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.
There was no way to include every possible question in an interview like this, so if you’re wondering about something that’s not addressed, please leave your question in the comments below so the interviewee can address it.
My questions are in bold italics and her responses follow in black.
Let’s get started…
GENERAL OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 55 and my partner is 54.
We have been together for almost 15 years, but we are not married.
Neither of us have been married before and at this point, our attitude is “if it’s not broken, don’t fix it”.
Do you have kids/family (if so, how old are they)?
We do not have children or pets.
We each have siblings and a total of 6 nieces and nephews.
What area of the country do you live in (and urban or rural)?
We met when I was living in a large urban city in the Midwest, but we relocated to my hometown, a large city in the southwest, about 8 years ago.
Is there anything else we should know about you?
I retired in October 2017.
Your article about your early retirement showed up in my news feed shortly before that and it pushed me over the edge.
RETIREMENT OVERVIEW
How do you define retirement?
I define it as no longer needing to work.
This does not include choosing to work on your own terms.
How long have you been retired?
Almost a year and a half (since Oct. 2017).
Is your spouse also retired?
No, he is still working and has no plans to quit. He enjoys his job and the company he works for.
It’s great for me because I was able to get on his health insurance plan. Had that not been the case, I would not have been able to retire early.
What was your career and income before retirement?
I was a corporate communications manager making $130K with a 12% bonus target.
Why did you retire?
In the 5 years I was at my job, my role changed several times (sometimes because I wanted it to, other times it was out of my control). The company also experienced big changes with new leadership and lots of job terminations.
There’s no sense in listing all my work grievances here, suffice it to say, in the final year, I no longer felt motivated or inspired by work I was doing.
There was a lot of unnecessary travel and projects that were never completed.
My frustration grew and the negative physical and mental impacts of working at a job I hated were also getting to me. I wasn’t sleeping well, I gained weight and I was quick to get angry at my partner. I could see my personality changing but I wasn’t able to snap out of it.
That summer, a friend died six weeks after being diagnosed with glioblastoma (aggressive brain cancer). It was a reminder that life is short and I owed it to myself to be happier.
PREPARATION FOR RETIREMENT
When did you first start thinking seriously about retirement and when did that turn into a decision to do it?
I’m not sure I gave it a ton of thought besides thinking I literally couldn’t stand another endless Monday status meeting.
I knew that I was in good shape financially and that I could go on my partner’s health insurance immediately.
I also knew that I could get another job if necessary although probably not at the same salary.
What were the major steps you took from deciding to retire to developing a plan to do so?
The biggest step I took was paying off our house about three years before I retired.
I didn’t necessarily think about it that way at the time. It was more of a decision to get rid of all my debt.
A few months before I gave my notice, I talked to my CPA who is also a financial planner and his input made me confident that I could stop working.
What did your pre-retirement financials look like?
I’m only going to talk about my financials, because my partner’s situation doesn’t really impact me beyond giving me access to health insurance. (Also, he doesn’t really share his info with me. I just know that he has a very healthy savings and investment account and zero debt).
On the day I retired, I considered my net worth to be just over $4M:
- Brokerage acct: $2.7M
- IRA: $293K
- 401K (which I later rolled over into my IRA): $150K
- Inherited IRA: $47K
- Municipal bond acct: $250K
- Cash: $225K
- Private bank stock: $209K
- Home: $615K – no mortgage
Car: BMW on a pre-paid lease. Bimmers are my indulgence (this is my third). Although when this lease is up next year, I’m going to settle down with a much less expensive used car that doesn’t have low profile tires.
Other than credit card bills, which I pay in full each month, I have no debt.
What was your overall financial plan for retirement?
After reviewing my pre-retirement spending, I figured my annual spending to be around $75K.
My stock portfolio produces about $25K annually in dividends (the rest is reinvested) and my bank stock produces $20K annually.
I do not adhere to a set budget, but I did start using Mint to keep a closer eye on things.
It was not a surprise to see spending on things like new clothes and dry cleaning reduce significantly.
My partner and I do not co-mingle any of our bank accounts. We share a credit card account for all household expenses, such as utilities, repairs, groceries, entertainment etc. BY FAR, our biggest expense is groceries/eating out. I like to cook and part of my retirement plan was to cook most of our meals at home as well as cooking things for my partner to have at work for lunch.
