It’s true that it is never too early to begin planning for retirement. Our family is somewhere between 6-8 years out of retirement or FIRE. We are still thinking how to actually execute the retirement process. It may be full cold turkey or a more gradual process of moving from the working class to the retired class. However, here are three things we are doing now to get ready.
We are taking small steps toward downsizing by selling stuff on EBay or giving away to charity where the tax deduction can come in handy. Each week we collect stuff around the house to sell. My wife does all the pictures, write up, and monitoring. She also seems to keep all the money as well but that ok. She will try to sell the item for two cycles. If the item doesn’t sell on EBay then she will switch to Craigslist. If it still doesn’t sell, we will move the item to the charity bin and schedule a pickup. Regardless, the item is gone from the property which in and of itself has value. While 2-3 items per week doesn’t sound like much, imagine doing that over the next 6 years. How much have we made? Last month, we made $500 which isn’t too bad for old stuff that just collects dust.
We use the bridge as an analogy between sources of income becoming available during retirement. If you are retiring early then you may not have access to your 401k, social security, or pension to just name a few. So you need a bridge to fill in the gap. For us the bridge looks more like steps as seen below.
In this situation, we are looking to retire 5 years out but we will only have access to my 401k and any Cash savings. Two years after that, the other retirement accounts become available since I will be 59.5. Two more years, and I can start taking Social Security and a Pension. You get the idea, we need bridges to bridge the gap between the steps. Our ability to pull retirement out or push it in depends on how well we create these income bridges which may include other income sources as well. The good news indicated by this diagram is that in about 14 years no bridges will be needed and we will be rolling along nicely.
The last thing we are looking at is how our allocations need to change as we get closer. Returning to the diagram, we are going to need to be much more conservative in my 401k since that account will be tapped first. We will be able to use the Rule of 55 and not have to pay the 10% penalty on the funds, just the taxes. So this account is moving toward a 20/30/50 split between cash, bonds, and stocks. For my other retirement accounts, we are moving toward a 60% stock allocation. However, on my wife’s accounts we can be much more aggressive since we have 12 years remaining before they are added to the fold. The basic idea here is to see the gaps and build bridges as needed.
One of the questions we get frequently is about setting up a community and what does it take to be successful. There are three things that come to mind that every successful community should do. The first concept relates to context. What is the community about and what kind of organizational actions does this community support. Is the community an internal announcement type environment or is it a community that will interface with your customers about new products and services? Is it a community that you do production or operational support activities? Is it a community in which you can do training and education functions? If you were to look at some of the most successful communities out there, such as money matters and your health matters, these communities focus around education and training. They are trying to get a community of people with similar interests to talk but the primary goal there is still education and training. That’s the context of the environment. So this first step is to make a conscious decision of exactly what your community is going to focus on. Probably the worst thing you can do is try to be all things to all people and therefore create mass confusion for the users as well as the administrators of the community.
The second item that comes to mind is content. There are not too many communities out there that you can create one element of information and all of a sudden the community takes off by itself. That really doesn’t happen except in the vendor demonstrations. The most successful communities have created an environment where they streamline a constant flow of communications. These could be entries announcing training events, communications of new products and services, or support help. We see many examples of successful communities that have this steady stream of information. As an example, the cloud community provides a constant flow of informational bookmarks and education and training opportunities. Additionally, we publish our newsletter, announce new services and communicate our core strategy on a regular basis. This creates a situation where a steady flow of content and information gets folks coming back and tuning in.
The final area that we should think about is how to engage the community. It is one thing to post a lot of content and information and it’s another to create an engaging form of communications. Community engagement can come in the form of badges or some form of Gamification. Engagement can come in the form of how you publish and what you publish. You want the conversation to invite opinion and comments. This blog is a great example of how we invite different opinions and provide a different perspective of what’s happening with management and the newest technology. The basic idea is to get people involved and engaged at a high enough level that they want to keep coming back over and over again. Maybe even contribute a comment or two as well. Communities offer this same type of opportunity. So keep in mind that if you want successful communities then remember context, content, and engagement.
The simple answer is yes. In fact, no data is actually moved outside your device. Currently, we don’t use cloud storage or any external data storage to handle your information. The information you put into the application is stored within the browser in something called Local Storage. With local storage, web applications can store data locally within the user’s browser. Before HTML5, application data had to be stored in cookies, included in every server request. Local storage is more secure, and large amounts of data can be stored locally, without affecting website performance.
What about in the future? In the future, we would like to add the option of storing your data in the cloud so that you can share the information across devices. This way, you can see the same information on your laptop as you do on your mobile phone. We will do everything to keep this data safe, secure and most importantly anonymous. We will never ask for names, accounts, passwords, or anything of that nature so rest assure, your data is secure.
If you are like me, you track your net worth in an Excel spreadsheet. We have been doing this since 1988 and it’s interesting to see the chart and associate life events to the ups and downs. Entering all that data into another application can be tedious but we have created an easy to use form that will load it up for you.
There are four field that you can enter. The first two, age and year you started tracking, are used to establishing a starting point. Yes, we could have used your current age to calculate these but this is more fun and ensures we start at the right place. The next two fields are for your assets and liabilities. These fields are comma delimited which means we use a comma to separate the years. Let’s put in a simple example. Suppose you have been tracking your net worth for 5 years. Here is what you could put use as input.
Year Started: 2012
From here we can import the data and create five net worth records. Of course, you can change the values and add comments on the net worth table view.
RetireWithLess.com is one of the easiest online retirement calculators out there. It can be as simple of complex as you like. The good news is that you only need to provide four fields of information to get started. So what do we need to know and why.
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The first field of information is you current age. We use this to calculate the amount of time you have until retirement. Hence, the second field is the age of retirement. The more time you have to save and invest the better but we also want to provide the most accurate information as well. The third field of information is your salary or income. This field is used to determine how much to add to your savings each year between now and your estimated retirement date. Finally, we ask how much you have saved. These four fields can populate the entire application so you can see your situation before and after retirement.
Of course, we assume a lot of information that you might want to change in the profile and configuration forms. For example, we take 70% of your income to determine your expenses in retirement. That could be way off so you may want to adjust that as well as other information.
Welcome to Retirewithless.com. A new blog to discuss my 35 year run toward retirement. I hope you will find the information and knowledge of value for your journey. I will also be providing online help and instructions here for the RetirewithLess online retirement calculator and net worth tracker.