indefinitely — also not a good option! As with everything, we all have to find the balance of risk vs. comfort that we can live with. :-)

  7. Lots of great points here, as usual, but man, it can be overwhelming. We’re also a family of 2 (not including dogs) and I don’t expect to have any safety net of anyone else to take care of us in our old age, so we know we have to be prepared for long term care, medical expenses, and any other of life’s surprises. We cannot risk being destitute in our 90’s because we didn’t plan well enough.

    Honestly, it can all feel pretty deflating. How did you ever decide that you had “enough” money to retire with so many unknowable variables in play? It seems that every time I try to revise our goals/expectations to be “more realistic” some other consideration comes along to make me think we should be even more conservative than what I thought our super safe number was. I’m at the point now that I don’t know what our “magic number” is, or even how to arrive at a realistic number anymore.

    All I know is that once we get to a certain point, we’re getting out of Dodge, even if it just means working a different job for less money. We’re both burned out big time and there needs to be some sort of light at the end of the ever-elongating tunnel…

    • “How did you ever decide that you had “enough” money to retire with so many unknowable variables in play?”

      I’m with you. By the 4% rule I’ve been FI for over 2 years, but too many things keep me working, mostly realted to healthcare for family or my future, old-self. But I also can’t afford to get on a OMY-syndrome treadmill. While I was never bold and risky enough to quit my job pre-FI and start a business as so many do (and I respect them immensely), my plan is to use my FI status to start business(es) after I retire. That way, the inevitable business failures won’t carry the risk of not having food on the table. I’m confident that I can figure out SOME kind of venture that will pay me decent money. But I’m self-aware enough to realize my entrapeneurial skills aren’t sharp enough to do it without the FI safety-net.

      • I think your approach is super smart — it’s why we’ve realized we always want to have some active income coming in, to help hedge against future unknowns! Getting into the OMY spiral is NOT the answer!

    • I know this stuff is a lot. My goal isn’t to overwhelm you! On the “enough” question, ours has definitely hinged on knowing we have a much bigger chunk of money set aside for our 65+ years, and committing to not touching that money before then. Then we can be a bit closer to the traditional FIRE amounts for our “early” retirement. Also having all those contingency plans helps me a ton. But this isn’t easy stuff — anyone who says it’s easy is selling something or looking for validation of their underconsidered life choices. ;-)

  8. Part of my plan is that I will have a small pension coming in from my years at the Federal government at 65, and that the national pension plan in Canada seems to be doing fairly well right now. So, if I can reach fire using the 4% and it works for 20 years, at the end of those 20 years I will tap into another $1000 (in today’s dollars) a month. Sure, nothing is 100% but I do plan to pick up some side gigs (when possible) when I reach FIRE mostly because I am Type A and enjoy working. So that will be a hedge as well. I am also basing our numbers on what we spend as a family of 4 and anticipate when the kids leave we will spend even less (or maybe not ;P).

    • Knowing that you have a pension certainly helps give you more comfort than most! I think your plan sounds smart — keeping some active income and having later hedges to boost you up.

  9. Ugh, what a buzzkill. :) When I think of all of the variables at play in the later years, it gets to be overwhelming and I try to explain to myself why working until 65 won’t be so bad. Eventually, I fear the dreams of long camping trips, touring SE Asia and sleeping in on Monday morning will get crushed by the uncertainty of old age.

    Gotta go try to stir up some motivation…and revamp some spreadsheets.

    • I know. ;-) This all comes back to that simple truth: There is no risk-free option. Either take the financial risk, or risk spending all our good years at the office. If you decide the first is your chosen risk, then mitigate what you can and then take the leap!

  10. One of the things I’m trying to organize for my “real” retirement is getting a group of friends to all buy condos in the same building. This way we can easily see each other and provide help as needed. Some are married, some have kids, but you never know what life will be like 30 years from now. It would be just like the dorms in college but with senior citizens (and our own bathrooms!) :)

    A friend has taken this idea and decided to buy land in either Washington or Oregon, with the thought of enough space for tiny houses and RVs for anyone who wants to join her (and her husband). While that idea sounds great at 40 years old, there’s no way I’d be able to handle that lifestyle when I’m older. And, even now, I wouldn’t want to live in that small a space year round.

    Lucky for me I’m not much of a DIY-er and my house is all on one level (but would need modifications if I ended up in a wheelchair) so that’s easier to foresee. There’s just so much to think about and I’ll be one of the late early retirees, aiming for ER at 50….

    • I LOVE that idea. And maybe invite in some younger folks too so it doesn’t turn into a whole bunch of sick people around the same time. ;-) It’s weird to me that so many senior living communities aren’t condos or tiny homes but big sprawling golf course properties — makes no sense to me to give people MORE space to maintain as they age!

