What am I missing?

[Gumby]

Even though I see and understand the numbers and have verifications from retirement calculators, it still doesn't seem real. It's like my financial anxieties from trauma in my younger years are preventing my mind from accepting it all, and instead are staying on high alert for what-ifs. Or maybe it's mentally popping out after so many years of laser-focused accumulation to get to a safe place.

Is that common?

More common that you might imagine. The young wife and I have sufficient pension and social security income that we don't need to draw on our portfolio to cover our regular living expenses. In fact, the first two years of retirement, we actually saved money. This year, however, we took a lengthy and luxurious vacation to Egypt and Jordan, and we had to draw on the portfolio to pay for it (<1% draw). Notwithstanding my analysis telling me we will never run out of money, it is still a weird and unsettling feeling to decumulate instead of accumulate.

 

[TripleLindy]

I retired 5 years ago and even though we’re in good financial shape, I still have anxiety, especially when the markets tank like they have this year. It’s just the psychological nature of the beast.

We’ve had some lumpy expenses over the past 18 months, most of which were self-inflicted, like expensive family vacations and helping our kids buy houses, but others, like replacing a roof still left a mark. Our vehicles are 21 and 11 years old, both in great shape, but we’ll probably need to drop $30k-$40k on a new car in the not too distant future. Just make a plan that includes worst-case scenarios and look as far into the future as you can.

As far as health insurance goes, your premium will be really low if buying an ACA plan based on the income you estimated above. For example, our investments spin off around $65k of income and our ACA premium is $200/month. There are plans available that wouldn’t cost us anything, but our docs are not on them. Max out of pocket, not including premium, will be limited to around $9k or less per person. If you’re in good health and can avoid injuries, like something requiring surgery, your expenses will be much lower than that. Dental and eye care are not included in most ACA plans, so if you have expenses there, be sure to account for them.

It might be worth finding a good financial planner who can validate your assumptions and formulate the right plan. Our planner assured me that we were fine, but I wouldn’t have pulled the retirement trigger without those assurances. If anything, just talking things through with someone who understands the process helps.

Good luck! Once you make the decision, you’ll find it to be one of best decisions you ever made!

 

[COcheesehead]

This guy has some phenomenal podcasts about the deaccumulation stage.
https://www.rogerwhitney.com/

 

[Aerides]

Are there other lumpy expenses that typically surprise some retirees?

It varies, and yes they happen to all of us. I had a thread on this at the end of last year as it was particularly lumpy, but not really that unusual.

Our big lumpy this year? We found we had a lot of leaks and decay in our air ducts for our central AC, and got them all replaced. Included new intakes and things to bring us up to code...$10k

Our fence started showing some rot in some places, and had gotten pushed out of shape in other due to trees growing in the way (because I planted a bit stupidly 10 years ago).
options were...
Replace just the broken stuff and live with unsightly patchwork? $3k
Replace all with wood and face the same problem in a few years? $8k
Replace with vinyl and have a much longer life? $11k
Oh, but first take out the massive stretch of bamboo...$2k

The good thing about not living on a shoestring, and having flexibility in our budget, means we can do the expensive, better, longer term versions in most cases.

 

[ncbill]

It varies, and yes they happen to all of us. I had a thread on this at the end of last year as it was particularly lumpy, but not really that unusual.

Our big lumpy this year? We found we had a lot of leaks and decay in our air ducts for our central AC, and got them all replaced. Included new intakes and things to bring us up to code...$10k

Our fence started showing some rot in some places, and had gotten pushed out of shape in other due to trees growing in the way (because I planted a bit stupidly 10 years ago).
options were...
Replace just the broken stuff and live with unsightly patchwork? $3k
Replace all with wood and face the same problem in a few years? $8k
Replace with vinyl and have a much longer life? $11k
Oh, but first take out the massive stretch of bamboo...$2k

The good thing about not living on a shoestring, and having flexibility in our budget, means we can do the expensive, better, longer term versions in most cases.

The above is why I moved into a townhouse 25+ years ago when my wife was pregnant with our first kid.

Pay a monthly fee and never have to worry about outside maintenance.

Raised the family here...major city recreation facility across the street was great for the kids.

Most residents in my development are older couples who moved out of their "big house" after the kids left.

We saved a lot of $$$ by never buying the big house in the first place.

I'm now watching my in-laws who have lived in the same home over 50 years begin to struggle with keeping it up, especially their large yard and garden.

