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Im 59, have $2,500 a month to spend and prefer an artsy community near the ocean thats not too hot where should I retire? – MarketWatch

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Dear Catey,

Im quickly closing in on 60 and will retire at the end of this year. I can spend about $2,500 a month in retirement. Im single, and my family lives on the West Coast. I prefer a cooler climate, proximity to an ocean and enjoy a community that supports the arts. Im not opposed to snowbirding to avoid extreme summer temperatures. I currently live in Alaska, and south has an undeniable appeal.


Dear M.D.,

Im not going to lie: Finding a compelling spot to live on the West Coast so you can be near your family and the ocean might be a little tough to do with a budget of $2,500 a month. But I think Im up for the challenge. In other words: This winter could be decidedly less chilly for you!

Ive got a handful of places that are artsy, relatively affordable (at least for the West Coast) and within a few hours drive of the Pacific Ocean. Since youre single, you might be able to squeeze by on $2,500 a month in these spots, especially if you dont have much in the way of health care or other expenses, but I will say that youll need to keep a pretty tight leash on your spending to do so.

But before I dive in, I think its important for all readers to note that if you want to spend part of the year in a location like Alaska or Florida, both no-income-tax states, check the rules on how long you must stay in the state per year to maintain the tax advantage. (M.D., this article on Alaska snowbirds might be of interest to you.)

That said, whether you decide to spend part of your time in Alaska or not, here are some spots you might want to consider.

Olympia, Wash.

Like Alaska, Washington has no state income tax and its state capital, Olympia, has plenty of other perks you might like, too, including arts offerings. The Olympia Film Society showcases independent and classic films at the historic Capitol Theater, a city landmark. Art collectors wont want to miss the semiannual Arts Walk, featuring paintings, sculptures, photography and more, Kiplinger writes of Olympia, which it calls a smart place to retire. And should you want more in the way of arts, you can drive about an hour and be in Seattle.

If youre craving the beach, head to the 40-acre Kenneydell Park, which offers 1,000 feet of freshwater beach, plenty of trails to hike and a swimming area on Black Lake. Olympia also boasts a wine trail, a coffee trail and a university that welcomes older students.

Its certainly not dirt-cheap to live in Olympia (the cost of living is 13% above the national average, according to Sperlings Best Places most of that due to housing (the average one-bedroom costs about $930 a month to rent, for example). But the absence of a state income tax could give you a boost should you decide to work a part-time gig to supplement your $2,500 a month, and will help you keep more of the money you withdraw from any retirement accounts.

Eureka, Calif.

Its tough to do California on a budget if you want to be on the ocean, but Eureka fits the bill. Its got a cost of living thats only about 5% above the national average, according to Sperlings Best Places, and the average one-bedroom rents for less than $800 a month.

This sleepy seaport town at the northern end of the state is crowded with artists and dotted with quaint Victorian homes, I wrote back in 2012 when I recommended it for active retirees. And though its small (fewer than 30,000 people), there are interesting arts offerings, including monthly art walks, art galleries, food and music festivals, and more.

Temperatures in Eureka are relatively mild (its typically in the 50s and 60s) and there are myriad redwood trees, as those who hike and bike will surely discover. That said, there are some downsides to living here, including high property-crime rates and more than an average number of rainy days.

Medford, Ore.

This isnt the first time Ive recommended Medford to a retiree when 66-year-old Bill from San Diego got sick of Californias costs, I suggested he go here, too and theres a good reason for that. Medford is pretty affordable (with a cost of living about 9% above the national average) and has decent weather with mild temperatures and less rain than in other parts of Oregon.

Ashland is just 20 minutes by car from Medford and is known as an arts community (its home to the renowned Oregon Shakespeare Festival), but Medford, too, has its fair share of artsy stuff to do, including theater, art galleries and a dance-oriented arts center. Sperlings Best Places even calls it a cultural and residential crossroads between California and the Pacific Northwest.

Also, there are more than two dozen parks in Medford, and southern Oregon offers gorgeous hiking options, and Medford is an emerging wine region with a growing artisan food scene. One possible drawback is a relative lack of diversity in the area.

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Im 59, have $2,500 a month to spend and prefer an artsy community near the ocean thats not too hot where should I retire? - MarketWatch

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Liz Weston: Get professional help before withdrawing retirement funds –

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Dear Liz: Im retired, 64 and delaying Social Security for a few years. I want to create a monthly stream of income from $850,000 in retirement funds. It may be needed to show a solid, dependable income so that I can get a mortgage. Is there any way to avoid the 20% federal and 7% state tax withholding? I do realize the amount I withdraw could trigger higher Medicare premiums in the future. The drawdown is $8,300 per month, which leaves me a spendable amount of $6,000.

