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Thinking about retirement? Dana Ferris from HumbleDollar shares her one-year countdown to July 2025, combining smart financial moves with exciting personal goals. Get inspired and start planning your smooth transition today!
I’VE DECIDED UPON MY retirement date: July 1, 2025. We just passed the one-year countdown point, so I thought I’d share some of my ideas and plans for my final year in the workforce.
This countdown idea, of course, isn’t original with me. Indeed, there are apps that you can put on your phone to count down the time until retirement. I was primarily inspired by a retirement blogger named Fritz Gilbert. He’s way more decisive than I am. Gilbert started his blog several years before his planned retirement date, and has meticulously documented his journey leading up to retirement and the time since.
Besides setting a date, I’ve already completed a couple of preparatory steps. I’ve attended several retirement webinars offered by my current university’s retirement program and my previous university’s program. I now understand the timelines for filing retirement paperwork, and I have those dates on my calendar for next spring.
One year to go: Financial tasks. One thing I thought I’d be doing during this final year is stress-testing our retirement spending plan. We have a spreadsheet of sorts that roughs out what we think our monthly expenses will be. But since my husband may not retire next year when I do, we don’t need a trial run of our more austere spending plan—yet. Instead, I’ll need to think about a household budget that will change in two distinct and related ways.
First, my take-home income will go up. I’ll be receiving pensions from two university systems, and together they will replace more than 80% of my current gross income. Meanwhile, I’ll no longer be making contributions to my university pension, Social Security and Medicare, and my 403(b) and 457 retirement plans. These contributions, together with federal and state tax withholding, easily devour more than 50% of my gross pay. Once I’m retired, the only deductions from my pension checks will be for federal and state income taxes.
Second, we’ll have more taxable income. My pension contribution and my voluntary contributions to retirement plans are all “above the line” deductions that reduce my adjusted gross income. When those are gone, my tax liability will increase.
So, one of my financial tasks this year is trying to figure out what the bottom line will be and what to do about it. For example, perhaps I should be looking into tax-smart ways to invest my extra take-home income.
I also need to think about what I’ll do with my current retirement accounts, which are with Fidelity Investments. In addition, I have a rollover IRA with Charles Schwab from my previous employer. I don’t have to do anything in particular with these accounts, and required minimum distributions for me won’t start until 2035, when I’ll be 75 years old.
But I’m a fan of simplicity and want all of those accounts in one place. Will it be Schwab, Fidelity or perhaps Vanguard Group? My IRA at Schwab is all invested in Vanguard funds. If I roll my Fidelity accounts into my IRA, do I sell the funds I currently own and invest the money elsewhere?
Finally, both my husband and I will turn 65 next year and become eligible for Medicare. He previously worked for California’s state government, and we’re both currently covered by the health benefits from the state’s retirement plan. Once we’re Medicare-eligible, that will become secondary coverage, so we’ll have to investigate our options—there are several—and make our decisions.
One year to go: Personal tasks. I’ll need ideas about how to fill my time purposefully and pleasurably. I have some things I’d like to do, or at least try, but I need to think those through. Happily, I have the perfect space in which to do this, as I have a winter quarter sabbatical from work approved.
My primary objective for those 10 weeks will be to map out some goals for the first year or two after I quit the day job. For example, I’m sure I’ll look into ways to work on my health and fitness regimen once I have more time. I also may take private swimming lessons at a local club. I’ve never been a very good swimmer, and would like to do laps for exercise and feel more comfortable in the ocean, since we live in California and like to travel to Hawaii.
I also want to devote more time to some of my existing hobbies, such as cooking. I’d like to improve my baking skills and learn how to make amazing salads with a spiralizer. Right now, my cooking choices tend to focus on what I can accomplish most quickly and with the fewest ingredients possible. I think I’d enjoy slowing down and spending more time creating delicious, healthy food.
Purposeful activity will be important for me, as I’ve never been one who could tolerate too much leisure. I already do some volunteer leadership work at our church that draws on my teaching and writing skills, and I expect to continue doing some or all of those things. I’d also like to find a local nonprofit where I can volunteer. I’m not sure where I’ll land, but I like the idea that I can try and discard various options until I find what’s right.
Finally, I want to devote more time to relationships. I’ve been doing this more and more in recent years. With additional free time, I can initiate things like walks or coffee with friends, or perhaps hosting people for dinner, movie night or to watch sporting events. I think I’m capable of being a generous friend to people, but I’ve always had to be somewhat protective of my time and energy because my work takes up a lot of it.
Many people don’t have the luxury of planning for retirement in such a precise way—they retire abruptly because of failing health, family issues or job concerns—or they may not be in a financial position to retire at all. I know I’m privileged, and I hope to use the time and space I’ve been gifted to get retirement off on the right foot.