I have a sufficient cash balance, so I use that to cover my expenses. I’m estimating that I won’t have to sell any stock positions for 3-5 years.
Did you make any specific moves to prepare your finances for retirement?
No. If I had not already paid off my mortgage, I would have done that.
We live in a 3 bdr 3.5 ba townhouse. While this is a lot of space for the two of us, it is the standard size home for the area we wanted to live in.
I could see us moving to a more suburban or lakefront community in the future, but certainly not until my partner retires.
Who helped you develop this plan?
I tried using financial planners twice. Once was through my brokerage firm and the second time was with an independent financial planner.
I wasn’t really impressed with either of them. I felt they tried to fit me into a pre-determined “box” rather than seeing me as an individual.
However, I recently had a portfolio review with my bank and am considering moving to their brokerage group. I was impressed with the planner and felt he did understand my objectives and concerns.
What plans did you make in advance to leave your job?
None.
What were your pre-retirement concerns (financial or non-financial)?
Healthcare was obviously the biggest.
Had I not been able to go on my partner’s plan, I would not have been able to retire early.
I probably would have just looked for a lower-paying, less stressful position.
Financially, I knew I was in pretty good shape, although you never know what is around the corner.
I can tell you that my partner’s biggest concern was what I was going to do all day!
How did you handle deciding on and paying for healthcare?
As I’ve mentioned, I was able to go on my partner’s work health insurance for additional $125/month. I am very, very grateful.
I doubt my partner will work past age 60 though, so we will need to come up with a plan to get coverage before we qualify for Medicare. Other than just saving money for the inevitable, I’m not sure what other kind of planning to do here.
I have had the epiphany that maintaining my health is the most important thing I can do. Retiring and escaping the mental stress I was under was only part of it. I go to the gym at least 5 days a week and Pilates twice a week.
Since retiring, I have lost over 15 lbs and dropped my cholesterol by 50 points. My partner has commented that I don’t get as angry as I used to when I was working.
How did you tell your family and friends of your plans?
Telling my family wasn’t a huge deal. They’re happy to have a free babysitter and errand-runner.
It’s a little different with friends though, the response is often a mixture of surprise followed by a lot of personal questions!
THE ACT OF RETIRING
How did you ultimately retire?
In the year leading up to it, I realized that my work had ceased to be meaningful or satisfying and the day-to-day environment was toxic.
I met with my manager to see if there was any way to shift some things so I could play to my strengths, rather than working on things that I had little experience with. I did not get the response I was hoping for. We ended the meeting agreeing to discuss it again in the fall.
I tried to dig in and make the best of it. I have worked ever since high school, so the thought of leaving my job with no firm plans was kind of scary.
But I was so unhappy at work, it just took over my life. I began to have a lot of self-doubt and self-esteem issues which further complicated things.
Ultimately, I decided to leave my job and call it an early retirement.
What went well?
There wasn’t really much of a reaction from my manager or the company leaders. I felt great, though. It was a huge relief.
What didn’t go so well?
I was asked to participate in a meeting to determine who on my team would take over my various projects and responsibilities.
Ultimately, my manager cancelled a lot of the things I’d spent my time on, confirming my feelings that I was really wasting my time and effort there.
How did you ultimately find the courage to do it?
This was not an issue in my case.
RETIREMENT LIFE
How was the adjustment, especially the first few months after retirement?
Initially, it felt like a vacation. I could sleep as long as I wanted, and I did for the first few months.
I went grocery shopping at my favorite store and didn’t have to fight for a parking spot. I made elaborate meals. I baked bread.
We took a few vacations and I made working out at the gym more of a priority. It was great!
How is retirement life now? What do you like about it and what do you dislike?
Things are good. My stress level is way down. I’ve got a good routine. My partner is well fed and happy that I am happy.
I sometimes wonder if I should be doing “more” with my time; that I should find some kind of work or bigger purpose.
A retired friend of mine told me to keep an open mind and the right thing would “appear”. That has not happened for me yet.
What do you do with your time? What does an average day look like?
On an average day, I get up at 6:30 am with my partner and we have breakfast together.