  11. This is the sort of stuff that sends me deep into panic, especially with the knowledge that no extra number of working years will fully shield me from the uncertainties of aging.

    Anyone have tips for building that social support network in their adulthood? I don’t (and won’t) have children and am not sure that I can reasonably expect friends and family to look out for me in the future.

    • My goal isn’t to make you panic, just to not be cavalier about it all! But I’m guessing that would not be your problem. ;-)

      I don’t have tips right now for the social network piece, but this is something we’ll be exploring more and writing about after we actually retire! Welcome any and all tips!

  12. Thank you for your comments on age and health! I retired at 60 and it always bugs me when millennials or gen xers refer to anyone over 50 like they are aged and infirm. My wife and I ran a dozen marathons in our fifties and typically outran most of the people in the race of any age. We are those people that hike past everyone else on trails. We just have made fitness a priority and while we’ll keel over some day it won’t be tomorrow. And I was all set to gripe at you and what do you do but throw in a beautiful disclaimer that you were only talking about you, and not me and my sweet wife. Good on you sir!

    • Can I be like you when I grow up? ;-) That’s super awesome that you guys are so active and rad. I have learned to have a healthy dose of respect for the physical abilities of those older than us. :-)

  13. This is a great topic. I managed my grandmother’s affairs during her later years when she was in assisted living. For context, she lived in independent living until she was 97 (probably a couple years longer than she should have lived there). I moved her into assisted living, closer to me in another state, when she was 97 until she passed away at 103. Fortunately, she was very healthy until she passed away so she didn’t have a set of expenses associated with health issues. Even with her overall good health (she would often say: “I feel fine, nothing hurts me”), it is amazing how expensive assisted living can be for someone needing a lot of personal care assistance. I obtained a very clear understanding of the issues that could arise and the tradeoffs that would need to be made. I would often run cash flow estimates and contingency planning scenarios about how long her assets could sustain her in a steady state and if, for example, she needed to go into nursing care. These are scary scenarios as the last thing we want is for our loved ones to outlive their assets and thus impact their quality of life. However, we need to know what we are up against and contingency plan accordingly. While my grandmother was fortunate to have enough assets to live comfortably for a few more years (I estimated her portfolio would last her until she was 108 in a steady state situation), when she is spending approx. $6K / month in assisted living, it doesn’t take long to burn down a portfolio. This is an extreme example as many of us can only hope to live to be 103 but we need to plan accordingly just in case :). i haven’t figured out a way to plan for being a centenarian so interested in the community’s input.

    • I actually don’t think that’s an extreme example, it just happened to your grandma at an extreme age. (Also, you rock for taking care of her!) But this is exactly the kind of scenario that should just us all pause, and inspire us to pad our portfolios a bit more before we give up our income!

  14. Great point. And, in fact, it pays to consider RMDs, social security, and taxes way in advance. Many folks don’t realize that social security becomes taxable if you make much – or have to take a distribution.

    You can avoid a ton of taxes by taking distributions early in many cases. Plus, you can do that much more easily if you’re already financially independent – and don’t care where the “income” in a given year comes from. It can save bundles in taxes and make your money more available. If you wait until 65 or 69, though, there’s only so much you can do. So all the more reason to start thinking a decade or two ahead of time…

    • Definitely good to look at this stuff in advance. I’ll make a case for not avoiding all taxes — they pay for things that benefit all of us like schools and libraries. So I wouldn’t call tax avoidance a goal of ours. But good to know what you’re looking at either way!

  15. What a buzzkill indeed. :) The more I read about this topic, the more I think that the “4% Rule” is too aggressive for me. I’m reading Early Retirement Now’s series about the 4% rule now and it shows that it is way, way more risky than the famous Trinity Study suggests. So I’m getting used to the idea of being more conservative and shooting for 3% to have a high chance of being able to cover increasing costs later in life.

    • Might even consider a 2% SWR target if you are retiring early – too many factors involved in early retirement to not be safe on the withdrawal rate.

      • We need to calculate what ours will actually be. I think, if you look at total net worth, we’ll be withdrawing under 2% a year in early retirment, with the possibility of bumping it up later in traditional retirement if markets are nice to us.

      • Quick question – do you count your home equity in your 2% total net worth number? I get hung up on certain details sometimes…. I just don’t think my house is anything to me but a small monthly expense, no matter how much it’s worth, if I have a mortgage on it or not, you know? It’s worth something to me as it gives me a place to live (and I LOVE where I live), but it’s not a working asset other than I live in a frothy real estate market and if I sold I could pocket some cash and then perhaps re-buy at the next adjustment; however, that feels the same way as timing the stock market. Ok, back to other things… and less focus on details that get me running through numbers.

