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I’VE DECIDED UPON MY retirement date: July 1, 2025. We just passed the one-year countdown point, so I thought I’d share some of my ideas and plans for my final year in the workforce.
This countdown idea, of course, isn’t original with me. Indeed, there are apps that you can put on your phone to count down the time until retirement. I was primarily inspired by a retirement blogger named Fritz Gilbert. He’s way more decisive than I am. Gilbert started his blog several years before his planned retirement date, and has meticulously documented his journey leading up to retirement and the time since.
Besides setting a date, I’ve already completed a couple of preparatory steps. I’ve attended several retirement webinars offered by my current university’s retirement program and my previous university’s program. I now understand the timelines for filing retirement paperwork, and I have those dates on my calendar for next spring.
One year to go: Financial tasks. One thing I thought I’d be doing during this final year is stress-testing our retirement spending plan. We have a spreadsheet of sorts that roughs out what we think our monthly expenses will be. But since my husband may not retire next year when I do, we don’t need a trial run of our more austere spending plan—yet. Instead, I’ll need to think about a household budget that will change in two distinct and related ways.
First, my take-home income will go up. I’ll be receiving pensions from two university systems, and together they will replace more than 80% of my current gross income. Meanwhile, I’ll no longer be making contributions to my university pension, Social Security and Medicare, and my 403(b) and 457 retirement plans. These contributions, together with federal and state tax withholding, easily devour more than 50% of my gross pay. Once I’m retired, the only deductions from my pension checks will be for federal and state income taxes.
Second, we’ll have more taxable income. My pension contribution and my voluntary contributions to retirement plans are all “above the line” deductions that reduce my adjusted gross income. When those are gone, my tax liability will increase.
So, one of my financial tasks this year is trying to figure out what the bottom line will be and what to do about it. For example, perhaps I should be looking into tax-smart ways to invest my extra take-home income.
I also need to think about what I’ll do with my current retirement accounts, which are with Fidelity Investments. In addition, I have a rollover IRA with Charles Schwab from my previous employer. I don’t have to do anything in particular with these accounts, and required minimum distributions for me won’t start until 2035, when I’ll be 75 years old.
But I’m a fan of simplicity and want all of those accounts in one place. Will it be Schwab, Fidelity or perhaps Vanguard Group? My IRA at Schwab is all invested in Vanguard funds. If I roll my Fidelity accounts into my IRA, do I sell the funds I currently own and invest the money elsewhere?
Finally, both my husband and I will turn 65 next year and become eligible for Medicare. He previously worked for California’s state government, and we’re both currently covered by the health benefits from the state’s retirement plan. Once we’re Medicare-eligible, that will become secondary coverage, so we’ll have to investigate our options—there are several—and make our decisions.
One year to go: Personal tasks. I’ll need ideas about how to fill my time purposefully and pleasurably. I have some things I’d like to do, or at least try, but I need to think those through. Happily, I have the perfect space in which to do this, as I have a winter quarter sabbatical from work approved.
My primary objective for those 10 weeks will be to map out some goals for the first year or two after I quit the day job. For example, I’m sure I’ll look into ways to work on my health and fitness regimen once I have more time. I also may take private swimming lessons at a local club. I’ve never been a very good swimmer, and would like to do laps for exercise and feel more comfortable in the ocean, since we live in California and like to travel to Hawaii.
I also want to devote more time to some of my existing hobbies, such as cooking. I’d like to improve my baking skills and learn how to make amazing salads with a spiralizer. Right now, my cooking choices tend to focus on what I can accomplish most quickly and with the fewest ingredients possible. I think I’d enjoy slowing down and spending more time creating delicious, healthy food.
Purposeful activity will be important for me, as I’ve never been one who could tolerate too much leisure. I already do some volunteer leadership work at our church that draws on my teaching and writing skills, and I expect to continue doing some or all of those things. I’d also like to find a local nonprofit where I can volunteer. I’m not sure where I’ll land, but I like the idea that I can try and discard various options until I find what’s right.
Finally, I want to devote more time to relationships. I’ve been doing this more and more in recent years. With additional free time, I can initiate things like walks or coffee with friends, or perhaps hosting people for dinner, movie night or to watch sporting events. I think I’m capable of being a generous friend to people, but I’ve always had to be somewhat protective of my time and energy because my work takes up a lot of it.
Many people don’t have the luxury of planning for retirement in such a precise way—they retire abruptly because of failing health, family issues or job concerns—or they may not be in a financial position to retire at all. I know I’m privileged, and I hope to use the time and space I’ve been gifted to get retirement off on the right foot.
Dana Ferris and her husband live in Davis, California. She’s a professor in the writing program at the University of California, Davis, and is the author or co-author of nine books on teaching writing and reading to second language learners. Dana is a huge baseball fan and writes a weekly column for a San Francisco Giants fan blog under the nom de plume DrLefty. When not working, she also loves cooking, traveling and working out. Follow Dana on X @LeftyDana and on Threads, and check out her earlier articles.
