RIF'd at age 55

RIF'd at 55
By: Beverly Terrill (c)

I have long teased my husband that I was going to retire at 55.  Before that, I said I was going to retire as soon as my kids were on out of the house. In other words, sometime in the future and when I felt ready.  Fate intervened and now at 55 years old, my position has been eliminated.  I have been with the company for 30 years with officially 28 years of service. It wasn’t just me. I was in a wave of about 70 employees.   Now what?

Let’s back up a few years, my husband is self-employed and I have worked for the same company since we met. When we married, we owned a home and our cars. No monthly payments.  I made decent money and carried the health insurance. My husband made very good money. Then came the crash of 2008. The business my husband had built from scratch was now showing half the profit we netted prior to 08. However, I was moving up the ladder in my company so still no worries about money. Keep in mind we are very frugal. We drive cars that are at least 8 years old and only buy new appliances when the old one dies.

I had many different jobs during my tenure and one in particular was brutal. I worked long hours, traveled and often worked holidays. I began to dream of being retired. At this time I was only 52. My company had a 401k plan and I had been contributing 6% because that was how much my company matched.  However, if I wanted to retire with any type of income, I needed to put more into my 401K. I bumped it up to the annual maximum allowed pre-tax.  Luckily, I did this for 2 years before my unexpected layoff. Also, several years before this, my company implemented an HSA plan so I maxed it out as well.

Fast forward to today. What are my options as a 54 year old?  There are more options than you might think that will allow me to begin to draw from my 401K and my small pension my company also provides.  So what can I do today?
  • Draw from 401K plan – Whoa! Don’t you have to be 59 ½ to avoid the penalty?  Nope. If you leave your job during or after the year you turn 55 (50 for certain government agencies), you are allowed lump sum distributions out of your company retirement plan penalty free.  It is still taxed however based on your current tax rate in the year you withdraw.
  • Take my pension distribution either in a lump sum or monthly distributions. We are talking about a plan with less than 100K. This is taxable but there is no type of penalty.
  • Live off my savings account which is about 4 years at our current household spend

But before I decide to forget ever working for corporate America again, let’s look at all options. I am ONLY 54! I plan to live at least 30 more years.

So the first thing my husband and I determined was the value of the pension and 401K if I wait until at least 65. Medicare will kick in at that time as well.  In addition, we will both have access to our Social Security whenever we decide the time is right to begin drawing from that pool. Bottom line is that all forms of retirement assets will remain as such.

The focus now becomes on what I can do for the next 10 years to create income.  Once my job ends, I will have health insurance though very costly for 18 months. This is known as COBRA coverage. Essentially, you are now paying the employer and employee cost of you health insurance. 18 months is the federal law that the employer does not control. I could use my HSA savings to pay the premiums for those 18 months. I mention health insurance because we know that if we do not have at least some type of catastrophic coverage, our savings can be wiped out with a major health issue.

Let’s look at the timeline for my next 10 years:
  • 6 months severance so I could do nothing for the first 6 months – it’s appealing to take the summer off and golf
  • 18 months insurance coverage which means I can be self-employed and/or work with my husband. I could also work with an outside consulting firm. But eventually, I will need a job that offers me affordable insurance or a business that makes so much money; I don’t need to worry about a health disaster.
  • For the next 8 and half years I just need to make enough money that I can hold onto not only my retirement but my savings as well.

Follow me on my journey as I navigate the path to retirement. I can’t wait to see what happens next!!!

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When it comes to retirement, where you live matters

When it comes to retirement, where you live matters 
By: Beverly Terrill (c) -

How much you will pay in taxes in retirement depends a lot on where you live.
New research from personal finance website GOBankingRates compiles data on sales, property and income taxes, as well as whether Social Security benefits are taxed, to identify the states where retirees face the smallest and biggest bills.

One thing that the states that landed at the top of the list have in common: no state taxes on Social Security benefits and mostly low, if any, income taxes.

Most tax-friendly states

1 Alaska

2 Wyoming

3 Delaware

4 New Hampshire

5 Washington

6 Nevada

7 Florida

8 South Dakota

9 Tennessee

10 Hawaii


Almost half of parents raid their kids' college savings accounts


45% half of parents raid their kids' college saving

Nearly half of parents with college savings for their children have withdrawn some of the balance in the past two years, according to new data from T. Rowe Price, which surveyed 1,086 parents with children ages 8 to 14. Of the 282 who had taken money from their child's college savings, just 18 percent used at least some of the funds to pay for their kids' education — and only 3 percent used the money solely for education.  

Full article at cnbc


Delayed financial gratification


Delayed financial gratification

"People who put less emphasis on the future might make decisions in and before retirement that expose them and their families to greater risks, the authors concluded."

Read full article


Labor force participation rate rising for those over 65


Labor force participation rate rising for those over 65

A rising share of Americans is holding jobs into their golden years, bucking the overall trend of people leaving the labor force that is concerning Federal Reserve policy makers trying to boost growth. As the elderly continue to work, their paychecks are fueling spending and contributing to the U.S. economic expansion.