I go to the gym between 8-9 AM. Each week, I do a couple of spin classes or other cardio and lift weights. I also participate in mobility classes like stretching and foam rolling.
After that, I do the house stuff. Grocery shopping, meal planning, cleaning, laundry. This is another thing my partner benefits from because these chores used to take up our weekends and now we only grocery shop on the weekends if he wants to.
In the afternoon, I sometimes take a short nap or relax with a book. Around 5 PM I start getting dinner ready so that my partner can eat before he goes to the gym.
I also work on my hobbies, baking and photography, and I usually take photos of what I bake.
Occasionally, I get together with a friend for dinner on the weekend or to see a movie or we’ll have people over for dinner.
Looking back, what would you have done differently?
I’m not sure I would have done anything differently.
If I had been less miserable at work, I might have tried to stick it out long enough to find another job.
Was there any emotional impact from leaving the workforce?
I’m 1000% happier. My partner and I joke that I never have a bad day, which is true.
I think my partner is happier, too.
What surprises (financial or non-financial, good or bad) have you had since retiring and how have you handled them?
The drop in the stock market last fall was a bad surprise.
Even though I have recouped a good part of my losses, it made me realize that I needed to address the risk in my investments and I will be addressing that with my CFP.
What are your future plans?
Definitely want to travel more! We have a trip to Japan coming up. This has been on my bucket list for years, so I am super excited.
RETIREMENT FINANCES
How has your financial plan performed compared to what you had estimated before retirement?
I didn’t really have a defined plan when I retired.
I signed up with Mint and set up some budgets so I could get a better idea of where the money is going. It’s been helpful in that respect.
How are you handling Social Security, required minimum distributions, tax issues and the like?
This isn’t an issue for me since I am only 55.
I will likely defer taking Social Security.
Did you return to paid work? Why or why not?
No, although I have had interviews, nothing has been compelling enough to make me want to give up retirement.
Did you find it hard going from being a saver to a spender?
It’s been easier than I expected.
Looking back, what do you wish you knew in advance?
This goes back further than the months leading up to retirement, but I wish I had managed my career better.
To be honest, I never really liked the work I did and I wish I’d found something more fulfilling back when I was just starting out.
What advice do you have for those wanting to retire?
If your work situation is literally making you sick, make a change.
Whether that’s a new job or retirement, I’ve found that my mental and physical well-being is the most important thing.
Michael says
What a great job saving that amount by 55! Enjoy your retirement!
Lisa says
I’m loving this new series. It’s very enlightening and has answered several questions that I’ve been thinking about. I’ve read so much about people losing their identity when they retire. It sounds like the adjustment has been easy for you. Your first year away sounds like a dream. Your daily routine it what I hope mine will be when the time comes. Thank you for sharing.
I’m 7 years away from being able to contribute to these posts. I’m more focused on meeting my goal reading these successes. Thanks!
MI 122 says
Good interview. Do you mind me asking, how did achieve such a sizable portfolio by age 53?
KK_55 says
I got a nice head start from my grandparents who invested about $100K for me in the stock market in the first few years of my life. From there, it was the power of compounded interest.
It helped that my parents kept a tight rein on that account until I was almost 40. I was making decent money by then and living within my means, so the money was mostly left alone to grow.
Paper Tiger (aka MI-27) says
That would have been some head start. If 100K averaged an annual return of 9%, it would have doubled every 8 years or 5 times over a 40 year period which would equate to a nest egg of over 3M. I’m guessing it was probably a little less than that but still a very nice present from your grandparents.
Congrats on your early retirement and thank you for your story!
KK_55 says
Yes, of course there were ups and downs. My parents paid for my out-of-state college tuition from that account and because it was 100% equities, I experienced losses.
Figuring out how to unwind positions I’ve held for more than 50 years and managing the tax implications is definitely a challenge.
Paper Tiger (aka MI-27) says
I know all about paying for out of state college. We have a daughter who is a sophomore now. Fortunately, we started a 529 when she was born and paid into it monthly until she hit 18. With the S&P doing fairly well during this period we saved enough to cover undergrad and future grad school. The power of compounding is truly amazing!
CS says
How did you decide how much to contribute to the 529 over the years? We’re you worried about excess contributions that might not be used? Did you go 100% in on the 529 plan or did you use other savings options in parallel to have more flexibility (savings, CD’s, brokerage, etc)?
