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.
This interview was conducted in September.
This is part 2 of an interview. To read part 1, check out Retirement Interview 43.
My questions are in bold italics and their responses follow in black.
Let’s get started…
THE ACT OF RETIRING
How did you ultimately retire?
We stayed as stealthy as possible leading up to our final month(s). I mentioned my whiteboard countdown above. Only the one close colleague knew my plan. So he and I went out to lunch the day before I submitted my resignation. I think he was just as excited as me to see the company’s reaction the next day. He kept calling me on the morning that I submitted my resignation to see if I’d spoken with anyone yet! I’m pretty sure he called me like five times that morning! 🙂
The actual conversation with my boss and HR was somewhat anticlimactic. It caught them completely by surprise, and I don’t think they had any idea what to really say.
My subsequent final four weeks were like a lame duck presidency. I spent time with my employees handing off critical project information and reassuring them that they could call anytime. My boss essentially ignored me those last few weeks, and isolated herself (even more than usual) in her office. I think she was utterly terrified, that senior management would now realize that she wasn’t actually a contributor. (Side-Note: She was removed from her role less than two months later.)
Free career advice – Never stop being a contributor regardless of your level!
What went well?
The overall plan worked extremely well. Our exits from our workplace(s) were well executed. Financially, we were well positioned and the markets have been gracious, in spite of the current year’s down turn. Again, it’s gone so well that I actually already made a slight shift back (we dynamically allocate) toward more equity in my traditional portfolio after this most recent stock market downturn. I remain optimistic long term, but I do think the next few years could be quite bumpy for the US stock market.
We have also adjusted to our new lifestyle by exercising and traveling more. I am exercising like crazy again. I see it as my new “job” and I initially lost about 30 lbs after retiring. I run and lift weights three days a week and feel better than I did in my 30’s or 40’s.
We also bought an RV this year, and we have spent about a third of our time on the road since that purchase. I’m sure this will settle down at some point, but we are loving it. We really aren’t campers. We utilize it more as a home away from home and a means to get close to our travel destinations. We have four more trips already booked for the next few months. They are mostly shorter stays of a week or so, but we also booked several weeks in the FL Keys this coming winter at a new RV resort with an ocean front spot.
What didn’t go so well?
So three major things in this category, all healthcare related:
- Approximately a year after retiring, my wife got some bad news on her health. I won’t go into detail, but it is significant, and has greatly altered our perspective on life. Please don’t feel the need to comment. As much of a shock, that it was to us, it has also been a positive reminder to enjoy the time we have with family, friends, and experiences. She is doing well, I actually believe early retirement is greatly extending her outlook and health. This is a reminder for all of us to execute as early as possible because nothing is guaranteed.
- COVID…Need I say more? We have avoided the C19 plague to date, and we were very careful given my wife’s health situation. The shutdowns impacted us minimally, as we were already pretty isolated in our home compound! We still traveled, but much more carefully. C19 was especially difficult with my elderly mom living in assisted living facility. We were completely restricted from in-person visitation for many months, and I am convinced her dementia accelerated significantly as a result. She entered hospice and passed away in late 2020 at the age of 90. It was extremely difficult, but I’m thankful we were able to be there in-person for her hospice period. This would’ve been even more difficult, if we had still been working full time. I will always be grateful for the freedom to spend that time with her during her final months. That alone made FIRE worthwhile. She was simply a wonderful mother.
- Our plan to utilize Obamacare also had a slight draw back. While it has been extremely helpful to have subsidies by managing our (MAGI) incomes, it essentially eliminated our ability to do any significant Roth conversions in our 50’s. We have a significant deferred portfolio. I ran the numbers in our massive FIRE spreadsheet, and it would actually be slightly more beneficial to not take the Obamacare subsidies and pay our premiums in full, while Roth converting more tax deferred saving now (avoiding more taxes later during RMDs). However, my wife’s medication is also extremely expensive, so we have essentially decided “a bird in hand is better…”, and a slightly (estimated) longer tax benefit isn’t really worth the gamble. So we have not been able to Roth convert as much at this stage as originally planned, and will need to make up ground in this area, once we are on Medicare and before RMDs start. It’s a first world issue, I know, and completely irrelevant when compared to #1 or #2 above, but I’m answering the question accordingly.
