Daily Snapshot

When to Retire—the Big Decision

So, you’re not yet retired, but you’re trying to decide if and when. How are you going to make that decision? What if I told you there were four simple, yet profound, questions to ask yourself, and when the answer to all four of them is “Yes,” it’s time to retire?

How powerful are these questions? In a retirement life-planning workshop a couple of years ago, we were covering these questions and how they could be used to make the retirement timing decision. We got through the module and were about to move on to a new topic, when we heard a woman scream from the back of the room, saw her stand up, and listenen as she hollered, “I’m outta here!”

She had been struggling with when to retire, and her financial advisor had been trying to convince her she was ready. But neither she nor the advisor had a framework for thinking about it. Now she had one, and her path was clear. For her, the answer to each of the four questions was “Yes.”

I’m not expecting anyone who reads this post to have the same spontaneous reaction, but you never know. Here are the questions.

Questions 1: Do I have enough?

This is the financial question—important, but many make the mistake of having it be the only one they consider. Although it is not absolutely necessary, finding a trusted resource, like a financial advisor, can help you develop your answer.

We remind people that financial security is not about the size of your nest egg, but rather it’s about making sure that you have matched your lifestyle to your available resources. Spend time developing your budget, then integrate it into your financial plan.

Questions 2: Will I have enough to do?

Another way to pose this question is, “Do I have a written, holistic retirement life plan?” Refer back to my earlier post that identified the “3-P’s” of preparing for retirement, Plan, Practice, Partner. Consider this additional “P”—Portfolio.

Just as your financial advisor will strongly suggest that you diversify your financial assets into a portfolio of investments, so should you have a portfolio of meaningful things you are looking forward to doing in retirement. Do you have such a portfolio? Is it written down to increase the odds that you’ll follow your plan?

Questions 3: Have I had enough?

Some people choose not to retire, because they remain passionate about their work. That may be true for you. Do you jump out of bed in the morning excited about your work day? Or despite having had a long, fulfilling career, have you lost your edge? Is going to work and making it through the day just not as motivating as it once was?

Questions 4: Does my spouse, partner, or someone else close to me want me around 24×7?

Having worked with hundreds of couples, we’ve learned that many retirements fail because there is no understanding of or alignment with each other’s dreams and plans. This is why we urge every pre-retiree to a) identify those closest to you who will be affected by your retirement, and b) have the “crucial conversations” with them.

The crucial conversations, available on our web site, will help you gain alignment to your retirement plans. In fact, for couples, we urge that each partner have an individual plan, and the couple also has a joint plan. And, given that many retirees are not in a couples situation, we emphasize that you engage with anyone who will be impacted by your decision to retire to ensure there are no issues you’ve not considered.

Typically, once the crucial conversations have taken place and there is alignment to the plans, the answer to question 4 should be, “Yes.” Have you had these conversations?

We don’t urge people to retire, but if your answer to each of the four questions is “Yes,” what’s holding you back?

Retiree Speak

I know retiree speak. I don’t know how or when it happened, but somehow I now know this once-foreign language and way of life.

If you are a retiree, see if the following is familiar. And if you are not yet retired, here’s what you have to look forward to…

I am very careful spending money. I have to really want something to buy it.

Yesterday I spent about an hour roaming through Kohl’s trying to spend $10 in birthday cash and some money on a gift card. I know. Crazy. It was “free money”, and I still had trouble spending it.

I shop at Goodwill, but I usually buy on Wednesdays when our local Goodwill stores have 30% off for senior citizens. I used to be embarrassed by that label, but I proudly proclaim it to get 30% off the price of a $4 item.

Today I tried to spend a 15% off coupon at one of my favorite women’s clothing stores. Unfortunately 15% off a $59 blouse doesn’t make sense to me. So, I walked out empty handed.

I complain about things that break. Take my eyeglasses for example. When I got them about 18 months ago, they screwed up the order several times, and it took more than a month to get the glasses. I complained to the office manager, and I got about 30% off the price.

These same glasses are now my nemesis. The lens pops out, the temple screw comes loose, and they are crooked on my face. Today I stopped at the optometrist’s office for about the 5th time in 3 months to get the lens put back in. After fixing the glasses, the lady ordered me new frames free of charge despite the fact that the warranty was up. Maybe she is scared of me?

I use rewards cards. I carry all of them on a key ring in my purse. I LOVE my discounts and free stuff. Here are a few of the cards: CVS, Walgreens, Kroger, Marsh, Bath and Body Works, Big Apple Bagels and Panera Bread. And oh yes, there are the daily emails from The Loft, Pottery Barn and Pier One filled with savings!

