Enjoying Early Retirement Travel in Switzerland – photo by Bob

{GCC – Since publication 6 years ago of the widely popular financial review for ‘The Bobs’ , people have inquired on social media, email, blog comments, and even in person, “Where are they now? Please tell us how it turned out!” Not wanting to let you all down, I asked (often) if they might share an update of what they have experienced and learned. Alas, they were much too busy enjoying retirement. Until now…}

Happy New Year GCC readers. Bob here from our now infamous financial review, Scared to Death of Early Retirement. I just had my 5-year retirement anniversary, so I thought we would give you and Jeremy has been pestering me for an update on how things have been going.

First off…

…there is nothing like early retirement, though it may not be for all. We both enjoyed our jobs but realized there had to be more to life while in our healthier years.

As we thought about it, apprehension and nervousness made it difficult to make the big decision. We had all the popular questions and concerns:

What would we do with all of the extra time?

Would we end up needing to get part time jobs later after giving up two good jobs?

To a lesser extent, what would our family and friends say?

Do we have enough saved?

How long will the money last before Social Security starts?

I was 58 and Bob2 was 56. I had tracked our monthly expenditures for over a year so we could understand how much it cost us to live. All of this was rolling around in our heads.

Then early in 2015, we discovered the FIRE movement and started having some interaction with a few of the FIRE bloggers including the guy that runs this site. We also attended the 2015 Chautauqua in Ecuador where we had the opportunity to hang out and talk to fellow like-minded FIRE enthusiasts and a few of our favorite bloggers. It was during this time that it all became clear and what we had been thinking could actually be our reality.

To be honest, it took me about 4-6 months after retiring on 12/31/2015 for the job stress to go away. For example, being in an IT manager, one of my responsibilities required me to be on-call 24x7x365. I felt like my pager would go off in the middle of the night and I’d be up for hours. It took that long before the feeling went away. To keep busy post retirement, I had the project of preparing and selling our rental property before Bob2 retired on 12/31/2016. We were both tired of the rental experiment and we weren’t cut out for it. This goal helped the transition and was one thing less that Bob2 worried about.

Bob2 is more Type A’ish than I am and was kind of “lost” for a while not knowing what to do with the time. We both had structured jobs and it was a huge change moving to retirement mode. It was easier once we stopped trying to micromanage and overanalyze what was “the right thing we should be doing”. Today, he’s going to the gym 5-6 days a week and I’m walking about 6-7 miles every morning. To that end, we don’t feel guilty about what we do or don’t do the rest of the day.

Would we go back, hell no! Are we sorry or do we regret the decision? Absolutely not. Like Jeremy wrote in the original post, maybe we could have retired sooner but hindsight is always 20/20.

On the financial side post retirement, we rolled our Traditional 401k, Roth 401k, and TSP funds from our old coal mines into our retirement accounts at Vanguard and promptly bought VTSAX. During the time in 2016 before Bob2 retired and after speaking to a fellow FIRE retiree, we opened new retirement accounts at Fidelity and rolled over our entire portfolio from Vanguard to Fidelity. The reason being was “all in one management” along with a Debit Card with a Cash Management Account that would refund all bank ATM fees charged for withdrawing cash at ANY ATM. This made any ATM, our ATM.

The majority of our portfolio is the S&P Index ETF, ITOT, at Fidelity. ITOT, has similar performance to Vanguard VTSAX. To this day, we don’t have any bond exposure in our portfolios. Are we crazy? To some folks, yes and maybe, but we have a high risk/volatility tolerance. At some point, we may add some bond exposure, not sure. This past Covid March, our portfolio fell a little over 28% but came back stronger. We don’t consider losing until we have to sell and we’re long haulers, not market timers. In the years since retiring, our resulting annual withdrawal rate has only been 1-2% of the overall worth of the portfolio.

We only have one individual stock an it’s a little company called Apple. We purchased our first shares of Apple in 2005. The stock is still in my old coal mine account for the historical cost basis data. Will be selling some shares to pay the taxes for the Traditional to Roth conversions. After all of the consolidation, our total portfolio has grown 110% in the five years since I retirement on 12/31/15.

Our plan is to hold off taking our Social Security, hopefully until 70.5. I look at each of our Social Security accounts as “annuities in waiting” that grow every year until we reach our max withdrawal age. This should allow us the opportunity to convert as much of our Traditional IRA money as we can into our Roth IRA’s before we each turn 72. As a gay couple without children, at some point, we will have to think about charitable giving options.

On the subject of income, after turning 62, I became eligible for a small pension from the Carpenters trade I was part of in a prior career. I also have some guaranteed retirement income from the old coal mine that has a guaranteed return of 7.5% of funds invested, though the last few years, the return has averaged 20.5%. Along with that, Bob2 turned 60 in October and we’ve now applied for his Federal Annuity pension.

Receiving his annuity will also allow us to get back on the Federal Employee Health Benefits (FEHB) plan in 2021. We will no longer be restricted to use Affordable Care for health insurance. We’ve always kept our income below the ACA cliff to qualify for the subsidy until he could get at his pension and get back on his FEHB health plan. Now, we can start the Traditional IRA to Roth conversions as we will no longer be income restricted as on the ACA. Also, to reduce our tax exposure, two years ago we moved our residency to Florida from Missouri as there is no state income tax and saving us approx. 6.5% on state taxes. We had purchased our Florida condo as a short sale in 2012.

Both of us kept our Long-Term Care Insurance policies from our employers as the premiums are still reasonable and we’ve had the policies for some time. At some point, we will re-evaluate to decide if we want to self-insure.

We had agreed we would stay close as long as our dog was with us. While in Florida, she passed in April 2019. Last summer was the first year of being able to travel and we took our first trips to Europe. These trips whet our appetites for more. This year we had more travel on the books but Covid had a different idea. We’re discussing a longer term stay in Italy and some other opportunities when the world heals and moves on. We love to travel and found it expands the mind and shows us the experiences of different locations and cultures.

Life is good at Burg Eltz – photo by Bob

We have always been on the same page with life and money and have never done without anything we wanted. We’ve always saved, worked hard and never lived beyond our means. It’s time now and as a result of our efforts, we plan to travel as much as we can until we aren’t able.

Thanks Jeremy, for your original input, the regular posts and keeping the GCC website going. We still find it useful and informative since leaving the rat race.

Happy New Year and good fortune to all,

The Bobs

Happy 5th Retirement Anniversary!