One Year into Retirement

[HornHuskerDad]

A quick summary of my first year in retirement - TERRIFIC!!!!

It didn't take long to settle into retirement; I think I had prepared pretty well in advance (financially and psychologically). The year got off to an ominous start - the first day of work for my Lockheed friends in 2011, I got to go to my dentist for an emergency root canal!

During the first year, Mrs. HHD and I managed to do several things on our collective bucket list:

- Took our first cruise (five-day junket to the Caribbean).
- Bought a new HD TV (Longhorn son owns his business in North Dallas doing AV systems, so that made it pretty easy).
- Bought a mini-plan to go to several Rangers games. I passed on the playoff tickets (a bit too pricey).
- Bought a mini-plan for selected concerts of the Fort Worth Symphony. Mrs. HHD and I really enjoy that.
- Took a ten-day road trip to the Dakotas, Montana, Iowa, Nebraska, and Kansas. Went to Mt. Rushmore, Custer State Park, Spearfish Canyon, and Deadwood. Then on to North Dakota to the TR National Park. Went back to De Smet, SD, so Mrs. HHD could tour the Laura Ingalls Wilder Museum. Spent a night in Sioux City (just to say I had been to Iowa), the on to Lincoln to help oldest son celebrate his 40th birthday. On to Abilene, KS, to see the Eisenhower Museum and Home (recommend it highly!) before coming back home.
- Remodeled the kitchen. After all the years of doing projects myself to save money, I did this the easy way and wrote a check to the contractor for a turnkey job!
- Spent more time in my wood shop. I'm still trying to master the lathe.

I continued to teach at the Bridge Club (as an independent contractor - more on the importance of this later in the post). I also did some limited consulting (also as an independent contractor).

Learned, much to my delight, that if your only source of earned income is self-employment, then you can claim your medical insurance as an adjustment to income on the front of your 1040 (up to the net profit on your business). For me, this makes our medicare premiums, dental insurance premiums, and eyeglass insurance deductible. That will help a lot on my 2011 Federal Income Tax.

I had mixed results with Prince (my cat). He just turned fourteen, and I've had him since he was a kitten. During the years I was working, I arose at 5:00, and Prince quickly associated 5:00 with breakfast. I was hoping to retrain him for a 7:30 or 8:00 breakfast - no luck. But we've compromised - he gets me up at 5:00 to feed him breakfast, and he lets me go back to bed for a couple of hours.

Now that I've been retired for a year, I see the importance of financial planning that my investment advisers had been pounding at me. With my USAF pension, my Lockheed pension, and our two Social Security checks, we were OK. My earnings from teaching bridge paid for my own bridge games and a lot of my golf. The earnings from consulting are sitting in my account, as we haven't needed them so far.

Didn't get to play as much golf as I wanted, and I had to shut it down in October for surgery to remove bone spurs and chips in my elbow. I've been cleared to start practicing and hope to play again by early March.

For all you folks nearing retirement, my advice is the following:

- Listen to your financial advisers and prepare for retirement income and spending.
- Prepare yourself psychologically for the change in the daily routine.
- ENJOY IT!

HHD

 

[OldHippie]

Congratulations. You seem to be keeping yourself occupied doing things you like. I'll be two years into retirement come the first of May. I haven't enjoyed myself this much since I was in graduate school in the 70's.

 

[Dogbert]

Thanks for the encouraging comments. Tomorrow is my last day of work after 30 years at the office.

 

[HornHuskerDad]

Congratulations, Dogbert - you've earned it, now enjoy it! Take it a day at a time - you'll settle into it pretty quickly.

HHD

 

[Dogbert]

Thanks HHD. I've been planning for it for some time. My financial adviser says "go for it." I've got a new routine well scoped out, but the first two weeks will be helping my dad (85) put his house on the market. And I've got an old car I bought this summer that needs a little work (or at least my friends and I can hang around the garage and discuss what it needs).

 

[HornHuskerDad]

^Hi, Dogbert,
Be sure to check your auto insurance. If you were insuring the car for commuting to and from work, your rate will go down when you change it to "personal use only." It's not a huge cut, but every little bit helps.

HHD

 

[mcbrett]

HHD-

I'm not near retirement age, but my OCD like nature makes me think about it often.