 

[Finally FI]

Bonds are actually pretty simple to understand. I would start with this overview from Fidelity.

https://www.fidelity.com/learning-c...fixed-income-bonds/fixed-income-learning-path

There are also some really good individual bond threads on this forum.

Thanks for that link! It is beginner-friendly and explains a lot of things that didn't make sense to me before reading it.

 

[Finally FI]

More common that you might imagine. ... Notwithstanding my analysis telling me we will never run out of money, it is still a weird and unsettling feeling to decumulate instead of accumulate.

I retired 5 years ago and even though we’re in good financial shape, I still have anxiety...

Thank you for sharing that this anxiety is common. That makes me feel better, although I was hoping the feeling would go away quickly after retirement. I guess it's going to take a while to sink in mentally as the new normal.

 

[Finally FI]

As far as health insurance goes, ... There are plans available that wouldn’t cost us anything, but our docs are not on them. Max out of pocket, not including premium, will be limited to around $9k or less per person. If you’re in good health and can avoid injuries, like something requiring surgery, your expenses will be much lower than that.

This was great information! I was trying to figure out how to choose a plan, as the list is long. I never thought to just ask our preferred hospital system what they take. The past couple of years, I've been told by multiple medical offices that they don't take Pathways when I've mentioned being on BCBS.

DW and I are both in good health, so the total premium + max out of pocket should be an exception, but I definitely want to be prepared for worst case.

Good luck! Once you make the decision, you’ll find it to be one of best decisions you ever made!

Thanks again! The decision was made for me and everything is in motion; only a few weeks left. DW is planning on 5 more years, but might flip to part-time or decide to be done before then.

 

[Finally FI]

It varies, and yes they happen to all of us. I had a thread on this at the end of last year as it was particularly lumpy, but not really that unusual.

Our big lumpy this year? We found we had a lot of leaks and decay in our air ducts for our central AC, and got them all replaced. Included new intakes and things to bring us up to code...$10k

Our fence started showing some rot in some places, and had gotten pushed out of shape in other due to trees growing in the way (because I planted a bit stupidly 10 years ago).
options were...
Replace just the broken stuff and live with unsightly patchwork? $3k
Replace all with wood and face the same problem in a few years? $8k
Replace with vinyl and have a much longer life? $11k
Oh, but first take out the massive stretch of bamboo...$2k

The good thing about not living on a shoestring, and having flexibility in our budget, means we can do the expensive, better, longer term versions in most cases.

We've only been in this house for a few years, but my spreadsheet shows we're just passing the $100k mark on home improvements, with most of that spent on the exterior. I'm grateful that we've had the financial ability to go with high-quality, low-maintenance, long-lasting alternatives, as those will mitigate future costs and headaches.

While most of those costs were understood and planned for when we bought the house, lumpy home expenses are definitely on my radar and I agree completely about making sure we have that budget flexibility!

 

[SecondCor521]

Thank you for sharing that this anxiety is common. That makes me feel better, although I was hoping the feeling would go away quickly after retirement. I guess it's going to take a while to sink in mentally as the new normal.

For me it has been a gradual thing. After 8 years and being at about a 1% WR, it's starting to sink in that time and health are in shorter supply than money.

You're going to be fine. Like many here, you've got plans and backups and analyzed it all backwards and forwards. And you're naturally cautious. Your biggest problem will probably be loosening up.

This was great information! I was trying to figure out how to choose a plan, as the list is long. I never thought to just ask our preferred hospital system what they take. The past couple of years, I've been told by multiple medical offices that they don't take Pathways when I've mentioned being on BCBS.

DW and I are both in good health, so the total premium + max out of pocket should be an exception, but I definitely want to be prepared for worst case.

States use different websites, but my state's ACA plan allows me to put in doctors and hospitals and know if they're in any particular plan.

Since you're in good health, you might look at a Bronze HSA plan. You'll lose Silver CSRs, but those might not be that good at your income level anyway. A Bronze HSA plan will be nearly free, and would allow you to open an fund an HSA, which has some nice tax features.

Thanks again! The decision was made for me and everything is in motion; only a few weeks left. DW is planning on 5 more years, but might flip to part-time or decide to be done before then.

Some married persons wiser than me here have suggested an approach where one is retired and one is still working: fix her breakfast and coffee in the morning, rub her feet when she gets home, do the grocery shopping while she's at work, take care of paying the bills and dealing with insurance and taxes, deal with the vet visits for the pets, etc. First, you could win major brownie points. Second, she just might decide retirement is really nice and decide to join you.

