My Retirement: The First Six Months

A post back on June 11th discussed certain sacrifices individuals make in retirement.  We thought it would be important to continue to share real life experiences of individuals during their pre and post-retirement years.  A client of mine who took a very cerebral approach to her retirement was kind enough to share her own experiences now that it has been six months since her official retirement date:

* Planned ahead, both financially and psychologically. Continue to say NO to both paid and unpaid requests to do what I was doing during my long career.

* Limited my volunteer activities to no more than 2 to 3. Continue to say NO to many other requests that have come in. (Note: The point of this is so I don’t replace work, work, work all the time with volunteer, volunteer, volunteer all the time and don’t have any time left for myself to enjoy other things.)

* Dramatically stepped up exercise, other “healthy living” activities (what I eat, etc.). I retired at age 60 and intend to be around a long time to enjoy it… but to do that, I have to focus on “healthy living.”

* Have detailed plans (that are fluid — can be changed at any time) for specific uses of certain “pots” of money (CDs coming due, etc.). For example, specific amounts are being saved in money markets and CDs for upcoming house projects, planned trips, even this year’s property taxes.

* I know the order in which I will/am withdraw(ing) from my funds in retirement. CDs and money markets first; non-retirement mutual funds next; traditional IRA after that (when I’m required to at age 70 and a half); Roth IRA LAST.

* Have a schedule in place to convert more of my traditional IRA funds into my Roth IRA — so I’m not taxed all at once (in the same year) but will have more money in my Roth to withdraw from tax-free when I am older.

* Continue to pay off credit cards in full each month and only put on them what is necessary (rental cars on trips, etc.). Retirement won’t mean much if I get deep into debt.

* Am staying educated — is important to keep up with not just the stock market but also other potential changes that will affect me as well. For example, I have an HSA account (at State Bank) and by reading articles I learned I will not be able to use it for over-the-counter prescriptions beginning in 2011. Some good sources to stay educated: Money magazine, Smart Money magazine, Kiplinger’s Retirement Report, Eric Tyson’s books (such as “Investing for Dummies” and “Mutual Funds for Dummies”), articles on business pages of newspapers, other short Internet articles (CNN Money, etc.).

* I regularly E-mail my financial advisor and/or accountant when I read something I think applies to me but am not totally clear on it.

* Am watching my dollars (using grocery coupons, keeping an eye open for sales, etc.) but am not “skimping” to the point where I’m not enjoying life.   

* I continue to “ladder” my CDs over a three to four year period so I know I will have “safe” sources of money available at all times.

* I keep a certain amount of money in my money market accounts for unanticipated emergencies.

* Am staying FOCUSED that retirement is not about worrying about future finances, but rather about doing what I want to do while I remain healthy and able — because after years and years of hard work I know I deserve it!   

We would love to hear from more of you on this subject.

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