Answer: Good for you for delaying the start of Social Security, but please get yourself to a fee-only certified financial planner before you tap any of your retirement funds. A 4% initial withdrawal rate from retirement funds is considered sustainable.

The amount youre contemplating would be nearly three times that. Even if youre withdrawing at that rate for a limited time, it could leave you without enough money later. And if this high withdrawal rate is the only way you can get the mortgage you want, you may be taking on more debt than you can really afford.

The certified financial planner also can help you with a tax strategy. Tax withholding on retirement income is usually voluntary, but paying the actual tax is mandatory.

The percentage you ultimately pay on the withdrawals will be based on your tax bracket, which could be higher or lower than the 20% federal and 7% state rates you cite.

Before you withdraw anything, you should have a good idea of what the tax bill will be and have plans to cover it. Those could include having the investment company withhold a certain percentage or making quarterly estimated tax payments.

You may have done well with a do-it-yourself approach up to this point, but there are many ways to mess up your finances unknowingly in retirement. Youd be smart to get expert help in creating a tax-efficient withdrawal strategy that maximizes your retirement income while minimizing the risk of running out of cash.

Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the Contact form at

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A Retirement Community That Comes to You – The New York Times

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Traditional C.C.R.Cs operate under an assortment of contractual arrangements. Some have high buy-in fees, refundable to varying degrees after a residents death; others function more like rentals. Depending on luxury and geography, they tend to serve seniors who are financially comfortable.

Often, residents sell their houses to pay entrance fees that average $107,000 to $427,000, according to a report from LeadingAge, the trade association representing nonprofit senior care providers. (LeadingAge has rebranded these entities life plan communities.) Monthly fees range from $2,100 to $4,200.

Its a great solution for people who either have means or good retirement plans, some wealth built up, said Ruth Katz, senior vice president of public policy and advocacy at LeadingAge.

So far, the at-home programs carry lower price tags, though members still pay for housing and other living costs. At Senior Choice at Home in Florida, Mr. Ahmadi said, a 75-year-old would probably pay $55,000 to $60,000 in entrance fees and about $525 a month.

At Springpoint Choice, which has about 270 members in New Jersey and Delaware, initial fees run $30,000 to $65,000, with monthly charges of $300 to $500. All the fees are tax deductible.

If in a year they have a life-changing event, they could be paying $400 a month for skilled nursing, which on the East Coast typically costs $13,000 a month, Ms. Laidman said.

Ms. Basso joined Springpoint Choice at a bargain rate. Because she has good long-term care insurance, her entrance fee was a discounted $25,790; she paid it with the sale of her New Jersey house and her parents condo. Her $128 monthly fee has since increased to $146.

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Pete the Planner: Could a retiree outlive his savings even with a part-time job? Possibly. – USA TODAY

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Peter Dunn, Special to USA TODAY Published 6:00 a.m. ET Nov. 8, 2019 | Updated 1:37 p.m. ET Nov. 8, 2019

USA TODAY's Janna Herron explains the theory behind the FIRE movement - Financial Independence, Retire Early USA TODAY

Dear Pete,

I just retired at 60.I am a single, head-of-household male with no children.When I retired, my annual salary was about $120,000.I have had my mortgage paid off for about fouryears and have no monthly debt load.I have approximately $1.7 millionin investable assets.

The job I left offered no real pension once I retired.Even though I have taken a part-time job (sixmonths per year, very flexible consulting work ), I am still concerned about outliving my savings.Am I nuts to be concerned? Dean

Feeding Your Piggy Bank: This is how much the average American saves each year

Pete the Planner: I never tell a person not to worry, whether they should be worried or not.Were all wired differently. Instead, Im going to use our time together to illuminate apathto successand to help you identify some circumstances that could upendyour plans.

Im concerned youdidnt mention your current income. In fact, Ive convinced myself you dont know what it is. If thats the case, thats a problem. Sure, you likely make avariable level of income from your consulting gig, but how much is that and how does it set your lifestyle? If you make less, do you spend less?Or do you supplement an arbitrary amount of income with an arbitrary withdrawal from your nest egg?

Yournest egg, as youve acknowledged, is not a bottomless bowl of M&Ms grandma setsoutaround the holidays. Your dollars are finite. And if youwithdraw themindiscriminately, your fear of depletion is warranted.

Whether you like it or not, you need a budget.You must determine exactly how much all of your monthly obligations cost you.(Photo: Getty Images)

I can only assume you lived on your $120,000 salary and that standard of living has continued into your new retirement. You paid off your homeand your debt beforeretirement, which is fantastic. However, that doesnt necessarily mean you then setaside the money that previously satisfied those debts as savings on a monthly basis. If you didnt, then you increased your lifestyle heading intoretirement, which is common, but not great.