How did you ultimately find the courage to do it?
I obviously succumbed to OMY syndrome! 🙂
Again, our plan was a long term action plan (7 years), so we really should have known it would be a no brainer by the time we executed.
My OMY syndrome did provide a nice 17 month trial run for living on our rental income before needing it. In retrospect, it was actually overkill (especially) given my wife’s health situation. I wish I’d not spent the extra those 17 months working, so we’d have more time. The windfall severance from that period did allow her to retire six months earlier, so that was definitely a plus.
RETIREMENT LIFE
How was the adjustment, especially the first few months after retirement?
Retirement life has been wonderful. Even after taking a relatively easy OMY at the smaller company, it did take me a while to adjust to my new found freedom. The new freedom was super exhilarating, but didn’t seem real for the first few months.
My wife had taken off nine years earlier in her career to raise our daughters, so she adjusted much more quickly. It honestly took me a year (or more) to fully unwind, and realize this was forever and not just a very cool extended vacation.
I’ve heard many people struggle with how to keep busy in retirement, but that has never been the case for us. We have many hobbies, and fill in with a lot of travel… and of course lots of wonderful grand baby time now! It’s truly been an incredible experience for us.
How is retirement life now? What do you like about it and what do you dislike?
As I said above, we love retirement! We enjoy the freedom to keep our new granddaughter as much as we like, or go visit family or friends more often, or just drop everything for weeks on end and travel to new places. There’s very little to not like.
We had a great non-work social network pre-retirement, and that hasn’t changed much. We have met a few more retired friends and many existing friends have been working from home since COVID, so it’s almost like they were retired too!
Life, in general, is awesome. We are managing health issues as best we can, and living every moment. I highly recommend retirement (as early as reasonably possible)!
What do you do with your time? What does an average day look like?
My typical day (when not traveling):
- Wake up when the sun hits me. (Usually 700am-730am)
- Grab a light breakfast, drink a couple of cups of coffee while catching up on current events.
- I typically exercise for an hour and a half (three days per week). On my “off” days, I have several hobbies or I may work on passion projects. My wife prefers walking most mornings. I join her on my non-running days.
- We have lunch in or out depending on our plans for the day. We often drop the top on the car and just take a drive and stop along the way for lunch. We live in a gorgeous area just minutes from the mountains and a couple of hours from beaches, so there’s no shortage of things to do and see.
We love visiting our local wineries and breweries. I even have several “angel” investments in a couple of local businesses, one of which has several brewery locations, that we frequent at least once a week. Helping these small businesses has become a small passion project for me. I enjoy providing free business guidance, and the small investments in their expansion has provided another nice unexpected income stream in retirement. We have made three such small investments since retiring. These three small investments are now producing approximately $1900 per month in additional cashflow.
My afternoons vary. I’m usually working on a fun project or catching up on yard work or gardening. My wife loves painting with water colors.
Typical days are really not planned when we aren’t traveling. After a 20+ year career of never ending appointments, I now hate days with any appointments! It’s like the dentist is stealing my freedom and time!…Evil dentist! (Hahaha. He’s actually a really nice guy!)
Most weeks are unplanned. Last week for example, we found a fantastic waterfront site on a nice lake about 2.5 hours from home. We reserved the site on a whim because someone had just cancelled their reservation, so we jumped in the RV and a couple of hours later were mixing drinks, sitting in our zero gravity recliners on the edge of a beautiful lake, and laughing at how easily we had just picked up and gone. We stayed all week and had a blast! We have already scheduled a return visit in mid-October. Hopefully our girls and spouse (and granddaughter-yay!) will join us for that week.
We have a VRBO house rented in Surfside Beach (SC) for this coming week. It will be a wonderful family getaway for all of us. I told our daughters after we had rented a 5BR house, and we would furnish groceries for the week. They could all just come down and enjoy the week with us at the beach. They are all now coming, so we’re looking forward to some awesome quality time with the whole family. It’s awesome to be in a position to provide this vacation for the whole family. We’ve discussed it, and it will likely become an annual event for us all. This would be difficult, if we were still working full time.
I’ve digressed terribly (…squirrel!!), but our evenings are usually spent having a nice dinner and then reading and/or watching TV.
What are the major activities that fill up your time in retirement? Are there any new ones you’re planning to try?
