Retirement... been there for 26 years... Hi! (pension, financial advisor, moving, spouse)

[pushin80]

So ya have to start somewhere Best to begin with the who, what where thing.

My bride and I are best described by my username. Married 57 years, retired age 53 due to health scare (okay now). New Englander, College+, service in the army, then to retail management for 25 years... 22 full household moves, 4 kids, a few years in my own business and now happily retired for 26+ years. Lived everywhere from Maine, Martha's Vineyard, Georgia, to Florida, Texas, Chicago suburbs, and now settled in N.Central Illinois, in a full service continuous care facility, in a regular home which is part of a stepped community, which includes villas, apartments, assisted living, full rehab facility, nursing home, and Alzheimer unit... total of about 350 housing living units.

Retired early, without too much money and now feel happy, comfortable and financially safe. Not that anyone would care, but by way of explaining the why and wherefore, the early retirement years were a learning period. Going from a suburban 2500s.f. home, to a 6 month snowbird life in a campground 400 s.f. Park Model, to an active manufactured home community in Florida, for the first 14 years of retirement. SS @ age 62 and mostly savings and IBonds.

That's where we are today. Now, since there has to be a subject in beginning a new post in a forum that's new to me... here's our simple plan to check out where we are, financially, in our continuing retirement. It's not what most financial advisors or online calculators suggest.
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So here's the plan that determines where we are, and where we can go financially, in the coming year. It allows us to adjust our spending, accordingly. Three possible budgets. #1 Optimal, #2 Nominal, #3 Austere.

Here is the calculation:

~ Ongoing stable income... Social Security, Pension (not for us), Annuity and any other stream of income that is reasonably stable.

~ Total Assets... those not included in the income stream. Savings, Personal property (including home) and any other assets that go to make up Net Worth. (note)... netted out to include monies owed and estimates to be based on liquidation value.

~ Life Expectancy... From today's date... either using government data, or your own expectation.

Calculate how much you can spend, by dividing total assets by life expectancy and adding the stable income total.

Example:
Stable income $30,000.
Total assets: $800,000.
Life expectancy... currently 60. Expect to live to age 85. So 25 years. $800K divided by 25 equals 32K per year.

Using the formula, it means that you can spend $30K plus $32K or $62,000 per year.
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This has worked for us, and checking the numbers on a regular basis is very simple. So far, we're well ahead of schedule, meaning that our outlook for a longer life is working out well. Inflation, unexpected expenses, or market changes have not caused significant variances over the longer haul... (26 years).

A long first post, but hopefully not the last... Looking forward to catching up on some of the millions of posts on these forums.

[akck]

I think your method is a good way to manage your income. The only wrinkle I'd mention is what if you live past age 85? I'd suggest you re-evaluate your plan say every 5 years and make adjustments to your assumptions if needed. At minimum, you should evaluate if you can live on income spread out to age 90, 95, or some other possible age beyond your plan. I personally planned out to age 95 figuring I won't live that long, just to make sure we'd have enough if I'm wrong.

[Tall Traveler]

Pushin 80,

Congrats and that's excellent information you provided. Using your formula, wife and I would have about $158K per year if we retire now still in our 50's but for some reason, my wife has fears that's not enough. I think because her Father retired at 48 and ended up having to become much more careful with spending once he hit his 60's and we are not accustomed to frugality anymore. Anyway, we are planning to give retirement a try in a few months (she's not working now) but she wants to work part time to make some extra money because of her fears we don't have enough even though I know we do.

[oldsoldier1976]

Welcome to the group. We like hearing success stories and yours sounds great. I am not retired yet but soon. Thank you for your service. I appreciate those who came before me. Enjoy your time and post up good stuff, bad stuff, and stuff in between.

[pushin80]

Originally Posted by akck

I think your method is a good way to manage your income. The only wrinkle I'd mention is what if you live past age 85? I'd suggest you re-evaluate your plan say every 5 years and make adjustments to your assumptions if needed. At minimum, you should evaluate if you can live on income spread out to age 90, 95, or some other possible age beyond your plan. I personally planned out to age 95 figuring I won't live that long, just to make sure we'd have enough if I'm wrong.

Yes... exactly. We check our progress on a regular basis, especially when there's a major expense in the offing, but at least every year. So far, whether by planning, frugalizing, or luck, we're ahead of our original plan, and have gone from safety @ age 85, to age 92...

One item in the planning... being realistic! While almost everyone plans with a safety margin, it's sad to see so many people holding off retirement to be "safe", and missing out on the happy years. A few years ago, we lost a new neighbor in Florida... he retired at age 67, so he'd be safe. He enjoyed retirement for two years, then passed away... leaving his "safety net" of more than a million dollars, to his nephew.

When we retired in '89, we were scared to death that we might not make it. The backup plan then, was to go back to work. As it turned out, everything went well, and the 40 hours of work per week was spent in enjoying life... traveling and sharing our retirement with other younger people who were in the same boat as us.

