Retirement Interview 21

Here’s our latest interview with a retiree as we seek to learn from those who have actually taken the retirement plunge.

If you’d like to be considered for an interview, drop me a note and we can chat about specifics.

My questions are in bold italics and his responses follow in black.

Let’s get started…


How old are you (and spouse) and how long have you been married?

I am 64 and my wife is 62.

We have been married 19 years, a second marriage for both of us.

Do you have any children and if so what are their ages?

I have a son (41 years old, married with 3 young boys) and a daughter (39 years old, married with 2 boys).

What area of the country do you live in?

We live in the suburbs of a mid-size city in Western New York.

My wife and I both grew up in small towns in Northern New York and our families both had summer cottages located next door to each other on a lake in the Adirondacks.

Ironically, we both ended up in the same city in adulthood and after our first marriages both ended up in divorce, we reconnected, dated and eventually got married. I mention this because I think our similar backgrounds has been a positive in our relationship from day one right up to our current retirement stage.


How do you define retirement?

That time in your life when you are financially able to live the lifestyle you desire without the need or desire to continue working.

I recognize that many choose to continue working for enjoyment in a different capacity, hours of their choosing and on terms they control after “retiring” from a career job. I consider this semi-retirement unless the hours worked are very minimal or on a volunteer basis and done purely for enjoyment & socialization.

If the lifestyle you desire is to continue working regularly for a paycheck, regardless of your financial position, to my way of thinking you haven’t retired even though you could.

How long have you (and your spouse) been retired?

I retired January 2017 (age 61) and my wife retired July 2018 (age 60).

My wife wasn’t quite ready to retire when I did and only needed another 18 months to earn retirement healthcare benefits for both of us.

I enjoyed the time to find my own way into retirement, but also needed to be sensitive to the fact that my wife needed the same time to transition when she retired.

What was your career and income before retirement?

I was in healthcare administration (CFO and then CEO) for 37 years and my wife was a public sector attorney for 36 years.

My ending salary was $200,000 and my wife’s was $112,000.

Why did you retire?

For me it was because I had planned, run financial projections and wanted to get out of the demands and obligations required of me in my employment position.

Both my father and mother had retired early as did my siblings and thus it felt very natural and appropriate to retire early.

I enjoyed my career and felt blessed for having the opportunities it provided, but I was also very excited to leave it behind.

I had a very fortuitous situation occur whereby several years prior to my retirement my employer was worried I might leave for “better pastures”. They therefore negotiated an employment contract with me that included a 457(f) deferred compensation plan whereby the company would set $21,000/year aside in an investment fund(s) of my choosing payable to me only if and when I retired at my normal retirement date (age 65/ November 2020).

Since there was a risk of forfeiture, these funds would not be taxable to me until and unless I stayed with the company until age 65, unless the company chose to discontinue my employment at which point the funds would become payable and taxable to me at that time.

Fast-forward several years to 2015 when the company was concerned that one of our aged facilities was in need of significant building upgrades and operating within an antiquated income stream with no capital investment funds available or debt capacity. I was charged with developing and implementing an exit strategy for that facility, which I did.

However, I indicated that losing that facility would negatively impact the operations and financial stability of our remaining facility, so I was then charged with developing and implementing a strategy for that facility. The solution was the establishment of a joint-venture affiliation with two other like organizations whereby we would share certain back-office services, eliminating duplicative services and costs.

One of these services was executive management and thus the dilemma of how to downsize from 3 CEOs to 1. Two of the CEOs (including myself) were nearing retirement and I saw the opportunity to achieve my desire to retire early.

Long story made shorter, I offered to step down once I had successfully helped implement the new affiliation structure and the company agreed to provide me a 2-year salary continuance severance effective January 2017.

Why did your spouse retire?

My wife was a prosecutor for 20+ years and then worked as a law clerk for a judge before ending her career with the NYS Justice Center prosecuting crimes committed against disabled individuals.

These were very political and challenging positions that while also rewarding were very demanding and frustrating.

