57-year-old just set 2015 ER date

[Niuatoputapu]

New member from California here, 57-years-old with 58-year-old DW, both still working. I just provided a six month notice to my boss, and now have a June 5, 2015 target ER date. DW hopes to work another 4.5 years which is great since she carries our health insurance. We saved 40% of our income (her salary) in the past decade and can happily live on 50% of today’s gross, so short of a multi-decade long market meltdown, the numbers work.

AA = 65/10/24/1, Equity/RE/GIC/Cash, excluding primary residence. Currently avoiding bond exposure, so apparently we tactically allocate. Currently have 30 mutual funds, and though that may sound silly, I add that they are spread over ten plans (two 403(b)s, three Rollover IRAs, two Traditional IRAs, two Roth IRAs, and one 457(b) Plan). Average cost about 55 bps. Cost will go lower once we exit the 403(b)s and 457(b) in which we are captive.

Will keep our 2.875% mortgage until sooner of downsizing (after DW retires in 2019) or rate adjustment in 2022.

DW did not “work for money” about 10 of the last 30 years in order to raise our three children and get her master’s degree. So now she is happy that it will be my turn (for 4 years) to be the appendage rather than the principal breadwinner. I’m looking forward to it too. Hope I can add to the site’s discussions.

Any advice for a couple who space their retirements four years apart?

 

[pb4uski]

Welcome and congratulations. I don't have any advice on your situation because DW was a SAHM so she was already "retired" when I retired.

One question though - you own guaranteed investment contracts? I'm quite familiar with them having worked in insurance but haven't heard much about them lately, particularly retail. What sort of interest are they paying these days? What issuers are you using?

 

[Niuatoputapu]

One question though - you own guaranteed investment contracts?


My 403(b) is at TIAA-CREF. They offer varying versions of their "Traditional" product. The one version available to my plan currently pays 3% guaranteed with no withdrawal restrictions. Not officially a GIC, but it quacks like one.

 

[pb4uski]

Ah, I see. The old fixed account option. Today I wish I had access to a 3%, no interest rate risk investment. Consider yourself lucky.

 

[retire2020]

We've similar plan as OP. My wife took a career break to raise kids and they're now 10 years old. She slowly started consulting work which fits in her schedule while kids are in school. She is currently seeking full-time employment with School System and if that works out, I'll accelerate my FIRE date to 2018 and get on her health insurance until she quits when kids go to college in 2022. During the time when only DW is working, I'm planning to convert huge amount of IRA --> Roth IRA(worth 800K now) without worrying about Obamacare subsidy. After she quits, we'll make sure that our MAGI is below 400% FPL to get some subsidy for health insurance.

 

[robertf57]

One question though - you own guaranteed investment contracts?


My 403(b) is at TIAA-CREF. They offer varying versions of their "Traditional" product. The one version available to my plan currently pays 3% guaranteed with no withdrawal restrictions. Not officially a GIC, but it quacks like one.

Look a little closer at TIAA Traditional. Not really a GIC equivalent. The accrual guarantee is a minimum of 3% for most contracts but there is a variable components as well. My vintage is currently paying about 4 and 1/2%. Also need to consider the payout restrictions. Most contracts require 9 year and a day to roll money out if you don't choose to annuitize the account. The annuity payment is also not what you may think. The guaranteed rate in payout is 2 and 1/2% but also includes a variable amount that has been significantly greater than the payout of SPIAs. Kind of a diferent beast and one I really didn't understand when I began participating in TIAA-CREF all those years ago.

 

[Niuatoputapu]

Look a little closer at TIAA Traditional. Not really a GIC equivalent. The accrual guarantee is a minimum of 3% for most contracts but there is a variable components as well. My vintage is currently paying about 4 and 1/2%. Also need to consider the payout restrictions. Most contracts require 9 year and a day to roll money out if you don't choose to annuitize the account. The annuity payment is also not what you may think. The guaranteed rate in payout is 2 and 1/2% but also includes a variable amount that has been significantly greater than the payout of SPIAs. Kind of a diferent beast and one I really didn't understand when I began participating in TIAA-CREF all those years ago.

Robert, thanks for the advice, but you are quoting restrictions from TIAA-CREF's Group Retirement Annuity (GRA) while I have a Group Supplemental Retirement Annuity (GSRA). The former does have some handcuffs. It paid 3.75% over the past 12 months. The GSRA only pays 3.00% but it does not have the same payout restrictions. I'm happy with the lower return and greater freedom. It is strange that TIAA-CREF calls both of these products their "Traditional" when in fact they are so different.

 

[Sue J]

Any advice for a couple who space their retirements four years apart?