[pushin80]

Some more thoughts... actually lookbacks on our last quarter century of being retired.

Here's a jump ahead from the earliest days... 1989 to 2004... Our earliest years were back and forth six and six, from Il to FL... being as we're not infinitely wealthy, the following happened in our Florida Park, that made us change our longer range plans. Here's the story...
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Bob and May owned a home in Maine, but were doing the snowbird thing. Since he was not independently wealthy... small pension... he decided to sell his home in Maine... $280K... and use this as his nest egg for the rest of his retirement. Shortly after making the full move to FL, May began a 5 year downslide int Alzheimers. Nursing home... at the time about $60K per year. Now, Bob's home in FL was a mfg home worth about $30K. The five years of May's care cost Bob's entire bank account and he was left with his home, $30K, his car, $20K, and his Social Security. The government took the rest. He had to spend down to that before Medicaid paid for May's care.
Had he kept his home in Maine, as a permanent home... when May passed, he would have been able to keep it until he died. Today, the state puts a lien on this, but in those days that was not commonly done.
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That set us to thinking about our own situation, so we looked for a permanent, higher value home that could be protected in case either of us were to require care beyond what insurance would pay. We took from our savings and bought our current home outright... in essence protecting the surviving spouse. Depending on the state, it's possible to shelter as much as an $800K home this way. The lookback period... which the state can use to deny this type of shelter is now 5 years, so gifting or other ways of evading the 5 year limit are not possible.

We moved to a full service CCRC 12 years ago. For us, a good choice. More about this another time... Our retirement has not been about travel, or living a high life... but it's great fun, and we're happy.

[akck]

Originally Posted by pushin80

Yes... exactly. We check our progress on a regular basis, especially when there's a major expense in the offing, but at least every year. So far, whether by planning, frugalizing, or luck, we're ahead of our original plan, and have gone from safety @ age 85, to age 92...

One item in the planning... being realistic! While almost everyone plans with a safety margin, it's sad to see so many people holding off retirement to be "safe", and missing out on the happy years. A few years ago, we lost a new neighbor in Florida... he retired at age 67, so he'd be safe. He enjoyed retirement for two years, then passed away... leaving his "safety net" of more than a million dollars, to his nephew.

When we retired in '89, we were scared to death that we might not make it. The backup plan then, was to go back to work. As it turned out, everything went well, and the 40 hours of work per week was spent in enjoying life... traveling and sharing our retirement with other younger people who were in the same boat as us.

Good to hear that you re-evaluate your plan. I agree that some wait too long building a safety margin, the good old "One More Year" syndrome. We had enough saved that I could've retired 2 years earlier except for medical coverage, which was my reason for waiting until age 60. Conditions at work weren't so bad, so I decided to stay. It did help knowing I could quit anytime during that last year.

Now that I'm retired, we've decided we like traveling and realize we better do the majority of it while we're younger and more able. It does mean more expenses earlier than planned, but reduced travel later (either by budget, lack of mobility, or we just don't want to).

Originally Posted by pushin80

Some more thoughts... actually lookbacks on our last quarter century of being retired.
...

We moved to a full service CCRC 12 years ago. For us, a good choice. More about this another time... Our retirement has not been about travel, or living a high life... but it's great fun, and we're happy.

I'd be interested to hear more about your experience living at a CCRC. My FIL had several strokes and passed away this summer. We were shuttling back and forth, making sure someone was with him in the care facility. What we learned from it was that we don't want to put our kids through the same process, so we'll be looking at CCRCs over the next decade to learn more about them.

Oh, and thank you for starting this thread and sharing your knowledge. Many of us are just starting on the retirement path and it will be helpful to hear the good, the bad, and what I'd do differently, from someone who is 20+ years ahead of us, not to mention those in the planning process.

[pushin80]

Thank you for the kind words...
So, about CCRC's... All kinds... different costs, different services. We explored many, many different ones, so our decision wasn't made easily, or based on a sales pitch.

Let me describe our CCRC. I'd guess you could call it a unitary complex, under a single umbrella.

Where we live... A 1600 sq. ft. home with a two car garage, vaulted ceilings, and most of the amenities we were looking for. A great room with a fireplace, 2 bathrooms, a good size kitchen, laundry room, two bedrooms... One with a large walk in closet, and a smallish den/third bedroom. The home was built in 2000 and has state of the art, senior friendly features. Carpeted (except for the baths and kitchen) to limit fall injuries. Wide, sill-less doorways and levered handle doors throughout. (wheelchair friendly). In the baths and kitchen all of the counters have slide out drawers. One bath has a level entry shower with built in seat, and a high rise commode. All features like double hung dual pane thermo windows are standard in all of the 79 individual homes (some large duplexes). Emergency (string pull) wall switches in each room, and fire alarms to be connected to outside emergency services. Small patio. All homes energy efficient.