Knowing that our financials were in excellent condition, she ultimately reached that point where she knew it was time to leave the workforce and planned accordingly.


When did you first start thinking seriously about retirement and ultimately decide to do it?

My financial background and love of numbers has always led me to maintain meticulous records and spend numerous hours planning, calculating and projecting.

As my Millionaire Interview #164 outlines, we were very successful in designing a wealth building & management plan following the 4 steps of:

  • Working the Income
  • Managing the Margin
  • Investing the Surplus
  • Riding the Market

I initially had the number of $2 million as our target wealth trigger to retire and we reached that goal in 2013 at age 58.

As already explained, when the opportunity presented itself in 2016 and our wealth had climbed to $3 million, I didn’t hesitate to pull the trigger.

My wife began to seriously think about retirement along the same time I decided to retire, but as indicated previously, she wanted to accrue the necessary years of service with her State employment to ensure retirement healthcare benefits as well as see to the finish a current prosecution case she was in the midst of.

What were the major steps you took from deciding to retire to developing a plan to do so?

For me, the main issues were:

  • My defined benefit pension plan would not begin until I reached age 65
  • I wanted to maximize my earnings for pension calculation purposes
  • I wanted to minimize taxes related to whatever plan I established

I knew we had ample investments to provide income if needed, but I really didn’t want to invade these yet wanting to continue to have all income re-invested.

My first solution was the negotiation of a 2-year salary continuance severance that was equal to 50% of my current $200,000 salary ($100,000/year). I would use that as my income for years 2017 and 2018, which I knew along wife my wife’s salary was more than ample to meet our current budget needs.

I didn’t want to be hit with the tax burden of the 457(f) deferred compensation plan payout on top of my severance pay, so I negotiated a new 2-year employment contract with the company to provide Grant writing services on a part-time basis (8-16 hours/week) from home.

The salary ($40,000 versus over $200,000 raised) wasn’t as important to me as the fact that the continuing employment would postpone the 457(f) payment until after my 2-year severance finished.

On January 2019 when my grant writing contract expired, I discontinued my employment entirely and thus I received my 457(f) deferred compensation plan payment ($216,000 net of taxes), which I planned to use as salary income for 2019 and 2020.

I put $75,000 in my Vanguard Money Market and set up a monthly auto transfer to our checking account in the amount of $6,250 to serve as salary income.

I put $75,000 in a Capital One C. of D. maturing in 1 year so that I would be able to transfer the proceeds to our Money Market and continue the $6,250 salary income for 2020.

I put $25,000 in my 403B deferred retirement account and I used the balance towards the purchase of a 2016 Honda Pilot to replace my 2007 Mercury Mariner.

In 2021 going forward I will receive an annual pension of approximately $68,000/year.

My wife had enough years of service with the State of NY to retire early with full immediate benefits that pays $68,000/year with inflation adjustments every 3 years. So as soon as she had the necessary years to also earn lifetime healthcare benefits and finished up her current prosecution case, she pulled the trigger as well.

What did your pre-retirement financials look like?

At 12/31/16 when I retired, we had assets of $3.1 million made up of:

  • Cash: $26,000
  • After tax Investments: $1.66 million
  • Deferred Income Retirement Investments: $1.17 million
  • Property (home equity, autos, cottage equity): $250,000

We had no liabilities.

Years 2017 and 2018 our salary/severance/pension income was approximately $250,000 against expenses of approximately $150,000 enabling us to continue to re-invest all investment earnings ($360,000) and add $200,000 to investments from our excess of earnings over expenses.

We ended 2018 with a net worth equaling $3.66 million.

What was your overall plan for retirement?

Beginning in 2019 with both of us retired our annual income would be $143,000 comprised of the $75,000 Vanguard Money Market auto transfer of the 457(f) plan proceeds and my wife’s $68,000 pension payment.

Beginning in 2021 when the 457(f) plan proceeds are exhausted, they will be replaced by my $68,000 pension payment.

