Monday, February 10, 2020

Retirement Planning

It is difficult to forsee the future. I think that is one of the things that holds me back a bit. What is the future going to look like? Who knows. Writing this now to get down and share my thoughts and plan.

I have been saving in earnest towards retirement for a while, maybe the past ten years. At 52, it is not a very long while to have been saving for retirement. I did have a IRA account through my school but rules changed and I could no longer contribute to that account so it has sat dormant since. I was not happy with the high percentage cost IRA's they offered after that so stopped contributions in that way. I do have a pension through the teachers retirement system. It is a good program if one continues to teach for the full thirty years on the rule of 90. Retiring from teaching after twenty years, not so much. 

I read a bit. The Mr. Money Mustache , I just found Get Rich Slowly, The Dave Ramsey fellow. It is all a bit overwhelming and too much. Today, I found a good article on $1000 a month in retirement, basically it is necessary to have $240,000 in an account earning at least 5% return in order to pull out $1000 a month. For every $1000 a month desired, one needs $240,000 in a "retirement" account.

In many ways retirement wise I am fortunate. I am basically single with no children. I have a good job that pays slightly less than the median household income in Oklahoma. I bought a house about 10 years ago in a rough part of town for abut $50,000 and got it paid off. My truck has 250,000 miles on it. Dining out is my biggest expense. Things are changing in my girlfriend just got a new house. We will be fixing it up and using the current house as a short term rental or an AirB&B.

I have a glass studio that breaks even on expenses and earnings each year. I do pay myself $1000 a month from the studio and put $800 (with a $24 match) a month into a Vanguard Simple IRA account. I do have a CPA for taxes and keeping everything in good order from a legal standpoint.

I have several savings accounts earmarked for purpose. I have an HSBC travel account. This account is funding through a couple of modest oil royalty checks from wells my father has given my brother and me.  The HSBC card can be used outside of the US without fees. We have been to Tulum Mexico a couple of times and it is a great place to visit. I opened the HSBC account with Tulum in mind as they have a branch so getting cash is easy. I have a summer travel account that pulls automatically from checking every month. I have a house and truck savings accounts where I funnel left over funds from checking at the end of each month. I did open a Money Market Mutual Fund account with the truck fund and put money in each month as if I were making a payment on a new vehicle so I am saving now for a new truck. It is not really recommended to save for short term in a fund like that but with so little interest paid on a standard bank account or even a CD it is a risk I was willing to take.

So with all of that as to where I am. I plan on teaching for at least eight more years to make it to 30 years teaching and retirement. I am unsure of health insurance at this point but I expect to be able to maintain membership in the health system provided by the state for teachers. I have a lot of little bits of saving in retirement accounts which should add up to a little bit of supplemental income in the future. It really seems okay but is a constant fear. I think more people fear over a zombie apocalypse then they fear over saving enough for retirement and they are probably hoping for the zombie apocalypse because they do not have anything saved for retirement.

There are lots of people out there who are experienced in the ways of retirement. Folks who are experts with advice. What is the best approach? Read and read some more. Talk to folks, meet with financial planners. I have a difficult time giving money to someone for taking care of my retirement. I met with a group a few years ago and they wanted me to transfer all of my accounts into their plan and they would take care of everything for a fee. I could not see a benefit. I met with my local recommended financial adviser to get an idea of if I am going in the right direction. Things look good but yes, they want me to move my accounts over to their program and they can get a percentage of my investments. I think a good financial planner would be one willing to work together to provide the best direction. Sign posts and goals to follow, not charging a toll every year or quarter. I think that is about it. If this helps you in anyway let me know.

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