Category: Retirement Planning

We had a money scare this week. It all worked out, but I wanted to share the story because knowledge is power – especially when it comes to retirement finances.

For about 10 years, I had an IRA with Morgan Stanley that was a rollover from a previous job’s 401K. I liked and trusted my adviser there, but I wanted my pre-tax money all in one place, so I rolled over my Morgan Stanley IRA to my employer’s 401K, where it did just fine. I left it there after I retired.

We still had a regular investment account with Morgan Stanley and maintained a great relationship with Bob, our Morgan Stanley adviser. With Voya, I was one of thousands. I always valued the level of service Bob provides and talked with him about coming back, but I wanted to be sure I understood the fees.

Bob presented a low-cost plan, and I decided to roll my savings back to an IRA with Morgan Stanley. My employer’s plan was administered through Voya. I called Voya and asked how to get started. First, they tried to talk me into staying. That decision was complicated by the fact my employer is switching from Voya to another company in January. A good time to jump ship.

The next thing I had to do was get Dale to sign a waiver to the annuity that comes with the 401K if I should die. That has to be notarized and then returned via snail mail. Wait a week and then call again. The next complication is about buckets – not all my savings was in one account. I had my regular 401K, which was called the Salaried Savings Plan. I contributed to that, and there was a company match.

The other account is called the Capital Accumulation Plan. That plan was 100 percent funded by the company, but it is also a qualified plan, meaning it is pre-tax and approved for rollover.

I walked through it all with the Voya rep. Seemed pretty straightforward to me. They would mail the checks to me, and I had to pay to expedite them, and then mail them to Bob at Morgan Stanley. That part annoyed me.

A few hours later there was a message on my cell phone about a mistake at Voya, would I please call back? The rep said they canceled the transaction for my Salaried Savings Plan because the balance included post-tax dollars. I couldn’t imagine how that would even be possible. I had a lot of questions the rep couldn’t answer. I said this is my life’s savings, and I do not have a lot of confidence right now. Maybe I please speak with a supervisor?

The supervisor was great. I explained my concerns and confessed I was beyond the extent of my financial acumen. She said some of my 401K contributions were post-tax. It’s all there, but rules for distribution are different. The good news is I’ve already paid taxes on it. My choices were to take that money as a cash payout or roll it over to a Roth IRA. I don’t need the cash now, so Bob set me up with a Roth. Now I would be getting three checks from Voya.

Good news – because of the screw up and subsequent delay, the market went up a bit and my balance increased by a few thousand dollars. I’ll take it, thank you.

Now I have all three checks, which I will mail to Morgan Stanley. It seems like a cumbersome process, but in hindsight, it wasn’t so bad. I just kind of panicked when they said something was wrong with the money. Yikes! I’m a journalism major.

Lessons Learned

• When investing your 401K, be direct in asking about fees. You want to understand how they make their money. Read about fees to help you with some of the lingo.
• Most of the time you can leave your plan invested with your former employer, and it can be a good deal, but they can switch administrators and make other changes that impact you, so pay attention.
• Understand the buckets of money in your plan. I had no idea mine included post-tax dollars. I didn’t even know that was legal.
• Be honest about what you understand and don’t understand. Ask questions until you feel comfortable.
• If necessary, ask to speak with a supervisor.
• Plan ahead. None of this is fast.

I know there are some excellent retirement bloggers out there who have financial expertise. I hope you will come forward and add your insights, correcting me if I got anything wrong.

Nearly every day I tell myself how happy I am to be retired. I don’t miss my job. The nest egg is in good shape, I have lots of hobbies and am having fun. However, at times I miss feeling successful.

The thing is, I never achieved the level of success I aspired to, so I’m not sure what I am missing. I did very well in my career over the long haul and found satisfaction in knowing I used my skills well and accomplished more than anyone else expected of me. Still, I left some opportunity on the table.

Should I go back to work? I looked at jobs online today to see if anything sounded interesting. I saw one job requiring “grit” and “a nearly insane level of attention to detail.” Sure, that could be me on a good day. More than likely it’s not.

Reading through job descriptions, there’s strong demand for passionate self-starters who can roll up their sleeves and collaborate with a fast-paced global team. I used to write this crap – and reading it now cured me of the itch to find a job.

Perhaps it’s not the feeling of success I miss but the feeling of knowing what success looked like. In the workplace, the path to success is mostly linear, and it points up.