Expenses for 2019 were $115,000 which is what we project for 2020 and the immediate years to follow. This provides us a modest margin of approximately $25,000 without factoring in investment earnings or eventual RMDs and Social Security.

Our expenses in retirement are significantly lower than when we were working primarily due to less income tax on lower taxable earnings (my wife’s pension is non-taxable for state income tax).

All other expense line items really didn’t change much other than our vacation budget doubled from $8,000/year to $16,000/year.

Our budget percentage breakdown computes as follows:

  • 20% income taxes
  • 14% vacation
  • 8% groceries
  • 7% medical costs & premiums/ auto & property ins. Premiums
  • 6% property taxes
  • 6% gifts & general merchandise
  • 6% utilities & services
  • 6% home improvements & repairs
  • 6% dining out
  • 5% fitness & entertainment
  • 3% cash purchases
  • 3% donations
  • 3% gas & auto maintenance
  • 3% personal services
  • 2% cottage & boat maintenance
  • 2% all other

With $2.4 million in after-tax investments and $1.7 million in pre-tax deferred retirement funds as of 12/31/19, I project a modest $100,000/year income stream as needed or desired from our after-tax investments using a 4% draw against an average 4% return. This would appear to be a very conservative estimate since our average 19 year earnings compute to 9.5%/year. I project an additional $60,000-$120,000/year income stream from our RMDs starting when I and then my wife reach age 70 ½.

Our combined Social Security is projected to be about $70,000/year based on my wife taking hers at age 66 and I taking mine at 71.

Based on these projections I feel very confident about our finances in retirement. We plan to leave a hefty inheritance to our heirs and will inherit around $500,000 within the next 5 years most likely. We will have ample income and wealth to manage market turbulence, unforeseen needs and to up our spending and lifestyle should we desire.

Did you make any specific moves to prepare your finances for retirement?

As already indicated, my main challenge was establishing an income stream to replace at least some of my current salary during the years prior to my retirement benefit which wouldn’t begin until age 65.

We could have used investment earnings, but I really didn’t want to go there yet. Ultimately, the severance payment I was able to negotiate, the part-time 2-year grant writing employment contract, and the eventual 457(f) deferred compensation plan payout resolved that issue to my satisfaction and comfort.

Another move I made was to discontinue having the dividends and realized capital gains from our after-tax investment funds automatically re-invested. Instead I had these auto-transferred to our checking account where we could use them if needed, pay estimated tax withholding or re-invest any surplus.

When I re-invest any surplus I do so in a manner that also serves to re-balance our investment portfolio.

Lastly, although I still subscribe to a long-term investment strategy that favors the higher ultimate returns from equities, I kept hearing that voice inside me saying “you need to be more conservative” and “why do you want to keep playing the game once you have won”, and “the market is due for a correction”.

So I did stop investing a lot of our surplus/margin and began socking it away in our money market account. I also transferred $500,000 of my deferred retirement account out of equity mutual funds and into a guaranteed 4% fixed fund.

At 12/31/19, we were invested 80% equities and 20% fixed which provided us with an ample “security net” and “dry powder” to invest when the market correction comes.

Who helped you develop this plan?

For better or worse, I have never used a money manager or advisor. While I don’t feel I have the inside knowledge to effectively buy and sell individual stocks, I do subscribe to the effectiveness of investing in well managed, low-cost mutual funds with a history of long-term results.

My financial background and passion enables me to accomplish what is necessary and I am very comfortable with the results. I read, listen and pick up knowledge here and there and ultimately I enjoy making my own decisions.

Some people shake their heads at those who pay others to fix their cars, pay plumbers to make house calls or call an electrician to re-wire an outlet. Personally, I fix what I can but don’t hesitate to pay someone else to do what I can’t. Financial planning, investing, tax returns are DIY projects for me and most likely always will be.

What plans did you make in advance to leave your job?

Aside from the financial plans already indicated, the only other item was ensuring a succession plan was in place for the company I was leaving.

The last year of my employment I primarily worked on the restructuring implementation and mentored the key executives who would be stepping into my roles.

