The Importance of Goals

I've been guilty of stagnating these last few months. I know this because now that I'm in the midst of training for the Santa Barbara Wine Country Half Marathon, happily running and pushing my endurance boundaries each day, I recognize how much I've missed having a physical goal to shoot for. Without a tangible goal, I found myself making excuses for why I didn't want to go running or to the gym on any given day. Without a tangible goal, I am at apparently at risk of becoming a couch potato . . . something completely and totally unacceptable in my universe!


So with one goal already established and underway, I'm adding a few more to keep my physical juices flowing and my couch potato tendencies at bay for the remainder of the year.


Memorial Day weekend will find us at the Great Western Bicycle Rally. This is a family-friendly event that brings bicycling enthusiasts together for three days of sporting events guaranteed to deliver high levels of fun, energy and satisfaction. I'm signing up for the Velo de Femme, a female-only supported ride that traverses the rolling hills around Paso Robles, including, of course, a stop at a local winery. The ride is 42 miles in length, a perfect mid-level distance that requires regular, but not extensive, training. Ironically, in my case it's my saddle that needs to be trained for long distance more than my legs. I'm not sure there is any other sport that taxes the saddle so. I actually stood in my pedals the last five miles of my first 50 mile biking event some years back because my saddle was so sore. 


The summer will find us in the eastern Sierra's, where we plan to do a series of strenuous day hikes ranging from 8 to 12 miles over the two week period will be visiting. In preparation we will be hiking many of the peaks in our surrounding mountains with the Meetup hiking club we belong to.


And this December will find us in Ridgecrest, California running the High Desert 30K with our oldest daughter.


I've missed having endurance goals to train for, and am happy to be back on track. Life is infinitely better and easier when I'm physically active and stretching beyond my comfort zone.


So what's on your list of goals? I'd love to hear!

Maiden Voyage . . . or Life Is Just A Beach!

We recently returned from a weekend getaway in our brand new trailer, and had a wonderful time, though we're beginning to realize that getting used to a new rig is a bit like getting used to a new baby. We're completely enthralled, but don't quite know everything there is to know as of yet about our newest family member.

We spent our maiden voyage along the Newport Beach coastline at Crystal Cove Moro, California's first new coastal campground in decades, built at a mind blowing cost of $15 million dollars. Not quite sure I can see where all the $15 million went since the campground, nice as it is, is basically a whole lot of dirt with some lovely native landscaping, two bath/shower houses and a day use area, but for the drop dead ocean views alone, we intend to return again and again. 

The view from our bluff site.

Getting backed into our site and set up went quick and super smooth. We did, however, get a lot of attention from our fellow campers when we went through the pop up part of the process. I don't think they knew what to make of our unique rig, appearing to be simultaneously confused and impressed. We had a lot of people stop by and ask us "What is it exactly?" which was a lot of fun. 

 Set up success!

Our first snafu occurred when we couldn't figure out how to turn on the kitchen sink faucet. It had worked perfectly when the dealership took us on the walk through a couple of weeks back, but it sure wasn't working now. So, since it was late (we didn't get in and set up till 7:00 PM, and didn't discover the faucet wasn't working till after 8:00) we used the campsite water spigot to fill an empty one gallon jug I carry around for just such emergencies.

We hit our second snafu when the auxiliary gas outlet we'd had installed on the outside of the trailer failed to make a connection with our new compressed gas campfire ring, and we therefore couldn't get it to light. 

And not related to the trailer at all, we also couldn't get our Coleman propane lantern to work, adding to what was rapidly becoming a pretty frustrating first night.

To the rescue came our good friend, an engineer, who was camping alongside us for the weekend. He perused our water faucet for a few moments, flipped a button to ON . . . the one labeled as "Fan" by the way, not "Water Pump" . . . and voila, we had water! He next tackled the auxiliary gas issue and showed us a hidden valve under the trailer that needed to be turned on for the gas to flow . . . voila, we now had a campfire! 

Equally appreciative and embarrassed, we declined to say a word about the lantern. We'd aired enough of our mechanical-ineptitude dirty laundry for one night. And besides, we were in great spirits now that everything having to do with the trailer was working. We poured some wine, sat by our little camp fire for a bit, and then turned into bed about 9:30 PM.

We slept great, and woke up after nine hours of sleep, something we rarely are able to pull off at home. We made coffee and went outside to watch for dolphins, pelicans, surfers and maybe (hopefully!) a whale. And actually saw all four things to our absolute delight. 