We are expecting our first child later this year and I have already opened a 529 with a small monthly draft. My plan is to balance that and a savings account but I like trying to understand the approach others have taken.
Danielle says
I’d like to second CS’ request. We just had our first child and I have yet to open a 529 account, but wondering how to balance education savings vs. flexible options, as I’d love to also help him with other life goals when the time comes. Perhaps a post about this in the future, ESI?
ESI says
See if any of these help:
https://esimoney.com/category/college/
MM Interview 55 says
Congrats on your retirement!
What a great lesson in being financially independent enough to be able to just walk away from work to safeguard your physical and mental health.
Enjoy your retirement and your newfound happy life!
KK_55 says
Thank you! I owe a lot of it to my parents who continually told me to save my money for the future. That did not mean a lot to me as a 25 ear old, but I get it now!
Millionaire73 says
Really enjoying this new series!
Kristy says
This is a fantastic series. Thank you for sharing KK_55.
I love the insight of recently retired fiftysomethings.
You are so fortunate that you were able to go on your partner’s health plan. I doubt that is an available avenue for most early retirees.
Wow! to have an investment to grow like that –awesome!
Ever since I found ESI a couple of years ago, my mantra has been “save every dollar you can”….I tell my kids that, and all twentysomething workers!
KK_55 says
Exactly! I think about the my earlier working years when I did not contribute much to my 401Ks and I want to kick myself.
AEL says
Hi,
I am about the same age, not married but live with my partner, and have a very similar net worth. My yearly expenses are about $80K. We keep separate accounts, too. (Really, I felt like I was reading about myself!)
I retired in November of 2017 at the age of 56. Health insurance is one of my biggest expenses, and I had to purchase my own personal policy. It costs about $750 a month. You are very lucky that you are able to get coverage through your partner, but I am curious about your comment that you could not have retired if you had been unable to join your partner’s plan. I don’t like what I have to pay, but I am not having a problem affording it. Would the cost of a personal policy have been so cost-prohibitive such that you would have delayed retirement if a personal had been your only option?
KK_55 says
Wow, that is a lot of similarity! Good question though. I looked at the marketplace options briefly and saw that none of my doctors were participating. At the time, I had a health concern and I was not willing to change doctors, so the cost was only a part of things.
To be honest, I felt like I had been working just to have health insurance for the past 5 years or so.
AEL says
Ahh, yes..that makes sense!
Best of luck, and isn’t it great to be retired so young?!
KK_55 says
It certainly is! I am really enjoying this series of interviews because it is reassuring to see that the end of my work experience is very similar to other early retirees! This has really helped me get over some of the guilty feelings I had.
MI-75 says
Congratulations on getting FIREd!
I really enjoy these new series.
Mark says
Love it! Thanks for sharing. About a year ago I was right where you were in your job. Frustrated with lots of it, a bad boss, lots of extra jobs being piled on, refusal by the company to hire more people, etc. Like you, it was affecting my life at home. I know I was irritable and got angry at things that were not that big a deal, and I was turning into a person I didn’t like. I wanted to retire very badly but at age 49 with college bills etc. I knew it wasn’t realistic. It took awhile but I was finally able to find a new job. It’s a lot tougher at that age and salary level than I thought it would be. But I am happier now and don’t dread the the next 5-7 years of work before I can retire for real from a position of choice rather than desperation. So I would heartily endorse your recommendation to get out of those toxic situations as quickly as you can as they really do affect your health and your relationships.
KK_55 says
Isn’t it sad that so many people are stuck in legitimately toxic work situations?
Matt says
Retiree #2- can you provide some information about your investments? What are your brokerage, 401K, IRA’s invested in? Is the $25K in dividends from those 3 accounts?
What is the private bank stock and how did you obtain that?
Thanks! Good interview!
KK_55 says
So the $100K that was invested on my behalf was largely in stocks like GE, GM, ATT, KO, BAX, XOM and IBM.
After I started working and investing on my own, I put the money in funds like Fidelity Contrafund and various Vanguard funds and the Russell 2000. I also culled some of the original positions and their related spinoffs.
The $25K comes from dividends in the brokerage account. It’s would be closer to $50K if I were to stop dividend reinvestment, which I will probably do soon.
