Want to be rich? Earn more money and work to unrig the system

The Thinker by Rodin

Dave Ramsey is an American businessman and motivational speaker trying to get people rich by motivating them to get rid of their debt. There is certainly nothing wrong with being debt free. It’s a state that I happen to be in at the moment, which gives me a leg up on some surprising people, like Donald Trump. Trump owes at least hundreds of millions of dollars to Russian banks and likely lots more to others. Who knows for sure? It’s not like he’s telling us but it likely clouds his judgment and explains why he is so friendly toward the Russian government. Trump seems to celebrate debt in a way that Ramsey does not. He proudly called himself the King of Debt during the campaign.

However, I am quite convinced that if I hadn’t incurred strategically good debts over the years I wouldn’t be as comfortable as I am today. It turned out that for me the real key to wealth was earning more money than most people over a longer period of time. If you can do that and you invest your money wisely at some point you should exit a reasonably wealthy person and with no debts too.

So it turns out that garnering real wealth, unless you are lucky enough to inherit a bundle of it, is about using an effective strategy. Many of us do this without really thinking it through. For example, most of us live near or within cities. Do most of us prefer this sort of existence, which is much more costly than living in a trailer park somewhere in southern Alabama? It’s hard to say but it is clear that living in or around cities expands our possibilities for acquiring wealth. It puts us closer to a variety of different jobs. It makes it easier to expand our educational credentials should we need to do so because there are colleges and universities nearby. Better employers prefer to locate in cities because the talent pool is richer.

Obviously there are downsides to living in cities. I experienced them by spending over 35 years in the Washington D.C. metropolitan area. The downsides are probably too numerous to mention but among them were a higher cost of living in general, housing prices that were frightening and barely attainable even at a higher salary, crushing and frequent traffic jams and long days that began before sunup and lasted past sundown. I was glad to cash in my chips in retirement and move somewhere without these issues. By doing so not only do these downsides go away but also I get much more value for the money I have. Having wealth doesn’t mean much if you can’t enjoy it before you die.

So there was that but there was also the trick of making more money than most people. This was made possible in my case by some combination of talent, passion, circumstance, risk, luck, strategy and privilege. When I made the decision twenty years ago to get a graduate degree, I didn’t have to look far. George Mason University was not far away and they had a top-notch software engineering school plus I got some employer subsidies for the tuition and a lower in-state tuition rate. Moreover, it was a great field to get credentials in as it distinguished me over many other candidates for higher paying positions.

About the time I got the degree I used the degree to successfully get a higher-earning position. I used the higher income to reduce debt, as Ramsey would advise. I also used it to squirrel away as much money as I could toward retirement. And I used a lot more of it than I would have liked doing sensible things like replacing the windows and roof of our house. I didn’t pay for this out of pocket. I paid for it using a home equity loan. Some debt is both good and useful.

One way to build wealth turned out to be allowing our house to appreciate in value. We paid $191,000 for it in 1993, mostly with borrowed money. We sold it for $505,000 in 2015. Not only did we get a place to live for 22 years, thanks to the crazy real estate market (made possible by so many people wanting to live in our neighborhood) we also made nearly $500,000 by occupying it, paying off the mortgage and maintaining it so we could sell it for a good price. If you are so debt-phobic that you live in a trailer park instead then unless you are very savvy with your extra money you probably aren’t going to get that sort of return on your investment. And even if you do, you will have spent thirty plus years living a cramped and challenged life. Is this a price worth paying to be debt free?

I mentioned that being a white male helped. I’ll never be able to attach a monetary value to this, but it was huge. I was always implicitly one of the guys. Cultural factors made it easy for me to fit in. Mostly it was other white males that promoted me. I knew what they were looking for and mirrored those behaviors.

And so today I am properly retired. And while I have no doubt that Dave Ramsey is wealthy, he’s still out there selling stuff. Me: I’m retired. I can enjoy the rest of my life. Maybe Ramsey takes joy in his work and it’s what he’d be doing for free otherwise. From all the marketing material he sells and the seminars he puts on I suspect his life is not quite as rosy as it seems. As for the quality of his advice, I for one take it with a grain of salt. Certainly it’s a good strategy to work toward being debt free, but it’s one of many strategies needed to acquire wealth. It begins with a clear-eyed assessment of your strengths, the labor market, current economic forces and figuring out how to optimize your assets to fit these forces.

Ramsey also peddles what I think is the false Republican notion that any man (or woman) can pull themselves up by their own bootstraps. False! False! False! Some people through circumstance and by being blessed with nurturing parents can do so. There are lots of minefields to acquiring wealth and there are many institutional forces out there working actively to reduce your odds. Much of the wealth generated from recovering from the Great Recession came from something Republicans seem to loath more than anything else: Obamacare (the Affordable Care Act). People mostly lose wealth when unexpected medical costs balloon into crushing debt. By extending the health insurance franchise to more Americans, it cushioned these impacts. That plus a recovering economy created wealth, which allowed many to invest that wealth in places like the stock market that is soaring today.

So I firmly believe that it’s a combination of talent, drive, strategy and smart governance that brings real wealth. The only issue is who gets the wealth and right now it’s clear that most of it is going to those who are already rich. No combination of talent and drive can fix a rigged system. Bernie Sanders understands this, which is why his message resonated in the last campaign and is likely to resonate even more in 2020.

Financial management on a fixed income

The Thinker by Rodin

My stepmother says that retirement is just another stage of life. After two years of retirement I’ve learned that she is right. It’s definitely a new stage of life for my wife and I. Many of the old rules no longer apply. For one thing, the rules of managing our finances have changed pretty drastically.

For example, when we used to have a mortgage, the bank did a lot of the thinking for us. They figured out our probable property taxes and paid them automatically for us. Since they had a stake in our house, they also worried about our home insurance and insisted on paying that too. All we had to do was give them a fixed amount of money every month in addition to our mortgage payment.

That’s changed. With no mortgage, my financial life actually got more complicated. Instead of one convenient payment, I now have to think about setting aside money for property taxes and home insurance. These are not exactly trivial expenses. Our property taxes are close to $8000 a year, which means I have to have $2000 set aside every quarter to send to the city, no ifs, and or buts. Moreover I (not the bank) need to remember to send these payments in. It used to be so simple.

