NOTE: I'm currently (January 2022) in catch-up mode. I had attempted to post monthly updates from July 2017 to current. When the virus hit, I kind of lost enthusiasm, to say the least. Instead of trying to recreate the posts since then, I've created one 'end of experiment ' post to tell you how it turned out. Please come back often to see the progression of my investment updates. Most of the monthly updates include investing advice or opinions, so you won't want to skip reading any of them! Thank you.
Remember that time in your life in grade school, when after a hard morning of ABC's or eating glue you were allowed to go out on the playground and have fun? Remember how much fun you had playing and exploring and not having the least bit of worries?
How would you like to recapture that wonderful time? Explore the world? Play all you want?
In this blog, I will present a lifetime plan that should allow you to enjoy a RECESS after you've toiled for many years and accumulated enough savings to last the rest of your life.
In case you hadn't picked up on it, I call my plan RECESS, Retire Early, Claim Early Social Security. It might be a cheesy acronym, but I wanted to plant an idea in your mind that would remind you of the end goal as you go through life – remember RECESS when you get your first job. Remember RECESS when you get a raise. Remember RECESS when you buy a house. Remember RECESS when you stop working. Remember RECESS when you make your Social Security claiming decision. Throughout your life, I want you to remember the principles of RECESS, and you too should be able to retire comfortably and confidently.
RECESS is formulated from my opinions. But those opinions are based on the historical facts of each topic. I cannot predict (nor can any other 'expert') the future of the stock market, Social Security law, inflation, or any other factor, so I do the next best thing, I use known historical averages when applicable. During my own adulthood (beginning in 1973), I've seen 3.31%3-18.63% mortgage rates, .8%-13.3% annual inflation rates, and S&P 500 index annual returns of -38.49% to 34.11%. For those areas outside of my control, I will use the documented historical averages. Some of my opinions and discussions cover factors that are harder or impossible to use historical data. These include wages, career choices, state income taxes, emergencies, family dynamics, and many others. You should apply your decisions and thinking for these items as they pertain to you. As they say “Your mileage may vary”.
This blog is divided into two sections: RE (Retire Early) where I will present the components of what it may take for you to be able to quit working at or before age 62. These posts should help guide your saving and spending decisions during your working life. The second section, CESS (Claim Early Social Security) explains how the Social Security benefit program calculates your monthly benefit based on your work history, age, cost of living and Price Wage Index. I offer an argument for ALWAYS claiming at the earliest possible time (your 62nd birthday). It also offers tips and suggestions for your investments and lifestyle, which are certainly just as important as your claiming strategy.
I do not want to present a blog like so many books I've read that have a lot of fluff or tell you the same thing 5 different ways. This effort is straight forward and a presentation of an plan, You can choose to accept all of my thoughts and assumptions, some of them, or none of them. My conclusions are sometimes contrary to the advise and opinions of famous, well-paid 'experts'. All I can say in defense of these ideas is – I retired comfortably at age 60. And you can too!
Disclaimer: the RECESS approach is not for everyone. If you are reading this blog, that's a great start. You are probably savvy in your saving and spending strategies and decisions. This method will not work for those who think their tax refund is a bonus check, who need to own a new car, are deep in credit card debt, need to buy the most home they can afford or can not account for all the money they spend. Those types of people can be helped tremendously by this plan, but if they refuse to discipline their savings and spending, they cannot hope to achieve the goals of this program, which is to take a career ending RECESS.