One Year into Retirement

Discussion in 'Quackenbush's' started by HornHuskerDad, Jan 29, 2012.

  1. watashi

    watashi 250+ Posts

    Good stuff on this thread. I retired from the Air Force in 1996 and am nearing retirement age from my current employer. Not sure I'll hang it up yet, but the option is nice.
     
  2. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    ^It is indeed comforting to have the option to hang up your cleats when you're ready. I assume you've gone through the numbers as they relate to retirement income, spending plans, medical insurance, and so on. When the time is right and you're committed to the decision (and the date), you'll start firming up the details and it will come together at the right time.

    Good luck on your planning and decision process. And thanks for your service to our country in the Air Force.

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  3. orangecat1

    orangecat1 500+ Posts

    I talked to my mom this morning. My dad was a part of the "class of '93". That year the state offered state employees a ridiculously good incentive to retire that year.

    My dad retired, took two months off, and went to work for one of his former employees, an engineer who started his own firm.

    Now my dad is talking about retiring again, possibly in February of '13.

    The only problem will be how to completely fill his day. He's got some church work to do, but other than that, I'm not sure he has any real hobbies.

    Money is not an issue.

    State employees who retired from the National Guard do well in retirement.

    State pension
    Guard pension
    IRAs and 457s
    Social security
     
  4. lostman

    lostman 500+ Posts

    Sounds like you are having a great time HHD! Been reading this thread on and off since you started it. Some good advice too. It is never too early to start planning!
    This little tidbit was key for me and my first "retirement". After teaching in public schools for 28 years, I was eligible for benefits (about 67% of average of last 5 years). It was going to take working 12 more years to get to 100%. Where if I retired at the end of that year and found another job that made at least $30K I would pull in more than if I stayed in public schools. Not to mention being able to contribute again to an IRA set up years ago, plus current employer matches a 403b at 5.5%.

    I can't wait to read what year 2 has in store for you HHD! And for the other retirees out there. Losthubby and I still have a few years left, but it is just about 5-7 years away. Time for me to start getting a hobby that does not involve curriculum, kids sports, or remodeling the house! [​IMG] Maybe golf, golf courses are always in nice places.
     
  5. orangecat1

    orangecat1 500+ Posts

    lostman, there is something else also to be gained by getting a job where you don't contribute to TRS. It's what I call the 30 year rule. If you get 30 years of substantial earnings outside of TRS, you are exempt from the Windfall Provision.

    Iow, my example is that I will buy my 6 years of state of Texas service(TXDOT) from ERS, so that when I add up my years + age, at 56 I will have reached the rule of 80.

    But, before I taught I worked for a company also, so if I add up my years not contributing in TRS I will have a total of about 18 years. So, if I retire from TRS at 56, get the immediate pension, then go to work full-time for 12 years, I will have reached 30 years outside of TRS.

    from S. S.

    "The Windfall Elimination Provision does not apply if:

    You are a federal worker first hired after December 31, 1983;
    You were employed on December 31, 1983, by a nonprofit organization that did not withhold Social Security taxes from your pay at first, but then began withholding Social Security taxes from your pay;
    Your only pension is based on railroad employment;
    The only work you did where you did not pay Social Security taxes was before 1957; or
    You have 30 or more years of substantial earnings under Social Security."

    Boom, then I get full Social Security and keep my pension from TRS.
     
  6. lostman

    lostman 500+ Posts

    Thanks orangecat!!! I will definitely have to check that out. I remember some teachers retiring a few years ago talking about not being able to get SS (their own AND that of deceased husband) at all due to some restricition because of contributing to TRS and all. Since I was still years away from even thinking about it, I did not pay close attention. I will definitely be checking into that. I still have lots of good years left to work, and want to work - just in in public ed anymore.
     
  7. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Thought you that have been following and participating in this thread might find this interesting as a data point.