Almost by definition when you retire you live on less money than when you were working. If you screw up your personal finances it becomes harder and more painful to make up for excessive expenditures. Because I am pushing 60, I cannot assume I can go out and find another job to make up the difference. This means I have to watch how I am spending money. When I see large differences between expected and actual expenses, I have to figure out what to do about it. The choices boil down to pulling money out of our portfolio on the assumption we won’t spend it all before we die (always a chancy proposition) or cutting expenses. Yes, it’s possible to take out a loan to live a larger lifestyle, but it’s counterproductive. You can’t dodge your financial mistakes when you live on a fixed income.

It’s a good thing retirement gives me the time to analyze these things. In truth though we are just emerging from a time of great transition that followed our retirements. Only now after moving four hundred miles, selling one house, buying another house and even living in temporary housing for five months are things starting to settle down. Our transition created so much uncertainty that keeping a budget was pointless for the last few years.

Steering your financial ship in retirement is a lot like taking a sailboat out on choppy seas and into a storm. You have a pretty good idea where you need to go but the end is hard to see. At best there are shapes in the mist and you have to rely on your handy compass, buoys and nearby lighthouses for general navigation. We have reached the point where the waves are 1-3 feet, visibility is good and the sun is shining. But there is more work to do. The deck needs a lot of clearing and new sails need to be raised.

So many things have changed. Take taxes. It used to be I sent a W-4 to payroll and hoped enough was withdrawn from every paycheck to pay our income taxes. In Massachusetts where I live now there is no reciprocal agreement with the federal government (my former employer) for withholding state taxes from my pension. So I have to remember to pay estimated taxes every quarter. That’s not too hard. I add it to my Google Calendar. The harder part is figuring out how much to send the commonwealth.

The commonwealth is unforgiving. Last year we were new residents. I didn’t start withholding estimated taxes but when I estimated our state taxes they looked minimal, under a thousand dollars, so I didn’t bother. I had bigger fish to fry. I learned later that the law is if you owe more than $400 when you file your tax return that you owe a tax penalty. Our taxes were about $800, so the comptroller eventually sent us a tax penalty bill. Frankly, I was pissed. I had sold a house, bought another one, spent four months in one state and the rest in another, estimated our state taxes as best I could and they were still going to ding me for this? Yes indeed. Fortunately the penalty was less than $20. It was cheaper to pay the penalty than to figure out for sure if I was subject to one.

We’re in a new house but of course this house will degrade over time too. Roofs will have to be replaced. Cars will need to be retired and new ones bought. The cost of maintaining a standard of living is never cheap but living on a fixed income means I have to anticipate these major expenditures. Yet they are so variable it’s hard to know how much to put aside. In twenty years when the roof needs replacement (assuming it lasts that long) how much will it cost to replace?

There’s no way to know for sure, but I did check how much it cost to put new shingles on our old house (about $3000 in 2002). I assumed an inflation rate of 3% over 20 years. This suggested that in 2035 I would need about $5800 to replace the roof. Effectively if I set aside $25 a month now for this future, we’ll be all set in 2035 … if my assumptions hold true. Looking at all our major future expenses like this, it amounted to about $350 a month that I needed to set aside. Or I could choose to ignore them and hope when the time came I had enough cash sitting around. That’s not a good idea because taking money out of a retirement portfolio usually means you pay taxes on what you take.

I also need to periodically look at my tax withholdings. Tax software makes this somewhat less painful but it can only project based on current tax law and expected income, deductions and credits. So I need to read news sources on changes to tax laws to anticipate them.

The good news is I am getting pretty good at all of this. I’m refining a system, basically a fancy spreadsheet with lots of worksheets. I’m thinking if I do need extra income, maybe I should set myself up as a retirement financial consultant. Only I haven’t really tested my system. It will take ten or more years of experience to know if my methods work, but if they do it should be worth something to someone.

To truly live on a fixed income though you need a system or you need a portfolio with lots of extra cash in it that you can draw from when you make mistakes. Perhaps I could sell this as a service, much like my bank used to do with my mortgage payment. You give me X dollars a month and I’ll make sure you have just enough cash to pay these bills when they come due. I’ll pad my portfolio with their fees because they won’t want to wrap their mind around this stuff. Maybe $50 a month would be fair.

Meanwhile, I’ll keep refining my spreadsheets. I’ll get it right one of these days; I know it.

Retirement is great (for introverts)

The Thinker by Rodin

So what’s it like being retired? I can faithfully report that it’s great! But it’s only recently that I figured out why it’s great. It’s great because I’m an introvert.

Doubtless you have heard stories about how many people are miserable in retirement. There is nothing to do, you hear. That is not a problem for me at all. I still like to keep busy, although I do it now mostly at home as opposed to doing it in an office. When I worked in an office though much of what I did was not a whole lot of fun. It’s the nature of work. I was fortunate enough to have a career that meant that a lot of work was fun, but a lot of it (probably most of it) wasn’t fun. The not fun part included a lot of management. That’s no longer a problem. To the extent I “work” in retirement it’s for fun, and it’s doing nerdy stuff that I enjoy doing.

My theory is that those who are miserable in retirement are extraverts. Extraverts thrive on social interaction. In retirement unless you plan your transition very well extraverts are likely to feel a loss of social connection. So lots of retirees volunteer, join clubs, hang out at church or engage in community events. If successful they can energize themselves socially the way they used to do when they worked. However, it is likely to be a challenge.

That’s not a problem for us introverts. We get energy not by cutting ourselves off socially but by engaging in problem solving activities that we enjoy. I have a long list of things I want to do, most of them nerdish, and it’s likely I simply won’t have time to get to more than a handful of them. There are so many choices on any particular day it’s hard to know where to start. And if I don’t want to start on a particular day and instead spend it surfing the web reading political content, I can do that with no feelings of guilt.

Curiously I still work, I just do the stuff I wanted to do when employed but largely couldn’t due to my position and responsibilities. I don’t require the income but it’s nice to earn some income, so I consult as work comes in. I have a website. People send me queries. I fix their Internet-related problems from the convenience of my office. I bill them and they pay me, usually through PayPal. Most of the social interaction is via email, but occasionally I’m chatting with a client on Skype, which I’ve done twice this week.

And while this nerdish work usually involves untying some electronic knots, occasionally I end up participating in a larger cause. I once wrote that I did some work for a porn star. I did not have to take off my clothes but I did have to fix her forum. I’m in something similar now. She’s a woman that used to be in the prostitution business (“adult professionals”, as she calls it) and is trying to organize these women. There are lots of problems if you provide sex as a service. Aside from the possibility of contracting a disease, there are a lot of creepy clients out there. This woman wants to create a service so vetted clients can connect with vetted “adult professionals”. No, this is not in the United States. I won’t mention too much more except I am part of a team she is hiring to get this done.

