Reflections After Five Years of Retirement

I'll catch you up, but "spoiler alert": not much has changed

December 27, 2023

I recently realized that I've been retired for five years. (My wife says that I'm not really retired, but you know what I mean.) Wow, time flies!

I retired in late 2018 at age 66, my ”full retirement age” (FRA) as defined by Social Security. It was a little earlier than I’d planned, as I may have waited until age 70, but I was motivated to do it to devote more time to writing and other activities.

Over the next two years, I wrote and published three books and continued to publish articles on this blog about every two weeks. I've written well over 200 since 2015.

In this article, I want to reflect on the last five years (a couple of which were "pandemic years," as we all know).

Things have generally gone as planned, but there's been a surprise here and there (Prov. 16:9). The pandemic disrupted our lives in many ways, and the economic and political landscape has also been very volatile. We live in interesting times, to say the least.

As we turn the page on 2023 and look ahead to 2024, I wanted to share some personal thoughts and observations after my first five years in retirement in a handful of categories.

Living

Is a new phase coming?

I wonder whether five years into retirement and entering our 70s (my wife and I are both 71) will be a different phase than our 60s. Retirement planners talk about the "go-go" years, the "slow-go years," and the "no-go years." I think we're between "go-go" and "slow-go." I don't think they have a word for that, so I'll call it the "go; no, let's not go now, maybe later; oh, why not, let's go now; wait, where were we going?" years.

Actually, I don't feel that much different, nor do I think my physical or mental capacities are significantly diminished from what they were five years ago (though my wife's perspective may differ from mine on that). My main area of pain/weakness remains my knees, especially my right one, so I may consider a knee replacement sometime in the next few years.

Did you know that the knee is the most commonly replaced joint in the body, typically due to advanced osteoarthritis? Because the knee joint bears the most weight, it’s most affected by arthritis. That joint, along with the ankle, is the most injured in sports like football, basketball, and tennis.

I may not be as strong as I was ten years ago (okay, I'm definitely not), but I think I'm wiser about planning for and living in retirement. And about life in general, I think (and hope). Aging has a way of affecting us that way.

The thing I like most about retirement is the flexibility.

It's wonderful not to have a regular, 8-to-5 (or to 6 or 7 or longer) weekly work schedule. (I had some IT roles over the years with an operational component that required me to be "on call" 24x7x365.) No more commutes during rush hour or business travel. (And no more calls in the middle of the night.) Greater freedom from time constraints is one of the best benefits I've enjoyed during my first five years of retirement. Even though I am still, in a sense, working part-time as a volunteer at my church and elsewhere, some of what I do can be completed from home at whatever time of day I prefer to work.

Even when I was working, I made time for family. I wanted to be at home as much as possible, so I never took a job requiring a lot of travel. I wanted to be at my daughter's gymnastics meets and my son's baseball games. I wanted to help out as a coach when needed (for baseball, that is.) And most importantly, I wanted to make sure I stayed involved in my local church, and that work didn't crowd out important church activities and responsibilities.

Retirement lets us slow down the pace, and we can put a higher priority on spending time with the people we love—our family and friends. We can make time for other meaningful activities. And we have more control over our time and schedule without the day-to-day pressures of a full-time job.

We haven’t moved (yet).

Lots of people downsize or move to a new area when they retire. There are often really good reasons to do that. We've considered it, but we're still in the same house we've been in for almost 20 years.

Our house isn't huge, but I'm increasingly frustrated by how much time and money it consumes. We've done some remodeling and updating, but maintenance issues still crop up regularly. Plus, I spend a lot of money trying to keep my yard looking nice, and sometimes I wonder, "Why exactly am I doing this?"

We haven't been too motivated to move because our single-story brick ranch house is paid for and is about five minutes from our church. We're between 30 and 45 mins. away from our adult children (and grandchildren). We also have many friends in the area and are close to various stores and other services. And we love hosting gatherings of friends and family and the occasional church small group.

So, why move? We don't plan to anytime soon, but we might consider it if the right "situation" arose (location, type of residence, price, less maintenance, etc.). This is a tough time to buy and sell real estate. It might make more sense when we're 75 or 80 than it does now. Assuming my wife will live longer than I do (statistically speaking), it's something I'd like to do for her sake before I'm gone because I've seen how hard dealing with all that can be on a surviving spouse.

We’ve enjoyed more travel, but it has gotten expensive (and so is everything else these days).

Like many new retirees, my wife and I have done more traveling. We've made several extended trips to national parks (much longer than I ever took while I was working). We've visited most of the parks we really wanted to see (Zion, Arches, Glacier, Yellowstone, etc.). We don't have a lengthy travel bucket list and may slow down a little. But I imagine we have a few trips left to go. We'll probably do more of the "go somewhere and stay awhile" kind of trips than the ones where we go for two to three weeks and stay in five different places; too much driving, packing, and unpacking is exhausting.

