Started serious retirement planning in our late 40's, so 15 yrs later than we should have, LOL.
Spouse had lifetime employment with state agency with good pension and generous bennies. He retired with 42 yrs (5 airtime, 37 actual employment) at the age of 56. I also retired at 56 but a couple of years before he did, with small pensions, no bennies; but a fair amount of financial industry knowledge gained from my career.
We always assumed we would live on his pension and (in the future) sale of the house. My pensions and SocSecurity were planned to be "extra."
I did not want to continue taking care of our portfolio once retired. We then transferred it to the independent CFP firm we had originally hired to handle my MIL's portfolio. She had mild dementia so we spent efforts to get someone not only competent but also that she would like personally.
We have no children; if anything had happened to us, she and our heir/trustee would need a reliable and professional resource to trust. This firm has experience with elder clients facing declining physical and mental issues; they have been in business for forty years.
Our portfolio is in a 55/45 split of equities/bonds, reported to us on a quarterly basis (although I can always check it at Schwab's website). 60% is IRA (no Roths) and 40% taxable, from which our distributions come. We take a 3% distribution, which we use for charity donations, travel and dining out.
Between spouse's pension, my 3 small pensions which kicked in at age 65, and SocSec which I took at 66, we have a lot of discretionary income left over every month. Spouse will not take SocSec until age 70 due to a 60% WEP penalty which will reduce it to a few hundred/mo.
We are spenders. Always have been and always will be. We were advised to get LTCi when we started retirement planning and did so. I knew premium increases would occur as it was priced too cheaply. Fortunately our income has increased over the years that keeping it going was well worth it. Now our type of policies are no longer sold (too costly for insurers) and the premiums are much higher - but still far, far less than the cost of just one of us needing Skilled Care Nursing, Convalescent, Memory, or Home Care for a couple of months - and our policies have an
unlimited benefit period. Benefits rise 5% compounded annually.
We live in a HCOL area so consider the LTCi in the same vein as our auto, homeowners, quake, and umbrella policies: they are there if we need them.
We had intended pre-pandemic to sell or rent our SFH and move into senior or condo apt, but the pandemic/lockdown knocked that plan askew. We have an older house with a continuing project list, so will continue to leisurely whittle away at that list until we finally do sell.
With the recent low interest rates, we took out a small mortgage to free up some equity at a 2.75% interest rate, with the approval of our advisory firm. Still have most of it left so should be able to get a lot of the maintenance/remodeling done without going out of pocket.
Why no Roths? Unfortunately the state pension mgmt was very slow about allowing Roths, so they were announced less than a year before Spouse retired. I ran the #s but it wasn't worth it then. Every few years the CFP firm runs the #s - they just did it a few months ago - and same thing: really not worth it, as our income is so much higher in retirement than when we were working, so our tax bracket essentially remains the same as before.
Of course, when one of us dies, the other is going to get socked with the "widow's tax", but that's the way it goes......
Better than having to eat dog food
