Goal Setting, Retirement

Our 5 Year Journey to Retirement

lose up photo of green flower
Photo by Vraj Shah

In about 4.5 – 5 years’ time, my husband and I plan to hang up the 9-5. We will be 60 and 62 respectively.

Saying goodbye to a steady paycheck can be a bit scary, but having the freedom to do things on our own time, while we are still relatively young, is intoxicating.  We will, of course, need to save a bit more and plan a bit more before we actually make the move.

Here is what we currently have:

  1.  HealthCare.  Good healthcare costs will be upwards of $30,000 a year before Medicare kicks in at the age of 65.  We currently have a Health Savings Account (and plan on keeping it!) that we contribute the maximum amount ($8,000) to every year.  This tax deductible account will cover deductibles and our long term care insurance.  Health insurance is the bigger nut to crack, and something we will research extensively.  We could use my husband’s firm COBRA for the first 18 mos, or private health insurance. We also have an investment account of $137,000 (the amount is an estimate, and could possibly be more) that I will receive at age 62.  We plan on pulling from this account to pay for our health insurance until Medicare.
  2. Retirement Account Growth. At the present time, our 401Ks and Roth Accounts stand just shy of $1.2M.  It’s been a bit of a roller coaster ride over the past several years, but it’s also been a steady climb.  We do not have a pension, so this, along with social security, is it.  We will be contributing the maximum amount over the next 4-5 years, so conservatively we believe it will grow to at least $1.7M.  Obviously we won’t touch a good portion of that so it can continue to grow over the next 10 -15 years, giving us enough to last our whole lives.
  3. Downsizing.  Since healthcare will, in essence, match the cost of our mortgage, it is imperative that we own our home outright.  We are not in a position to pay our current home off in 4 years (see #4), but we plan on downsizing and have no mortgage upon retirement.  Besides being mortgage free, we like the idea of lower utility bills, lower taxes and less to take care of.  The unknown at this point will be where we decide to live.
  4. A healthy cash stash.  By living well below our means, over the next 4-5 years we plan on having two years’ worth of living expenses in cash.  We hope to use this so either our retirement accounts can grow a bit longer, or use during a down market.  Of course, you know me.  I believe in balance and that tomorrow is not guaranteed, so we still will be taking vacations and having fun during this time period. 🙂
  5. Social Security. {UPDATE}  After learning more about social security benefits, we will both take our benefit at age 67.  I will be two years ahead of my husband, so part of it will start on Year 5 of our retirement.

Of course, you all know the best laid plans can go awry, but this is what we know right now.  I will be blogging about our retirement journey here in this space, (and hopefully be a bit more consistent. 😉 ).  I hope you will join me.

If you are retired, or planning to retire, am I missing anything??  Please share!

 

 

 

Goal Setting, Living for TODAY, Retirement

Making TODAY count.

See the source image
QuotesIdeas.com

This quote actually caught me off guard when I finished up my last post.  I’ve been concentrating on my dreams for my life seven years from now, when I should be concentrating on today.

Every now and again I have to remind myself to find the joy in what’s happening in the present.  I tend to find myself looking to the future and not enjoying what is today. Tomorrow is not guaranteed, so making each day count is imperative to living a full and happy life.

This doesn’t, of course, mean to forget about the the future.  Planning is important.  But planning and living a beautiful life today is too.

The weather has changed.  It’s cold and wet and dark out. I won’t be surfing the net to find a new property in Florida (to enjoy seven years from now).  Today I will enjoy a hot cup of coffee, walk my sweet dog, tidy up the house, prepare a warm meal for my family and enjoy a good book.  Perhaps I will bake a sweet treat.  I will definitely take a hot bath and listen to soft jazz. And be grateful.  Grateful for the days I’ve already been given, and for today.  24 hours, 1,440 minutes to enjoy and make count.

How are you making today count?

 

 

Florida, Retirement

Mother Nature’s Apology and a Retirement Epiphany.

person spreading hands against sun
Pexels.com

After the polar vortex last week, this week has been a dream.  (Mother Nature – you are forgiven).  We’ve experienced sunshine and temps all the way up to 72 degrees.  Yesterday I started some 5K training on my 3 miler route and I felt amazing.

