Do You Have a Retirement Date Target?

June 18, 2009 by  
Filed under Retirement Planning

Most people have figured out by now that many baby boomers are having to re-adjust their plans for retirement, mostly by delaying their target retirement dates. The reality of the market crash coupled with inadequate boomer retirement savings to begin with has forced those decisions.

My impression is that many readers of Tough Money Love are not baby boomers but are younger.  This causes me to wonder if the younger folks have adjusted their retirement date targets or if they have a target at all.

Let me stop here and present my definition of “retirement.” To me it is actually financial independence: That point in your life where your demand for money does not exceed your ability to meet that demand without having a paycheck.

Some folks can’t comprehend a time when they will not want to work, even a little. That’s OK. In my retirement definition, working is optional but not financially necessary because you have the resources to do without employment income if you so choose.

I would hope that readers of personal finance blogs – of all ages – would have retirement in mind as one of their financial goals. Otherwise, why are you reading? At the least, having a target retirement date in mind would be helpful in the selection of investments and in determining suitable savings rates.

Investors who consider the purchase of the now-discredited target-date retirement mutual funds would also be forced to think about a date or age when retirement may happen.

So now to the questions for you – which I am asking because I may have something to learn from your answers.

1.  Do you have a target date (or age) in mind for your retirement?

2. If so, what is that age?

3. If not, why not?

Thanks in advance for your answers.

While we are on the topic of important life events, how about learning some life lessons from someone who has lived a little? Check out this list of 50 life lessons compiled by a 50+ columnist from the Cleveland Plain Dealer. What I like about her list is that she has written them in a witty way that makes them a little more memorable.

Thanks for being a reader.

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10 Responses to “Do You Have a Retirement Date Target?”
  1. Gail says:

    A year before the crash I was assured by a Vanguard financial advisor that I was on target to be able to retire at 57 (I’ll be 50 next month) but now I’m thinking no earlier than 60 and quite possibly not until 62, when I’m eligible for SS and to take out a reverse mortgage if needed to supplement my savings. (But I’m still working towards having my mortgage payed off by 57.) In my mind the big wild cards affecting my retirement date are whether I’ll be able to work full time through my 50s (and earning enough income to keep pace with inflation) and what’s going to happen with health care reform in the future.

  2. Cat says:

    I’d like to retire by age 60. I’m 26 now and am putting 25% of my income into 401k/Roth IRAs. I’m assuming social security will be dead or dying by the time I’d be eligible.

    I chose 60 because my son will be out of college by then, and I plan to fully fund his education. This will let me do that (I’m putting 25% of my income into an ESA and a 529).

  3. SJ says:

    I have no target at all. I mean, I’m getting a phd… so how much could I care about money? heh…
    Depending on the routes in my future, I’d love to travel, potentially start and lead a field of research =D, and just change the world?

    I’d love to be finanially free earlier, but truly no idea; I have no set year yet =)

  4. My Journey says:

    I don’t look at retirement. Maybe its cause I am 27, but I couldn’t imagine working in some fashion…whether that is a part time practice (attorney here) or as a business owner.

    Just something so I don’t go nutty!

  5. TMN says:

    Sounds like I’m in a similar boat as others around my age (26). While I’d like to be financially independent as much as the next guy, I really have no desire to ever stop working. I enjoy interacting with people and creating useful things. At the most I might transition to more risky ventures as I get more financially secure.

    Back to financial independence, I have no specific date in mind. Right now I’m focusing on minimizing costs as much as possible by building habits that cut my fixed costs, and saving for a condo so I can stop paying rent. I’m avoiding retirement accounts for now because I’m convinced the stock market is primarily a scam, and trying to educate myself on investments in general so I can pick something good that’s more based in reality.

  6. Jenn says:

    In 8 years, when our oldest starts college, we’ll have already paid off our house.

    I figure in 15 years, when our youngest graduates from college, we’ll be able to stop working full time. (It might be earlier, but we both really enjoy ourselves).

    I’m 40, so I guess that would make my target 55, which seems awfully young. But I’m sure I’ll be like my dad and just keep working, even if it’s not a “career” type job. And there’s a TON of volunteer opportunities which I’d like to take advantage of… I keep a list so that I don’t feel deprived by my current commitments.

  7. Marie says:

    We can retire at 65 because we’re on the path to do so. Except that healthcare really is a wildcard. If things don’t change at my husbands employer he can work 20 hours a week and still qualify for full medical benefits. So that is our plan. Medical will wipe out all our assets unless we have some form of coverage. I haven’t quite figured out what we will do about medical once my husband is no longer able to work at all. But otherwise we could at 65.

  8. Doctor S says:

    I have a goal to be retired by 55, but I won’t really retire. I have the idea that when I am done working in industry, I am going to go back to school one day when im older and get my masters in education and become certified to teach. I want to teach into and during my retirement years and use that as another income. Not sure how that will work but it is the goal. Tough to predict now but thats the blueprint. I have some dream goals as well, but Ill share them when they occur! Stop working in industry at 50 is the goal and teach from that point on til the day I die!

  9. David L. says:

    I am 55 and was laid off from my job in January, and have been doing consulting work since then while I am between permanent jobs. But I continue to save as much as possible and currently have a good savings base at this point. I also was fortunate not to have not lost much in the big downturn since I moved funds into more conservative instruments before that hit.

    I would like to retire in ten years at age 65 if I can save enough between now and then, but I am flexible and may wind up working until 70 if need be. If there is anything left of Social Security, it will be just a little supplement.

  10. Debbie M says:

    My target retirement age is 52. That’s the earliest date my pension can kick in. My house will be paid off when I’m 50.25 at the latest, so I’ll be able to live on the pension alone. The pension also comes with good health care benefits.

    My greatest fear is that the pension plan will get worse (again) including having the health plan disappear and/or changing the age at which I qualify. But I plan to retire at age 52 regardless. So I’m also maxing out a Roth IRA plus adding a little extra to a Roth 403b.

    I’m 46 now. Yes, my investments plummeted because yes, I did have virtually everything in stocks. (About 1/4 of my net worth is in my pension, 1/4 in my IRA, and 1/2 in my house–even though I bought the cheapest reasonable house I could find! A pension is sort of like bonds, so I feel this is a decent mix.)

    I don’t mind working, but I’m way better at thinking of things I’d like to do all day than my boss is. When I retire, I hope to be done working forever. However, I do know that things change and can change for the extreme worse, and I’m starting to think that I should keep up some job skills just in case. Also, health costs can go crazy as you age, so it’s good to have a cushion for that.

    I do think Social Security will still be around for me in some form; I just think of that as inflation protection.

    Note: When I was 25, I was not thinking about retirement. I was paying my student loans off ASAP, then saving for a car, then for a house and retirement. However, I did get very good with the frugality skills and those are serving me well.

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