Monday * July 28th 2014

Retirement Ruminations…

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I tend to be pensive, a worrier, obsessive-compulsive about many things.  Lately, I’ve been spending time thinking (and losing sleep) about my upcoming retirement.  (The last day of school is May 23rd and the official date of retirement is July 1st.)  Al, from the Bayfield Bunch mentioned recently that he isn’t very fond of the word “retirement.”  I tend to agree with him…

Gee, if I let go of my job and receive a “pension,” will it be enough to live on?  I sort of made a “bad career move” when I left Indiana in 1996 to move to the “Land of Enchantment.”  (However, I was ready to leave the midwest for a new adventure.)  I’m vested for Indiana teacher retirement, but it didn’t roll over to New Mexico.  I had to start fresh and am now retiring under “the rule of 75″ (age plus years of service equal 75).

I’ve toyed with the idea of taking out the Indiana retirement money in a lump sum and pay off my house. (If I do so, I’ll be totally debt free.)  I’ll still get an additional pension from Indiana since I’m “vested” in the system (at 63), but it will be reduced by about one half.  To me, it still seems logical – even though the account earns approximately ten percent interest.  At 62, I’m going to take early Social Security, so that will be a big bump in my income at that time.  Until then, I have some savings and TSA’s that I can rely upon.

I HATE the fact that retirement income is still taxable AND that my health insurance premium will take a big “chunk of change.”  If push comes to shove, I can always work – substitute teachers are always in demand…

However, in the future, I probably will sell my townhome and relocate to a different area and/or become a full-time RV traveler.  I hate making these decisions alone – it’s so taxing…

I hope that I didn’t offend anyone by “thinking out-loud” about my retirement finances – it’s just that sometimes it’s difficult to come to a decision when you’re “on your own.”

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9 Replies to Desert Diva to “Retirement Ruminations…”

  1. Darrell says:

    I understand the difficulty in making decisions alone. It is hard to play devil’s advocate with yourself because you’re always right. (lol) I too, will be retiring soon (about 24 months) and am making those decisions alone.
    Good luck in your decision making, and I hope you have peace of mind with the decisions.

  2. Sounds like you don’t need advice!

    If you sold your townhouse first, would you do better with your high-earning account fuller? More full? Fullish?
    The Good Luck Duck´s last blog post ..Hello, cowboy.

    • Desert Diva says:

      I want to keep the townhome for awhile – it’s like a safety net. I’m sure all will be fine – it’s just the obsessive-compulsive part of my personality coming through. I actually have enough money saved and in TSA to carry me through until 62 and live comfortably. Thanks for visiting me – maybe our paths will cross this summer…

  3. Greg UNITED STATES says:

    These decisions are a lot like going to Vegas….you are gambling your income against how long you plan to live…..lol

    You seem to be ‘working’ through what is best for you and NO ONE else can tell you what is ‘best’ for you…..that said I will point out one thing to consider – if at all possible if you can delay taking your SSecurity (even to the point of using your TSA money to offset) you will add significantly to the monthly amount you receive – that said it goes back to my opening remark – how long do you plan on living?

    Also as soon as possible get to a tax free state…..lol

  4. Brenda says:

    I retired a decade ago and remember having many of the same feelings you are having. One thing to add into your financial computations is that you won’t have to spend as much on clothes, gas, and probably food. The last item because working folks usually buy more prepared foods to save time. You have described enough equity above……it will work out for sure.
    Honestly, though you probably aren’t thinking of it right now, the hardest part might end up being no longer being around your second graders. I used to teach that grade as well. Their innocence, trust, freshness and enthusiasm for life……..that will be a loss.

    • Desert Diva says:

      Thank you for visiting and and commenting Brenda. It’s always nice to visit with 2nd grade teachers! :-) I liken the experience to jumping into cold water – once you just do it and acclimate to the water you’re just fine…

  5. Teri UNITED STATES says:

    Taking a lump sum distribution of a pension will put you in a higher tax bracket for one year, and you will not be happy with the amount of taxes you will have to pay.

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