This post was written by Marie.
Do you dream of retiring some day? Maybe you are ready to retire financially but have other concerns. Perhaps you are socking away go-goobs of money for a far off retirement date and are wondering if it is worthwhile to forego all those ‘along the way’ life treats in order to be prepared for retirement.
I’m retired! I have been since April 7, 2010. Hubby retired in July 2007. Before retiring I often wondered about life after retirement – would we have enough money, what was our net worth, would it change our marriage, would the kids and grandkids have different expectations about their inheritance, what if catastrophe struck and money became an issue, what would I do, would I miss the daily interaction with the people with whom I worked for many years?
In hopes of helping someone out there find answers to their own retirement questions, I share today my own retirement experiences and lessons learned to date.
Lesson One – Do the Math
We did the math twice, once when Hubby retired and once when I retired.
Hubby is one of those lucky few that actually has a pretty safe pension – one that also comes with health plans (which cover me as well) – so calculating his was easy. He actually gets about 2/3 of his parting salary in pension form, even when providing me with a survivor benefit. If I die first, he can rescind the survivor benefit to increase his monthly pension amount. Health insurance is a bit more pricy than when employed, but less than a lot of other people pay. Plus, I was still earning a significant salary so we really weren’t worried about having enough income to live on when he retired.
We didn’t count on the psychological effect on me though. Hubby continued to work hard around the estate (ok, I’m being a bit grandiose – but you could call 6 acres an estate – right?) after retiring, but that didn’t stop me from being jealous of his new status and wanting to join him. However, I had just taken on a new assignment and didn’t feel I could desert the post and leave my company in a lurch. Then the Great Recession hit so I postponed for a few years.
When I was preparing to retire, I tried to go part time – but my company wasn’t willing to fill my spot with a part-timer. Next I collected and reviewed the past two years worth of expenditures to see exactly what our actuals were. Then I collected and reviewed the past five years of income from non-job related sources to see what our income averages were. I counted only on getting the lowest years incomes. Since I wouldn’t start collecting any Social Security or retirement income for several years, we would need to live on Hubby’s pension and any alternate income sources we have. Our alternate income streams include an inherited IRA, real estate rental income and dividends/interest from investments. We found that we could afford it (Happy, happy days!).
Make sure you have the financial backing to quit your job! Remember to include taxes as an expense.
Lesson Two – Exit Smartly
In 2010, my company was just preparing to do their first round of recession related layoffs. However, I did not want to volunteer to be laid off to collect the layoff benefits. That isn’t the way I wanted to end my 25+ years of active working. I wanted to go out with full honors. A few months after I retired, I regretted not volunteering. It would have been financially wiser to take the layoff money and run. It would have meant about a year’s worth of salary.
Now, however, I hear that the company will not consider re-hiring anyone laid off in the first round. Since I didn’t soak the company for the benefits, I should have a chance at being re-hired should I decide to go that route within a few years.
Keep your ear to the ground for lucrative exit strategies, but don’t close off possible future opportunities by doing so!
Lesson Three – Retain Credentials
I worked as an IT project manager for years and years without any project management credentials. In my last position in the company (managing a 100,000 staff hour project), I thought it would be beneficial for the company, and for me, to gain certification. I paid good money and spent a lot of time studying for the Project Management Institute’s Project Management Professional certification.
I plan to keep current in this certification until I start collecting Social Security (which should happen in 3 more years – assuming the program is still paying out then!).
Hedge your employment opportunity bets by staying current in your expertise area.
Lesson Four – Deal with Company Retirement Plans
Each time I left a company (I worked for 2 others as an IT person), I dealt right away with the retirement plans. At my last company, we had two plans. The first was composed mainly of company stock. I did deal with this one as soon as possible by moving it in kind to a taxable IRA – so I could take advantage of the Net Unrealized Value taxation rules.
However, I haven’t learned this lesson too well, as I still have the second plan, which is a 401K. Since the mutual funds in it were an institutional share class, I couldn’t move them in kind. The plan was to sell the assets within the plan to get to a cash basis and then move them to an IRA. I got most of the funds sold, but then the market tanked and I’m reluctant to sell the rest in a down market.
Take care of retirement business when you retire!
Lesson Five – Tackle New
My plan for after retirement was always to get into something new – a franchise, the storage unit business, or residential real estate, and in addition, to develop a web site to help people deal with wealth.
To transition from work to retirement – and prepare for developing my web site, I opted to take the Kaufman Foundation class “Fast Trac – New Venture”. This introduced me to a slew of new entrepreneurial type people and taught me some great academics.
So far, I have been so busy with my web sites (Family Money Values and Bellyfat ) that I haven’t had time to explore any of the other ideas.
Doing new things, meeting new people and establishing new routines keeps you out of your spouse’s hair, provides the potential for new income streams, introduces you to new people and concepts and supposedly develops your brain!
Lesson Six – Keep a Routine
For thirty years, I have done exercises in the morning before work, I knew I wanted to continue that healthy routine after retiring. Since we only have one TV, I knew I had to let Hubby know that I really, really wanted to use it for an hour in the morning (one of his favorite TV watching times).
To get all my web stuff done, I knew I had to set some sort of routine up so the work would flow naturally. I actually laid out an operational schedule for myself for each day of the week. Mondays I would work on writing, Tuesdays the focus was marketing and etc. I also laid out timeframes within each day for checking mails, statistics and etc.
Routines happen, whether you want them to or not. Decide how YOU want your days to go and set up your routine to accomplish that.
Lesson Seven – Be Selfish
You’ve worked hard all your life, be a little bit selfish when you retire. Do what YOU want to do, give what YOU want to give, be what YOU want to be.
Hubby doesn’t particularly enjoy travel – but I love it! We both grew up thinking that husband and wife always go together – if you travel separately something is wrong with your marriage. Now we realize that isn’t true and have agreed that I will travel when I want and he doesn’t have to go if he doesn’t want to.
We have always wanted to give our kids a leg up in the world. Part of that is passing money to them in the form of annual gifts. This lets us see them enjoy the money, saves on death taxes and helps them out when they are young and poor. However, we always take care of ourselves first. We don’t think this is particularly selfish, just prudent. After all, the kids would probably chip in to help us out anyway so why not just keep the money and take care of things ourselves? So for the next few years, annual gifting will be way down.
You aren’t getting any younger – be selfish – work your bucket list!
Are you retired? Please add your lessons learned to mine in the comments.