Read full story 



Do What Makes You Happy

photo by DrStarbuck 

Do What Makes You Happy

Wanted to Create a Fish Business

John was a gentle man that I met while working at a local hospital as a maintenance person. John had some walking difficulties but helped in the cleaning department where I worked. We sometimes shared lunch on the roof. He often spoke of having a fishing business where he could fish for his own use, rent boats and live close by. He was a dreamer like we all are. But he was different then most of us. he was totally committed to having this retirement climate he often spoke off. John retired from the hospital two months before I left for a new job. I never imagined I would ever see him again.

Made His Dream Come True

Ten years later while visiting a neighboring Elks Lodge I ran into John who was an Elk member like I was. At first it was just small talk then he mentioned he was slowly making his dreams come true. He said that five years ago he purchased a small cottage on a medium lake and was currently fixing up the cottage and soon would be renting out rowboats for people to fish from. The lake was a good source for catching bass and other eatable fish. He told me where he was located and I rent a boat from him numerous times the next summer. The lake was super for fly-fishing and I enjoyed our conversation together fishing and some Bud Light. He truly made his dreams come true.

Passed Away Doing His Dream

A few years later after moving to a new state I received a call from a brother Elk and learned John had passed away doing what he always wanted to do, he died while fishing. What a way to go, doing the thing you like the most to do. A brother Elk of mine purchased his home and business. I hope he’s having as much fun as John did.

Don't Wait Do

Retirement should be a time of doing things that bring joy to your life and not just a time for waiting to die. I miss my early years but like the joy of being free to do what I want. Currently I find writing my joy and hope it continues for as long as it works for me.

Happines Should Be Your Goal

Forget about getting old and just make good plans that involve being happy at what you’re doing. Life should be happy till the last breath leaves your body. That’s how I feel and I’m sticking to it.

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Pay Everything Off

photo by Casey Serin

Pay Everything Off

Start With a Clean Slate

Starting a new life as a retired person is a more rewarding event if all your debts are paid off. You can accomplish this in many ways.

Sold His House

A co-worker of mine sold his house and used the profits from the sale to satisfy all his debts. This included paying off his car balance, all credit cards and a credit union loan he took out four years ago to help his daughter with tuition costs for going to college.

Purchased a Fixer Upper

At this point he had a positive cash balance of forty thousand dollars, when he invested in an old house he planned on repairing and the reselling for a nice profit.

Rented a Studio Apt.

Then he found a rental facility in the town where his daughter was going to school. It was a studio apartment that only cost him a modest rent which include all utilities.

Found a Companion

The last time I say him at a social event he said things couldn’t be better. He was living the life of a retired person with two pensions and social security. He said he’s met a nice lady and they shared time together and each wished to remain in there own dwellings. He and I smiled and parted shaking hands. Boy did he have this retirement stuff figured out.

Moved into Government Housing

Mary a former neighbor has retired and moved into a senior facility, which is being sponsored by the government thru HUD. She pays thirty percent of her income for rent and receives help paying her utility bills. She occupies a duplex with one bedroom, which has a walkout patio area. The complex is new and nicely taken care of. It is also located in a small town with no crime problems. She too is doing well in her retirement. She also said she paid off all her debts and has a small nest egg for future plans to travel around the United States. Sounds like a good well thought out plan.

Time to Be Happy

Retirement is a time to do all those things you wanted to do when you had to work. Now with good planning and no debt things like this are very much in the realm of coming true.

Paying off your debts is a great way to start your second life. That’s how I feel and I’m sticking to it.

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Experiment Before Retirement

photo by Nadya Peek

Experiment Before Retirement

Take Your New Thoughts for a Spin

Most people when they move into the second phase of their life have plans on paper or in their head on what they want to do and they know it will be a good thing for them. Nothing of course could be further from the truth. We never know how were going to react to something till we do it, that's when we find out whether we like it or if it’s going to work like we thought it would.

Don't Just Think Know

I have had the pleasure, joy and opportunity to talk to many retired persons and have discovered that what they thought was going to be good for them or etc, turned out to be nothing like they thought it would. My survey on this subject probable covered over fifty people over a number of years. But I did discover what I think to be a truism and that is that if you try something before you retire and give it a good run for the money you will discover what you like and don’t like. And you almost always didn’t have a real clue about the job or business you were going into.

She Took a Job to Learn

Almost to a person success was achieved because the retired person learned the job one hundred percent before they retired and knew exactly how it worked and the true reality of the job or business. One lady I interviewed had this incredible ability to create purses and sold them from her home and her advertising was just her happy customers who kept coming back to her. She wanted to open a store of her own and sell more of her goods. But she was smart and got hired at a store that sold products and sold things she already makes. During her six months there she learned everything she needed to know and then decided to retire and open her own place. She told her employer of her plans and the owner offered her a partnership and put up the money to get the business started. The last time I heard of her, she was now over seeing three locations and having the time of her life.

It Wasn't Luck it Was a Plan

Yes that would appear on the surface to be more luck then anything else, but nothing could be further from the truth. She knew what she wanted to do and knew how to make the products that people liked and then she knew she had to learn the business first hand and she did that by working for someone else till she knew everything she needed to know. Then she told her boss that she would be leaving and then this business offer was made to her. It wasn’t luck it was a plan and she worked at it till it worked.

Know by Doing & Then Do Your Dream

Take it from one who knows, don’t move a muscle till you know everything you need to know and then get some experience and then leap into life and life will make a place for you. That’s how I feel and I’m sticking to it.

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