Monday, September 21, 2015

More number crunching

It was a pretty relaxing weekend, overall.  Even with DH's crabby mood. I got lots of house cleaning and general tidying up done. My house was so nice and clean yesterday that by afternoon I just sat down and watched some shows on Netflix. I removed some more of the dead annuals from the planters. I still have some blooming a bit, but about half is gone now. We've been getting some rain off and on, so the grass is slowly coming back to life

I spent early yesterday evening reading the retirement book Sluggy recommended (from previous post). It wasn't available through my library and I think the $10 spent to download it to my ipad mini was worth it. I quickly read through it all, though I will go back at some point and do the worksheets. I learned several things that I didn't know and some things I will find helpful. I especially liked the section on putting your retirement money in "buckets". I had heard about the 4% rule of withdrawing money, but this bucket method makes so much more sense to me. I am/will be hands on and I budget, so using this method should help optimize our retirement money.

Since most of us live pretty long these days, the author works on a 30 year retirement. I think that is a bit much. Even if I do live to 95 (like my grandma did) by then I'll most likely be in a nursing home and all my (meager) savings depleted quickly anyway. But, it's certainly not out of the realm to expect a 20-25 year retirement life. The bucket method is to put your retirement into 3 buckets. Money for the first 5 years, money for the next 5 or so years and then a bucket for long term investing....that long term bucket - money that you won't need for 10-12 years and has another 20-25 years to grow, can be invested more aggressively than the money you will need the first 10 years. Makes so much sense to me.  It also makes me realize that if we only have, say $300k to start with, by divvying it up into buckets, the long term portion, invested more agressively, still has the potential to grow my retirement savings every year. I will not just have $300k and that is all, to live on for 25-30 years. I haven't run the estimated numbers, but I think we will be able to add to our retirement portfolio quite a bit over those years.

The Social Security part is still all a bit of a mystery and the book really didn't go into much detail about that as I had hoped. I did learn that DH does have enough credit for his own social security and logged into an account for him to see his estimated benefits. I had apparently, several years ago, got the impression he didn't have enough credit for SS, but it was disability that he didn't have enough for and I didn't realize they were calculated differently. So, that is a relief - especially as I learned from Sluggy (and the book) that if you don't have enough credits from SS, then you have to pay for medicare (currently $441 a month). So, at least we have dodged that bullet. Apparently there are 80 some different ways to take SS. Typical gov't for you, I guess. I think that down the road, as I get closer, it will be very prudent to meet with a SS advisor to figure out what is best.

I also know I need to maximize my 401k contributions to get the full matching my employer offers. I just haven't been able to afford that much and am leaving free money on the table. Hopefully after DD is on her own and I have more discretionary income, I can then funnel that to 401k. Currently, I need to be putting another $160 a month in order to get the full matching I could be.

It was also very helpful to learn that if I choose to work a lower paying job for several years at the end of my work life, it won't negatively affect my monthly benefit amount, as they take the highest 35 years incomes. This might give us some options when I am 62 to sell our home, move where we want to live and supplement living off our 401k, with job income, until taking full SS at 67.

The years always go by so fast - I'm sure the next 10-15 will be done in a flash.  While we certainly aren't going to have excess money to live lavishly, we should at least have enough to live simply and comfortably. We won't have to eat cat food, I hope ;)


  1. Very interesting about the Medicare. I did not know if you did not qualify for SS, then you had to pay for Medicare in full. I wonder if you qualify under spousal benefits for it. It is definitely something I need to look into as I do not have any credit because I only worked outside the home maybe 9 years including teenagers times, so that probably does not count.

    This is all very good to think about though. I am constantly crunching the numbers.

    1. that's a good question. I tried a search on it and it kind of sounds like a spouse might be eligible for free Part A, based on meeting certain criteria. It was good for me to find out that DH is eligible for his own SS, as that gives us another option to look into of him possibly collecting starting at 62, vs having to wait until later, when I would collect. It might be better for us to start him collecting at 62 - since he can't work and with his health, most likely has a shorter life expectancy and taking early payments might be smart for us.