That seemed doable to me, so I set my eyes on the prize and worked hard. Sometimes I fell short of my hopes and dreams, and other times I wildly exceeded even my own expectations. But I had the map, I had a compass and I stayed on the trail. There were prizes along the way and incentives to keep going.

By the time I retired, I had lots of prizes, but my bullshit meter was pegged.

In a career limiting development, these days there’s not much of a gap between my inside voice and my outside voice. I wanted to do something different with the last third of my life anyway, so I retired as soon as the math worked out.

I’m coming up on the one-year mark, and I’ve learned retirement doesn’t come with a map or compass. Many of us traded our talents for money and security. I certainly did, and I have no regrets. But I am still driven to reach my full potential, whatever that is, and now I have to figure it out all by my own self. I have a feeling I’m not alone.

After a long career of orderly achievements, some of us will have to work at understanding what it means to be successful in this chapter of our lives. We’re used to managing big projects, and now the project is us.

So, yes, I would get a job if I had to or an unbelievable opportunity came knocking, but I don’t want to work because it’s a safe retreat into familiar territory. I’d rather deconstruct retirement and figure out what’s next. As Gandalf said, all we have to decide is what to do with the time that is given us.

And if there is no next big thing, that might be OK, too. Whatever passions drive you, maybe the answer is to keep driving. Maybe that’s enough. I have a note to myself on my desk that says, “When all else fails, just write. Just write.”

Thank you for reading my stuff! It’s a pleasure to connect with the wonderful community of people who find their way to these pages.

October 19, 1987. I was 32, and Dale was 38. It was a Monday, Black Monday to be specific. We were on a scuba diving vacation in Mexico, hanging out in a bar sucking down cold long-necks, when we saw the stock market crashed. We had next to nothing in assets at the time, we didn’t even own a home, certainly nothing invested in the stock market. We ordered another round and toasted our good fortune.

That time is gone. We worked hard and made enough money to invest for retirement. These days a good deal of our assets are hard-wired into what happens on Wall Street. I don’t have a pension, but Dale does, so I like to think we balance each other out. All he has to do is keep breathing, and all I have to do is stay calm.

It’s all manageable, and I understand you can’t make short-term decisions in a game that depends on long-term results. That doesn’t mean I have to like it. In fact, I hate the stock market. I’m lucky I had a 401K and incredibly grateful to have cobbled together a decent retirement, but I’m a worst-case scenario kind of gal. Why sleep when I can brood over the possibilities of financial disaster?

I know not to check it every day, but I do log in about once a week … that’s probably too much. But I read about the trade wars and the possibility of a recession, so I like to go online and see if there are any signs our nest egg is headed down the shame spiral. It’s all allocated in low-risk investments, but still. I was a journalism major, and money spazzes me out.

There has been a bit of a downturn, but my 401K is fine. Small losses but nothing unexpected. Our financial planner says we’re in good shape. Our living expenses are covered by Dale’s retirement and other savings right now, and I don’t plan to start withdrawing from my 401K for several more years. Knowing there’s time to recover helps me in my quest to stay relaxed. If you’re squeamish about money like me, I hope you will take comfort in knowing you can learn to live with the stock market.

Retirement is such a privilege. I grew up in a lower middle-class family with low expectations. No one thought I’d make it through high school, let alone college. But I had deep internal drive, and I did the best I could with what I had. I joined the Army right after high school, went to college on the G.I. Bill and moved 23 times in my career.

Although I didn’t do anything particularly brilliant to get here, I was consistently not stupid. I just read that line attributed to Warren Buffet’s partner, Charlie Munger, in this blog post from Joe Hearn at Intentional Retirement. Consistently not stupid seems like such a low bar, but considering the alternatives, I’ll take it. I also liked what Joe said about getting the big things right – a roof over your head, a good relationship with your spouse, good health.

I’m not sure I can ever again be that worry-free diver girl plopped out in the sand on the beach or carelessly sucking down beers in a Mexican bar, but I’d like to channel some of her back to the future. A little less anxiety, a little more live for the moment, trust that I got the big things right and the rest of the cards will fall into place.

As far as channeling goes, I’m thinking I could start small. Naps? Margaritas?