(I personally think prostitution should be legalized, taxed and regulated. Moreover, I certainly care about women so I want women that choose to be in this business to be as safe as possible. So it’s consistent with my values and furthers a larger cause. It’s safe to say that I would never meet such people otherwise. I have never used a prostitute and can’t imagine ever doing so. For a little while though doing work like this lets me peek behind the lace curtain and it’s interesting.)

When there are no clients who want to exchange my services for money, there are some open source projects I contribute to. Because I am no longer engaged daily with people doing information technology, I attend local meet ups instead. A few weeks ago I attended a seminar on cloud computing, comparing Amazon Web Services with Google Compute Engine. So I do get around socially among a limited set of people a lot like me, and it’s both fun and educational.

I had dreams of writing custom apps in retirement for paying clients but I haven’t even started looking at that. The other work has kept me too busy. And there are plenty of things I can do during the day that are not work related. I can go biking or walking, and I usually do one of these a day. My pension pays most of the bills. My supplemental income improves my standard of living but mainly keeps me engaged in a profession, helps me feel useful and makes me feel nerdishly happy.

I also do most of the household management. This probably falls into the category of work. I keep the books. I propose a budget. I track our spending. I do a lot of the housework and shopping as well. This sort of work is part of living, but I make it as fun as I can. One example: I’ve created a spreadsheet that finely estimates my probable state and federal income taxes, so I can carefully adjust withholding amounts.

So if you are introverted you are probably really going to like retirement. It’s you extraverts that have to worry. You will have to plan to replace the social interaction that came with work with a lot of other stuff instead.

For me this is truly the best time of life. I can spend most of my time doing stuff I like, without the crushing responsibilities that come with your middle years like child rearing, paying the mortgage and putting your kids through college. What to do next is never a problem. It’s almost guaranteed to put a smile to my face.

Give us a real retirement (or the 401K/IRA trap)

The Thinker by Rodin

There are some proposals afloat (from progressives naturally) to increase social security payments. Social security used to be enough to marginally live on with Medicare helping by reducing health care cost spikes. Social security is supposedly indexed for inflation but it’s clear that the index doesn’t measure the true cost of living. If you depend almost entirely on social security, you are either slipping into poverty or are already there. So conceptually Senator Elizabeth Warren’s idea looks like a good one. The money will get quickly spent anyhow, which will boost the economy. Of course either deficits will increase or taxes will need to be raised to pay for it. There’s no consensus to do either, so seniors (those that can) do their best to get by. In many cases they remain partially or fully employed while being “retired”. I see them all the time at the registers of my local Costco.

Social security was never designed to keep you fat and rich in retirement, just set a basic floor above the poverty line. The assumption was that the house and cars were paid off so it would allow you to live modestly where you were at. If you desired a richer standard of living, you drew off any pensions or retirement savings that you might have. Pensions are much better than retirement savings but turned out to be too expensive for many companies to continue to voluntarily fund. The alternative, when they were offered at all, was a 401K or similar retirement savings plan. Better employers match your contribution up to a certain amount. If you didn’t have a 401K plan at work, you still had the option of an Individual Retirement Account (IRA).

IRA’s sound good in principle too, but they require you to be proactive, i.e. regularly put a portion of your income aside. Worse, you shouldn’t touch the money. If you do touch it you must refund your account with interest and pay a penalty. The problem with an IRA was that even if you were methodical about putting money aside you couldn’t put a whole lot of it aside. This year you can put up to $5500 a year into a traditional or Roth IRA.

Assuming a middle class income of $50,000 a year or so, putting $5500 into an IRA amounts to ten percent of your salary, a high hurdle that most cannot make. But let’s say you manage to sock $5000 a year aside and do so for 40 years, something that would be excruciatingly hard for most of us with expenses like rent, car payments and childcare. Let’s say you somehow managed to earn six percent on the investment after fees. This means after forty years you would have $772,000 to help you live a nicer retirement. Is this enough?

You would think that the answer would be yes. Let’s say you expect to have thirty years in retirement, which means you could withdraw $25,700 a year over thirty years before running out of money. The amount you would get from social security would depend on how many years and how much you contributed to it. In 2011, the average social security check was $1180 a month. Without a pension or matching contributions from your employers to your 401K, this means an income of $3321 a month, or $40,000 a year.

Remember this is the best realistic case for a person that self funds their retirement because their employer won’t. It assumes a middle class wage earner, say a skilled mechanic, who is methodical about investing for retirement and can do so consistently. If your house is paid off do you think you can live comfortably on $40,000 a year in retirement? Most likely you are shaking your head. Since this is the best realistic case, your actual yearly retirement income is probably more like $20,000 to $30,000 with social security, absent other sources of income. No wonder I see so many grandmas and grandpas working at Costco. What they needed was a pension, but since their employer didn’t provide one they are making up the difference with a (probably part time) job at Costco. Costco at least provides a living wage, so perhaps they are supplementing their retirement income by $20,000. Maybe with working they have $50,000 in income per year. Is that enough to live on? Maybe, but you are working and not really retired.

My point is that 401Ks and IRAs are not viable retirement solutions for almost all of us, even with social security, although they were sold as real solutions. Moreover, social security income is not keeping up with the true cost of living. Sometimes even with a pension you don’t earn enough. This is the case with my brother in law. He retired some two decades ago on a community college pension where he worked programming the college’s mainframe computers. My sister (his wife) is in her sixties. He’s probably at or around seventy. She’s earning some money as an in-home health care aid, likely at less than $15 an hour. Last I heard he was helping manage a Disney store at Orlando International Airport. They get by, but at best they are partly retired.

We either have to give up the idea of ever really retiring or we need to find a way to fund retirement so that your retirement income is somewhere in the range of 70% to 80% of your pre-retirement income, which financial planners say you need to have something close to the same standard of living you had before retirement. To consider what a high hurdle that is, most financial planners (like ours) say not to withdraw more than 3% from your portfolio a year, at least if you want to maintain its value and have something to pass on or some extra savings to fall back on if you live to 100. This means if you want $60,000 in income per year from your retirement savings, you need to retire with a nest egg of $2,000,000. Yowza!