In fact, paying off major debts just before retirement can be incredibly dangerousbecauseof the risk of increased discretionary income increasing your lifestyle, heading toward a period of time (retirement) in which your available income is likely to decrease.

Additionally, if at retirement you becamesolelyresponsible for your health insurance premiums, then yourmonthly obligations increased the moment your income theoretically decreased. Assuming fullresponsibilityforinsurancepremiums for the first time in a long time can shock the system, and the wallet.

Whether you like it or not, you need a budget.

Earning Money After Retirement: Look for these three streams

You must determine exactly how much all of your monthly obligations cost you. Once youvefound this number, you have to ask yourself a very vital question Isthis sustainable? Ive convinced myself you dont know the number, and in turn, cant possibly confirmitsviability.

Forinstance, if you spend $6,500 per month consistently, then you must assign income to handle those expenses every month. If you simply spendwhatever feelsright, youll find yourself broke in a decade.

The importance of homing inon your true living expenses isespecially practical as you approach the age in which youll activate your SocialSecurity retirement benefits. Its not uncommon for a person whos been retired for a few years tounintentionally increasetheir lifestyle once Social Security income kicksin. This generallyhappens when a retireeoperates without a budget.

(Photo: Getty Images)

Look, I fully understand how unappealing budgeting is,especially once youve worked so long and hard to provide yourself an adequate retirement. But itsbecause youve worked so long and hard that you oweyourself the benefits budgeting provides.

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Even $1.7 million can disappear in arelatively short period of time if you refuse to budget. To replicate the lifestyle ($120,000 annually) youve just left behind in the workplace,youd need to withdraw 7% ofyour nest egg on an annual basis. That is not a sustainable plan. The more consulting income you earn, the less youll have to withdraw.

You also need to take the time to think through how your consulting income will wane. Will it gradually decrease over time as you purposefully put in fewer hours? Or will your income come to a screeching halt, whether it's voluntary or placed upon you. Too often, retirees who are working part time wrongly assume they alonedictate the continued viability of their part-time income strategy.

Thepiecesof a successful retirement are all there for you. Just be sure toassemblethemcorrectly.

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Pete the Planner: Could a retiree outlive his savings even with a part-time job? Possibly. - USA TODAY

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Here are the two funds you need before and after retirement – MarketWatch

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Target-date funds (TDFs) can be fantastic retirement savings tools. Many are well-diversified, cost-effective, and automatically reduce risk for investors as they approach retirement.

Theres a problem though. Most hold bonds in their early years when young investors are protected from portfolio balance declines by relatively large contributions to accounts with relatively small balances. They also rarely include meaningful amounts of small-value asset classes which historically have improved returns over the long haul.

To offset this over-conservatism, we proposed a simple solution: multiply the investors age by 1.5 and use that as a percentage to invest in a TDF, then put the rest into an all-equity fund. In backtesting, this approach outperformed a pure TDF approach in more than 99% of the 576 overlapping 40-year periods tested, and only increased dips in portfolio balances (drawdowns) by 2% to 6%. Heres the summary data from that study. Please see that article for detailed descriptions.

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Here are the two funds you need before and after retirement - MarketWatch

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Workers in These Careers Retire the Earliest, Study Says – The Motley Fool

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Early retirement is a dream shared by many but achieved by few. In fact, although half of U.S. workers say they'd like to retire by age 60, according to a survey from TD Ameritrade, only a third expect to be able to do so.

Retirement is expensive enough as it is, so if you want to be able to leave your job earlier than the traditional retirement age, you'll likely need to have a mountain of cash saved up to last the rest of your life. So when you picture what types of people can afford to retire early, you may be imagining doctors, lawyers, and other affluent professionals.

Image source: Getty Images.

However, new research shows a surprising reality: Workers who hold unskilled positions tend to retire earlier than their professional counterparts, and they also spend more years in retirement. But before you quit your job, there's more to the story.

This surprising tidbit comes from a report published in theJournal of Epidemiology and Community Health. Researchers spent over a decade studying citizens in the U.K. to find out how occupational social class and overall health affected the age at which workers retired. In part, they looked at the differences between those who worked unskilled jobs like cleaners, messengers, and manual laborers and those who worked professional jobs such as doctors, accountants, and engineers.

Ultimately, they discovered that those who held unskilled positions retired earlier, on average, than those in professional roles. Furthermore, these unskilled workers also tended to spend more years in retirement. In fact, unskilled workers in poor health still spent around five years longer in retirement than professional workers in good health.

That said, the study also revealed that the reason unskilled workers retired earlier usually had to do with health problems. The professional workers who spent fewer years in retirement did so because they were in better health and were able to work longer before retiring.

