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I DON’T KNOW THAT MY life has been all that different from that of others. Still, what’s happened to me has—I believe—been good preparation for retirement. Here are seven life lessons I learned on my journey from childhood through to my departure from the workforce just before my 70th birthday.
Lesson No. 1: Doing it yourself can save big money. My older brother got me interested in cars. This was the late 1950s and 1960s, when drag racing and international road racing became popular in the U.S. Teenage boys back then were primarily interested in three things: girls, sports and cars. My brother was only interested in girls and cars. I was an eight-year-old trying to keep up with my older brother. I didn’t like girls, so cars were an easy choice.
I helped my brother work on his cars. I learned they weren’t so intimidating and could be understood with a little effort, and that doing your own repairs could save a lot of money. The problem: I assumed my brother would help me like I helped him. But I didn’t have a girlfriend. My brother did, and the girlfriend didn’t like time away from her. Helping out a little brother wasn’t permitted, so when I did repairs, I had to do them all by myself.
Lesson No. 2: Nothing lasts forever. When I was age 15, my father had a massive heart attack and died in the room next to where I was watching television. It was a shock that he was gone. The pain hits all at once. Then, over time, you come to accept it.
I’ve since watched others suffer through long, drawn-out illnesses like cancer. Heart attacks, at least, are quick. At 15, I needed guidance to help me through my teenage years. I didn’t get it. I had to navigate this period by myself, and the result was a lifelong focus on self-preservation.
Lesson No. 3: Being alone doesn’t always mean being lonely. The kid who lived across the street from me came from a family of five children. He was my age, so we were in the same grade throughout school. I thought of him as my best friend. But he didn’t consider me his best friend, just a friend. I ended up spending many hours by myself. My mother encouraged me to pursue other friendships, which I tried, but none measured up to the kid across the street.
Being alone forced me to find things to do by myself. TV was an easy solution, but one my mother strongly discouraged. Reading was encouraged—I came from a family of readers—but it wasn’t one of my favorite activities. Bike riding was an activity I enjoyed, as well as walking and repairing things. All are activities I continue to this day.
Lesson No. 4: Know the basics of managing money. My family were savers, so I had both Christmas Club savings accounts and regular savings accounts from an early age. After my father died, I thought we were poor and began a lifetime study of money management. Knowing the basics, coupled with the availability of mutual funds, allowed me to manage my investments without making a lot of mistakes.
Lesson No. 5: Real estate isn’t a guaranteed road to wealth. I bought my first home when the company I was working for moved from New York’s Wall Street to New Jersey. The firm assigned a real estate agent to work with me, along with a territory I could select from which qualified for the full transfer package. It was a godsend. I moved from a studio apartment in Brooklyn to a two-bedroom townhouse in northern New Jersey.
I subsequently changed jobs, and my new employer also moved, from New York City to central New Jersey. This meant another transfer package. Good thing it did. The price that the transfer company was willing to pay for my home was 17% less than I had paid.
The saving grace was that my employer covered the difference between what I paid and what I received from the transfer company. This allowed me to buy our current single-family home. From that point on, to make sure we were never underwater on our home loan, I accelerated mortgage payments to pay off our loan in 15 years instead of 30.
Lesson No. 6: The best things in life are free. If you’re like me and avoid buying things, your appreciation grows for those things you do have. You also lean toward doing things that don’t cost anything. Like going for a walk. Or taking a bike ride. Or sitting in the backyard and studying the behavior of birds who visit the bird feeders. Or sitting in the backyard and studying the cats who also study these very same bird feeders.
Lesson No. 7: Physical fitness is a lifelong pursuit. As a kid, I regularly failed physical fitness tests and never made the cut for a sports team that I tried out for. Still, I had a goal: not to be fat. Not being an athlete isn’t as important to me as not being overweight. Watching what I ate, drinking water instead of soda, and going for walks and bike rides has led to a level of fitness that I can still maintain today at age 72.
