Considering Retirement

I’m still trying to figure out what it will mean to retire. I accept that part of it is about getting old and the reality of dealing with health issues as the body weakens and breaks down. In fact, I spent three hours yesterday morning in urgent care with my retired husband. He injured his knee at the golf course while simply putting on his golf shoes in preparation for his fourth round of golf this week. We left urgent care with his knee in a brace, crutches, a subscription for 600mg of Ibuprofen, a list of orthopedic surgeons, and my commitment to play nurse maid for several weeks while he heals. My husband has been retired now for almost three years, but I am still working. The majority of our friends are now retired or considering it. It’s been a few weeks since I attended a retirement planning session and I thought I had some things figured out, but my husband’s unexpected injury yesterday jolted my thinking.

I’m grateful for the financial planning professor who conducted the retirement workshop I attended during our community day on campus. She was not only funny and knowledgeable, but she provided great advice and a lot of food for thought. Like any lesson, some of it is worthy of implementation and some requires a bit of tweaking to fit one’s particular circumstances.

Her first bit of advice was to not retire until someone shows you the door. In my thirties, forties, and even into my early fifties, that was something I might have said myself because I really enjoy my job. I enjoy working in an environment where lifelong learning and youthful enthusiasm is central. I’m happy to get up every morning and to go to work. But these days, I’ve noticed a change in myself. I come home exhausted after a normal days work and I almost dread those days when I need to be there after hours, partly because I’m tired and partly because I don’t see well at night and it is dangerous for me to drive in the dark. There are physical limitations that I never anticipated and actual health issues that appeared out of nowhere that I have to deal with. For the first time, I realized that retirement might be physically necessary. And with the injury yesterday, I realized that caregiving could easily force the issue should a more serious health issue arise with my husband or me.

Her second bit of advice was to consider what you’ll do after you retire. How will you spend your time? I took inspiration from a friend’s “Second Act” retirement party and although a retirement party is not something I would desire, I fully embrace the idea of a second act. I’m just not certain yet what mine will be. I’m toying with a few ideas but nothing is solid yet. The financial advisor is fond of working part-time during retirement as a means of keeping the mind sharp and interacting with people for emotional well-being. Isolation and loneliness lead to rapid declines in health. I realized that this too must be tempered with a contingent plan for possible health related issues.

The financial advisor shared a map of the United States and pointed out the most retirement friendly places to live. We had already picked Arizona for its weather and cost of living, and thankfully, it was on the list of best places. Personally, I prefer the idea of moving to Nevada and building a family compound where we could enjoy a shared courtyard and separate homes living among family members. Nevada is a retirement friendly destination too, but my husband had a really bad experience with gambling early in his life and I think he fears the draw of the ubiquitous casino.

Along with the where to live was the physical space. The planner talked about downsizing or reverse mortgages as part of the retirement plan. We’ve chosen downsizing and the next house will be a one story. I was surprised when the planner recommended keeping a mortgage. We had planned to sell our current house and purchase a new one outright. Apparently, that wasn’t the best fiscal management option for tax purposes. But again, the events of yesterday raised questions about our current plan. It had never even occurred to me that we might not be in good enough health to move, however, I can see now that a one story is a must. My husband couldn’t navigate the steps to come to bed last night. He slept in the family room downstairs. And how wise would it be to move so far away from family and friends? We don’t know a soul in Arizona and we would be entirely isolated in case of an emergency.

And then there was the issue spending money in retirement. The financial planner kept reminding us that retirement means you are living on a fixed income that will have to last for an undefined amount of time. She showed a graph that showed how retirees spent their savings. They start off spending a lot for travel and leisure. Then they settle down. But in the end, the greatest amount of their savings is eaten up by health care. The reality is that catastrophic healthcare costs can hit at any time in retirement. All it will take is an accident or a devastating diagnosis. Again, the time spent in urgent care yesterday drove this truth home to me. Thankfully, we have both already fulfilled most of our need to see the world. Few trips remain on our to do lists.

In the end, her greatest pieces of advice were to stay healthy as long as possible, be kind to your children because you will eventually need to rely on them, have a good financial team (attorney, tax accountant, and financial planner), put off taking social security as long as possible to receive the maximum benefit, and never pay the restaurant bill when you dine with your kids. Remember that they are earning and you are on a fixed income.

Except for a solid plan for a second act, I’m ready for retirement. I give myself five years until I’m actually ready, but after yesterday, I realize that I am in desperate need of a contingency plan for everything.