Early retirement is more common than you may think, and it's not always a positive thing. Roughly 43% of current U.S. retirees said they were forced into retirement earlier than they'd anticipated, a report from the Employee Benefit Research Institute found. When asked why they had to leave their jobs early, the most common responses included health issues and unexpected job loss.

If you have to leave your job earlier than you planned and your savings aren't retirement ready, your golden years may not be as enjoyable as you'd hoped. Especially if you're forced to retire due to health issues and can no longer work, you may have no choice but to make do on whatever you have saved -- whether you can actually afford to retire or not.

Some factors -- like health issues and unexpected job loss -- are out of your control, so you may not be able to avoid an earlier-than-expected retirement. But you can prepare yourself the best you can and protect your financial future.

One way to do that is to start building a robust retirement fund sooner rather than later. If your retirement strategy is to simply work into your 70s or 80s so you don't need to save as much now, your plans could be thrown out the window if you end up retiring before you're financially prepared. While it's not necessarily a bad thing to want to work past the traditional retirement age, make sure you have a backup plan in case you have to retire earlier than you anticipate.

A second option is to increase your Social Security benefits. Waiting to file for benefits until your full retirement age (FRA) will ensure you'll receive the full benefit amount you're entitled to. But if you wait until after your FRA to claim, you'll receive extra money each month in addition to your full amount. That boost can be significant, too -- those with a FRA of 67 can expect to receive an additional 24% each month by waiting to claim until age 70.

The downside to this strategy is that if you're forced into retirement in your early or mid-60s, you'll need to be able to survive on your savings alone until you're ready to claim benefits. But if you can swing it, you can collect fatter Social Security checks every month for the rest of your life.

Early retirement can either be a dream come true or a nightmare, depending on your financial situation. While you can't know whether you'll be forced into an early retirement or not, you can protect your finances to give yourself the best shot at retiring as comfortably as possible.

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Workers in These Careers Retire the Earliest, Study Says - The Motley Fool

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Upsizing In Retirement: Going Against The Grain – Forbes

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By Elizabeth Alterman, Next Avenue Contributor

Ruth and Al Brod and family in their dining room

When Ruth Brod retired from her job as a probation officer in 2004, she and her retired husband, Al, decided to sell their 1,600-square-foot house in New Hyde Park, N.Y. and move into a 2,800-square-foot house in Delray Beach, Fla. Having ample room to accommodate visiting friends and family was only part of the reason the couple decided to upsize in retirement.

The home prices had risen dramatically in the area where I lived, so I was able to afford to buy a nicer home, Ruth explains. I couldve bought something just fine for half the price. But when youve worked hard all these years, its nice to be comfortable.

The Brods spacious ranch on a quiet cul-de-sac is part of a vibrant 55-and-up community which has given them a chance to make new friends and embrace a range of activities there.

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I really enjoy my home, Ruth says. Its not just a house; I bought a lifestyle.

The Brods are hardly alone in bucking the downsizing trend in retirement. People in their 60s are doing it for all sorts of reasons from finding a home that better suits them to buying one with room for a live-in parent or visiting family members.

People who choose to upsize in retirement often do so when relocating to a more climate-friendly area, such as Florida or Arizona, says Cara Ameer, a real estate agent with Coldwell Banker Vanguard Realty in Jacksonville, Fla."Many times, they want to find their dream home and feel it is time to make that happen.They dont want to sacrifice on location, finishes, and, most importantly, a view.

For some fortunate people, upsizing in retirement can mean trading up apartments to live the luxe life theyve envied.

Says Manhattan-based real estate broker Susan Landau Abrams of Warburg Realty: We have been involved in several transactions where empty-nester clients moved from three-bedroom owned apartments to four- and five-bedroom owned apartments. They are at the pinnacle of their success and want to enjoy life and live graciouslyThey want spacious master bedrooms, his and her master bathrooms, an office/library and a chefs kitchen. Several of our clients have dedicated an entire bedroom to create the ultimate luxury in Manhattan: a huge walk-in closet.

Next Avenue recently wrote about the trend of some empty nesters in their 60s moving from the suburbs into the city. New York City-based real estate broker Michael J. Franco of Compass says hes noticed that as an upsizing trend, too.

Ive seen a lot of baby boomers coming back into the city and spending more money on residences than they made selling their houses in the suburbs, he says.

In certain instances, they leave modest houses in the suburbs to lavish apartments in Manhattan to pursue a more active lifestyle. In others, theymove from smaller apartments to bigger ones to accommodate grandchildren or other guests. They want room for kids and grandkids in hopes of them visiting more, says Franco.

Still, upsizing isnt the norm among people relocating in retirement.