      • In the 2% number, yes. In our general asset calculations and withdrawal plans, no. Overall, we’re totally with you on not really counting home or rental property values because we don’t plan to convert them to cash. (Totally agree trying to sell now and buy in downturn is 100% market timing.) I also don’t even really update our home values in the NW spreadsheets, because I don’t like artificial boosts that are meaningless. ;-)

    • You’re welcome. :-) Haha. I definitely think going lower than 4% is a smart move for so many reasons.

    • The ERN website really helped me gain more confidence in my numbers. I’ve run his spreadsheet tool dozens of times with different “what if” scenarios.

      • That’s great! Also good to run it with your own scenarios that feel likely in your own circumstances. (Example: we live in wildfire country, so what if we get wiped out by a wildfire? Etc.)

  16. It is really important to consider these potential outcomes when planning for retirement and it’s something I’ve been thinking more about lately. Although leading a healthy lifestyle in your earlier years better positions you later in life, it’s no guarantee for trouble-free aging. Three years ago, I was in an accident and sustained some serious injuries that impacted my mobility for a few months. It was a real eye-opener for me as I’ve always been an active and independent person that rarely needs help with completing anything physically demanding. To suddenly requiring help with completing the simplest tasks like grocery shopping or vacuuming the floor. It was frustrating to say the least.

    I’m now factoring this into some of my plans for future. For ex, moving to a small town that has an acute-care hospital close by, buying a house that isn’t multi-level with a bunch of stairs to climb up and down, purchasing an annuity for security, etc.. Not the most exciting things to think about for retirement but essential nonetheless.

    • Kudos to you for taking on the “boring” stuff! It’s less fun to talk about, but more important than most of the fun stuff. Sorry about your accident — I hope you’ve been able to make a full recovery!

  17. Hello! Great post. I’ve been following your journey to FI. I have also listened in on your interview with MadFientist. I think you guys are awesome and I look up to you on my journey to FI! Checkout my blog at

  18. This is and the health insurance issue is keeps me up at night. We’re on the same early retirement schedule as you are (4 months to go!) and now that it’s so close all the “what-if this unexpected thing happens” anxieties feel too real. I come from an extremely financially risk-averse family, but surprisingly, my parents are our biggest cheerleaders in ER. They are in their early 70s and healthy, and they now report they saved too much and wish they had stopped working earlier and enjoyed life more. The lesson for me is that it’s okay to factor in some level of risk.

    • You’re sooooo close!!!! How exciting!!! I LOVE that your parents have encouraged you to make the leap — so helpful to have someone on the other side who’s seen the other side of risk: risk of working too long and spending too much time at work. I totally get your health care anxiety, though, obviously! ;-)

  19. Long-term care costs are so expensive. I’m glad you are considering that as you age your body will change and what you can do for yourself will change dramatically. When I buy a condo, I will only buy one with an elevator in the building. I know that eventually my knees won’t be able to handle stairs, and I know that my friends who use mobility aids want to be able to visit me. I also look closely at the bathtub, because I know that taller ones pose more of a fall risk.

    • It’s so good that you are thinking that way. I have seen some examples firsthand of people who had challenges arise pretty quickly, and were no longer well-suited to the homes they lived in. I don’t want that to happen to us… or to you! ;-)

      • Frankly, I am lucky that I have a lot of friends with disabilities. I’m seeing access issues everywhere now. That will protect me later. Whether I age or am injured.

  20. So one of the things that led us to the idea of early retirement was when we realized, if we worked til 62 or 65, we’d have an obscene amount of money in our 401k’s that we’d never possibly be able to spend. Much like you guys, we started investing in our work plans very early and have been maxing out for a few years now.
    Even with our revised early retirement date (assuming we will continue to max out contributions for the next 5 years), we will still most likely have a few million to see us through our later decades, plus a small pension (maybe, assuming it’s still available when we hit 59.5) from the time we’ve put in with our employers. So for us the worry is more about making our smaller early-retirement bucket last til we can access that money!

    • That’s such an interesting way to come to the realization! I think most people would be happy to have that problem, so it’s commendable you realized you’d have more than enough and didn’t need to be greedy. And same boat here on the smaller ER fund — but I have full confidence that you guys will figure it out. ;-)

  21. Tanja You should sit down sometime with a RMD calculator and a tax calculator and actually calculate what the government has planned for you. Calculate out to age 95 and calculate both single and married taxes.

  22. Hi.I love your blog and this post in particular! I did not get into fire soon enough.We did keep some of our lifestyle creep under control. Anyway I will be retiring sometime this year (2019) at the age of 64. Some of the blogs do use the “we can always go back to work” mantra.That may not be an option for me.