And then it happened.  My epiphany.  I NEED sunshine and warmth to feel good. Of course I’ve always known this, which is why I sit under a light therapy lamp every morning in the winter.  But this time the answer to my retirement housing conundrum came to me as clear as day.

I’ve been struggling with where I’m going to live in retirement.  My health and well being seem to improve with the sunshine.  Yesterday’s run (jog) solidified the answer.  I need to spend winters some place warm.  My pick? The gulf coast of Florida.  A single family home large enough to house family and friends.  There are two cities I already am familiar with and LOVE.   Of course I will need to research everything from taxes to healthcare before I dive into such a large investment.  My daughter lived in that area for over 3 years, so I will start with her insights.

I still want a place here in Virginia to be close to my family the other half of the year, and it has now become clear as to what kind of housing that will be.  Of course, in order for it to work, both homes will be have to be paid off before my husband retires.  I guess we shall see.

I’m happy to have a vision and a direction in which to move forward. It may not work out, but at least I have a clearer picture of how I want retirement to look.

Time to do some research.

If you live in Florida, please share your thoughts!

 

 

Goal Setting, Retirement, saving money

2019 Goal: Living on our future retirement income – with real numbers.

black calculator near ballpoint pen on white printed paper
Photo by Pixabay on Pexels.com

One of my 2019 goals is to live off an amount we will need in retirement…an amount we believe we need to live a life we want to live in retirement.  For us, that includes travel and spending three months every winter in a warm climate (destination undetermined).  (I write the last part with conviction, as the temps are cold and there is 10 inches of snow on the ground.)

So what is our magic number?

After numerous calculations and a bit of guess work (who knows what healthcare will be when we retire), we figured we will need between $7,000 – $8,000 a month.  For 2019, I will be taking the lower number of $7,000 (which includes our $2,400 mortgage).  We hope to have our mortgage paid off by the time my husband retires at 62, however we kept the $2,400 in the budget as it most likely will be replaced by purchasing health insurance until the age of 65.

How will we come up with $7,000 in retirement?  We will have three sources to pull from:

  1. Personal Savings;
  2. Social Security (yes, we will be taking it at 62); and
  3. Retirement accounts

Social Security will provide $3,000 of the $7,000 (at least as of this writing), and we can use personal savings/retirement accounts for the rest.

By withdrawing $7,000 a month from our retirement accounts, our savings will still last more than 30 years based on very conservative calculations.  So, between social security and our retirement accounts, we can go as high as $10,000 a month (to help with inflation) if we need to.

MONTHLY RETIREMENT BUDGET

Here is our monthly retirement budget *in real numbers*  (and what we will be living on for 2019 and beyond).

*Please note we do not have any debt.  Being debt free is very important when entering retirement, including your mortgage.

  • *Utilities/Water/HOA $500
  • Food/Eating Out $600
  • Household $125
  • Subscriptions (i.e. Netflix, Amazon Prime) $50
  • Gasoline/Car $200
  • HealthCare  $2400 (Our mortgage for now)
  • HSA – Medical Expenses $500
  • Vacation/Travel $500
  • Misc. (clothes, personal care, etc.) $400
  • Cell/Cable/Internet $300
  • *Insurance/Taxes  $1,000
  • Gifts/Christmas $200
  • Home/Car Maintenance  $225

*These are figures based on where we live now (a high cost of living area).  It is probable that we will be moving out of our large home into one that is smaller and fits our future lifestyle.  We are hopeful that insurance/taxes/utilities will all be lower when we do so.

This is our plan, but of course everyone’s retirement plan will be different. Some will need more, some less.  My parents, who live in upstate NY, live comfortably on $2,500 a month.  My MIL, who lives in PA, unfortunately, attempts to live on a social security check of only $1,500 and it’s rough.  So, don’t plan on living on Social Security alone, you won’t make it.

We have seven years before we actually take the plunge into our third phase of life called retirement.   A lot can happen between now and then, but I’m hopeful our health stays good and the retirement accounts continue to grow.

If you are in retirement now, or are gearing up for retirement, how does your budget look?