First few months of retirement

This post focuses on the first five months since my recent retirement.  I was always worried about the transition into retirement and what that would look like. Hopefully, this post can give you a sense of how it has gone for me. In summary, the first few months have been fun and very busy without any hints of anxiety or boredom. Below are some of the key areas of focus.

Travel: I decided to go on a long (6 week) trip to Greece and visit some of my favorite places right after retiring. I retired on a Friday and went on the trip on the following Wednesday. This made the transition to retirement very exciting and postponed many of the initial worries with retirement (what will I do with my time, will I be bored, etc.). I wrote several posts about most of the places we visited during this trip. According to my daughter who came on the trip with me and my wife, this was the best trip ever and I must concur. I also went on a couple of smaller trips in the fall which I’ve been trying to do for several years but was never able to do due to work. My wife and I went to the Niagara Falls and combined that with a visit to Toronto which is only an hour and a half away from the Falls. Even though I’ve been living in New Jersey for 25 years this was my first trip to the Falls. Later in the fall, my wife, my daughter, and I went to Pittsburgh where my brother and his family lives. Both trips were great and I plan to do posts on both trips at a later point. Pittsburgh in particular was a pleasant surprise and is a much more interesting place to visit than most people think.

Where to live: This is a question that I assume every retiree has to consider and it occupied a fair amount of energy during the past few months. There are many considerations that go into this decision including financials, family situation, etc. For us, there are two main reasons for considering a move. (1) We live in a beautiful suburb in New Jersey that unfortunately is quite boring. We would love to live somewhere where there are more activities, where people can walk to stores and restaurants, and where it’s fun to walk around. My wife and I like to go for long walks and when we walk around our property we can see deer, squirrels, chipmunks, and the occasional fox but not much else. We think we’d enjoy more the city life. That’s where I grew up and where my wife lived for many years. (2) We would like to downsize a bit so that we don’t have to take care of the property (four-bedroom house in a 1/3 of an acre). We don’t have a huge house but it still feels a waste to have rooms that barely anybody goes into.

Given that my daughter goes to medical school in New York city, we considered moving there. We looked mostly for rentals because buying something there requires a big financial commitment. We thought that a two-bedroom apartment might be a good choice. We thought of spending around $5K per month for the rent. That would make it equivalent to the interest we would generate by putting the proceeds of a potential sale of our home into CDs (banks are currently offering between 4.5% and 5.5% interest) plus the property taxes we are currently paying. To our surprise the $5K per month proved to be quite inadequate. We were able to find some apartments in that range in decent neighborhoods but they were small (800-1,200 sqft) and in poor condition. Since we host our two kids for the holidays and since my son has been staying with us between Thanksgiving and New Year’s (thanks to his employer’s work from home policy), we decided that this was not workable. We want to make it enjoyable for the kids to visit us so that they like to come home and we thought that having them share a room especially if my son has to work for part of the time would not work.

As an alternative, we decided to look for renting or buying in some of the larger towns in New Jersey (Morristown, Westfield, Montclair, Jersey City, Hoboken) that are close enough to New York city and close to train station so that we can easily get to the city. Rents are somewhat lower but not that much. We were able to find some places that were somewhat bigger but most of them were not in good shape. I guess landlords have enough customers and don’t need to update the apartments. The ones that were nice were either significantly more expensive or were in undesirable neighborhoods. We also explored the possibility of buying. Unfortunately, it is currently not a great time to buy. There are very few choices and whenever a desirable place gets listed it sells quickly and well above asking price. From what we heard from realtors inventories are low because owners don’t want to move because that will require them to get a new mortgage at the current high mortgage rates (8% currently). As a result, we decided to stay put until the spring and reconsider the situation at that point. In the meantime, we’ve been driving to the different towns and spending time there quite frequently which has been a reasonable alternative to actually living there.

