Retirement Realignment

I retired from my 38-year career as an electrical engineer with the country’s largest operator of nuclear power plants on September 5, 2023. I’d often dreamed about having an enjoyable encore career, and a week after retirement I began working part-time as a Chief Engineer in a consulting firm with a few hundred employees. The job has largely been true to my dream. In the roughly 16 months since I retired from full-time work, my wife Lisa and I have undergone many changes related to our financial lives. Here are 10:

1. Emptied our TreasuryDirect accounts. Given the current mediocre returns on savings bonds, along with a desire to simplify our finances, we cashed in all our on-line savings bond holdings, zeroing out our TreasuryDirect accounts.
2. Cashed in paper U.S. Savings Bonds. The process of dealing with the Federal Government bureaucracy to redeem savings bonds seems clunky and slow. Many banks are no longer redeeming bonds, even for longtime customers. My bank still provides that service, so I’ve been cashing them in there. I’ve worked through all the highest denomination bonds. This has had tax implications as our interest/dividend income has been much higher than normal. I’ve adjusted my pension and earnings withholdings accordingly.
3. Went on Medicare. Well, at least Lisa did. It was a very smooth process, all successfully completed online. I didn’t even feel the need to purchase ‘Medicare for Dummies’ to help navigate through the decision making. Plenty of good information was available here on HumbleDollar. And no, she is not enrolled in a Medicare Advantage plan.
4. Spent 50% more on eating out. My son Dan and I meet almost every Thursday for lunch. Dan is a software engineer who works from home and lives about a half hour away from me. My wife, daughter and daughter-in-law get together monthly for a Cutler girls’ meal. Having lots of flexibility in my schedule, I regularly meet for meals with a variety of friends. So does Lisa. And there are date nights, of course.
5. Replaced our gas heating system. When a major part in our 23-year-old gas heater broke, I didn’t hesitate to replace the entire unit rather than getting it repaired. Furthermore, I didn’t spend any time agonizing before selecting the more expensive but higher efficiency replacement option.
6. Cut the cord on cable TV. The addition of basic TV to our cable internet package was costing us about an extra $70 a month. Most of our TV viewing involves YouTube or Amazon Prime. Occasionally we watch our local TV channel, which comes in very clearly with an antenna. In fact, we can pick up about 11 channels over the air. Given our viewing habits, there was absolutely no reason to continue paying for cable TV.
7. Funded Roth IRAs in retirement. Since I still have a modest earned income, we can fully fund Roth IRAs for both me and Lisa. I look at the Roth IRAs as our last line of financial defense. They are in essence our long-term care insurance policies, to be used only when all other resources have been exhausted. We hope to be able to transfer these policies intact to our heirs.
8. Began modest withdrawals from my 401(k). About two-thirds of our financial wealth is in my 401(k). I realized that although our asset allocation is satisfactory to me, our asset location profile is not. It’s time to start slowly chipping away at the ticking tax bomb before the RMD grenade explodes in 13 years. I’m taking a baby step by starting withdrawals at an amount roughly equivalent to what a financial planner might charge me in fees.
9. Increased focus on estate planning. Lisa and I are not getting any younger. At our ages, things can change quickly. My current focus on asset location is partly a nod to estate planning. We plan to update our wills this year. I continue to add more details to my ‘sudden death’ instructions letter for Lisa.
10. Fixed a date to begin taking Social Security. Based on results from Michael Piper’s Open Social Security calculator, Lisa and I should both start taking our benefits at her full retirement age. That’s what we’re planning to do.

As you can see, a lot can happen financially in a little over a year. I doubt that things will settle down in 2025. I may have a part-time job, but retirement is a full-time endeavor.