I mentioned in a previous post that I have a deadline set for the start of my retirement. And that I have a list of prerequisites to determine whether I’m in a safe-enough-for-me position to retire sooner. Each quarter I evaluate my progress against those prerequisites, and my quarterly check-in for this is aligned with my birthday instead of the standard calendar quarter. That’s because a couple of my prerequisites are based on my 60th birthday so the calculation is simpler.

Result for this check-in: It's not time to retire now, but I’m continuing to make progress!

In order to pull the plug immediately, I’d have to have these things accomplished:
(1) Retirement account on target for 7 figures on 60th birthday
(2) College savings on target for full funding
(3) Mortgage paid off
(4) Savings of basic expenses until 60th birthday set aside
(5) No consumer debt

Currently my progress is:
(1) 100+%
(2) 50%
(3) 39%
(4) 6%
(5) 8%

Assumptions for these calculations: average annual return on investments will be 5%, no further contributions to investments, full funding = 40 semesters (8 x 5 boys), $36,000k annually for basic expenses, starting consumer debt was $10k. (At one time I had negative progress on this! For the record though, it’s at 0% interest.)

The next time I check-in on this progress will be around my birthday.

A few years ago, I read a financial article, book, or blog (I can’t remember unfortunately.) that had an impact on how I prepare for retirement.

Before then I had just focused on a number to achieve for my retirement account – one that would support a ‘retirement phase’ budget with a 4% annual withdrawal. My thought, like many others, was that my retirement date would be the day I achieved that number. I could project that date but not count on it. The article made me rethink the approach and instead think more about my remaining time and its value. So, make the DATE the goal, not the AMOUNT. After reading, I decided to set a deadline for my retirement start date and then work to make that happen. There’s a mental shift, at least for me, in having a “deadline” instead of a “target date”. A target is something that I work toward and hope it works out, but know it might not and that’s okay. A deadline on the other hand is something I work toward with some sense of urgency because if it doesn’t work out, I have to resort to a back-up plan that isn’t as nice. When I have a deadline, I tend to make sacrifices earlier if necessary so I won’t miss it.

June 30, 2025 is my retirement start deadline. I will be retired on that day. It makes me excited just to type that! That makes today a milestone – my retirement is a maximum of 5 years from today. What if I don’t have the magic number in the retirement account? Then I will adjust my retirement lifestyle, but I will not change the date. One thing that has reinforced my view has been this site, where I see several of you in retirement living quite well without a huge nest egg. There are so many accounts too of people who had a sudden disability that resulted in that date being selected for them and they weren’t prepared. And others who achieved their magic number but have the ‘one more year’ syndrome for several years because they worry about the potential flaws in their calculations. I also encountered one of those Monte Carlo simulators that included the probability of being dead along with the probabilities of being broke or wealthy. That drove home the concept to me: I want to control how I spend the rest of my life.

2025 is the year I turn sixty. I can access my retirement account without penalty then. I won’t qualify for Medicare yet. My youngest boys won’t be finished with college. All those factors are included in my planning.

I set a list of prerequisites that must be met if I voluntarily opt to retire before June 30, 2025. In order to allow myself to retire earlier, I have to have these things accomplished:
(1) Retirement account on target for 7 figures on 60th birthday
(2) College savings on target for full funding
(3) Mortgage paid off
(4) Savings of basic expenses until 60th birthday set aside
(5) No consumer debt

I track my progress against those prerequisites each quarter. I have a timeanddate.com countdown set too – today I have 260 more Mondays until my deadline.

Today was the day for my monthly net worth calculation. I time it each month to be just after the automated house payments. I expected ugliness so I actually was almost pleasantly surprised. I’m down $24k since last month. The retirement accounts did take a brutal beating but it was countered by the company stock price increase, house value increase, and debt payoff. The company is private and the stock price is evaluated only twice per year. That happened last month so the impact of the volatile market isn’t reflected in the price yet.

As much as I know that it’s risky to try to time the market, the three days of huge losses was too tempting. I spent a few thousand of funds in the money market to buy more index funds. (all within the retirement account). I must not have been unique in that thinking given the big gains yesterday. I don’t regret doing it since the (much) lower value of the account overall made the cash position a little lopsided.