    I just returned home from going to my 50th high school reunion for the Class of 1962. All of us are somewhere between 67 and 69 years of age. I was in a small class; 79 graduated in my class. 10 are now deceased (3 from cancer, 3 from accidents, 4 from "other causes") for an attrition rate of 12.7%. There are another 8 that cannot be located, so we have data on 61 of us. Of those 61, 13 (21%) are still working full-time. That includes a lawyer, a psychologist, a computer guru, a real estate pro, a consultant, and two that are in family-owned businesses. Another 5 (8.2%) are working part-time (including me) - one works in a motorcycle shop (his passion for many years), a CPA, and a former star athlete who works part-time at a golf course. The remainder (70%) are essentially fully retired. Typical hobbies and interests include the following: golf, skiing, travel, music, painting, scuba diving, hunting, and camping. 7 of us are involved in significant volunteer work (churches, community groups, and the like).

    I did not find a single person who simply "sits on the porch and rocks." Even those that are "fully retired" are involved in significant outside activities to keep themselves busy and looking forward. Everybody agreed that having plans for the future is essential to continued well-being and purpose.

    Hope these figures add some emphasis to the points we have been discussing in the thread.

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  8. orangecat1

    orangecat1 500+ Posts

    HHD, thanks for that snapshot. 1962 was the year my parents got married. (They graduated from high school in '54 and '59) We're throwing them a big "surprise" party about a month or so before their actual anniversary, so the fact that the party will be a month before the anniversary will probably catch them off guard.

    Re: the people who are "rocking on the porch", my uncle owned his own business and retired rather early, at about age 60. He had no retirement plan other than his own savings, which he projected would last long enough. He was wrong, he is still alive, and very sharp mentally. He just turned 90 in May. In hindsight, he needed to work another 5-7 years, maybe longer.

    Now that's what is scary to me. If I were out of debt, I would have already bought long-term care insurance. That stuff is so incredibly cheap before you turn 55. I will definitely buy LTC after the kids are gone to college, etc.
     
  9. orangecat1

    orangecat1 500+ Posts

    one other thing. I have been doing some pretty serious internet research re: retiring from TRS, and found a couple of goodies:

    1. all TRS members who have 50 days of state days can buy one more year, when they retire. They charge a pretty penny, but it's based on expectancy tables, so you can expect to get your $ back in about 11 or 12 years.

    2. all CTE(career and technology) teachers-iow vocational teachers-who can show industry experience and who can get approval from their district to give the teacher two steps on the salary scale can buy up to two years while they are working.

    3. The biggie, I can choose to retire from either TRS or ERS!!! wooww!! I have started the ball rolling to buy back my time from ERS, and now I will be able to choose.

    ERS has the free health insurance premiums, but I would have to work longer to earn this. The even bigger carrot, imo, is buying health premium for my wife at 50% of cost. So, I could work until 60, get free health premiums + 50% off for my wife, and then get another job to work until at least 72.

    Assuming my wife can get herself out of her little credit card debt, the timing would be almost perfect. She would retire at 62(she is two years older than me), she could collect social security plus her pension, and the health insurance could come out of my retirement check.

    Her social security plus her pension might be about 70% of her income while working.
     
  10. orangecat1

    orangecat1 500+ Posts

    I can't believe my wife actually has a decent chance to retire at age 62. Because she has a fairly low salary, and all of the health insurance premium comes out of her check, she could take home about 80% of her current take home, which will not increase hardly at all in the coming years. She's stuck with that "performance pay" bs.

    She deserves it, though. IF she can pay off her little debts. Who am I kidding? She will probably put all of the money she has been spending on boy scouts, etc. to spending more $ on the dogs, and the kids college.

    I'm planning on spending only the EFC for their college.(good luck to me)

    And wow, those 6 years of state employment have really paid off. I'm gold because those 6 years of service were before 2001. ( all a person needed was 3 years of service before '01 to get the benefits) That is the reason I'm allowed to choose ERS or TRS, and get the free health insurance premium when I retire.
     