Our delight over the whale sighting quickly turned to concern, however, when it became apparent the whale was unable to free itself from several buoys it was dragging behind it, and was actually in distress. Through our binoculars we saw two boats trailing the whale, and then a short time later, two more boats appear and release divers into the water to try and cut the whale free. We watched their repeated attempts to untangle the whale for as long as we could before the ocean current carried everyone beyond the reach of our binoculars. Fortunately, a news story posted today indicated the rescue team was ultimately successful in freeing the gray whale, a juvenile it turned out, from hundreds of pounds of netting it had become entangled in. Hooray!

We spent the remainder of Saturday hiking up and down the canyon immediately adjacent to the campground, returning to camp about 3:30 PM, good and tired after covering close to nine miles. We took showers and settled down in some comfy camp lounges with wine and some books for the remainder of the afternoon, pausing to watch the beautiful sunset, before heading into the trailer to make dinner. After dinner, exhausted, we barely made it through cleanup before crawling into bed and sleeping for a second nine straight hours. 

On Sunday morning, totally refreshed, we again sat outside to enjoy the view and our morning coffee - no whales this time - before starting our campsite breakdown. Breakdown took about an hour since we stopped frequently to figure out our new routine. I'm sure we'll have it down to 30 minutes the next time now that we know what we're doing.

Oh, and our costs for the weekend were a lot less than $15 million - 

• Crystal Cove Moro State Beach electric/water site: $50 x 2 days, plus $8 reservation fee: $108
• Gas: $12
• Groceries:  No change from what we'd spend if at home
• Whale, pelican, dolphin and surfer watching: $0
• 9 mile hike through El Moro Canyon: $0
• Sunday morning breakfast at Pacific Whey Cafe in the Crystal Cove Promenade: $18.50
• TOTAL FOR TRIP: $138.50

All and all a wonderful, successful new trailer break-in weekend!

The daughter of a friend, using fallen tree branches she found on the trail to try and mimic my husband's walking sticks 

Enormous squash blossoms were everywhere on the trail

 Not sure what these are, but they are gorgeous, very large, and turn a beautiful rose color around the edges as they blossom fully.
(Update: Further research indicates it may be a dudleya brittonii!)

California sunset

Budget Allocation in Early Retirement

I wanted to do a follow up to my earlier post about establishing priorities to achieve early retirement, in order to give an overview of how we've specifically allocated our annual retirement spending accounts now that we've gotten there. I've used percentages, rather than actual dollar amounts, because percentages are fairly applicable regardless of how small or large someone's particular budget might be.

Our annual retirement budget is divided between discretionary and non-discretionary allocations. These are currently at 38% and 62% respectively, a result of having worked very hard over the years, particularly the last ten months since I retired, to minimize our non-discretionary obligations. Let's face it - generally these are the least satisfying items to deal with in anyone's budget. 

Here's our non-discretionary list, including the percentage of total annual budget revenue each is projected to consume:

Non-discretionary annual spend
 1%  Auto & Trailer Insurance
 2%  Auto & Trailer Maintenance
 1%  Cell phones
 1%  Gardener (yes, non-discretionary in our case!)
 5%  Groceries
 2%  Home & Earthquake Insurance
 3%  Home Maintenance
 2%  HOA Dues (includes swimming pool, spa and tennis court maintenance)
 9%  Medical/Dental/Vision Insurance
10% Taxes
 2%  Utilities
38% Total

And here's our discretionary list, including the percentage of total annual budget revenue each is projected to consume:

Discretionary annual spend
 3%  Auto Fuel 
 2%  Cash (Our weekly mad money allowances)
 5%  Charitable Donations
 2%  Clothing
 1%  Electronics
 3%  Entertainment
 2%  Gifts
 1%  Gym
 3%  Hobbies
 3%  Home Decor
 1%  Housecleaning Service
15% Major Items (Auto replacement, home remodel, major home repairs)
 1%  Personal Care (Haircuts, beauty products, etc.)
 2%  Restaurants
18% Travel
62% Total

Most of these categories are "use it or lose it," meaning whatever is unspent at the end of the year remains unspent in our portfolio. Four categories, however, will accrue for future usage. These are:

• Home Items (I plan to continue to update my home decor as I feel necessary.)
• Home Maintenance (After one year of accruals, we will probably feel comfortable releasing future unused portions back into our portfolio.)
• Travel
• Major Items

Over the last 10 months I've been able to reduce our overall spend significantly by identifying a lot of waste, and cutting it out of our budget altogether. This included raising our insurance deductibles, cancelling all online subscriptions, cooking at home the majority of the time, and reducing our weekly auto fuel consumption by grouping errands, even doing some by bicycle or foot. We've also identified more efficient ways to achieve the same results, such as consolidating our land line, internet and cable services into one bundled package, using our public library instead of purchasing books and magazines, getting the occasional movie from RedBox instead of streaming them from our cable provider, planning our weekly menu around supermarket sales, taking group dance, piano and tennis lessons instead of private, and even moving to a vegetarian/quasi-vegan lifestyle. (Moving away from meat has resulted in a 15% reduction in our overall grocery spend, to my pleasant surprise.)

