Just put in my paperwork: it feels really weird.

[roadtripper]

Yikes. Kind of freaking out a little. Two public school teachers--55 and about to be 55. Not early by this forum's standards, but everyone around us acts like we're crazy. DH "retired" last year and got a great job at a local university. They just asked him to stay indefinitely, and he wants to, which is great. I am set to go in June and have a side hustle as a travel agent that I will hopefully expand when I have more time. We've been thrown a few curve balls pension wise, but we have 1M in addition to our (smallish) pensions, and I've been tracking our spending for a long time. I've been crunching numbers every which way, and it seems like we're going to be fine, but I am scared to start drawing down this nest egg that we worked so hard to build. Grateful for any advice.

 

[freedomatlast]

Congratulations! Sounds like you are ready financially, and you have plenty of things lined up to do, that you enjoy doing. Enjoy!

 

[wanderingwheelz]

There’s some missing info here.

Pension size and future social security?

Debts? Husbands salary, your expected future earned income from travel agency?

Assets.. tax deferred? Taxable? 1MM strikes me as a vague figure which isn’t likely exceptionally accuratee.

Children... college?

With more information and more specific questions you’ll get more useful input.

 

[pb4uski]

Yikes. Kind of freaking out a little. Two public school teachers--55 and about to be 55. Not early by this forum's standards, but everyone around us acts like we're crazy. DH "retired" last year and got a great job at a local university. They just asked him to stay indefinitely, and he wants to, which is great. I am set to go in June and have a side hustle as a travel agent that I will hopefully expand when I have more time. We've been thrown a few curve balls pension wise, but we have 1M in addition to our (smallish) pensions, and I've been tracking our spending for a long time. I've been crunching numbers every which way, and it seems like we're going to be fine, but I am scared to start drawing down this nest egg that we worked so hard to build. Grateful for any advice.

Relax.... while you will be withdrawing from your nestegg, chances are that it will still be growing. The average annual return on a 60/40 portfolio from 1926-2018 was 8.6%.... let's round that down to 7% to be conservative... if you withdraw 4% then your nestegg will still be growing 3%! YMMV.

For example, we retired at the end of 2011... and after 8 years even with ~3% withdrawals for spending money plus withdrawals for buying a winter condo and to replace our one-car garage with a two-car garage with loft we have 125% of what we started with.

 

[HI Bill]

Congrats! Do you have STRS (State Teacher's Retirement System) retirement benefits or similar? With California's STRS, and educators make considerably more than their (salary) counterparts receiving SS. As long as your debt and spending are under control, I'm sure you'll be fine. But without a few #s, it's impossible to be sure.

 

[Mdlerth]

You've got this. Now, go win one for the Tripper!

Yikes. Kind of freaking out a little... I've been crunching numbers every which way, and it seems like we're going to be fine, but I am scared to start drawing down this nest egg that we worked so hard to build. Grateful for any advice.

I retired at the end of the year, so I'm just starting The Big Scary Journey. My advice to you is the same I am giving myself. Tell yourself "It's gonna be great." Say it multiple times throughout the day, and repeat it every day of the week.

You can crunch numbers all you want. I did - a thousand times - and still do. Not because I expect the numbers to change. It's because seeing them work out each time gives me reassurance.

If your numbers worked out last month and last week and yesterday, they will work today and again tomorrow. Your opening word "Yikes" says it clearly: your challenge at this point isn't a financial one, it's one of confidence. Mine is, too. Voluntarily turning off a regular paycheck is an intimidating prospect.

Consider what folks do in professions where confidence is critical to their success on a daily basis: salespeople go to affirmation sessions, athletes listen to pep talks from coaches, etc. Books on positive thinking routinely become bestsellers. Try giving yourself some regular reinforcement and perhaps "Oh, boy!" will become your default perspective instead of "Yikes".

Now get out there and quit! Hmm, that didn't sound exactly right, but you know what I mean! Good luck!

