Here’s our latest interview with a retiree as we seek to learn from those who have actually taken the retirement plunge.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview was conducted in November.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 64 and my wife is 65.
We have been married 42 years, she is the smartest decision I ever made.
But I’m not sure what she was thinking?
Do you have kids/family (if so, how old are they)?
We have three grown millennial children.
They have three engineering, one medical doctor, one business, one education degrees among them, and one PhD in the works.
They all have good jobs and are totally self supporting. Two of them are married, but no grandkids.
What area of the country do you live in (and urban or rural)?
We live in rural Arkansas, just outside of a small city/town.
Is there anything else we should know about you?
I’m a chemical engineer and worked at one company my entire career.
I’m also Millionaire 64.
How do you define retirement?
I define retirement as no longer needing to earn money and spending your time exactly how you choose to.
Of course I enjoyed my job so I kind of have always felt retired.
How long have you been retired?
I retired right after my 60th birthday, so I’ve been retired almost five years.
Is your spouse also retired?
That’s kind of hard to say.
She taught school for nine years and then retired to raise kids and run our household. I think she always worked much harder than I did, still does, so it is hard to say how retired she is.
What was your career and income before retirement?
I worked at one company for 38 years. Started as a summer intern and left as the VP and General Manager of the whole thing.
I worked as an engineer, then an engineering manager, then a plant manager then became a corporate VP, a lobbyist agend government affairs VP and finally the General Manager of the of the entire organization.
My first year I made $18,000 (That is $72,000 in today’s money). My last year I made $430,000, but that included some stock benefits and a huge bonus, my next best year to that was about $300K and most of the last few years I worked I made closer to $200K.
Why did you retire?
I had a couple million invested, plenty to retire with, when my dad passed away.
He was the classic millionaire next door. He never made six figures in his life but he and my mom still amassed a couple of million dollars that my brother and I each received half of. So we literally inherited a million dollars each. That was more money added to the pile than I would have been able to save working to the conventional retirement age of 67 so it occurred to me, why do that?
I told my CEO he needed to look for my replacement and that set the wheels in motion. I retired a few months after that.
Interestingly I received several large job offers after I retired to go back to work for even more money than my old job paid. But I had no trouble turning those down.
PREPARATION FOR RETIREMENT
When did you first start thinking seriously about retirement and when did that turn into a decision to do it?
As soon as I told my CEO I was ready to leave it was a done deal.
My job had always been my favorite hobby, out of many hobbies. But over the last two years it had become much less so. I was carrying more stress than I knew, I was always on call and there was some risk of liability if I stayed.
What were the major steps you took from deciding to retire to developing a plan to do so?
Really I already had a financial plan. I knew I had more money than I needed. Social Security alone is going to pay my wife and I $65K when we take it at age 70 and we only spend about $100K per year so our withdrawal rate is going to be very small.
The main thing I did was to set up a consultancy with two major clients. It has given me about eight hours a week of fun work in retirement and also makes 100% of our expenses so far.
What did your pre-retirement financials look like?
Since we were 60 at retirement I had access to all our accounts with no penalties.
But because I had about five consultancy gigs going which have consistently made over six figures in retirement we have not had to touch our portfolio to supplement our income.
We have a 55% equity, 25% bond, 20% cash allocation currently.
What was your overall financial plan for retirement?
We just tracked our actual spending, it had run about $100K for the previous three years.
And that proved to be very close to our retirement spending, including the high cost of health insurance.
Did you make any specific moves to prepare your finances for retirement?
A couple of years before retirement we moved from 90% stock to 55%.
No other changes, we still have the one and only house we have lived in for over 40 years. It is long since paid for and only worth about $200K. We really don’t count it as an asset.
Who helped you develop this plan?
I was a guest on Sound Retirement Planning podcast, Jason Parker’s show.
As part of that he gave me a free financial plan, really detailed and thorough.
What plans did you make in advance to leave your job?
I got my name out as a potential expert witness, I lined up some consulting clients and let my employer know I’d consider doing some consulting for them or lobbying if they wanted me to.
What were your pre-retirement concerns (financial or non-financial)?
This will sound bad probably, but I worried about my ego. I was the face and the name for one of the oldest companies in our state, a company that was a household name. I had 700 employees and was active in politics. So I had a good deal of fame on the local and state level, even nationally. I testified before both House and Senate committees in DC and was in the news pretty often.
That is ego stroking stuff, I was a player. I had governors, senators and billionaires in my cell phone contacts and they’d take my calls.
I honestly was afraid I’d miss being connected and being recognized. Plus there are a lot of perks that go with that.
How did you handle deciding on and paying for healthcare?
We used COBRA for the first 18 months, Blue Cross high deductible after that.
It costs about $16K to insure both of us with a $6500 deductible plan that rarely paid for anything. It was good coverage and affordable to us.
How did you tell your family and friends of your plans?
We had no living parents. We just texted everyone.
Only one brother in law advised against it. While I thought I was a big deal, he really was. He ran a major Fortune 500 corporation until he retired and he missed his private jets and exciting past life. He said I’d be bored like he is now — he was wrong!
THE ACT OF RETIRING
How did you ultimately retire?
I announced it to my team two months in advance and I kept coming into work but I really didn’t do much, I kind of coasted most of the time.
I also arranged a severance, which retirees don’t get, but I had some negotiating power and was successful.
What went well?
It was all good. They had a couple of parties, I got a lot of hugs. I was a well liked boss.