What we really needs are real pensions again. I know what you are thinking, “Isn’t social security a pension?” Well, yes, sort of, just a subsistence pension and it is funded jointly between the employer and the employee. It’s not a living pension, i.e. the sort of pension your parents or grandparents routinely got. Employers don’t have to provide pensions and most won’t. Moreover, many that did have pensions have reduced benefits or have turned the problem over to the government when the fund became insolvent. The real issue was that the private pension system became unworkable, mostly because Congress let it get that way. This doesn’t mean that a real public pension system couldn’t work instead.

Think of such a system as social security on steroids, or perhaps social security evolved. The problem is how to make such a system solvent. Asking employees to contribute too much more probably does not make much sense although many employees would be happy to contribute their 401K contributions toward a public pension system for a higher pension on retirement. Such a system could be funded through taxing employers more. Corporate taxes after all are a smaller and diminishing portion of total federal income, as corporations get increasingly clever at dodging these taxes. This means companies like General Electric pay virtually no federal income taxes. It shouldn’t be hard to have laws that would require GE to pay enough in taxes to fund a public pension for its employees. It would probably be pocket change to their overall profits.

Just as we have a graduated income tax where higher income taxpayers pay proportionally more of their income than lower income taxpayers, the same thing could work in the corporate (and non-profit) world to fund a public pension for all workers. It’s understood that Dollar General’s profits per employee would be lower than GE’s, so their taxes for funding a public pension system would be lower. The government actuaries would have responsibility for making sure it is doable. If some of GE’s contributions effectively go to prop up the pension of Dollar General employees, that’s perfectly fine as the costs are being socialized across the public at large. This is the way insurance works, after all. Companies will come and go but the government does not. If Dollar General goes belly up, whatever replaces it will pick up its slack.

So this is my solution. If this required funds to be invested in well-managed stocks or bonds, using a life cycle fund approach, I am fine with that, as long as those investing these funds are held to a fiduciary standard. Expecting that people can self-fund their own retirement anymore is unrealistic. I hope my analysis show why this is so. Someone has to pick up that slack.

Taxing the profits of corporations (similar payments would be needed from non-profits) for the purpose of public pensions could allow people to have actual retirements again, like your parents or grandparents had. We just have to choose to act.

Open season on a fixed income

The Thinker by Rodin

It’s open season time and you know what that means. For most of us it means not bothering to take the time to see if there is a better medical, dental or vision plan out there. And by “us” I definitely mean “me”, at least until this year. Although I retired in 2014, I was working for most of it so it was easy to go on autopilot in 2015.

This year though I am fully retired and living on perhaps seventy percent of my previous income. This year although our expenses have gone up, for some reason my fully indexed cost of living pension won’t be, a factor somehow of falling gas prices. I’m not alone. Lots of pensioners and social security recipients feel like they have been cheated. The problem is that the official cost of living index is bogus. While I might spend a couple of hundred dollars less in gasoline this year than I did last year, food prices have gone up and eating is not optional. If prices are holding steady, the word hasn’t gone out to my city. The real estate assessment was $15.80 per thousand dollars of assessed value this year. In 2016 it jumps to $16.16. Moreover I just bought a new house for about $486,000 but it’s been assessed at $500,000. This means we need to pay $401 more just in property taxes yet with no increase in income.

So value is becoming more important. We’ve been on Blue Cross for more than a decade, but Blue Cross too is tightening the screws. With no changes we would pay over $650 a year more in premiums. Copays have been increased as well, up $5 each for primary care and specialists. We (my wife in particular) see lots of doctors. It’s not hard to rack up a hundred visits between the two of us per year. We could easily spend another $1000 a year on health costs next year for no increase in services. We would have to do this with no cost of living raise.

Thus I felt I no longer had the luxury of inertia. As I started to examine my options, I quickly realized why I had punted all these years. It’s because while choice is good in theory when it comes to health insurance it is mind-numbingly exasperating and time consuming. It’s something of a crap shoot as to which plan offers you the best value, since you have no way of knowing how much care you will actually need. About all you can do is use past years as a benchmark, and that means analyzing all your health expenditures. (Note: if you are a federal employee, federal annuitant or survivor of either, Checkbook has a useful guide that costs less than $10 that can help a lot.)

Since I spent a day just analyzing health insurance options, it’s a good thing I am retired. I doubt I would have this sort of leisure if I were still working. I had to sift through the details of all the various plans and see if I could find some magic combination that is not overly expensive, rated reasonably well and with most of our doctors “in network”. I had to analyze premiums, deductibles, copays, limitations on types of services, and which of our doctors were on each plan. I’m still not entirely clear which plan offers the best value, but it’s pretty clear it’s no longer Blue Cross.

I can also change my dental insurance and add vision insurance during open season. I already have a long term care policy, but no insurer would insure my wife so when that time comes we’ll have to depend on savings. Which opens up another can of worms that retirees have to grapple with. If you have some major and unplanned costs, where do you get the money?

Since we recently settled on a house a lot of our reserves have gone to pay lawyers and other busybodies. We’re hardly without savings but if I had to put my hands on $75,000 or so in cash it would be a challenge. A 401-K or IRA is not like a faucet that you turn on and off at whim. You generally get just a one chance a year change to adjust the spigot – during open season.

We supplement my pension with a modest monthly withdrawal from my 401K. On the advice of my financial adviser, I’m limiting withdrawals to 3% of the portfolio. This will in theory keep our nest egg secure, not growing in value (over inflation) but not losing value either. I can up the withdrawals to say 4% and slowly build up cash reserves at the expense of paying more income taxes and a smaller portfolio. I can hope no major expenses like this happen. I can get another home equity loan and use that when needed, but that money certainly won’t be free. The other alternative is to get another job, something I’d prefer to avoid since leisure is the whole point of retirement.

Since when you are retired you can’t easily change your income and expenses are hard to control sober retirees have to look forward a lot. Our new house is nice but like every other house it will move toward decay. We’ll eventually need money to replace the air conditioner, roof and buy cars when the old ones expire. This didn’t used to be a problem. I had enough income where I could pay for most of these expenses out of pocket or from our savings account. Now I have to anticipate them.