An April 2019 survey of adults age 50 and 60 conducted by Del Webb, a leading builder of active adult communities, found that of those planning to move in the future, 43% prefer their next home be the same size as their current one and 22% want it to be bigger. Nearly a third of the Gen Xers surveyed desiring more space (29%) said theyd design their next home to accommodate their parents.

And sometimes, the upsizing happens by moving from one home in a retirement community to a bigger one there.

Thats what Ken and Sharon Thomas did. They live in Del Webbs Sun City Peachtree active 55-plus community in Griffin, Ga., and recently moved from a 2,690-square-foot home in it into one boasting nearly 4,000-square-feet. The couple moved to Sun City Peachtree in 2013 after Ken retired from Lockheed-Martin. They opted to buy the larger home in 2018 to accommodate Sharons mom, whod lost her husband and is not as ambulatory as she once was.

Says Ken Thomas: A lot of my generation is bringing their parents in, as opposed to putting them in retirement homes or assisted living where the parents would be moved into a foreign environment. Were very blessed to be in a position to do that.

Similarly, the Thomas neighbors, Patty and Chuck Leer, have decided to spread out a bit. Though their new home is only 300-square-feet larger, it offers more usable space that will afford Chuck the workshop he wants and additional room for Pattys interests, which include quilting, painting and card-making.

Our living room is about double the size it was, says Patty.We have one dining area instead of two, and our current sunroom will be traded for a much bigger screened porch.So, our reason to upsize was to put the space where we would best use it.

If youre thinking about upsizing in retirement, planning early can be the key to making the dream a reality.

John Bergquist, senior founding partner at Common Sense Financial in South Jordan, Utah, who has helped retirees reach this goal, has a suggestion.

If you are seeing this in your future, you definitelywant to incorporateit into your retirement plans, Bergquist says. That may mean prioritizing whats important.

Maybe you choose not to take the extra vacation trip or plan to do more staycations, so you can use the funds to buy that larger home. Maybe you decide to drive more economical cars to have the extra funds. It's just a matter of deciding what's most important to you.

And a piece of cautionary advice from Ameer: a larger home can mean super-sized utility bills.

A bigger home costs more to maintain no matter where you live, she says.And if the home has a swimming pool or a dock for a boat, she notes, that only further adds to maintenance and upkeep.

Upsizing, if you can afford it, offers plenty of upsides. But before you get your heart set on a sprawling abode, be sure to consider the costs that come with it.

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10 Numbers That Tell the Story of Retirement Processing –

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If youre planning to retire at the end of this year, or are just curious about what happens to your application when the time comes, youre probably interested in retirement processing. During the summer, I dedicated two columns to this topic: 3, 2, 1...Retire! And What Happens to Your Retirement Paperwork. Later I wrote about a field trip I took to Boyers, Pennsylvania, to see firsthand how the Office of Personnel Management handles retirement applications.

A federal retirement application is still completed on a paper form, like it was in 1920 when civilian employees first were provided retirement benefits. But advancements now allow the information on the form to be passed to OPM electronically so that your retirement can be completed more accurately and efficiently.

Thanks to modernization, according to Ken Zawodny, OPMs associate director for retirement services, 74 percent of non-disability retirement claims are currently processed in 44 days or less. Although there are still cardboard folders, paper fasteners and metal file cabinets all over OPMs Retirement Operations Center, and full automation of the retirement claims process is still in the future, Zawodny is proud that OPM has incorporated Lean Six Sigma production management concepts in order to streamline retirement processes.

One way to shed light on retirement processing is to look at at some facts and figures:


The rough percentage of retirement claims that have a deposit or redeposit, which means money is owed to the retirement fund in order to credit a period of service towards eligibility and/or computation of a retirement benefitor in some cases, to avoid a reduction to the benefit. Before final processing, the new retiree is given an opportunity to pay unpaid deposits or redeposits.


The percentage of new retirement claims that are submitted via the Defense Finance and Accounting Service. Another 30% come from the Postal Service, along with 15% from the National Finance Center, 8% from the Interior Department Business Center, and 4% from the General Services Administration. The rest come from smaller independent payroll offices.


The percentage of new retirement claims placed in interim pay status immediately. Interim pay is generally equal to 80% of your basic retirement benefit and is paid to you while your claim is being finalized. There are some situations in which the figure is lower than 80%.


The number of data elements electronically transmitted from your payroll system to OPMs Retirement Operations Center when your application is submitted. This allows OPM to immediately begin processing your retirement claim.


The percentage of new retirement claims that are Federal Employees Retirement System applications. Just five years ago, claims were split about evenly between FERS and the Civil Service Retirement System.