  11. Bayerithe

    Bayerithe 1,000+ Posts

    I'm definitely glad there are people out there who think about their financial future. More people need to do this, rather than squandering their money and depending on the government.

    I've been contributing 10% of my salary to my 401k. (company match stops at 13%, 50 cents on the dollar.) I'll aim for the final 3% once the wife's student loan is paid off. Once that is done, we'll hit the full 13% and start re-investing in the Roth IRA on a monthly basis. We're in our early early 30's, so we have a ways to go.

    I'm glad you mentioned not playing it safe on the 401k. I had a riskier allocation of index funds, of 25% small-cap, 25% midcap, 25% large cap, 15% international, 10% bonds. The company 401k guy recommended I scale back the mid and small caps and put more into the large caps, which made sense, as they tend to lose less money in turbulent markets, like right now.

    even with all that, I'm afraid it's not going to be enough. Wife is still unemployed, architecture field sucks.
     
  12. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Good start, Bayerithe. The time value of money is on your side if you start early and invest regularly. At your age, you can afford to take the risk of being very heavily in equities. As you get closer to retirement, your advisor will recommend that you shift more toward a balanced approach (preserving your assets while still leaving some in equities to protect against loss of purchasing power). I was 25% index, 25% small cap, 25% international, and 25% mid-cap in my 401(k), right up to the last quarter before I retired (I switched it all into Stable Value option before rolling it into my new IRA). But since I had my USAF pension, my Lockheed pension, and our two Social Security checks (all of which are essentially risk-free bases), I could afford to be very aggressive with my own funds in the 401(k). As you get closer to retirement, you'll want to sit down with your advisor and figure out where all your sources of retirement income are coming from and adjust your risk accordingly.

    Also figure the cost of retiree medical and dental coverage if you retire before Medicare age (currently 65).

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  13. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    It's been a while since I updated this thread. I'm now three years into retirement and still loving it! Last year Mrs. HHD and I treated ourselves to the Alaskan cruise - I recommend it highly. The scenery was absolutely btreathtaking.

    I'm still doing a bit of consulting and still teaching at our bridge club. Since I'm an independent contractor in both cases, I can deduct the cost of our medical insurance on the front of the Form 1040 (Medicare and Tricare Retiree Dental).

    Interesting point to consider as you near the magical age of 70-1/2 (which I hit in October). The year you hit the magic age, you must start withdrawing from your IRA and paying income tax on the withdrawals. I haven't touched my IRA since I retired (except to make additional contributions from my earnings), so it's increased nicely. I still don't need the current income, so my broker suggested that I set up an individual brokerage account in addition to my IRA. He took enough from the IRA to meet the Required Minimum Distribution (RDM), sold enough to raise the cash to make a 25% withholding payment to the IRS, and put the remaining shares into my new brokerage account. Seems like a good way to keep the money working for us.

    Plans for the fall include a five-day trip on the Rocky Mountaineer from Vancouver to Calgary. Everyone I talked with about it raved about the service and the scenery. We're looking forward to the trip.

    And as soon as we get back, we'll have a wedding - youngest son is getting married at the end of September. And I'll get a new granddaughter in the deal - his fiancee has a daughter from her previous.

    As my interest in consulting wanes (and I'm planning to hang it up when my current contract expires in mid-2015), I have more time to pursue my hobbies - golf, bridge, and my woodshop. Having outside interests to pursue is a key to remaining active and involved in retirement. I have very few days when I'm totally bored.

    Prince (my cat) is now 16 and still gets me up at 5:00 to feed him breakfast. But I have learned to go back to bed for a couple more hours sleep after I feed him. Guess he still has me well trained!

    You folks that are nearing retirement, plan as carefully as you can and go for it! Retirement is terrific.