And a note about medical insurance, top of mind for anyone considering early retirement. We elected to go with a high deductible HMO plan that includes prescription coverage with a small co-pay, and basic preventative care at no additional cost. We are comfortable with this option because it's 1) highly unlikely either one of us will need more than preventative care for some years to come given our current states of health, 2) we can afford to pay the deductibles should it become necessary in any given year, and 3) we are covered for all other expenses, ensuring a catastrophic illness would not wipe us out financially.

Having such a large percentage of our annual spend marked as discretionary allows for considerable peace of mind as we prepare to move into dual early retirement in May. In the event our portfolio under-performs in any given year, we can easily adjust our discretionary spend and ride it out for as long as necessary. And we've also not included the cash value of our home in our long term planning, giving us the added cushion of knowing we could sell it and move to something less expensive to free up equity should it ever become necessary.

Establishing Priorities to Achieve Early Retirement

I placed a post about my husband's upcoming retirement on my Facebook page, and it wasn't too long before the first "must be nice!" reply appeared. So let me assure all that might be viewing this post that while yes, early retirement  is nice, it's also available to a whole lot more folk than just my husband and myself. The question, really, is are you making early retirement a priority, or do your spending decisions indicate otherwise?

In conversations over the years with friends and acquaintances that are feeling squeezed, I can often identify spending behaviors that don't appear to correlate with their not-enough-money-to-ever-retire-early complaints. As an example, I recently had an exchange with an acquaintance that was considering leaving the profession of teaching because it left them feeling too financially stretched to ever retire early. However, this friend has such an over-accumulation of stuff purchased over the years they have to rent storage space at the cost of $75 a month. Which is $9,000 over the ten years they've been doing it, plus the loss of interest had this money been invested, plus, of course, the purchase cost of the unused items themselves. This friend also enjoys dining out on a very frequent basis, and watches for all new computer gadget releases with baited breath, buying each latest-and-greatest as soon as it hits the stores. And has the hefty credit card charges and monthly service contract fees that go along with chasing technology.

I also have a 50'ish friend lamenting about retirement that drives a late model luxury car, owns an iPhone and and iPad (plus the monthly service fees that go along with) and just purchased and remodeled an enormous new home.

And another that doesn't believe that vacations should ever involve cooking, but rather should always be spent in expensive hotels that necessitate eating every meal out. And as a result doesn't feel they will be able to afford to retire ahead of age 65.

From my perspective, all of these folk have a good amount of additional money to sock away monthly toward an earlier-than-65 retirement objective . . . they are just choosing to direct it elsewhere. Which is totally their prerogative by the way, but which would seem to indicate that early retirement really isn't their priority after all. 


In our case, we knew early retirement was a priority, and tried hard to align our spending decisions accordingly. First and foremost, we lived below our means for many, many years. We also had to repeatedly resist the temptation to ratchet up our standard of living each time our paychecks increased, because as tempting as it was to do so, it was directly counter to our stated objective of early retirement. 

We followed a 90/10 rule with our salary increases, company bonuses, tax refunds and other monetary windfalls - we saved 90% of the net, and spent the other 10% on something we both wanted, generally travel. We refinanced our home twice in order to lock in a lower rate of interest on our mortgage, and then worked to pay it off as fast as we could, ultimately in 17 years rather than 30. We primarily purchased used vehicles, and kept them for a really long time. 

We also tried to be very careful about what we got used if it wasn't congruent with our projected early retirement budget. We kicked around the idea of getting involved with golfing or scuba diving, but ultimately decided we weren't willing to work the extra years necessary to include either in our retirement budget. It did, however, make both financial and physical sense to build our early retirement life around activities like hiking, running and bicycling. Aside from them being things we enjoy tremendously, they had the advantage of being good for us, and virtually free no matter where we were. 

Each dollar saved put us closer to the point when we could retire - the point at which 3% of our amassed portfolio could cover our projected annual retirement income needs.

I guess the point I'm trying to make is that achieving early retirement is not impossible. It's a combination of living beneath your means and working to increase your savings % each year, paying off your home as quickly as possible, resisting the urge to spend "found" money, resisting recreational shopping or eating, looking for inexpensive ways to build regular fun and satisfaction into your life and never taking your eye off the ball. 

