Income Streams

Much of my anxiety about retirement is financial - it feels a bit like walking off the edge of a cliff. Can I have enough money to live on, and still fulfill some of my dreams?

I will have four income streams, and my expenses will be changing.

I have modeled a budget in Excel.

The first income stream is Social Security. Given my birth year, I can fully retire at age 70. That means I will be at my maximum Social Security payment level, and if I earn extra money, I can keep it without affecting my Social Security amount. My Social Security payment will replace 35% of my current paycheck. That amount is fixed, with an annual cost-of-living adjustment.

The second income stream is from my pension. I participate in the Washington State Teacher Retirement System's Plan 3, which is a hybrid defined benefit/investment system. My defined benefit will be 33% of my current paycheck. 

The investment part of TRS Plan 3 is a third income stream. I can choose not to withdraw any of it, but IRS rules require minimum withdrawals starting at age 72. Given the withdrawal rate that will keep some money in the account to age 100, my withdrawals could replace 33% of my current paycheck. Of course the amount actually in this account fluctuates with the markets

With these three income streams, I can have the same amount of monthly income as I do now. 

A fourth income stream is jobs that I do. There is high demand for school psychology services and related skills. It's possible I could continue to do the work I do now, but there are strict retirement system rules that limit me to working 900 hours/year for a district - I am not sure yet whether that limit applies to a single district, or multiple districts in a year. I also get asked to do related jobs. This summer, I worked for two testing companies, each with a project that could be completed in under five hours, and each paid me $1,000 per job. Those two jobs involved work on the internet - I could have completed them from anywhere. The retirement of baby boomers has created a huge staffing shortage, one that won't go away in my lifetime. Covid created a necessity for online assessment technology, and there are school psychologists working from remote locations. That all sounds like a lot of work,  but I would still get to choose the hours I work. 

I have often thought of volunteer work I would like to do on projects that are important but not expected as part of my current job. This might include things like a research and program evaluation focused on reasons for non-attendance among our secondary students. I've often thought I would like to tutor students. My boss pointed out that I could be paid for such work. 

A fifth income stream I might have had is personal savings. Some people are very good at socking away money aside from retirement accounts. I have not been good. I have been able to keep one paycheck away from living paycheck to paycheck, and probably should be saving more, but it will never be a source of long-term income for me. Our District provides a pre-tax annuity savings plan which would be quite useful.

A sixth income stream is not really income, but reductions in expenses. I will go from regular to a retired member of my union (NKEA/WEA/NEA) and professional associations (NASP/APA) - this will cut annual expenses of $2,000.  I will no longer be paying into the retirement system, and my contribution to the WA Cares long-term care insurance will go away. Our current president-elect has promised to eliminate income taxes on Social Security, but I think that is unlikely (and foolish)

So it looks like I won't have to worry much about surviving financially.  

A Healthy Lifespan

Writing about the health insurance decision made me think about the most important insurance decisions - how to stay healthy during an extended lifespan. When I was born, I could expect to live 66.7 years. I've already beaten that by 3 years. A male born today can expect to live to 73.5, a female, 79.3.  Health changes in the last 69 years means people are likely to live almost 7 years longer.  The hardest year for survival before the elder years is the first year - having made it to 69, I can expect to live another 14.3 years (age 83), if I am like most males (my birth gender). I am transgender, and have been on female hormones - had I been born female, I could expect another 16.7 years (85). But I am not typical: I am white, English speaking, native-born, highly educated, have a well-paying job with good health care, and I have never smoked. Having those characteristics, I have a 50% chance of living to 93. 

What will my life be like at 93? About 11% of the younger adult population (age 21 to 64), and about a quarter (24.3%) of people in my age cohort (65 to 74) have disabilities. But this rate nearly doubles among those over 74 (45.9%). I sometimes describe myself as "temporarily able" - someday the slings and arrows of life are likely to catch up to me. 

What can I do to keep disability and illness at bay for the longest possible time? They say you can't change your genetics, but genetics can warn you of possible illnesses that can be prevented. If I'm alive in 3 years I will have outlived both of my parents. I've outlived both of my maternal grandparents. My paternal grandparents lived well into their 70s. The family curses on my mother's side appear to be diabetes and heart disease, on my dad's side, depression and alcohol abuse. 

