Right in the middle of making popcorn one evening last week the phone rang. A perfect example of snack interruptus. As I continue to mend from a recent surgery, snacks are pretty much the only excitement I have at the moment.
The call was from our accountant and her timing couldn’t have been worse. The new season of “Humans” was just about to start, and I was psyched to again watch actors portraying robots who in turn are portraying humans. I really like this show.¹ As disappointed as I was with the interruption, I had to admit that this is what happens when one keeps a west coast accountant and then moves to the east. Our evening was in full gear; hers hadn’t even started yet.
Only the week before I had mailed back her “organizer” with all of our tax information for 2016. I knew that we’d hear from her soon, and I was bracing myself for what fresh hell awaited us this year. The past two tax seasons had been disappointing due to Gorgeous earning more money than any of us anticipated. Darn the luck, you know?
To stem our April bleeding this time around, Gorgeous made sure in 2016 to send the IRS a higher fixed percentage of her estimated quarterly payments. Our accountant’s software tends to suggest payments that aren’t realistic compared to what she’s making in real time. So after a long discussion with her last season, we changed the calculation and upped the amounts for the new year.
Our newly found diligence paid off for us. Between her higher estimated payments, and the automatic withholdings taken from both my retirement annuity and part-time job, we got a refund back this year of just under $5,000. It’s not ideal to overpay like that, but at the same time it’s a message that we’re finally getting this whole retirement thing under control. It’s a meaningful milestone.
At the accountant’s suggestion, we applied the refund to Gorgeous’ next estimated tax payment for this coming April.
Well. How nice that she’s taken care of. I guess I can kiss goodbye that box set of vinyl Genesis albums I’ve had my eye on for over a year. I remember a time when a refund meant that you could celebrate and buy something nice for yourself. Those days have apparently ended. It’s now all about prudence. Bitter? Who, me? Nah.
My taking early retirement in 2014 was a sudden and spontaneous decision. A medical concern for me at the time had a major influence, as was a change in my job that hadn’t worked out quite as I hoped it would. Although I never had a strict time frame in mind, it was always a dream of mine to retire before I reached age 60. But at that point in 2014, I was at least three or four years away from busting a move.
Nevertheless I went ahead and took the plunge. I was 55.
But there were some hurdles in my path:
- In spite of being divorced for four years, I had a couple of financial entanglements with my ex which remained unresolved.
- My 401(k) took a small hit four years earlier courtesy of our divorce decree. I was able to get it back to pre-divorce levels thanks to increased contributions, but the overall balance was still short of my previous goals.
- My amazing new wife brought me lots of unconditional love and happiness, plus a Julia Child-like mastery in the kitchen. But sadly, she had absolutely no personal savings of her own. Divorce hadn’t been as “generous” for her as it was my ex.
Nearly every single retirement article you read advises to plan way ahead of time before walking away from a career. But my own planning was literally squeezed into months instead of years. Although my fundamentals were all there (pension, a substantial 401(k), ample Social Security credits), I was nonetheless confronted by a creeping parental-type voice whispering in my ear saying, “Dude, you’re really taking a risk here.”
Even as a spirit, I really wish Mom would stop calling me “Dude” on those periodic visits of hers. It’s creepy.
Gorgeous and I spent many a night before I retired discussing our plans and going over different financial scenarios. We used spreadsheets and a pendulum (each of us bring different skill sets to the table). We were trying to wrap our minds around how we’d pull this whole thing off without my having to become a dish washer at IHOP and her waiting on tables.²
To be sure, we’ve experienced some rocky moments and unexpected challenges after I walked out that career door a free man in 2014. For one thing, Gorgeous drastically underpaid her estimated taxes that first year, and boy did we get a whopper of a tax bill the following April. That one hurt.
She was also hit by an absolutely perfect storm of dental issues that began as soon as we arrived in Florida. Like a series of dominos falling, it started with one tooth, then the adjacent tooth, followed by the next one, and so on. When all the dental repair was finally finished by early 2016, our total out-of-pocket expenses for two dentists, one endodontist, and an oral surgeon amounted to over $17,000 (after insurance payments).
I decided later to view all of the above as a kind of “stress test,” similar to those written for the Dodd-Frank Act to test if a banking institution has enough capital to withstand adverse conditions. Ours wasn’t a simulation but we thankfully passed the test with enough of our own capital still intact.
So one milestone noted and filed in the cabinet.
Other milestones on the horizon are the purchase of a new home later this year, building a sizable Roth IRA investment for Gorgeous, and somehow find a way to start traveling more around the U.S. We both have a strong desire to make our way up to Nantucket and beyond.
Oh, and someone desperately wants two kitties.
And while all of that is happening, I once again repeat how I’ll be watching (and bracing myself) for deviations to the campaign pledges the Orange One made about social security and medicare. He made strong promises about keeping both programs intact because of their “popularity” (his word). Let’s pray someone in that administration can explain to him that a government program’s popularity isn’t the same as ratings on TV. I’m not very optimistic about our chances.
Now if you don’t mind, please leave me alone with my popcorn. I’ve had enough interruptions for one day.
Until next time…
¹ For American audiences: Monday nights on AMC. Please also be advised that whenever I publicly endorse a TV show, it becomes a fate worse than death for that particular series. Look for it to be cancelled sometime next summer.
² Apologies to readers who actually work at IHOP and are offended. I think I actually meant Denny’s.