Unable to think of a better strategy, I looked at what these expenses cost us before. I made some realistic estimate of when these expenses would hit and what they might cost then with inflation. So I’m setting aside some of our income to draw from for these expenses in the future. It’s not an exact science, but it’s a start. It’s also sobering. I’ve created a car replacement fund assuming we’ll buy two cars for $25,000 each in today’s dollars, one in 2019 and one in 2023. To reach the goal I must place $481 of our income monthly into an escrow account. Similarly for all these future house expenses, I’ve created a capital fund. If my numbers are accurate, $343 a month set aside for these expenses should cover them.

All this is well and good but it leaves less money to actually enjoy your retirement particularly when your expenses go up when the government says they haven’t. Which is why I’m reluctantly becoming value-driven in retirement. Every expense needs a second look, including our health care costs. So I need to shop around.

As for health insurance, since I am an ex-federal employee I’ll probably bid adieu to trusty but expensive Blue Cross and say hello to the National Association of Letter Carrier’s plan instead. Lower premiums, lower deductibles, similar services and a reasonably good choice of doctors will probably go a long way to keeping these expenses unchanged in 2016. We’ll see. If not I’ll be crunching the numbers again in a year at the next open season.

Health insurance in the United States is needlessly complex. If there must be competition then the government should require that all plans offer the same services so we could shop around more easily. Or perhaps we could do what every other first world country does: create a national health care system. Then instead of figuring out how much health you can afford you could simply get the care you need instead. Sign me up for that!

Retirement’s first year

The Thinker by Rodin

Certain people get paid breaks during their careers. They are called sabbaticals. It’s basically an extended period of paid downtime, usually at least six months, to get away from a 9-5 job and recharge. It’s a privilege apparently given to a vanishingly few of us: ministers, scientists and professors for the most part. The rest of us don’t merit the privilege. The sabbatical depends on the idea that a change of scenery and intellectual focus will feed a creative mind and it will result in renewed energy and perhaps new ideas upon your return.

I could have used a few sabbaticals in my career. I think I would have been more effective in the workplace. Of course I didn’t get any of them. Some of us though have the privilege to retire well and in decent health at a reasonably young age. I opted for retirement a year ago. August 1, 2014 was my last day as a full time salaried employee. I retired at age 57 principally because I could. My federal pension was generous as I was under the old retirement system and I was highly graded in the government. In addition I had enough saved for retirement that it appeared I could reasonably expect to match my standard of living. It helped to have almost all my debts paid off too.

Still, retiring was a bit of a nervy thing to do. It ends badly for a lot of people. Often they discover they don’t really have enough money to have the sort of retirement they envisioned. Or they find themselves terminally bored, missing the contact they used to have at the office. I miss having the daily office experience, although at the time it was a mixed experience. I keep in touch with a few old colleagues, mostly on Facebook. However, most of them have vanished as a continuing presence in my life. I also miss having an office, just some place outside the house to escape to for much of the day. Of course I love my wife, but I wasn’t sure if I would like her as much when we were in each other’s faces so often.

So far I feel like I haven’t properly retired. For one thing, I haven’t stopped working. I don’t work full time, but I am doing some consulting that amounts to about twenty hours a week on average. It just depends on what inquiries come in through my professional website. This was by design. In spite of the pension and the retirement savings, I wasn’t confident that we could maintain our standard of living. Continuing to earn some money eased my financial anxiety. It also forced me to keep engaged in the work world, just in a different way than I used to.

When I wasn’t consulting my wife and I were busy remaking our lives. As regular readers know, the last year has been busy in spite of the fact that we are retired. That’s because we chose to relocate, and that decision started a whole chain of events. It meant selling our house in Virginia and moving to western Massachusetts. We sold the house in April and now we live in temporary lodgings in Easthampton, Massachusetts while our house in nearby Florence lumbers toward completion. It won’t be until we are in our new house and things are properly put away that this transition will finally be complete.

From last August through last March most of my time was doing basic fix up to our old house so it would sell. This meant what seemed like endless trips to the local Lowes, plastering, painting and minor construction jobs. Simultaneously we had to find a new place in Massachusetts. A neighborhood had to be selected, a house price agreed to and contracts had to be signed. It was all very tedious and often nerve wracking, but it worked out quite well. I went by our new house today and inspected the newly installed drywall, which is all screwed into place but awaits a lot of joint compound. We hope to move in during the middle of September.

As nerve wracking and expensive as the whole process was, it was still better than my old job. It had pretty much burned me out after ten years. The cast of masters I reported to had changed as well, and not for the better, giving me more incentive to get out. It did not take long after retiring to find that I slept better and was much less stressed in general. I discovered I have a natural sleep pattern after all (bedtime is around 11:30 and eight to eight and a half hours of sleep a night is what I need). I rarely got that when employed, except on the weekends. The crazy demands of my job and the frequently hellish commutes made it mostly impossible. I spent much of my professional life sleep deprived.

I rarely find myself bored in retirement, but I do find myself doing more of what I prefer to do and less of what I don’t like to do. I found that I like information technology too much to give it up. I try to stay current on the latest trends and to expand my knowledge, even though I am unlikely to need to know a lot of what I am learning. I used to feel guilty about surfing the web at work. It’s obviously not a problem anymore. I surf with abandon. Should I get bored I have Netflix streaming as a distraction. I also subscribe to a music streaming service. Together they provide a lot of entertainment.

Now that I’ve moved I find that I exercise more. I’ve taken up biking again and have enjoyed the many bike trails in our new neighborhood. I often walk in the evenings, generally for a few miles. I also enjoy learning about my new community. Finding new doctors, meeting new neighbors and connecting with a new religious community have proven to be growth experiences. Before the move I stayed connected to my community too. Right until the end I kept volunteering at my local Unitarian church. I also taught a class at a local community college. I am trying to teach here as well, but so far there have been no nibbles.

It does at times feel surreal to have relocated four hundred miles away. I had been living in the Washington D.C. metropolitan area for more than thirty-five years. I do miss some things from that area. In some ways I stay connected. I still read The Washington Post; I just do it online. At the same time I enjoy reading the local newspaper around here, pedestrian though it is compared to the Post. In the Daily Hampshire Gazette a big news story can be a moose found ambling through a suburban neighborhood. Routine content includes school lunch menus. I read the details of local town meetings where items like buying a new fire truck must get an up or down vote from the citizenry. They practice real democracy here in New England. It would not occur to The Post to publish this sort of “news”. It would be beneath them.