I talk with my friends about mortgages. Is it better to continue paying the mortgage or to pay it off because the mortgage interest rate is higher than the value of investments?

And should we be downsizing our home? Some friends have already done this, and others are in the process. And most are moving to single story houses as they anticipate problems navigating stairs in the years ahead. We are in a large two-story house, and my excuse is that we are still dealing with merging Mike’s house and my house into one place.

We frequently discuss prescription drug plans with our friends. Yesterday’s discussion was whether you get rewards points on the CVS Care Card when you buy prescriptions.

And as much as I hate to admit it, we talk more about our health. There is high blood pressure and diabetes and rotator cuff surgery. And then there is the occasional hip and knee pain. Make no mistake. Our bodies are betraying us!

Pensions and retirement plans are often a subject of discussion. One of our friends recently retired, and he talked about the company’s retirement system dashboard. Before he retired, the web site gave him a green light telling him he had enough saved to retire. After he retired, he went back on the web site and was surprised to find a red light (meaning do not retire). Oops! He called some of his friends at the company and yelled about this red light (apparently a program glitch). Ah, yes… he has now earned his wings as a retiree.

And earlier this week I went online to check the statement on my retirement plan. Imagine my surprise to find the balance was zero. And I called one of my friends at work who explained I needed to look in a different place on the web site because the plan administrator had changed. Thank goodness we still have friends at work.

We often discuss whether we want to work again. Consensus is that no one wants a full time job though sometimes finances necessitate that. The discussion is often about whether a job would be in the same field or something entirely different. One friend who worked with me at an insurance company was able to leverage her experience as a Master Gardner into a part-time job at a local nursery each Spring.

And volunteering is a big consideration now with more time on our hands. Some of our friends volunteer and others do not. And for those friends who volunteer, there is a lot of variety including: Habitat for Humanity, their church, teaching drums in an after-school program and the Indianapolis Museum of Art.

Everyone talks about having time to exercise once they retire. And you know what? We exercise more now, and so do our friends. From walking, biking, tennis and exercise classes, most of our friends are more active with more time. Hopefully this offsets the lower metabolism and resulting weight gain that comes with aging.

So I learned retiree speak without really trying. Seems like it just snuck up on me in the darkness of night. And now the label “retiree” fits a little easier. I’ve gotten past my concern that “retiree” meant “old”.

Why just this week I heard “60 is the new 40”. Hey, you can’t beat a bunch of baby boomers redefining “old”! For someone who is turning 59 tomorrow, this comes just in the nick of time. And if I use my rewards card to get $2 off a meal at Panera or a free glass of tea at McAllister’s, life is good!

Busted Flat in California – Let’s Move to Costa Rica!

Pura Vida was his sign-off on his Match.com profile. Pura vida? What did this guy from Montana know about Pura Vida? If he hadn’t signed off that way, we never would have met … or should I say re-met?

What, exactly, does Pura Vida mean? Literally translated it means pure life. Costa Ricans use it frequently for many different reasons. The first time I visited Costa Rica in 1989, I was told to use it often. It never failed to break the ice or bring a smile to the face of the receiver. I learned it meant many things – rather like Hawaii’s “aloha”: hello, goodbye, I like you, have a nice day, relax, everything is just fine, nothing we can do about it, lucky us, things could be worse, life is good, enjoy life, life is short – eat dessert first!

Pura vida brought us together; pura vida keeps us together. Shortly after our first date, we discovered we had known each other twenty-two years prior; he was my dressage horse-riding instructor in Santa Cruz, California, but due to his strict “no dating student” rule, we didn’t connect on a romantic level. Looking back, the timing would have been off anyway; we each had adventures to pursue which, at the time, would not have been compatible.

According to his profile, he was looking for a woman who would be comfortable living in Costa Rica. I had mostly given up on finding an age-appropriate man to share life with, and was on the verge of deleting my profile and moving to Costa Rica, where my parents live, to pursue my writing aspirations.

One little “Pura Vida” changed everything!

Our first date ignited a whirlwind romance! We set about building a life together as baby boomer newlyweds starting from scratch. Due to a variety of circumstances, we were both free and clear of all stateside obligations, and both collecting social security. He suggested we could live nicely in a town called Atenas, on our combined income. I said he was crazy, based on the price of living in Nosara, Guanacaste, where I spent most of my Costa Rica time.