Here's another thing: travel has gotten expensive. We try to do it reasonably, but I can see how a married couple with the resources could easily spend $50,000 to $100,000 in the first decade of post-retirement travel or much more, depending on how you travel and where you stay. We budget for travel using one of our "sinking funds." Still, nowadays, it's expensive no matter how and where you go.

I have to assume that declining health at some future point would be the first obstacle to a lot of travel, but other things could get in the way. Travel isn't our main priority anyway; it would be the first to go if money gets tight. But for now, when we travel, we'll work harder to economize and stretch our travel dollars as best we can.

Of course, it isn't just travel that's expensive. Anyone who says that retirees can live on 50% of their pre-retirement income is mistaken. Maybe you could if you have no mortgage or rent, own one car, hardly drive or travel, never eat out, don't give away much, and have very low healthcare costs. Or if you moved in with your kids. However, most retirees want to maintain a lifestyle similar to what they had before retirement, and many experts say that retirees spend the most in their first decade of retirement and that spending gradually tapers off later in life as we travel less and become more homebound. This is probably true, but assume those first five to ten years will be at least 80% of your pre-retirement spending.

Church involvement remains a top priority for us.

My wife and I have continued to stay engaged in the life of our local church. We view this as a joy, a privilege, and one of the greatest blessings of being a child of God. We've attended the same church for 30 years. (I've taught kids in our children's ministry whose parents I had in my class when they were the same age.)

Anyone who has been in a local church for a long time knows that there are a lot of ups and downs, and we've had our share. But I still think the church, as a local community of believers, is the best place on earth.

Church life affords us, as retirees, many opportunities to serve as we're able, to build relationships, and to grow in our knowledge and love for God. And, as we all know, no matter our age, we need to continue growing in Christ-likeness; it's best not to turn into a cranky old coot in retirement.

I want to keep serving in my church and community as the Lord enables me.

I struggled with the heading of this section since it sounds like I'm saying, "Since I'm such a good Christian, I want to keep serving," or something like that. I am not a "good person (Rom. 7:18), but I want to serve because 1) I believe it's something we're all called to do, 2) God will give us the ability to do what he calls us to do, and 3) It makes retirement and life in general more joyful and fulfilling.

As Christians, we do not claim to be perfect. We hold on to the fact that our sins have been forgiven by God’s grace through the substitutionary death and resurrection of Jesus Christ. As disciples of Jesus and in his grace, we desire to be more kind, compassionate, merciful, and generous than unbelievers. This is one way to “let our light shine before others, so that they may see our good deeds and glorify our Father in heaven" (Matt. 5:11).

We don't serve out of our own strength and intrinsic goodness. I know that any real good that I do comes from Christ in me and is due to the work of his Holy Spirit in me. I'm not boasting in myself; I'm boasting in what Christ has done in me and can do through me (Phil. 2:13, Phil. 4:13). It is because of him, and it is for his sake so that his name might be glorified in the earth (John 15:8).

Some of these activities are part of my role as a deacon in my church and a church staff volunteer. I also teach a Sunday School class, lead Bible studies, and occasionally a small group. But I do other things in the community since I have more time in retirement, mainly involvement with a local Title One elementary school and a food pantry. I also try to help others with stewardship and retirement by writing for this blog and individual financial counseling and coaching.

Orienting our lives in retirement so that we have the opportunity to serve others and not succumbing to the temptation to spend all our time (and money) for ourselves is a New Testament biblical mandate (Heb. 10:24, Titus 3:8 and 3:14, and Eph. 2:10). But no matter our age, we need a rich supply of God’s grace to do that good works He’s called us to. As Paul wrote in 2 Cor. 9:8, “God is able to make all grace abound to you, so that having all sufficiency in all things at all times, you may abound in every good work.”

We try to stay physically active, but it can sometimes be challenging.

First, we're not "pickle ballers." I don't have anything against it, and I really like pickles, especially spicy ones, but my knees won't handle it. I played tennis most of my life, so I have a tough time playing a paddle and ball game in a relatively small space. I want to run and swing like a tennis base-liner, but it's not good for my knees or the safety of the other players.

What I do enjoy, and do a lot of, is walking. I walk almost 6 miles three to four times a week. I've found that walking helps my back (which I injured many years ago after finishing a long run along Lake Michigan with a downhill sprint while on a business trip) and my knees. Plus, I enjoy listening to sermons, podcasts, and audiobooks while walking; it makes me feel like I'm doing two constructive things simultaneously.

