I turned 60 this year — a big milestone birthday for many reasons. Most of us come to dread that date on the calendar as we get older (and I certainly felt that way many times throughout my 40s and 50s), but this year was a little different.
I might have turned one year older, but I also got to celebrate something I've been looking forward to for a long time: I retired from my job! My husband, Ed, and I have been saving up for (and looking forward to) this time in our lives, and we're thrilled it's finally here for us to enjoy.
Here's how I reached my retirement goal — and how you can start working toward yours.
Our Plan for Retirement
When it came to creating a strategy for our retirement preparations, we focused on what we actually wanted retirement to look like. Understanding what we wanted — like a second home in North Carolina, which we could use to escape the harsh Minnesota winters — helped us come up with a realistic idea of what it would actually cost.
That, in turn, informed how much we needed to save to make it happen. Contributing to my 401(k) at work was always a top priority due to both the match I received from my company and the fact that the plan offered tax advantages throughout my working years.
Once I hit my 50th birthday, I also started taking advantage of the "catch-up" contribution allowed for my Roth IRA. That meant I could invest $1,000 more per year — a small amount, but every little bit helped in that last decade of my career, and played a big role in how I reached my retirement goal.
Ed and I planned that I would officially retire when I turned 60 in part so we could start accessing the money I had saved in my 401(k) without any penalty. (You may be required to pay a 10 percent tax if you make a withdrawal before age 59 1/2).
We also decided to wait on filing for Social Security because we were diligent savers and we know we can fund our own retirement until at least age 65. Waiting for a few years means getting a bigger benefit, and we wanted to take advantage of that as part of our retirement plan.
Using Resources Available to Us
We've always been planners — but not financial experts, and trying to manage our money on our own wasn't realistic. That's a full-time job in itself, and my husband and I both rose high enough through the ranks in our careers that we had enough responsibilities without also having to constantly mull over every retirement consideration.
That's why we chose to work with a financial professional (we've had the same one for years). She helped us make complicated decisions by presenting all of our options and clearly explaining each. In addition to leaning on her guidance and advice at critical points, we leveraged a number of informational resources, like online research, to make our retirement goal possible.
Establishing More Income Sources
Ed and I didn't want to rely on our 401(k) and Roth IRA accounts alone to fund our lifestyle. Like many people, one of our most nagging questions upon retiring was "will we have enough?"
Wanting to ensure we didn't run out of money, we sought strategies beyond our retirement accounts. Working with a financial professional, I set up an annuity to help increase the funds we had available for our lifestyle. Ed and I also explored a variety of life insurance options, and chose to further diversify how we could fund our retirement by choosing a whole life policy that offered us the best benefits (and will help give our grown children a little extra support once we're no longer here).
What's Next for Us
That's how I reached my retirement goal — but now that we're here, we know the work doesn't just stop. We have some additional retirement considerations even as we begin enjoying this next phase of life.
While I'm excited to have more time and energy to spend with my family — including my children, their spouses and a growing number of grandchildren — I do sometimes worry about what will happen if we face a completely unexpected event. It's not exactly fun to worry about worst-case scenarios, but I know thinking them through is part of smart planning.
Our insurance policies, as well as our annuity, should help us get through any catastrophes or emergencies, but we've also talked about our options should we need to generate more income.
I have a few ideas, including putting my expertise to work by consulting a few hours a week with my old coworkers, who've expressed interest in partnering on some projects. Ed also loves woodworking as a hobby, and has seriously considered starting up a small shop both for fun and to earn a little extra cash.
For the most part, I feel confident with our plan, and I sleep well at night knowing we have income from many different sources, including our investments and the financial products we leveraged along the way. I'm looking forward to exploring this next chapter in our lives, and I love sharing my experience reaching my retirement goal in the hopes it will encourage others to keep saving, keep planning and know it could be possible for them, too.