The homes sell in the $175K to $220K range. In our state we have the homestead exemption and a separate senior tax freeze, which keeps our house tax at $2500. We are part of a very passive Home owners association, which in the 12 years that we've been here, has done fine work in keeping fees down and diving good service. (Several years go, the HOA provided a fix for a builder problem... peeling paint on outside door and garage door frames.) Now we have aluminum frames avoiding the 4 year repaint. All homes have vinyl siding and red brick fascia in front. Our home owner dues are $150/mo., which includes mowing, shrub and tree care, and excellent snow plow service. The entire complex is quite attractive, with curving walks, common areas, standard outdoor post and garage door lighting all included in the fee, as well as quarterly restaurant dinners or picnics. While not a gated community (no need... in the newer upscale area of town) all town services are available. Waste management, water and electric fees are very low compared to most Illinois towns. Our Electric is provided by the city owned hydro plant on the Illinois River. (less than $.08/kwh.) We are less than a mile from almost every major service, restaurant store... and 1.2 miles from Walmart. Beyond that, almost all country roads. We are 1.5 miles from the confluence of Illinois' two major N/S, E/W highways... routes 80 and 39. The HH income is about $54K versus where we lived before.. 95 miles away... $92K. this is reflected in the relative cost of living. We're less than 1/4 mile from Aldi's (our favorite store) and HY VEE... the equivalent of Whole Foods.

One more thing... We're 25 miles from my campground home on the lake at Woodhaven.

So that's where we live now. At the risk of boring any reader, I'll take up the rest of the CCRC complex in a separate post.

[pushin80]

Now... for the rest of the complex. We chose this, because of the "what if" factor. What if we couldn't handle the house? What if we couldn't drive? What if we had a health problem requiring rehab? What if we had trouble handling the daily chores and especially paying the bills? What if we became partially disabled and needed help with some things, but still wanted to avoid the nursing home? What if... Alzheimers?

So the first thing we thought of was staying together and... building a social contact circle so we'd know the neighborhood, rather than going 'cold turkey' into a place where we didn't know anyone. We've had an opportunity to see how this is a problem with people who make their first contact with the senior community when they're forced into moving.

The rest of the community is located in connected buildings.

The apartments... This deserves some explanation, because of the way it works here. A three story building with a mix of studio or one, or two bedroom apartments. 65 units. While some CCRC's require an endowment purchase... typically $100 to $300K our is a simple rental with only a one month refundable deposit. Here's the really neat part...
A simple one price covers all payment... monthly rental. Currently this is $2000/mo. for one person, and an extra $500 mo for the second person. This covers all of the following:

-two meals a day in a very nice dining area... (linen and full service tables)
-free transportation for all medical visits
-scheduled transport for shopping, grocery shopping, and for special events... shows, gambling boat, bingo and the like.
-in house meeting rooms, card rooms, a beauty parlor and a well stocked library.
-all... utilities... electric, heat and air, WiFi, Cable TV, water, sewer and waste pickup. All except telephone.
-once a week light housekeeping service.
-weekly calendar for scheduled activities. many events during the year.
-small extra charge for car garages.

There is one caveat about living in the apartments. All residents are required to be able to live independently.

Next is assisted living. Another rental with expert assistance in things residents can't perform alone. Eating, dressing, wheelchair, medications etc. This is often not always a permanent residence, but there for those who will recover from physical problems or illness. Single or husband/wife occupancy. 45 units.

All of the complex was built recently, with the oldest being built in the late 1990's, so nearly everything is new or state of the art.

A complete sophisticated rehab with 40 rooms and outpatient care. Fully staffed with degreed specialists, a very active and well used facility. Any residents of the CCRC are entitled to managed physical maintenance programs... The 150 machines are electronically controlled for credit card type programmed cards which set speed, repeats, resistance and timed workouts which are then recorded for individual review. not sure of how many workers but we've seen as many as 7 at one time... The rehab program has received highest marks from the medical community.

Then... 65 nursing home units. This may have been the decision maker for us. We spent some time watching and talking to residents before we bought. Almost everyone gave the care, food, and aide compassion... (important) high marks.

Four years ago the complex added a complete Alzheimer's unit, and a special attention common room. There are an additional 65 rooms.
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Yup... more than you wanted to know, but an outline of what we consider to be a full service CCRC. The parent company owns 17 more of this type of complex, in five states. Some with fewer parts, like our villas, or the rehab unit, but others with services attuned to younger persons.

This may not be of interest to you personally, today, but it could be a basis for looking at a facility for parents or for future planning. Unfortunately, many decisions are left to the last minute, when there isn't time to investigate where the retiree may spend the later days.

[LoriNJ]

So, if I am reading your post correctly, your CCRC didn't require a large "buy-in" payment? Instead, you pay a monthly rental fee of $2,500? If I read you correctly, yours is the first CCRC I have read of that is set-up this way. The big upfront payment is what has always made a CCRC a less attractive option in our retirement planning. (Not at retirement yet.)

If you have to go to the assisted living or nursing home part of the CCRC, do you still only pay a monthly fee?

Thank you for your informative posts!