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Doug’s Financial Approach to Retirement

Category: Financial and taxes in retirement

Sep 19, 2012
Note: This was originally sent in by Doug, a member, as a comment with an alternative approach to retirement, specifically in reaction to Betty Fitterman’s article, “Retiring on a Dime“. We publish here because it has some interesting and common sense ideas, and appreciate Doug sharing them with us.

Hopefully my example will help others prepare for their retirement. Deciding when to retire is the key. In my opinion you should retire when you realize you’ve acquired enough assets and possessions to maintain the standard of living you want to live. I “semi” retired at the age of 43. My original plan was age 50 but circumstances led me to retire early. Six years later I don’t foresee outliving my money at any point because I not only planned my retirement finances but my retirement lifestyle.

Financially I set myself up for income with a rental, IRA’s and some stock. A financial planner? Sure I have one he manages the IRA’s and a couple of other things but I do the real work. He seems to think I’ll outlive my money and if I lived his lifestyle I certainly would. By comparison I don’t want or need a 5,000 square foot house and $250,000 car to “make me happy”. Investments need to be monitored and cared for just like any physical asset if they aren’t working you need to make changes, stocks and real estate can be sold, Ira’s moved and cash invested.

Next is Lifestyle. When your retired you have a lot of time on your hands. You can’t live the lifestyle you had when you were working nor would you want to. When working my days off were limited and spent running around trying to get my housework and projects done only to collapse and start the process all over again. Now I have the time to do everything! Although all related I broke down lifestyle to encompass Health, Hobbies/Interests and Expenses.

Health – Good health is first priority, do research and take on a course of self improvement for life extension. Look at yourself in the mirror and ask if this is who you want to be if it’s not change it. Sure it takes work, hard work but then again your not working are you. At just 35 I was faced with having to take medications for the rest of my life I chose not to take the drugs and took a course of well being with diet and exercise. I keep a vegan diet not only did I drastically lower my grocery bill I improved my health tremendously. Instead of buying a recreational motor vehicle I bought a bicycle for a couple of thousand, took up yoga and got some used workout equipment. All of which replace the physical work I did, lower stress and improve health and well being.

Hobbies and Interests – I took on hobbies that don’t have ongoing costs with membership fees or maintenance. When I was working I had a power boat for a few years it needed hauling, maintenance and had to be set in a marina now I plan to get a kayak. Other hobbies and interests like photography, astronomy, motorcycling, biking, reading, hiking and walking can improve the mind and body without much expense after the initial investment. If you enjoy doing it your making improvement but only if you can afford it.

Expenses – Surprisingly my cost of living dropped by over one third when I retired. This was mostly because of the costs I incurred just going to work. How do I know? I keep a spreadsheet detailing every dollar I spend in a personal budget. This helped me target and review where my money goes. The first thing I looked for was overlapping services one example is insurance. I had towing insurance on my auto policy, motorcycle policy, auto warranty and AAA all of which I paid for. Needless to say I cut and canceled the overlap. All within a couple of years my old refrigerator and TV broke. Replacing the fridge with a new one saved me $20 a month in electricity and will pay for itself in just 3 years. Mindful living has further reduced my expenses, small things add up like using dish towels instead of paper, putting electronic devices on power strips and turning them off saved me $10 a month. Now my electric bill averages $20 a month and there’s no need to put big black panels on my roof.

I hope you enjoyed the story of my personal venture. I wanted to offer a success story written from the point of view of an average guy with a little college under his belt who owned a small blue collar business. I live a great life, travel at will and my only worry after breakfast is what to have for lunch!

Comments: Please share your ideas and reactions in the Comments section below.

Posted by Admin on September 19th, 2012


  1. Great article Doug. I enjoyed reading it and will attempt to incorporate a few things into my life. Thank you.

    by alfie — September 20, 2012

  2. Doug,
    I so identify with your thinking and lifestyle choices. I plan to follow your blogs as you’ve already taught me a money saving tip re: cutting overlapping towing insurance. I’ve also been into astronomy since college and look forward to developing this interest into a hobby.
    I also know that retiring from a job that required commuting should be reported to one’s auto insurer as our rates are calculated on weekly driving patterns and can pare down those monthly premiums!

    by Vivian Collins — September 20, 2012

  3. Hi Vivian,
    I’m glad you liked my article. Astronomy is a cool hobby. I should use my scope more but I live in light polluted NJ. I bought my scopes new but if I were to do this again I would have gotten used or refurbished which is how I buy my photography equipment when I get the right deal.