With regard to my own post-retirement plans, I really didn’t have a plan (which I know bucks the traditional advice). I guess I was pretty confident that I would find my way and work it out on the fly.

What were your pre-retirement concerns?

Other than the financial concerns surrounding my income replacement plan that I explained previously, I didn’t really have any non-financial concerns.

I think I had mentally prepared myself and was emotionally ready to leave the workforce so I was really excited about the opportunities and new lifestyle that lay ahead, even if I didn’t know exactly how it would all roll out.

How did you handle deciding on and paying for healthcare?

While this can be a big issue for many, for us it really wasn’t. As a State employee, my wife has very good benefits and a few years prior to my retiring we researched this carefully. We both had single coverage plans through our own employers and were only paying what was approximately 20% of the total premium.

My company plan however did not have retiree coverage. My wife’s plan did have retiree coverage but a spouse had to be on the plan for 2 years prior to retirement to have family coverage extended into retirement. Therefore, 2 years prior to my planned retirement date, I dropped my employer coverage and we went with a family coverage plan with my wife’s employer. It cost us more for those 2 years to do this but obviously the retiree benefit coverage was a great benefit we didn’t want to forego.

So we will have healthcare coverage throughout our retirement years paying only about 20% of the total premium cost. Once we qualify for Medicare, this plan will continue to offer us a Medicare Supplemental plan at even less cost. If my wife pre-deceases me I’m screwed, so I plan to take good care of her!

How did you tell your family and friends of your plans?

As indicated previously, within both of our families, early retirement was normal so in many ways we were just continuing a family tradition.

I always looked upon this as a credit to one’s planning and performance and thus took a great deal of pride in being able to retire early.

I loved it when friends would say “you’re too young to retire”! Honestly, our friends would congratulate us and say they can’t wait until they can retire too. I never felt any outward jealously or negativity from anyone, if in fact it did exist.

Unfortunately, our society frowns on discussing personal finances so we aren’t comfortable telling the details behind our success stories, which is why I love the ESI website where we are free to confidentially tell our stories and learn from one another.


How did you ultimately retire?

I stepped down from my position 6 months before my retirement date and mentored the executives that were taking over my roles. That was probably more time than what was necessary and I had a plenty of time to clean out my office and files (dealing with over 30 years of accumulated data turned out to be very challenging and time consuming).

However, I will say that nothing is more soothing to your well-being than throwing into the recycle bin years of struggles, challenges, documents and work history that once consumed you and now were just “yesterday’s news”.

I had a very nice retirement event that enabled me to share time and words with my employees, board of directors, consultants, family and friends. While I said we would stay in touch, the reality was that in time I saw very little of them once our paths no longer crossed.

The first day of my retirement I loved every minute of it and have never looked back.

What went well?

Honestly, everything went well from my perspective and I don’t think I would have changed a thing.

The transition time afforded me ample time to prepare and leave in an orderly manner.

The part-time employment contract allowed me to maintain some connection but on my terms, a limited timeframe and a new focus.

With my wife still working full-time, it also gave me time to find my own way and adjust to my new lifestyle.

What didn’t go so well?

Well my long ago plan was to have purchased a second lake house in Virginia so we could spend part of our time in a warmer climate until we were ready to move their full time. We had spent 3 years researching homes and did put in offers on 3 potential homes but never were able to finalize anything.

I really wanted that major decision completed before we retired, but it just wasn’t in the cards. In hind-site, perhaps it was best as now I’m not really sure the timing or plan would have been best for us. Regardless, it represents an element of my planning and vision that didn’t work out the way I had originally planned.

The other issue we had was when my wife retired a year and a half after I did she was starting out on the first step of her retirement years while I was somewhere up ahead. I had to learn to slow down and let her catch up, which she reminded me of on many occasions.

How did you ultimately find the courage to do it?

For both of us it wasn’t a factor of courage because the planning and preparation had been done. We both just knew when it was time and we were ready.

I think you obviously have to have your finances in place first and then you need to be excited about leaving your current career and moving into a new lifestyle.