There was also a big fancy dinner where a lot of people said a lot of nice things about me. It was a good send off.
What didn’t go so well?
Nothing went badly. My consulting started the day I left work and succeeded way beyond what I expected.
How did you ultimately find the courage to do it?
Frankly, inheriting a million dollars when you already have millions gives you a whole lot of courage.
I also was an avid consumer of blogs and podcasts on FIRE so I knew the numbers and that I was bullet proof financially.
How was the adjustment, especially the first few months after retirement?
It was not a big deal.
I kept my running group routine of my wife and I getting up before 5AM three days a week and running a few miles with a bunch of friends.
I just immediately had more time for our hobbies.
How is retirement life now? What do you like about it and what do you dislike?
It is great, I have never missed my old job.
Because of the consulting I am still connected and show up in the news and still run into my previous contacts. It mostly hasn’t changed like I expected.
I carried over a lot of heavy volunteering into retirement and a lot of my “brand” was associated more with that work than with my 9 to 5. That kind of surprised me in a good way.
What do you do with your time? What does an average day look like?
On a run day it is up at 4:50AM.
Then we drive to where our run group meets and run four to seven miles depending on which day it is. After that we go home and I’ll usually cook breakfast.
We’ll read the papers while doing that and that usually takes an hour or so.
Generally after that we will go hit tennis balls or we may have lined up singles with a friend so we’ll each have a tennis match. That takes until lunch time when my wife generally will cool lunch.
In the afternoon I’ll read blogs and sometimes post something while she is usually doing yard work or a house project. My wife does all the grass cutting, gardening and most household maintenance. She’s a farm girl and extremely hard working and capable.
In the evening we’ll cook together. We have rules, except for breakfast when we read the paper while we eat there are no distractions at other meals. We have that time to talk and spend together with no TV and no social media.
Some days, maybe one per week, I’ll travel and work in our capitol city consulting.
We also fish usually one or two days a week. We play pickle ball. We take our side by side all terrain vehicle all over the state and country to ride off road.
We hike a lot. We have bushwhacked to all 120 Arkansas waterfalls, that was a ten year project and some of those were nearly life threatening adventures. We both ski, we shoot targets, and we also hike trails. In addition to all that we do together we also go on vacations with our individual friends. My wife just got back from the beach and I just got back from catching red fish and speckled trout on the coast.
What are the major activities that fill up your time in retirement? Are there any new ones you’re planning to try?
All the hobbies I just mentioned but also I chair a college board of trustees and a large charitable foundation board. Those involve a good deal of unpaid volunteer work.
We also generally take an overseas trip, we had a cool hiking trip to Switzerland set up for 2020 but, you know, dumpster fire happened.
What is your social life like?
Our main sets of friends are our running friends, our tennis friends, our pickle ball friends, our fishing friends, our church friends and my work friends.
Most of our social time isn’t dinners or parties, its doing active sports with those different groups. But we also do have parties and events sometimes with them.
Looking back, what would you have done differently?
Not a thing. I wouldn’t have worked longer or shorter.
I’m content. I think I hit the sweet spot.
Was there any emotional impact from leaving the workforce?
None, but some of that is because I didn’t really leave. I still work with many of the same people as a consultant. But I only work maybe eight hours a week instead of 50-60.
There is a huge reduction in stress. I didn’t realize what I was carrying. As soon as I left I felt like I was floating, it took me awhile to figure out what I was feeling was the absence of stress!
What surprises (financial or non-financial, good or bad) have you had since retiring and how have you handled them?
I was surprised I made so much money with so few hours worked in consulting, that was a good surprise.
We’ve had some health issues, like anyone in their sixties but none has proven serious, yet.
What are your future plans?
Not to change anything, it’s not broken, in fact it’s optimal.
I may stop my current consulting, it is getting a little boring now.
If I do, I’ll need to find something else to keep me mentally challenged.
How has your financial plan performed compared to what you had estimated before retirement?
Since we are at zero withdrawal rate it kind of has to work, but it’s nice to see it grow every years.
Can you give us some insights into your post-retirement spending and income? How much do you spend annually and on what? And where does the income to pay for your spending come from?
We spend somewhere around $80-100K.
We are members of the country club, we travel a good bit for tennis competitions.
My consulting has paid all the bills so far.
How are you handling Social Security, required minimum distributions, tax issues and the like?
We aren’t old enough for any of that, my wife will take her small Social Security at her full retirement age, I’ll wait until age 70 to take mine. I still pay a lot of taxes for my consulting income.
Did you return to paid work? Why or why not?
I consult for entertainment and as an off ramp from full time work. I may quit that at the end of this year. I think that is likely and then I’ll experience total retirement.
Did you find it hard going from being a saver to a spender?
We haven’t had to yet, but yes, it is going to be an adjustment.
Looking back, what do you wish you knew in advance?
Nothing really, maybe that there wouldn’t be anything hard about it at all.
What advice do you have for those wanting to retire?
Take care of the financial part.
But my other advice, just as important, is to learn to be your spouse’s best friend. You are going to see a LOT of them after you retire.
I’m blessed that my wife loves the same things and doing them with me. She catches bass, hits tennis balls, runs marathons, shoots guns, plays pickle ball, hikes and scrabbles up and down mountains, loves off roading, likes travelling, loves to cook together.
You need your own separate friends and activities too, but if you don’t have a lot of common interests I can see how your marriage could fall apart in retirement. And that would be a disaster.
Growing older is no picnic. I can manage it with my best friend, I can’t imagine growing older without her.