What would you say was the smartest thing you did, as well as the worst as far as your financial planning while you were in your 40s and 50s?

Not using the 401k enough? Savings? Etc..

Thanks and enjoy your hard work! I wish I could do a nice long road trip like what you described.

 

[HornHuskerDad]

Hi, Mcbrett,

Without a doubt the smartest thing was taking advantage of a pretty good 401(K). Put in at least enough to get all of your company's matching funds. Also realize that time is on your side for the long haul - inflation is not dead, and you need a better return than you can get with "safe" investment options. Early on I went 100% equities in my 401(K) and rode it out through some very turbulent cycles this past decade.

The biggest pitfall awaiting you is retiree medical insurance. I was, of course, very fortunate to have military medical benefits as a retired Reservist - but I feel that I earned it through all the years of service. If you are not yet 65 when you retire, that could take a huge chunk out of your pension until you reach the age for Medicare.

As for psychological preparation, you need to have some outside interest (hobbies, community service organizations, and so on) developed before you pull the plug on your 8-hour workday. My next-door neighbor is my age; his wife fears that he would be totally lost if he retired, because he has no big outside interests other than work.

I started a focus at age 60 - be totally debt-free (other than the balance on the mortgage) by the time I retire. When you take your 401(K) and roll it into an IRA, your advisor will tell you that you are now at the point where you need to go a bit more conservative in the portfolio (especially if you're starting to withdraw from it). In today's market, it makes no sense to earn 3-4% in your IRA while you're paying 13-15% interest on credit cards.

Hope these thoughts give some useful observations.

HHD

 

[mcbrett]

Good stuff HH. The 401k agree 100%- I always think to not use a tax advantage like that is almost throwing away money.

Having other hobbies and interests is also a great point- although I'd love a long road trip thru parts of the country I've never seen too.

 

[Texanne]

*sigh* I'll never be able to retire, I'll work until I am dead.

 

[Dogbert]

End of day two. Feeling good. Working on my dad's house a lot and getting good things done. Miss my regular lunch friends.

 

[1918Speedway]

I retired 4 years ago and it's great! It's nice to get to do things during the day as opposed to after work. I had a knee replaced 2 years ago and sure was glad to not be worrying about getting back to work. I do miss the kids in the library but I don't miss the administrative bs from the public school system.

 

[HornHuskerDad]

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[nashhorn]

Really enjoyed this thread. I have been 'going' to retire since June 09 but cannot pull the plug (or trigger). Wife against it totally for fear of my wasting away and her running out of money. Neither of which I believe will happen but I am phobic about what the economy will do given our politician nitwits.
Work is still tolerable so far so thinking of holding on (if I can) till end of fiscal year which is Sept 30. Just so long as have enough money to pay mortgage, taxes, and watch the Horns at DKR I'm good, but darned if wife doesn't want,,,,,make that demand, a little bit more. Good woman though, just a bit squimish about the unknown.
Hookem

 

[HornHuskerDad]

Nashhorn, I understand the situation - been there, done that. I got my Wells Fargo advisor to sit down with both of us and build us a projection for retirement, including a summary of assets, liabilities, and spending needs. Then he gave us some very good guidance on setting up our IRA to meet those projected needs. It really helped Mrs. HHD to get a pro's view in addition to my own.

As for the wife's adjustment to having "twice as much husband and half as much money," it will help a lot if your outside interests get you out of the house some so you don't seem to be interrupting her daily household routine so much. I'm out a night or two a week to play bridge and teach at the club, as well as being out a couple of afternoons to play or practice golf.

When you do your projections of spending needs, remember the following, and it will improve the picture a bit:

- You won't have any FICA withheld from your pension.
- Your gasoline bill will go down - depending on how bad your daily commute to and from work was prior to retirement.
- Your auto insurance rates should go down when you stop commuting to/from work.
- If you go out to lunch every day while working, that expense will disappear when you retire.
- Your clothing expenses (purchases, dry cleaning, and so on) may go down quite a bit.

Hope you find these insights useful.

HHD

 

[CMA 5.110]

HornHuskerDad if you don't mind me asking, when did you get a "financial advisor"? Is that something one should do near retirement or earlier in one's career? I'm 35 now, married with no kids, is that something I should look into already? Luckily, i am already doing one thing you recommended and am taking full advantage of my company's 401k match.

