Is Early Retirement (or even at all) A Pipe Dream?

Early retirement

Everyone had money during the ’90s. At least, that’s the story that most pundits will put forth. Of course, there are others who will argue that the good old days occurred much earlier than the Clinton administration.

It was in the 1950s and the 1960s that most people worked for a large company for their entire careers. Those big companies loved their employees so much that they offered pensions that would kick in around age 60 or 65, and the formerly employed would be able to ride on easy street until time took its toll and they passed from the scene at around age 70 or 75.

Today, many people argue that it’s going to be nearly impossible for any generation after the Baby Boomers to retire early, if they’re even able to retire at all. It is true that pensions are quickly going the way of the saber-toothed tiger, but there are other options that people can utilize to take their own money into their own hands. Here are some things to think about when talking about the possibility of retiring early.

Social Security Will Not Be Available

Some people argue for the imminent demise of the Social Security system. These arguments are premature because even dire projections still see the system paying out 70 percent of the current level a few decades from now and leveling off at that point. Could there be a cut in payments? Yes. Is the system likely to go completely belly-up? No.

The biggest problem when it comes to early retirement and Social Security lies in the fact that people can’t access these funds until they are at least 62. At this early date, benefits are much smaller than if people waited to take payments at their full retirement age of 66 – 67. Therefore, it’s no use to count on Social Security for early retirement.

There Are a Number of Opportunities for Retirement Income

In the private sector, many companies offer employees 401k plans. These retirement vehicles allow employees to save up to $18,000 per year (as of 2015) in a retirement plan that defers income taxes until the money is taken out. If a person were to max this out for the first 20 years of employment, they’d have accrued just above $871,000 should they average an 8 percent return over that time. At the assumed safe withdrawal rate of 4 percent, they’d be able to take out about $35,000 per year without running out of money.

Lest people be concerned if their employer is not in the private sector, there are other options for early retirement. Governmental agencies still tend to provide traditional pensions. They also frequently allow employees to save in a 457 deferred compensation plan. This works much like the 401k, but when an employee decides to retire, they can take the money out without penalty.

Nonprofits will–quite often–offer a 403b plan. Even those who do not have an employer who offers retirement plans can still save up to $5,500 per year in a traditional IRA or Roth IRA. The latter could help provide income in early retirement because the contributions are not taxable and can be taken out at any time.

Working Income Is Important

It will be difficult for any worker at a fast food joint or a retail establishment to get to early retirement if they stay around minimum wage. It is possible to save up, but it will take many years to save a large enough amount to actually retire. A higher income allows people to come closer to maxing out their 401k and IRA accounts each, and this is key toward getting to early retirement.

Saving Is More Important

Dave Ramsey recommends saving 15 percent of income in a retirement account. He estimates a 12 percent return. While this is not a realistic return under most circumstances, he is right that a person will have a sizable nest egg after 40 years, but this is not early retirement.

There are newer financial preachers who argue that a middle-class income should allow a person to save between 40 and 80 percent of their annual income. Jacob at Early Retirement Extreme argues that a person can live on $7,000 per year. Pete at Mr. Money Mustache shows that even a teacher making $40,000 per year can retire in about 10 to 13 years if they cut down on their frivolous spending and save enough.

Living on less allows for the required nest egg to be much smaller if a person saves enough to maintain the 4 percent safe withdrawal rate because the cost of living will be lower indefinitely without new cars and a McMansion. Finding additional options for income on the side can speed up the process, and paying off all debt is a must for early retirement.

While many people are concerned that they’ll never be able to retire, it is definitely possible. All that’s needed is avoiding major medical problems and saving a large percentage of your income from each and every check. A 40-year working career could drop to 20 years or less with some hard work and adequate planning.

Applying for Scholarships is Certainly Worth Every Headache

Applying for Scholarships

I was strongly encouraged to earn an education. My parents had saved some money over the years to help with school, but being the youngest of eight children and the daughter of teachers, I couldn’t expect to have money to cover the entire cost of college. Since college was my goal, I prepared and applied for scholarships. Because of those scholarships, I was able to receive my bachelor’s degree without any student loans or debt.

Scholarships are an essential tool most people don’t think about when they are considering college. They can’t be earned last minute and take immense preparation, but to graduate without debt is worth all the hassle.

Obscene Amounts of Scholarship Money Is Wasted Each Year

Students have all sorts of reasons for not applying for scholarships. They aren’t the top of their class, they don’t want the hassle of applying, they didn’t score high enough on ACT or SATs, and the list goes on. According to the Washington Post, the database fastweb.com has over 1.5 million scholarships, equaling more than $3.4 billion. There is a scholarship out there that fits who you are as a person, and possibly only you.

According to Scholarship America’s CEO Clifford Stanley, millions of dollars in scholarships go unused. Only one student out of every 10 at four year colleges has some kind of scholarship.

Don’t count yourself out before you give scholarships a try. You will not regret the time spent and energy put into applying for scholarships.

Tips to Remember When Applying for Scholarships

Before you decide to apply for a scholarship, here are some thoughts to consider and items to remember.