The age at which a retiree's records are no longer retained. Records of thosewhose date of birth is 1904 or earlier are destroyed.


The approximate number of retirees who reach age 100 every month. These folks receive a letter in the mail from OPM upon reaching this milestone.


The approximate size of OPMs retirement operations staff: about 500 employees at the Retirement Operations Center in Pennsylvania, 150 at a call center (also in Pennsylvania), and 300 in Washington.


The approximate number of CSRS employees left in federal employment.

1 trillion

The dollar value of combined assets for retirement, health benefits and life insurance programs for federal employees that OPM oversees.

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This Couple Retired At 32 (With 5 Kids) To Discover Their Dream Job – Forbes

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Imagine growing up under the poverty line, never graduating college, having $55,000 in debt and earning well below $100,000 and wanting to retire early.

That doesnt shape up as your typical early retirement story. Yet this Montana couple with five kids in tow paid cash for their house and managed to retire at the ripe old age of 32.

Adam and Jillian Johnsruds family

Its the stuff of the American Dream, a true story that needs to be told, heard (and read), and taken to heart. If this couple could achieve that status with all the obstacles they faced its a real possibility for anyone else.

Thats what makes Adam and Jillian Johnsruds story so exciting. But it gets even better. Like a lot of people who retire early in life, Jillian now earns far more money than she ever did in her working years.

Thats one of the common apparent contradictions in the F.I.R.E. Movement (Financial Independence, Retire Early). Those who achieve it seldom kickback to enjoy a life of blessed nothingness. Almost inevitably free from the constraints of the daily struggle to survive they move on to something bigger and better in life. They may even discover their dream job or occupation.

Making the Decision to Pursue F.I.R.E

One of the most important details in the Johnsruds story is their decision to pursue a life of financial independence and early retirement was entirely intentional.

Early in their marriage, the Johnsruds made a conscious decision to commit to living frugally. They decided to concentrate their money in the areas of life they felt mattered most, and say no to everything else. Using that strategy, they managed to save $250,000 in 10 years, and retire very early in life.

But like a lot of young couples, they started with an uncomfortable level of debt. The total was $55,000, made up of student loans, credit cards and medical bills. If we add the debt pay off total to the $250,000 in savings, the Johnsruds actually saved the equivalent of well over $300,000 in a single decade.

As you might imagine, reaching that level of prosperity required a few unconventional directions in life.

Read More: The Forbes Guide To Fire

Extreme Frugality Strategies

During the 10 years leading up to early retirement, Adam and Jillian Johnsrud had a combined income that averaged between $50,000 and $60,000 per year. Using conventional means, thats not the kind of income that would enable you to amass a six-figure investment portfolio in a single decade. To save 50% of their income they turned to extreme frugality.

As Jillian puts it, We had 10 years of saying, this is nice, but we have bigger dreams.

That translated into frugality in almost every area of their existence.

Feeding a family of six has the potential to bust any budget. But Jillian gets around that by keeping food costs to no more than $1 per pound. Thats mostly a matter of shopping and literally searching out food items that cost less than $1 per pound. Since most items in grocery stores are listed by price per pound, Jillian simply focuses on those available for under $1.

That strategy also enables her to avoid the need to chase sales and clip coupons, two strategies that are usually considered foundational to extreme frugality.

Clothing is another issue with such a large family. To keep this expense low, they buy big lots of used clothing, often from friends. That also saves time on shopping, avoiding the need to chase sales or sift through the racks at thrift stores.

Other strategies include packing lunch every day (when they both worked), driving a beater car, and living in an old camper for a time so they could pay off their debts faster.

Says Jillian, Those hard choices gave us the amazing lifestyle we have now.

Buying the Ugliest, Nastiest Home

By the time the Johnsruds had amassed $200,000 in savings and investments, they were in the market to buy a home.

Now they could have gone the traditional route of buying the most expensive house they could afford. That might have meant paying cash for a $200,000 property, or even making a big down payment with a big mortgage on a dream home.

But with their commitment to a future of financial independence, they chose a non-traditional route.

Determined not to be sidetracked from their F.I.R.E. pursuit, Adam and Jillian instead opted to buy a small house for $50,000. Thats inexpensive even in a small rural market like Kalispell, Montana. But the price was that low in large part because it also had a flooded basement. We bought the ugliest, nastiest home that would accommodate the family we were hoping to have, Jillian reported. Then spent five years remodeling it.

It wasnt a decision that came without consequences. They spent the first year just making the home livable, and a total of five years fully renovating it. And since the home is small by the standards of the local market, they were forced to get rid of many possessions they seldom or never used.

But as a result of the choice they made, and the sacrifices that came with it, the family is now comfortably housed in a mortgage-free home. And while housing is usually the single biggest expense for most households, it barely makes a dent in the Johnsruds monthly budget.