 

[Finally FI]

For me it has been a gradual thing. After 8 years and being at about a 1% WR, it's starting to sink in that time and health are in shorter supply than money.

You're going to be fine. Like many here, you've got plans and backups and analyzed it all backwards and forwards. And you're naturally cautious. Your biggest problem will probably be loosening up.

With the number of friends, family, and coworkers that have passed away or been diagnosed with something bad the past few years, my awareness that time and health are worth more than a bigger bucket of money was the biggest factor in my retirement decision.

It sounds like, even knowing that, I shouldn't expect my anxieties about money to disappear overnight.

States use different websites, but my state's ACA plan allows me to put in doctors and hospitals and know if they're in any particular plan.

I didn't know that feature existed, and it worked great to allow me to filter plans that are accepted by the hospital system we prefer! Thank you for sharing that!

Some married persons wiser than me here have suggested an approach where one is retired and one is still working: fix her breakfast and coffee in the morning, rub her feet when she gets home, do the grocery shopping while she's at work, take care of paying the bills and dealing with insurance and taxes, deal with the vet visits for the pets, etc. First, you could win major brownie points. Second, she just might decide retirement is really nice and decide to join you.

This made me smile, because other than foot rubs, I already do everything on that list, as well as cook dinners and do the dishes. First because I absolutely adore my DW and like to do things for her, and second because I'm a busybody. I've actually been curious about how I can step that up after retirement.

.

 

[EastWest Gal]

Our state website allows you to put in doctors and hospital systems to make sure they take a particular plan.

Also, the hospital system sites do the same thing. Be aware that some hospital systems will accept one plan from a company but not the other. A few years ago I almost got the wrong plan. One hospital system took a Highmark “Blue Access” bronze plan but not the “Direct Blue” bronze plan. Highmark is a Blue Shield company in the mid-Atlantic. It’s worth the time to cross check with the hospital or doctor’s office. I double checked by calling as well before we chose our plan.

 

[Finally FI]

Our state website allows you to put in doctors and hospital systems to make sure they take a particular plan.

Also, the hospital system sites do the same thing. Be aware that some hospital systems will accept one plan from a company but not the other. A few years ago I almost got the wrong plan. One hospital system took a Highmark “Blue Access” bronze plan but not the “Direct Blue” bronze plan. Highmark is a Blue Shield company in the mid-Atlantic. It’s worth the time to cross check with the hospital or doctor’s office. I double checked by calling as well before we chose our plan.

Thank you. That's good to know!

 

[Finally FI]

Update: It looks like DW might be retiring at the end of this year, rather than working another 5 years as originally planned. Exciting and scary at the same time!

Now we really need to figure out our withdrawal strategy and ACA details.

 

[Finally FI]

Big update: DW just retired!!

After moving to another new job last year, we came to the realization that her line of work is stressful and frustrating, even part time, no matter the workplace. So, she gave notice and just finished her last work week. We're super excited.

We signed up for a Bronze HSA health insurance plan through the ACA Marketplace, using a broker to get guidance about specific insurance companies in this state.

Thank you for all of your guidance and support through these major life changes!

 

[Gumby]

Congratulations and welcome to the club.

 

[skyking1]

Big update: DW just retired!!

After moving to another new job last year, we came to the realization that her line of work is stressful and frustrating, even part time, no matter the workplace. So, she gave notice and just finished her last work week. We're super excited.

We signed up for a Bronze HSA health insurance plan through the ACA Marketplace, using a broker to get guidance about specific insurance companies in this state.

Thank you for all of your guidance and support through these major life changes!

Congrats!
I missed the thread the first time around. From your first post I could see you were set. Congrats to your wife for stepping off onto the next adventure.

 

[old medic]

Congradulations...

 

[Finally FI]

Thank you. We are incredibly grateful. We've been blessed in more ways than I can count.

And since my first post when I was retiring at the end of 2022, the stock market has pushed our portfolio to new levels I never expected. FIREcalc investigate now shows $154k for our 100% success rate. That's 3x our annual spending including health insurance and max OOP for the bronze plan.

Mentally, over the past year, it's started to sink in that this is real. Our equities still feel like "funny money" because of the huge fluctuations, but even at the recent bottoms in 2020 (Covid) and June of 2022, we still showed 100% success at $127k.

It's difficult to express just how grateful we are for all of the things that led to this, including, most recently, the knowledge and guidance in these wonderful FI and RE communities.

 

[Cassius King]

That's great to hear. Congrats to you and your wife!