Retirement Budget Tracking

As I've mentioned in prior posts, I started tracking every single household expenditure beginning last June, shortly after I retired, to try on our proposed retirement budget and see how well it fit while we still had one paycheck coming in.


Previously we had tracked our spending annually by overall category, (i.e., Utilities, Food, Insurance, etc.) rather than monthly and by specific category (i.e., Electricity, Gas, Water/Trash, Groceries, Restaurants, Auto Insurance, Homeowners Insurance, Earthquake Insurance, etc.). Doing so gave us an general sense of where we were at the end of each year, but didn't leave us feeling much in control.


Although I wasn't too excited about the whole tracking thing in the beginning, concerned it would take up too much of my time and become boring, I quickly found out that once we set up our initial budget spreadsheet, tracking our expenses daily was very easy. It was also extremely informative. As my entries grew, each Budget allocation line began to build a compelling story about exactly how we were choosing to spend our money.


Using Restaurants as an example - we initially set our annual Restaurant Budget at $2,000, approximately $166 a month, an amount that seemed reasonable based on our prior restaurant spending pattern. However, as a result of discovering how much I enjoyed cooking at home once I retired and had more time, and utilizing discount sites like Groupon and TravelZoo when we did go out, we ended up spending so much less than we had expected we decided it made sense to reduce our annual Restaurant allocation to $1,500. And based on our ten month spend, it looks like we'll be reducing it even further this next fiscal year. 


What's been really exciting about this whole thing is that we are spending less, while feeling happier overall. We eat at home more because we enjoy doing so, and yet we are able to eat out as often as we might wish because we are paying just a fraction of what we used to each time. 


Below is an example of how our Restaurant line is set up and tracked, including a more detailed view for February spend to illustrate how granular our tracking is:





February Details:

Taking a look at Utilities next - tracking each bill separately began to paint a picture on how usage fluctuated over the course of a year, and how we might alter our behavior to lower our bills going forward:

With regard to Electricity spend, I could now identify that our usage costs roughly doubled in our hottest S. California months of July and August. I also noted that while September was just as hot, our being gone on vacation for 14 days significantly reduced our September bill. Now that I clearly see the usage pattern and it's impact on our total bill, I'm very motivated to begin using our automatic thermostat to better regulate when our A/C goes on and off over the course of the day, as well as making sure we set it to OFF when we're out of town. And to also make a calendar reminder to clean our A/C filter every 30 days. 


We'll likewise begin to utilize our automatic thermostat this next winter to try and reduce our gas costs. With my husband no longer getting up at 4:00 AM to get ready for work, we'll be able to delay when the gas heater goes on by an hour each day at the very least without any sacrifice. (Quite the opposite in fact - looking forward to sleeping in that additional hour instead!) And since the majority of our Water/Trash bill is the water usages costs to water our yard, we'll continue to work on replacing high water need plants with more drought resistant versions. 


Although this may appear to be an awful lot of minutia, there are several very good reasons for taking tracking down to such a detailed level. The first is that we aren't among the group of folk that will be retiring with pensions, so we'll need to remain very diligent about living on less than our portfolio generates in interest to ensure we do not outlive our money. The second reason is that I appreciate being able to look back at our activities to see if they delivered adequate satisfaction. As an example, my Entertainment details for last July show we spent close to $150 on tickets, parking and food to go see a major league baseball game at Angel Stadium. Since blowing that wad, I've figured out that we can enjoy baseball games at our local university for about $30, likewise covering tickets, parking and food. The fun quotient? Pretty much the same. Actually, scratch that . . . doing it for $120 less per game makes it a whole lot more fun.

It's Official - We are Soon to Become Dual Retirees!

How I have been looking forward to this post!


My husband, 56, has just given his retirement notice and we will officially become a dual retiree household on May 18, just ten short weeks from now. So, although future posts will discuss pertinent details of our early retirement such as - how we structured our retirement budget, plan to pay for healthcare, what our thoughts are on long term care insurance, how we plan to position our investments, what our investment withdrawal rate will be, and how I'm dealing with the anxiety of stepping away from the mental safety net a steady paycheck provides - today's post is simply about the exciting travel plans we have as dual retirees for the remainder of the year. As I've mentioned in prior posts, we have made a number of changes within our overall retirement budget to ensure we have adequate funds for travel.


I'm giving my husband one week to settle into retirement before we hit the road. Our plan for the next couple of years is to take a series of increasingly longer RV trips in and around the USA and Canada, plus continue our once-a-year "fancy" forays to countries we haven't yet visited.