We booked our flight and started exploring options. The first stop – “El Sueño de Mariana”, the magical spot built as a family home, but evolved into an elegant retreat. We drove from San Jose to Nicoya, the capital of Guanacaste, and the last big town before turning onto the dirt road for the one hour drive to Don and Micki’s palace. I suggested we buy supplies in Nicoya as they would be cheaper than Nosara. He said: “Can’t we just buy fruits and vegetables at the Farmer’s Market?”

“What Farmer’s Market? There is no such thing in Nosara.”

He looked astonished. “In Atenas there is a big outdoor market every Friday where you can get your whole week’s supply of food for under $20.”

“Ha!” I answered, “For $20 you might get a pineapple and a couple of avocados! Okay, maybe that’s an exaggeration, but it is NOT cheap there. When’s the last time you went to this so-called farmer’s market in Atenas? I think you’ll be surprised to see today’s prices. You’ve been reading fairy tales on the internet.”

He politely declined to discuss the matter any further. We spent a week driving around Guanacaste using my folks’ house as home base. We drove to Marbella, San Juanillo, Playa Negro, and Tamarindo looking for a place we might like to live. Nothing was affordable on our meager budget. Nothing.

The day before our flight back to California, I impulsively blurted: “Hey, let’s leave today and go to this Atenas you keep talking about. You’ve got my curiosity up!”

“No, that’s okay. I’ve already resigned myself to living at the beach, close to your parents. It’s going to cost more – way more, but we’ll just have to work it out.”

“Wait a minute! I want to see it. I don’t see myself as a Central Valley girl, but I still want to see for myself. I want to prove to you that you are mistaken about the cost of living there. Things just aren’t cheap in Costa Rica. When we first came in the early 90s, they were, but not anymore. I don’t know how some of the Ticos (Costa Ricans) can afford to live in their own country. Well, maybe if they just eat rice and beans, I suppose it’s possible. Based on their wages, I just don’t get it.”

So, off we went! It took about four hours to drive from Nosara to Atenas. As we started up the mountain road from Alajuela, a bustling town, a peaceful shroud seemed to descend from the sky. I felt a shift in the universe and a peaceful tranquility engulf me as we left the commercial district of Alajuela. We wound around and around until we came to a sign: “Welcome to Atenas, El Mejor Clima del Mundo (the best climate in the world)”.

As luck would have it, there was a real estate office right at the entrance to the town of Atenas. We decided to go in and inquire about available rentals, not expecting to actually see anything on such short notice. Surprisingly, the rental agent offered to show us three properties.

The very first one knocked my socks off! The casita was in a gated community, walking distance to town, furnished beautifully right down to the linens. It was fairly new with modern amenities, views of the town, and a swimming pool to boot. The price? $750 a month including gardener, utilities, internet and gate guard fees. I was astounded!

We didn’t commit to leasing the casita at that time. We went home to California where I was struggling as a real estate agent in a plummeting market; my husband was battling to stay afloat in an uncertain construction market. We were killing ourselves just to meet the basic food, clothing, shelter expenses. I hadn’t bought a new pair of shoes in months and was suffering from severe withdrawal. We were paying ONE THOUSAND dollars a month to rent a room in somebody else’s house!

Our plan was to work until we had a suitable stash with which to move to Costa Rica. It was taking every penny to keep the status quo, let alone gather seed money! There was something wrong with this picture.

One Sunday morning as I sat in the real estate office waiting for the phone to ring, I kept thinking about that casita in Atenas. With our combined social security income, we could pay the rent, buy food at the farmer’s market, and still have money left over.

We made the exploratory trip to Costa Rica in May; we pulled up stakes in California in July. We gave away most of our worldly goods, packed a few suitcases and started our new life as American Expats!

And guess what? My husband got a job after we moved. Because of us living here, a California based company hired him to cover the Central American portion of the business. Although he travels more than we would like, it provides us with a good income and luxuries we would not otherwise be able to afford.

We are happy living in Atenas. There is a strong expat community mixed in with the Tico culture. We eat healthy food purchased at the farmer’s market that was harvested just prior to being loaded on the truck. We enjoy “the best climate in the world” (this according to a study done by National Geographic some years ago), and we are less than an hour away from the city of San Jose where we can attend the theater, visit museums, and enjoy fine dining at restaurants from all over the world.

Should you move to Costa Rica? It’s not for everybody! We are expats living in Costa Rica. Could you move here and live happily on your pension and/or social security? Maybe. The answer is different for each person. It’s best to visit, spend some time traveling throughout this diversified country and decide for yourself.

Pura Vida!

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