Fourteen years ago I retired after teaching for 30 years in Arizona and as soon as I could get full retirment pension benefits. I'm now 64 and have been divorced (my choice) for more than 2.5 years.
My pension is decent, but nowhere near as good a Oregon PERS retires' (I am not familiar with retirment benefits for teachers in Washington), but it is decent. My largest expense has been health insurance and that expense has ballooned over the last 14 years...I was not prepared for that. I kept health insurance through my former employers. Fourteen years ago the state of Arizona covered one-third of the $300 monthly cost. Now they cover only $150 of the almost $700 monthly cost. Since I started drawing Social Security two years ago, the picture is brighter, and I understand that the cost of my health insurance will decrease when I reach Medicare age.
It always puzzled me why so many of my (teaching) colleagues said they could never retire as early as I did, even through they could get full retirement benefits well before age 65. I made them aware that their pension would not have many of the (tax) deductions we paid as workers...no deductions for the retirment fund, no deductions for Social Security. Perhaps they never crunched the numbers; perhaps they just didn't know how to live within their means.
Within one's means
Living within one's means is the key. Don't buy things you don't need or don't really want. Pinch pennies on the small stuff (or everyday stuff) so you can afford to splurge on luxuries. Don't use credit cards for anything you can't pay in full when the bill comes due. Borrow money only for a home. Buy a house you can afford early in your career, and don't sell it unless you really need to or want to.
The first house I bought I stayed in for 21 years. I took out a $40k mortgage on a $42k house in 1973, sold it in 1994 for $145k. The next house I bought required my taking out only a $40k mortgage. Five years ago I decided to pay off my mortgage, and I did so by selling some stock I inherited from my father in 1965. I had not touched the stock in 37 years, and $7k of stock (in the company my father worked for) appreciated to over $150k.
The rest of the stock I "lost" or "gave up" in the divorce. Niether the stock nor the house had ever been community property, but I had been married for 35 years in community property states. Nevertheless, I feel I came out ahead when I divorced. My ex-husband always preferred to be self-employed. He was very talented in his career, but he was a very poor businessman. I was always the main (and often only) source of income for our household...I had to pay his health insurance, I had to pay his self-employment and income taxes.
My other advice:
• Start a tax-sheltered annuity early in your career. Starting it later is better than never starting one. I started mine in 1965, my second year of teaching. I put in only $75 a month ($900 a year). By the time I retired, that money appreciated to $120k. I do regret never having increased the monthly amount of money I put into the annuity (on bad advice from my long-time accountant). I now have a certified financial planner who has helped that money earn a lot more.
• Don't drive if you can walk. Walking is good for your health and your pocketbook (Consider buying your house in a neighborhood where you can walk to transporation.)
• Take care of your cars, so they last a long time. (Most of my cars have lasted 10-15 years.). Keep your car, not your junk, in your garage...you paid too much for that garage to use it to store junk.
• Have fun. Find a passion. Neither has to require a lot of money.
• If you find yourself suddenly single, grieve and get angry, but don't feel sorry for yourself. Take care of yourself; you are your most important asset.
Thank you for giving me this opportunity to realize that I'm doing pretty well.
Judith Jernigan, Vancouver.