We both had very successful and fulfilling careers and that made it easier, not harder, to say “my job here is done” and move on to new opportunities.


How was the adjustment, especially the first months after retirement?

Many people told me I was crazy to retire January 1st when I would be faced with 3-4 months of winter with nothing to do. That didn’t turn out to be the case as I totally enjoyed winter, snow and cold now that I didn’t have to commute to work in it.

Instead I leisurely had my breakfast, watched “Good Morning America” and smiled as I listened to the traffic reports. I shoveled the drive on my time, built my annual backyard skating rink, joined a gym and loved life.

For my wife, she retired mid-July and the first thing we did was spend 3 weeks at our family cottage in the Adirondacks. A month later we took a 16 day trip to the United Kingdom. Needless to say her adjustment was a whirlwind of fun!

How is retirement life now? What do you like and dislike about it?

We love it! In addition to retiring, we discontinued many other commitments (board and committee involvements) in order to provide us the flexibility we wanted to enable us to travel more, remove all potential elements of stress and pursue other relaxing activities.

We find that our pace of life is much slower and more relaxed now that we have more time.

It is important to create a schedule so that you have a sense of structure and purpose. It also helps you to keep track of what day of the week it is. I should also mention that while Sunday evening used to be the worst time of the week for us, it is now one of our favorites. I love Mondays when the rest of the world goes back to work and we get to continue our weekend with no crowds.

My wife is more of an extrovert so I think she misses the social aspect of working, but to her credit she has maintained connections and still socializes with many of them. She has indicated that she may eventually look for some volunteer work or part-time function as long as she can control her time commitment.

I am more introverted and have no trouble finding enjoyment within my own inner circle.

We are spending 4-5 weeks every winter staying at an Airbnb in a different area of the south each year. Eventually we hope to find a place that we love and want to purchase our own second home there. We also travel more and have a slew of trips we want to take like Alaskan Cruise, Portugal, Northern Europe, Hawaii and much more.

What do you do with your time? What does an average day look like?

Fitness had always been a priority for me but was often difficult to find the time and energy. In retirement this hasn’t been an issue and I workout 3-4 days a week for 3 hour sessions.

I also have time for hiking, kayaking, reading, walking, etc.

Household chores and projects can be leisurely done and I am now doing more DIY projects.

The pace of life is what I saw change most of all. Instead of rushing to get everything done, I can now take my time because I have the time. I get up most days between 7-8 a.m.; do some stretching and floor exercises before having a healthy breakfast.

Monday, Wednesday and Friday are usually my workout days at the gym from 10-1 p.m. After a shower and lunch, I’m usually feeling beat and will retire to my easy chair to do a crossword puzzle or read.

Late afternoon I’ll busy myself with whatever until my wife and I start dinner. We both share in the cooking and clean-up.

During hockey season, my evenings are totally dedicated to watching hockey games while my wife watches her favorite shows.

In the off-season, the weather is nicer and our evenings are generally outside activities, socializing and TV at night.

On my non-workout days, I focus on body recovery which is generally time in the hot-tub, walks with my wife, household chores, projects, lawn & garden maintenance, reading, puzzles, etc.

I do miss the number crunching and planning that work provided, so I am always fussing with our personal finances, reporting and projecting. Yes, I am that guy!

Looking back, what would you have done differently?

Honestly, nothing significant comes to mind. I do wish we had a second home somewhere down south and were spending 5-6 months there, but my wife is not there yet. I still think we’ll get there eventually, but for now I must admit that the flexibility of spending time in a different place each winter is pretty cool and much easier than maintaining a second home.

Last year we stayed in Charleston, S.C. and this year we stayed in Carolina Beach, N.C. (near Wilmington). Unfortunately, our stay this year was interrupted by the Corvid-19 pandemic and we had to leave earlier than scheduled.

Was there any emotional impact from leaving the workforce?

For both of us this was not an issue as we were ready to leave the stress, politics and commitment after enjoying successful and rewarding careers.