The private bank stock is from a regional bank in the southeast. I inherited it from my mom, unfortunately I don’t know how she acquired it originally.
Does that answer your question? If not, I’m happy to provide more info.
Matt says
Yes, thanks!
MI-119 says
I got a little bit of a different takeaway from this interview. $100K invested with an average return of about 7% over 55 years comes out to just over $4M (before taxes).
We are currently at several times our FI number but still plan on working for the indefinite future.
With the kids in their early teen years, we are very much focused on their financial health to give this kind of head start including investment accounts, college/professional school funding, assistance from both sets of grandparents, financial education, hopefully one day a takeover of our business, etc. They just don’t know all this yet so that they work hard now in school.
Just goes to show you, healthy finances mean options. I have a prediction that the youngest retirees will not have kids and/or will have an employed spouse with health benefits, assistance from family, career dissatisfaction, layoff/disability, need to care for a loved one, a new career/income generating side hustle or real estate, in some sort of combination.
These interviews may also show evidence that a true, voluntary early retirement is going to require in the vicinity of $5M in today’s numbers, Suze Orman’s magic number. The summary of the first 100 retiree interviews will be quite revealing.
MMiguel says
I agree on the $5mm Suze Magic Number (as well as your other assumptions) for FIRE (okay maybe $4mm). But, that’s just me and I like to live well and sleep well.
It can quite clearly be attempted on less (as the many testimonials on ESI suggest), I just know that I would be uncomfortable with much less – unless I had a pension, or high confidence in a sizable inheritance, or some other sort of added safety-net.
Only time will tell.
GT says
Well done! Enjoy the retirement.
I love the idea on putting $100k in a brokerage account for my kids. I am well funded with 529s and maybe once those are where I want I’ll do a brokerage account for each.
I think the future will be tough for the younger generations, like my elementary age children.
KK_55 says
I agree. I am seeing it already with the oldest of my nieces and nephews.
Chess says
How do you pay your CFP? Is he paid based on the value of your accounts or is he paid per consultation?
KK_55 says
He was charging $150/hr for consultation.
mattej says
Being around 55 is such an interesting time in life.
I will be 54 in a few months but half your savings and no partner or kids etc.
Love working but need to make some changes.
The stock market seems to have worked very well for you. I found it to be time-consuming and difficult these past few years I have unsuccessfully tried.
Agree with health and happiness. Those together with freedom mean everything as long as you can keep paying for your lifestyle.
Gary says
Love this new series. I’m 51 and like many concerned about healthcare. I guess I don’t understand how you couldn’t retire without health insurance? You certainly have plenty of assets to cover marketplace premiums.
KK_55 says
That would be nice, but I like my doctors and they’re not in the marketplace. I figure the health insurance / healthcare landscape is changing a lot right now, so sticking with my partner’s insurance for the near-term is the best option. We’ll just have to see where things are in 5 or so years and adapt from there.
MMiguel says
A $100K in 1969 would be the equivalent purchasing power of ~$700K in 2019 (based on CPI). Of course there are a number of different ways to look at it, but I guess my point is that your grandparents were kinda on the wealthy-side (not to mention generous) to be able to part with that kind of money. So, I’m curious, where did their wealth come from and did they do same for any other family, and if so how that turned out for the others?
Thanks for sharing your thoughts (and finances).
MMiguel says
Or $800K in 1964 (55 years), if invested at birth.
KK_55 says
Well, my total balance would probably be more now if I hadn’t used it to pay for college, my first two condos and other things along the way.
Yes, my grandparents were weathy-ish, I guess. My grandmother’s father was a businessman and my grandfather was a small-town doctor (sometimes accepting rabbits or other game in lieu of payment. He liked to eat!) . Of course, this was before health insurance. And they did seed stock portfolios for my two siblings.
I’m not exactly sure what the initial amount was, to be honest. When I was in my early 30’s and opened my first brokerage account (I turned in all the paper stock certificates), that is what the account guy estimated the initial amount would have been.
My younger brother is also retired, his job title and salary were always considerably higher than mine, so I am sure he’s fine. My sister is 10 years younger than me and she is still working. Both sibs have kids. Her portfolio was started with slightly different stocks because she’s younger but I’m pretty sure she’s OK too. She is nowhere near retirement though.
