I saved the biggest retirement concerns for last. Medical concerns and financial considerations are the greatest sources of anxiety in retirement and require the greatest amount of attention. I know this has been true for me pre-retirement and for my husband during his four years of retirement.
In preparation for my retirement, I’ve been steadily checking off a list of medical checkups. I began in late January with a complete physical exam. It wasn’t surprising that my doctor told me that I need to eat less, eat better, sleep more, and continue to exercise. He stated his goal was for me to enjoy a healthy retirement. Following his advice was bound to improve my numbers and three months later, my lab test results were in fact much improved. I’m grateful that my pap and mammogram were both normal. My colonoscopy will occur later this month when the surgery center reopens. I had my post-COVID-19 dental cleaning and x-rays. Although I had no cavities, I had a filling replaced and scheduled a voluntary cap to take care of a food trap to prevent future problems. My dentist recommended a new toothpaste and two extra cleanings per year for added gum care recommended for older adults. My vision appointment is schedule for next month and I’ve obtained a referral to see a dermatologist for a check-up and also to remove several unsightly moles and to obtain a cream for age spots. I’m fully vaccinated against COVID-19, shingles, and pneumonia. Long time health issues are being monitored and treated effectively. My plan is to go into retirement with a good baseline and a medical regime in place. Of course, paying for healthcare will be a major monthly expense for the rest of my life, even with Medicare. In fact, it is a monthly expense that is larger than my mortgage.
Turning to expenses, over the last few months I reconfigured my monthly budget and developed a detailed plan to take distributions from my pension, savings, investments, and retirement savings over the next 30 years, saving Social Security for maximum payments later. I am now very happy that I began saving and investing for retirement in my early 20s. That slow and steady decision along with corporate and University contributions has put me in a very good place financially. Never doubt the power of time and steady market investments to build wealth. The best financial advice I received early in life was to automatically pay myself first every month, to protect my credit rating by paying bills on time, and to only take on good debt like a mortgage, student loads, and a car payment. These are debts that actually represent an investment in the future and a great credit rating results in the lowest available interest rate. It was my goal to be debt free with the exception of our home by retirement and we’ve accomplished this. Even though we have a mortgage, we have a lot of equity that puts us well into the black. A financial advisor once said that in retirement we should keep a mortgage for tax purposes, so even if we do sell and purchase a less expensive home, we will still finance that new house.
My husband jokes that he has enough saved for the both of us. And while that is definitely true, I’m an independent person who does not want to rely on anyone. And frankly, I enjoy financial planning and I can’t do that with someone else’s money. Since we married in 2003, we’ve always kept separate bank accounts and joint accounts for shared expenses. I’m sure that this being my second marriage has made a difference in my thinking about my financial independence. However, I encourage my children to look after their own financial health and not to rely on their spouses.
Another consideration unique to our second marriage is that my husband and I each have three children of our own. We agreed that we wanted to ensure that our children are beneficiaries of our joint and respective estates. I took a lesson from my father’s family situation wherein my grandfather married three times. His only five children were from his first marriage before she died. My father and his siblings had to watch in horror when my grandfather died from a stroke and everything my grandfather and their mother built together, including the family home and a vacation home, passed directly to his third wife and subsequently to her biological children. Neither of us wanted a scenario wherein our biological children were excluded from the money and assets we both worked to accumulate our entire lives. So, we spent $120 on notary fees to reconfigure our beneficiary list to provide 60% of our respective savings, investments, and retirement savings for our respective children. In California, a spouse is automatically guaranteed at least 50% from these accounts unless a notary witnesses the spouse’s signature to waive this right. So, we did this.
A long time ago, we established a Living Trust, then revised it a few years ago. Once I retire, we are going to revisit that Trust again to make revisions to include guidelines for the distribution of funds and items to our respective grandchildren. We have conversations about the different components that go into our Trust such as the will and the healthcare directives. These conversations help us determine what we really want and prevents future arguments among surviving family members.
Among one consideration, I would now prefer to be cremated instead of buried. As I continue with my decluttering project, in preparation for this revision, I am taking pictures of my jewelry and other special items and deciding who will get what specific item. Before I had broad categories listed. I’m thinking that I might begin distributing certain items throughout my retired life. It might be nice to actually see the items valued and enjoyed.
I built into my retirement distribution plan a set amount of mad money per year for just plain fun. Whether it’s money to take a trip, to take a class, to start a new hobby, or complete a pet project, it is nice to be in the position to know I have adequate funds to simply dream and enjoy myself.
In concluding my series of reflections on preparing for retirement, I think it has become clear that retirement planning starts years before retirement, particularly when it comes to health and wealth. The decisions made in ones twenties, thirties, forties, fifties, and sixties, will all have either a negative or positive impact on whether retirement is an option and at what level it can be enjoyed. Of course, there are those, who like me, didn’t believe in retirement back in my thirties. A financial advisor told me to save and invest anyway and to take care of your body anyway. And I’m so glad I did.