Plan for lower income in your 50s?

[trimatty471]

This message has been deleted.

[trimatty471]

I took out a 30 year mortgage when I was 30. My plan is to be mortgage free by 50.

[phil5185]

Plan for lower income in your 50s?

It was the opposite for me, my highest income years by far were from 45 to 60 (retired at 60).
As for mortgage, I refinanced one of our houses when I was age 64 so I plan to be mortgage-free at 94. <joking> I will most likely sell that house.

[dancinmama]

DH's highest earning years have been from age 48 to now at age 54. We relocated for a transfer/job promotion in 2005, but without that his wages would have stagnated due to the lack of opportunities for promotion at his previous work site.

We are in our 6th year of a 30 year mortgage (on the house that we bought when we relocated). At this point, we are not planning to pay it off any time soon, but have MOST of the money to do so if we decided to.

[lazysundays]

My SLs will be paid off, and overall take home will be another 20k per year (never mind raises). So definitely more income, and mortgage not paid off, but that is the easy bill.

[Deleted]

I'm 58 now and, thank heaven, still employed and making good money. We've got 7 years left to go on a 15-year mortgage and are about to refinance, but I'll put the payment savings in a Fidelity account in something fairly stable but with a long-term expected return rate over the mortgage rate (3.75%). That way I'll still have money to pay it off in full at age 65- or earlier if the investments do better.

The plan for when my income decreases, due to retirement or being dumped out of the company and unable to find another job, would be to put the house on the market, downsize, and drastically cut back our spending on travel and other areas where we've been splurging. DH's SS would be enough for the current mortgage so we wouldn't be forced to sell at distress-sale prices. We have no credit card debt, student loans or car payments, and the retirement projections don't assume that we'll use the equity in the house for anything except buying another house.

[Tiny]

Back when I started taking financial control (late 30's/early 40's) and got serious about saving for retirement and thinking really hard about where I wanted to go in life (what I valued) - I did factor that I might be earning less in my 50's and 60's. I was thinking the drop in income might come from being able to take a less stressful (lower paying) job OR switching careers (which might mean years at a lower pay scale as I 'worked my way up' again.) I was figuring that if I had more money saved (retirement/after tax investments) I'd have alot more flexibility when I WAS in my 50's and 60's - even if I didn't take a cut in pay so saving more became a win/win for me.

[Deleted]

I think I posted about your income peaking in your late 40s/early 50s. Mine did. The article I read also explained that this is the worst time to be laid off because you won't usually get a job paying as much.

I peaked at about age 55. The system decided to use private school experience, pushing me to the top of the salary scale for my certification. The way the economy is, I will be lucky to get another raise before I retire at age 66. I am 57 now. Right now, my salary has decreased 2.5% because of an increase in our share toward retirement.

The truth is that most of us just "keep on keeping on." My second mortgage, used to do a 80/10/10 mortgage, pays off next month. I will then add that $317 to my house payment. But even if I can't pay it off before retirement, $850 is close to what we would pay for a decent apartment. We already have a new roof, new decks, etc. Once we replace the hvac system, we should be good to go . . .

[ameiko]

I plan for lower income at 55- when my retirement kicks in!

Heck, even if it's lower, I might not notice since I am now longer investing orpaying a mortgage.

[dancinmama]

Jul 3, 2011 12:42:47 GMT -5 Tiny said:

Back when I started taking financial control (late 30's/early 40's) and got serious about saving for retirement and thinking really hard about where I wanted to go in life (what I valued) - I did factor that I might be earning less in my 50's and 60's. I was thinking the drop in income might come from being able to take a less stressful (lower paying) job OR switching careers (which might mean years at a lower pay scale as I 'worked my way up' again.) I was figuring that if I had more money saved (retirement/after tax investments) I'd have alot more flexibility when I WAS in my 50's and 60's - even if I didn't take a cut in pay so saving more became a win/win for me.

ATSiaRU: I totally agree with your strategy. Obviously, it's all about balance, but most people can never save too much for retirement. We saved a bundle because we always wanted for DH to have the option of taking early retirement with his company. Age 55 is the earliest that you can retire, receive a pension, and get retiree medical. DH will be 55 in 2012 and despite everything that we've done, now medical costs are coming into question - premiums for retiree medical have skyrocketed and medicare benefits are coming into question. It doesn't mean that he can't retire next year, but the rising costs of medical could drastically alter the retirement lifestyle that we had envisioned, so we are closely weighing everything before he puts in his paperwork.

In the meantime, he COULD get laid off as his company will let 1200 go in his division, most being in his labor grade. That would not be nearly as devastating to us as it may be to other people he works with who are older and have said that they need to work for another 10-15 years before they retire.

[Deleted]

Yes, which is the primary reason for paying off the mortgage for the house we're going to move to in a year. DH doesn't really see a happy future for himself with the company for which he's worked for the last 23 years and figures that at age 53 (in November) he will be basically unemployable.

We thank our lucky stars that we've saved/invested what we have. It would be an ugly future otherwise!