Where did the time go? So I am quite busy living the dream and have been since May 2nd, 2020. That was roughly the last day of work for me in the fire department. My official retirement day was July 1, 2020. I couldn’t wait to get out the door. By that time, I was just working on menial tasks and not getting into any real heavy cases at work. The last thing I wanted was to get wrapped up in a serious arson or code compliance case and have to come back for court. Ugh, I have already received a summons for January and February 2022. Yes, you read that correctly. That was not part of my dream. Where is the dislike button? Interesting note though, they have to pay me the salary rate I was making when I left to come back for court.
That passive income stream just keeps on flowing
Before I left, I needed to purchase another piece of property while I still had my sweet annual salary. Making roughly 130K a year with an excellent credit/fico score, I was a shoo in for an approval to purchase a second home. I didn’t have any other debt besides the home in Burke which was almost 19 yrs in to a 30 yr mortgage. I shopped around for months and kept my eye on a piece of property. It was a bit high priced but I kept it in my favorites in Zillow. It went off the market under contract and then came back. This was a good sign for me. Keep in mind that Covid was silently creeping into the US and was not a pandemic yet. I found a house with an in-ground pool and negotiated the hell out of it. It was vacant for months, had some issues that needed to be addressed but it was my perfect purchase. I rented out my townhouse in Burke and had my sister move in with me into the new house to supplement my income. Living large in the hood. Cha ching! Then the pandemic hit and with travel locked down, it was a great summer to have the pool.
I do what makes me happy
So I’m collecting my pension for the rest of my life. That makes me happy. I am also drawing down on my 457 and decided to take $2000 a month for now and will re-evaluate yearly. I am also working part time as a 1099 contract worker for a government agency. Sweet cash, and fun work. I recently just picked up another part time gig at a winery working in their brewery. Yes they do have a brewery at the Winery at Sunshine Ridge Farms in Gainesville, VA. This all makes me very happy and all the while money just flows in to my pockets. I don’t want to come off as a braggart, just saying that this too, can all be for you. A little planning and automation, and you will be on the right track.
The magic of compound interest
As I stated, currently I am drawing down $2000 a month pre-taxed. I posted previously that I would take the standard 4% but I opted to go a different route. My son knows that I don’t plan to leave a legacy behind. Keep in mind the new SECURE Act effects the distribution of inherited IRA’s. Check out the link below for more info on the SECURE Act. Folks can’t draw out the inheritance for life anymore, it has to all be taken out within 10 yrs so the tax man can get is $$. My funds will last me till I’m 85 or 90. Heck, the family can have whatever is left over after I’m done living my best life.
https://www.fool.com/retirement/plans/inherited-ira/rules/
I have taught the financial freedom methods to my son and he is well aware that he is able to do the same things that I have done, so as not to have to rely on anyone for assistance in the future. The kids and other family members need not worry about how to pay for any future expenses should I need them such as long term care etc.
Since I have left the department, the magic of compound interest has done wonders for my 457 as well as the Bull market. I’ve drawn down the 2k monthly in 9 months since retirement for a total of 18,000. I have not been able to add any money to this account since it was a work place investment, however it has increased in value at a rate of 26% since I left work last July 2020. For my fire department friends, listen up. Get out of those managed funds and stop paying those folks to tell you what to put your money in to. They will take you for the expense ratio, their extra fees and probably not make you the best money you can because they always play it safe. Let your money make more money for you.
Slow and steady makes it sexy
Slowly increase your contributions so you won’t feel the pinch. Make sure you do a percentage of your salary and not a dollar amount. Do this until you max out the contributions. If you have anything left, open a ROTH account at Vanguard or Fidelity. This is free and you don’t have to pay anyone to do it. I will help you set one up if you need it. My selections in the 457 are in Vanguard Small Cap, Vanguard Mid Cap, and Fidelity S&P 500. They did have the Vanguard Institutional Index which was the best by far but they got rid of that and replaced it with the S&P 500. I did not select a bond fund since my pension is in essence my “bond” fund. Keep in mind I am not a financial advisor. Take all of my writing here with a grain of salt. Also remember I retired with 20 yrs in at the age of 52 and not needing to work anymore. So set it and let it marinate. When the numbers start rising, you will feel very sexy indeed.
Please plan to open and fund a ROTH, watch out for your expense ratios, and love what you do.