I've been walking for so many years (since I recovered from that back injury) that I was starting to feel like it wasn't doing me much good (although I know that's not the case). So, I'm trying rucking, which is walking with a weighted backpack. I started with carrying 10 pounds in my "rucksack," and I hope to work my way up to 20 over the next few months. . . we'll see.

My wife has a total reverse shoulder replacement after her right shoulder was basically destroyed in an accident, and an initial surgery failed. She has been working with a physical trainer for the last few years to regain and improve function and has made fantastic progress. I'm so proud of her for all her hard work and grateful for the professional help she's received. It's helped her to do one of the things she loves a lot: work in her flower garden.

I mentioned that we've visited several national parks since I retired, and we've hiked in all of them. We typically do a "one day on, one day off" routine to avoid getting too tired. We also live in a state (NC) with great hiking in the Blue Ridge Mountains. I have started taking my grandsons on hikes, which I look forward to doing more of as they get older.

Finances

My thoughts and basic practices regarding retirement finances haven’t changed much.

I explain a lot in this blog about what I think and do regarding financial stewardship in retirement. I discuss spending, health care, investing, income planning, giving, etc. You can look at all my articles here or choose a topic here.

I wasn't an "early retiree," and I started saving relatively late for retirement. As a result, I had to play catch-up during my 40s and 50s. But I (and most boomers) were fortunate to enjoy a record bull market and low interest rates that drove up bond prices for the last few decades. This has, undoubtedly, caused many of us to have an overly optimistic outlook on future performance.

My children and yours probably have a very different perspective. Many missed out on the bull market and are dealing with high costs, high interest rates, and lower investment returns. The only consolation is that idle cash will earn them some decent interest for the first time in a while.

Even though I lived and worked during a record bull market, I always felt some economic "black swan" event was just around the corner (and there were a couple). Therefore, I never had a portfolio of more aggressive investments than 60% stock and 40% bonds—a "balanced" portfolio. The result was that I still did okay and could sleep a night, and I didn't feel compelled to sell stocks when things seemed really bad.

I still manage my own investments, but my approach is mostly "buy and hold," so there isn't too much involved except some occasional rebalancing. I use a mix of mostly stock and bond index funds and a mutual fund here and there.

I have retained this conservative bent in investing as a retiree, and my portfolio is now closer to 40/60, a "moderately conservative" allocation according to Fidelity. I also tend to be income-focused, not because it's superior to all other investing strategies (such as a total return approach), but because it fits my needs and temperament. It's more of an income strategy, and I like receiving stock dividends and bond interest income to help fund our retirement. I would rather not sell shares of either if I don't have to.

The financial markets are very different now than they were when I retired. Some of it is good, some not so much. Stocks are very volatile, and the outlook for the next ten years isn't as good as they performed from 2010 to 2020. Bond prices have been hit hard, but yields are way up, which is a positive for retirees like me. Will current interest rates stay as high as they are now? Perhaps, as they're closer to long-term averages than most think. So, overall, I'm as risk-averse as ever, as shown by my shift from 60/40 to 40/60, with 10% of the 60% in cash.

I use a basic withdrawal strategy for retirement income.

I've studied and written a lot about systematic retirement withdrawal strategies. Mine isn't very sophisticated. I use a "bucket strategy," and my cash withdrawals are basically early RMDs since I've not reached the age when the IRS requires them (now 73 for me). They provide the income we need in addition to Social Security to pay the bills. Although our financial needs fluctuate yearly, it's not a lot. I use some virtual "sinking funds" to handle things like travel, property taxes, auto repairs, etc. And as I mentioned above, I'm using QCDs for all our larger charitable donations. I think being flexible and adaptable is what's most important; any autopilot solution that doesn't account for personal or more systemic changes can be risky.

I've used some computer modeling tools to project our long-term financial situation. I don't know enough to recommend one over another, but I do like one I used recently that was built by honestmath.com. It's free (as are all their resources), has a simple, easy-to-use interface, and produces a nice graph and chart. Be sure to read the directions before using it because some fields are ambiguous. It models using Monte Carlo simulations, not historical performance, which, though not perfect, is a reasonable approach. To create the charts, they look at 10,000 possibilities each time you run the model. No model is precise as they can't predict the future; only God knows what will happen in our lives and the world. But they can help give us a sense of how our savings will last under a lot of different economic conditions.

My wife and I are both 71 now and need our money to last for at least one of us into our 90s. The models say we'll be okay, but sometimes I wonder if it's time to reconsider a single premium income annuity (SPIA). Annuity payouts are much better now than in a long time, so they are much more attractive (in the 7%-plus range versus 4% to 5% for a couple our age). But remember, that includes a return of principal plus some earnings. And the payments are NOT adjusted for inflation. Truth is, I have the same aversion to them that many retirees do: handing them a big lump sum that I will never see again and may not even get back in monthly annuity payments over our lifetimes. (Not to mention the damaging effects of inflation over the long term. To get one with an annual adjustment of 2 or 3 percent to cover inflation, you have to give up a couple of percent on the front end).