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  14. nashhorn

    nashhorn 1,000+ Posts

    Hello HHD,
    I joined you July 12, 2013. And let me tell you retirement is highly underrated!
    I read all you had written on the subject and listen to all advise givers (and there were several) before making the move. One thing I completely agree on regarding finances is to cushion yourself with money to provide as much time as you can before you have to start withdrawing from your savings, IRA specifically.
    I, was not as sound as you - getting three plus years = but I made sure that I had minimum of 18 months, providing for a major expense of our remodeling project plus all living expenses to be covered before I ever started drawing out anything from the IRA.
    My company changed to the lump sum instead of standard pension some 20 years ago and of course all of us older employees got screwed with the result. Fortunately my Dad had always push and prodded me to put away as much as I could into the 401 plan. Is it all going to be enough? Who knows but it is enough that I could not justify staying in the rat race.
    And it is true, you do stay busy! All those, "when I get the chance to do", things really mount up in one's lifetime. Plus, on the advice of the learn'eds, I am doing a couple of things they say are essential to keeping the brain active - improving/or learning a musical instrument (for me guitar) and working on Spanish.
    One thing I never thought I would do is sleep in, yet I have found that getting up at 9:00 am is really not such a bad thing! More than anything else though, while the remodeling has taken a disproportionate amount of my time, I am so enjoying getting time with my Grand Kids - I have 7 and just learned my youngest daughter is expecting. The best times are still ahead!
    .......but I do dread the gov't mandated withdrawal. Aholes even tell you when to die!
     
  15. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Sounds like you're off to a great start, Nashhorn. Do keep planning projects, hobbies, and the like to keep yourself occupied. As I said earlier in the thread, there have been very few times when I didn't have anything planned and got bored. Fortunately, Mrs. HHD came to the rescue with another list of "Honey-Do" items for me.

    Do give some thought to the time when you'll have to start drawing down your IRA and paying taxes. If you don't have a need for the additional income at that point, get your adviser to find a way to keep the funds working for you. I have had far too much money sitting in my checking account, getting essentially zero interest. With the individual account now open, I'll start transferring the excess from my checking account into the investment account.

    Hope you continue to enjoy your hard-earned retirement!

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  16. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Hi, All,

    One more update on my retirement. Mrs. HHD and I just got back from a one-week trip to the New England states. I checked off one of the items on my bucket list - I have now visited all fifty states.

    I had banked my timeshare week last year, so I traded it for a week at a resort in Western Massachusetts. Used AAdvantage miles to get tickets to Bradley Airport (Hartford, CT), so the out-of-pocket for the week consisted of (a) rent car, (b) meals, and (c) tourist attractions. Not a bad way to do it.

    Saw the JFK Museum in Boston - recommend it highly, very worthwhile (although difficult to find in Boston freeway traffic). Also did the FDR Museum in Hyde Park, NY, as well as the guided bus tour of West Point (US Military Academy). Drove through the US Coast Guard Academy in New London, CT, so I have now seen all four major US service academies.

    Drove through Wilmington, DE, just to say I had been to Delaware, then on to Philadelphia to see Independence Hall and the Liberty Bell - recommend this visit highly - very inspiring to see Independence Hall and the Liberty Bell. Stopped at Liberty State park in Jersey City and viewed the Manhattan skyline and the Statue of Liberty.

    Drove through southern Vermont (Bennington to Brattleboro) - very scenic drive. Through NH and on to Kittery, Maine, where I managed to eat two lobsters - when in Maine, lobster is an absolute must!

    The only thing I missed was a side trip to Cooperstown to visit the Baseball Hall of Fame - guess that will have to stay on the bucket list for another visit.

    When you retire, plan on some trips like this - it's interesting to see other parts of the country (and it makes you appreciate Texas even more).

    Next trip is September - fly to Vancouver, ride the Rocky Mountaineer to Calgary, and fly back to DFW. Everyone I asked that has been on the Rocky Mountaineer raves about it. I'll post a follow-up report after that trip.

    Retirement is TERRIFIC!!!!!