 

[roadtripper]

Thanks for all the helpful and supportive replies. I'm not super comfortable getting granular, but I have budgeted for 80K per year in spending in firecalc, and our pensions will start at 46K and ramp up to 62K when another one kicks in in a few years (taught in 2 different states). Most investments are Admiral shares at Vanguard and 457s in our state. Mortgage is the only debt, and will be paid in 8 years. I budgeted as though we will continue to have a mortgage in case we decide to invest in real estate; DH is skittish about taking on debt. We won't start to draw down next year, and I think we need more cash on hand, so that will be the goal. I'm sure I'll hang out here more so that I can learn more about the most effective draw down strategies. Thanks again!

 

[RobotMom]

Congrats. I am 56 and kind of in your boat. I'll be looking to retire in another 2 years. I think side hustles are a key to retirement solvency and peace of mind. They are great in two ways - they give you purpose and a little extra money. If your retirement is on track without the side hustles, you should be perectly fine once you've added them in.

 

[Trawler]

Congrats!!! Retired in 2012 at age 51 and DW at 54 and one of the hardest things was to actually start to withdraw from investments as we never had before. I just kept telling myself that is why we saved it. Eventually I realized it was Great!! Still crunch numbers for reassurance and to be sure we are good giving ourselves a raise. Enjoy!

 

[pb4uski]

Thanks for all the helpful and supportive replies. I'm not super comfortable getting granular, but I have budgeted for 80K per year in spending in firecalc, and our pensions will start at 46K and ramp up to 62K when another one kicks in in a few years (taught in 2 different states). Most investments are Admiral shares at Vanguard and 457s in our state. Mortgage is the only debt, and will be paid in 8 years. I budgeted as though we will continue to have a mortgage in case we decide to invest in real estate; DH is skittish about taking on debt. We won't start to draw down next year, and I think we need more cash on hand, so that will be the goal. I'm sure I'll hang out here more so that I can learn more about the most effective draw down strategies. Thanks again!

Then you really have nothing to worry about.... your withdrawals will initially be $34k and then drop down to $18k.... so your withdrawal rate will initially be 3.4% and then 1.8%... well within a safe withdrawal rate.

You are also overbaking your mortgage in FIRECalc. Change your spending to the amount excluding mortgage payments. On the second tab, add in off-chart spending equal to your mortgage payment starting in 2020 and uncheck the inflation-adj? box and also add in a pension starting when you mortgage ends and uncheck the inflation-adj? box.

 

[EastWest Gal]

I doubt your feeling very strange and unsettled is only about money. Stepping of the career path is a huge transition. The idea that everyone retires at 65 is baked into Social Security, enacted in the 1930s and Medicare, enacted when we were children. So many of us in the U.S. have embraced 65 as retirement age as the way it always was, that it has become baked in.

I started that process in 2014, finished last year. I felt grief at times, mostly at my lack of sense of "accomplishment". But over time, that has been replaced with a sense of normalcy about this new life. And true joy. There are moments when my sense of personal contentment and joy absolutely soars. It is a delight in those moments. And those moments cost nothing.

There is always fear with any transition-from starting kindergarten to graduation to marriage to a new job to moving. Embrace the experience. The strangeness of waking up every day without an obligation to go to school or work within an hour of waking from sleep will soon be replaced by the feeling of this being your new normal.

 

[pb4uski]

Yes, we are creatures of habit so change is hard.

I felt uncertainty, but not grief... not close... despite still liking my job and colleagues and most clients.

 

[RxMan]

I’m sure I will struggle with the same emotions when I’m approaching my retirement. If you’ve saved your entire life shifting gears and spending is going to be an adjustment even if you have plenty of money.

There’s also the issue of replacing the sense of purpose and accomplishment that a job can provide. I hope I will be able to shift gears and replace employment with things I enjoy doing and even explore new hobbies and experiences when my time becomes my own.

Good luck to you. You sound like you’ve properly planned. At the end of the day it boils down to trusting the plan you’ve already developed and just going for it. You’ll know when you’re ready. Let us know how great things are from the other side of retirement when you get there!