In other financial news, DS2 just received an unexpected scholarship. It was $1500 so with our split arrangement that’s $750 for me. I had money set aside for his food costs for the remainder of the semester so I’m redirecting that money to the 0% CC to be repaid by May. The balance on that card will now be $4900.

Maybe this is a morbid topic but FIL’s recent death along with our ages too I guess is prompting some discussions about our wishes for a time that we might not be capable of expressing them. I never have created a living will because I want to live! I figured that that is what doctors are supposed to do by default. But I didn’t think of more detailed aspects for a time when I could be bedridden and not able to either think clearly or communicate clearly. I decided that I am going to document how I want to be treated if I am ever bedridden. From getting fresh air, to music, nourishment, being at home, etc. I am going to write it down, tell my family, and show them where the file is kept.

We wrote wills almost 20 years ago. At that time we didn’t have much in the way of assets but we were concerned about our children (only two of them then) being cared for in the event that something happened to us. So we had relatively simple wills drawn up to name a guardian and to provide him with all assets and life insurance proceeds to use for providing for our children in the event that we both died. Otherwise we each left everything to the other.

Not only have we added children, but most of those children are 18+ so considered adults now, and we’ve moved to a different state. Watching both of our dads remarry after our moms died opened our eyes on how assets pass around. For example, if I died it would be fine with me for DH to remarry. But would I want my mom’s jewelry to go to his newer wife when he died later? No! I would not. So I’d like to have some possessions included in my will that would not go to DH in the event of my death if he outlives me. Also we’re seeing how very important it is that you appoint an executor that will carry out your wishes even if he doesn’t agree with them. I want to change mine now.

And on top of those things, we now live in one of the six states that has inheritance taxes for estates, even on assets (IRAs for example) that are not included in the will. The tax doesn’t apply to items inherited by spouses but it does apply to items inherited by children.

So actions for us now: (1) Rethink our second phase of retirement when we plan to downsize to a cottage. Let’s consider neighboring states that have similar climate and terrain but are more tax friendly for our family. And if one of us dies soon, God forbid, the surviving one should move. (2) Rewrite the wills this year. Plan to revisit them every 5 years – could be on all my milestone birthdays.

I’m curious to hear of your experiences with wills – creating your own or unintended consequences of others that you’ve witnessed. Anyone have a story to share?

HR hosted a Medicare webinar this week that all colleagues were invited to attend. Though I’m a decade away from Medicare, I’m not knowledgeable about it and it’s an aspect of retirement planning I should consider. So I attended. I was surprised at how few people attended and I think I was the youngest one. The person presenting the information was not from the company but from an organization that offers Medicare consulting services. The positive aspect of that is that she knew the topic inside & out. The negative aspect is that she was presenting an informational seminar to sell their services, so it was clearly in her best interest to make the topic complex and to be biased toward over-insuring.

The seminar was informative and I did glean some information for my planning purposes.

As to the components and their costs, I took these notes:
Part A – covers inpatient hospital & hospice care. $0 premium. $1408/occurrence deductible + co-pays after 60 days
Part B – covers doctors & medical services. $145 - $492/mo/pp premium depending upon income (rolling 2-year look-back). $198 deductible, then 20% coinsurance. Covers Part A deductible.
Part C – supplemental medical insurance. 2 types & various choices. ~$160/mo/pp premium.
Part D – prescription drugs. ~$33/mo/pp premium. $435 deductible.

Enrollment is not automatic and the initial enrollment period is 7 months long – 3 months before the birthday month, the birthday month, and 3 months afterward. After that there are forever-penalties that are tacked on to the premium if you enroll late in a component that has a premium.

It’s not a high deductible plan so you can’t contribute to an HSA any longer but you can use funds from an existing one to pay expenses including the costs of the premiums for Part B or D and some Part Cs.

Based on my knowledge of Medicare now and my personal values, I plan to take these actions:
(1) Enroll in Medicare just before my 65th birthday
(2) Make sure our income keeps us at the base premium level for Part B, beginning the year DH turns 63.
(3) Skip parts C, D and plan to spend that money on health-promoting activities instead.

Is there anyone using Medicare now that has tips or gotchas for the rest of us to know for planning?