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Don’t move accounts to Vanguard. They have significant customer service challenges they have yet to fix, despite the firm’s excellence at investments . You can hold Vanguard funds or ETFs at, for example, Fidelity; I do.
Thanks for the input!
Thanks for the tip
I’ve not had a single bad experience with Vanguard since 2016. I’m sure there are plenty of others who do but I feel this story has taken a life of its own. New CEO seems very focused on customer service.
I tend to be loyal to a fault. But Vanguard has made enough missteps that have directly affected me that, at this juncture, I’d be inclined to move my account if my time wasn’t so short.
Congratulations on your well thought out plan! When looking at medicare I would be very cautious about Medicare Advantage plans. IMO they are predatory and are a product to be sold and not “bought.” A person cannot revert to a supplemental plan once signed up for an Advantage plan and doctors are beginning to not take these advantage plans because of all the increased time/paperwork from prior authorizations. Advantage plans let the insurance company be another gatekeeper of your healthcare with record profits for them but limits healthcare options for patients.
Thanks! I’m guessing we’ll do whatever “Medigap” version is offered through our retirement system, not Medicare Advantage.
Dana, congratulations on a well thought out “glide path” into retirement. I retired last year and ever since, I tell my friends and colleagues who are not yet retired to at least “have a plan”. This isn’t a decision you make abruptly (unless you are downsized or let go) or lightly.
The only other advice I would offer is to do a bit more planning on the financial side. You mention considering rolling over your 403b account from Fidelity to another institution (it sounds like in-kind). You may want to consider other types of investment products including MYGAs or other types of annuities and the allocation of your assets from what your investment mix is now. We started positioning our investments prior to retirement into buckets (yes the Bucket Plan by Jason Smith) to have funds available for soon and later in retirement with appropriate investment strategies and vehicles. We used a Financial Advisor to assist us (with this and many other decisions) but many do this on their own as well.
best of luck in your journey and keep us posted.
Thanks! We definitely need to give more thought to our retirement accounts. We both have rollover IRAs from our previous jobs as well as current contributions, which in my case is 403B and 457, since I work for a state university. My husband’s current account is a 401K.
Since we will mostly be living on pensions and then adding Social Security, we have to think about what our goals for those retirement accounts are. I don’t see needing to annuitize them, since our pensions already provide that income stream (and both of us have spousal survival benefits and COLAs built in). But we definitely could and should give more thought to how they’re invested. They’re currently in target date funds (Vanguard and Fidelity).
He may be decisive, but Fritz Gilbert did not count to three before he decided to retire. 😉
😂 That’s good knowledge! 😂
Congrats! Sounds like you have a great plan to transition into retirement. My only comment is to consider if it’s really wise to simplify down to one financial institution. The overhead to have 2 or 3 financial institutions is negligible but if there a major cyber event, your money might be unavailable for a while. This is compounded if that same institution is also where you’ll do your banking and your monthly retirement checks are deposited. Another aspect is SIPC coverage limits, leaving the balance covered by a private insurance policy. I know simplify is a well regarded theme on this website, but I believe it comes with it’s own risk. I’ll admit this is highly unlikely, but not impossible.
Congratulations Dana. I agree with OldITGuy and have actually considered moving some of our assets from Fidelity to a third institution. I’m a Fidelity fan but cybersecurity is a risk and fraud is another, perhaps more likely.
Good questions. I’ll have to give those some more thought! Right now we do all our everyday banking through a local credit union.
We moved our checking account from a credit union to Fidelity, where we’re earning ~5% on our money. Also Fidelity did better than Vanguard and Schwab at transferring accounts.
Congratulations, Dana. Sounds like an awesome retirement.
I wrote an article last year on Medicare, but bottom line, read “Medicare for Dummies” and maybe meet with a SHIP counselor. I recommend Medicare A and B plus Medigap Plan G and the cheapest Part D drug plan that covers your meds.
Cool that your income goes up! I believe TurboTax still lets you run the numbers for free, only charging if you actually print forms or efile.
One thing I realized since I wrote the article is that I can and probably will double my retirement contributions for the first six months of 2025, since July 1 is my planned retirement date. That way I’ll get the full (final) tax year with that tax break.
I assume Dana and her husband will be choosing one of the Medicare health plans offered by CalPERS.
Yes, that’s right. We’re currently covered by CalPERS through his retirement benefits. When we turn 65, it becomes secondary coverage. As I understand it from older neighbors who are CalPERS retirees, we’ll be able to keep the PPO policy we have now and the costs will be different (less, I believe). There are both Medigap and Medicare Advantage options to choose between.
