It’s Lazy Man here with another post from regular writer, Kosmo. This is a good run-down of how his finances look going forward five, ten years, and beyond. If you are looking for something similar from me, I wrote about my retirement income back in June. In the new year, I’ll update my 2022 resolutions and make some new ones for 2023. Kosmo has already written a couple of other articles for you.
It’s hard to believe that we’re already rushing headlong into yet another year. Well, the years start coming, and they don’t stop coming. It has been an interesting year.
My daughter began high school this fall, and my son started junior high (7th grade). My daughter had a 3.95 GPA in junior high and a 4.14 in her first trimester of high school. She’s on the advanced track for math and science, plays the flute in the marching band, has an interest in art, is active in Girl Scouts, and has begun volunteering at the local food pantry. Marching band has become her passion. She’s quite introverted by nature, so it’s great to see her enjoy performing in front of a large crowd. One of the high school football games was played at a college stadium this fall, so her first-ever marching band performance was in front of about 15,000 people.
My son fell a bit short of his sister’s GPA, but only because they don’t have AP classes in junior high, which limits the highest GPA to 4.0. In addition to achieving a 4.0 GPA, he takes a seminar class that is essentially an extension of the gifted program he participated in during elementary. They do a lot of group projects, including a project where they designed carnival games and rigged them so that the success rate would fall into a specific range for success rate. They intended to have one group of elementary kids play the games for an hour. It was such a success that the elementary school principal invited them to stay for the entire day. He also plays saxophone, both in the standard school band and the jazz band.
How does this bragging have any connection to personal finance? The kids are becoming well-rounded enough to put themselves into a position to get some merit-based aid for college. My wife and I aren’t rich, but we earn enough to make need-based aid unlikely or very limited. If the kids are able to get some merit-based aid, it will lighten the load a bit.
We do have 529 accounts for both kids and have been contributing since they were born. While it’s difficult to keep up with the rising costs of higher education, the 529s will likely be able to pay for a substantial portion of their education.
It’s crazy to think that my daughter is only 3 1/2 years away from high school graduation. It seems like only yesterday that she was a baby. Time flies.
Our retirement accounts have not had a great year. However, I’m a long-term investor the bulk of our retirement assets are in date-targeted funds. I’m still about 18 years away from retirement, so there’s plenty of time for the market to bounce back.
I don’t max out my 401K contributions, but I contribute quite a bit, and I’m starting to boost the percentage every year. My wife is a state employee and makes a great contribution to her retirement account. Additionally, I have a defined benefit pension from a previous employer, where I worked for 20+ years. I’d actually be eligible to start receiving the pension at age 55, but I will defer to age 62 since the payments are much larger at 62.
My job has profit sharing, and one nice aspect is that the profit sharing is done in the form of a 401K contribution. The company had a good year, and the profit-sharing contribution was 15% (of my salary) this year. While that didn’t completely offset the overall 401K losses, it was a nice silver lining.
I run a lot of calculations in a spreadsheet. Barring a long-term bear market, we should be well-positions for a comfortable retirement. We won’t have enough money to live in luxury, but we won’t need to worry about where the next meal is coming from.
A team member is going to shift to part-time in 2023 instead of following her original plan of retirement. In the past few years, I have come to the realization that this will likely be the path I take as well. As I get closer to age 65, I realize that it will be impossible to just power down my computer and walk away. I will almost certainly shift to a part-time schedule and/or teach a class at a local community college. As much as I enjoy sleeping in and doing nothing, I’m going to need some sort of intellectual stimulation.
I’ll celebrate two years at my current job in January. I’ve written a number of articles about the experience, and it’s no secret that I enjoy working for the company.
I’ve recruited two friends to join the company and am working on recruiting some others. While I wish I could wear jeans to work, I’m a fan of the company culture. There’s much more of a fan of various teams working together to achieve common goals rather than taking on adversarial roles.
Officially, I shifted to supporting our e-commerce technologies several months ago. However, I’m still wrapping up several large projects from my old area. The e-commerce area is still in its early stages, so I’ll get to be a key contributor in getting it off the ground. I’ll be attending a conference in February to learn more about this space. The conference is in Palm Springs, which will provide a nice break from the Iowa winter.
My employer seems to be one of the few companies that actively celebrate employee retirements. A colleague from our department is retiring. There was a formal celebration a couple of weeks ago. The event was held at the company’s conference center. Hors d’Oeuvres, sandwiches, and an open bar. It was great to see a company spending time, effort, and money to celebrate the contributions of any employee. This particular employee had been with the company for 27+ years.
We had been kicking the tires on the idea of a vacation / rental home in Door County, Wisconsin. We love the area, and we’re at the stage of life where we’re fairly financially secure. Sister Bay is our favorite town in the area, but we had come to the conclusion that it wasn’t feasible. Either properties were too expensive, had too many restrictions, or both. We could probably make a small profit on a rental. However, the restrictions on usage would limit the amount of time we could spend there and would prevent us from pivoting from rental to retirement home in a few years. The whole point of having a property there is so that we can use it, with rental income, as a way to defray costs. If we can’t have unfettered use, there’s not much point in owning the property.
We took a short trip back up to Door County this summer to take a look at some of the surrounding towns. We needed to expand our horizons beyond Sister Bay.
Ultimately, we decided that we simply didn’t like any of the surrounding towns enough to make that sort of financial commitment. Several of them are quite nice but don’t quite have the appeal of Sister Bay. At this point, we’re just going to make occasional trips up to Door County and stay at AirBNBs. If the housing market there cools down over the next 5-10 years, we might find ourselves in a position to buy.