Here's what our 2012 calendar looks like from my husband's May retirement onward:


- Ten day RV trip to Paso Robles, Morro Bay and the Santa Barbara coastline
- Four day RV trip to Big Bear Lake
- Three day trip to Las Vegas to celebrate our 30th wedding anniversary
- Twenty-four day RV trip to Pismo, Sonoma, Lake Tahoe and Mammoth Lakes
- Three day trip to the Bay Area to visit friends
- Five day RV trip to San Diego
- Four day late summer RV trip to the beach to celebrate my 50th Birthday
- Four day fall RV trip to Yucaipa to enjoy apple picking season
- Fourteen day land and river boat trip to China
- Seven day trip to East Coast to visit our newly married daughter & son-in-law for Thanksgiving
- Five day RV trip to the California Central Valley to ring in 2013 with our always-fun camping club


Other than our trip to China, which we would have incorporated regardless, we had to keep the remainder of 2012 fairly fluid since there was always a chance something might come along to change the exact date my husband was able to retire. Since that is now a done deal as of May, we'll be looking at some serious time on the road beginning in summer 2013, when we plan to spend eight weeks in our RV exploring the Pacific Northwest.


I look forward to sharing detailed information on each of these trips as they occur, including cost, itinerary, effort and photos. For now, the phrase "Home again, home again, jiggity jig" comes to mind as I visualize the out-and-back pattern our first few years in retirement will hopefully take.

New Trailer, New Life

Our new trailer just arrived, and I am so excited to finally have it in our garage I literally couldn't sleep last night. I woke up every couple of hours thinking about how much fun my husband and I are going to have in the years ahead traversing the United States and Canada in our new trailer.


I spent the entire day today getting familiar with it and deciding where to place the items we use when RV'ing - dishes, utensils, cooking pots, prep bowls, bedding, games, cleaning supplies, outdoor seating, barbecue, portable firepit and large outdoor area rug. I found a place for everything, which means going forward we have only to pack our clothes before hitting the road. Food can either be brought from home, or picked up when we arrive, depending on how quickly we wish to make our getaway and how long we'll be gone.


We have an upcoming weekend scheduled at a nearby beach campground to give the new trailer a test run and make sure everything works as expected. The cost for this getaway weekend will be under $125, which includes the cost of our ocean front campsite for two nights plus the gas to get there. Our food costs will be exactly the same as they would be had we stayed home, and assuming good weather, our entertainment should all be free - hiking in a nearby canyon, walking along the beach, and enjoying ocean and wildlife views, sunsets and wine from our site.  


Actually a rainy weekend wouldn't be a half bad way to spend our test run weekend either. Our Southern California coastline never gets too chilly, and the idea of sitting out under an awning, fire at our feet, wine glasses in hand while listening to the rain and gazing out at the ocean sounds pretty good too.

Our new rig all set up, 24 feet in length in total when opened fully.

Our primary living area - very comfortable dinette with an expandable table and a king size bed sleeping area with privacy curtains and portable nightstands.

Fully functioning kitchen galley on the left, and small bathroom with shower and toilet on the right.

Peeking inside the bathroom (yes, it has a privacy door!)

Our new trailer folded down and ready for storage inside our garage. 

And here it is parked and ready for future usage, leaving plenty of room for my car as well. The advantage of being able to garage store is $0 out of pocket to store elsewhere, plus it stays protected and available for usage at any time.

Wow, What A Ride!

I picked up a tick this morning, my first one ever, and rather than just freaking out, which, I admit I did for about five minutes, I'd like to think of it as a proud symbol of my new life. 


Because how I picked up the tick is kind of awesome . . . it came aboard at some point during a vigorous 10-mile hike this morning up and down beautiful rolling hills covered with new spring growth. Some of the hills were steep, some were muddy, some a bit slippery, but all were invigorating. Could I have avoided the tick? Sure, I could have stayed home. But how boring would that have been? Instead, I chose to get up early, lace up my hiking boots and head to meet my fellow outdoor enthusiasts in order to get our hiking groove on and work up a sweat. And feel all the better for it.


So I consider the tick, unwelcome as he or she was, to be a proud symbol of my willingness to continually push my physical limits. Kind of similar to losing a toenail last summer after completing my second marathon. Or discovering chafing in areas I didn't even know existed after finishing my first cycling half century. 


See, this is the thing, or at least the way I see it - no one ever died from a sore muscle, or a lost toenail, or a repetitive use injury, or even a tick. To be an athlete is to accept a certain level of physical discomfort . . . discomfort more than offset by the amazing high that comes about as a result of pushing yourself physically.


As someone wiser than me said:

Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming "WOW-- What a Ride!"