Hi, approaching retirement at 63 and my husband is making me nervous!

[Ally]

My husband and I are both 59. I have been in charge of planning finances for most of our marriage (second marriages for both.) We are both frugal and live below our means. We live in a a very affordable part of the country, thankfully. My husband will have a pension that will continue in full to me if he passes away before me. It carries health insurance with a very reasonable premium for us. We will both get social security. I work at a nonprofit and have a 403 B plan, which we contribute to faithfully. We are debt free, our mortgage is paid, too.

So if we don't work, we can easily live on $35,000 to $45,000 annually, depending on if we travel a little. Without getting into our savings, we will have about $64,000 before taxes. When we are about 70, we could start withdrawing from our savings about $17,000 annually according to the FIRE calc. I think we are in a good position, keeping in mind we are not at all big spenders. We mostly like to see friends, play with our pets, read, garden, visit grandchildren, etc. And on top of this, my daughter is married to a family doctor and they have just built a home with a grandparent handicapped accessible suite, in case we ever need to come live with them.

My husband tends to be a pessimist, especially about the government. He watches all the doom and gloom shows and is convinced that the US dollar is going to collapse, inflation will run rampant and we will be living in a tent in our retirement.

So tell me, does the plan I have set up for us sound unreasonable? Should I be much more worried than I am? I think I'm starting to feel a bit of the bag lady syndrome from listening to my dear husband.

 

[donheff]

You should test the optimist's approach and retire while he covers the pessimist's side and continues working

 

[MasterBlaster]

So tell me, does the plan I have set up for us sound unreasonable? Should I be much more worried than I am? I think I'm starting to feel a bit of the bag lady syndrome from listening to my dear husband.

Your plan is reasonable.

Should you be worried ? - It sure looks like inflation, higher taxes, and lower entitlements are coming - but who knows. What's in question is the severity. Could you live with less than you stated if it comes to that ?

bag lady Syndrome ? - You say it like it's a bad thing !

 

[BigNick]

My husband tends to be a pessimist, especially about the government. He watches all the doom and gloom shows and is convinced that the US dollar is going to collapse, inflation will run rampant and we will be living in a tent in our retirement.

My answer to most of the doommongers would be along the lines of "well, if it gets that bad, you won't have a job anyway". But it sounds like you could boost your portfolio with the proceeds of the sale of a TV...

 

[Ally]

Lol, if it wasn't the TV, it would be the radio in the truck, etc. He's going to get the information some way. Yes, we could live on probably $24000 a year, if we cut out cable tv, really watched what we spent on going out to eat, etc. But we like to go on a couple of trips each year, eat out once or twice a week, etc.

We have alot of things we could sell, too, that I inherited. I just don't want to right now. We both like to save money and really the only new things we have bought for fun in the last 5 years are our iphones and an HDTV. I really think we will be ok. I hope.

 

[MDJO]

Your plan sounds very reasonable and I wish you the best in your retirement!

 

[Ally]

I hope to learn more while reading here. I already learned about FIRE. That really helped my peace of mind. It said we had zero scenarios where we would run out of money with the withdrawal rate we plan. But having a mom with Alzheimers, I could see how money sure can go alot faster than you imagine when you have to start paying care providers. We are applying for the LTC insurance through my DH's workplace. I hear they are really picky about who they insure though.

 

[Midpack]

Your plan sounds reasonable. We all have anxiety about the future, but you can't eliminate uncertainty. We've all faced it for our entire lives, and it just doesn't go away because we retire. Once you're comfortable that you have enough of a safety factor and you're mentally prepared, you start the next chapter. I am finding you know when you're there, happened to me this year - very little worrying left, and it's a big relief.

You can't plan for Armageddon or even Armageddon light. You will drive yourself crazy and never retire if you try to.

If he's still not convinced, at least make him review the numbers and decide what $ picture he would be comfortable at. If he hasn't put a pencil to paper, he'll never get better IMO.

Good luck, you're in better shape than most people (about 75% of folks from what I've read)...

 

[W2R]

I have an idea. When you retire, encourage him to start a vegetable garden and to ride a bicycle instead of driving his car. He'll think the reason for both is to prepare for inevitable inflation in food and gasoline prices and availability, and general doom & gloom, so he'll be happy.

The real benefit (IMO) will be that the bicycle will be good for his health, and you can enjoy all the great fresh vegetables that he grows. You'll both win.

 

[Ally]

Good idea. He does like to grow tomatoes.

 

[steelyman]

Somewhere recently I was listening to a podcast in which the speaker quoted someone else (Mark Twain, maybe?) who said, "I am an old man and have known a great many troubles, but most of them never happened".

You sound like someone who's put together a good plan and is smart enough to know what to do whatever comes up.

Go ahead and enjoy it!

 

[Arnie]

If you look hard enough there will always be reasons not to go for it. I suggest not looking so hard.

 

[GregLee]

... inflation will run rampant ...

This is not an irrational fear. It could. Maybe others here have something better, but the usual idea about that is to keep some money in common stocks. My wife and I have substantially all our savings in common stock mutual funds.

 

[Walt34]

My husband tends to be a pessimist, especially about the government. He watches all the doom and gloom shows and is convinced that the US dollar is going to collapse, inflation will run rampant and we will be living in a tent in our retirement.

It sounds to me like you're in good shape. Change is sometimes hard, even when it's a positive one.

Don't take this the wrong way, this suggestion is very much tongue-in-cheek, but instead of directing him to the Early Retirement forum, here's one for him:

Survivalist Forum Survival Gear Reviews and Self Sufficiency Articles

So while he's building a sod house and stockpiling MRE's and ammunition, you can take the dogs for a walk or visit the grandkids. That way everybody gets to do what they want to do in retirement.

