How Our Plans for Retirement Have Worked Out

We planned for retirement. We started saving for retirement as soon as we had reliable incomes early in our careers. We thought about where we wanted to live in retirement and my move to the Washington, DC, office of the American Bar Association became part of the plan. When we purchased a home here, we thought about what we wanted in a retirement home. We settled on a condo - neither of us enjoyed gardening or lawn work. We started planning for when to retire about ten years before the second of us retired. My husband is now five years, and I am now six months into retirement; it is time to look at how the reality matched the plan. 

Walking away from a regular income is a major concern when planning for retirement. We started by creating a retirement budget, a plan for what it would cost for us to live the way we want to live in retirement. This includes housing, utilities, groceries, transportation, hobbies, travel, clothing, personal care, and out-of-pocket costs for health care. For the first time, we wrote down what we were really spending and what we expected to spend when we retired. There are a few line items that can be eliminated or minimized if needed (for example, we still have a landline phone.)

We then looked at income. Social Security provides a handy planning tool in the annual earnings and benefits statements that project income at various retirement ages. Social Security has a good online planning tool, and if you have not done so, now is the time to set up your “My Social Security Account.” Don’t forget to deduct the Medicare Part B premium from the projected retirement benefit. I have a small pension. The website for the pension trustee has an excellent tool for determining the monthly payout (as a joint and survivor benefit, so whoever lives the longest continues to draw it.) We then looked at the balance in our retirement savings and non-retirement investments and consulted with more than one expert on how much income we could reasonably draw on that over our expected lifetimes. 

There are all kinds of calculators and advice on when to start Social Security, when to draw on tax-deferred retirement savings, and how much income you can draw against savings and have the money last a lifetime. And the right answer for you is based on your circumstances. Do you have enough income to cover your expected expenses? What is your tax situation? Are you concerned about leaving an inheritance? Ultimately, the decision on timing is up to you. A starting point for everyone is a carefully developed budget and a review of income sources.

For us the projected income was higher than the projected budget once Medicare kicked in.

We spent time thinking about staying busy in retirement. Both of us had some writing projects we wanted to work on. I recommitted to walking an hour a day. We wanted to travel more. I wanted to take time to paint and get more involved in the community we live in.

A couple of years before Jay could retire, a senior manager at a department meeting said, “We would like to negotiate early retirement packages for some of our senior staff.” We talked about it, consulted the budget and projected income, and made them an offer on an early retirement buyout that they accepted. We should have asked for more. When he retired, I was still working full time, so he delayed starting Social Security, resulting in a higher benefit, and our savings continued to grow. 

How Is Retirement Working Out?

Six months into both of us being retired and one rather expensive dream trip finished and paid for, we are spending less than we expected, less than budgeted. Grocery expenses are higher than expected, but we are not spending as much on restaurants. This is largely a result of my not going out to lunch two or three days a week from the office. We are spending much less on clothing. We are driving less. My public transit expenses have dropped by 70% (we live a ten-minute walk from a subway station). Don’t forget about the senior discounts, the half-price subway fare card available at 65, and senior admission rates at museums add up. All in all, things are settling into a pattern that is sustainable with a minimal draw on savings and investments. I sometimes think we should start spending more. 

We love where we are living. We are a 10-minute walk from the subway a 30-minute ride from world-class museums, and a 10 to15-minute drive from landmarks of colonial history. The condo community is very well maintained and I have time to enjoy the community amenities. In the three years leading up to my retirement,, we replaced the bathrooms and kitchen - taking into consideration aging in place by doing things like replacing a bathtub with an accessible shower, adding additional lower-level storage in the kitchen, and waist height wall ovens. 

Jay has published a few academic journal articles, and I am writing for Voice of Experience and other ABA publications. I have time to devote to the ABA that I didn’t have when I was working full-time. If you see me at Annual or Mid-Year, please say Hi.

As I recently wrote for VOE, we are turning dream trips into reality. We have a two-week road trip planned for this fall and have booked another trans-Atlantic cruise for next spring. I am enjoying going to the ABA national meetings. 

Finally, something I didn’t really plan on but is filling a few hours each month, I am doing a little consulting work. I am specifically avoiding anything that is even remotely the practice of law (if you have a law license, your state will determine what is included there). I am reviewing grant proposals, doing some conference speaking, and providing feedback on operations and management for a non-profit. I am enjoying keeping my mind engaged and helping to help others provide access to justice. 

Live the Way We Want

I am glad that we planned for retirement. At times, I have to remind myself that I have spent several years running the numbers on income and expenses, and we can afford to live the way we want to live without un-retiring. We feel engaged in life. We are doing things and going places that bring us joy.