When you live in and around Washington D.C. you are deeply consumed by the minutia of national and international affairs. Who you know is important but what’s most important is what you do, which amounts to what power do you have over the government, which ideally involves control of policy or regulation. One of the first questions you are asked when you meet someone new is “What do you do?” In my last job I had a reasonably prestigious position. While that vanished with retirement, I find I simply don’t miss the authority or the problems I used to wrestle with. It’s someone else’s problem now. I’ve moved on.

I’ll try to come back to this topic in a year. I expect that my next year of retirement will be more settled and I’ll have a truer perspective of what it means and feels like to be retired. So far I have found that if you are reasonably confident that your financial house is in order and you are pretty good as distracting yourself with fun things to do, it is something to look forward to and not to dread.

Affording retirement and running the numbers

The Thinker by Rodin

I’m a bit anal about money. It probably comes from being a child of someone who lived through the Great Depression. So our retiring last year was a leap of faith. Of course being anal about money, I spent some time with our financial adviser basically to hear him tell me we could actually afford to retire. I retired, but didn’t quite believe it could last, particularly when we started spending thousands of dollars fixing up our house to sell it. The money going out far exceeded our retirement income.

April 29 is our settlement date, but will be important for another reason. On that day for the first time since at least 1981 I will be debt free. That’s because with settlement I won’t own a house anymore and thus won’t have to sweat the mortgage payment. Never mind I never technically owned it. I never got the mortgage balance to zero, although the balance is now under $20,000. With settlement the loan balance will be paid off. We expect a check for about $440,000, which will probably sit in a high yield checking account for a few months. Then it will go to purchase the next house.

We have no car loans and our home equity loan will be paid off at settlement. So we’ll be living totally debt free, assuming we don’t take out a mortgage on the next house. That’s our goal although we will probably draw from other savings to pay cash for our house to avoid a mortgage. Over the years we refinanced our current house twice, so our mortgage payment has lately been under $1200, and that includes escrow for property taxes. $1200 a month is very cheap housing in Northern Virginia, particularly since the next owner of our house is paying $505,000. Even with 20% down he will likely have a monthly mortgage payment in excess of $2500. Mortgage payments will hopefully soon becoming a distant memory for us.

No mortgage payment frees up a lot of cash, which is a good thing for many reasons. One reason is because when you are retired, you live on less money than you used to. To enjoy the same standard of living, you pretty much have to pay off your mortgage. Until recently I wasn’t confident that we could actually do it, and it has made me nervous. Now it’s becoming clear that we can actually retire without sacrificing our standard of living. More money will still go out for a while. Simply moving our stuff will cost us close to $5000. There will be settlement fees with the new house, perhaps a couple of thousand dollars. And there will be one time costs with moving into a new house, which mostly involves window treatments. Toward autumn though these should be in our past as well. With time I hope we can recoup these major one-time expenses.

I do know that when we move to Massachusetts we’ll be spending far less to live. Moving to “Taxachusetts” is supposed to be just the opposite, so much so that Massachusetts is frequently cited as one of the most expensive states to live. In our particular case, most of our income is my pension. Massachusetts won’t tax this income. Running the numbers today I quantified the savings: about $380 a month. These savings essentially continue until we are dead. Assuming we live 30 more years and never move out of Massachusetts, that’s $136,800 we can spend on something else.

With a new house under construction, we’ll be renting for three to four months. We’ll be paying $975 a month to rent a two bedroom, one bath apartment in Easthampton. Rent is not the same thing as a mortgage and since we are renting month to month we have no legal commitment beyond the end of the month. The landlord takes our rent and pays for the apartment’s upkeep as well as its property taxes. As a percentage of our monthly income, $975 will be hardly anything and much less than we pay to live in our current house, when you add in the other expenses like lawn care and water.

Of course it’s not quite that simple. We will eventually move into our house paid for with cash, but houses have expenses too. Our property taxes will be more, $15.80 per thousand dollars of assessed valuation, last time I checked Northampton’s property tax rate. We’ll pay more in property taxes in Massachusetts than we do in Virginia, about $1300 a year more. Property taxes alone should cost us around $620 a month, which is as much as a mortgage payment in many places. Since we’ll be in a condominium, we’ll pay about $350 a month to the condo association, compared to $62 a month we pay now to our homeowners’ association. However, the condo fee includes exterior maintenance, so I won’t have to worry about having the money to replace the siding or the roof. Electricity and water are likely to be more expensive as well, although many houses install solar panels and often get credits from the power company for putting electricity into the grid.

So there’s no way yet to fully quantify our net savings by relocating, retiring and selling our house, but it is likely to be substantial. I don’t expect that we’ll have more money to spend as retirees than when I was working and making more money. That will become clear in time. With a relatively fixed income it will become important to track expenses against a budget and regularly adjust our lifestyles accordingly. Not all costs can be anticipated. But it looks like on April 30 we will not only be debt free but retired both in body and spirit.

Retirement journal: Part 3

The Thinker by Rodin

It took about five and a half months of retirement but this morning when I woke up I realized had nothing pressing to do.

I guess that’s good. For much of these last months the pressing things were related to our pending relocation and mostly they involved fixing up our house. That work is mostly done. We got something of a Good Housekeeping Seal of Approval last week when our house stager came by to tour our house. It’s her job to make it attractive enough to draw a seller willing to pay top dollar. I was worried she’d want to bring in rented Ethan Allen furniture and make us move much of our furniture into storage, but there was none of that. She approved or at least could work with the furniture we have.

Her suggestions were for the most part easy to deal with: silver knobs and handles for the kitchen cabinets and lots of fluffy white towels for our bathrooms, which either she or our realtor will supply from their inventory. Our beds will need skirts around them. Perhaps the most onerous task is to get rid of the green trim in the living room, dining room and hallway. The green trim will become bright white, and that includes two doors painted green. Mostly she was positive. Our months of work have paid off. We’ll find out how well it worked around March 1, when our house will go on the market. If we get and accept an offer then a whole other process will start.

Already our home is becoming a house. Most of the personal items hanging from the wall have been put away. Possessions are moving into boxes that are getting stuffed into closets, probably not to be seen again until they are reopened in our new home. Furniture is getting moved around. Open space is what buyers want. So off went the valences that obscured the view of our deck, which makes our main floor now appear much larger than it is. Clutter like our coat tree is bad and we were instructed to hide it. Buyers must get the illusion of large and uncluttered open spaces, including kitchen countertops. Our many upgrades over the years are marketable. These include hardwood floors on the main level and granite countertops in the kitchen. The stager complemented us on our curb appeal and smiled when she saw our large backyard. It should appeal to someone or someones probably like us, just twenty or so years younger than us: someones with the time and money to tackle the endless tasks of keeping a house in good repair while actually living in it. I assume it would be a family with small children, but for some reason I imagine some gay or lesbian with lots of stuff buying the house instead.