DH has been retired since 2010 and I still work at a part time job (school crossing guard - 8-9am and 3-4pm) that I enjoy. I make a little money but there are no benefits.

I had been a stay at home mom until 2006 and DH was always working full time. When he lost his job and retired we had to adjust to him being around the house all the time. We had some "personal space" issues and both learned to adjust to the new reality. He quickly learned to LOVE being home and retired! I always enjoyed being at home so I was glad to see him not working and having the opportunity to do what he wants and putter and play and just enjoy this.

Our main differences now are that he has no time schedule and I still have one. I go to bed on time, wake to an alarm and get going, eat meals at a set time and have a routine on weekdays. He has no schedule and can stay up late, sleep until he's done and eat when he feels like it. Sometimes we are together all day and sometimes not.

I'm very happy that he is retired. His pension pays the bills and my income goes to saving and investing, so we do not have money worries. He worked for many years and deserves to play now.

 

[MBAustin]

Welcome and congratulations for taking the plunge, Niuatoputapu, (Is there a story behind your screen name?)

DH retired about 4 years before me. He picked up some additional chores around the house, especially things that involved being home like scheduling repair people. He did a lot of volunteer work also. When I retired we did start doing more things together during the day. But it wasn't as radical a change as you might think, at least for us. YMMV.

 

[robertf57]

Robert, thanks for the advice, but you are quoting restrictions from TIAA-CREF's Group Retirement Annuity (GRA) while I have a Group Supplemental Retirement Annuity (GSRA). The former does have some handcuffs. It paid 3.75% over the past 12 months. The GSRA only pays 3.00% but it does not have the same payout restrictions. I'm happy with the lower return and greater freedom. It is strange that TIAA-CREF calls both of these products their "Traditional" when in fact they are so different.

Thanks for the clarification of what you have. There are slight differences for various contract types, so I am careful to use words like generally or usually. The GSRA does lift the cash-out restrictions for a slightly lower return and a few of the GRAs had an out clause within the first months after separating from service for a small percentage surrender fee. The variable addition to the guarantee however is similar in both contract types"
" ...Guarantees principal and a minimum rate of interest (generally 3%) plus the opportunity to receive additional amounts, as declared in advance, on a year by year basis. Such additional amounts, when declared, remain in effect for the “declaration year”..." The additional amounts vary by the "vintage" in which the premiums were paid. To the best of my knowledge, TIAA has never NOT paid additional amounts. In fact I think the GSRA guaranteed rate is generally < 3%. (haven't studied it since my contracts are older and not GSRAs

Anyway, the bottom line is that these contracts are really not like other annuities or a GIC in my mind and require a little noodling to understand what role they may play in your portfolio. Pardon my heresy; but, I plan to actually annuitize my traditional contract: The payout looks like it will exceed anything I could get from a SPIA, it has some opportunity to rise as the additional amounts are based on performance and it will play a role in combating my longivity risk......
.

 

[martyp]

I retired 4 yrs ago and DW is still working with a plan to retire in June 2015 (We'll see . . . ).

Advice?

I was already doing the food shopping, cooking, and kitchen cleaning. I took over most of the housework and I take care of the dogs. I don't wake her up after midnight. I still have plenty of time for my own activities.

Work out a plan and do what is right under the circumstances. Every couple is different.

Ohhh . . . listen to her complaints about work and be supportive.

 

[heeyy_joe]

Make dinner. Repeat.

 

[Niuatoputapu]

Welcome and congratulations for taking the plunge, Niuatoputapu, (Is there a story behind your screen name?)

Regarding my screen name - in my longer hair days, I hitched a ride on an ocean freighter and landed in Niuatoputapu. It was almost three weeks before another freighter stopped so I was able to explore the island well. Retirement should allow us to hop freighters at will, yes?

 

[MBAustin]

Freighter-hopping - I don't recall seeing that on the board as a retirement hobby so you might start a new trend!


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[Teacher Terry]

My hubby & I both retired almost 3 years ago. Mine was by choice & his was not. He is also 5 years younger then me. I do p.t. consulting & teach a university class. He has been working f.t. on a project for the last 6 months that will end in 2 months. This made him realize he will seek another f.t. job. We did fine when we both were home together at the same time. Some things we did together & some we did not.

 

[SumDay]

Make dinner. Repeat.

^^This.

My spouse retired 7 years ago, and I have, as of today, 1,269 days, 8 hours & 50 minutes to work (but who's counting?)

He still works a few hours a day doing consulting, so I feel like he's earning his keep. It has taken a lot of adjustment, but we're getting there. Do what you can to help her - believe me, she'll appreciate it. Don't ask, just do. Or tell her to leave you a list for the week if there are special things.