Regrets, Nana Has a Few

In my last post I wrote about ten things that I had done right to prepare for retirement.  Today I address the things that I would do differently.

Plan:  I made the decision to retire quite suddenly.  Although I was eligible for full retirement, I didn’t have an exit plan in place.  I made the decision to retire when I lost total respect for the people I worked for and it became too difficult to continue to pretend that everything was okay.  Granted there was talk of changes to the actuarial tables that would have impacted the amount of my monthly benefits, but for me it was an emotional, not reasoned,  thought process that led to my decision.  Other bloggers have related accounts of their retirement plans; all in all I think that it is probably wiser to devise an exit strategy at least six months before a retirement date.

Take full advantage of employment related benefits:  There were benefits that I received as an employee that are not available to me in retirement.  Before retirement I should have had all my dental work done since my post-retirement plan does not include dental.  Six months before your final retirement date, get in to see your dentist and doctor and get EVERYTHING checked and fixed.  Because I retired with only 30 days notice, I didn’t have time to get an appointment with my dentist and get a few things fixed before my insurance expired.  My employer also offered an Employee Assistance Program that offered, among other things, free access to counseling.  Heck, it was free.  I should have taken the three free counseling sessions and had some assistance coming up with a post-retirement plan.

Start saving for retirement sooner:  I had retirement savings, but they took a big, well really gigantic, loss in the stock market crash a few years ago.  They are starting to recover but I wish I had more in savings to supplement my income from my pension and future social security income.  When I was younger I didn’t think about retirement.  Had I listened to advice and acted on it, I would have a lot more money in the bank.

Decide where and how you want to live in retirement and act on it before you retire:  If I were buying a house to live in for retirement, I wouldn’t buy the house I now live in.  If, for example, the spouse or I had to use a wheelchair, my current house is not fully accessible.  Although it is all on one level, there are stairs at both the front door and rear that would make getting in the house a challenge.  There is nothing that stops us from downsizing now, but  my sense is that it would have been easier to secure funding (and pay it off) while we were both still working.

Get a hobby or a plan for staying active:  The first few months of my retirement were a challenge for me.  After the retirement trip to Hawaii and cleaning out my long neglected garage, I had no plan for what to do with my days.  I am still envious of the people with well thought out retirement plans that include a bucket list of activities.  I’m still fumbling around doing whatever pleases me at the moment.  There’s nothing that stops me from creating a plan now, other than I’m quite happy doing nothing.  Unfortunately, there’s a little voice inside me that isn’t happy about my slothful behavior.

Build relationships with other retired people:  When I retired my friends were all still working.  It is only now, two and a half years later, that I am starting to build relationships with other retirees…and that is a challenge for a recluse!  I’m comfortable going to a matinee or shopping by myself and it is a pleasure to do these things during the week when they aren’t crowded, but it is also fun to have a friend along.   

Make a commitment to exercise:  Remember these are things that I wish I had done, not things that I did!  I have the time now so there are no excuses (except it’s really hot today.)  Commit to exercise several times a week.  There are days that I realize I didn’t leave the house…I should at least be walking or riding my bike a half an hour a day.

I wish I were one of those people who lives life without regret.  I’m packing around a boatload of regrets.  Sometimes it’s easy to fix…I can return that sweater that made my daughter comment, “Mom, what were you thinking!”  Sometimes it’s a missed opportunity that might never come my way again.  I may be piddling away my retirement years, but I don’t regret the decision to retire. 

10 Things Nana Did Right to Prepare for Retirement

The list of things that I should have done to prepare for a comfortable retirement is long, but today I'm writing about the few things that I did do right, not because of good planning but mostly by luck.

1. Pay off your mortgage:  When I retired we had no mortgage.  I had read once somewhere about the cost of mortgages and how much you can save if they are paid off early.  The last time we moved we got a 15 year mortgage rather than a 30.  Occasionally, when we could afford it, we paid an additional sum on the principal.  Once our children graduated from college we had more disposable income and we accelerated our payments. Once our mortgage was gone, we didn’t increase our spending, but rather increased the amount we saved each month.  (Well, we did spend a little more on upgraded vacations!)  Owning our home allows us to maintain our lifestyle at a lower total monthly cost.