    by doug0613 — September 20, 2012

  4. If anyone is interested in a blank copy of the Personal Budget I mentioned in my comment to keep track of every dollar I spend it’s available here:
    It’s just a simple no frills spreadsheet in Excel format. I use OpenOffice the greatest FREE multiplatform office suit on the planet which you can get here: – doug0613

    by doug061363 — September 21, 2012

  5. I enjoy reading this article. I too retired really young. The big thing for me was moving out of California and downsizing my home, selling my bigger home for a new 1480 sq ft one. I bought a honda civic instead of a beamer, and have no credit card debt, I live in Arizona with desertscape, so there is no yard work to speak of…I can close up and travel on a whim. I feel free and happy, I have time to get involved in lots of things. I think you need to plan really well so you money does not run out.

    by holly2381 — September 21, 2012

  6. Hi holly2381, I’m leaving in October on my 3rd driving tour from New Jersey to Arizona. My first covered Mesa and the surrounding area then up to Sedona. On my second I covered the entire Valley area from Surprise to Superior to Fountain hills to Good Year. I realized it was to busy in the valley for me so I started looking around up north in Prescott, Prescott Valley, Cottonwood, Camp Verde, Lake Montezuma and Rimrock. This trip I’ll be returning to concentrate on northern Arizona. Where did you end up there? Valley Springs, California north east of Sacramento is on my list also. From what I see housing and real estate taxes are reasonable. Demographics show a lower cost of living than New Jersey. Do you know that area? What are your thoughts? I have about a 100 houses lined up to look at between California and Arizona. I’m leaning toward Arizona as I love the scenery but California is beautiful too with lots of natural resources.

    by doug061363 — September 21, 2012

  7. Hi Doug, I lived in California for 12 years! I still love it there but being here in Az I am so close that I can drive, or fly there often. I ended up in N. Phoenix in a beautiful new community, it feels like you are away from things, but you really are not! The cost out here are so much more reasonable, gas, real estate, good roads, taxes etc, plus we do not have earth quakes!!! California has no money, and it shows in so many ways. Also, people out here are much more friendly and it is easy to make new friends. I would be happy to talk to you, email me at and I will email you my number.

    by Holly2381 — September 22, 2012

  8. Doug…I think you mean SOUTH east of Sacramento. You will find that area is really lovely, but they do have winter there, sort of. And of course you are near earthquake faults. That isn’t something I fret about much, but a lot of people do.

    by Ginger — September 23, 2012

  9. Ginger Thanks for commenting. Your correct north was a typo. Valley Springs California is south east of Sacramento, north east of Stockton.

    by doug061363 — September 24, 2012

  10. Doug, that part of Arizona (Dewey, Cottonwood, Prescott) is very interesting to me also. Did you see any good spots there?

    by Ginger — September 25, 2012

  11. Ginger, I’m looking in Sedona and the surrounding area. Prescott is to cold for me, I’ve spent some time in AZ and this is where I want to go. You just can’t beat the scenery there.

    by doug061363 — September 26, 2012

  12. Very down to earth, realistic advice Doug. Thanks for presenting a balanced response to the “Retiring on a Dime” article…for those of us who don’t have half a million $$ laying about to throw at a motor home:)
    And yes…there are good deals to be had here in Sacramento these days! If you’re the right age, it’s a good time to invest in California real estate.
    Valley Springs is in a growing area sort of between Lodi & the charming towns heading up into the mountains like San Andreas, Angels Camp, Arnold & Murphys. Very Big Valley Western feel to the area with lot’s of grapes growing everywhere!

    by sandy — September 26, 2012

  13. Yes, Sedona is breathtaking, but a little pricey and can get overrun with visitors. What do you think of Cottonwood? i haven’t been there yet.

    by Ginger — September 27, 2012

  14. Ginger, Cottonwood is OK, it’s all good to me. Cottonwood has a lot of shopping near by, seems reasonably safe as far as crime and is affordable. You really have to go and look when shopping for a place in AZ, zoning laws can permit the oddest neighborhoods where a very nice house can be situated next to am industrial complex or dilapidated collection of containers used as homes.

    by doug061363 — September 28, 2012

  15. Doug (et al), why not live in Reno/Sparks/Carson City (NV) area for tax purposes and “play” in Lake Tahoe area of CA for fun?

    by Mad Monk — September 28, 2012

  16. Thanks for writing Mad Monk. I looked into the Taho and Reno area but it’s to cold for me. I’ve put a lot of research into this and Arizona, California and Texas are my choices in that order.

