As each of us ages, we have some big, complicated decisions to make. From the age of 15 (almost five decades now), my biggest decisions were where to work, how much salary my work was worth, did the company offer stock or stock options, was there a match for the money I put into my 401k, and so on. So it feels odd that my next decisions have to do with taking a much lower salary but giving myself room to live before I die. Here are some of the things factoring into my own personal decision.
- Do I have a direction to take in my retired life?
After all, I’m not one to do well sitting idle. But yes, I have a direction. My retired life will be as a writer, which I always wanted to be. Unfortunately, my family needed me to be something else, someone who earned a good salary and could support the family sometimes completely. That choice destroyed my writing life, except for the two books I published on engineering topics at the beginning of this century. That led me to a new career as a technical writer, which I did for seventeen years – a full career by some estimations. But I set my writing aside for a number of reasons back in my twenties so I could support the family. That also came at a great cost to me. I had to travel 100% of the time during that phase. I was gone from my children, and it has been very hard to forgive myself that. The good news is that some of the short stories I wrote back then have fully formed into novel ideas since. - Do I have other income besides Social Security and (hopefully) writing income?
Yes, I do. I will have saved enough in the next two years that combining my savings with social security will allow me to live in my house and take care of myself. The savings will supplement my SS income as needed and will help me pay for Medicare premiums. (Yeah, Medicare isn’t free.) Also, since I won’t be taking out my savings as a lump sum, it will still grow. My average yield has been 6-7% per year for most of my time saving it. I don’t need to go for the “safest” low-yield options, so I can continue to invest wisely in companies I know and industries I understand. - Do I expect to live into my 80s or 90s?
Not exactly. I have a multitude of health conditions that should have retired me already, but I’m stubborn and resistant to defeat. The cancer alone has stamped me with a shorter life, but the other co-morbidities alone could do that, too. I want to make the most of my healthier years while I can. Were I to work up until age 67 (my full retirement age) or 70, it’s likely I’d be one of those people who lives just a short time in retirement. That’s what makes people say, “I know someone who retired and didn’t live long” or “Don’t retire! It’s going to kill you!” (Oh, they’re out there! Super trolls trying to steal your joy!) You see, it’s a numbers game. You need to know your own self and your health, as well as what you can live on, when you make your decision. - Can I reduce my spending enough to survive on savings plus social security?
Okay, this is a hard one for me. Like most of you, I have had subscriptions to all the streaming services for quite a while. Looking at the way money flows out of my account is kind of shocking, so right now, at about 18 months out, I’m cutting expenses. A lot of what goes out every month, in addition to streaming service subscription fees, is for items that make my life more convenient, because let’s face it, I have little energy left over at the end of my work day/week to spend on things such as washing my car, going to the grocery store, etc., etc. But I have now cut out the monthly expense for the car wash, because I realized I was only using it maybe once a month, and not at all in the winter. I also cut out the fee for Instacart, because, although it’s convenient to put in an order on the app and have it magically appear, it is also crazy expensive. Extra fees for the deliveries add up fast. Plus there are times they have gotten my order wrong (meaning I have to take the time to enter a dispute and get a refund) and they always struggle to find my house, because there are two streets in my neighborhood that have the same name. Another one that was draining my account was the New Yorker. While I love the magazine and have read it off and on for years, the truth is, they had my subscription so screwed up that each time I tried to log on, there was a problem, and it wanted me to resubscribe. Gone, gone, gone. YouTubeTV. I spend a hundred dollars a month on that, more during football season. Well, as soon as the Super Bowl is over, I’ll turn that off until the next September. That will save me enough for the vet bills I end up with. Another one is pet insurance. I’ve had pet insurance on my dog for almost 7 years at $68 a month. My claims have been very few. If I had pocketed 7 years of that money, none of her trips to the vet would have exceeded that. I can’t afford to have that insurance on my cats. Way too expensive. But I’m happy to say that just one month into my planning, I have cut my Apple card bill, where all my subscriptions go, in half! I did that just by getting rid of the things that no longer serve me. I’m looking forward to doing a LOT more of that. - Will I be able to take care of myself in retirement?