As a postscript on the house, Adam and Jillian spent an additional $30,000 for renovations. But today the home is worth close to $200,000, and theres still no mortgage on it.

That was just the beginning. Armed with a practically non-existent housing expense, they continued to save. Just a few months after buying their first house, they bought and renovated a rental property and later, a second that now supply one of their three basic income sources.

Income generating real estate is a smart strategy. David Wilson is a Certified Financial Planner and real estate investor in San Diego, CA, and a big proponent of residential real estate investing. People always need places to live, David maintains. And unlike commercial real estate, if things get bad and your properties arent renting, you can drop your rental rate and almost always get your property rented.

Being Out-of-Step with the Culture

Some people may be willing to buy a $50,000 wreck of a house to fix it and flip it for a profit. But far fewer would be willing to buy it as a place where their family will live. Jillian and Adam got some negative reactions for doing just that, especially as their family expanded when they adopted a sibling group of 3 kids. Almost everyone in their life kept asking, "So when are you going to move into a bigger place?"

And unlike a lot of young couples, they had to resist the urge to buy a brand-new car every few years. Then there were the restaurant meals and the expensive vacations they didnt take during their F.I.R.E. build-up.

But these are the price nearly everyone has to pay on the road to financial independence.

Jillian was prepared to pay that price, and may have had a built-in advantage from an unexpected direction. Growing up poor taught me I might have to work twice as hard, twice as long, and put up with a lot more crap just to make the progress, she claims. And I said, OK, if thats the price of admission, Ill pay it.

The Income and Expenses of Early Retirement

To retire, the Johnsruds draw income from three sources:

The safe withdrawal rate of 4% is a foundational issue for all retirees, but especially for early retirees. Many retirees have questions about how much of their portfolios can be withdrawn each year without running out of funds before they die, offersBenjamin Brandt, CFP of Capital City Wealth Management in Bismarck, ND, and host of the Retirement Starts Today podcast. Often times, retirees will look to the 4% rule for guidance, and only withdraw an inflation-adjusted 4% of their initial portfolio starting balance in retirement.Many retirees dont realize how conservative this strategy really is, as 96% of 30-year withdrawal periods end up with more money than they started out with!

The three income streams total $3,550 per month, or $42,600 per year. Thats well below the US median household income of $61,937 per year. But its more than enough for the Johnsruds, who are able to live on just $2,000 per month.

And because theyre able to live so far below their means, they can get by on just two of their three income sources. That enables them to continue to save an entire income source each month, to build their savings for the future.

They can live on that much money because they dont have the typical financial burdens of middle-class life. Theres no mortgage, no student loan debts, no car payments and no credit cards. The Johnsruds are largely able to sustain their low-cost lifestyle because they avoid debt entirely.

According to Jillian, their core living expenses are just $700 a month. That includes:

Over and above the basic monthly expenses, their groceries run about $700 per month, leaving them with $600 to cover whatever else they need or want. And fortunately, the familys health insurance is provided by the military, as a result of Adams time in the service.

The Payoff of Early Retirement

With their combination of three steady income sources, and a low cost of living, Adam and Jillian are no longer tethered to 9-to-5 jobs. That frees them to pursue activities and goals that they want to pursue.

One of those activities is spending plenty of time with their children. Without the need to report to a job every day, Jillian and Adam are able to spend most of their days with their kids. That also means more time for school-related activities, as well as leisure pursuits.

A major early retirement goal for the couple was to be able to travel with their family. They do it frequently, which is helped by the fact that they keep their trips low-cost.

They love to travel to national parks, and recently spent 10 weeks visiting 10 different parks with their family. Thats one of the perks of early retirement the ability not just to take vacations, but extremely extended ones. They own a camper, which eliminates the need to pay for lodging.

And while theyre away on vacation, they sometimes rent out their home to raise additional income. The income even covers the entire cost of some of their vacations.

The same frugality that benefited the Johnsruds when they were working their way toward F.I.R.E. is continuing to keep them comfortable now that theyve achieved it.

And along the way, they been able to travel to 42 states, 27 countries, and even spent a full four years living abroad.

Those are the kinds of life enriching experiences that many people dont experience even in traditional retirement.

F.I.R.E. Isnt Necessarily About Traditional Retirement

One of the distinguishing qualities of F.I.R.E. is that it bears little resemblance to the traditional notion of retiring to a life of perpetual leisure. While leisure is certainly part of the package, the desire to produce and accomplish figures significantly into the mix.

Jillian has described this concept as Flexible FIRE. It involves a mix of activities and pursuits. For example, some weeks include leisure activities that are closely associated with retirement. The Johnsruds multiweek vacations are an example.