My personal favorite activities are running, lifting weights, biking, kayaking, and travel.
My wife likes to paint with water colors, walk, kayak, and bike.
We live on a beautiful small lake, so we kayak it often. We also have many great local rivers to kayak with friends and family. We have a half dozen nearby bike trails that we frequent.
But we spend a lot of time traveling now, and plan to increase that aspect even more with our new RV. We did a cross country trip from WA to the East Coast last year with one of our daughters, visiting all the major national parks along the way. We have spent at least a portion of the last seven winters in the FL Keys, and plan to do so again this coming winter.
We did a FL Keys to Nova Scotia road trip in 2019. We did an East Coast to Texas road trip in 2018, and various other week long trips to Savannah, Hilton Head, Tybee Island, Charleston, Beaufort, and Oak Island. We are now planning more long range RV trips to the western side of the country and maybe the Great Lakes region over the next few years. My wife would like to visit a few more European countries. I’d like to visit Australia and New Zealand within the next five years. (So many bucket list places to still check off!)
What is your social life like?
We live in a small rural town, so everyone knows everybody! We have an awesome circle of friends and family that are all close by. Our two daughters currently live within a 45 minute drive, so I’d say that our social life is wonderful.
However, our oldest daughter is career military and will be repositioned to a new location next year, but we have enjoying having her near home for a couple of years. We will likely visit her often, no matter where Uncle Sam moves her during her career. She keeps reminding me she is only 9.5 years from retiring (she is only 32 years old)!
Both of my girls are executing their own investment and FIRE plans!
We typically spend Wednesday afternoons at our local brewery with a close network of friends. It’s essentially a social hour that typically lasts for four hours or more!
Looking back, what would you have done differently?
I definitely would not have worked the extra 17 months (OMY).
We would have also retired at least two years sooner, knowing what we know now. I over killed the plan. It’s a gift (and a curse!)
I now understand that I lost valuable time “making sure” we were prepared. We would’ve easily been fine retiring two (or three!) years earlier in retrospect.
Was there any emotional impact from leaving the workforce?
Only an improved emotional impact…
We both still have lunch with our closest work friends, so those connections are still there.
And neither of us ever really ever identified by our work lives, so that adjustment was easy adapting to being to an “old retired guy”!
People still look shocked when they find out we are retired.
What surprises (financial or non-financial, good or bad) have you had since retiring and how have you handled them?
The biggest thing (again) has been my wife’s health. She is currently doing great, so it’s not yet a significant issue for her, so we are maximizing time and living in the moment every day.
Nothing is a given, so enjoy the journey along the way. I don’t plan to expand in this area, as she prefers this area remain private. (Thank you, in advance, for understanding our privacy in this area.)
Financially, we have had a great initial five year start into retirement. Our assets have grown considerably since retiring thanks to the market and the inflationary impacts on rental assets. They certainly exceeded our initial plan projections.
What are your future plans?
More of the same…enjoy family and friends, travel, stay as healthy as possible, and enjoy the moment.
We may continue to expand our rental property business through a new construction project. We are continually investigating this option, and see this as a likely progression for the business at some point. It may provide me another “fun project” for a period.
I will continue to mentor our daughters (and spouses) with their FIRE plans.
My wife will continue to balance that with making sure they also live for today too! 😉
RETIREMENT FINANCES
How has your financial plan performed compared to what you had estimated before retirement?
This has been the easiest part of retirement.
Initially, I was very conscious of every financial factor. I monitored everything constantly for the first few months. However, I hardly even look at the numbers anymore! We are up in every asset category since retiring five years ago, mostly due to a very good stock market and inflationary impacts on rents.
By the end 2021, we had gained over $1.75M in net worth since retiring! That number has retreated slightly in 2022, but on average we’ve still gained over a quarter of a million dollars in net worth per year since retiring…more than we ever made per year in base salaries while working!
Can you give us some insights into your post-retirement spending and income? How much do you spend annually and on what? And where does the income to pay for your spending come from?
Our post retirement base expenses have remained relatively flat. We are experiencing a small shift in expenses (like everyone) in 2022 due to recent inflationary pressures. However, our basic expenses remain around $4200 per month (up only minimally since retiring). We do spend pretty freely on gifts and travel, and we do have extensive discretionary spending above our basic expense level.
