Journey Into Retirement

There is no doubt that life in retirement is an entirely different “animal” than life during the “career wars.” To be honest, I had some sense of what to plan for, but I had no real sense of what it would actually be like once I pulled the trigger. Some have been positive, while others have presented a challenge.

In that regard, there have been some surprises that are important to understand. Here is my list of the top five “revelations”:

#1: There are Ideals and Then there are Practicalities

What I found very quickly was past ideals were fine, but one practicality of retirement is that you need to cut costs whenever possible. The most immediate example of this has been shopping at Walmart. When I was working, I would not have considered shopping at Walmart. The company is notorious for poor treatment of its in-store workers, shoddy treatment of women and questionable treatment of its suppliers. I will also admit it, I am a bit of a snob (sometimes) and Walmart has a downscale image. However, Walmart is the closet grocery store to our new house and if you can save 10% to 20% on each shopping trip then you need to consider this option. Another example is that I go to a gym that is adequate for my needs, but there are better options available in the Pensacola area. However, my gym is free as part of my Medicare Advantage plan (called the Silver Sneakers program) and every little bit of savings helps. So, there are tradeoffs to be made.

#2: Finances Come Online At A Leisurely Pace

Retirement income, such as pension and Social Security are on a delay. Be prepared to survive for a one to two months without an income because these retirement income sources come online over time, somewhat unpredictably. My first pension payment arrived about thirty days after my retirement, quicker than I expected. However, the first Social Security check did not hit the accounts until two months into the retirement. Government benefits are on a somewhat self-serving schedule. Medicare premiums are taken out at the beginning of the month of coverage. However, Social Security is paid one month after. So, for example, the Medicare premium for June was due June 1st. However, the Social Security payment for June did not arrive until late in July. And, since the Medicare premiums are deducted from your Social Security payment, when Social Security was finally paid, they took out two months of Medicare premiums in the first check. So, it could be a couple of months into retirement before your income stabilizes. You need to plan for this and be ready to reduce your spending or pull money out of saving.

#3: Expect to be Unbelievably Calm and Relaxed

I had some sense that my level of stress would be reduced. But, some warn that there are several additional stressors that could give you grief – such as reduced income, relocation, a change in social interactions, etc. However, for me despite all of the hassles related to the bank and the physical move, my level of stress is near zero. Interestingly, all of the hassles with the bank and the move made me much more adaptable. I am better able to roll with the punches. In addition, I no longer have the stress associated with the job. Probably as meaningful, I have no commute and that was a significant source of stress that just zapped my energy when I was working. My freedom is substantial and I have assumed a very laidback lifestyle. I have a sense of inner calm and peacefulness that I wasn’t expecting. I haven’t felt this calm and relaxed in years. Needless to say, retirement is looking like a very good choice.

#4: Establishing a Routine is More Difficult Than It May Seem

With all of the changes that happen coincident to retirement, you need to establish a routine. I have a number of blog posts previously pointing to the importance of proactively planning what you will do on a day-to-day basis. There is a huge danger of falling into inactivity that could have negative repercussions. Since the demands on you are minimal, it is all easy to spend you days watching TV. I am finding that if I don’t actively plan a schedule and stick with it, the TV option is all too inviting. However, we are still moving in and things have not settled down enough at this point to allow me to do this. So, the dead time is often being filled with the TV option. I am a bit of a news junky and these are very active times with the Russians and Ukrainians, Israel and the Palestinians. However, news channels are very repetitive and after the first 15 minutes, you pretty much have it and it is time to move on to the next activity.

To combat this, I have started to put together a schedule. I work out at the gym the first thing in the morning. I have explored volunteer activities at the local Humane Society and will soon be doing some part-time professional activities. The question is how you can fill the hours so that you are doing meaningful and interesting activities. This is a bit more of a struggle. In fact, it is much more of a struggle than I would have thought.

Some people retire and think that they can spend each day playing golf. The question is how long you can continue to do this without getting bored. My thing is not golf, but the beach. So that I don’t get too much of a good thing, I have limited my beach days to no more than twice a week. In addition, I am looking into buying a kayak and a sailboat. However, again too much of a good thing can get boring over time. It is important to find a diverse set of meaningful activities. When you are tempted to plop down and turn on the TV (particularly in the middle of the day), try to come up with an immediate alternative. For example, what things are around you that you have not explored yet. Turn off the TV and explore these things. Or, in my case pick up a musical instrument and play.

The difficulty is that you have probably spent many years regimented by a set work schedule. Now that you don’t have this structure, you need to proactively develop an activity plan. I am still struggling with this – much more than I would have expected.

#5: Establishing Healthcare Is Not Easy

Healthcare in retirement present its own set of challenges. There is Medicare Part “A,” Part “B” and Part “D” which are the standard options. You will be forced to sign up for Part “A” around the time you turn 65, although you probably will not use it if you are still working and on an employer’s plan (there is no Part “A” premium required). Medicare Part “B” includes things such as doctor’s visits and the like and can be delayed until you retire. Part “D” is prescription drug coverage. However, there is also Medicare Part “C” known as the Advantage plans. Under part “C” you opt for coverage offered by a private insurer. This plan may offer the same coverage as Medicare part “B” and part “D.” However, you may have some additional benefits offered such as limited dental and vision coverage. In addition, some plans offer free gym memberships as well. Part “C” plans can be “free.” Well, they are not really free – you just pay your normal Part “B” monthly premium and the government, in turn pays the private company. I found a really good Part ”C” plan though Humana.

Sounds easy, right? Well, it got a bit tricky. You see, Medicare has a base premium that they charge everyone. That amount currently is $104.90 per month and is deducted from your Social Security payment. However, if you have a relatively high income, that base premium can be increased by as much as 2.5 times. You are probably saying that your income will drop substantially in retirement and you fall well below the criteria for increased Medicare premiums. That’s what I thought until I got a letter from Medicare informing me that my premium would be double the base premium. How could this be? Well, in determining what your premium should be, Medicare looked up my income from 2012, provided them by the IRS. The problem was that this income was for a working year before I retired and was relatively high. When I called them to challenge this, they required that I set up a meeting with my local Social Security office to discuss this. I was able to back them down to the base premium by estimating what I thought my total income would be for 2014, but that was a guess and it was a hassle.

Then Humana told me I couldn’t be part of an Advantage Plan because I was not signed up for Medicare Part “B” (I was but it was in transition in the Medicare system). Then Humana informed Medicare that I might have been uninsured for over 63 days which would have triggered an ongoing premium penalty (this also was not true). Every day you can expect something.

So, don’t be fooled by “simple online signup.” There will be hassles and things are unlikely to go smoothly. If there is ANY possibility for a fowl-up, there will be. Expect this. That’s one way that I filled up my beginning days of retirement. The key is don’t get upset – take everything in stride and things will inevitably work out.

As you might have guessed, it hasn’t been boring. The challenges continue. However, I am absolutely convinced that the decision to retire was a good one – it is time to move on to this new life! If you are considering retirement, just make the call and adjust as you need to. If you are at or beyond the full Social Security retirement age, there is no reason not to!