 

[Grizz]

For his peace of mind, you could encourage him to buy a few ounces of gold since apart from guns & whisky, it is expected to be the next currency if the dollar were to collapse.

 

[obgyn65]

It looks like you are all set, Ally. Well done.

 

[Sue]

Ally, are we married to the same man?

Although we are FI, My husband is also concerned about the same possible future ecomonic problems as well as the fact our megacorp discontinued early retirement health benefits right before we would have retired (we work at the same company). As a result he has been relucent to pull the retirement trigger, while I push for RE due to a bad work situtation.

After numerous discussions and doing some reading, I had to admit that people who are concerned about the destruction of the dollar and high inflation, have some valid points. So we compromised. He agreed to a deadline for retirement, longer vacations and some minor upgrades to our lifestyle as long as we were working. We still live LBYM, but not as rigidly. I agreed to work an additional two and a half years longer. This would pad our nest egg (protecting against inflation and higher healthcare costs in retirement) and maximize our access to megacorp health insurance after we retire. I also adopted a "its just a paycheck and then we leave" attitude without any guilt. This has helped a lot although I am jealous of people who are already retired.

I think deciding to retire is a process. For some people it takes longer to become comfortable with this decision than for others. Maybe it would be helpful to try and see your husband's point of view regarding the ecomony and figure out if there are any rational arguments which might help set his mind at ease.

 

[ziggy29]

My husband and I are both 59. I have been in charge of planning finances for most of our marriage (second marriages for both.) We are both frugal and live below our means. We live in a a very affordable part of the country, thankfully. My husband will have a pension that will continue in full to me if he passes away before me. It carries health insurance with a very reasonable premium for us. We will both get social security. I work at a nonprofit and have a 403 B plan, which we contribute to faithfully. We are debt free, our mortgage is paid, too.

...

So tell me, does the plan I have set up for us sound unreasonable? Should I be much more worried than I am? I think I'm starting to feel a bit of the bag lady syndrome from listening to my dear husband.

Let's see:

• LBYM lifestyle
• low cost of living
• pension with 100% survivorship
• affordable health insurance
• supplemental defined contribution assets
• debt free
• no mortgage.

I'd say you've already waged 95% of the battle; the rest is just details. Congratulations.

As for your husband's pessimism, I happen to share it but I also recognize these are things I can't control. All I can control is how I prepare for the possibility of things really hitting the fan. And if it *really* hits the fan, no amount of financial preparation may save us anyway.

 

[MichaelB]

Ally, how much of the expected pension income is indexed, and what index is used?

 

[Retire2013]

You will be fine. Stop worrying. Your spouse does enough of it for both of you.

 

[Bestwifeever]

Your husband should be proud of the planning you've done (I'm sure he is). He sounds like he would find something to worry about no matter what so I would say take his concerns out of the equation as you've probably addressed them in your planning already (e.g., debtfree, no mortgage, having $64K available without even touching savings, but living very comfortably on $35K --that should accommodate inflation for a while). It sounds like you have a wonderful life that you enjoy together--congrats!

 

[Rustic23]

Ziggy +1

It's time to step back and enjoy life.

 

[Ally]

Thanks for all the input. I think in some ways my husband has some valid reasons for concern, and I hear that. He is actually eligible for full retirement already, but has decided to work until 63 for a higher pension. I was going to probably work that long anyway, too. Both our jobs are very high stress, so if it hadn't been for losing some steam during the recent stock market problems, we might have retired even earlier.

How much of the pension is indexed? I'm not totally sure what you mean, but if it's something like COLA, this is a state of TX pension and occasionally the Legislature raises it, but not often. For the past few years, they have issued an additional payment once a year. However, this year, I don't see that happening. Luckily, our area's economy has been very stable in general. Houses still sell at the same prices or more, maybe a bit slower. Unemployment is under 5%. Since they don't often raise the pension payments, that is why my husband is choosing to work longer to get the higher payment. And that is why I was planning to keep contributing to savings. When we start withdrawing some at age 70, then it should help with increased costs at that time. For dire situations, we could sell our house and live at our daughter's in the suite they built for us.

I think y'all are right - I have to take the pessimism with a grain of salt. But then he's great in so many ways. He loves my children (his stepchildren) and raised them like his own. He is wonderful with the grandchildren and they love to go in his pickup with him to the recycling center, the dog shelter where he volunteers, walking our dogs, etc. We have good friends together, he's hilariously funny and witty, and we like to do alot together, except he doesn't like traveling much, so I go with friends/family. Seeing him with my (our) children and grandchildren makes me love him even more, if you know what I mean. So the doom and gloom, I can live with occasionally.

 

[MichaelB]

Ally, sorry for the confusion. Yes, I meant COLA.

I think a spouse's objections or fears need to be addressed in a positive manner, and this is especially important when retiring early. Translating broad fears about the future into specific financial risks helps. By focusing away from the fear and toward the consequence you think about outcomes, which enable one to plan for those eventualities and take measures to offset the risks.

There could be an exposure in Ally's situation because the pension income is not indexed to inflation, and one decade of high inflation followed by another of average would jeopardize the standard of living.

A way to deal with the objections and the risk (which is not unreasonable IMHO) would be to invest part of the savings in instruments that are effective dealing with inflation. For example, TIPS, commodity based equities, or both. Even some broad based equities. Given that most of the income is pension, this is not risky at all - in fact, quite the opposite. It protects the portfolio and also addresses the key fear.

 

[Westernskies]

Buy him a pallet of beans and a case of bullets for his retirement present, and let 'er rip. You're already there; unfortunately, it sounds like he may never be...
Good luck, and keep us posted.