Our initial income budget of $120,000 per year (entirely from rental income) was over kill for our expense needs, but has given us lots of room for those discretionary items. We are still accumulating money as a result. We could spend more, but we really have everything we could possibly want and you can only travel so much.
We are now also giving more to our kids and grand daughter, but mostly through education investments and vacations to date. They are all self sufficient, so we have to find ways to assist without assisting too much! 🙂
We have also increased our giving (outside of family) since retiring. This continues to be a focus for us. There are two local food banks that we donate to, and have goals to increase each year.
We have managed to purchase some major discretionary items during retirement too. We have purchased three vehicles since retiring. All were slightly used vehicles because we don’t typically buy brand new vehicles. For the auto voyeurs out there, we bought an F150 4×4 EcoBoost Super-cab (my wife’s truck!), I bought an F250 4×4 Super-cab for me to drive, and we also purchased an older “garage kept” 2004 BMW Z4 convertible as a “pretty day” car. All have less than 50k miles…and yes, we like driving trucks! (Did I mention we live in a very rural area?!) An interesting note: I’ve heard pickup trucks are the most preferred vehicles among millionaires! I’m not sure if that’s true or not, but it certainly seems to fit for us!
We also paid for my youngest daughter’s wedding in 2017 (approximately $30k). We built an awesome outdoor stone fireplace (2021) and large Pergola (2019) over our lakeside patio of our home (approximately $30k combined). I mentioned it earlier, but we also bought a slightly used RV this year.
Yes, we had planned (accrued) for all of these items in advance, and our zero dollar budgeting has allowed us to spend discretionary money accordingly in retirement. We both find it much more palatable to spend money (if it brings value) when it is already accrued for a particular purpose.
We also have a miscellaneous bucket accrual for unplanned expenditures and donations. I know it’s just mental accounting, but it has certainly helped us learn that it’s ok to spend money in retirement.
How are you handling Social Security, required minimum distributions, tax issues and the like?
We are still evolving our plan on SS given my wife’s new health situation, but we will likely take my wife’s earlier than FRA now. We’ve utilized the tools on the SSA website to determine the optimal strategy, but it really all comes down to her health situation. We will definitely wait on mine until 70 (mine will by far be the larger of the two).
We’ve always taken the approach that SS would be a nice “extra”, and we always planned our income to not need it. So it will likely provide an added inflationary buffer for us. We also recognize there is likely to be a lot of changes from a SS standpoint in the meantime, so I’ll attempt to maximize it, but it’s not a “make or break” thing for us.
Lastly, I mentioned it earlier, but we are filling out tax brackets and doing very small Roth conversions when possible now, and we will be trying to make up ground on Roth conversions between 65 and 72 (once on Medicare and not dealing with the Obamacare subsidy issue) to reduce RMD’s and related taxes. Based on my spreadsheet, we can still mitigate much of our future differed tax problem with this strategy. If anyone has better ideas, I’m all ears! It’s been one of our hardest (first world) issues to solve in retirement. (That’s not a complaint, just an observation btw!)
Did you return to paid work? Why or why not?
Definitely not, I have turned down several jobs, and at least two or three part time opportunities to consult. My wife has also disregarded a part time offer.
I hope to never see another W2 or 1099! But it is still an option, if the world starts to crumble! (I’m pretty unemployable at this point! I can’t see me ever getting up at 5am again!) I’d be more likely to take on some currently third partied tasks within our rental business, if ever necessary, verses trading time for money in Corporate America again.
But let’s hope it never comes to that…We both really prefer not working now! Fortunately, we have built in lots of emergency levers to activate, long before it ever comes to that.
Did you find it hard going from being a saver to a spender?
Yes. It’s just my nature as a planner to build scenarios for every conceivable situation. My wife is also frugal. I have already repeatedly mentioned our process for accruing funds for nearly all expenses including possible CAPEX eventual failures (roofs, HVACs, septics, etc). I have learned with our personalities, that if we accrue everything ahead of actual spending (including discretionary spending), we find it much easier to spend on things that bring value to our lives.