This one is not really a yes or no option, though it may sound that way. There will be times when I might need help, but part of my spending will be to get a membership at the YMCA, where they have yoga, tai chi, and water aerobics classes. I have not been able to enjoy that yet, because of work. I can’t deal with getting up any earlier than I already do, because it takes one hundred percent of my energy to work from 8:00 – 4:30. After 4:30, I’m spent. Some of that is due to my health conditions, but most of it is due to the stress of my job. And no amount of talking to my boss or anyone at work has shown me that they (a) really care or (b) can do anything about it with today’s financial disarray. By taking gentle exercise classes, I can improve my well-being and maybe increase my energy. That will allow me to take care of myself. And if I reach a point at which I need any help, I’ll either see what services are available to me, or I will rely on my son. We have talked many times about living in the same house or on the same property again. I have options. One thing I never bought into was long-term care insurance. You have to decide for yourself, but for me, the astronomical premiums simply didn’t make sense. Again, you have to look at your own situation and figure it out. - Do I have the gumption to go for it?
Yes, yes I do. Like some of the trolls, I also know people who didn’t live long in retirement, which is why I needed to have a plan I could live with. When I was in my twenties, working at the job where I had to travel all the time, one of the managers in the home office announced his retirement. He was at his full retirement age and was feeling the effects of all the stress from his job. We had a party for him. We wished him well. We saw him off to what was supposed to be a long retirement with his wife of forty years. Two days later, he dropped dead of a heart attack. Is that proof he should have kept working? No. I think it’s proof of what the job did to him. We have all heard these stories, and they scare us into staying at a job long past when it makes sense to leave. Part of me (okay, a BIG part of me) wishes I could turn in my notice on Monday, but I have a set target I want to reach in my savings before I do it. The goal is set. - Do I have the two million that financial planners will tell you that you need in order to comfortably retire?
Hell to the no! I have much less than that, but I have enough to sustain a simple life for myself. As my sister (who is 74) said, “If we had that kind of money, we’d be dancing!” And this is why I’m doing all the research myself. I don’t want to spend one penny on a financial planner, whose main goal is to sell products their company earns a commission on and make a percentage of your portfolio for themselves. I mean, if you think that would benefit you, then go for it. One of my coworkers who is a year younger than me is worried that I’m doing this without a financial planner. The last financial planner I worked with was when I was in my late thirties. My then husband and I went in for a “free” session with him to go over what kind of a plan we needed. At the time, we’d had to take out a chunk of our 401k funds to take care of our daughter. We wanted to be able to make up for that and have the chance of a retirement some day. After going through our numbers, this guy had the nerve to look at us and say, “You’re screwed!” Yes, we reported him, and hopefully he lost his job. I refused to be talked to that way or to be frightened into following any plan that he laid out for us. I think the reason I remember that is because of the effect it had on me and on my marriage. I think it caused a lot of resentment or blame, sometimes toward our daughter, because we were “screwed.”
So in a little over a year, unless something happens to make me retire sooner, I’ll be putting in my papers for Medicare and for Social Security. And then I’ll put in my notice at work. I figured I’d better give them a month of lead time to find someone else (or multiple someones) to cover what I’ve been doing for the last few years. I’ll start putting in place the form to tell Medicare what I expect to really be making in retirement (so they don’t base my premiums on my much higher salary at retirement – yes, it’s a thing!) and putting in my changes for my student loan repayment, because with all the interest, I’ll be dead long before it is paid off anyway. I’m on an income based repayment plan already, so my monthly bill is $900 a month! I will never discourage you from getting a degree, at any age, but finishing mine in my early 50s put a financial strain on me. Were it not for the loans, I would have already paid off my car and a couple of other things.I would have more money for retirement.
Having had a stroke earlier this year, along with being diagnosed with diabetes, put on a new medication for COPD, being prescribed statins and a daily aspirin, and with all my other conditions and medications, I have had to take stock of my life and be realistic about it. I’m tired of being tired, and I’m fed up with spending all my daily energy for a company that, while it’s a good one, will forget I existed the day after I leave.
For me, the magic number is 65. What is your magic number? Write me and tell me about it!
Namaste,
Jude
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