As mentioned previously, there seems to come a time when you just know it is time and you are ready. That was the case for both of us and we have no regrets. My wife has kept her connections and still talks and sees many of her work friends which helps her with the separation.

What surprises have you had since retiring and how have you handled them?

Well most recently has been the market crash, but most of us knew that was coming in some fashion sooner or later. Fortunately, we don’t rely on our investment earnings for our routine expense budget so we’ll just ride it out similar to what we did in the 2008-09 downturn. I have made some minor transfers of money market funds to equity funds since the crash and plan to make more significant transfers in the months to come when it appears the volatility and impact has diminished. I’m not a market timer, but I will adjust our investment weighting periodically.

The other issue we had to face is income tax strategy. We both deferred significant income during our working years on the basis that our retirement year’s income would be significantly lower. Now I’m not so sure, which is a nice position to be in but skews our taxation strategy.

We have a unique situation in 2020 because my 457(f) plan distribution was totally taxable in 2019 when received even though I am using it as income over 2 years. Therefore our 2020 taxable income is unusually low, so I plan to convert a portion of my retirement IRA into a Roth IRA at a lower tax rate than I project in our later years.

From a non-financial perspective, I was surprised that my wife likes to have the TV on most of the day even if she is doing other things (she calls it multi-tasking). I prefer quiet and don’t like many of the programs she has on (I call it trash). How we handled it is that I leave the room and find my own place to relax and do my thing. Ultimately, it just means that sometimes we both need our space and own time in addition to the time we enjoy spending together.

What are your future plans?

Well currently not a hell of a lot while we hunker down and self-isolate during the Covid-19 pandemic. But that too will pass and all our lives will hopefully return to normal soon.

We want to keep traveling and will spend several weeks at our family cottage this summer. We have 5 grandsons who all play elite soccer and we love to watch their games and travel to wherever they are playing.

As mentioned previously, my wife may eventually find a volunteer or part-time activity.

We’ll continue with the lifestyle and activities we currently enjoy at least for the near term. I hope we eventually both find the desire to purchase a second home somewhere and slowly transition to spending more and more time there until we are ready to move full-time from NY to there.

Health is the big unknown you can’t always plan for, so God willing we hope for a long period of active retirement before time and age forces us to slow down and move into that next stage of our life.


How has your financial plan performed compared to what you had estimated before retirement?

So far so good, but I think it will take a couple more years to really get an actual understanding of our annual retirement expenses as I find that in the first several years there is a transition factor that I believe skews the numbers. Eventually, I believe the numbers will begin to level off and thus a more accurate 5 year average can be calculated.

The income side of our finances has been easier to predict and that has been right on our projections.

With respect to our investment earnings projections, we were well ahead at the end of 2019 simply because I used an annual expected rate of return of a conservative 6% and our actual has been closer to 9.5%. With the recent down market and the unknown future economic impact of the Covid-19 pandemic, having plenty of room for a significant devaluation of our investment portfolio value is a good thing and exactly why I used conservative estimates.

Additionally, having a plan that doesn’t require utilization of our investments to meet basic expenses and needs will allow us not to have sell off assets in a down cycle.

Can you give us some insights into your post-retirement spending and income?

Our 2020 income budget is $143,000 comprised of $75,000 (my Vanguard Money Market transfer of the remaining 457(f) plan distribution) and $68,000 (wife’s pension). My pension ($70,000) kicks in beginning in 2021 when I am 65 years old.

Our expense budget is $110,000 comprised of:

  • $22,000 income taxes (2019 paid in 2020 plus 2020 estimated)
  • $16,000 vacation
  • $9,500 groceries
  • $6,000 medical insurance & expenses
  • $6,500 property taxes
  • $6,000 general purchases and gifts
  • $5,500 utilities & services
  • $5,500 home improvements & repairs
  • $5,000 dining out
  • $3,500 cash purchases (ATM withdrawals)
  • $3,500 gas & auto repairs
  • $3,000 donations
  • $2,500 home & auto insurance
  • $3,000 summer camp & boat upkeep
  • $2,500 fitness & personal services
  • $10,000 other miscellaneous (this represents a 10% reserve)

Not included in this budget is market appreciation/depreciation and income from investments (dividends and realized capital gains) which we plan to re-invest net of taxes owed and any discretionary uses we opt for.