It appears I need a little work in my life. I was good at my job, and being good at something and getting paid for it gave me satisfaction. Now I’m doing what I love, mostly writing and playing golf, and neither one is fun if you have high expectations.

On a bright note, I also love to walk and have the whole one foot in front of the other thing mastered.

Many retirees still work. Sometimes you need the money, and sometimes you need validation beyond what you do for pleasure. Perhaps it’s up to each individual to define what retirement means to them. My definition is evolving.

I don’t want to work full-time if I can help it. I’ve saved a solid nest egg, but in addition to validation, it turns out I also like money coming in. I confess – even though I’ve written about changing my relationship with money – it is unsettling to see my checking account with no regular deposits.

As a communications professional, public relations work and writing are a good fit. After all, this was my career for 38 years, and I wasn’t quite ready to chuck it all. I just wanted a different lifestyle – not to be a slave to the job. More balance, more leisure. A chance to try different things and see what sticks.

So far, I’ve done a bit of consulting for a PR firm, and I like it. Writing this blog keeps me in the game, and what I’ve learned about social media platforms such as Instagram makes my brain hurt. As a wannabe cannabis advocate, I find this new world so interesting and am eager to learn more.

Engaging with the world on different terms is fun and exciting. But no lie, it’s hard to put yourself out there and risk personal failure or public indifference. It’s safer to retreat. But if we don’t try new things, the results are obvious. Nada. Trying at least opens the window of opportunity.

A bit of challenging work coupled with a relaxed lifestyle feels sort of perfect. I’ve thought about playing golf four or five times a week and calling it a day. But there are few psychological rewards for those of us who are addicted to the game but pretty much suck at it. Also, what if I became disabled? As we age, I think it’s important to mix the intellectual with the physical so no matter what happens, we can still have meaningful and relevant interests.

I’m planning to expand my consulting business, perhaps adding a client or two. Not enough work to ruin the bliss of retirement, but I just can’t stand the thought of going away quietly. I’ve always lived my life thinking about infinite possibilities for both work and pleasure, and I love thinking the best thing yet might be just around the corner.

Today I share a warning from the ghost of retirement future. I built a solid portfolio of skills and talents in my 38-year career, and when I retired from full-time work, the things I was good at were the first to go. Everyone talks about outliving your money, but maybe the real risk of retirement is having our hard-won strengths put to the test.

1. Time Management – The morning flies by fast when you sleep late. Breakfast, news, email … and the next thing you know, it’s time for lunch! Last week I had a 10 a.m. appointment just a few minutes from my house, and I wasn’t sure I had enough bandwidth to execute in a timely fashion. And yet another worry bead – at this pace, I may not have enough jammies to get me through the next few years.
2. Leadership – I have no authority and a team of one who does not believe he reports to me. I have a clear vision, which I’ve shared with him during happy hour (think of it as an all-hands). But I get the sense he is not engaged. His discretional effort is focused on BattleBots.
3. Project Management – We work on a new project every day, and it is called dinner. The results are spectacular, world-class, but there is occasionally a problem with cost, schedule or expectations … mostly expectations. Somehow during the kickoff meeting, he forgets to tell me he’s putting Trinidad Scorpion Peppers in the beans, and I don’t know, he just doesn’t seem to understand the business case for chia seeds.
4. Communication – As a leader, I used to command attention, but now I wonder if I speak and no one hears me, do I still make a sound? I practice my outside voice on the pool guy. “Wow, a lot of leaves today, huh?”
5. Conflict Resolution – When colleagues with different objectives and needs clash in the workplace, a good leader uses respectful dialogue to separate the people from the problem and help the team stay focused on shared business goals. This doesn’t always work at home, where there is no best practice to resolve snits, irks, miffs, fumes, gripes, pouts, stews, nags and peeves.

Of course, the agile retiree with a learning orientation will adapt. I now realize my strengths are also development areas. I’m committed to continuous improvement. In the near-term, I will get dressed and do something about the jammie shortage.

Thinking about retiring some day? I got serious about retirement five years prior to pulling the plug. Started running financial scenarios, maxing out my 401K, changing my hair.

Changing my hair? What does that have to do with retirement? While no single action will get you out the door, it’s about simplifying and saving, and small things add up. No matter where you are in your career, here are 10 things you can do now to accelerate your financial freedom – or at least stretch your paycheck for better living today!

