The Last Paycheck (Probably Ever)

Four years ago, I took a retirement package that included a (very reduced) paycheck that would continue for 4 years. If you want to be completely transparent about the transaction, it was a sale of the business I spent 25 years building. I sold it back to the company I worked for, then they sold it to the person who is now sitting in my old desk chair doing my old job. Its over now, though. No more checks for me until I’m old enough to get social security checks.

Part of the reason for that is that our private health insurance got really expensive, so we opted for the publicly available marketplace insurance , knowing that our income was going to drop substantially this year. It is less expensive for us than the previous option, IF and ONLY IF we keep our income lower. Which it will be unless I get a job. Not that I was planning to.

I mentioned to my husband that i’d gotten the “last paycheck” and he asked how I was going to get money. Was I going to start selling assets in our joint account and set up a monthly draw like the paycheck I had been getting? (He lets me do the finances. He’s perfectly capable of managing them, but since I did it for a living and watched the stock market all day, it was easier for me just to do it.) Honestly, I haven’t been paying as much attention to our finances as I did when it was my job, but I have been watching dividends etc accumulating in our joint account. I intentionally stopped reinvesting dividends and capital gains, because I am going to start spending them eventually. There is no sense in reinvesting money, and then selling and creating additional taxes.

The market has done well, and our accounts have increased in value by 40% or so (about 10% per year) since I retired. Knowing that I was going to start spending some of it eventually, I have gradually begun to make our account more conservative and nudge some of our investments from the stock side to the bond side. Our account was mostly stocks for most of the time we were invested, and we now have more than 20% in bonds and cash. I’ll be adding to this, but honestly, we don’t spend all that much- I’m analyzing our spending again, and don’t have exact figures just yet, but I suspect we have several years worth of spending in bonds and cash- enough to withstand an extended down market.

When I retired, I was worried about when the paychecks stopped coming in, but I’m feeling better about it at this point. Most retirement plans that fail, do so because the market goes down substantially in the first 5 years of retirement, and funds must be sold for income when the market is down. Our finances are actually up in value, and we’ve hardly withdrawn anything. Since interest rates have gotten so much higher, the income from our bonds is up substantially.

My husband still works some, and has picked up paying the family health insurance, so my expenses have gone down to the point where I will be able to pay the rest of the bills from the dividends and capital gains in our joint account. Yes, our finances are somewhat separate in that we have separate accounts and he pays some bills and I pay others. We do have our investments in a joint account whenever we can (retirement accounts have to be in single name). I don’t really recommend this approach for all couples, but we got married pretty late and were both used to doing it our own way. Also both of us are savers, so it worked out.

Dividends are not likely to cover all of our expenses, we will have to sell funds for large purchases, like new (or newer) vehicles, but I think dividends and capital gains will cover our regular expenses. Large purchases can usually be delayed or financed to avoid a large withdrawal in a down market though, which helps to make our portfolio more recession proof.

I’m feeling pretty good healthwise, too. I have been getting a great deal of exercise, walking almost daily outside in the sunshine, adhering to my weightlifting goals, and spending lots of time with friends and family. I haven’t planned another vacation yet, or even come up with another fitness goal, but I’m pretty content with how things are going right now. My youngest son has also developed an obsession with pickleball, and on the way back from playing several games with him, I was telling him about my plans for the week (you know, playing pickleball while he was in school and most people are at work.) He said retirement sounded like fun to him. I laughed and told him that you have to work first, but that retirement IS pretty cool.

Fun stuff I’ve done lately- My husband and I went to two concerts, the Eagles, and then Travis Tritt for our 22nd Anniversary. I also learned how to crochet (because I needed another hobby- lol) and I hosted Easter at my house. I’m the standby babysitter in case my niece goes into labor early. She’ll be induced on April 16, but someone has to babysit the 18 month old if it happens before that. I’m the closest relative and retired, so I’m on call- Yay!