I’ve actually been to webinars on retiree health coverage offered both by the UC (my current employer) and CalPERS (my previous employer) and am still a bit confused about how they complement each other. But I suspect it will come clearer as we approach 65. My husband gets there a couple months before I do, so whatever he does, I’m sure we’ll decide it together and both do the same thing.
Congrats, Dana, on setting a date.
I don’t know about CalPERs coverage. Like you, however, I could have opted at age 65 for my state’s retiree health plan. Turns out it covered less and cost more than regular Medicare with supplemental coverage (Plan G and a drug plan). I’ve had no regrets in foregoing the state plan.
Studying the options took about a week of long days, but then I’m the kind needing full immersion to feel comfortable with a subject. Luckily, I was retired by then. I delved into my state’s insurance website (yours seems to be here), attended a SHIP presentation, researched the Medigap/Advantage plan outlines and drug plan formularies, and lastly met with a SHIP counselor, who confirmed that the state plan was not in my best interest. This booklet would have made a great starting point for what I ended up with.
My wife’s cousin held a CPA and worked for insurance companies his whole professional life.
When we asked him about Medicare he chuckled and gave us the card for THE CONSULTANT they used.
40+ years in insurance and he STILL recommended an expert.
Medicare – and various supplement plans – is very, very complicated.
It’s well worth it to pay an expert professional to help with your choice.
DISCLAIMER: My wife who has a Masters In Finance makes all our investment decisions.
We did not use a consultant. I think for most people what Kathy said above is a great choice: trad Medicare (part A and B), supplemental coverage (we did a high-deductible G plan for Nancy and I’ll follow the path she blazed when I turn 65), plus the cheapest part D plan that covers any meds, has a decent reputation, and uses pharmacy networks you like. We got our medigap plan from the same insurer my employer used when I worked, also the same one who wrote my ACA coverage.
One nit about applying for Medicare which I learned the hard way: Be sure when you fill in the Medicare web application on ssa.gov, that your birthplace EXACTLY matches whatever’s on your birth certificate. They’re basically doing a character by character string compare, so dot the Is and cross the Ts. My wife was born in a town which has two parts but locals use the same core name to refer to the whole thing. But one is called “Borough of X” and the other is simply called X. Hopefully your birthplace is less complicated.
I don’t remember anything like that, but I was born in England. I may have had to show them my naturalization certificate.
You have to pick said consultant with great care, and find out who is paying them if you aren’t. I tried using an agent last year and he was worse than useless.
I wrote this article in June and realize that I’ve already made some progress on a couple of items! I bought a spiralizer and have been experimenting with some great salads this summer. I even treated myself to a shipment of some good flavored olive oils and balsamic vinegars. I was trying to incentivize myself into eating more salads for health reasons, and now I’m looking forward to my salad every day!
I also have a date on the calendar in October to host a group of neighbors to watch our 49ers on Thursday night football. That’s one of those games that will be on Amazon Prime, to which we subscribe but some of our fan-neighbors do not.
Dana, if I were a professor like yourself, I’d award you an ‘A’ for your countdown plan. You’ve thought things through thoroughly and are in an excellent position both financially and otherwise. Your line “I’ve never been one who could tolerate too much leisure” was striking to me. Sounds like you have a solid plan to use your newfound time purposefully. Best wishes for your final year and beyond.
Thanks, Ken!
Great plan! Recognize that you (and your husband) are allowed to change your minds about what activities/hobbies will look like. Good luck.
Absolutely! For example, if I decide I hate swimming laps or it’s too hard to get good at it, I’ll do something else. I’m looking forward to that part.
I recommend swimming above all exercises. You will workout your whole body and mind when you swim. It is a low impact exercise and it is something you can do until your 100 birthday. You just need good instructions. I took an intermediate swimming class when I was in college and I learned how to float without much effort. After that I learned different swimming styles. Please make sure that you take a college level class in a university campus. You can take it as a continued education class.
Dana, thanks for an excellent article. It sounds like a well thought out plan.
I was one of those that was forced into a phased retirement duet significant changes in my job. It was not the way I would have planned it, but we made it work. It appears that your financial plan provides you a margin of safety and flexibility for any future changes on unexpected occurrences. I wish you the best.
I hope so on the financial plan. As I mentioned a couple of articles ago, when I was choosing a retirement date, the only thing that would push me toward a later date was hoping we have “enough.” I’m pretty sure we do, but there’s always that little nagging voice reminding me that you don’t know what’’s coming in the future.
Dana, your retirement sounds like more work than a job! I relate—I hope to stay busy and useful, as well. Of course, we know the first month of your countdown was unexpectedly challenging. I hope you get to do all you plan.
Thanks, Ed. The recent death in the family is definitely a reminder that you can plan all you want, but you also need to hold those plans lightly. I’d still rather have a plan and adjust it as I go than not have one, but that’s always been how I’m wired.