    I want to mention I can afford to live almost anywhere I choose.

    This blog/article started when I wrote a comment in response to the articles Retirement Reality Check and Retiring on a Dime. That comment was edited by Topretirements John Brady where I remarked how a lack of planning resulted in the loss of half the authors assets and that many readers here are either not ready to retire or don’t know when to retire. Three key points that when omitted changed this articles point of view.

    by doug061363 — September 29, 2012

  17. Doug, In your travels in area of Cottonwood, did you happen to visit Jerome? Personally, we found it “quirky” enough to be delightful. Also, we like a little “cold” and Jerome’s elevation (relative to Cottonwood, which we didn’t like) provides such. If you do not like cold you may not enjoy Flagstaff (they do have snow in the winter), but to us it was “heavenly” – at 7K feet+ it should be 😉 . Be aware that I believe that Flagstaff has some water issues that preclude much additional development there (i.e., that they have no water rights from Colorado River, whereas CA does … something like that). For the astronomer, there are: the altitude (less atmosphere and smaller town with less light pollution … plus the high desert right outside town), University of N. AZ, and of course Lowell Observatory (a MUST visit if just for the history buff … e.g., Martian “canals”). We are in a somewhat different situation in that we cannot afford to live anywhere we’d like … or I’d move to Marin County, CA right now (love it there … to visit … plus one of our sons lives & works in SF). Lake Tahoe is same … nice but expensive. We’ve traveled somewhat and enjoyed many of those places. Our next big trip (after St. Augustine in December) will be a more indepth time in Pacific Northwest. Hmmm, if you can afford to live most anywhere, have you considered overseas? Not the usual Costa Rica/Belize, but areas of France, Italy, etc. If you speak, or are willing to learn, Spanish, Brazil or Argentina may even be possible areas. Just throwing out ideas/questions. What about NM? We liked Las Cruces and area around it (Organ Mtns to east, Gila Nat. Forest to NW, White Sands to east, Ruidoso, Carlsbad, Roswell, etc.). If you like wine, some nice wineries in Las Cruces area … and pecan orchards … both along Rio Grande River. A lot of Texans seem to vacation in the mountains east of town (especially during summer). Probably too cold in winter, but you might like southern CO (Cortez, Durango). Sorry for rambling … it’s what we Mad Monks do in all of our free time 😉 ).

    by Mad Monk — September 29, 2012

  18. I love Jerome for it’s quirkiness, but don’t think I’d want to live there. It is perched right on the side of a steep grade. I feel like I am about to fall down the hill whenever I walk down the street. I’m a little disappointed by the comments about Cottonwood. I guess I’ll have to go look, but I am so limited with respect to funds.

    by gingermc — September 29, 2012

  19. Doug, we think alike in many ways. Like you I retired early (at 45) and after some study became my own financial planner. Many of my corporate colleagues thought I was a bit crazy, and to be honest I had some doubts of my own … which is probably why I didn’t sever the ‘golden handcuffs’ entirely, but elected to take a leave of absence … I never went back. I’ve been retired for almost 35 years now and am still enjoying romantic new adventures with my wife of 58 years – every single year.

    The key, in my opinion, is in being your primary financial planner. The motivation is not because you’ll be able to invest better than a professional, but rather because you’ll better understand the lifestyle tradeoffs if you do the work. This assumes you’ll be doing your own taxes which also has the effect of clarifying lifestyle choices.

    The other big thing is what to do about health insurance … something that is especially important to women. While I agree that lifestyle is the most important contributor to health, the question of catastrophic coverage is also important. There may be other options now, but for us, a Health Savings Account, which rewards you for being healthy, was the solution. Unfortunately, in the 80s, the government made it difficult for individuals to acquire. I had to form my own company and do enough yearly contract work to fund my HSA contributions – but I got most of those back (tax free). I hope HSAs are easier today.

    Three things. First, if we could have obtained an HSA in our 20s when we were starting out, we would have accumulated several hundred thousand dollars by the time we retired some 20 years later (tax free compound interest is marvelous). Second, we’re now on Original Medicare (don’t have either Part C [additional coverage] or Part D [prescription drugs]). We’ve found that if you tell doctors and pharmacists you’ll pay cash the cost drops significantly … as much as 80% on drugs. There’s just a lot of overhead associated with traditional insurance. And finally traditional insurance tends to enable unhealthy lifestyles … justified perhaps because of the stress associated with corporate employment … which, of course, is a big reason to retire early.

    by Dick — September 29, 2012

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