1. Keep your hair simple. For me, it was going gray and choosing a style that only needs a trim every couple of months.
2. Avoid dry clean only. If you must dry clean, extend the life of your clothes by using a steamer to eliminate wrinkles. My portable Shark works great. Women can copy men and wear a cotton shirt under jackets to absorb perspiration – you’ll go longer between dry cleaner visits. I like these t-shirts under jackets – no bulk, and the sleeves don’t bunch.
3. Max out your 401K if you have one. With every raise, take a percentage and apply that to your 401K until it’s maxed out at $18,500 annually. If you are over 50, you’re entitled to catch-up contributions, which max out at $6,000.
4. Quit buying extra handbags, statement jewelry and other accessories. Find a few signature pieces that make you feel great and leave the rest at the stores. Shopping is not a hobby.
5. Bring your lunch. You’ll feel better, too.
6. Back away from Starbucks – it’s easy to spend $10 a day on this habit.
7. Use public transit. I rode the bus to avoid a long commute, but it ended up saving me a ton of money and wear and tear on my car – my company even paid for the bus pass.
8. Skip color on your nails. Enjoy a professional mani-pedi, but get your nails buffed shiny, and you can go longer between visits. Some salons charge an extra $5 for the buff, but you’ll save money in the long run.
9. Stop drinking sodas. Drink water instead, and use a water bottle with a filter so you can refill it just about anywhere. I like this one.
10. Pass on injectables and expensive anti-aging face creams. If you are lucky, you are going to get old anyway.

I’ve always been reasonably frugal, but I’ve also wasted money. I came from a low-income family, joined the Army and went to college on the G.I. Bill. Once I got a good job and started making money, it was all too easy to reward myself for hard work because, “I can afford it, and I deserve it.” You think more stuff will make you happy, but it doesn’t. Reward yourself by saving!

One could argue planning for retirement is a matter of privilege, and I agree, but I also believe people from all walks of life value freedom on whatever terms they can grab it. I am grateful for my career and happy I saved enough money to end it so I can live differently and reinvent myself as I age.

 

After relocating more than 20 times in my career, we moved to the Bay Area for my last job. I’m from California and wanted to come back, but I turned it down twice. I was in my late 50s and most people my age are moving in the other direction. But I needed the job. My husband and I did the math, and we finally said whatever, we’ll buy a house we can never pay off in our lifetime and then move again when I ultimately retire.

I remember making the decision – cracking open a beer and taking that first cold draw. I suddenly heard my late mother’s voice, and she said, “It’s OK. You can come home.” I broke out in tears.

My husband and I bought a ridiculously expensive “starter” home south of San Jose, and I rode the bus to Silicon Valley and back every day. It could have been worse, but I do think the commute hastened my retirement. It was 2.5 hours a day on the bus, and I wanted more mellow in my life.

Oh, but we were hooked on California … as in not leaving again. I created a spreadsheet, and we started to search for a less expensive part of California. It does exist. We chose a community in the foothills of the Sierra mountains. The realtor assumed we would want new construction. Perhaps thinking the house wouldn’t have time to fall apart before we did. However, we didn’t like new construction neighborhoods. We liked big trees and old camellias.

Still, new construction was tempting. They were staged to perfection and super glamorous, but the problem is we aren’t. Like us, our furniture is old and well-traveled with stories to tell. I just couldn’t see our weathered stuff in these shiny digs.

We ended up purchasing an 18-year-old house in an established neighborhood with mostly original owners. Kids walk to the nearby schools, and we can hear the band practice at night. The tile floor has some chips. Wood cabinets are worn, and there are dings on the walls and around the baseboards. Our furniture looks great, and the cat is happy.

Dale and I were tidying up this morning, and I said, “You know what else I love about this place? It looks like we’ve been here 20 years and just stayed after the kids left. As though we’ve been here all along.”

After a lifetime on the move, maybe this is what home feels like.

Although I like the concept of looking stylish in retirement, I simplified my wardrobe in the last few years of working, and I just can’t get too excited about clothes anymore. I buy my jeans in the men’s department at Kohl’s, and I wear a lot of black because it’s easy. I’ve been told I look menacing, and I’m afraid that’s what happened at the bank this week.

Part of my retirement income came in a lump sum. Not ideal in terms of taxes, but I had no idea what I was doing when I made distribution decisions, and I’ve accepted the government gets a big chunk of it. As someone once said to me, if you’re paying more money in taxes, it means you have more money to begin with. Be grateful.