2. Pay off outstanding debts:  We are debt free.  If we use a credit card, we pay off the balance every month.  Our cars, our boat, our toys are all paid for.  When we bought our RV a few months ago, we paid cash.  Even with low interest rates, there is a cost to using credit.  I prefer to use that money to enhance my lifestyle rather than provide profits for a credit card company.  Because we are debt free, it is easy for us to manage our monthly bills.  Our monthly living costs are pretty low.

3. Live below your income:  We have always lived within our income.  When we were first married and had entry level jobs, we lived paycheck to paycheck…but we did not rack up credit card debt.  Our credit cards were really a safety net, used only in an emergency when we didn’t have money to pay for an unforeseen event.  If we had to use them, we made paying off the balance a priority in our budget.  We have never lived large.  Once we started earning more than subsistence level salaries, we started saving.  We spend less each month than we take in.  We don’t buy anything until we have the money to pay for it or until our monthly income is large enough to absorb payments. 

4. Try living on your retirement income before you take the plunge:  My husband has not yet retired.  He would like to retire in the near future.  He does not have as generous a pension plan as I do, so we know his retirement will reduce our total income.  Since I retired we have lived on his income only and banked my pension checks each month.  This has provided us with some insights into living on a reduced income, and safely allowed us to explore if total retirement at a reduced income is comfortable for us.  It has also been a good transition period for me.  We have not dramatically changed our lifestyle, but I am not as free-wheeling at spending as I used to be when I worked.   I know that it takes much longer to rebuild our checking account balance at our reduced monthly income level.  If my husband were to retire now, we know we would have to change our spending habits to live below our income.  It’s a balancing act and we’re trying to find the perfect tipping point for us.

5. Have a back-up plan for increasing income:  A part-time job is a good financial safety net for retirees.  I am fortunate to have a teaching license that allows me to substitute in our local schools.  Because substitutes are in high demand in our area, I can work as much or as little as I like.  I use the money I earn substituting to pay for vacations and flights to see my grandchildren.  I substitute one or two days a week.  If I don’t feel like working, I don’t have to accept a job.   For me, a recluse by nature, it forces me get out of the house and interact with people…and I’ve taken quite a few vacations on the money I earned without diminishing my account balance.

6. Start saving early: When my children were toddlers I purchased US savings bonds every month by having the cost deducted automatically from our checking account. After a few months, we didn’t miss the money.  Every month those bonds came in the mail, one for each of my two children and one for my husband and me, until the bank ended the program.  The children used their bonds to help pay college costs and we still have our stack of bonds to use in retirement.  Both my husband and I took advantage of retirement saving programs offered by our employers.  It is surprising how that money has grown over the years.  I do regret that we didn’t save more aggressively, but I am thankful that we took the small steps that we did.

7. Have a plan for medical insurance: I could retire early because my employer pays the majority of the cost of my and my spouse’s medical insurance until I am eligible for medicare.  Cost of private insurance with my pre-existing conditions would be prohibitive.  When I started working for my former employer, I didn’t pay a lot of attention to the early retirement options in my contract because retirement seemed a long way off.  I was fortunate to be able to take advantage of this benefit.  As you approach eligibility for retirement it is smart to review your employment contract so you know if keeping your employer's medical plan is an option. 

8. Get familiar with your employer’s retirement qualifications and benefits:   Many retirement benefits are being renegotiated in light of the current financial crisis.  It is important to keep on top of changes.  I retired before changes in actuarial tables would have reduced my benefits.  A good friend of mine retired this year from the Oregon education system because a change in her negotiated contract would end her entitlement to seven years of district paid medical insurance.  She decided to retire before the new provisions took effect and that allowed her to keep a benefit that is worth well over $100,000.00 to her over the next seven years.

9. Walk away: Emotionally it was difficult for me to let go of my work life, perhaps because I made the decision to retire only a month before my final day of work.  I didn’t try to hang on to elements of my former life.  No lunches with former coworkers and/or dropping by to say hello. After Christmas when everyone went back to work, I went to Hawaii.  I wasn’t available for questions because I wasn’t at home.  It helped me to make a clean break.

10.  Enjoy

My next post I’ll tell you about the things that I should have done before retiring.