As we’ve been taught to do, I mostly ignored the money I was setting aside for retirement while I was working. In theory, I claimed to understand the mechanics of what was happening with it every two weeks. But in reality, it made about as much sense to me as supply-side economics. And just like I am now with the new tax plan here in the U.S., I was surely unsure how it would all eventually trickle down to me. I understood that it was my money, but I literally had no idea how or when I would get my grimy hands on it.
Which is why a recent Sunday Guest Post here on Donna’s blog caught my attention. Written by Lynn from Encore Voyage, she tells her story of retiring from a long career in teaching, followed by an unplanned termination of her husband’s job. It sounds like it was a scary situation for them, at least in the short term. Everyone wants to make sure they’ve dotted all their I’s and crossed all those T’s prior to taking the retirement plunge. To paraphrase Art Linkletter, retirement planning isn’t for the faint of heart.
One passage in Lynn’s post spoke to me directly (emphasis mine):
“We were not old enough to officially ‘retire,’ and we hadn’t been taking specific steps to do so. While we had spent a lifetime saving for retirement, and we knew we would be okay financially, we were unprepared for about a zillion changes that happen when you suddenly become retired.”
I can relate to that completely because my own ‘retirement’ was surprisingly quick and somewhat haphazard. In hindsight, I now characterize that period as controlled confusion.
I took early retirement four months shy of my 56th birthday. I had just been through a rather quick medical odyssey, the results of which were both inconclusive but thankfully positive. At the same time, my employer dangled an early retirement and buyout offer to eligible staff. Although I had been eligible for similar offers in prior years, this time around the timing seemed right to take it. There were other horizons to explore.
I had done very little in the way of retirement planning. But like Lynn and her husband, I too had been diligently saving. My goal each year was to sock away a higher percentage of my salary into my 401(k) plan than the previous year. A divorce four years earlier forced me to partition a percentage of it for my ex-wife. My response to that was to increase contributions to make-up for the loss. By the time I made the early retirement decision, I had managed to recover and even add to what the court-ordered decree had removed. In fairness, a post-recession bull market helped my efforts tremendously.
A little over three years later, this retirement experiment has blossomed into a very satisfying next phase for us. Thanks to my wife Gorgeous’ full-time business, my part-time job, and a small pension that I receive from my former employer, we settled into a Florida condo which we purchased earlier this year.
My money in the 401(k) plan continues to sit on autopilot. I log in every week to check on its performance. Once a year, during the month of January, I review and re-balance everything so that all funds are back to their pre-determined allocations. Distributions from it are still a few years away from starting.
Gorgeous had no savings prior to our getting married, and she’s now on a mission late in life to build her own retirement fund. It’s really never too late to start.
The most important part for us is that we have figured out a way forward without dipping into the cookie jar.
My thanks to Donna for this opportunity to appear on her blog again.
Snakes in the Grass