The above seven life lessons have, I believe, prepared me for a successful retirement. How so? Here are seven things I’ve noticed about retirement:
David Gartland was born and raised on Long Island, New York, and has lived in central New Jersey since 1987. He earned a bachelor’s degree in math from the State University of New York at Cortland and holds various professional insurance designations. Dave’s property and casualty insurance career with different companies lasted 42 years. He’s been married 36 years, and has a son with special needs. Dave has identified three areas of interest that he focuses on to enjoy retirement: exploring, learning and accomplishing. Pursuing any one of these leads to contentment. Check out Dave’s earlier articles.
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I get that there’s a desire to be debt free, but putting your assets to work for you is also important. Having a bunch of equity tied up in the house doing nothing to add to your life enjoyment, other than being debt free, is not for me. However, regaining opportunity cost should not be wasted; if the money that you might have paid off the mortgage with is wasted, then you’re burdened with both the interest cost AND the opportunity cost.
I think that one needs to get even MORE active immediately before or as you get started in retirement. Muscle loss needs to be stopped so that you can enjoy more go-go and slo-go years. Jack LaLanne lived to 96 and at 70, was still stronger than average 20-year old. We’ve been brainwashed by big Pharma and big Medicine into thinking that our so-called “twilight years” must be accompanied by drastic losses of mobility and ability, and that’s just not true, but we have to commit to making that happen.
IRT #1, I saved a bunch of $$ reroofing my house… that’s NEVER going to happen again. There are limits.
In the book How To Get Rich and Stay Rich by Fred J. Young, he talks about getting older and not wanting to do the work around the house like he used to. He mentioned cleaning gutters specifically and I as I got older, I totally understood what he was saying. But at 30 I would never think I’d not want to get up on a ladder and do a little work.
I agree with almost all of your points. But with a 2.125%, 15yr mortgage, it makes no sense paying it off early. I’ve refinanced many times over the last 22 years, but no more. The final refinance was from a 30yr, 3.875% that would have been paid in full when I turned 103. Keep contributing, I enjoy your writing.
The logical part of my mind wants to keep a 2% mortgage and leverage that for higher returns. The emotional part of my mind wants to be totally debt free. It just feels good. At this point feeling good overrides my desire for higher returns.
Great advice David. You and I line up in our lives as I was the middle kid of 5 and was mostly on my own as well. I also fix what I can, however at this point I don’t feel the “frugal twinge” as when I was trying to make the most of what I have.
And I’m with you on paying it off. If you have a dollar coming in, however have to give .25 to a payment, it is better to pay .30 on that bill when we are still earning and have it gone by the time we are in our retirement years.
Now, the important aspect is keeping healthy and doing regular exercise is very worthy of consideration. We don’t have to be muscle men, but regular movement is king!
Thank you Mr. Garland!
We got our mortgage in 2020 at 3.125%. When we retire in a couple years, we will have guaranteed income from pensions (with annual COLAs) and later Social Security, so we’ll be able to afford our mortgage payments without any stress. We went years of having a huge chunk of net worth tied up in our home, and I’m not interested in doing that again. Right now our cash savings are paying 4.5% interest, so we’re ahead even without putting that extra money in the stock market. And yes, we have to pay taxes on the interest from savings, but we also get a tax deduction for the mortgage, so it evens out.
Maybe at some point if we have disposable income beyond what we want liquid, we’ll accelerate mortgage payments, but it’s not a priority right now. I know everyone thinks you should always pay the mortgage off, but one size doesn’t fit all.
I would agree that one size does not fit all but it does seem to fit most.
I am following the Invest vs. Reduce Debt comments in the HD Guide > Borrowing by paying down my mortgage instead of bonds or savings. Earnings might be higher in a stock investment but has more market risk that I do not want to take. I plan to be mortgage free in January 2025. Paying off my mortgage would be sooner but would require me to withdraw more from my tax deferred account sooner and would cause additional income tax in excess of the mortgage interest I would otherwise pay.
In regards to your justification that we have to pay taxes on the interest from savings, but we also get a tax deduction for the mortgage, so it evens out I wonder about your actual tax benefit from your decision. The maximum acquisition mortgage debt you can consider in itemizing is currently $750K and at a 3.125% mortgage rate the maximum mortgage deductible interest would be $23,438. Add the maximum $10K tax deduction allowed under the TCJA tax rules plus any charitable deductions to determine your itemized deductions and many (about 90% of all individual tax returns currently claim the standard deduction) find the tax benefit from the deductible amount of interest from itemizing is of limited marginal benefit when compared to the available MFJ standard deduction.
