Yay! Success in my first year of retirement!

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CindyBlue

Full time employment: Posting here.
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I am so happy to be able to share with you all that my first year of retirement was a financial success!

Some backstory (that a lot of you already know!)...
I had started thinking about how to financially afford to retire in 2014. I found this wonderful forum and asked lots of questions and read lots of posts here over the next couple of years. I figured out a budget I thought I would have the retirement income to support in 2016, and set up a separate bank account with that much money in it in 2017, spending only from that budget for that year, with a successful outcome. I then "restocked" that account with the same amount, and waited for retirement.

I retired at the end of August 2019, and just now, Sept 1st, 2020, calculated the outcome of the past year's spending. Even with some extra expenses due to my dad's decline and moving to a nursing home and us now being solely responsible for fixing up and maintaining the house and property, I made budget with about 12% left over. I am so relieved and happy that all the planning has worked!

There was one huge one-time, unexpected expense this year, which was paying off the mortgage on dad's property. We paid that out of savings, and did not include in the budget calculations for this year. I know that's "cheating", but we don't anticipate anything like that again (knock on wood!) - and what I was trying to calculate was the basic yearly budget to see if it would fit into my income parameters (a small pension now, and SS starting at my FRA in March of next year.) It does, thank goodness, and leaves some income left over to add to savings for that next rainy day.

I am feeling very relieved right now - time for a glass of wine (or two) (grin!) Thank you, everyone here, for your support and advice! You are amazing!!
 
Thank you for posting this. It's great to hear recently retired experience, since we are getting ready ourselves.

I like the method of paying everything out of a separate account, to see what it really costs. We have not done that so our spending must be calculated with some effort.
 
Congrats.
It is always nice when a budget works out.
 
Congratulations! I am also coming up on my first year and what a ride it has been.
 
Congratulations! The first year was pretty anxious for me, glad you are doing great.
 
ImThinkin2019 said:
Thank you for posting this. It's great to hear recently retired experience, since we are getting ready ourselves.

I like the method of paying everything out of a separate account, to see what it really costs. We have not done that so our spending must be calculated with some effort.
Click to expand...

That separate account made it very clear to me what I was spending. I'd tried to calculate the actual spending the year before I set up the separate account, but as you said, it took a lot of effort. Silly, right? I either spent it or I didn't so it should have been clear from my checking account and credit card account records, no matter what bank account it came from. Unlike a lot of people here, I don't have a "lot" of money, so my calculations must be very clear and very accurate, as best as I can figure them and predict the future (yeah, right, I know (smile!)) But setting up that separate account (which wasn't hard to do) made it all very clear. I needed it to help me be very clear about whether or not I could afford to retire.
 
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I retired a few years ago but the wife has a few more years to go (5).
Initially I planned out the expenses and income for retirement.


However, since she is getting closer to retirement, I started tracking all expenses from one account to get a better handle on annual expences. We have a budget but I would like to know what our real retirement expenditures are, similar to your situation.


First thing I found is we are spending much more on remodeling the house. It looks like we do one large project a year. It's probable that in the next five years we will need to replace two AC units, roof, windows, water heater, vehicle as the house is approaching 30 years old.


So, I'm writing this because what seemed like a one year "emergency" is turning into a "non-emergency" yearly recurring cost.



Just be aware an plan for these "non-emergencies".
 
workmyfingerstothebone said:
First thing I found is we are spending much more on remodeling the house. It looks like we do one large project a year. It's probable that in the next five years we will need to replace two AC units, roof, windows, water heater, vehicle as the house is approaching 30 years old.
So, I'm writing this because what seemed like a one year "emergency" is turning into a "non-emergency" yearly recurring cost.
Just be aware an plan for these "non-emergencies".
Click to expand...

Good advice! Yep, we planned and have those covered. We seem to always have a "big" repair each year, such as septic (both of the past two years - ugh!!) or the well, or my teeth (double ugh!!) at least once a year. We have savings that we designed to cover those expenses, hopefully enough to last the next 30 years, if past expenses are an accurate predictive measure.
 
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Congrats on executing a well thought out plan! Funny how that works.
 
That is great!
 
Congrats! We’re about two months in to semi retirement and your story is very inspiring. The way we’re making the budget work is by blocking off the fixed costs and having the portfolio pay for those. We then have a more variable category of costs, which we’ll cover with our cash stash and part time incomes. Someday, SS and accessing our home equity can replace the part time work. We still like earning some money for now but flexibly and on our own terms, so semi-FIRE works well for us, we think. Your plan is terrific, too, so enjoy!
 
The one thing that can derail us is if we have a huge unexpected health issue such as one of us needing to go to a nursing home. We have enough in savings to cover about 20 months of that for one of us, but will be in trouble if it goes longer than that. We have talked extensively about this issue and almost decided to continue working until we dropped just to keep saving, but eventually changed our minds and decided to take the risk. It's definitely a risk, too, and we are very much aware of that, but we decided that the benefits of retiring outweighed the risk at this point. It was - and still is - a tough decision.
 
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Congratulations! Retirement is so nice and it sounds like you have a well thought out budget and spending plan.
 
I think most of America, 95% (and the world for that matter), cannot handle a major medical bill in the hundreds of thousands of dollars.



For example, a nursing home for 2 years @ 60K/year.
 
Congratulations on your success!
We are in our first year of retirement. So far the only surprise is the staying put due to Covid. There are a couple of items which are not routine everyday living costs but we had anticipated and budgeted for, such as a new car and helping out DS with housing costs while he completes his dental school works. All is well.
 
Congratulations!

I keep track of trailing 12 month spending since spending tends to be lumpy. Using credit cards extensively (paid each month) and quicken makes that tracking relatively simple.

That 12% under budget amount could go into a special fund to save for a rainy day (eg nursing home). With luck, you won't need it at all.
 
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