I am living in a miraculous time. I have been on statin drugs for the last 30 years to keep high cholesterol at bay, and I try to follow a Mediterranean diet. I take an ACE-inhibitor for high blood pressure, and Xarelto to prevent blood clots. I use a CPAP machine to help with sleep apnea, a condition which untreated creates a high risk of stroke. Most of these prevention tools did not exist in my grandparents' time. 

Some of these conditions are likely due to my weight. I am about 40 pounds over what is "normal weight" for my height. I love food - but I eat too much and I'm too sedentary. 

My job involves a lot of sitting - a lot of typing reports. I've had leg pains from time to time, starting 30 years ago, but worsening last year when I had what my doctor called "sciatica". After six weeks and intense pain making walking difficult  I now have a set of physical therapy exercises which take about 20 minutes in the morning and 10 minutes at night.  And I have been pain-free for the last six months. 

I know evidence is limited on whether mental games can prevent dementia, but I play games every day: the Times mini crossword, Wordle, Connections, Spelling Bee, and Apple News’ Quartiles.  I do these because they are fun. They only exercise one specific ability: crystallized, or verbal ability, the one ability that grows in later life.  I need to do more visual-spatial games, more fluid reasoning problem solving games, and games that stretch my working memory  

(Note to self: If I want to go on photographic walking tours of Paris next October, I need to keep up my PT, keep on walking daily, eat smart portions of healthy food, and keep thinking how great the future can be.)

 

Don't Retire: Rewire! A list of things that energize me

I've joined a retirement group with the National Association of School Psychologists. We're meeting monthly via Zoom and at the Association's annual convention. These are school psychologists who have retired or are nearing retirement - we have had similar jobs and skill sets, and similar financial profiles - so it is reassuring and educational to participate in these meetings and hear how people are doing. At the first meeting I attended, my friend Michelle Malbey recommended a book by Jeri Sedlar and Rick Miners called "Don't retire: Rewire! Five steps to fulfilling work that fuels you passion, suits your personaility, and fills your pocket" (Third Edition, 2018, Alpha/Penguin Books). 

Every summer for me is like a trial run for retirement. I can set my own schedule and participate in whatever activities I want to do. But after a few weeks, I realize I need some discipline. I can't sleep til noon every day, and I can't play video games all day. My life needs to have a purpose or purposes. In fact my life has had purpose, and those purposes can continue. It's just that in retirement, I get to choose how I meet those purposes. I can choose what activities to be involved in without worrying where my next paycheck is coming from. 

The concept of "rewiring" is understanding the drivers that have propelled my work over the years; linking those drivers to activities, creating a rewired version of those activities, and creating an action plan to make it happen.

Sedlar and Miners take you through a series of exercises to identify your drivers. My drivers include:

1. Adventure (local and distant)
2. Friendship
3. Experiences
4. Mentoring
5. Having a Global perspective
6. Making a difference

My values include;

1. Adventure
2. Autonomy
3. Beauty
4. Calmness
5. Community
6. Curiosity
7. Compassion
8. Friendships
9. Justice
10. Comedy

Then, there are dream projects/activities

1. Travel around France and Spain blogging about food and experiences
2. Photography
3. Learning keyboard and fiddle
4. Comedy clubs
5. Music clubs
6. Sailing
7. Theater - acting? managing?being in the audience?
8. Driving the Trans Canada highway
9. Driving a US loop
10. Museums 
11. Mentoring
12. Creating an ADHD assessment manual for my district
13. Helping my district to earn an Exceptional Psychological Services designation from NASP

Some of these are reminders to revisit things that give me joy (I haven't picked up my fiddle since before Covid). Some are things I haven't attempted yet (I've been on sailboats - but my only experience sailing was my uncle handing me the tiller of his boat in the Gulf). Some straddle the line between being an active driver of the activity vs spectator, and for some activities, being a spectator will be just fine. 

Rewiring is a process of scheduling activities that scratch those itches. Some things can be easily scheduled short term. Others are long-term projects, and I can't do them all. I will document progress here.