Any advice would be appreciated. Thanks!

 

[HornHuskerDad]

^Glad to answer, CMA. I got an advisor in my early fifties. It was important to me to be prepared early, since I was a Reservist and was slated to start drawing my USAF retirement at age 60. It also helped to get advice from a pro beyond the obvious answer of maxing out my 401(K). One of the things the advisor can help you determine is the availability of alternatives to provide for your widow if you predecease her. I did not have a lot of detailed knowledge of Social Security, for example - and my advisor had the resources to get the info we needed.

It also helps a lot to have an advisor selected (one in which you have confidence based on your ongoing relationship) so you can roll your 401(K) over into an IRA as you retire.

Hope this helps.

HHD

 

[CMA 5.110]

Thanks HHD! Great Info.

 

[BMBMD]

I once thought that I would retire early, but no more. I plan on working until at least 72, God willing-another 15 years. I like working, I think I'm still good at what I do, and it sure pays better than retirement! Besides, I think you live longer if you work longer.

 

[HornHuskerDad]

^More power to you if that's your desire. I found that the daily routine of my job (and I was very good at my job!) started to become a drag when I got into my early sixties. It helps a bunch to have some outside interests already developed - in my case, teaching at our bridge club, as well as my hobbies of playing bridge, playing golf, and working in my woodshop.

Once you are vested and eligible for retirement at your company, you are effectively working for the difference between your current salary and the available pension. If you've been with your company long enough to have a decent pension benefit, that may affect your decision.

But I understand where you're coming from - the prospect of sitting on the porch, rocking away until your turn to die, is not very appealing to those of us who have been active. I found that a large part of the decision to retire was influenced by my having provided alternative activities to stay involved after formally retiring from the job.

HHD

 

[Bluff Horn]

My Dad retired from Internatiiol Paper as a mechanic five years ago. He misses the daily interaction with buddies but does not miss work in the least.

Big adjustment, but it has worked out well and he deserves every miinute of it

 

[Dogbert]

Almost two months since I retired and I don't miss work at all. I miss my friends at work, but we've been going out to lunch once or twice a week and that is good. My wife and I have a two week vacation planned this summer that we are both looking very forward to.

The Austin spring weather is beautiful and getting outside doing anything is great. All my former job pressures have pretty much melted away and I can spend most of my day doing what I want. Life is good.

 

[HornHuskerDad]

Good start, Dogbert. Keep your schedule "full" - not every minute, but enough activity to keep you moving and to keep you focused on the future. In my fifteen months so far, the only times I've really been frustrated with retirement are those few times when I had nothing to do and nothing planned. Fortunately there have been very few of those times.

HHD

 

[Dogbert]

HHD, Right now I have plenty of things planned, but I see what you mean. I am going to finish up the project of selling my dad's house before too long. I have my car project (old 60s era sports car rebuild) that I keep working on as time permits. I am still thinking about what else I might want to do after my vacation this summer. Trips to Longhorn away games are a possibility, but that's seasonal. I will consider a job of some sort eventually. I will want a challenge if I do not find one in what I am doing.

 

[l00p]

If you are in Austin you could volunteer at the State History Museum, maybe even the Blanton on campus. There is likely stuff on campus too. Maybe look into a part time position as a Security Guard with UT. You get benefits, work on campus and you get retirement...wait, never mind that last part.

 

[Dogbert]

l00p, I have retired friends who work at the Erwin Center and DKR for sporting events. It's an interesting option. As a Web developer it would be great to work at the LHN -- or maybe in some capacity with Samantha Steele.

 

[l00p]

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[hooklahoma]

IM a gen X'er. Our parents, aunts and uncles have have recently retired in the last year or two. Almost without exception they sit on facebook or TV all day long. What a waste.

The're not old and decrepit or poor. I dont get why there not out enjoying life

 

[Basil Your Face]

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[HornHuskerDad]

^Nice thought, Basil. Prince is not into dry cat food, and I can't find an automatic feeder that will accept canned food - so we continue with the early morning feeding, followed by a couple hours back in the rack.

But give Prince credit - he has me trained pretty well!

HHD