  • Search out all the different scholarship opportunities. Don’t just settle for school scholarships. US News suggests looking into scholarships through your community, potential school, church, and civic organizations. Don’t be afraid to ask everyone and apply for all and any. But, be advised, if you have to pay money to get scholarship advice, it is most likely a scam.
  • Once you are in a certain program or department, don’t forget about individual scholarships offered through the department, not the college. Jason Slack, a department head at Utah Valley University, said many scholarships go unclaimed in his department because people don’t know they are there and don’t ask.
  • Know the deadlines of all the different scholarships. Along with knowing deadlines, know the different requirements to allow yourself time to correctly fill out each application.
  • Take the time to fill out the application completely. Spell everything correctly and have others proof read it to make sure everything looks good.
  • Be careful about who you ask to write recommendation letters. These letters can make or break your scholarship. Make sure you ask someone who can write well and will actually give you a good recommendation.
  • Make your application stand out. Find unique things about you that set you apart from the other applicants.
  • Get involved. It doesn’t matter what you are involved in, but take opportunities to explore extracurricular activities, leadership, academics, community service. All these different avenues will look great to those deciding on who is awarded the scholarship.

Always Apply – Even if You Think You Aren’t the Most Qualified

Don’t just assume there is a better applicant out there. You never know if you will be awarded the scholarship. My junior year of college I decided I wouldn’t apply for a scholarship in my department. I knew some other people who were also applying and they had done more than I had in the department. I just knew I didn’t have a chance. My husband convinced me to just try. I got everything put together and applied to please him, really. I was shocked when I actually received the scholarship. Don’t count yourself out. Let the committee decide!

Applying for Scholarships are Absolutely worth the Hassle

The scholarships I received, varied over the years. I was awarded scholarships due to my grades, being in leadership positions while at college, from my specific department, and scholarships from individuals where I met the certain requirements. I am so grateful for the different scholarship opportunities that allowed me to graduate debt free.

I understand having student loans is necessary for some people, but I also know plenty of students who simply don’t apply for scholarships. They are worth all the work and hassle. Search out different scholarships, apply and see what happens. Any money earned through scholarships is money you don’t have to pay back once you graduate.

Is Spring Being Replaced with Screens? Here are Inexpensive Spring Activities for the Family

Spring activities

The first day of spring has officially come and gone. The leaves are starting to bud and flowers are starting to bloom. The earth is starting to green up and the brown of winter is fading. And, most kids won’t even see the beauty that is Spring because they can’t get their eyes off the screens in front of them.

Are Your Kids Attached to Screens?

“I’m bored . . . there is nothing to do!” This technological age has kids finding it harder to use their imagination. If there isn’t a screen in front of them, they have a hard time paying attention.

According to the New York Times, kids ages 8 to 18 spend more than seven and a half hours each day outside of school with screens, which includes television, cell phone, computers, iPods, etc. Those numbers don’t include the time kids spend texting and multitasking while on devices. You add all the numbers up and kids these days spend over 11 hours in front of a screen, a day.

Here are a few inexpensive spring activities you can do as a family to get your kids–and let’s be honest, you too–away from the screens and spending more time together.

Spring Activities to Do At Your Home

If you are sticking around your house each day and need to break the screen cycle, here are a few ideas to get your kids outside and enjoying the beautiful weather.

  • Have a sidewalk chalk competition. Set a timer, draw for a set time, and then judge the drawings. Have Popsicles for the prizes.
  • Play games you used to play in your youth: sardines, hide and seek, kick the can, tag, kickball, home run derbies, etc. Teach your kids what you used to do before the screens took over.
  • Go on a bike ride or a run. Teaching your children to have a healthy lifestyle will last a lifetime and it is never too early to start, according to professor and author Stephen Virgilio.
  • Do yard work. Make it a competition to get the kids excited. Plant a garden together or do service for others in the area that need yard work done.

Be creative and find ways to include all your children. It is never too early to instill good work habits, as well as good healthy activities.

Adventures to Enjoy Spring around Town

If you are looking for things to do away from the home, here are a few suggestions.

  • Go to a local park. Play on the toys, take a Frisbee, walk around the park, whatever fits your family’s interests.
  • Learn a new sport together. Take lessons in golf, tennis, or another sport you want to learn as a family. Enjoy learning and playing together.
  • Find the local hikes around your area and explore.
  • Enjoy the spring nights and look at the stars, play night games, go get ice cream and enjoy the beautiful sounds of night.
  • Feed the ducks or other animals in the area. Visit the zoo, aquarium, wild life conservation, dairies, or farm. Enjoy seeing the baby animals or animals in general.
  • Rent four wheelers or other modes of transportation that are different and fun.

There are more things to do around your city than you think. Look into different options and find fun things your family will enjoy. Remember to make it fun so your kids don’t want to pull out their phones.

Inexpensive Spring Vacation Activities

Most of the schools take off time for spring break. Take advantage of the time away from school to get your kids away from the screen and plugged into the real world.

  • If you have money saved, take advantage of fun and inexpensive destinations for spring break.
  • Look for fun adventures close to your home. A national park, amusement parks, places to tour and learn more about. Look for ways to create a staycation for your family to enjoy inexpensive spring activities.
  • Before gas prices spike in the summer months, go on a road trip and see what adventures you come across.
  • Go visit grandma and grandpa. Take the time to learn about the past and spend time with those family members.
  • Let each family member decide on one destination or activity around your home and enjoy exploring.

Vacations with your family don’t always have to be elaborate and expensive. Be creative and find ways to make the most of your time with your family and plan exciting spring activities.

You Won’t Regret Time Away From Screens

“We don’t want to demonize media, because it is going to be a part of everybody’s lives,” says pediatrician Marjorie Hogan.  “[we have to] make sure it’s not going to take the place of all the other good stuff out there.”

One thing I can promise you is when you lay down at night, after spending time outside, away from screens and with your family; you won’t regret the time spent. Plan some activities now that are inexpensive but require everyone to put down the screens and enjoy time as a family.  What fun activity are you going to do with your family this weekend?