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  17. Vol Horn 4 Life

    Vol Horn 4 Life 2,500+ Posts

    [​IMG]

    That has been a goal of mine since I was in my 20's. I'm about 75% of the way there, but Alaska and Hawaii are gonna take some planning and saving. I still need to hit the NE area and the northern midwest too.
     
  18. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    ^When you go to the Northern Midwest states, be sure to build in a couple of days in western South Dakota - Mount Rushmore, The Badlands, the State Park were all well worth the visit. And from there go to North Dakota and drive through the Teddy Roosevelt National Park. BTW, the highways in the Dakotas are excellent - had no problems at all.

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  19. Seattle Husker

    Seattle Husker 5,000+ Posts

    Sunset @ the Badlands in South Dakota is gorgeous, one of the most beautiful I've every seen. Make sure you hit Wall Drug too...you can't miss it with all the billboards pointing you to it for 200 miles in every direction. It's a surreal experience.
     
  20. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    ^Great observation, Seattle Husker - and you're absolutely right! The Badlands is a terrific visit.

    I'll add one to that, also - when you go to Mount Rushmore, be sure to go to the evening retreat ceremony (lighting of the mountain and lowering of the flag) - a very moving moment, and well worth the drive.

    In my opinion, the Dakotas are vastly underappreciated - the scenery is outstanding, TR National Park in North Dakota must be one of the best kept secrets in the country.

    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  21. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Time for another update. Mrs. HHD and I went to Vancouver, BC, last Thursday and rode the Rocky Mountaineer to Kamloops, then on to Banff, finally took the RM bus tour on up to Calgary. What a terrific trip - the scenery was absolutely breathtaking! I must have taken 150 pictures. Saw the salmon running upstream to spawn, lots of bighorn sheep, elk, ospreys, and eagles. Service on the train was first-rate all the way. Almost like a cruise ship - every time you turn around, they're bringing you more to eat and drink. RM has their logistics down pat - picked up our bags each morning, and the bags were waiting for us when we got to the next hotel.
    Glad I checked the weather forecast before I left home - forecast called for lows in the 40s in Calgary, so I took a long-sleeved shirt. Glad I did - they missed the forecast, as on Monday (our departure day for flight back to DFW) it was in the 30s with snow!

    Recommend the Rocky Mountaineer highly - an excellent vacation. If you get the chance, go for it!

    That ends our travels for this year (my fourth year in retirement). Next event is the 26th of this month - youngest son is getting married, and there are still details to handle before the wedding.

    No idea what we'll do for travel next year. Guess I'll have to get with my travel agent and look at alternatives.

    Final summary statement for this update - RETIREMENT IS TERRIFIC!!!


    HHD [​IMG] [​IMG] [​IMG] [​IMG]
     
  22. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    It's been a while since I posted another update on retirement. Here's what has happened since the 2014 post.

    Mrs. HHD and I flew all three grandkids to Orlando last summer for a week at Disney World. Very enjoyable, but horribly hot and humid - one afternoon even the grandkids pooped out early and went back to the lodge to lounge around the pool. I'm sure the kids will remember that trip long after Grandma and Grandpa are gone.

    I did pick up a "retirement pointer" worth passing on to you. As time passes, Mrs. HHD and I have accumulated enough little irritating health problems - nothing major, but accumulated irritants - that travel is becoming less attractive. I had been advised (when I retired) by an older friend to take advantage of early retirement years for the trips, since health will limit the travel opportunities later in life. Worth considering...

    Also, as I stated in an earlier post to this thread, keep in mind the magic age of 70-1/2 - you must start taking withdrawals from your IRA (and paying taxes at the ordinary income marginal rate). I didn't need the money, so my financial advisor created another investment account for me. Once a year he calculates the RMD, takes enough stocks out of my IRA to meet the RMD, cashes enough to make a 25% withholding payment, then moves the rest into my individual account. My IRA produces essentially enough dividend and gain income to meet the RMD, leaving the principal basically the same (not exact, but pretty close). Meanwhile, my individual account grows by (a) the stocks transferred into it when making the RMD and (b) any outside money I bring in from consulting.