As you apparently itemized in 2022 I suggest a as if recomputing of your 2022 return using a standard deduction to see your marginal benefit from itemizing as a dollar amount. Compare that amount with the tax the interest income is costing you at the appropriate marginal federal and state tax rates. I could see a possible tax benefits of continuing carrying the mortgage if doing so allowed you to contribute additional funds to a traditional 401(k) or IRA if you expect your future tax rates to be lower after you are no longer working in a few years.
For me, at 73 and mostly retired, the math and the emotional aspects makes paying the mortgage off better than the investment alternative. I was happy to read that your current planning allows you to pay the mortgage without stress. You may have chosen good over best depending on how long you plan to live in your home.
Best, Bill
Thanks, Bill. The taxes either way are not the real issue but rather having a lot of money tied up in the house. As long as the mortgage payments are easily manageable within our retirement income, I’d rather have money be more liquid.
I know most people, including the author and a lot of personal finance guru, swear by paying the mortgage off before retirement. I thought that way for a long time, too.
All 14 of your points are very well taken, David, but I especially agree with #6 and #7 of your retirement prep, that the best things in life are free and the importance of remaining physically fit. In my own case, I want to be able to play with my youngest grandchild (4) and hopefully go on some more travel adventures (Mongolia!), so fitness is important for those goals as well as for my general wellbeing. I, too, enjoy the shenanigans of my backyard wildlife: Lucky, the cat from next door, stalks the rabbit family living under my deck several times daily.
Managing your own investments is basically controlling one’s behavior; picking investments is the easy part; Index Funds of course
Wonderful lessons and a valuable perspective. Thank you for sharing.
“Holding a mortgage in retirement adds to your financial headaches. Pay it off.”
All good suggestions except this one. I’d rather keep my money in the stock market than pay off my sub 3% mortgage. I’ll die before my mortgage is paid off so I’d prefer to have the money to use myself rather than give it to the lender. They’ll get their payoff after I’m gone. Win-win.
At 3% I agree with you, but that was a relatively narrow window. At 7% I’m with David. I like the peace of mind that comes with being debt free.
Many people feel this way, But there is no guarantee money in the stock market won’t be lost or decline in value. If you pay mortgage off, you then have the old monthly payment money to use yourself every month. You can’t both use it and have it in the stock market.
I hate debt. No home mortgage, car payment or credit card debt. But… (I like to contradict myself occasionally…) if you are investing on a regular basis with the money not tied up in a mortgage and the market goes down, aren’t “buying low”? Again, I wouldn’t to it. It’s a “finesse move” that’s not up my alley. Like trying to put “spin” on a golf ball. I’m just grateful if it goes straight down the fairway.
Thank you for the reminder that moderation and common sense have incredible value!
David, you and I are very similar. I love my work. I’m great at working but not much of a socializer. I like doing things alone like walking and bike riding. Occasionally I’ll have someone else with me, but if not, no big deal. I’m planning on working until I turn 68 and want to continue my passion for traveling both domestically and to other countries. Therefore I know how essentially it is to stay healthy. I never played sports in school. Since I’m 6’1″ people automatically assume I must’ve played basketball, right? If I could run, jump or shoot, I would’ve been a helluva basketball player. LOL!!! I survived an aortic aneurysm 25 years ago and keeping my blood pressure down by keeping my weight down is a big motivator for me to stay healthy. I don’t plan on taking Social Security until I’m 70. At this point, it looks like making that work should be easily accomplished. I will admit that I’ve never been much of a DIY guy. I was just never taught. Once I retire, I realize that I’ll have the time to fix things on my own and you can learn anything on YouTube! Steve
Thank YOU! I’m in your club There’s a lot of value to work and I do like it. There’s something about being successful on a job well done!
I live close to a small creek which has a walk/bike path along it. There’s even a beaver dam close that has to be reduced from time to time as the pond backs up. Right in the middle of a city!
I did take SS at 70, now the COLA increases are given from that largest amount I could have received. Sweet feelings.
Delayed gratification rules!