Meanwhile our new home awaits construction. Nearly a month has passed since our last visit to Northampton Massachusetts where we will move but there has not been much progression on our attempt to get a house actually constructed. Both the builder and the architect inconveniently took two-week vacations during the holidays. The ground froze over while they went to warmer climates. The foundation is the first part of our house to go in. It doesn’t sound like frozen ground will keep us from having the foundation put in, but completion a P&S (purchase and sale) agreement has. We had to find a lawyer up there to represent us, and the owner of the plot is supposed to forward an agreement to our lawyer. It’s no big deal and it hasn’t happened yet, but maybe it doesn’t matter since we need to go up there again to have a meeting with the architect (now back in the snowbelt), and our amenities will certainly affect the price. In any event, we will need to find 5% of the assumed price when they start digging the basement, and any old check won’t do. It has to come from our credit union directly, because Massachusetts’s privacy laws prohibit the builder from seeing our account number.

There is a high probability that we will settle on the sale of our existing house long before the new house will be ready. This means we’ll have to live somewhere, so we’ll probably have to find temporary digs. We’ll likely move to some apartment or house near our new home, leaving much of our stuff in storage up there but unpacking quite a bit of it while we wait. The other possibility is that our house won’t sell for whatever reason. We will take all steps to prevent this of course, but it really has to sell if we are to pay for the bulk of the new house. Renting out the old house while buying the new is possible, but we’d need some sort of bridge loan. And it would raise the complexity of the whole relocation thing another notch.

All these things are in motion but at the moment not much of it requires our immediate attention. So today is something like a slack day, and it’s not the first. Last week we took in a Wednesday matinee. Apparently some theaters try to attract us people of leisure with discount Wednesdays tickets. That’s how we got to see The Imitation Game for $5.75 a ticket. It’s amazing how much less complicated living in Northern Virginia is when you can routinely get around outside of rush hour. It makes living around here almost pleasant.

I put out new versions of two open source programs that I have written. My consulting business continues to do well but at the moment there is not much in my work queue requiring immediate attention. When the weather cooperates I can get my daily walks in rather easily. I’m hitting the gym more often because most days are below freezing, but some days I take long walks in the cold air anyhow, bundled in my warmest coat, hat, scarf and gloves and with a podcast in my ears. I am contemplating starting a port of my two open source programs to a new platform, but finding the time to write my first app still is on the back burner, but something I want to do. It’s how I have fun, apparently. The idea is to sell an app or two, although most apps tend to languish, but hopefully it will generate some significant income worth the time invested.

In general, I am finding that retirement is good. I am still somewhat skeptical I can actually afford it, but a year or two of experience will prove it one way or the other. It’s not bad to bring in some income, but I do it mostly because I enjoy it, not because I have to do it. I want to stay busy and do stuff I enjoy but without feeling the pressure to make another mortgage or tuition payment. To find out if I succeed, keep reading these occasional retirement journal posts.

Misery loves company

The Thinker by Rodin

My eyes: they are burning. My nose: it is itching and it is sending occasional signals to my lungs to make me sneeze which I do explosively, usually three times in a row, followed by blowing my nose several times until inevitably the cycle repeats itself. In short I have a cold, or perhaps just cold symptoms. The former is more likely because for nearly two weeks my spouse has been under the weather too. She had one of these two-week killer colds last year about this time, and it is back. Until two days ago I had resisted acquiring whatever she had. It’s likely I have something else, but in spite of the regular sneezes from hell that hurts muscles in my back, this is actually a good sign. For me anyhow the cycle rarely varies. The explosive sneezing phase lasts a day or two, but it comes at the end. It takes a few more days for my voice to recover.

One can love one’s spouse while secretly wishing we weren’t sharing so much of our intimate space this way. The last two weeks have been like this, but not because I find my wife particularly grating. I’m used to her and her ways but when she suffers, which is about half the time, she won’t suffer in silence. She’ll let me know and I can’t do much but fetch things for her, offer sympathy and make occasional suggestions that get largely ignored (“why don’t you see a doctor?” “oh, it’s just a cold. there’s nothing they can do.”) until the misery reaches some unbearable zenith and then she is off to the urgent care clinic. Colds come and go but she also gets persistent migraines and other forms of headaches, as well as other chronic issues which effectively mean she spends what seems to me to be half her life, maybe more, in some form of misery. Doctors rarely give relief. She bears it as stoically as she can, which is not much. And so another day ends, a new day begins, and the pattern is likely to repeat.

We go through boxes of tissues at alarming rates but otherwise soldier on. Retirement is supposed to be about enjoying leisure but so far there hasn’t been too much of it. I go to bed later and wake up later, but the business of preparing our house for sale consumes much of my working day, otherwise I am doing consulting when there is work in my inbox. The consulting remains mostly pocket change, if $6000 so far this year is pocket change. The preparing the house for sale task though keeps going on, but there are signs of the edge of the forest. The kitchen gets repainted tomorrow and that is likely the last room to get a full coat of paint.

Between moaning in misery about her own condition, my wife chastised me today for working on the house when I am sick. Experience suggests I will spend the day sneezing regardless, so my feeling is I may as well work, which today involved mostly laying masking tape along edges of floors and cabinets in the kitchen, and painting the baseboards in that room. It’s what I do. I just sort of soldier on because if this is a cold then it’s a minor one, so I might as well keep going. It beats dwelling about how I don’t feel great. The fix up list keeps expanding somehow, but I also know our clock is running out. With my wife out of commission so much, I must take up her slack and that usually means painting something but occasionally involves some minor carpentry, shuffling off donations to places that will take them, or two nights ago, installing some new blinds in our front windows.

Despite the continuous minor construction, the house is looking good. I feel good about all the work and the $7000 or so in direct expenses so far since I retired trying to make the house look new instead of 30 years old. Yesterday I was touch up painting. A new carpet went down in the basement a couple of weeks ago. It looks good and for the first time in the 21 years we’ve been in the house, the basement actually feels warmish in the winter. The house is sort of battened down now with curb appeal, but inside there is still clutter that needs to be sorted through, windows that need cleaning, and more painting to be done. I am guessing we are about 85% done at this point. The hard stuff is largely behind us.