    Also watch your checking account balance. We're getting essentially zero interest on checking these days, so any balance beyond a couple of months expenses should be put to work in investments.

    I do have a grandkid trip planned for this summer - but driving this time instead of flying. TSA is getting to be a real pain in the neck, and the airlines are not real big on customer service or comfort. I'll drive them to Colorado for a week right after school lets out for the summer. Mrs. HHD is aboard with this plan. She has grown to hate the airlines even more than I do.

    All you folks that are nearing retirement, do your planning - with a competent financial advisor. When the time is right, pull the plug and go for it! Your imagination is not good enough to foresee how good retirement can be!
     
    Last edited: Mar 15, 2016
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  23. Crockett

    Crockett 5,000+ Posts

    Just in case you missed Joe Fan's Post in the Cactus Café Forum
    [​IMG]
     
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  24. nashhorn

    nashhorn 1,000+ Posts

    Good to read the update HHD.
    I concur on the "do it early" on the travel plans in retirement. Just coming back right now from watching a granddaughter perform in State Cheer Championships in Boise. We're in the air right now and I commented to wife at airport that I may have beginning rethinking on some of our trips because I never felt good this trip (short 5 days) and felt kinda puny on several of our past ones. Seem going from 65 to 68 is a lot more aging than was 60 to 65. As you said 'nothing serious', at least that I know about, but just not the same.
    And it is true, retirement rocks. I don't know how I got anything done when all I had was weekends.
     
  25. OldHippie

    OldHippie 1,000+ Posts

    A tip I have been given is that if you want to, you can take the required minimum distribution (RMD) and convert it into a Qualified Charitable Distribution. The IRA manager makes the distribution check out to the charity of your choice and you simply mail the check to that charity when you receive the distribution. It is never considered income and so requires no tax. It requires some minimal arrangement with the IRA manager and the receiving charity before you do it though. You could use it to substitute for, or supplement your regular charitable giving.

    I'll receive my first RMD this year, so I've been looking into it.
     
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  26. mchammer

    mchammer 1,000+ Posts

    Glad I found this thread. Great stuff.
     
  27. HornHuskerDad

    HornHuskerDad 2,500+ Posts

    Another quick update - we just got back from our grandkid summer trip to Colorado. This was a very enjoyable trip. I rented a minivan for the week, so the three grandkids could spread out and relax while I drove - worked perfectly! None of the grandkids had ever been west of the DFW Metroplex, so everything was new and exciting to them. Since I graduated from USAFA, I knew my way around the Colorado Springs area pretty well, so I was able to cram a lot into a three-day stay - took them up the cog railroad to the summit of Pikes Peak, drove through Garden of the Gods, drove them to Cripple Creek to ride the narrow-gauge RR to the old gold mines, then on to Canon City and the Royal Gorge.

    The grandkids really enjoyed this road trip - so much that they have already got their bids on for the next two summers! Next year we'll drive to Arizona and see the Petrified Forest, Painted Desert, and the Grand Canyon. The year after that will be South Dakota - the Badlands, Mount Rushmore, Custer State Park, Spearfish Canyon, and Deadwood.

    Mrs. HHD and I found the road trip to be a lot less stressful than flying. I think at this point we'll plan on summer road trips - and it was a bunch cheaper than the previous summer trip to Disney World. And my sons and daughters-in-law enjoyed getting some quality time for a week without their kids!

    I think I'm done traveling this year. I'll buy my wife a Southwest ticket to Panama City to visit her mom and sister in October (her mom's 96th birthday). Rest of the year I'll concentrate on piddling in my woodshop, playing golf (hoping I can find a way to break into the 70s - getting closer, but not there yet) and bridge.

    Glad to continue this thread - good to hear of other Hornfans folks that are dipping their toes into the retirement waters. You folks that are getting close - do it! Your imagination is not good enough to visualize how great retirement can be!
     
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