Tuesday, February 14, 2017

Transitioning into retirement

Image: http://az616578.vo.msecnd.net/files/2016/05/21/6359944300290907561102987068_re%2011.jpg

My retirement paperwork is officially received by the state, they have congratulated me, advised me of an approximation of what I can expect on a monthly basis (end of month), and alerting me that this still may* take up to 3 months to sort out (this is the dead season for retirement, BTW), they will email me 2 weeks before they are all set. No worries, I've got this.

We have been living on projected retirement income since I downsized, moved to the city 8 months ago. Continuing to live purposefully has allowed me to keep 6 months of living expenses (everything from soup to nuts) in my checking account. Once a month, I transfer any additional funds into my savings. I now have a very healthy, 20% down payment for my next home plus additional savings for a future car, emergency expense, etc..

While retirement for many means a total stopping of work, as long as I am physically able to, I plan on working until I am eligible to collect Medicare, having been one of the first teachers in this state to pay into that program. Currently, that is age 65, so 12 years to go. I continue volunteering at the hospital, and believe that I am making a good impression. I hope to get another full time position, in my new field, at the hospital for medical benefits. Any salary beyond that would translate into additional savings, most likely to be invested. If all goes as planned, with the already added additional income stream, I stand to make more income than I did in my former career, hopefully with a lot less stress, which has really impacted my health.

Medical insurance for me and the kids is a concern. They are aware that they may need to ask their father to go onto his plan (Note that since we married, I had always carried the insurance for the family, out of my paycheck). If for some reason I don't yet have a new job with benefits come 9/1, I can afford to get myself a plan, but would be hard pressed to also cover the kids, while maintaining the aforementioned goals.

Bills paid up, accounts and checking accounts balanced, taxes ready for a final go thru before sending them off to the CPA.


meme said...

It sounds like CT does not have a state health insurance plan that your children could go on. We have one in MA - lots of affordable plans that go by your income - I make roughly 50 thousand a year and pay 100 dollars a month for health insurance (Tufts plan). My husband is covered my medicare which is about 110 a month.

CTMOM said...

Meme, CT does have "ACA" insurance, it is expensive, with an even higher deductible than I already have, and doesn't cover much. Bottom line: our OOP expenses would increase. I'm researching my options.

Lee Ann said...

How have you saved so much on one salary? Good job!

CTMOM said...

Lee Ann, there have been a lot of changes since last Spring:

-I downsized my monthly budget by about 50%, being ever vigilent about finding ways to cut more
-I paid off about $15,000 of medical debt, using monies squirreled away in a tax deferred HSA; my last payment will be next week, leaving my bank accounts intact. My goal was to pay this off prior to my move to retirement, the effective date is March 1.
-I have had no other debt. My credit score remains skirting 800. I check it monthly.
-child support ended
-I then added an income stream, effective October 2016
-all 4 of my kids now pay their OOP medical costs, clothing, hair care, personal care items, recreational costs, msc expenses as well as contribute to the household grocery bill
-I received a severance package of 6 months full salary, but due to aforementioned, immediately went to living off of 1/2 of that, which reflects my anticipated retirement income. This translates into receiving a full year's worth of my entire living expenses from Sept-Feb (housing, insurances, personal care costs, pet costs, food costs, celebration costs, auto costs and a few items under "msc")but setting aside those monies to cover us in full, thru August. Meanwhile, I await my retirement application to be completed, at which point the set aside monies to cover us thru until Sept, will be stuffed into savings as well
-I "prepaid" for our medical insurance thru my soon to be former employer from Sept-Feb, yet we will have coverage until Sept 1. Pretax monies were used as a deduction. All accounting has been in reference to actual take home amounts in a paycheck. This choice to pay ahead for the insurance meant no hit on my bank accounts and I was able to use pretax monies deducted from my paychecks
-the added income stream plus my prorated severance equals $356.69 under (would have been the same or close to it, if I wasn't paying ahead on insurance) what my full salary take home would be, which will once again be leaving me 48% to put into savings
-I continue to apply for jobs in my new field, as I will need to get on a good insurance plan, due to our chronic medical issues (plan A). I accept that my new field will pay 25-30% compared to what I was earning in my former career; I will be working to gain access to an employer sponsores insurance plan, using earning (hopefully again pretax) to cover them. Any remaining salary after ins, will be added to my savings.

Bottom line is that since I am living so modestly, I am able to save so much, and should be able to continue to do so. Should I not find work come 9/1, which is a worry, I will have to find alternative insurance. I am exploring my options now (COBRA, ACA, as well as a private plan) but most of those options would most likely be so cost prohibative for me, that my Ex may be asked to put the kids on his policy. One plan, for example, that I looked into, would cost me $77,000 (not a typo) for a crappy high deductible plan to cover me and the kids. Note that from 1987-2012, I paid for the family medical insurance thru my salary. My Ex can step up to the plate for a few years until the kids age out, is my feeling.

Lee Ann said...

You are amazing. You've done such a wonderful job of being smart and careful.

Belinda said...

You've done well for yourself, Carol. I wish you the best in your job search.