I regret that I didn’t do more tax planning before I retired.

Income taxes aren't a big deal for me, but I can't say I enjoy paying them. My problem is that most of my retirement savings are in a "Traditional" IRA, which is taxable upon withdrawal. So, for every dollar we spend, I set aside between 15 and 20 cents for taxes. Plus, 85% of our Social Security benefits are taxable.

Because I have so little tax diversification, I wish I had found a way to save more in non-taxable accounts, thought more about Roth conversions, and figured out a way to do them from non-retirement savings, which is the key to optimizing them.

Although I don't have a lot of Roth savings, now that I'm age 70½, I can use the IRS provision for "Qualified Charitable Donations" (QCDs) to reduce my tax liability. I started making QCDs when I became eligible last April, so I'm curious to see how things work out at tax time.

I want to continue to give in retirement.

This one is a lot like the one about "doing good" above, where I talk about what a good person I am. Seriously, the same truths apply here. I give for one main reason: because of what Jesus has done for me—he gave his life to save mine. It's his sacrifice that moves me to generosity, even in retirement.

When I retired, I decided I wanted to continue giving at the same level as when I was working, and perhaps more as I was able. This is also a work of the Holy Spirit because the heart is where all decisions about giving originate (Matt. 6:21). Most retirees want to be more generous. Still, I understand the tension between the need to have enough to live on for the rest of your life and being generous to others. Some people want to split hairs over whether certain retirement income is subject to a tithe, but I think it's better to avoid that altogether and give generously as the Lord leads you (2 Cor. 9:7).

I already mentioned QCDs. I've found them very easy to do on the Fidelity website, and our church and other recipients have had no problem processing them. I will update you early next year on how it worked out in terms of income taxes. I expect to save some money on taxes without itemizing deductions as I've done in the past.

I like having our finances consolidated with one provider.

I'm a big fan of simplicity. So, early in retirement, I decided to consolidate my finances with Fidelity Investments. (If I hadn't chosen Fidelity, I would probably have gone with USAA, Schwab, or Vanguard). I like having my retirement savings and investments and my day-to-day banking (bill-paying) in one place and managing them on one website. I sometimes have concerns about not being company-diversified. It's not so much about Fidelity failing as a company as with its systems failing or being severely interrupted for an extended time, which would cause us problems accessing our money. (As an IT guy who worked in financial services, I know how many things can go wrong.) Plus, all companies are fallible, and we have all experienced some banking or investing glitch at one time or another.

I haven't decided to move any of our accounts to another institution. If I did, it would be to one of the providers I listed above, although the only one I have a relationship with currently is USAA for insurance. (I've had brokerage accounts with Wells Fargo Advisors and USAA. USAA sold their brokerage business to Schwab.) If I moved anything to Schwab or Vanguard, I'd probably choose several funds from them and steer away from Fidelity funds since I own several in my Fidelity account. As of now, I have no plans to do either.

Future

Looking back, planning for retirement was a good idea. And living in retirement has been pretty good for my wife and me so far. Still, the future is unclear. We all know that things can change instantly; times change, people change, we change, finances change, our health changes and our circumstances change. We will all experience the effects of aging—some sooner than others and in different ways.

Because only God knows what the future holds (Isa. 46:10), we trust in him. As we do, we also work things out as best we can, anticipate good times and bad (because the days are evil), and are grateful for all things because we know they originate in his sovereign will and are for our good (Eph. 5:20). We seek to follow and obey him as he gives us the grace to do so and seek his mercy and grace when we stumble or fall (Heb. 4:16).

God instructs us to plan (Prov. 16:9), but not to put our faith in our plan but in him (Prov. 3:5). He wants us to save (Prov. 6:6-8), but not so much, or hold on so tightly, that we become like the rich fool (Luke 12:16-21). He tells us to live wisely and be on guard against the evil that's in the world (Prov. 14:16), but not to become fearful or overcome with doubt or despair (Is. 41:10). But most importantly, he wants us to love and worship him (Deut. 10:12) and look forward to the day that his Son, Jesus Christ, will return, not as a baby lying in a manger, but as conquering King who will make all things right and new (2 Pet. 3:8-13).

Thank You

Thank you for subscribing to and reading this blog this year. I've had the opportunity to interact with many of you via email and even the occasional Zoom call. Your encouragement means a lot to me! I pray that you had a wonderful Christmas celebrating the birth of our Savior, Christ the Lord, with friends and family, and that God blesses you in the new year.