It sometimes seems surreal that we are likely to be moving within three to six months. We had our realtor at our house yesterday and penciled in March 1 as the date to list the house, but maybe February 1. It all depends on decisions not firmly made yet, and one involves whether to have a house constructed near where we plan to live near Northampton, Massachusetts. If so groundbreaking will have to wait until spring thaw, which is usually April 1, and construction will take about six months. House selling though is best done in the spring. It’s peak market and selling at other times of the year is problematic. This means temporary housing is likely in our future, something we are not looking forward to but will likely have to deal with. On the plus side it’s relatively easy to move 5 miles instead of 400.

Our Christmas lights are up on the porch for the last time. The tree will go up at some point too, largely because my daughter will expect one when she visits us on Christmas morning. My wife has done her Christmas shopping. I haven’t started it yet.

I taught my last class at Northern Virginia Community College last night, somewhat challenging as the cold symptoms had kicked in. The final exam is next Tuesday and that should end my fifteen-year off and on again teaching as an adjunct at the college. Teaching there feels comfortable now, so leaving this part of my life leaves me feeling wistful. I’m not sure if I will be able to find teaching opportunities where I end up. I may be closing this chapter in my life.

In retirement I thought I’d have plenty of time to exercise, but it’s challenging getting it in. Working around the house takes up much of my day, and involves a lot of moving around. I figure it counts. I walk around the neighborhood when I can but lots of rain has made walking outside problematic. The gym is still an option, but it’s hard to find the energy to go. Lately I’ve been going only every other week or so.

So that’s basically my life, at present.

Retirement journal: Part 2

The Thinker by Rodin

(Note: Part 1 was actually a post I made a couple of days before I retired.)

I’m about three and a half months into this retirement thing. Aside from the first eleven days when we were on vacation, there has been little retiring (as in leisure) so far in my retirement. I understand this is typical. My father said he was never busier than when he retired. What has changed is that mostly I am doing more of what I want to do, and less of what I had to do. But also preparing our house for sale has become something of a second job.

I’ve never been one to be passive. I prefer to have things to do. Fortunately, fixing up the house forces me to move around. It also requires a certain focus. It’s not something I work on every day. Tuesdays in particular are full of other activities as I teach a class on Tuesday evening. The work involved in teaching peaks on Tuesday but teaching activities occur during the week. I grade homework. I prepare a quiz. I monitor my faculty email. I make a lesson plan. It takes roughly six hours of work to do the work to teach the class. I do it at times that are convenient to me. As classes go this one is a great one to teach and it’s a subject that I enjoy.

Managing finances is taking more time as well. This too is something I enjoy. Perhaps I should have been a banker, or a financial planner. It used to be that I would open Quicken once a week. Now it is open all the time and I add transactions as they come in. My computer, which I used to turn off every night, now stays in sleep mode at night. It hasn’t been fully powered off in weeks.

Living on a fixed income is a challenge, particularly when you don’t know what your fixed income is. That ambiguity is gone. My pension was finalized on November 2, so now I know how much of that income I have to work with. It’s pretty much what I figured it would be, which is good. Still, it’s a lot less income than I am used to, and until the house is sold we are still carrying a mortgage, just not much of one (about $23K in principle is left). Meanwhile fixing up our house for sale is hardly free. It’s a major expense. As I type this I hear hammering in the basement as carpet tack strips are laid in the rooms down there. The basement carpet is being replaced before sale. Even with the cheap carpet, the job comes to about $3000, and that includes stretching the carpet upstairs that has expanded over the years. So there is a cash flow problem at the moment and it will continue this way for some months, all while our income shrinks. It’s predictable but it’s still a little unnerving to spend more than you take in month after month.

The regular trips to Lowes and Home Depot continue, and there are other expenses where I have to pay professionals. There are some aspects about our house that no longer meet the building code. We added a second rail to the stairs going to the basement. We’d have to add it anyhow. I’ve had plumbers out twice to fix chronic issues. We found a good handyman who took care of lots of little things like patching up the deck and adding a concrete step to our front porch. These were things that I would have done if I could have. It looks though like we are almost at the end of this phase. There is still a month or so of work to do, but it’s mostly stuff I can do that is straightforward and not too costly. New chores get added regularly to my task list. The latest: an upstairs toilet seal is broken and water is leaching down to the half bathroom below it. I’ll have to repaint the ceiling of the half bath after the toilet is fixed.

Months ago I complained about how hard it is to remove the clutter and crap in a house you have lived in a long time. We are still at it! There are still boxes of stuff to dump, donate or sell even after innumerable trips to Goodwill. The other day we attacked a closet in our TV room and discovered what my wife called a wardroom to Narnia. In an old trunk were decades of science fiction magazines. There was also a camcorder someone gave to us that we never used, and my 1984 Commodore 64 computer I still can’t part with, although it’s been twenty years since I turned it on. Also in there: a Betamax VCR that we posted online. Someone will pick it up today. All this work is necessary if you are going to move but not in the least bit interesting. It takes time and money, the sort of time you only have in retirement. I can’t imagine trying to fit this in on nights and weekends while I was still working.

In addition to teaching, I am still doing some consulting, mostly for pocket change. It’s clear to me though that my business is doomed to dry up. I sell consulting services for forum software (phpBB). The phpBB group recently released a new version of the software that will be much easier for people to upgrade and maintain by themselves. So my goal of writing apps in retirement may be a better way to earn some income. I haven’t actually written any apps yet, but that’s a minor detail. In reality though I don’t have much time to learn apps right now. This is something to do after we are resettled, if I can find the time then.

My biorhythms are changing. I had no idea what they were because until retirement I’ve always risen and went to bed on someone else’s schedule. Now, I seem to get naturally sleepy around 11 PM. Also, I am sleeping more than I expected, generally a solid eight hours a night. I wake rested and stress free.

One downside of retiring is not having some place (an office) to go to daily. Teaching a class and volunteering at my church gets me out and about, but irregularly. I do miss the daily interactions with my colleagues at my former job. I am out of the office politics loop unless someone posts something on Facebook or I attend some sort of event where they are. It was truer at USGS where I ended my career, but I have had the opportunity to know interesting people everywhere I worked. It’s hard to keep in contact with them in retirement in any meaningful way. And some use the opportunity of retirement to cut you out of their lives.

Mostly though I see few downsides to retirement so far. A couple of years of experience may make me more sanguine about its downsides.