Teaching: While working, I always thought that it would be fun to teach math in high school. I really enjoy working with kids and seeing them progress. I had the pleasure of helping my kids with math and science before college and they both did pretty well. I also coached my son’s soccer team for a couple of years and had a lot of fun with that eventually winning the league championship (over 80 teams). The other motivation is that I want to contribute more to the community in retirement (since I didn’t have time to do much while working) and math education seems like a good area. There is some effort required to get a teaching certificate from the state though. As a first step, I passed the tests required to become a teacher. The Praxis Core test is similar to ACT/SAT and all teachers have to pass it. Candidates can test out if they have recent score results (ACT, SAT, or GRE) but my tests were way too old. This test was relatively straightforward and I only had to prepare on writing essays to make sure I got the timing right. I also had to pass the specialized Praxis Math test. The test covers everything math related taught in high school including differentiation, integration, statistics, etc. Since I hadn’t done much on those recently, I bought a practice book and put some effort in preparing for it. It ended being an overkill. The questions were pretty simple and I got a perfect score. I must admit that I enjoyed the preparation anyway just as a way of exercising the brain a little bit. The certification process has some additional requirements such as 3.0 GPA and a certain number of math credits. If interested, you can see the full requirements for becoming a Math teacher in NJ here https://nj.gov/education/license/endorsements/1900CE.pdf . I applied for certifications over a month and a half ago and hoping to get the certification soon .

Financials: As I’m sure everybody that retires does, I’ve spent some time thinking about what I need to do to make sure I don’t run out of money during retirement. Fortunately, interest rates are high right now which makes it easier to generate income out of investments. The extra time I have in my hands helped me optimize my investments a bit which has had helped. I also spent a considerable amount of effort reducing expenses. Our biggest expenses currently are health insurance ($1,700/month), property taxes, paying for trips, and paying for my daughter’s medical school. From those costs, only paying for trips is controllable but we decided to spend freely there while we can still travel and moderate the spending when we get older. We did focus on some of the smaller areas of cutting costs and had some success:

• Those that know me well know that I hate spending money. As I expected, I went a bit overboard in some areas. For example, I decided to do the leaves in our yard this fall. We’ve been spending $400/year since we’ve had the house with a landscape company for that and that has been bugging me for years. However, doing it myself ended up being a poor decision. By the time I’m done I will end up paying myself less than minimum wage to do this task (based on the savings). I’m about half done and you can see in the pictures what that entails (we’ve done over 50 bags already). It was somewhat of an enjoyable exercise outdoors but it has consumed way too much time and prevented me from doing other things that I wanted to do. There is definitely a lesson here.
• Telecommunications costs: I always felt that we were overspending in this area (close to almost $5K/year) but never had the energy to deal with the impacts of the changes while working. We finally decided to do something about it. We eliminated our landline (that was close to $1K per year). This had significant fallout though. We had to update several of our bank accounts that were using that line for authentication and also notify several vendors. Our alarm also stopped working because it communicated through the landline. It took us a month or so to discover and deal with the fallout but we have now resolved all the issues. We also eliminated our TV service which was also close to $1K per year. We did lose some channels we like but we decided to spend some of the money on streaming services which made up for the losses. The strikes in Hollywood made it easier because many of our favorite shows were doing reruns anyway. Our cell phones are our main remaining costs (four lines) but we like Verizon’s coverage and are sticking with it for the time being.
• Alarm: We had a house alarm for many years after a break-in in the neighborhood. The price of our vendor had been going up significantly the last few years and it was now costing us $600 per year. The company was also asking us for $700 to upgrade since we cancelled our landline. We decided to go with a new alarm system from Ring. We paid $200 for the equipment, we self-installed it, and are now paying $7/month and self-monitoring from our cell phones. We may get their full service ($25/month) when we go away for long trips but what we have currently is adequate for our needs.

 Consulting As a way of staying engaged with the industry I started a company called PNM Strategic Consulting to do some consulting. Even though I haven’t pursued this aggressively given all my other activities, I was able to engage with a few customers which has been enjoyable because I’ve been focusing on strategic questions versus dealing with all the operational challenges I had to deal with my last job (meeting the business plan, dealing with personnel issues, recruiting, managing facilities, etc.). Starting the company was much easier than I expected. It took me a couple of hours to set it up. I ended up getting a SAM entry and CAGE code also. That took a bit more effort and a week or two since the process is relatively slow. I may write a post on this topic although there is plenty of online material on the topic but don’t hesitate to reach out if you have any questions..

Blog: Obviously, I also started the blog. This is mostly for answering a lot of the questions I have received about travelling to Greece and retirement. I know that at least some people have gotten value out of it.