For budgetary purposes, I project dividend and realized capital gains to be $75,000/year less $18,500 taxes. Obviously this varies depending on market conditions.

How are you handling Social Security, RMDs, tax issues and the like?

For now the plan for SS is for my wife to start drawing at her normal full benefit age of 66 2/3rds (projected benefit of $30,000) and for me to wait until I am 70 (projected benefit of $40,000) to get the maximum benefit that will also be available to my wife if I pre-decease her.

We both have longevity genes (family history) and are in excellent health. I like the idea of a higher SS benefit in our later years when pension payments become diluted over time with inflation.

With the new legislation, we can be more flexible on delaying RMDs (projected to ultimately be around $100,000/year) but will have to take these into income and pay the related taxes as required. This may create substantial income surpluses for us if we don’t increase our lifestyle and expenses so we will just re-invest to build up our estate.

With taxes, I plan to convert a significant portion of our current deferred retirement funds to Roth IRAs over the next several years before SS and RMDs increase our taxable income into a higher tax bracket. I plan to monitor this each year and act accordingly based on income projections.

Another tax issue I took advantage of in 2017 was the establishment of a Donor Advisory Fund to enable us to enjoy a large $50,000 charitable contribution deduction prior to transitioning to taking the IRS standard deduction in the years to follow. This will also facilitate increasing our donations in future years.

Did you return to paid work?

As previously indicated, I worked 1 or 2 half days in addition to some work from home doing some grant writing for my former employer for 2 years in order to postpone the distribution payout of my 457(f) deferred compensation plan for tax strategy reasons.

I discontinued this engagement effective 1/1/2019 and have not returned to any paid work since.

My wife retired in July 2018 and as yet has not returned to any level of paid work.

Did you find it hard going from being a saver to a spender?

Absolutely, and I’m still working on becoming a spender!

It is my natural tendency to be prudent and always look for bargains. I really don’t like to shop or spend money on luxurious items. I find that I have to actually focus on allowing myself to up our lifestyle and treat myself to some luxury. My wife is helping me with this.

So, we’re spending more on vacations, I’m not always spending hours researching every major or minor expenditure and I’m buying a few more discretionary items without feeling guilty.

This will be a work in progress but not a bad problem to have to work on!

Looking back, what do you wish you knew in advance?

Honestly, nothing major comes to mind as I am very pleased with how well our retirement planning and financial strategy has worked out for us.

I wish we had been able to define a mutually agreeable retirement home roadmap to implement sooner, but our plan B is an acceptable alternative.

Income tax minimization strategy has been a moving target and I’m still not sure how the dust will settle when all is said and done years from now. I think this issue is simply something one needs to re-evaluate annually and act in the manner that appears best based on the facts and figures in place at that time.

What advice do you have for those wanting to retire?

First, have several conversations with your spouse or anyone else you intend to ultimately retire with to fully understand what the objectives, needs and desires are as you map out your plan.

Second, perform a comprehensive review of your current and future financial picture using reasonable & conservative estimates and calculations. If you are uncomfortable with your own ability to perform this review, hire a professional to assist you.

Third, base your retirement date and strategy on the results of the comprehensive financial review to avoid being too early or too late for your comfort and peace of mind.

Fourth, ensure you always have in your accessible cash and money market accounts an amount equal to at least one year’s budget (or non-discretionary expenses) to eliminate the need to invade investments during a market down-turn.

Fifth, if your annual income is more than adequate to meet your annual expense budget, continue to invest with a longer term strategy to enable you to take advantage of higher returns via investments with manageable higher risks and volatility.

Sixth, remember that life is short and your health is always at risk, so when you reach the point where your finances can finally support your desired lifestyle without the need to work for a living, then start living for yourself. My wife and I used to work to make money but now our money works for us!


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