It has gotten easier for us, but our accrual system has certainly mitigated this issue. However, we still have lots of room for additional spending with our untapped traditional investments and eventual SS incomes. We are also still accumulating assets, such as putting the maximums into HSA’s each year. (We have accumulated over $60K in our HSA’s since retiring.) Many accrual items are still growing in-spite of our increased spending, but we have improved at spending more freely after five years of FIRE. (Again, a first world issue!)
Looking back, what do you wish you knew in advance?
I wish I’d known how easy the financial piece would be. Many of us lose sleep at night thinking about FIRE for many years. It wasn’t nearly as hard as I imagined, and we left valuable time on the table to build extra reserves, that we will likely never need.
Build a good plan. Account for one-off situations as best you can, and then go for it. Waiting until it’s an absolute perfect scenario will only costs you valuable retirement time.
If you’re still reading this post, you are likely a flexible, capable, and an intelligent individual that can adjust if necessary, so go for it and don’t sacrifice more valuable time than absolutely necessary.
What advice do you have for those wanting to retire?
Inflation and longevity are likely failure points for many early FIRE plans IMO. Build buffer assets and identify backup contingencies to cover those scenarios and you will likely be fine.
FIRE-type personalities are extremely resourceful, and react well to almost any challenge. Build your best plan, define some backup options, and go for it!
Time is what you’re ultimately trying to accumulate…money is just the means. If you’re here reading this post, you will be intelligent enough to react if something goes south.
We are an extremely resourceful and flexible breed (the FIRE’d) by our nature. Embrace it!
Hospitalist says
If you think RMD will be bad later for you, it will be way worse if there’s only one of you doing it.
ol70 says
Odds are their NW will continue to balloon and outpace spending by a significant margin. Same for me, my plan if I’m fortunate enough to reach RMD age is I’ll donate the full amount each year, then no need to worry about taxes!
RI-43 says
Hospitalist,
There is no question that individual tax brackets are significantly more punishing. It’s a difficult thing to contemplate at this point in life. We will have to navigate those waters as best we can.
SMB116 says
Thanks for sharing your journey with us. Great job planning out your retirement!
RI-43 says
SMB116, Thank you again for reading along and commenting!
JP says
Thank you so much for sharing your journey (story). It comes at the most opportune time for me as I have a few decisions to make. Congratulations and best of luck to you and your family!
Your last bit of advice is exactly what I need!
RI-43 says
JP,
Thank you so much! I wish you all the best!
Jane Elizabeth Hladky says
Sounds like you 2 are keeping busy and enjoying the fruits of your amazing 7 year plan! No looking back that’s for sure.
I struggle with drawdown math. We are in Canada so our LIRA/RRIF is like your Roth. We have to take a minimum amount each year but not until age 71. You get nailed if you have a lot in there when that time comes. With my husbands reduced life expectancy I am trying to figure what amounts to take out while staying in somewhat decent tax brackets. We essentially move it from tax sheltered to non-registered accounts to avoid future taxes. Kind of crazy I must say, I wish more advice and tools existed to assist with drawdown strategies. I am not mathy enough to create spreadsheets to see what the best case is every year.
We have a different health care system and thus no worries re: medication which would bankrupt us (over $300k/year) but travel & cancellation insurance is a big issue. For now he is working about 5 days/month because he’s able to keep his travel medical insurance. Without it, a trip to EU for 10 days would be an additional $2000. I do hear you about ‘time’ and sometimes wonder if he’d be better off to hang it up so we have more freedom but for now he requires monthly treatment and for that we have to be around anyways. We too have a new trailer. We plan to hit Idaho next month and Phoenix via Utah and the Grande Canyon in Sept. If you make it out West let us know
RI-43 says
Jane, I wish I could provide advice on Canadian financials and healthcare, but I have no experience in that area. A one time “fee only” advisor might be helpful to assist with setting up a plan to help with your conversions.
If we make it back out West soon, I may give you a shout! We just got home from the Florida Keys last week, so we are a little “road weary” at the moment. Next up, we are heading to Nashville, TN in a few weeks, so we are resting up for that drive!
Thanks for reading and commenting!
Anthony says
Hi RI-43,
Job well done. It’s great to see all of that planning has paid off and you are enjoying all the fruits of your labor. I read once that investing is “delayed gratification”. While I don’t necessarily agree that you can’t be gratified while saving and investing, the point is that living modestly today will allow more wealth in the future. In your case, wealth = free time. Happy for you and the best to you and your wife.