But other weeks they pursue income earning activities, mostly on a part-time basis. Then there are volunteer roles. For example, Adam serves on the board of a local low-income mental health facility, while Jillian serves on the board of the ChooseFI International Foundation that promotes financial literacy. And in still other weeks, they plunge into more significant projects.

Thats certainly been the case for Jillian. Once they reached financial independence, and cut the ties with their traditional jobs, she transitioned into entrepreneurship. She now coaches others on how to achieve the F.I.R.E. lifestyle her and Adam have attained.

Not surprisingly, theres a robust market for that kind of training. She coaches people one-on-one, runs paid groups, host events and speaks all over the country. She currently coaches 30 people each month, most of whom are involved in some sort of work transition. It might be someone selling a business, growing or scaling up a new business, finding a new job, or even preparing for retirement

She tells her story on her blog Montana Money Adventures, with the motto Helping People Custom Design Their Best Life with Passion + Passive Income. In addition, shes launching a podcast in January called Everyday Courage.

Final Thoughts

As is often the case, Jillian saw her income take off from her postretirement business activities. Thats not an unusual outcome when people begin pursuing their passions. In Jillians case, shes teaching others how to attain the life she has. Its a topic shes an expert in, because she and her husband created the lifestyle from very humble beginnings.

I had dreamed about being a writer or speaker, and just never thought that was an option, Jillian confesses. It only took becoming financially independent and leaving work life to find both.

Jillian found becoming financially independent allowed her to explore and discover her best work, and to transition into entrepreneurship. And while that had nothing to do with what she was doing in her previous employment, it had everything to do with the life shes been living for many years now.

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This Couple Retired At 32 (With 5 Kids) To Discover Their Dream Job - Forbes

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ABCs Martha Raddatz asked whether McChrystal thought Trump was immoral.I think he is [immoral], he responded. If we want to be governed by someone we wouldnt do a business deal with because their background is so shady, if were willing to do that, then thats in conflict with who I think we are. And so I think its necessary at those times to take a stand.

James Stavridis

Rank: Four-star admiral

Notable experience: Supreme allied commander for NATO

Retirement: From the Navy in 2013

What hes said: Stavridis called Trumps plans to withdraw from northeastern Syria a mistake of epic proportions; earlier this year he took aim at the president personally in Time magazine, where he explained why he thought the retired generals who had served in Trumps Cabinet had left.

What attracted Trump to generals in the first place? It seems he was attracted to the macho, direct, domineering profile that many civilians associate with generals, like Jack Nicholsons portrayal of a Marine in A Few Good Men, Stavridis wrote in Time. He may have thought associating with them would burnish his own credentials as an alpha male. (Remember, he also hired General Michael Flynn, who later pleaded guilty to making false statements to the FBI.) But it has likely dawned on Trump that generals are more cerebral than he ever would have guessed, have a pesky habit of quietly judging him in ways that got under his skin, are more intellectual planners than operational Rambos, and dont quite care about the politics and media signals that the President holds dear.

Colin Powell

Rank: Four-star general

Notable experience: Chairman of the Joint Chiefs of Staff under George H. W. Bush and Bill Clinton, and secretary of state under George W. Bush

Retirement: From the Army in 1993

What hes said: Active in Republican politics in the 1990s, Powell has since said the GOP needs to get a grip and that Republican politicians are afraid to speak out, despite a foreign policy in shambles under Trump.

A couple [of] weeks ago, the president put a circle around Southeast Alabama, saying its going to get hit by a hurricane. He put it on top of the meteorological prediction, Powell said in remarks at the New Albany Community Foundation, in Ohio, in October. In my time, one of us would have gone to the president and said, Mr. President, you screwed up, so weve got to fix it and well put out a correction Weve got to remember that the Constitution started with We the People, not Me the President. This is not the way the country is supposed to run.

John Kelly

Rank: Four-star general

Notable experience: Head of United States Southern Command; served as Trumps secretary of homeland security and then chief of staff, and resigned in 2018

Retirement: From the Marines in 2016

What hes said: This fall, Kelly criticized Trumps Syria policy and his White House staff. I think that, with all due respect to the president, was a catastrophically bad idea [to pull out of northeastern Syria], he said at a political conference hosted by the Washington Examiner in October. And I would just offer, it didnt happen while I was there. A couple of other people recently left the administration and then he went with his instinct. But it was on a number of levels the wrong thing to do [I told Trump when I left] Dont hire someone that will just nod and say, Thats a great idea, Mr. President. Because you will be impeached I have an awful lot of second thoughts about leaving. Because whether you like Mr. Trump or not, hes the president of the United States.

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Will the Generals Ever Crack? - The Atlantic

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