So yeah, I did get a nice head-start, but you know the saying, “the first generation makes it, the second generation saves it and the third generation pisses it away”? I am trying very hard not to do that.
MMiguel says
Thanks for the added detail. Sounds like you’ve used your “head start” wisely. And nothing wrong with having a great head start – as detailed by many of the millionaires on ESI, many have had some form of head start, whether they recognize it as such or not. I like to say that if anyone is born healthy, slightly above-average intelligence, and reasonably good looking (by our cultural norms), then they’ve got a big head start right there.
In my case, as best I can tell, my dad was the generation that pissed it away. So, I had to start from scratch, at least financially. But, its not lost on me that my mom and grandparents, and those before them probably passed along some sort of success “DNA” that I may never be able to quite understand.
In fact, a financial head start is not worth much, without the intangible cultural and social capital to go along with it. Anyhow, best of luck on breaking the 3rd generation curse.
KK_55 says
Well said! I agree with that completely!
MMiguel says
By the way, I should add, I’m in your age range. Still working the corporate grind, though have hit my FI “number”, but to each his/her own. I find the idea of working to be much more relaxing when it is a choice vs necessity.
Anyhow, congrats on your retirement. It’s very helpful for me to see how its done.
KK_55 says
Thank you! I definitely agree with you. There is a lot of comfort knowing that you’ve hit your number and go to work because you want to! I honestly wish that had been my situation.
KK_55 says
Hey y’all, this has been fun! Thank your for your comments and questions. We are leaving for our trip to Japan early tomorrow morning, so I will be offline for a day. If any additional questions come in, I’ll answer them once I find Wifi!
KK_55
Dividend Dude says
It is shocking how toxic some work environments can get. I think it’s great that you have figured out a way to save with your partner and retire early. Congrats!
Campfire says
Appreciate your story very much.I ended up changing jobs at a similar decision-point because I couldn’t afford to retire at the time.
I was in a toxic work situation in my mid-50’s, but at a non-profit rather than in the corporate world. Although my partner & I had lived in our house for decades & assumed we’d retire there, our needs were changing and we had been dissatisfied with life in our city for some time. After she involuntarily retired due to a layoff (no pension, very small social security), and my work stress became unbearable, I started applying for jobs elsewhere.
After a few months of intense searching, and coming in second several times, I ended up with my dream job with a small non-profit in a small town about 3 hours away. The transition happened very fast in the middle of winter and we decided to rent out our house rather that put it on the market. My folks, bless them, helped with the down payment on our new place. I figured we could just barely cover our increased expenses with my higher salary plus the rental income.
The move was a huge effort at our age, the new job responsibilities were exhilarating and overwhelming, and the financial risk was intimidating. My anxiety level actually went up and I experienced physical tension and other symptoms like never before. I knew the current stress was for the right reasons, and that a lot of it was driven by the multiple levels of major change we were navigating (which also included menopause, death of one parent, move to a foreign country by other parents, and the inherent funding instability of a small non-profit) I did get to the point where I’ve had to address what became an unconscious exaggerated response to any type of stress.
It was a very heavy load for the first couple of years, but things are settling down with the job and with family, I’m taking care of my physical & mental health, and our finances are improving dramatically. An inheritance is enabling us to pay off our current mortgage within 3 years and I’m starting to plan a ramp-down of my work hours & responsibilities after that. Just seeing light at the end of the tunnel is lowering my stress significantly.
I share this just in case others are considering a late-career job change to get them over the hump to retirement. Don’t under estimate how hard it may be to really pull that off, and it could still be totally worth it for the right situation. We did it just for the job, and we were familiar enough with the town to know we would like it, but it turns out this move has set us up well for retirement in multiple ways. We’re in a walkable neighborhood that’s keeping us healthy, with a cute smaller house we love, and a yard we’re turning into our sanctuary. The town and neighborhood are much safer and there’s lots of other active retirees here.
Really like learning from others experiences on this site.
KK_55 says
By the way, we got back from our trip to Japan yesterday and I have to say, it was spectacular! One of the best trips I’ve ever taken! If you’ve ever thought about going, I would say DO IT (although you might want to wait until after the Olympics).