RI-43 says
Anthony,
Thank you! We certainly could have lived a very different lifestyle and saved a lot less. But I think we did a pretty decent job of finding a happy middle ground. We have had wonderful homes, coached our kids in sports, taken nice family vacations most years, and always driven safe vehicles. The trick is (certainly) to live well while accumulating assets. I’ve never been a fan of missing out on life just to save money. It is a bit like threading a needle, and each person’s view is unique on what that means. I guess it’s why they call it “personal” finance.
Thanks again for the kind comments! Best of luck!
D says
Yes… retirement is awesome!!! I feel so blessed to be more than comfortable in retirement. I retired eight years going and still going strong.
Enjoy!!!
RI-43 says
D, Congratulations on eight years of retirement! Well done!
PEScott says
Great detailed update, and congratulations on your and your wife’s success.
Curious if you’re on the Millionaire Money Mentors site…if not, we’d love to have you over there.
RI-43 says
PEScott,
Thank you. I just never got around to joining the MMM site when it first started. Thank you, I may reconsider it at some point.
Gophers says
Excellent story. I’d love to learn. Ore about your RV.
RI-43 says
Gopher,
Thank you for reading along!
We had very little RV experience until last year. We weren’t sure how we would enjoy RV’ing, so we decided to slow step into it and give it a try. We purchased a slightly used RV directly from the original owners. It’s a nice setup for a retired couple. It’s a 38 foot unit with three slide outs. It has a large rear kitchen with double refrigerators/freezers, theater seating with a large 55” TV, and a lovely outdoor kitchen with a second large flat screen TV. We’ve now been on six trips since purchasing it. We took our longest trip in March to the Florida Keys. We already have four more trips booked for this year. So I would say, “So far so good!”
Arthur C Hamilton says
Outstanding Report!
All the best to you and your wife.
One RMD suggestion, to further confuse the evaluation. The tax cut and jobs act tax brackets are set to revert to the old, increased, brackets at the end of 2025. Making large conversions now may reduce taxes beginning in 2026, and reduce RMDs when you turn 75 (or 73 in my case) And Im constantly evaluating, “What if I get hit by a truck?” My wifes single filing and high RMDs pale in comparison of higher obamacare or medicare due to MAGI. The MAGI will be even higher at age 70, when you both are collecting social security (as long as you dont get hit by that truck)
Say it like they did in Seinfeld, but instead of SERENITY NOW! Say CONVERSION NOW!
Just one mans opinion,
Art
RI-43 says
Arthur,
Thank you for your input. We have done several iterations of long term plans, including foregoing ACA subsidies in order to do larger Roth Conversions now (to avoid some of those larger taxes on the horizon). However, we have other extenuating circumstances regarding healthcare costs that further complicate the picture. Again, I prefer not to go into those details, but we are making the best of our options and weighing the higher tax consequences on a year by year basis.
Thank you again for your helpful advice. You are absolutely correct about the potential tax impact, but there is an additional factor that changes the equation significantly.
Kristy says
Hurrah for planning on annual gatherings with your adult children! There are so many estranged families these days. Since 2014, we’ve taken an annual hiking trip with our kids, mostly in the west. We also, rent a house or condo, provide groceries and most transportation for now. They are all adults, and only one living with us yet. As our group grows, they will need to provide transportation for themselves. This year, the 3 kids each volunteered to each pay for a meal out, when we did visit a restaurant. What a great step for them to take!
Best wishes during your retirement journey, and for your wife’s health. A year ago, I was diagnosed with stage 2 breast cancer, had surgery, chemotherapy & radiation. Am now on 2 chemo drugs for the next 2-5 years. We don’t know how much time we have…that’s why we FIRE.
RI-43 says
Kristy,
Thank you for commenting. Family is so important. It’s what we all are really working to protect and enjoy. Family vacations are just the absolute best! I hope we are able to continue doing them for many years to come. It’s one of the most wonderful gifts we can give to our families (for so many reasons). We are so much closer as a result. I also hope you are able to enjoy many many more to come. The cancer treatments are amazing these days. I worked in Pharma for many years, and the treatments continue to evolve. Outlooks are very different than just 10-20 years ago, thanks to those advances. Best wishes for you health.