The check came Tuesday, and I wanted to deposit it right away. I’m an avid walker and hope to keep walking as long as my body parts hold up. I especially love to walk with a destination in mind and knew there was a trail from my house that would ultimately get me to the bank, so I put on my standard winter walk wear: black Sugoi track pants, black Champion polyester half-zip top from Target, black Tilley hat, a layer for warmth and a black backpack. Because what other color would it be?

It was a beautiful walk that took about 30 minutes. When I arrived at the bank in my hiking clothes with this hunk of nest egg in my backpack, there was a greeter who gave me the evil eye. She said, and I quote, “Did you have a transaction here?”

No, I’m just looking for a place to take a dump.

I didn’t say that because I am such a Girl Scout. I said, “Yes, I need to deposit a check.”

She points me to a counter, I fill out the slip and make my way to the teller, who also gives me the up and down. I said, “I get the sense ya’ll think I’m homeless, but I assure you I’m not.”

The teller said, “Oh, no, my mother always taught me. Never judge a book by its cover.”

That hurt. I mean, really, I thought I looked kind of cute.

Then she looked at the check and asked if we sold a house. I said, no, that’s my retirement. I did not add, “And it won’t be in your bank for very long.”

Later this week my husband got a $30 refund from overpaying his dental bill. He drove to the bank in his khaki cargo shorts and bright green North Face pullover, and apparently, he did NOT look menacing. Later I wanted to know if they asked him if he was there for a transaction. No, they just said, hi, welcome to Bank of America.

For many years, I was focused on working hard at my job and building my career. No regrets. Even after I had ovarian cancer at age 43, I was still full-speed ahead, and I was annoyed with anyone who even suggested I might want to retire someday. I wanted to be last man standing, the one who turns out the lights. One bad job later, and I was rethinking everything.

What made the job bad? I was treated with arrogant indifference by my boss and his cohorts, and I was bullied by one of his closest aides. Yes, it was just one job out of many great jobs I’ve had in my career, but the experience changed me. I think because of the way I grew up with a certain degree of indifference by my parents, I was expecting validation from work. I always got it because I was good at what I did. Take that away, and I felt empty. My problem, not theirs.

I made it out alive with my soul intact and went onto bigger and better things. I had a really good job and was making enough money to enjoy life’s many offerings, but I had so little time left over. While I was grateful to be earning a solid living, I was treated for breast cancer in 2015, discovering I was positive for the BRCA 1 genetic mutation. It occurred to me if one has some degree of financial stability, perhaps time is more valuable than money.

My time was compromised by a long commute to my job in Silicon Valley – 2.5 hours roundtrip on a bus. A nice bus, for sure, but the ride certainly made for a long day. I was up at 4 a.m., at my desk by 6:30 a.m. and home around 5:30 p.m. if traffic cooperated. Clean up, eat dinner and pretty soon it was time to check emails and go to bed.

The bad job started the ball rolling, but it was a book that sealed the deal. As I was searching for ideas to help me live healthy in spite of the killer commute, I came across The Blue Zones Solution by Dan Buettner. Dan explores the nine countries where people live long and healthy lives, and guess what? They don’t live like us. It’s not like I’m going to move to Costa Rica or Okinawa, but reading about their lifestyles changed my perspective and helped me eat better, too. The recipes alone are worth the price of admission.

Then the voices in my head chimed in with some tough questions. How much money did I really need? When would there be enough? How else might I live my life? What creative pursuits had I abandoned over the years as I put all my efforts into my job? What else could I do? What if I retired with enough money to do whatever I wanted? To explore being a healthy, happy and creative person who works on her own terms? Would I find validation? Would it matter?

We had always been savers, so money, while always a concern, wasn’t the biggest issue. It was my attitude about money that changed. For the first time, I thought maybe there’s such a thing as enough money, and maybe you don’t have to forfeit the rest of your life in exchange for more.

For the next couple of years, my free time was all about planning for the day I could pull the plug, which I did in September 2017 at age 62. If you’re even thinking there’s life after work, you’ll be happy to learn I’ll be sharing some of my planning and money-saving tips on this blog. If you’re still all about the work, that’s OK, too. You just might find a few tips that will help you chart your own path to financial freedom!